*1 LUNSTRA, Marty Plaintiff R. Appellant,
and
v. REAL 21 GKR-LAMMERS
CENTURY Lammers, TORS, Leroy Benjamin H. Pohl,
Kruse, and Irma Defendants
Appellees, Crew, Michael B. Crew of Crew & Siоux Sheryl Kruse and Bill G. Falls, plaintiff appellant; Cynthia for Kruse, Defendants. Crew, Falls, J. Ahrendt of Crew & Sioux LUNSTRA,
Marty Plaintiff R. the brief. Appellant, Woods, Full- Barbara Anderson Lewis of er, Smith, Falls, Shultz & Sioux for defen- appellees Century 21 GKR-Lam- dants and REAL 21 GKR-LAMMERS CENTURY Realtors, Lammers, Leroy Benjamin mers Lammers, TORS, Bеnjamin Leroy H. Irma Kruse and Pohl. Kruse, Kruse, and Bill Irma Pohl G. Defendants, Duncan, Dennis Duncan of Zimmer & Parker, appellee Sheryl for defendant and Kruse. Kruse, Sheryl Appellee. Defendant and 16179, 16247.
Nos. MORGAN, Justice. Supreme Dakota. Court South (Lunstra) Marty appeals from summаry against him judgments entered Considered on Briefs Dec. 1988. damages allegedly arising his actions for Decided June 1989. purchase prop- from real his residential (Sellers)
erty Bill from Kruse through Century the offices of 21 GKL- Realtors, Benjamin Lammers, Lammers H. (Realtors). Leroy аnd Irma Pohl Kruse We affirm. 8, 1983, July Sellers listed with Real- property
tors their residential located at Road, Falls, 8009 Oak Trail Sioux South Dakota, also described Lot of Oak Addition, platted Trails subdivision. As broker, listing Leroy Kruse obtained infor- regarding property mation from Sell- ers, published which was in the Sioux Falls size, Listing listing Book. As to lot “Irregular aprpx. stated: 3V2 acres.” property during first viewed the August an house held there in 1983. May nego- after several months of tiations, Lunstra’s offer to $125,000 accepted by for Sell- eccentrically shapеd lot This was an lot situ- Road in the wooded environs on the south of ated on a County. cul-de-sac at the end of Oak Trail Sioux Falls in Lincoln *2 28, 1984, Lunstra in2 ment as delineated in ers. On June moved Wilson Great [v. 6, July Co., and the transaction was closed 207, Northern Railway 83 S.D. (1968) 1984. N.W.2d 19 ]: 30, 1986, (1) May sepаrate On Lunstra filed Evidence must be viewed most favor- against complaints Realtors and Sellers nonmoving able to the party; that, in alleging selling the course of him (2) proof The burden of is on the movant property, the Realtors had and Sellers clearly tо show genu- there is no misrepresenta- made “false and fraudulent ine issue of material fact and that he property. Basically, the tions” about the judgment is entitled to as a matter of alleged misrepresentations were as follows: law; (1)that consisted of 3.5 acres (3) Summary judgment is not a substi- whereas, fact, acres; in it of 2.2 consisted tute for a court trial or by for trial (2) that the which had been jury any genuine where issue of ma- specifically specified. identified were not as exists; terial fact meantime, In the Sеllers had divorc- been (4) Surmise that a prevail will not judgment ultimately ed. A default upon trial is not sufficient basis to against taken Bill Kruse who failed to an- grant summary judgment on issues swer. Realtors and Kruse moved sham, which are not shown to be friv- summary judgments respective for in their оlous or so unsubstantial that it is granted actions. The trial court both mo- obvious that it try would be futile to tions, (1) holding that: Lunstra had been them; provided legally description a sufficient (5) Summary judgment is an extreme (2) property; Lunstra had actual or remedy which should be awarded constructive notice of all information con- only when the truth is clear and rea- plat tained in the including on record touching sonable doubts the existence involved; boundaries and number of acres genuine of a issue as to material fact (3) insрected Lunstra the property and should against be resolved the mov- agreed the same in its ‘as is’ ant; condition; (4) Lunstra an un- ambiguous describing deed proper- real (6) genuine exists, When no issue of fact ty and that all negotiations are summary judgment upon is looked merged in that deed. with particularly adapta- favor and is expose ble to sham claims and defens- appeal, Lunstra raises two issues: es.
1)
purchaser’s
Whether a
claim for dam-
ages against sellers,
upon
Tvinnereim,
based
fraud
483,
Nizielski v.
429 N.W.2d
reprеsenting
in
(S.D.1988)
Out,
(quoting
Time
Inc. v.
quantity
and boundaries of real es- Karras,
434,
(S.D.
392 N.W.2d
436-37
tate,
recording
plat
is barred
of a
1986)).
estate;
correctly
describes the real
record,
From our review of the
we are of
opinion
that there are no material is-
2) Whether sellers are liable for the mis-
July
1975, plat
sues of fact. On
representations of their
agents.
realtor
the Oak Trails
in
Addition was recorded
scope
We
define our
County
first
of review from Lincoln
Courthouse.3 In
Sell-
granting
an order
summary judgment.
purchased
ers
Lot 102 and built a home.
scope of
attended an
house
the fall
appeal
review on
is not
[0]ur
doctrine, of
‘clearly
acreage
under the
1983. When asked about
erroneous’
boundaries,
but rather under
“approxi-
the strict standards at-
Realtors identified
upоn entry
summary judg-
tendant
“approximate”
mate” boundaries and
acre-
permitted
early
2.
Appended
Appendix
Lunstra was
copy
move in
be-
1 is a
give
cause he had sold his house and had to
portion
relevant
of Oak Trail Addi-
possession beforе the Kruse sale could be
tion as recorded.
closed.
acquired by
personal
examina-
given
Sellers.
notice
age
information
from
offers were
tion of the recorded instrument or actual
counter
Several offers
May
through
ulti-
acquired by
other
made.4
late
notice
*3
$125,000
pur-
of
to
mately
an offer
made
means.
102,
Addition. Sellers
Lot
Oak Trails
chase
legislature
The
circumstanc-
has defined
pur-
written offer to
accepted Lunstra’s
constituting
notice in
es
constructive
SDCL
describing the real
correctly
chase. A deed
17-1-4,
provides:
which
delivered,
and
recorded
estate was
Every person
has actual
of
who
notice
of Lunstra.5
by or on behalf
put a prudent
circumstances sufficient to
issue,
argues
his first
For
fact,
inquiry
particular
upon
man
as to a
notice of the
of actual
that
the absence
inquiry
to
and who omits make such
with
acreage he is entitled to
and
diligence,
have
reasonable
is deemed to
rely upon
representations. As a
Realtors’
the fact
constructive notice of
itself.
that the Real
corollary,
argues
further
he
case,
properly
In
was
re-
this
obligation to substanti
tors
under an
were
description
and contained a correct
corded
ob
accuracy
of their information
ate
оf
“The
of an
the boundaries.
recordation
response,
tained
In
Realtors
from Sellers.
serves
constructive
of
instrument
as
notice
argue
Kruse
that notice was
actually
what
the instrument
contains.
recording
filing
given by the
of
v. County
SDCL 43-28-15.” Aasland
of
therefore,
notice must be
plat;
constructive
Yankton,
666,
(S.D.1979).
280 N.W.2d
668
matter of law.
imputed to Lunstra as a
Reedy,
Lunstra’s reliance on Rasmussen v.
Tinker, 22
v.
Lumber Co.
In
Fullerton
15,
(1900) misplaced,
14 S.D.
tical in content SDCL “approximations” house were as stated that: was the size of the shown on the infor- lot jurisdictions it in some has been While Rasmussen, mation In true sheet. purchas- by held the courts that a boundary represented along tо be a was ing property only charged is with con- Aasland, certain fence line. where the conveyances made in structive notice grant of a right-of-way recordation was title, ruling his a is not chain of such incomplete, we held that the existence of a state, applicable in this in view of the put purchaser road sufficient to provisions quoted, of our before Code require investigation right- notice to purchaser and the must be held here as of-way instrument. We feel that if the charged with nоtice of all the informa- exact ma- location boundaries was a might by tion have obtained an that been terial consideration in Lunstra’s offer to required examination of all the indexes Allen purchase, duty inquire. he had a by kept register to be of deeds relat- Green, 229 Va. 472 S.E.2d ing property. to the (1985). In somewhat that same vein and in a decision, Ins. Aetna v.Co. more respect recent With to the amount of acre Life McElvain, (S.D.1985) lot, 363 N.W.2d age agree in the contained we with the Recording 66 Am.Jur.2d Records & (citing negotiations trial prior court that all (1973)), Laws we stated: merged unambiguous warranty § in the deed correctly by The described the sold constructive notice furnished Gregory In Nelson v. instrument, conveyed. as every recorded so far ma- concerned, (S.D. County, rеcited 141-42 terial fact therein is is 323 N.W.2d 1982), equally be as conclusive as would actual we stated: Appendix property by Appended copy 4. All documentation referred to the 2 is a of a “sur- vey" legal apparently description made on Lunstra’s behalf his its street address. No- lender which was delivered to him on or soon acreage appear. where does reference to closing after the date. merger provides “good solely The doctrine of The news” is for the benefit of the individuаl upon delivery acceptance absolutely an un- realtors who escape liability deed, despite without a trial seri- ambiguous negotiations all allegations negligent ous merged fraudulent agreements are deemed misrepresentations. misrepresenta- (Cites omitted.) One therein. This court has tion was that this Sioux Falls residence apply held that it will this doctrine sub- approximately contained 3.5 acres when in (Cite omitted.) ject exceptions. The only fact it contained 2.2 acres. The sec- exceptions are the existence of fraud or ond specific concerned mistake or the existence of con- collateral *4 pointed Buyer out to which provisions agreements tractual or majority opinion glosses were false. The merged are not intended to be in the misrepresentations over both and excuses deed. reasons, including merger them for various Granted that the difference between 3.5 and constructive notice of the recorded acres and 2.2 is than acres more a minimal County Register in the Lincoln of Deed’s variance, ample opportunity Lunstra had to news,” problem “good office. The with the premises. occupied view the He even the is, produces such as it is that it “bad premises сlosing for week the news.” importantly, transaction. More in none of The “bad news” is bad for all realtors the several offers to executed generally. relegates pro- It the real estate any Lunstra was reference made to the fession to third class status or below. It size of the warranty lot. The deed that he public tells the that realtors “can’t be trust- the described the ed,” “buyer and that again beware” is same manner that it was described in his dealing law when with a realtor. Worse offers, barring any allegаtion thus of yet, it performing excuses realtors from fraud. We find that the trial court correct- reasonably investigate prop- basic duties to ly applied merger the doctrine of with re- making representations erties before con- spect quеstion to the acreage. of cerning specifically, same. More it violates case, Under the circumstances of this naught key holds for two rules of the charged Lunstra is with constructive notice South Dakota Real Estate Commission. of the any correct boundaries and refer- rule, 20:56:05:29, The first ARSD states: ence to the size merged of the lot into the taking listing, a licensee shall sub- warranty deed that was delivered and ac- stantiate that the information taken in cepted. Therefore, his actions in fraud and listing аgreement is accurate. As misrepresentation are barred. Because the concerned, far as latent are defects it is law, actions are barred as a matter of we not a violation of this section if licen- need agency. not reach the issue of buyer listing see discloses to the that the We affirm. parts information listing infor- solely representations mation are WUEST, C.J., HENDERSON, J., the seller. concur. rule, 20:56:05:31, key The second ARSD provides:
SABERS, J., dissents. A may licensee not make a substantial or MILLER, J., buyer willful deeming to a himself disqualified, injurious is participate. buyer. did not to the clearly Genuine issues of material fact ex- SABERS, (dissenting). Justice rules, concerning ist violations of these I dissent summary judgment because 20-9-1, (Second) SDCL Restatement improper against negli- claims of (1977), negligent Torts 552 § gent and misrepresentation. fraudulent misrepresentations. fraudulent presents “good
This case some news” majority opinion The “bad news” of the and some destroys “bad news” to realtors. prece- established South Dakota
452 right day of an concerning injured
dent
reliance
statements re-
to his
in court
Reedy,
Rasmussen v.
boundaries,
lating
in violation
Dakota
South
Constitu-
(1900),
quanti-
I
and remand
S.D.
APPENDIX