Justia South Dakota Supreme Court Opinion Summaries

Matthew and Caralynn Fonder purchased a home and obtained a mortgage from Wells Fargo Bank, N.A. Wells Fargo selected Wells Fargo Insurance, Inc. Flood Services (WFFS) to conduct a flood hazard determination on the Fonders’ home. WFFS determined the home was not in a special flood hazard area, and therefore, the Bank did not require the Fonders to obtain flood insurance. A flood later destroyed the Fonders’ home. Wells Fargo later filed a complaint to foreclose on the Fonders’ home. The Fonders cross-claimed against WFFS seeking to recover damages sustained a result of their reliance on WFFS’s erroneous flood determination. The circuit court dismissed the cross-claim for failure to state a claim and dismissed the Fonders’ motion to amend their third-party complaint to assert a claim of negligent misrepresentation on the grounds that WFFS did not owe the Fonders a duty. The Supreme Court affirmed in part and reversed in part, holding (1) the circuit court erred when it dismissed the Fonders’ claims for professional negligence and negligent infliction of emotional distress but did not err in dismissing the Fonders’ breach-of-fiduciary duty claim; and (2) upon remand, the Fonders may amend their cross-claim to include negligent misrepresentation. View "Wells Fargo Bank, N.A. v. Fonder" on Justia Law

Matthew and Caralynn Fonder purchased a home and obtained a mortgage from Wells Fargo Bank, N.A. Wells Fargo selected Wells Fargo Insurance, Inc. Flood Services (WFFS) to conduct a flood hazard determination on the Fonders’ home. WFFS determined the home was not in a special flood hazard area, and therefore, the Bank did not require the Fonders to obtain flood insurance. A flood later destroyed the Fonders’ home. Wells Fargo later filed a complaint to foreclose on the Fonders’ home. The Fonders cross-claimed against WFFS seeking to recover damages sustained a result of their reliance on WFFS’s erroneous flood determination. The circuit court dismissed the cross-claim for failure to state a claim and dismissed the Fonders’ motion to amend their third-party complaint to assert a claim of negligent misrepresentation on the grounds that WFFS did not owe the Fonders a duty. The Supreme Court affirmed in part and reversed in part, holding (1) the circuit court erred when it dismissed the Fonders’ claims for professional negligence and negligent infliction of emotional distress but did not err in dismissing the Fonders’ breach-of-fiduciary duty claim; and (2) upon remand, the Fonders may amend their cross-claim to include negligent misrepresentation. View "Wells Fargo Bank, N.A. v. Fonder" on Justia Law

Voorhees Cattle Co. brought a foreclosure action against Dakota Feeding Co. (DFC). In answering the complaint, DFC brought a third party complaint against B and B Equipment, Inc. (B&B) for breach of contract. B&B counterclaimed, alleging breach of contract and impossibility of performance. After a jury trial, judgment was entered for Voorhees on the foreclosure claim and for B&B on its counterclaims against DFC. DFC satisfied the judgment granted to Voorhees, leaving DFC and B&B as the remaining parties to this appeal. DFC appealed, arguing that evidence admitted at trial violated the attorney-client privilege and that the error prejudicially tainted the trial. The Supreme Court affirmed, holding (1) the privileged evidence should not have been allowed, but the evidence did not prove, nor go to the heart of B&B’s claims; and (2) as a result, the erroneous admission of the privileged communications was not unfairly prejudicial to DFC as against B&B. View "Voorhees Cattle Co. v. Dakota Feeding Co." on Justia Law

This case involved a dispute over a road located on property owned by David and Roxie Niemi in Fredlund Township. The Neimis brought suit against the Township seeking a declaratory judgment that the portion of Lewton Road that traverses their property is not a public road. After a trial, the circuit court concluded that the Niemis and their predecessors in interest had dedicated the road to the public by implication. The Supreme Court affirmed, holding that the circuit court did not when in ruling that the entire length of the disputed roadway was a public road by operation of an implied common-law dedication. View "Niemi v. Fredlund Township" on Justia Law

In 2009, 2010, and 2011, the Dowling Family Partnership and Dowling Brothers Partnership (collectively, the Partnerships) entered into a series of cash farm leases with Midland Farms, LLC. The 2012 crop year lease created a right of first refusal held by the Partnerships regarding the 2013, 2014, and 2015 crop years, a right that ripened into an option when Midland received an offer from Clement Farms and relayed the new price to the Partnerships. In 2012, Midland sought a legal determination that the parties had not extended the prior lease. The circuit court concluded that an enforceable contract existed between the Partnerships and Midland, and the Partnerships exercised their right to lease the property for the 2013 through 2015 crop years. The Partnerships were subsequently restored to possession of the leased property. The Partnerships sued Midland a second time seeking damages for being denied possession of the property from August 2012 to March 2013. Midland sought restitution from the Partnerships for the amount it paid to Clement as reimbursement for Clement’s planting expenses. The circuit court concluded that the Partnerships did not suffer damage, Midland was not entitled to restitution, and Midland had unclean hands. The Supreme Court affirmed, holding that the circuit court did not err in concluding that Midland breached its lease with the Partnerships and that the Partnerships were not unjustly enriched. View "Dowling Family P’ship v. Midland Farms, LLC" 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

Todd and Joanne Egge placed obstructions on a platted but unimproved service road north of their property. Gary Busselman sued the Egges for damages and sought an injunction to prevent the Egges’ obstruction of the service road, contending that the service road was open to public travel because it had been dedicated and accepted by the City of Sioux Falls and Minnehaha County. The circuit court granted summary judgment for Busselman. The Egges appealed, arguing that the circuit court erred in failing to require joinder of the relevant governmental entity responsible for acceptance of the purported dedication. The Supreme Court reversed and remanded for joinder of the appropriate governmental entity, holding that, under Thieman v. Bohman, the appropriate governmental entity was an indispensable party to Busselman’s action. View "Busselman v. Egge" on Justia Law

Frank and Josephine Kaberna established two trusts for the equal distribution of real property to their four children: Karen, Frank, Jean, and Don. After Frank and Josephine died, each of the four children, along with their spouses, received a one-fourth undivided interest in the real property. Plaintiffs later brought the underlying partition action against Karen and her husband due to disputes among the family members. The circuit court ultimately adopted a “Modified Maas Plan” that divided the real property. The Supreme Court affirmed, holding that the circuit court did not err in adopting the Modified Maas Plan. View "Kaberna v. Brown" 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 and Defendant claimed mineral rights to the same 280 acres of U.S. Forest Service land in Lawrence County, South Dakota. Plaintiff filed a complaint to quiet title. The circuit court granted summary judgment in favor of Plaintiff, concluding that Defendant failed to follow federal and state law regarding the proper location of placer mining claims but that Plaintiff followed all applicable laws and was therefore entitled to the mining claim. The Supreme Court affirmed, holding (1) the circuit court did not err in deciding that Defendant’s fourteen placer mineral claims on property at issue were invalid; and (2) Defendant’s invalid placer mineral claims did not preclude Plaintiff’s subsequent claims. View "Pete Lien & Sons, Inc. v. Zellmer" on Justia Law