Laura PETERS, Plaintiff and Appellant, v. GREAT WESTERN BANK, INC., Defendant and Appellee.
No. 27145.
Supreme Court of South Dakota.
Considered on Briefs on Jan. 12, 2015. Decided Jan. 28, 2015.
2015 S.D. 4 | 859 N.W.2d 618
Michael V. Wheeler, DeMersseman Jensen Tellinghuisen, Stanton & Huffman, LLP, Rapid City, South Dakota, Attorneys for defendant and appellee.
GILBERTSON, Chief Justice.
[¶1.] Laura Peters appeals the circuit court‘s denial of her motion to compel discovery on Great Western Bank (the Bank), as well as the court‘s granting of summary judgment in favor of the Bank. She asserts that the Bank was required to join her as a defendant in two foreclosure actions and that additional time for discovery was necessary for her to answer the Bank‘s motion for summary judgment. We affirm.
Facts and Procedural History
[¶2.] In March 2003, Peters obtained a default judgment against Barker & Little, Inc. (BLI)—a South Dakota corporation.1 BLI was a general partner in Barker & Little Limited Partnership III (BLLP). Doug Hamilton owned or operated BLI and BLLP, as well as a number of other entities including Barker & Little Manufactured Homes, Inc. (BLMHI). BLI was the operating entity for the management of rental properties, including property titled to BLLP. The Bank extended a line of credit to BLI secured, in part, by mobile homes and rent-to-own contracts owned by BLMHI.
[¶3.] In 2008, the Bank initiated foreclosure proceedings against BLLP and BLMHI. In its action against BLLP, the Bank sought to foreclose on a real estate mortgage; against BLMHI, the Bank sought to recover the mobile homes and rent-to-own contracts used as collateral on the line of credit extended to BLI. Because of BLI‘s relationship with both entities, the Bank named BLI as a codefendant in each action. The Bank and Hamilton privately negotiated a settlement agreement. Pursuant to that agreement, the various Hamilton-owned entities transferred real and personal property to the Bank. The Bank did not join Peters as a defendant or otherwise notify her of these foreclosure actions.
[¶4.] Upon learning of the Bank‘s foreclosure actions involving BLI, Peters initiated this action against the Bank, alleging fraud, conversion, deceit, and unjust enrichment. Peters made a motion to compel discovery, and the Bank responded with a motion for summary judgment. The circuit court granted the Bank‘s motion and denied Peters‘s motion as moot. Peters appeals, raising two issues:
- Whether the Bank was required to join Peters as a defendant in its foreclosure actions against BLI, BLLP, and BLMHI.
- Whether the circuit court should have granted Peters additional time for discovery prior to ruling on the Bank‘s motion for summary judgment.
[¶5.] Our standard of review on summary judgment is as follows:
In reviewing a grant or a denial of summary judgment under
SDCL 15-6-56(c) , we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.
Saathoff v. Kuhlman, 2009 S.D. 17, ¶ 11, 763 N.W.2d 800, 804 (quoting Pellegrino v. Loen, 2007 S.D. 129, ¶ 13, 743 N.W.2d 140, 143). We review “[a] circuit court‘s refusal to grant additional discovery prior to awarding summary judgment . . . for abuse of discretion.” Stern Oil Co. v. Border States Paving, Inc., 2014 S.D. 28, ¶ 24, 848 N.W.2d 273, 281.
Analysis and Decision
[¶6.] Peters alleges the Bank committed conversion and was unjustly enriched by obtaining property to which she had a superior claim. She also alleges that the Bank committed fraud and deceit by failing to name her as a defendant. However, the only persons that a foreclosure plaintiff must join as a defendant, under South Dakota law, are those who have “an interest in, or lien on, the mortgaged property as of the date of filing the action[.]”
[¶7.] Peters argues that her status as a judgment creditor of BLI gave her an “interest“—within the meaning of
The purpose of statutory construction is to discover the true intention of the law, which is to be ascertained primarily from the language expressed in the statute. The intent of a statute is determined from what the Legislature said, rather than what the courts think it should have said, and the court must confine itself to the language used. Words and phrases in a statute must be given their plain meaning and effect.
City of Rapid City v. Estes, 2011 S.D. 75, ¶ 12, 805 N.W.2d 714, 718 (quoting State ex rel. Dep‘t of Transp. v. Clark, 2011 S.D. 20, ¶ 5, 798 N.W.2d 160, 162). Further, the Legislature has commanded that “[w]ords used [in the South Dakota Codified Laws] are to be understood in their ordinary sense[.]”
[¶9.] Peters does not have an interest in the foreclosure property. Peters has not asserted any legal claim to, or right in, the property itself—e.g., she does not purport to hold any present or future estate in, or option to purchase, the foreclosure property. Instead, Peters simply obtained a default money judgment against BLI entitling her to the payment of $24,230.90. Such a judgment does not, in itself, give Peters a right to BLI‘s property. We decided a similar issue well over a century ago in Yetzer v. Young, 3 S.D. 263, 52 N.W. 1054 (1892). In that case, a judgment creditor sought to intervene in a foreclosure action brought by a third party against her judgment debtor. At the time, section 4886 of the Dakota Compiled Laws permitted a person to intervene in a lawsuit if that person had “an interest in the matter in litigation[.]” Id. at 267, 52 N.W. at 1055.2 The plaintiff asserted “that as a simple judgment creditor she had such ‘an interest in the matter in litigation’ as entitled her to intervene[.]” Id. She argued that “the object of [the third party‘s] action was to get possession of the goods, to appropriate them to the payment of their alleged mortgage, and thus reduce and divert the fund out of which she might otherwise collect her judgment, and that she was directly interested in preventing this.” Id. We rejected the plaintiff‘s argument, noting that “[t]he subject-matter of the litigation was [the third party‘s] right to take the goods under their mortgage. It went only to the possession. In this question [plaintiff] could not be concerned, unless she had some interest in the goods that might be affected by such change of possession.” Id. Here, like in Yetzer, Peters‘s interest in the foreclosure property is not a direct claim of right to the property itself; rather, the property merely constitutes a “fund out of which she might otherwise collect her judgment[.]” Id. Similarly, we hold that Peters did not have an interest in the foreclosure property at issue here within the meaning of
[¶11.] Because Peters did not have an interest in the foreclosure property,
A general creditor, either contract or judgment, may not [attack a conveyance as fraudulent]. He must first become interested in the particular property he desires to reach, by attaching his claim to it. In case of real estate, this may be done in this state by docketing a judgment in the proper county, or, in case of personal property, by levying an execution or attachment.
3 S.D. at 268, 52 N.W. at 1055. The procedure for acquiring a judgment lien on real property is essentially the same today as it was in 1892.
When a judgment has been docketed with a clerk of the circuit court, it shall be a lien on all the real property, except the homestead, in the county where the same is so docketed, of every person against whom any such judgment shall be rendered, . . . and no judgment shall become a lien on real property as herein provided unless it be docketed in the county where the land is situated.
When the officer has made a levy upon any personal property pursuant to the provisions of this code, he shall have a lien thereon for all purposes essential to carrying out the execution, but no execu
tion shall constitute any lien upon personal property until an actual levy upon such property has been made thereunder.
[¶12.] There does not appear to be any genuine dispute as to whether or not BLI held title to any real property. In its motion for summary judgment and accompanying submissions, the Bank plainly stated that BLI did not own any real estate involved in the foreclosure actions. Peters seems to agree with this statement, stating in her reply that she did “not dispute that [the] real estate [involved in the foreclosure actions] was titled to Barker & Little Limited Partnership III.” Additionally, the following colloquy occurred at the summary judgment hearing:
[The Court]: Now, it appears that there‘s no dispute that the property that was foreclosed on by the bank was owned only by Barker & Little Limited Partnership III, but you are disputing that, though. I mean, it seems to me that in your response to the statement of undisputed material facts you are agreeing that the only property involved was titled to the limited partnership, not Barker & Little, Inc., the parent company, so to speak. Help me out here.
[Peters‘s Attorney]: Your Honor, I agree that after the door opened on these private negotiations that resolved these two foreclosure actions there were two properties that were transferred. One was the property of Barker & Little Limited Partnership III that was subject to foreclosure. Another property was transferred that was not subject to foreclosure.
. . .
[The Court]: Was the property that was not subject to foreclosure owned by Barker & Little, Inc.?
[Peters‘s Attorney]: No. . . .
[¶13.] Despite these admissions, Peters maintains, in her briefs to this Court, “that what property was transferred in the foreclosures remain[s] unknown, and that Peters therefore dispute[s] Bank‘s claim that no [BLI] real property had been transferred.” We have said that “proof of a mere possibility is never sufficient to establish a fact.” Estate of Elliott ex rel. Elliott v. A & B Welding Supply Co., 1999 S.D. 57, ¶ 16, 594 N.W.2d 707, 710. Instead, “[w]hen challenging a summary judgment, the nonmoving party must substantiate his allegations with sufficient probative evidence that would permit a finding in his favor on more than mere speculation, conjecture, or fantasy.” Id. (quoting Himrich v. Carpenter, 1997 S.D. 116, ¶ 18, 569 N.W.2d 568, 573) (internal quotation marks omitted). Peters‘s speculation that there might have been BLI-owned real estate transferred to the Bank, coupled with her admission that the only real estate known—or hinted—to have been transferred was not titled to BLI, is not a presentation of specific facts. Peters‘s dispute, therefore, is not genuine.
[¶15.] Finally, we must determine whether there is a genuine issue of material fact as to whether Peters had an established lien on any personal property involved in the settlement agreement. Peters‘s attorney argued at the summary judgment hearing that “Ms. Peters could have, if she had notice of this action, obtained a charging order so that any property that was left over after the satisfaction of the bank . . . could have been claimed . . . due to her judgment.” As noted above, a general partner does not “own” partnership property. The only property that could have been the subject of a charging order would have been BLI‘s transferrable interest in BLLP,
[¶16.] Nevertheless, Peters asserts that a full accounting of all personal property involved in the settlement agreement is necessary in order to determine whether or not any of BLI‘s personal property was transferred to another party. Peters argues that “since Bank‘s entire case, and the trial court‘s grant of summary judgment, rest upon unproven assertions about what property was not involved in the foreclosures, discovery of the totality of what property was involved should have been permitted, prior to any summary judgment.” Peters misperceives the basis of the circuit court‘s ruling. As we noted
[¶17.] Finally, Peters asserts the circuit court erred in denying her motion to compel discovery prior to granting the Bank‘s motion for summary judgment. ”
the Rule 56(f) affidavit . . . include[s] identification of “the probable facts not available and what steps have been taken to obtain” those facts, “how additional time will enable the nonmovant to rebut the movant‘s allegations of no genuine issue of material fact,” and “why facts precluding summary judgment cannot be presented” at the time of the affidavit.
Stern Oil Co., 2014 S.D. 28, ¶ 26, 848 N.W.2d at 281-82 (quoting Anderson v. Keller, 2007 S.D. 89, ¶ 32, 739 N.W.2d 35, 43 (Zinter, J., concurring)). Even if Peters genuinely disputed whether BLI owned real property in Pennington County, such information would have been publicly available. Her “[m]ere speculation that there is some relevant evidence not yet discovered [does not] suffice” to extend the time for discovery. Id. ¶ 28, 848 N.W.2d at 282 (quoting 11 James W. Moore et al., Moore‘s Federal Practice § 56.102[2] (3d ed.2013)). Further, Peters did not allege that she docketed her judgment in any other county. Finally, Peters did not allege that she took the necessary steps to create a lien or interest in the personal property of any of the Hamilton entities. Because Peters “did not articulate probable facts relevant to [the existence of a lien on BLI‘s real or personal property] that could have been developed with additional discovery[,]” id., the circuit court did not abuse its discretion in denying Peters‘s motion as moot.
Conclusion
[¶18.] Peters does not have an interest in the foreclosure property at issue. Because there is no evidence that BLI owned real property located in Pennington County, that Peters docketed her judgment in any other county, or that Peters ever levied any personal property, Peters did not present any evidence to the circuit court that would prove the existence of a judgment lien against any property. Consequently, Peters did not have an interest in, or lien on, the foreclosure property on the date the Bank filed its foreclosure actions. Therefore there are no genuine issues of material fact, the Bank was entitled to judgment as a matter of law, and the circuit court did not abuse its discretion in denying Peters additional time for discovery. We affirm.
[¶20.] KERN, Justice, not having been a member of the Court at the time this action was assigned to the Court, did not participate.