Justia South Dakota Supreme Court Opinion Summaries

The Supreme Court affirmed in part and reversed in part the judgment of the circuit court granting summary judgment concluding that Plains Commerce Bank could not foreclose on certain trust real estate, that the trustee's mortgage on trust real estate was void and unenforceable, and that Plaintiff was entitled to attorney fees, holding that the attorney fee award was an abuse of discretion.Garry and Betty Beck treated an irrevocable spendthrift trust naming their three children as secondary beneficiaries. Their child Matthew Beck took out a substantial personal loan with Plains Commerce and granted a mortgage to the bank on trust real estate as partial collateral. When Matthew defaulted on the loan, Plains Commerce brought a foreclosure action against Matthew in his capacity as trustee. Jamie Moeckly intervened on behalf of the trust. The circuit court granted summary judgment for Jamie and further granted her motion for attorney fees. The Supreme Court reversed in part, holding (1) the circuit court erred in awarding attorney fees to Jamie as intervenor for the trust; and (2) because there was no mortgage foreclosure the statutory provision in S.D. Codified Laws 15-17-38 authorizing attorney fees "on foreclosure" did not apply. View "Plains Commerce Bank, Inc. v. Beck" on Justia Law

The Supreme Court dismissed this appeal from the circuit court's grant of First National Bank's (FNB) motion for summary judgment regarding FNB's foreclosure and replevin claims against Justin and Sharmin Inghram and denying FNB's request to dismiss the Inghrams' counterclaim for fraud, holding that the certification order in this case failed to satisfy Rule 54(b) requirements.The circuit court held that the Inghrams failed properly to resist FNB's summary judgment motion on its foreclosure and replevin claims and denied summary judgment on one of the Inghrams' counterclaims. After the court issued its final order and judgment, the Inghrams appealed. The Supreme Court dismissed the appeal based on the circuit court's order for Rule 54(b) certification, holding that the the circuit court abused its discretion in certifying the foreclosure and replevin claims as a final judgment under S.D. Codified Laws 15-6-54(b). View "First National Bank v. Inghram" on Justia Law

The Supreme Court affirmed the judgment of the circuit court determining that Arthur and Jerilyn Gregg were not estopped from asserting that their son-in-law, Tyler McGregor, had no rights in their cattle, and therefore, First Dakota National Bank did not have a security interest in the Greggs' cattle, holding that the circuit court did not err.Tyler and Rebecca McGregor operated a cattle feedlot, and First Dakota was their lender. In 2015, Tyler agreed to feed 289 head of cattle owned by the Greggs. When First Dakota conducted an inspection of the McGregors' cattle operation, Tyler misled the bank into believing that he owned the Greggs' cattle. First Dakota later filed this declaratory judgment action seeking a judgment against the Greggs for the value of the cattle returned to the Greggs. The court held that the Greggs were not estopped from asserting that the McGregor had no rights in the Greggs' cattle, and therefore, First Dakota could not claim a security interest in them. The Supreme Court affirmed, holding that the evidence did not support the first inquiry necessary to establish an estoppel claim. View "First Dakota National Bank v. Gregg" on Justia Law

In 2007, four members of the Stabler family - Stan and Rose Stabler, their child, Brad, and Brad’s wife Brenda - brought fraud actions against the First State Bank of Roscoe (FSB) and its president, John Beyers, alleging that FSB and Beyers conspired to induce the Stablers to sign notes and mortgages to pay debt that had been discharged due to bankruptcy. The circuit court rescinded one note and mortgage as to Brad and Brenda and allowed another note with a third-party bank to be enforced against them. After a trial, a jury found that FSB and Beyers fraudulently induced Stan and Rose to sign a promissory note and collateral real estate mortgage. Both sides appealed the circuit court’s judgment with respect to multiple transactions that they engaged in over the years. The Supreme Court reversed in part, holding that the trial court erred in (1) setting aside the $20,000 punitive damage award to Stan and Rose; and (2) ruling that a prior mortgagee that no longer holds any interest in a collateral real estate mortgage may file an addendum for the current mortgagee, and therefore, one collateral real estate mortgage lapsed for failure of the mortgagee, Beyers, to file an addendum. View "Stabler v. First State Bank of Roscoe" on Justia Law

Borrower, a hotel, obtained a loan from Bank in exchange for a promissory note and mortgage on the hotel. To further secure the obligation, Bank obtained separate commercial guaranties from individual Guarantors. Borrower subsequently defaulted on the note. Bank filed an amended complaint for foreclosure and receivership against Borrower. Borrower did not answer the complaint, and the circuit court entered a default judgment against Borrower and ordered that the mortgaged premises be sold at public auction. After obtaining the property, Bank filed a complaint against the Guarantors alleging that each Guarantor owed Bank over $3 million and other expenses associated with Bank having to run the hotel. The trial court granted the Guarantors summary judgment, concluding that Bank’s choice to bid the entire amount of Borrower’s obligation at the auction left no deficiency on Borrower’s obligation to Bank, and therefore, there was no indebtedness for the Guarantors to guarantee. The Supreme Court affirmed, holding that the guaranties were unenforceable because the Borrower’s obligation had been extinguished. View "First Dakota Nat’l Bank v. Graham" on Justia Law

Plaintiff obtained a default judgment against Barker & Little, Inc. (BLI). BLI was a general partner in Barker & Little Limited Partnership III (BLLP) and the operating entity for the management of rental properties, including property titled to BLLP. Doug Hamilton owned BLI, BLLP and Barker & Little Manufactured Homes, Inc. (BLMHI). Great Western Bank extended a line of credit to BLI secured by mobile homes and rent-to-own contracts owned by BLMHI. The Bank later initiated foreclosure proceedings against BLMHI and BLLP. BLI was named as a codefendant in each action. The Bank, however, did not join Plaintiff as a defendant or notify her of the foreclosure actions. The Bank and Hamilton privately negotiated a settlement agreement. When she learned of the Bank’s foreclosure actions, Plaintiff initiated this action against the Bank. The circuit court granted summary judgment for the Bank. The Supreme Court affirmed, holding that Plaintiff did not have an interest in, or lien on, the foreclosure property on the date the Bank filed its foreclosure actions, and therefore, there were no genuine issues of material fact, and the Bank was entitled to judgment as a matter of law. View "Peters v. Great Western Bank, Inc." on Justia Law

S.D. Codified Laws 53-9-6 prohibits parties from contractually limiting the statute of limitations except in the case of a “surety contract.” In this case, First Dakota National Bank purchased a financial institution bond from BancInsure, Inc. to provide coverage for liability issues that could arise in the course of the bank’s operations. The bond outlined that claims must be brought within two years of the discovery of a loss. In 2004, First Dakota issued a loan, which was obtained through forgery. First Dakota sought coverage under the bond for the loan, but BancInsure denied coverage on the ground that First Dakota had not brought suit within two years since the loss was discovered. First Dakota sued BancInsure in federal court seeking coverage under the bond and damages for the bank’s refusal to pay the claim. The district court certified to the Supreme Court the question of whether the financial institution bond in this case was a surety contract. The Supreme Court answered the question in the negative, holding that the bond in this case was not a surety contract. View "First Dakota Nat’l Bank v. BancInsure, Inc." on Justia Law

After Elliott defaulted on his mortgage GMAC Mortgage sued to foreclose. The circuit court granted GMAC summary judgment on his right to foreclose, finding (1) Freddie Mac was the owner of the promissory note (Note), and GMAC was the Note’s holder and servicer; and (2) GMAC, as holder and service, had authority to enforce the Note. Elliott appealed, arguing that GMAC lacked standing at the time it initiated foreclosure. The Supreme Court affirmed, holding that the circuit court did not err by granting GMAC’s motion for summary judgment because GMAC ultimately provided a properly indorsed bearer Note, mortgage, and evidence of default, thus providing evidence that GMAC had standing. View "Ocwen Loan Servicing, LLC v. Elliott" on Justia Law

In 2003, Appellants entered into a mortgage with Countrywide Home Loans that secured a promissory note in the amount of $165,750 and encumbered certain property. Plaintiffs later refinanced the loan by executing a promissory note in favor of Countrywide in the amount of $236,900 and executed a mortgage in the property in favor of BAC Home Loans Servicing, LP. In 2009, Appellants defaulted under the terms of the subject note and mortgage. In 2011, BAC filed an amended complaint to foreclose the mortgage. The circuit court granted BAC’s motion for summary judgment. The court also awarded attorney fees to BAC and reformed the mortgage by changing the legal description. The property was subsequently sold to BAC at a sheriff’s sale. The Supreme Court affirmed, holding (1) the circuit court did not err in granting BAC summary judgment to foreclose the mortgage; (2) the circuit court did not err in awarding BAC attorney fees and costs; and (3) the circuit court’s revision of the mortgage reflected the true intention of the parties and therefore, was not error. View "BAC Homes Loans Servicing, LP v. Trancynger" on Justia Law

A corporation entered into an agreement with Wells Fargo for a business line of credit. The owners of the corporation signed the document as officers of the corporation. The corporation later defaulted on the line of credit. Velocity Investments, the alleged successor in interest to Wells Fargo, subsequently filed suit against the corporation and the owners as personal guarantors of the debt. The trial court granted summary judgment for Velocity after the owners, acting pro se, failed to respond to Velocity's statement of material facts and requests for admissions. The Supreme Court reversed, holding that the trial court (1) abused its discretion in denying the owners' motion for leave to answer requests for admissions, as (i) allowing the owners to answer the requests for admissions would serve the presentation of the merits of this case, and (ii) Velocity failed to demonstrate that it would be prejudiced if the owners were allowed to answer; and (2) because the trial court granted summary judgment based solely upon the owners' failure to respond to the request for admissions, genuine issues of material fact still existed, and the motion for summary judgment should have been denied. View "Velocity Invs., LLC v. Dybvig Installations, Inc." on Justia Law