Gartner v. Temple

• Decision Date: 29 October 2014
• Docket Number: No. 26950.,26950.
• Citation: 855 N.W.2d 846
• Court: South Dakota Supreme Court
• Parties: Bradley GARTNER, Plaintiff and Appellee, v. Merle TEMPLE, Defendant and Appellant.

855 N.W.2d 846

Bradley GARTNER, Plaintiff and Appellee
v.
Merle TEMPLE, Defendant and Appellant.

No. 26950.

Supreme Court of South Dakota.

Considered on Briefs Oct. 6, 2014.
Decided Oct. 29, 2014.

855 N.W.2d 848

Haven L. Stuck, Lynn, Jackson, Shultz & Lebrun, PC, Rapid City, South Dakota, for plaintiff and appellee.

855 N.W.2d 849

James P. Hurley, Bangs, McCullen, Butler, Foye & Simmons, LLP, Rapid City, South Dakota, for defendant and appellant.

Opinion

GILBERTSON, Chief Justice.

¶ 1.] Appellant, Merle Temple (“Temple”), appeals the Sixth Judicial Circuit Court's judgment ordering the partition in kind of 3,374.9 acres of land located in Jackson County, South Dakota, owned with Appellee, Bradley Gartner, as tenants in common. Temple argues that the property cannot be partitioned without causing great prejudice, that the circuit court undervalued permanent structures on the land, and that the court should have reduced the amount of the ordered compensatory payment in favor of allocating additional land to Temple. We affirm.

Facts and Procedural History

[¶ 2.] In 2007, Gartner and Doug Temple—Merle Temple's father—entered into a joint venture and purchased a ranch (the Ranch) for $788,000 from Barry and Rita Barber—Gartner's aunt and uncle. The Ranch consists of 3,374.9 acres located in Jackson County, South Dakota. Gartner held an undivided one-fourth interest in the Ranch, and Doug Temple held an undivided three-fourths interest. The Ranch includes pastures, hay land, and several permanent structures including a house, machine shop, livestock sheds, calving barn, and corrals. After the purchase of the Ranch, Gartner and his wife sold their previous residence and moved into the house on the Ranch. Although Doug Temple and Gartner each kept the same number of cows on the Ranch, Gartner and his wife served as the Ranch's caretakers. Gartner received half of Doug Temple's calves in exchange for his services.

[¶ 3.] The White River divides the Ranch. Approximately 60% of the land is located to the north of the river and the remaining 40% is located to the south. The Ranch's headquarters—including the house in which Gartner and his wife reside—is located on the southern parcel. Both parcels are accessible by county roads, and the northern parcel is bordered on the north by a county road located approximately ten miles from Interstate 90. Electricity and water resources are available on both parcels, but the northern parcel offers no winter protections for cattle, restricting its use to fair-weather grazing.

[¶ 4.] Doug Temple died in May 2009, at which time Temple inherited his three-fourths undivided interest in the Ranch. At that time, the Ranch was appraised at a value of $1,130,000. Thereafter, relations between Temple and Gartner deteriorated. In February 2012, Gartner brought an action for partition and subsequently asked the circuit court to appoint three referees. The court held an evidentiary hearing on June 19, 2012, and heard testimony from Temple, Gartner, and three expert witnesses—Lyndell Peterson and Bryce Nelson for Temple, and Ronald Ensz for Gartner. The court granted Gartner's motion and appointed Peterson, Nelson, and Ensz to prepare a Referee's Report (the Report).

[¶ 5.] The referees met with the parties and their attorneys, inspected the property, viewed aerial photographs, examined the 2009 appraisal, and prepared the Report on June 25, 2013. The Report recommended dividing the Ranch into two parcels along the White River, with Temple receiving the northern parcel and Gartner receiving the southern parcel, including his home and accompanying structures. The Report resulted in an allocation of 920 acres to Gartner and 2,454.90 acres to Temple. Because Gartner only held a one-fourth interest in the Ranch, but received almost 40% of the land, the circuit court ordered Gartner to make a compensatory

[855 N.W.2d 850

payment to Temple of $102,337. Temple asked the circuit court to increase the value of the permanent structures according to their replacement cost—rather than their market value—and to award more land to Temple instead of the large compensatory payment. The circuit court denied Temple's request and he now appeals.

¶ 6.] Temple raises three issues in this appeal:

1. Whether the circuit court erred in refusing to order a partition by sale.

2. Whether the circuit court erred in adopting the Referee's Report.

3. Whether the circuit court erred in ordering Gartner to make a compensatory cash payment to Temple instead of awarding more land to Temple.

Standard of Review

[¶ 7.] “[P]artition is a proceeding in equity and the court has the inherent jurisdiction to adjust all the equities in respect to the property.” Eli v. Eli, 1997 S.D. 1, ¶ 8, 557 N.W.2d 405, 408 (quoting Braaten v. Braaten, 278 N.W.2d 448, 450 (S.D.1979) ) (internal quotation marks omitted). “We review equitable actions for abuse of discretion.” Englehart v. Larson, 1997 S.D. 84, ¶ 12, 566 N.W.2d 152, 155. See also Eli, 1997 S.D. 1, ¶ 8, 557 N.W.2d at 408. An abuse of discretion “is a fundamental error of judgment, a choice outside the range of permissible choices, a decision, which, on full consideration, is arbitrary or unreasonable.” Arneson v. Arneson, 2003 S.D. 125, ¶ 14, 670 N.W.2d 904, 910. We do not determine whether we would have made the same decision as the circuit court. Novak v. Novak, 2006 S.D. 34, ¶ 3, 713 N.W.2d 551, 552. Rather, “[o]ur function in reviewing matters which rest in the discretion of the trial court is to protect litigants from conclusions which exceed the bounds of reason.” F.M. Slagle & Co. v. Bushnell, 70 S.D. 250, 254–55, 16 N.W.2d 914, 916 (1944).

[¶ 8.] “Pursuant to an abuse of discretion standard of review, factual determinations are subject to a clearly erroneous standard.” State v. Guthrie, 2002 S.D. 138, ¶ 5, 654 N.W.2d 201, 203. In applying this standard:

The question is not whether this Court would have made the same findings that the trial court did, but whether on the entire evidence we are left with a definite and firm conviction that a mistake has been committed. This Court is not free to disturb the lower court's findings unless it is satisfied that they are contrary to a clear preponderance of the evidence. Doubts about whether the evidence supports the court's finding of fact are to be resolved in favor of the successful party's version of the evidence and of all inferences fairly deducible therefrom which are favorable to the court's action.

Estate of Olson, 2008 S.D. 97, ¶ 9, 757 N.W.2d 219, 222 (quoting Osman v. Karlen & Assocs., 2008 S.D. 16, ¶ 15, 746 N.W.2d 437, 442–43 ) (internal quotation marks omitted). We give no deference to the circuit court's conclusions of law, however, and review them under a de novo standard. Guthrie, 2002 S.D. 138, ¶ 5, 654 N.W.2d at 204.

Analysis and Decision

[¶ 9.] 1. Whether the circuit court erred in refusing to order a partition by sale.

[¶ 10.] Temple principally asserts that partition in kind cannot be made without causing great prejudice because neither resulting property would be capable of functioning as an economic unit. He further asserts that the referees incorrectly valued the permanent structures located

[855 N.W.2d 851

on land allocated to Gartner, further prejudicing Temple. Finally, Temple asserts that the circuit court's order to Gartner to make a compensatory payment to Temple in the amount of $102,337 is evidence that the partition is “grossly unequal.” Consequently, Temple concludes that the circuit court should have ordered a sale of the entire property, that the court should have modified the Report to award him a larger compensatory payment or additional land, and that the court should have converted the compensatory payment actually awarded into additional acreage taken from Gartner's allotment.

[¶ 11.] The partition of real estate is authorized and governed by SDCL chapter 21–45. In particular, SDCL 21–45–1 defines a cotenant's statutory right to the partition or sale of jointly owned property.

When several cotenants hold and are in possession of real property as partners, joint tenants, or tenants in common, in which one or more of them have an estate of inheritance or for life or lives or for years, an action may be brought by one or more of such persons for a partition thereof according to the

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