Healy Ran P'ship v. Mines

• Decision Date: 03 August 2022
• Docket Number: #29706, #29716
• Citation: 978 N.W.2d 768
• Parties: HEALY RANCH PARTNERSHIP, a South Dakota General Partnership, Plaintiff and Appellant, v. Larry MINES, Sheila Mines, Defendants and Appellees, and Mary Ann Osborne f/k/a Mary Ann Healy, individually and as the Executrix of the Estate of Robert Emmett Healy, and the Estate of Robert Emmett Healy, the Estate of Randolph Sharping, the Estate of Evelyn Sharping, Brule County, and All Unknown Assignees, Grantees and Beneficiaries of the Hereto-Named Defendants, and All Other Unknown Parties Who Have or Claim to Have Any Interest or Estate in or Lien or Encumbrance Upon the Following Real Estate Located in Brule County, South Dakota, Lot RH-2, Sharping Subdivision, in Portions of the Northwest Quarter (NW 1/4) and Meander Lots Two (2), Three (3), and Five (5) in the Southwest Quarter (SW 1/4) of Section Twenty-Three (23), Township One Hundred Four (104) North, Range Seventy (70) West of the 5th P.M., Brule County, South Dakota, Defendants.
• Court: South Dakota Supreme Court

978 N.W.2d 768

HEALY RANCH PARTNERSHIP, a South Dakota General Partnership, Plaintiff and Appellant,
v.
Larry MINES, Sheila Mines, Defendants and Appellees,
and
Mary Ann Osborne f/k/a Mary Ann Healy, individually and as the Executrix of the Estate of Robert Emmett Healy, and the Estate of Robert Emmett Healy, the Estate of Randolph Sharping, the Estate of Evelyn Sharping, Brule County, and All Unknown Assignees, Grantees and Beneficiaries of the Hereto-Named Defendants, and All Other Unknown Parties Who Have or Claim to Have Any Interest or Estate in or Lien or Encumbrance Upon the Following Real Estate Located in Brule County, South Dakota, Lot RH-2, Sharping Subdivision, in Portions of the Northwest Quarter (NW 1/4) and Meander Lots Two (2), Three (3), and Five (5) in the Southwest Quarter (SW 1/4) of Section Twenty-Three (23), Township One Hundred Four (104) North, Range Seventy (70) West of the 5th P.M., Brule County, South Dakota, Defendants.

#29706, #29716

Supreme Court of South Dakota.

CONSIDERED ON BRIEFS FEBRUARY 14, 2022
OPINION FILED AUGUST 3, 2022

CHRIS MCCLURE of McClure & Hardy, Prof. LLC, Sioux Falls, South Dakota, ANGIE SCHNEIDERMAN of Moore, Corbett, Heffernan, Moeller & Meis, LLP, Sioux City, Iowa, Attorneys for plaintiff and appellant.

LEE SCHOENBECK, JOE ERICKSON of Schoenbeck & Erickson, P.C., Watertown, South Dakota, Attorneys for defendants and appellees.

SALTER, Justice

¶1.] Healy Ranch Partnership (HRP) commenced this action to quiet title to a parcel of land located in Brule County. The complaint named multiple defendants, including the current possessors of the land, the previous possessors, and another member of HRP. The individuals currently in possession of the land filed a counterclaim, alleging they had acquired title through adverse possession. The circuit court decided motions to dismiss and for summary judgment adversely to HRP, determining that the current possessors of the land acquired title by adverse possession. HRP appeals. We reverse the court's decision to grant the motion to dismiss but affirm its summary judgment decision quieting title in favor of the current possessors.

Facts and Procedural History

The Healy Ranch and Lot RH-2

[¶2.] The Healy Ranch (the Ranch) is comprised of approximately 1,700 acres of farm and ranch land located in Brule County. Disputes over ownership of the Ranch and acrimony among members of the Healy family have led to a series of litigated cases since 2017, including our decision in Healy v. Osborne , 2019 S.D. 56, 934 N.W.2d 557, which we describe further below.

[¶3.] Originally owned by Emmet and DeLonde Healy, certain tracts of real property that make up the Ranch have, it appears, been conveyed, leased, mortgaged, refinanced, possessed by third parties, included in bankruptcy proceedings, sharecropped, and passed through the probates of various estates since at least the 1960s. At issue in this appeal is a single, 46-acre tract of property, commonly known as Lot RH-2, or simply RH-2.¹

[978 N.W.2d 773

[¶4.] For purposes of our discussion here, RH-2 was originally owned by Sheldon and Elsie Munger as part of a larger tract of land. In 1973, HRP—at that time consisting of DeLonde Healy, her son Robert Healy, and Robert's wife, Mary Ann Healy² —entered into a contract for deed with the Mungers to purchase the entire tract of land, which contained the lot eventually designated as RH-2.

¶5.] In 1986, Sheldon Munger transferred his interest in RH-2 to Phyllis Kott who, with her husband, conveyed the parcel to HRP in April 1990 upon satisfaction of the contract for deed. The deed for RH-2 was recorded later the same month.

[¶6.] Between the initiation of the contract for deed with the Mungers and the eventual recordation of the warranty deed in April 1990, several events transpired. Robert Healy passed away, leaving his interest in HRP to his wife, Mary Ann, and resulting in what the record suggests was an equal partnership between Mary Ann and DeLonde.

[¶7.] In addition, one of Robert and Mary Ann's three sons, Bret, returned from South Dakota State University in 1986 to take on a larger role in the management of the Ranch. In an effort to facilitate Bret's transition, Mary Ann, DeLonde, and Bret executed a new partnership agreement, under which DeLonde would relinquish what was described as "her 25% interest in Healy Ranch Partnership" to Bret in exchange for various lifetime benefits and being relieved of all responsibility for the Ranch's debts. The resulting iteration of HRP is sometimes referred to as the 1986 Partnership.³

[¶8.] As Bret began his new role with the Ranch in 1986, it was in the midst of bankruptcy proceedings. Bret claims he helped guide the Ranch through its bankruptcy plan in a way that preserved the family's ownership interest in the real estate and allowed the Ranch to continue operating as a going concern. At various times during the course of his management, Bret leased the entirety of the Ranch's cropland to local farmers and also operated his own separate feedlot business.

[¶9.] In 1989, Bret moved out of state and did not return to the Ranch until 2006. In the interim, it appears as though Bret remained involved in its business. The sequence of events that are at the center of this case begin in 1990, around the time Phyllis Kott transferred the 46-acre RH-2 tract at issue here to HRP pursuant to the contract for deed.

[¶10.] At some later point in 1990, HRP entered into negotiations to sell RH-2 to Raymond Sharping. What ultimately became of their negotiations is unclear, but three facts are undisputed: 1) Raymond began possessing and farming the 46-acre tract and paying the property taxes associated with it; 2) no member of the Healy family, either individually or on behalf of the Ranch, has possessed, farmed, or paid real estate taxes associated with RH-2 since 1990; and 3) Mary Ann executed a warranty deed on August 1, 1992, conveying RH-2 to Raymond and Evelyn Sharping.⁴

[978 N.W.2d 774

Post-1990 possession of RH-2

¶11.] In 1993, Evelyn Sharping passed away. A circuit court order from October of that year indicates that Raymond successfully terminated Evelyn's life estate in RH-2, as well as other tracts of real estate. The termination of Evelyn's life estate in RH-2 was later recorded with the Brule County Register of Deeds.

[¶12.] It appears Raymond Sharping continued to farm RH-2 and pay the real estate taxes until his death in 1998. Raymond's will, dated January 24, 1996, devised to his son, Randolph Sharping, "all real estate which I may own" in the area approximating the legal description of RH-2, though it did not specifically list the parcel by that designation. (Emphasis added). The will also severed the mineral rights, which Raymond divided equally among his children.

[¶13.] Upon Raymond's death, his daughter, Crystal Ashley, was appointed to serve as the personal representative of his estate. Acting in this capacity, Crystal issued three personal representative's deeds, which divided the mineral rights to RH-2 among Raymond's three children—Crystal Ashley, Alice Sharping, and Randolph Sharping. Crystal also executed a fourth personal representative's deed conveying Raymond's remaining interest in RH-2 to Randolph Sharping. Each of the deeds were recorded with the Brule County Register of Deeds in June 2000.

[¶14.] It seems undisputed that Randolph, like his father, farmed and paid the taxes on RH-2 until his death in 2012. Between June and July 2012, Randolph's siblings executed and recorded quitclaim deeds conveying the mineral rights of RH-2 back to Randolph. Prior to his death, Randolph executed and recorded a warranty deed for RH-2 on June 21, 2012, in favor of Larry and Sheila Mines. On June 26—five days after the deed from Randolph to the Mineses was executed—Bryce Healy,⁵ acting on behalf of the Healy Ranch corporate entity, Healy Ranch, Inc. (HRI), executed and recorded a quitclaim deed to RH-2 in favor of Randolph. Randolph's estate, in turn, then issued a personal representative's deed for RH-2 to the Mineses, who have subsequently possessed the land, farmed it, and paid the taxes.

The Healys’ post-1990 treatment of RH-2

[¶15.] Mary Ann signed the 1992 warranty deed conveying RH-2 to the Sharpings in her personal capacity and as the executor of her late husband Robert's estate. The deed was never recorded, and the record does not reveal whether it was ever delivered. Bret claims to have first discovered the deed in April 2017 in a file at the law office of the family's former attorney. A few days after Mary Ann signed the 1992 Sharping deed, the Brule County Planning Commission approved her dedication and plat, which designated the 46-acre tract as Lot RH-2 of "Sharping Subdivision."

[¶16.] Sometime in 1994, Mary Ann⁶ created the corporate entity known as Healy Ranch, Inc., which we refer to here as HRI, listing herself as the sole shareholder. In 1995, Mary Ann and DeLonde executed a warranty deed purporting to transfer the Ranch real estate from HRP to HRI, with the exception of RH-2. Over the next several years, Bret and his two brothers, Bryce and Barry, purchased shares in HRI from Mary Ann until they each owned an undivided 1/3 interest.

[978 N.W.2d 775

[¶17.] Though not central to the issues before us in this appeal, Bret's view of the relationship between HRI and HRP permeates his ongoing disputes with his mother and brothers. According to Bret, HRP remains the true owner of the Ranch's 1,700 acres of agricultural land because Mary Ann was not authorized to transfer HRP's real estate to HRI without his consent. Bret reasons that Mary Ann essentially converted her own 75% interest in HRP into HRI, which then became a partner, with Bret, in HRP. Under this theory, Bret and his brothers purchased only their mother's 75% interest and left intact Bret's 25% interest under the 1986 partnership agreement. However, after its creation, it appears the Ranch's lenders dealt only with HRI and, most often, with Bret who...