JUNE J. HUSTON, Plaintiff and Appellant, v. VANCE MARTIN and THE ESTATE OF DALE M. JARMAN, Defendants and Appellees.
#28365-aff in pt & rev in pt-JMK
IN THE SUPREME COURT OF THE STATE OF SOUTH DAKOTA
2018 S.D. 73, OPINION FILED 10/10/18
APPEAL FROM THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT HAAKON COUNTY, SOUTH DAKOTA. THE HONORABLE JOHN L. BROWN Judge. CONSIDERED ON BRIEFS ON MAY 21, 2018.
ROGER A. TELLINGHUISEN MICHAEL V. WHEELER of DeMersseman, Jensen, Tellinghuisen & Huffman, LLP Rapid City, South Dakota Attorneys for plaintiff and appellant.
WILLIAM M. VAN CAMP of Olinger, Lovald, McCahren, Van Camp & Konrad, PC Pierre, South Dakota Attorneys for defendants and appellee Vance Martin.
MARGO D. NORTHRUP of Riter, Rogers, Wattier & Northrup, LLP Pierre, South Dakota Attorneys for defendant and appellee the Estate of Dale M. Jarman.
[¶1.] At Father‘s insistence, Daughter conveyed considerable amounts of land to her father and nephew. In return, Father promised to “make things right” with Daughter by leaving her half of his estate. However, Father left Daughter only $30,000 in his will after conveying the vast majority of his multi-million-dollar estate to Daughter‘s nephew. Daughter sued her nephew and the estate, alleging breach of contract, fraud, and unjust enrichment. Nephew and the estate moved for summary judgment on several grounds, including that Daughter‘s claims were untimely under
Facts and Procedural History
[¶2.] Prior to his death, Dale Jarman (Jarman) owned and operated a large cattle ranch in Haakon County. Jarman operated the property via Jarman Ranch,
[¶3.] On March 31, 2011, Huston, at Jarman‘s insistence, executed and delivered a warranty deed transferring her undivided one-half interest in 147.77 acres of land to Jarman for and in consideration of one dollar. Huston claims she did not wish to transfer the land. When deposed, Susan substantiated Huston‘s claim, observing that Jarman was “persistent” in his efforts to convince Huston to transfer the property. On March 13, 2013, Huston also transferred by quitclaim deed her ownership interest in 560 acres of real estate to Martin. Huston averred that Jarman threatened to disinherit her if she did not comply and promised to “make things right” with her in his will if she made the transfers. Specifically, Huston alleged that Jarman promised to leave her 50% of his estate.
[¶4.] However, Jarman favored Martin in his estate planning. In May 2011, shortly after Jarman received Huston‘s land, Jarman requested that his attorney revise his will to devise nearly the entirety of his estate to Martin. Unbeknownst to Huston, by the end of 2012, Jarman had transferred more than $2,500,000 in cash and assets to Martin. Martin did not give consideration for the gratuitous transfers. After his death in March 2014, Jarman‘s will revealed that he had devised almost all his property to Martin, including the land Huston had conveyed to him. Although the property was worth millions of dollars, Jarman left only $30,000 to Huston in his will.
[¶5.] On July 24, 2014, Jarman‘s estate published a notice to creditors. On July 8, 2015—nearly a year later—Huston filed a complaint against Martin and the estate, alleging fraud, breach of contract, promissory estoppel, and unjust enrichment. On June 9, 2017, Martin and the estate moved for summary judgment, raising numerous grounds for dismissal. The circuit court held a hearing to consider the motion on August 18, 2017. Martin and the estate argued that
[¶6.] While acknowledging that this Court has enforced oral agreements in the past, Martin and the estate contended that those cases predated the enactment of
[¶7.] In response, Huston argued her claims were not time barred by
[¶8.] After hearing argument from the parties, the court remarked that the case involved “a great number of . . . potential inequities[.]” However, the court concluded that “under the circumstances . . . and the statutory language,” it would “grant summary judgment on all claims,” observing that “obviously, this is something the Supreme Court is going to have to sort out as to, certainly, the breach of contract and matters.” The court did not elaborate further as to what statutory language it was referencing, nor did it provide citations to authority in its order granting Martin and the estate‘s motion for summary judgment.
[¶9.] Huston argues that the circuit court erred in granting summary judgment. To answer this question, we restate Huston‘s issues as follows:
- Whether the circuit court erred by dismissing Huston‘s breach-of-contract claim.
- Whether the circuit court erred by dismissing Huston‘s fraud claim.
- Whether the circuit court erred by dismissing Huston‘s unjust-enrichment claim.
Standard of Review
[¶10.] Under our well-settled standard of review, “[s]ummary judgment is proper where, the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Hofer v. Redstone Feeders, LLC, 2015 S.D. 75, ¶ 10, 870 N.W.2d 659, 661 (citing
Analysis
1. Huston‘s breach-of-contract claim.
[¶11.] Huston argues that the circuit court erred by granting summary judgment on her breach of contract claim. Specifically, she alleges that viewed in the light most favorable to her claim, the evidence established a contract between Jarman and Huston, and that the contract, though oral, overcame the statute of frauds defense. Although Huston recognizes that
[¶12.]
[a] contract to make a will or devise . . . may be established only by (i) the provisions of a will stating material provisions of the contract, (ii) an express reference in a will to a contract and extrinsic evidence proving the terms of the contract, or (iii) a writing signed by the decedent evidencing the contract.
(Emphasis added). The Legislature patterned the language of
[¶13.] Here, no such writings exist, and the statute contains no partial-performance exception. Indeed, the statute limits the means by which a contract to convey by will can be established to “only” those listed.
[¶14.] Additionally, other states that have examined identical statutes adopting language from the UPC have concluded that, absent a writing, a contract to will or devise does not exist. See, e.g., Cragle v. Gray, 206 P.3d 446, 452 (Alaska 2009); Orlando v. Prewett, 705 P.2d 593, 596–98 (Mont. 1985) (“To recognize a part performance exception to this statute would once again create the uncertainties and litigation that the statute was designed to reduce and eliminate.“); Johnson v. Anderson, 771 N.W.2d 565, 569–70 (Neb. 2009). Because Huston has not alleged a valid breach-of-contract claim, we need not address whether the claim was time barred under
2. Huston‘s fraud claim.
[¶15.] Huston claims that the circuit court erred in granting summary judgment on her claims of fraud.4 She argues that her claim should survive regardless of the validity of her contract with Jarman because fraud may be based in tort as well as in contract. In Huston‘s view, she established the basic elements of fraud by presenting evidence of a letter from Jarman to his attorney directing the attorney to redraft his will to make Martin his primary beneficiary. She also contends that she identified evidence suggesting Jarman carried out his intent to gift Martin a vast majority of his estate in violation of their agreement. Accordingly, Huston argues that the circuit court prematurely granted summary judgment.
[¶16.] The circuit court did not specify its reason for granting Martin and the estate‘s motion for summary judgment on Huston‘s fraud claim. Huston argues her claim was both validly pled and timely because the statute of limitations in
[¶17.] In support of this proposition, Martin and the estate cite Spohr v. Berryman, 589 So. 2d 225 (Fla. 1991), a Florida Supreme Court decision. Spohr involved a divorce agreement directing the husband, Spohr, to prepare and maintain in his possession a will that “would bequeath and devise to his wife and children not less than one half of his estate.” Id. at 226. Despite this agreement, Spohr left his entire estate to his surviving spouse. Id. Spohr‘s ex-wife and children failed to bring a claim against the estate within the time permitted under Florida‘s nonclaim statute. Id. at 226-27.
[¶18.] The Florida Supreme Court concluded that although “the claim of [the ex-wife] and the children did not come to
[¶19.] South Dakota‘s nonclaim statute applies to all claims “which arose before the death of the decedent.”
[¶20.] If a contingent claim for fraud arose before Jarman‘s passing, then the claim would be untimely under
[¶21.] For example, in Le Sueur v. Quillian, 56 S.D. 289, 228 N.W. 380 (1929), we held that a claim was contingent and therefore barred as untimely when the claim depended on the potential actions of one of the parties. The dispute in Quillian arose after Quillian conveyed land by warranty deed to Le Sueur in 1921. Id. Quillian had previously mortgaged the land, and in 1923, Quillian died. Id. Le Sueur did not present a claim within the time given by the notice to creditors. Id. at 381. In 1925, the “mortgage, not being paid, was foreclosed,” and Le Sueur was evicted under a sheriff‘s deed. Id. at 380. In 1926, Le Sueur presented a claim for the amount of consideration recited in her deed with Quillian plus interest from the date of eviction. Id. at 381.
[¶22.] The Quillian Court observed that the “covenant against [e]ncumbrances was broken as soon as the warranty deed to [Le Sueur] was delivered. Therefore, at the time of Quillian‘s death and during the period within which creditors might present claims was running, [Le Sueur] had a claim which could have been presented to the executrix.” Id. The Court further noted that “the claim was contingent” because “if Quillian‘s executrix or heirs . . . pa[id] off the [e]ncumbrance, no claim in favor of [Le Sueur] would thereafter exist[.]” Id. Because “[Le Sueur‘s] claim for the amount of the consideration named in her deed could have been presented as a contingent claim,” the claim was barred under the nonclaim statute. Id. at 382.
[¶24.] To support her position that
[¶25.] The Green Court, focusing on the date on which the claim accrued, rejected the argument that the time restraints in
[¶26.] We conclude that Huston‘s reliance on Green and the repealed language of
[¶27.] Moreover, our holding today that Huston‘s contingent claim for fraud is governed by the provisions of
[¶28.] Further, because the claim became actionable after Jarman‘s death, we need not address those situations where the contingent event does not or cannot occur until after the close of the claims-filing period. See generally Johnson v. Larson, 216 N.W. 895 (N.D. 1927). Here, a contingent claim for fraud arose prior to Jarman‘s death. Huston did not timely file her claim within the applicable four-month time frame, and the claim is barred by
3. Huston‘s unjust-enrichment claim.
[¶29.] Huston also argues that the circuit court improperly granted summary judgment on her unjust enrichment claim.6 She alleges that when reviewing the
evidence
[¶30.] An unjust-enrichment action sounds in equity. Hofeldt v. Mehling, 2003 S.D. 25, ¶¶ 14, 658 N.W.2d 783, 788. “Unjust enrichment contemplates an involuntary or nonconsensual transfer, unjustly enriching one party. The equitable remedy of restitution is imposed because the transfer lacks an adequate legal basis.” Johnson v. Larson, 2010 S.D. 20, ¶ 8, 779 N.W.2d 412, 416. A party alleging unjust enrichment must show that the other party both received and knew he was receiving a benefit. Additionally, it must be inequitable to allow the enriched party to retain the benefit without paying for it. Id. ¶ 11, 779 N.W.2d at 416–17.
[¶31.] Even assuming Martin did not engage in any wrongdoing, the actual question is whether “it would be inequitable to allow [him] to retain the benefit without paying for it.” Larson, 2010 S.D. 20, ¶ 11, 779 N.W.2d at 416; see also DFA Dairy Fin. Servs., L.P. v. Lawson Special Tr., 2010 S.D. 34, ¶ 28, 781 N.W.2d 664, 671 (“Unjust enrichment occurs ‘when a party confers a benefit upon another party who accepts or acquiesces in that benefit and it is inequitable to receive that benefit without paying.‘“).
[¶32.] Despite this, Martin cites Commercial Trust and Savings Bank v. Christensen, 535 N.W.2d 853, 858 (S.D. 1995), where we said that an unjust-enrichment claim does not arise simply because a landlord benefits from a tenant‘s efforts to permanently improve the property. We held that an unjust-enrichment claim in this context “implies illegal or inequitable behavior by the landlord in obtaining the benefits conferred by the tenant,” such as by “request[ing] they make . . . improvements to the property or otherwise suggest[ing] they would reimburse” the tenant for the cost incurred in doing so. Id. at 858–59. However, Christensen is distinguishable from the present circumstances because Huston‘s situation does not involve a disagreement between a landlord and tenant. As articulated by Christensen, landlord-tenant disputes involve the “well-settled principle that, in the absence of an agreement that the landlord will pay for improvements or a statute imposing liability on the landlord, a tenant is not entitled to compensation for improvements made to the leasehold even though they cannot be removed by the lessee.” Id. at 858.
[¶33.] Although a court may, after weighing the equities in a particular case, grant or deny a remedy, Hofeldt, 2003 S.D. 25, ¶ 14, 658 N.W.2d at 788, here the court dismissed the claim on summary judgment without providing a reason. Doing so at this stage of the proceedings was premature because genuine issues of material fact exist as to what Martin knew and did with respect to Huston and Jarman‘s alleged agreement. The circuit court erred by granting summary judgment on this claim against Martin.
Conclusion
[¶34.] Huston‘s breach-of-contract claim fails under
[¶35.] Affirmed in part and reversed in part.
[¶36.] GILBERTSON, Chief Justice, and ZINTER and JENSEN, Justices, and SEVERSON, Retired Justice, concur.
[¶37.] SALTER, Justice, not having been a member of the Court at the time this action was assigned to the Court, did not participate.
KERN
Justice
Notes
An action for breach of a contract to convey by will does not accrue until the death of the promisor. Kitchen, 498 N.E.2d at 45; Stratmann, 806 P.2d at 464 (finding the contract is breached when prior will is revoked). Greens could not have filed a creditor‘s claim against Carrol Green because the breach of which they complain (her failure to honor the contract contained in the 1964 joint will) did not occur until her death. Therefore, their claim could only be filed against her estate and does not fall within the ambit of
SDCL 30-21-17 . 516 N.W.2d at 330. (Emphasis added.)
