David COLBURN and Christine Colburn, Plaintiffs and Appellants,
Robert HARTSHORN, Defendant and Appellee, and First Interstate Bank, Defendant.
Considered on Briefs Nov. 4, 2013.
Patrick M. Ginsbach of Farrell, Farrell and Ginsbach, PC, Hot Springs, South Dakota, Attorneys for plaintiffs and appellants.
Courtney R. Clayborne of Clayborne, Loos & Sabers, LLP, Rapid City, South Dakota, Attorneys for defendant and appellee.
[¶ 1.] This is an action to recover on a cattle caretaking agreement and to foreclose an agister's lien. The circuit court awarded compensation on the agreement, but ruled the agister's lien invalid because the cattle were cared for on the cattle owner's land, not the caretakers' land. Yet nothing in our laws governing such liens defeats their validity when cattle are entrusted to a caretaker on the cattle owner's land. Accordingly, we reverse and remand.
[¶ 2.] In January 1998, to run a cow-calf operation, Christine and David Colburn began leasing real property from Christine's father, Robert Hartshorn, in Custer County, South Dakota. According to the Colburns, Hartshorn agreed to lease the property to them for $20,000 a year, with the term beginning January 1 and ending December 31. Each year, the Colburns were to make a $10,000 payment on or before April 1 and a second payment of $10,000 on or before November 1. In addition to leasing Hartshorn's real property, the Colburns agreed to care for Hartshorn's cattle, which included providing feed, cake, minerals, pasturing, watering, herding, calving, weaning, and arranging for calf sales. In exchange, Hartshorn would give the Colburns one half the net calf sale proceeds when the cattle were sold in the fall of each year. Neither the terms of the cattle care agreement nor the lease agreement were reduced to writing.
[¶ 3.] This arrangement continued from 1999 until 2007, when drought conditions forced Hartshorn to move his cattle from the Colburns' care to a ranch in Wyoming. In January 2010, Hartshorn resumed the same arrangement with the Colburns, placing some 50 head of cattle on the land the Colburns leased. Following the October 2011 sale and Hartshorn's receipt of the Colburns' $10,000 lease payment, Hartshorn placed in the Colburns' care 58 cows and 3 bulls. On April 1, 2012, the Colburns paid the first half of their annual lease payment.
[¶ 4.] In September, a dispute David Colburn and Hartshorn had over some hay intensified when Hartshorn allegedly drew a gun on David. In response, David obtained a temporary protection order against Hartshorn. Hartshorn did not challenge it, saying he wanted nothing to do with David. According to Hartshorn, after their relationship deteriorated, he no longer wanted the Colburns to lease his land or care for his cattle. In response to a letter from the Colburns' attorney seeking a stipulation that would allow the Colburns to sell Hartshorn's cattle and divide the net calf sale proceeds, Hartshorn replied that any attempt by the Colburns to sell the cattle would be deemed theft. Hartshorn then attempted, unsuccessfully, to obtain another rancher to care for his cattle.
[¶ 5.] In October 2012, the Colburns served on Hartshorn and First Interstate Bank an agister's lien for caring for Hartshorn's 58 cows and 3 bulls. See SDCL ch. 40-27. They also gave notice of their intent to retain possession of the cattle until payment. That same month, the Colburns brought an action to recover amounts due for their care of Hartshorn's cattle in 2012 and to foreclose on the lien at a rate of $1.34 per day per head after October 15, 2012, for their continued care of the cattle after what would have been the ordinary sale date. Ultimately, the Colburns sought and received a court order to sell the calves in February 2013, at the St.
Onge Livestock Exchange. The sale yielded a net return of $42,384.75, which the Custer County Clerk of Courts held in trust.
[¶ 6.] In a bench trial, David testified about the terms of the land lease and cattle care agreement. He explained that because they began leasing Hartshorn's land in January 1998, he believed the lease ran from January 1 to December 31. He said that Hartshorn agreed to pay them one half the net calf sale proceeds each October for the care the Colburns provided the cattle during the year. Because Hartshorn did not sell the cattle in October 2012 and did not pay the Colburns for the care provided before October 2012, David claimed Hartshorn owed them one half the net calf sale proceeds from the February 2013 sale. The Colburns also sought to recover $1.34 per head per day after October 15, 2012, for the care they provided for Hartshorn's cattle until they were sold in February 2013. As support, the Colburns offered expert testimony from Perle O'Daniel. O'Daniel testified that the Colburns' lien for $1.34 per head per day was fair and reasonable.
[¶ 7.] Hartshorn testified that the terms of the land lease and cattle care agreement with the Colburns were intended to be consistent with his previous written lease and cattle care agreement with Travis Bies. Under that agreement, Bies leased Hartshorn's property from April to March, made two lease payments (April and November), cared for Hartshorn's cattle, received one half the net calf sale proceeds, provided 20 tons of hay to Hartshorn in non-drought years, and allowed Hartshorn's granddaughter to run cattle on the property. According to Hartshorn, beginning in 1998, the Colburns agreed to abide by the terms of the Bies Lease, and in fact, provided the 20 tons of hay to Hartshorn in non-drought years, allowed Hartshorn's granddaughter to run cattle on the land, paid rent in April and November, and took care of Hartshorn's cattle. By the terms of the Bies Lease, the Colburns, in ...