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Huston v. Martin

Supreme Court of South Dakota

October 10, 2018

JUNE J. HUSTON, Plaintiff and Appellant,
VANCE MARTIN and THE ESTATE OF DALE M. JARMAN, Defendants and Appellees.

          CONSIDERED ON BRIEFS ON MAY 21, 2018


          ROGER A. TELLINGHUISEN MICHAEL V. WHEELER of DeMersseman, Jensen, Tellinghuisen & Huffman, LLP Rapid City, South Dakota Attorneys for plaintiff and appellant.

          WILLIAM M. VAN CAMP of Olinger, Lovald, McCahren, Van Camp & Konrad, PC Pierre, South Dakota Attorneys for defendants and appellee Vance Martin.

          MARGO D. NORTHRUP of Riter, Rogers, Wattier & Northrup, LLP Pierre, South Dakota Attorneys for defendant and appellee the Estate of Dale M. Jarman.

          KERN, JUSTICE

         [¶1.] At Father's insistence, Daughter conveyed considerable amounts of land to her father and nephew. In return, Father promised to "make things right" with Daughter by leaving her half of his estate. However, Father left Daughter only $30, 000 in his will after conveying the vast majority of his multi-million-dollar estate to Daughter's nephew. Daughter sued her nephew and the estate, alleging breach of contract, fraud, and unjust enrichment. Nephew and the estate moved for summary judgment on several grounds, including that Daughter's claims were untimely under SDCL 29A-3-803 and prohibited because a contract to devise by will must be in writing. The circuit court dismissed the case, granting the motion for summary judgment. We affirm in part and reverse in part.

         Facts and Procedural History

         [¶2.] Prior to his death, Dale Jarman (Jarman) owned and operated a large cattle ranch in Haakon County. Jarman operated the property via Jarman Ranch, LLC, which possessed significant assets. Jarman and his wife (Joyce) had two daughters, June Huston (Huston) and Susan Martin (Susan), and a grandson, Vance Martin (Martin). In 2002, Susan transferred 640 acres of property to Huston via a series of deeds made without consideration due to concerns about the health of Susan's husband. The family worried that Susan's retention of the property would affect Medicaid payments or could be targeted by creditors. When Joyce died in July 2010 Huston inherited an undivided one-half interest in the family ranch.

         [¶3.] On March 31, 2011, Huston, at Jarman's insistence, executed and delivered a warranty deed transferring her undivided one-half interest in 147.77 acres of land to Jarman for and in consideration of one dollar. Huston claims she did not wish to transfer the land. When deposed, Susan substantiated Huston's claim, observing that Jarman was "persistent" in his efforts to convince Huston to transfer the property. On March 13, 2013, Huston also transferred by quitclaim deed her ownership interest in 560 acres of real estate to Martin. Huston averred that Jarman threatened to disinherit her if she did not comply and promised to "make things right" with her in his will if she made the transfers. Specifically, Huston alleged that Jarman promised to leave her 50% of his estate.

         [¶4.] However, Jarman favored Martin in his estate planning. In May 2011, shortly after Jarman received Huston's land, Jarman requested that his attorney revise his will to devise nearly the entirety of his estate to Martin. Unbeknownst to Huston, by the end of 2012, Jarman had transferred more than $2, 500, 000 in cash and assets to Martin. Martin did not give consideration for the gratuitous transfers. After his death in March 2014, Jarman's will revealed that he had devised almost all his property to Martin, including the land Huston had conveyed to him. Although the property was worth millions of dollars, Jarman left only $30, 000 to Huston in his will.

         [¶5.] On July 24, 2014, Jarman's estate published a notice to creditors. On July 8, 2015-nearly a year later-Huston filed a complaint against Martin and the estate, alleging fraud, breach of contract, promissory estoppel, and unjust enrichment. On June 9, 2017, Martin and the estate moved for summary judgment, raising numerous grounds for dismissal. The circuit court held a hearing to consider the motion on August 18, 2017. Martin and the estate argued that SDCL 29A-3-803 barred Huston's claims for breach of contract and fraud because Huston failed to file her claim within four months from the date notice was given to creditors pursuant to SDCL 29A-3-801(a).[1] They also argued that Huston's contract claim could not survive without written evidence memorializing the alleged contract under the statute of frauds or SDCL 29A-2-514, which require that any contract to make a will or devise be in writing.

         [¶6.] While acknowledging that this Court has enforced oral agreements in the past, Martin and the estate contended that those cases predated the enactment of SDCL 29A-2-514. According to Martin and the estate, because SDCL 29A-2-514 bars the claim irrespective of any partial performance, our precedent enforcing oral agreements is irrelevant in the present case. Further, they contended that Huston's fraud claim could not survive apart from the contract claim because the fraud allegation did not arise from a breach of an independent legal duty, i.e., that "all of their assertions . . . are formed or arise from the formation and enforceability of the contract." Finally, Martin and the estate asserted that Martin was not unjustly enriched by retaining the land because he was unaware of any contract between Jarman and Huston and engaged in no wrongdoing.

         [¶7.] In response, Huston argued her claims were not time barred by SDCL 29A-3-803 because, in her view, the four month limitations period did not apply to her claims. Specifically, she contended that SDCL 29A-3-803 applied only to claims that arose prior to the decedent's death-her claims, she emphasized, only became actionable after Jarman's death when she realized her father bequeathed assets to Martin in violation of their contract. Further, Huston argued that when she transferred the property to Jarman, she triggered the partial-performance exception to the statute of frauds. Jarman argued that the exception must equally apply to SDCL 29A-2-514 because claiming a contrary conclusion would lead to an unjust result. As to the fraud claim, Huston observed that fraud involves questions of fact and summary judgment at this stage would be premature. Regarding unjust enrichment, Huston noted Martin had both received a benefit and knew of the benefit, and, as such, it would be inequitable for Martin to keep the land without paying consideration.

         [¶8.] After hearing argument from the parties, the court remarked that the case involved "a great number of . . . potential inequities[.]" However, the court concluded that "under the circumstances . . . and the statutory language," it would "grant summary judgment on all claims," observing that "obviously, this is something the Supreme Court is going to have to sort out as to, certainly, the breach of contract and matters." The court did not elaborate further as to what statutory language it was referencing, nor did it provide citations to authority in its order granting Martin and the estate's motion for summary judgment.

         [¶9.] Huston argues that the circuit court erred in granting summary judgment. To answer this question, we restate Huston's issues as follows:

1. Whether the circuit court erred by dismissing Huston's breach-of-contract claim.
2. Whether the circuit court erred by dismissing Huston's fraud claim.
3. Whether the circuit court erred by dismissing Huston's ...

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