Estate of Henderson v. Estate of Henderson

• Citation: 2012 S.D. 80,823 N.W.2d 363
• Decision Date: 20 November 2012
• Docket Number: No. 26316.,26316.
• Parties: ESTATE OF Walter G. HENDERSON, David Henderson, Personal Representative, Plaintiff and Appellee, v. ESTATE OF Dora R. HENDERSON, Susan R. Henderson, Personal Representative and Individually, Defendant and Appellant. and Estate of Andrew M. Henderson, a/k/a A.M. Henderson, Deceased, Roger A. Hubbard, Sharon M. Henderson Bouck and Unknown Defendants A–D, Defendants.
• Court: South Dakota Supreme Court

823 N.W.2d 363

2012 S.D. 80

ESTATE OF Walter G. HENDERSON, David Henderson, Personal Representative, Plaintiff and Appellee,

v.ESTATE OF Dora R. HENDERSON, Susan R. Henderson, Personal Representative and Individually, Defendant and Appellant.andEstate of Andrew M. Henderson, a/k/a A.M. Henderson, Deceased, Roger A. Hubbard, Sharon M. Henderson Bouck and Unknown Defendants A–D, Defendants.

No. 26316.

Supreme Court of South Dakota.

Considered on Briefs Oct. 1, 2012.

Decided Nov. 20, 2012.

Kenneth E. Barker, Timothy J. Vander Heide, Bradley P. Gordon of Barker Wilson Law Firm, LLP, Belle Fourche, South Dakota, Attorneys for plaintiff and appellee.

Patrick Duffy, Rapid City, South Dakota, Attorney for defendant and appellant.

WILBUR, Justice.

[¶ 1.] Walter Henderson (Walter) brought a quiet title action to claim ownership of an undivided 30 percent interest in a mineral estate in Fall River County, South Dakota. Following a court trial, which confirmed Walter's ownership of the mineral interest in fee, Walter's half-sister, Susan Henderson (Susan), individually and as a representative of her deceased mother, Dora Henderson's (Dora) estate, appeals to this Court arguing that Walter's cause of action is barred by the statute of limitations under SDCL 15–2–13(1) and SDCL 15–3–2. We affirm.

FACTS AND PROCEDURAL BACKGROUND

[¶ 2.] Andrew Henderson (Andrew), the father of Walter, was the owner in fee of certain mineral interests located in Fall River County, South Dakota. On November 6, 1973, Walter and Andrew entered into an agreement, which granted Walter an undivided 30 percent interest in Andrew's entire mineral estate subject to prior oil and gas leases as of September 18, 1972 (the Agreement). The Agreement was signed by both Walter and Andrew and properly acknowledged by a notary public on November 14, 1973. The language of the Agreement provides “[u]pon the request of Grantee, and without the payment of further consideration, Grantor agrees to execute and deliver to Grantee such conveyances, assignments and other instruments as may be required to effectuate the foregoing provisions of the Agreement.” The language also provides that “[t]his Agreement shall benefit and be binding upon Grantor and Grantee and their respective heirs and assigns.” As payment and consideration for his purchase of the undivided 30 percent mineral interest, Walter delivered to Andrew a $6,000 cashier's check dated November 2, 1973.

[¶ 3.] Prior to the Agreement, Andrew had executed a number of oil and gas leases of his 30 percent mineral interest. Following the execution of the Agreement, Walter entered into additional oil and gas leases of his 30 percent mineral interest. Walter received lease and bonus payments as a result of the oil and gas leases that both he and Andrew negotiated. All of the oil and gas leases relating to the 30 percent mineral interest were recorded with the Fall River County Register of Deeds.

[¶ 4.] Walter recorded the Agreement with the Fall River County Register of Deeds on July 16, 1976, eight days after Andrew's death. In his Last Will and Testament, Andrew left Dora, Walter's step-mother, only those mineral interests and all other real and personal property Andrew owned at the time of his death. Lastly, a Decree of Settlement of Final Account of Executrix: For Final Distribution of Estate and Adjudicating Termination of Life Estates (Final Decree) was signed for the estate of Andrew Henderson on September 17, 1982. The Final Decree conveyed 70 percent of Andrew's mineral estate to his surviving wife, Dora.

[¶ 5.] Following Andrew's death, Dora negotiated and executed four oil and gas leases that described her 70 percent interest in Andrew's mineral estate. These leases were recorded at the Fall River County Register of Deeds as of September 21, 1979; June 2, 1980; February 7, 1985; and March 5, 1985, respectively. Dora died testate in Fall River County, on April 6, 2008, and the probate of her estate was pending at the time of trial. Susan, the daughter of Andrew and Dora and the only heir in Dora's will, was appointed the personal representative of her mother's estate.

[¶ 6.] Walter filed a quiet title action in order to assert his ownership in fee of the undivided 30 percent interest in the mineral estate. Susan and other named defendants filed a joint Answer that challenged Walter's ownership to the 30 percent interest in the mineral estate and asserted counterclaims of conversion, fraud, and punitive damages. Defendants also pleaded the affirmative defenses of laches, statute of limitations pursuant to SDCL 15–2–13(1) and SDCL 15–3–2, estoppel, failure of consideration, waiver, and failure to state a claim upon which relief could be granted. Both sides moved for summary judgment and the motions were denied by the trial court. In denying Susan and other named defendants' summary judgment motion, the trial court concluded that “there is no issue of material fact upon which Defendant could prevail on her statute of limitations argument.”

[¶ 7.] A court trial on the quiet title action was held on January 6, 2012. ¹ The trial court entered judgment in favor of Walter's estate declaring Walter as the owner in fee of the 30 percent undivided mineral interest. The court concluded that Susan and the other named defendants had not pleaded a basis for their claim of ownership in the undivided 30 percent mineral interest under SDCL 21–41–14. Specifically, Susan and the other named defendants did not set forth the nature of their claim to the property in their Answer, but instead, they “claim[ ] all right, title, and interest in the mineral estate because, by operation of law, Plaintiff Walter Henderson has none.” As such, the trial court held that Susan and the other named defendants' Answer was legally deficient under SDCL 21–41–14 and “[t]he failure of the Defendants to state the basis for their claim of ownership in the subject property [was] fatal to their defense.” ²

[¶ 8.] Susan, the only party before this Court,³ presents the following issue on appeal: “Whether any statute of limitation applies to time-bar Walter's quiet title cause of action.” Because Susan claims that Walter has no ownership interest in the 30 percent mineral interest, we first consider whether Walter has ownership of the 30 percent mineral interest for purposes of quieting title under SDCL ch. 21–41. Thus, this Court frames the issues as:

1. Whether the trial court erred when it concluded that Walter was the owner in fee of the mineral interest described in the Agreement, effective November 6, 1973.

2. Whether Walter's quiet title action is time-barred by any applicable statute of limitations.

STANDARD OF REVIEW

[¶ 9.] “Findings of fact, whether based on oral or documentary evidence, may not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.” SDCL 15–6–52(a). Conclusions of law are reviewed under a de novo standard, “with no deference to the trial court's conclusions of law.” Detmers v. Costner, 2012 S.D. 35, ¶ 9, 814 N.W.2d 146, 149. “[I]n deciding a mixed question of law and fact, the standard of review for ... the application of law to fact [ ] depends on the nature of the inquiry [.]” Stockwell v. Stockwell, 2010 S.D. 79, ¶ 16, 790 N.W.2d 52, 59. “ ‘If ... the question requires us to consider legal concepts in the mix of fact and law and to exercise judgment about the values that animate legal principles, then the concerns of judicial administration will favor the appellate court, and the question should be classified as one of law and reviewed de novo.’ ” Id. (quoting Darling v. W. River Masonry, Inc., 2010 S.D. 4, ¶ 10, 777 N.W.2d 363, 366). “The construction and application of statutes of limitation presents a legal question that [this Court] review[s] de novo.” Masloskie v. Century 21 Am. Real Estate, Inc., 2012 S.D. 58, ¶ 6, 818 N.W.2d 798, 800 (citing Jensen v. Kasik, 2008 S.D. 113, ¶ 4, 758 N.W.2d 87, 88).

ANALYSIS AND DECISION

[¶ 10.] 1. The trial court correctly concluded that Walter was the owner in fee of the mineral interest described in the Agreement, effective November 6, 1973.

[¶ 11.] Susan contends that SDCL 15–2–13(1)⁴ is applicable to this case to time-bar Walter's quiet title cause of action. Underlying this claim, Susan argues that the Agreement between Walter and Andrew failed to produce a mineral deed resulting in a breach of the contract between Andrew and Walter. Susan further asserts that the breach of contract resulted in Walter's failure to obtain “title” to the 30 percent mineral interest. Because Walter did not obtain a mineral deed from his father within six years of the signing of the Agreement, Susan asserts that Walter is time barred under SDCL 15–2–13(1) from asserting any ownership interest in the 30 percent mineral interest.

[¶ 12.] Susan also argues that, even if SDCL 15–2–13(1) does not apply, SDCL 15–3–2⁵ prevents Walter from securing the relief sought in his Complaint. She asserts that Walter was not seized or possessed of the right to the 30 percent mineral interest within the 20 year time period in SDCL 15–3–2, and thus, his claim is time-barred. To determine Susan's claims, we must first examine Walter's ownership interest.

[¶ 13.] Under SDCL 21–41–1,⁶ a quiet title action permits an individual who has an estate or interest in real property, “whether in or out of possession [of the property] and whether such property is vacant or occupied [,]” to test the validity of any adverse claims of ownership of the real property for the purpose of quieting title to the real property. SDCL 21–41–1; Swaby v. N. Hills Reg'l R.R. Auth., 2009 S.D. 57, ¶ 43, 769 N.W.2d 798, 816 (citing Morse v. Pickler, 28 S.D. 612, 134 N.W. 809, 810 (1912) (stating that “ ‘[a]n action to quiet title may be maintained by any person having an estate or interest in land, either legal or equitable’ ”)). The...