APPEAL FROM THE CIRCUIT COURT OF THE SEVENTH JUDICIAL CIRCUIT PENNINGTON COUNTY, SOUTH DAKOTA THE HONORABLE WALLY EKLUND Judge
The opinion of the court was delivered by: Wilbur, Justice
#26223, #26226-rev & rem-LSW
ARGUED ON AUGUST 29, 2012
[¶1.] In 2008, Rob Poeppel brought suit against Luke Lester for breach of contract for Lester's failure to purchase Poeppel's voting interest in Coldwell Banker Lewis-Kirkeby-Hall Real Estate, Inc. (CBLKH). Following Lester's stipulation as to breach, a court trial was held on the issue of damages. The court awarded damages to Poeppel in the amount of $250,000 plus prejudgment interest and costs.
FACTS AND PROCEDURAL BACKGROUND
[¶2.] Poeppel was the owner of a 25% (100 no-par shares) voting interest in CBLKH. In March 2008, Lester, an independent contractor and broker associate at CBLKH, approached Poeppel about purchasing Poeppel's 25% voting interest in the company. Also during this time, Mel Dreyer, another broker associate of the company, approached Diana Hooper, another owner of a 25% voting interest in CBLKH, about Dreyer purchasing Hooper's 25% voting interest.
[¶3.] On March 28, 2008, Poeppel and Lester entered into a contract for the sale of the shares. The parties agreed that Poeppel would sell Lester one hundred shares (25%) of no-par CBLKH voting stock for $500,000. The contract signed by the parties was a form that Lester received from Dreyer. Dreyer had used the form during his negotiations with Hooper. Lester then made changes to the contract and presented it to Poeppel for signature. Paragraph five of the contract entitled "Access to Information" provides:
The parties acknowledge that Seller has provided to Buyer certain financial information with respect to the Shares and that Buyer has formed his own opinion as to the value of the Shares being purchased hereunder. Notwithstanding the foregoing, prior to Closing, Seller shall, or shall cause the Company to, provide to Buyer and to Buyer's counsel, accountants, or other representatives full access throughout the period prior to Closing to all of the Company's properties, books, contracts, commitments, and records, and shall furnish to Buyer during such period all information concerning the Company's affairs as the Buyer may reasonably request. SELLER MAKES NO WARRANTY OF THE INCOME PRODUCING ABILITY OF THE SHARES OR THE PROFITABILITY OF THE COMPANY. BUYER RECOGNIZES THAT THE VALUE OF THE SHARES IS DEPENDENT IN PART UPON BUYER'S SKILL AND ABILITY.
Additionally, paragraph seven, section c, "Warranties of Buyer," provides: "That all documents and records requested by Buyer have been delivered or made available to Buyer, and Buyer's investment decision is based upon Buyer's own investigation and analysis and not the representations or inducements of Seller or Seller's agents."
[¶4.] The closing date on the contract was set for May 15, 2008. Lester failed to attend the closing and did not pay $500,000 for Poeppel's shares.
Additionally, Lester notified Poeppel in a letter dated May 22, 2008, that he was unable to secure financing with the right structure for the purchase of the stock.
[¶5.] After continued negotiations between the parties failed, Poeppel brought suit for breach of contract against Lester in September 2008. In his answer, Lester raised the defense that his consent to enter into the contract was obtained by fraud. Lester alleged that Poeppel failed to give him important financial information regarding the company; made a false claim about the income producing ability of the shares of stock; and told Lester that the company held an exclusive franchise with Coldwell Banker.
[¶6.] Poeppel moved for summary judgment on three separate occasions alleging that the contract was unambiguous as to Lester's receipt of CBLKH's financial information. Each motion was denied.
[¶7.] A trial was scheduled for November 2-3, 2011. On the day before trial,
the trial court concluded that the terms of the contract were unambiguous and that parol evidence as to financial documents was inadmissible. The court also granted Poeppel's motions in limine to exclude evidence relating to CBLKH's financial information and to exclude statements made by Poeppel to Lester concerning income that was generated by the stock and the exclusive franchise agreement. Following these rulings, Lester stipulated to the breach of contract.
[¶8.] The issue of damages was tried in a court trial on November 3, 2011.
The trial court entered judgment against Lester for $250,000 plus prejudgment interests and costs.
[¶9.] On appeal, the issues presented are:
1. Whether the trial court erred as a matter of law in concluding that the ...