APPEAL FROM THE CIRCUIT COURT OF THE FOURTH JUDICIAL CIRCUIT MEADE COUNTY, SOUTH DAKOTA HONORABLE JEROME A. ECKRICH, III Judge.
The opinion of the court was delivered by: Zinter, Justice
CONSIDERED ON BRIEFS ON NOVEMBER 3, 2008
[¶1.] Joseph and Kandy Spencer, husband and wife (Spencers), sued Joseph's mother's estate (the Estate of Mary Jo Spencer (the Estate)), claiming entitlement to a one-half interest in thirty-two acres of real property titled in Mary Jo's name. Alternatively, Spencers sought the monetary value of their asserted interest in the property. The circuit court granted summary judgment in favor of the Estate, and Spencers appeal. We affirm on the ground that all applicable statutes of limitations expired.
[¶2.] Mary Jo Spencer and Dale Spencer are the deceased parents of Joseph Spencer. This dispute arises out of a 1973 oral agreement between Dale and Joseph to jointly purchase real property.
[¶3.] According to Joseph, in 1973, Dale approached Joseph about purchasing equal interests in thirty-seven acres of land that was going to be sold at auction. The purported agreement was never reduced to writing. On September 10, 1973, Dale purchased the property from Georgia Baker. Baker and Dale subsequently entered into a contract for deed to finance the purchase. The terms included a purchase price of $37,000, a down payment of $9,250, and the balance to be paid in five annual payments of $5,550. On September 12, 1973, Joseph gave Dale $9,250, and Dale then made the down payment to Baker. On September 14, 1973, Baker executed and escrowed a warranty deed. The deed conveyed title to the thirty-seven acres to Dale alone. From 1974, until the final payment in November of 1978, Dale made the annual payments. During this same period, Joseph and Kandy signed several checks payable to Dale with the notation that each represented a "land payment."
[¶4.] On July 1, 1975, Baker and Dale amended the contract for deed to facilitate Dale in obtaining clear title to 5.8 acres of the property so Dale could build a home. Unlike the original contract for deed, under the 1975 amendment, Baker agreed to deed the 5.8 acres to both Dale and Joseph. Baker also agreed to separately deed the remainder of the property (approximately thirty-two acres) to both Dale and Joseph. The amended contract indicated that the new 1975 conveyance of the entire property to Dale and Joseph would be a substitute for the 1973 deed. Baker was responsible for escrowing the substitute deed at a designated bank.
[¶5.] In accordance with the amended contract for deed, Baker executed two deeds. On July 1, 1975, Baker deeded the entire thirty-seven acres to Dale and Joseph. On July 22, 1975, Baker also deeded the 5.8 acres to Dale and Joseph. For reasons not explained in the record, the 1975 deed conveying the 5.8 acres was recorded on July 30, 1975, but the July 1, 1975 deed conveying the entire thirty-seven acres to Dale and Joseph was never recorded. Instead, the original 1973 deed conveying the thirty-seven acres to Dale alone was recorded on April 10, 1980, approximately seventeen months after a final payment on the contract for deed. Thus, under the recorded deeds, Joseph was a record joint owner of the 5.8 acres, but not the remaining, approximately thirty-two acre parcel conveyed to Dale alone. That thirty-two acre parcel is the subject of this litigation.
[¶6.] The record does not reflect any disputes regarding ownership of the property until 1984. In 1984, Spencers filed for bankruptcy. Spencers' bankruptcy schedules claimed a one-half interest in the thirty-two acres. On September 19, 1984, Spencers' attorney received a letter from attorney Alvin J. Ford indicating a problem with the deeds supporting Spencers' claim to the one-half interest in the thirty-two acres. Ford disclosed that according to the recorded deeds, Baker had deeded the thirty-seven acres to Dale alone by the September 14, 1973 deed. Ford further disclosed that only the 5.8 acres was deeded to Dale and Joseph by the July 22, 1975 deed. Ford advised that there was a cloud on Joseph's claim to a one-half interest in the remaining thirty-two acres necessitating a quiet title action.
[¶7.] Spencers' bankruptcy attorney subsequently ordered a title search of the records of the register of deeds, clerk of courts, and treasurer of Meade County. The search confirmed that the only property in Joseph's name was his joint interest in the 5.8 acres. Spencers then confronted Dale, questioning why Joseph's name was not on the deed to the other thirty-two acres. Dale told Spencers he did not have to explain, and Dale refused to talk with Joseph's bankruptcy lawyer. As a result of these discoveries and events in 1984, Spencers felt "totally duped," "betrayed" and they conceded that they knew they had been "deceived," yet they "didn't do a thing" about it. Spencers further conceded that, whether or not they had seen a deed with their name showing their one-half interest in the property, they knew that the property should have been deeded to Joseph and that they had been defrauded.
[¶8.] Notwithstanding these 1984 discoveries, Dale died in 1994, without Spencers having taken any action to pursue their ownership claim. Attorney Russell Molstad probated Dale's estate. On April 4, 1994, Molstad sent a letter to Dale's beneficiaries disclosing the record title of Dale's real estate. This letter again reflected that Joseph did not have an interest in the property, except for a portion*fn1 of the 5.8 acres. On August 4, 1994, the personal representative's final report was sent to Joseph. In accordance with the recorded deeds, the report proposed a distribution of the thirty-two acres to Mary Jo, with Joseph only retaining a one-half interest in his portion of the 5.8 acres. Joseph did not object to the proposed distribution or file a claim against Dale's estate. Joseph received a copy of the final decree of distribution, dated August 19, 1994, conveying the disputed thirty-two acres to Mary Jo.
[¶9.] The record reflects Spencers further failed to pursue their claimed ownership interest from the 1994 probate until 2003. In January 2003, Kandy visited Mary Jo and asked if there might be any records to explain why Joseph was not a record owner. Mary Jo and Kandy went through Dale and Mary Jo's safe deposit box and discovered the 1975 contract for deed and the 1975 warranty deed conveying title to the thirty-seven acres to Dale and Joseph as tenants in common. Spencers contend that this was the first time they knew of the existence of these documents. No action, however, would be taken to pursue Joseph's claimed interest in the property for more than three more years.
[¶10.] In August 2005, Mary Jo died. Under the terms of her will, the thirty-two acres was to be divided equally among Mary Jo's four children. In March 2006, Joseph filed a $200,000 claim against the Estate claiming that he was entitled to an equitable lien on one-half of the value of the property. The Estate's personal representative disallowed Joseph's claim.
[¶11.] On May 9, 2006, Spencers commenced this suit against the personal representative and the Estate, seeking a declaration of entitlement to a one-half interest in the thirty-two acres. Alternatively, Spencers sought specific performance or an equitable lien for the amount they had contributed towards the purchase of the property. Spencers' claims were brought under causes of action for declaratory judgment, constructive trust, ...