David M. Finneman, husband; Connie S. Finneman, wife v. Walter Robert Laidlaw, husband; Frances Evon Laidlaw, wife
No. 21-3452
United States Court of Appeals for the Eighth Circuit
Submitted: November 15, 2022 Filed: January 10, 2023
Appeal from United States District Court for the District of South Dakota - Western
Before BENTON, KELLY, and ERICKSON, Circuit Judges.
David M. Finneman and Connie S. Finnemаn made contracts for deed for two properties of farmland in South Dakota with L & L Partnership, owned in part by Walter R. Laidlaw and Frances E. Laidlaw. After several foreclosure proceedings and state court cases, the Finnemans lost all interest in the propertiеs. Years later, the Finnemans sued the Laidlaws for fraud, conversion, and breach of contract. The district court1 dismissed their claims for lack of standing, res judicata preclusion, and failurе to plead fraud with particularity. Having jurisdiction under
I.
The Finnemans made contracts for deed with L & L Partnership for two properties in South Dakota. The Finnemans mortgaged their interest in the properties to Rabo Agrifinance, Inc. and FarmPro Services, Inc. A decade later, they made a quitclaim deed, transferring their interеst in the properties to Rock Creek Farms,
In foreclosure, Ann Arnoldy and Michael Arnoldy purchased judgments against the Finnemans and redeemed the contracts for deed for the properties. State court litigation ended in four separate South Dakota Supreme Court judgments against the Finnemans, holding that all rights at law and equity in the properties had transferred to the Arnoldys. See Rabo Agrifinance, Inc. v. Rock Creek Farms, 813 N.W.2d 122, 130 (S.D. 2012); Rabo Agrifinance, Inc. v. Rock Creek Farms, 836 N.W.2d 631, 640-41 (S.D. 2013); L & L P‘ship v. Rock Creek Farms, 843 N.W.2d 697, 704 (S.D. 2014); FarmPro Servs., Inc. v. Finneman, 887 N.W.2d 72, 75 (S.D. 2016).
Despite all this, the Finnemans sued thе Laidlaws for fraud, conversion, and breach of contract. The district court dismissed, holding (i) the Finnemans lack Article III standing, (ii) the doctrine of res judicata precludes their claims, and (iii) they failed to plead fraud with particularity. The Finnemans appeal. This court “review[s] de novo the district court‘s grant of a motion to dismiss.” Quintero Cmty. Ass‘n Inc. v. FDIC, 792 F.3d 1002, 1008 (8th Cir. 2015).
II.
The Finnemаns argue that the district court erred in finding that they lacked Article III standing.
“At all stages of litigation, a plaintiff must maintain a personal interest in the dispute. The doctrine of standing generally assesses whether that interest exists at the outset.” Uzuegbunam v. Preczewski, 141 S. Ct. 792, 796 (2021). “[T]o establish standing, a plaintiff must show (i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief.” TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2203 (2021), citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). See also PHL Variable Ins. Co. v. Fulbright McNeill, Inc., 519 F.3d 825, 828 (8th Cir. 2008) (“Federal district courts sitting in diversity, as the district court in this case, must apply the forum state‘s substantive law.“); Westborough Mall, Inc. v. City of Cape Girardeau, 693 F.2d 733, 747 (8th Cir. 1982) (diversity case evaluating standing under Missouri law); Black Bear v. Mid-Central Educ. Coop., 941 N.W.2d 207, 212-13 (S.D. 2020) (stating an almost identical test fоr standing in South Dakota).
The Finnemans do not have standing because they have not suffered an injury in fact that would likely be redressed by judicial relief. The South Dakota Supreme Court held that “[the Finnemans‘] equitable ownership of the property and all rights under the contract for deed, inсluding the right to cure any default, were transferred to Arnoldy[s].” L & L P‘ship, 843 N.W.2d at 704. The Arnoldys cured the contract-for-deed default when the deed was issued to them by L & L Partnership in 2014. “Once mortgaged and after foreсlosure, redemption, lapse of all other redemption rights, and issuance of the sheriff‘s deed, the purchaser at the foreclosure sale becomes the owner of any rights hеld by mortgagor or the mortgagor‘s assignees.” Id. at 702. The Finnemans have no legal or equitable rights in the properties. See FarmPro Servs., 887 N.W.2d at 75 (The Arnoldys “held both
Because the Finnemans have no interest in the properties, they cannot show they suffered an injury in fact that would likely be redressed by judiсial relief and have no standing to pursue the claim. See TransUnion, 141 S. Ct. at 2203. The district court properly granted the Laidlaws’ motion to dismiss for lack of standing.2
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The judgment is affirmed.
KELLY, Circuit Judge, concurring.
In my view, plaintiffs meet the minimal requirements for standing. I wоuld affirm based on the district court‘s alternative holding: that dismissal was proper because thе Finnemans’ claims either were barred by res judicata or failed to comply with