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Berbos v. Berbos

Supreme Court of South Dakota

December 12, 2018

JOE BERBOS and LISA BERBOS, individuals, JOE BERBOS REAL ESTATE LIMITED PARTNERSHIP, a South Dakota Limited Partnership, and JOE BERBOS MANAGEMENT, LLC, a South Dakota Limited Liability Company, Plaintiffs and Appellees,
v.
NICK BERBOS, an individual, BERBOS FARMS GENERAL PARTNERSHIP, a South Dakota General Partnership, NICK BERBOS REAL ESTATE LIMITED PARTNERSHIP, a South Dakota Limited Partnership, Defendants and Appellees, NICK BERBOS MANAGEMENT, LLC, a South Dakota Limited Partnership, and VICTORIA PERRY, individually, and CRAIG PERRY and JAMES PERRY, Surviving Trustees of the Trust created by the Last Will and Testament of Gerald Perry, Deceased, Applicants and Appellants.

          CONSIDERED ON BRIEFS ON OCTOBER 1, 2018

          APPEAL FROM THE CIRCUIT COURT OF THE FIFTH JUDICIAL CIRCUIT BROWN COUNTY, SOUTH DAKOTA THE HONORABLE RICHARD A. SOMMERS Judge

          SANDER J. MOREHEAD of Woods, Fuller, Shultz & Smith, P.C. Sioux Falls, South Dakota Attorneys for plaintiffs and appellees.

          REED RASMUSSEN of Siegel, Barnett & Schutz, LLP, Aberdeen, South Dakota Attorneys for defendants and appellees.

          CARLYLE RICHARDS of Richards, Tonner, Oliver, Fischbach & Dell, LLP, Aberdeen, South Dakota Attorneys for applicants and appellants.

          GILBERTSON, Chief Justice

         [¶1.] Landowners Victoria Perry, Craig Perry, and James Perry (Appellants) entered into a farm lease/cash rent agreement with Berbos Farms General Partnership (Berbos Farms). Joe and Lisa Berbos and Nick Berbos were partners in Berbos Farms. Appellants sued Berbos Farms to recover unpaid cash rent under the lease for the year 2015. During discovery in that litigation, Appellants realized Joe and Lisa had filed a separate action in circuit court to dissolve Berbos Farms. Appellants moved to intervene in the partnership dissolution action seeking to preserve their right to payment of the 2015 cash rent in case Berbos Farms was dissolved. The circuit court denied the Appellants motion and they appeal. We affirm.

         Facts and Procedural History

         [¶2.] Appellants own and manage approximately 900 acres of cropland in Edmunds County. On January 4, 2013, Appellants entered into a farm lease/cash rent agreement with Berbos Farms. Nick signed the one-page lease on behalf of Berbos Farms. Berbos Farms took possession of the farmland for three years: 2013, 2014, and 2015. Appellants claim Berbos Farms made timely payments on all cash rent required by the lease until November 1, 2015. At that time, Appellants claim Berbos Farms failed to pay the agreed cash rent of $56, 196.

         [¶3.] Appellants sued Berbos Farms and Nick and Joe individually to recover the 2015 cash rent payment. Appellants commenced discovery and deposed Joe and Lisa. During Joe's deposition on March 30, 2017, Appellants discovered that: (1) Nick was no longer representing Berbos Farms in obtaining rental land in South Dakota; (2) the relationship between Nick and Joe had become tense; and (3) Joe and Lisa had commenced a lawsuit to dissolve Berbos Farms in April 2014. Appellants moved for summary judgment, but the circuit court denied the motion on October 5, 2017. As of the date of this appeal, the action to recover the cash rent is still pending in circuit court.

         [¶4.] Based on the information obtained in Joe's deposition, the Appellants moved to intervene as a matter of right pursuant to SDCL 15-6-24(a)(2) and attached a proposed complaint in the Berbos Farms partnership dissolution lawsuit on January 16, 2018. The proposed complaint in intervention raised the same claims as the Appellants asserted in the lawsuit to recover the unpaid cash rent. Joe and Nick opposed the motion to intervene. On March 2, 2018, the circuit court held a hearing and denied the motion because: (1) there was a pending lawsuit that had no relation to the partnership dissolution; (2) allowing the intervention would open the door to any creditor or individual with claims against Berbos Farms to join the dissolution lawsuit; and (3) permitting the intervention would allow Appellants to unnecessarily discover the net worth and financial holdings of Berbos Farms. On March 9, 2018, the circuit court entered a written order denying the motion. Appellants appeal the circuit court's order and ask this Court to review whether the circuit court abused its discretion in denying the motion to intervene.

         Analysis & Decision

         [¶5.] We review a circuit court's denial of a motion to intervene for an abuse of discretion. In re Estate of Olson, 2008 S.D. 126, ¶ 4, 759 N.W.2d 315, 318. "An abuse of discretion refers to a discretion exercised to an end or purpose not justified by, and clearly against reason and evidence." O'Day v. Nanton, 2017 S.D. 90, ¶ 17, 905 N.W.2d 568, 572 (quoting Kaiser v. Univ. Physicians Clinic, 2006 S.D. 95, ¶ 29, 724 N.W.2d 186, 194).

         [¶6.] "South Dakota's court rule SDCL 15-6-24(a)(2) is almost identical to Federal Rule of Civil Procedure 24(a) . . . . [and] governs intervention as a matter of right . . . ." Olson, 2008 S.D. 126, ΒΆ 5, 759 ...


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