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Arla M. Johnson v. Claude S. Miller

August 15, 2012



The opinion of the court was delivered by: Gilbertson, Chief Justice



[¶1.] Arla Johnson deeded farmland to her daughter, Linda, and son-in-law, Claude Miller. Linda subsequently filed for divorce from Claude. Arla then sued Claude, claiming she was fraudulently induced by him into deeding the land. The circuit court granted summary judgment in favor of Claude. Claude appeals the denial of his motion for attorney's fees. We affirm.


[¶2.] Claude and Linda Miller were married in 1992. Shortly after, Arla began to rent her farmland to them. They established an arrangement whereby Arla paid one-third of the expenses and received one-third of the profits. This arrangement continued for approximately 16 years. Claude handled all the day-to- day operations of the farm.

[¶3.] In January 2008, Arla decided Linda and Claude had paid enough over the years to deserve ownership of the land. Arla's attorney drew up the deeds and she then gifted the farm real estate to Linda, her only daughter, and Claude. For one dollar consideration, Arla conveyed via warranty deeds approximately 720 acres of land, granting Linda and Claude joint tenancy with right of survivorship. There were no conditions on the deeds. Arla testified at her deposition that she did not discuss deeding the land to Claude and Linda before she went to her attorney to have the deeds drawn.

[¶4.] In October 2009, Linda filed for divorce. Desiring the land to stay in the family, Arla sued Claude, alleging she was fraudulently induced to deed the land. She contended that Claude made promises and statements that he would continue to farm the land and raise his family there. Arla also asserted that Claude's alleged promise to continue to be Linda's husband was consideration for transferring the land to him. Arla's request for relief was to have the land's ownership restored to her and any other equitable remedy the court believed appropriate.

[¶5.] Depositions were taken of both Arla and Claude. After a hearing, the circuit court granted summary judgment in favor of Claude. The court found that its primary reason for granting summary judgment was Arla's deposition testimony. No appeal was taken from the grant of summary judgment.

[¶6.] Claude filed a motion requesting attorney's fees under SDCL 15-17-51.

The court held a hearing on the request. The attorneys presented arguments, but there was no testimony. The court stated at the hearing that a claim for fraudulent inducement was well-grounded in the law and that this case turned on fact questions. The circuit court denied Claude's motion for attorney's fees and entered findings of fact and conclusions of law. On appeal, Claude alleges the court erred in determining Arla's suit was not "frivolous or brought for malicious purposes."


[¶7.] "We review a trial court's ruling on the allowance or disallowance of costs and attorney fees under an abuse of discretion standard." Stratmeyer v. Engberg, 2002 S.D. 91, ¶ 12, 649 N.W.2d 921, 925 (quoting Eccleston v. State Farm Mut. Auto. Ins. Co., 1998 S.D. 116, ¶ 20, 587 N.W.2d 580, 583).*fn1 "An abuse of discretion refers to a discretion exercised to an end or purpose not justified by, and clearly against reason and evidence." Ronan v. Sanford Health, 2012 S.D. 6, ¶ 8, 809 N.W.2d 834, 836 (quoting St. John v. Peterson, 2011 S.D. 58, ¶ 10, 804 N.W.2d 71, 74). "We will overturn the trial court's findings of fact on appeal only when a complete review of the evidence leaves the Court with a definite and firm conviction that a mistake has been made." Nemec v. Goeman, 2012 S.D. 14, ¶ 11, 810 N.W.2d 443, 446 (quoting Pietrzak v. Schroeder, 2009 S.D. 1, ¶ 38, 759 N.W.2d 734, 744).


[¶8.] SDCL 15-17-51 provides:

If a civil action or special proceeding is dismissed and if the court determines that it was frivolous or brought for malicious purposes, the court shall order the party whose cause of action or defense was dismissed to pay part or all expenses incurred by the person defending the matter, including reasonable attorneys' fees.

The terms "frivolous" and "malicious" are stated in the alternative. To recover attorney's fees, the applicant must prove at least one of these conditions. After a hearing, the circuit court held that Arla's action was not frivolous or malicious.


[¶9.] We have previously "held that an action is malicious if it 'is begun in malice, and without probable cause to believe it can succeed, and which finally ends in failure.'" Stratmeyer, 2002 S.D. 91, ¶ 20, 649 N.W.2d at 926 (emphasis added) (quoting Michlitsch v. Meyer, 1999 S.D. 69, ¶ 19, 594 N.W.2d 731, 735).

Malice "exists when the proceedings are instituted primarily for an improper purpose." An improper purpose occurs in situations where: the plaintiff in the original action was actuated by any unjustifiable motive, as where he did not believe his claim would be held valid, or where his primary motive was hostility or ill will, or where his sole purpose was to deprive the defendant of a beneficial use of his property or to force a settlement having no relation to the merits of the claim.

Id. (quoting Manuel v. Wilka, 2000 S.D. 61, ¶ 39, 610 N.W.2d 458, 465).

[¶10.] The circuit court found that Claude failed to establish facts that would indicate Arla instituted the action for malicious purposes. The court also found that Arla's motive was "to recover title to a sizeable amount of real estate." Claude asserts the claim was malicious because it was only filed after he and Linda had begun divorce proceedings. He also points to Arla's testimony that they had not discussed deeding the land until it was actually done and the fact that Linda was not named as a defendant.

[¶11.] The complaint asserts that Claude had "promised" to continue to be Linda's husband and farm the land. She specifically testified that when she signed the deeds, she "figured [she] was giving the land to Linda and the kids" and Claude was "just kind of the caretaker . . . there to kind of do the work and be a support to them." Arla repeatedly testified that her motivation for filing suit was to keep the land in the family. *fn2 Arla expressed feelings of disappointment and dissatisfaction towards Claude as a farmer and as a husband and father. However, the record does not demonstrate feelings of malice, ill will, or hostility by Arla against Claude.

Further, there is no indication that Arla believed her claim would not be held valid, or that she was simply trying to force a settlement. The court's discretion in determining the claim was not malicious has not been shown to be "clearly against reason and evidence." The record does not support a conclusion that Arla brought ...

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