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In re Dennis Snaza Family Trust

Supreme Court of South Dakota

March 14, 2018

In the Matter of the DENNIS SNAZA FAMILY TRUST.

          CONSIDERED ON BRIEFS ON JANUARY 8, 2018

         APPEAL FROM THE CIRCUIT COURT OF THE FIFTH JUDICIAL CIRCUIT DAY COUNTY, SOUTH DAKOTA THE HONORABLE JON S. FLEMMER Judge

          GREGORY P. GRAJCZYK Milbank, South Dakota Attorney for petitioner and appellant Wayne Snaza, individually and as trustee.

          GORDON P. NIELSEN DAVID A. GEYER of Delaney, Nielsen & Sannes P.C. Sisseton, South Dakota Attorneys for respondents and appellees Ronald Snaza & Ann Perrell.

          SEVERSON, Justice

         [¶1.] Wayne Snaza gave notice of his intent to exercise his rights under an option agreement to purchase all the real property held by the Dennis Snaza Family Trust, which was under court supervision at the time. Ronald Snaza and Ann Perrell, as beneficiaries of the Trust, objected to Wayne's claimed rights to the property, arguing the option agreement was invalid. After a hearing, the circuit court ruled that the option agreement was void because it could not survive the contemporaneous execution of deeds to the same real property. The circuit court also ruled that even if the option agreement was valid, Wayne waived his rights when the real property was transferred to the Trust. The circuit court ordered that Wayne, as trustee of the Trust, distribute the net income and residue of the principle of the Trust to the beneficiaries upon completion of its term. Wayne appeals the circuit court's order. We affirm.

         Background

         [¶2.] On March 25, 2008, Anthony and Bernice Snaza executed a quitclaim deed that transferred specific property they owned in Day County, South Dakota, to their son Dennis Snaza. That same day, Anthony and Bernice executed an option agreement in favor of their sons Dennis and Wayne Snaza that involved the same real property described in the deed. The option agreement provided that Dennis or Wayne could elect to purchase the real property described in the agreement by tendering notice of their election within 120 days after the death of Anthony. The right to exercise the option was conditioned upon Dennis or Wayne being actively engaged in farming.

         [¶3.] On April 28, 2008, Dennis and Wayne signed the option agreement. However, Dennis passed away shortly thereafter. On March 29, 2010, Wayne executed a stipulation agreement that stated in part:

I . . . assign, set over and transfer all of my right, title and interest in and under the Estate of Dennis James Snaza. . . . By this instrument, I authorize and direct the Personal Representative of the Estate of Dennis James Snaza to distribute my interest to the Dennis Snaza Family Trust, Anthony P. Snaza, Trustee.

         On April 26, 2010, Anthony and Bernice recorded the quitclaim deed that previously conveyed the property to Dennis. Anthony then recorded a personal representative's deed on August 18, 2010, that transferred the property held by Dennis's estate to the Dennis Snaza Family Trust. On November 5, 2013, Wayne recorded the option agreement.

         [¶4.] Anthony and Bernice were the primary beneficiaries of the Trust. Ronald Stanza, Ann Perrell, and Wayne were secondary beneficiaries. Ronald and Ann petitioned the circuit court to assume supervision over the Trust following the death of Anthony and Bernice. By stipulation of the beneficiaries, the circuit court assumed supervision over the Trust on October 28, 2016.

         [¶5.] On November 30, 2016, Wayne filed notice with the circuit court of his election to exercise his option to purchase the real property held by the Trust. Ronald and Ann objected, claiming the option agreement was void. Wayne filed a motion in the circuit court on June 12, 2017, to confirm the sale pursuant to the terms of the option agreement. After a subsequent hearing on the motion, the circuit court concluded that the option agreement could not defeat Anthony and Bernice's quitclaim deed to Dennis because the deed was presumed to pass fee simple title to the property, and it did not appear from the deed that a lesser estate was intended. The circuit court also found that there was no indication a lesser estate was intended in the personal representative's deed that transferred the property from Dennis's estate to the Trust. In the alternative, the circuit court stated that Wayne waived any rights he had in ...


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