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Hedlund v. River Bluff Estates, LLC

Supreme Court of South Dakota

February 28, 2018

RONNIE HEDLUND, KAREN HEDLUND, VIB ENTERPRISES, LLC, and LEIMBACH DEVELOPMENT, LLC, d/b/a/ ABC STORAGE YARD, Plaintiffs and Appellants,
v.
RIVER BLUFF ESTATES, LLC, Defendant and Appellee.

          CONSIDERED ON BRIEFS ON JANUARY 8, 2018

         APPEAL FROM THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT STANLEY COUNTY, SOUTH DAKOTA, THE HONORABLE MARK BARNETT Judge.

          JAMES E. MOORE ARON A. HOGDEN of Woods, Fuller, Shultz & Smith P.C. Sioux Falls, South Dakota Attorneys for plaintiffs and appellants.

          JACK H. HIEB ZACHARY W. PETERSON of Richardson, Wyly, Wise, Sauck & Hieb, LLP Aberdeen, South Dakota Attorneys for defendant and appellee.

          GILBERTSON, CHIEF JUSTICE.

         [¶1.] Ronnie and Karen Hedlund, individually and on behalf of their business VIB Enterprises LLC, and Leimbach Development LLC appeal the circuit court's denial of their request for preliminary and permanent injunctive relief against River Bluff Estates LLC. The Hedlunds and Leimbach argue the court erred in concluding an adequate legal remedy exists for an alleged increase in water drainage from River Bluff's property. The parties also dispute whether the court's factual findings and legal conclusions issued after the injunction hearing are conclusive as to further proceedings in this case. And River Bluff argues the court's decision is not appealable. We affirm the court's denial of preliminary injunctive relief and remand the case for further proceedings.

         Facts and Procedural History

         [¶2.] This case is a water-drainage dispute between adjoining landowners in Fort Pierre. The Hedlunds and Leimbach operate several commercial businesses on their properties. River Bluff Estates owns the adjoining property to the south, on which it operates a housing development for manufactured homes. In 1998, Ronnie Hedlund installed a drainage ditch that runs across the Hedlunds' and Leimbach's properties, just north of the property line shared with River Bluff. And to the north of that ditch lies Bass Drive, a road located entirely on the Hedlunds' and Leimbach's properties. The parties' properties are bordered to the east by Highway 1806. For purposes of water drainage, all properties at issue are considered "urban" rather than "rural."

         [¶3.] In 1998 and 2005, River Bluff's predecessor in interest constructed an embankment, referred to as the northern slope, near the property line. The purpose of constructing the northern slope was to create additional lots for the housing development. The northern slope is approximately 13 feet tall and is constructed of Pierre shale. It has a three-to-one grade without benching, compaction, or any drainage structures. No drainage study or compaction or density tests were conducted prior to the construction of the northern slope. Since taking possession of the property, River Bluff has added fill dirt to lots adjacent to the embankment on multiple occasions.

         [¶4.] River Bluff's predecessor also constructed another earthen structure, referred to as a wing dam, on the northwest corner of its property. The purpose of the wing dam was to protect the northern lots from drainage originating to the west by diverting that water onto the Hedlunds' and Leimbach's properties. The water diverted onto the Hedlunds' and Leimbach's properties would have normally drained onto River Bluff's property.

         [¶5.] Since the physical changes to River Bluff's property occurred, the Hedlunds' and Leimbach's properties have experienced an increase in drainage. An additional 4.6 acres of land that previously drained to the east or northeast of River Bluff's property now drains onto the Hedlunds' and Leimbach's properties. Water from the northern slope as well as from approximately half of the lots on the northern edge of River Bluff's property drain directly into the drainage ditch located on the Hedlunds' and Leimbach's properties. Additionally, rain events have caused soil to move downhill and deposit at the base of the slope, causing an encroachment of the slope onto the Hedlunds' and Leimbach's properties.

         [¶6.] On March 16, 2016, the Hedlunds and Leimbach filed a complaint against River Bluff, alleging nuisance (increased drainage) and trespass (encroachment of northern slope). The Hedlunds and Leimbach requested preliminary and permanent injunctive relief and damages. On June 15, the Hedlunds and Leimbach filed a motion that was premised on the same legal theories and that again asked the circuit court to "enter a preliminary and/or permanent injunction requiring . . . River Bluff Estates, LLC, [to] abate the nuisance that exists due to the uncontrolled drainage of surface water from its real property onto and across the [Hedlunds' and Leimbach's] real property."

         [¶7.] The circuit court held an evidentiary hearing on September 23 and October 6, 2016, to consider the Hedlunds and Leimbach's motion for injunctive relief. After receiving testimony and other evidence and conducting an on-site inspection, the court concluded the construction of the northern slope and wing dam altered the natural drainage in a manner that was "unreasonable and clearly intentional." However, the court denied injunctive relief because it concluded the Hedlunds and Leimbach had an adequate remedy at law. The Hedlunds and Leimbach argued the drainage problems could be remedied by installing a retaining wall for the northern slope on River Bluff's property and either expanding the existing drainage ditch or installing a storm sewer. In response, River Bluff argued the drainage problems could also be remedied by raising and moving Bass Drive on the Hedlunds' and Leimbach's properties. Presented with competing landscaping proposals, the court concluded that the parties were "simply arguing over which side of the fence" should be landscaped and that in either case, monetary compensation would afford adequate relief.

         [¶8.] On April 5, 2017, the circuit court entered findings of fact and conclusions of law regarding the Hedlunds and Leimbach's motion for injunctive relief. The court specifically found that the Hedlunds and Leimbach "show[ed] actual success on the merits of their nuisance and trespass claims" and that they "established a right to preliminary and permanent injunctive relief by a reasonable certainty in every regard except for showing that the problems cannot be remedied with money damages." But prior to entering a judgment, the court asked the parties to submit briefs on the question whether the court's findings would have any preclusive effect on future proceedings. The court concluded it had not decided the merits of the Hedlunds and Leimbach's complaint. Thus, the court entered an order ...


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