In re Dennis Snaza Family Trust
| Decision Date | 14 March 2018 |
| Docket Number | 28338 |
| Citation | 909 N.W.2d 719 |
| Court | South Dakota Supreme Court |
| Parties | In the MATTER OF the Dennis SNAZA FAMILY TRUST. |
GREGORY P. GRAJCZYK, Milbank, South Dakota, Attorney for petitioner and appellant Wayne Snaza, individually and as trustee.
GORDON P. NIELSEN, DAVID A. GEYER of Delaney, Nielsen & Sannes P.C., Sisseton, South Dakota, Attorneys for respondents and appellees Ronald Snaza & Ann Perrell.
[¶1.] Wayne Snaza gave notice of his intent to exercise his rights under an option agreement to purchase all the real property held by the Dennis Snaza Family Trust, which was under court supervision at the time. Ronald Snaza and Ann Perrell, as beneficiaries of the Trust, objected to Wayne’s claimed rights to the property, arguing the option agreement was invalid. After a hearing, the circuit court ruled that the option agreement was void because it could not survive the contemporaneous execution of deeds to the same real property. The circuit court also ruled that even if the option agreement was valid, Wayne waived his rights when the real property was transferred to the Trust. The circuit court ordered that Wayne, as trustee of the Trust, distribute the net income and residue of the principle of the Trust to the beneficiaries upon completion of its term. Wayne appeals the circuit court’s order. We affirm.
[¶2.] On March 25, 2008, Anthony and Bernice Snaza executed a quitclaim deed that transferred specific property they owned in Day County, South Dakota, to their son Dennis Snaza. That same day, Anthony and Bernice executed an option agreement in favor of their sons Dennis and Wayne Snaza that involved the same real property described in the deed. The option agreement provided that Dennis or Wayne could elect to purchase the real property described in the agreement by tendering notice of their election within 120 days after the death of Anthony. The right to exercise the option was conditioned upon Dennis or Wayne being actively engaged in farming.
[¶3.] On April 28, 2008, Dennis and Wayne signed the option agreement. However, Dennis passed away shortly thereafter. On March 29, 2010, Wayne executed a stipulation agreement that stated in part:
I ... assign, set over and transfer all of my right, title and interest in and under the Estate of Dennis James Snaza. ... By this instrument, I authorize and direct the Personal Representative of the Estate of Dennis James Snaza to distribute my interest to the Dennis Snaza Family Trust, Anthony P. Snaza, Trustee.
On April 26, 2010, Anthony and Bernice recorded the quitclaim deed that previously conveyed the property to Dennis. Anthony then recorded a personal representative’s deed on August 18, 2010, that transferred the property held by Dennis’s estate to the Dennis Snaza Family Trust. On November 5, 2013, Wayne recorded the option agreement.
[¶4.] Anthony and Bernice were the primary beneficiaries of the Trust. Ronald Stanza, Ann Perrell, and Wayne were secondary beneficiaries. Ronald and Ann petitioned the circuit court to assume supervision over the Trust following the death of Anthony and Bernice. By stipulation of the beneficiaries, the circuit court assumed supervision over the Trust on October 28, 2016.
[¶5.] On November 30, 2016, Wayne filed notice with the circuit court of his election to exercise his option to purchase the real property held by the Trust. Ronald and Ann objected, claiming the option agreement was void. Wayne filed a motion in the circuit court on June 12, 2017, to confirm the sale pursuant to the terms of the option agreement. After a subsequent hearing on the motion, the circuit court concluded that the option agreement could not defeat Anthony and Bernice’s quitclaim deed to Dennis because the deed was presumed to pass fee simple title to the property, and it did not appear from the deed that a lesser estate was intended. The circuit court also found that there was no indication a lesser estate was intended in the personal representative’s deed that transferred the property from Dennis’s estate to the Trust. In the alternative, the circuit court stated that Wayne waived any rights he had in the property by executing the stipulation agreement on March 28, 2010. Finally, the circuit court ordered Wayne, as trustee, to distribute the net income and the residue of the principal in the Trust upon the completion of the Trust’s term.
[¶6.] Wayne appeals the circuit court’s ruling, raising the following consolidated issues:
[¶7.] 1. Whether the circuit court erred when it ruled the option agreement invalid.
[¶8.] "An option to purchase real property may be defined as a contract by which an owner of real property agrees with another person that the latter shall have the privilege of buying the property at a specified price within a specified time, or within a reasonable time." Laska v. Barr , 2016 S.D. 13, ¶ 6, 876 N.W.2d 50, 53 (quoting Ziegler Furniture & Funeral Home, Inc. v. Cicmanec , 2006 S.D. 6, ¶ 17, 709 N.W.2d 350, 355 ). We interpret contracts as a question of law under the de novo standard of review. Id. ¶ 5, 876 N.W.2d at 52. "Because we can review the contract as easily as the trial court, there is no presumption in favor of the trial court’s determination." LaMore Rest. Group, LLC v. Akers , 2008 S.D. 32, ¶ 12, 748 N.W.2d 756, 761 (quoting Vander Heide v. Boke Ranch, Inc. , 2007 S.D. 69, ¶ 17, 736 N.W.2d 824, 831-32 ).
[¶9.] The construction of a deed is also a question of law. Chicoine v. Davis , 2017 S.D. 62, ¶ 4, 903 N.W.2d 544, 547. "We examine the instrument as a whole to determine what type of conveyance was intended." Id. (quoting Swaby v. N. Hills Reg’l R.R. Auth. , 2009 S.D. 57, ¶ 22, 769 N.W.2d 798, 808 ). "If the language of a deed leaves doubt on the intention of the parties, we will consider all the attendant circumstances existing at the time of execution." Id. (quoting Swaby , 2009 S.D. 57, ¶ 22, 769 N.W.2d 798 ). However, when the question is whether a deed was delivered, we review a circuit court’s finding of fact and the application of law to those facts under the clearly erroneous standard. Stockwell v. Stockwell , 2010 S.D. 79, ¶ 20, 790 N.W.2d 52, 60. "We review findings of fact for clear error and conclusions of law de novo." Tri-City Assocs., L.P. v. Belmont, Inc. , 2014 S.D. 23, ¶ 19, 845 N.W.2d 911, 916.
[¶10.] Wayne contends the circuit court erred in holding the option agreement invalid because Anthony and Bernice’s intent was to have the option rights attach to the land so that any subsequent transfer of the real property would be subject to the rights of the option holders. Wayne argues that the option agreement and the quitclaim deed that transferred the property to Dennis must be construed together as an integrated contract. In construing the two together, Wayne alleges his option to purchase the property attached to the property through the two subsequent transfers. We disagree.
SDCL 43-25-11. As a result, "[a] fee simple title is presumed to be intended to pass by a grant of real property unless it appears from the grant that a lesser estate was intended." SDCL 43-25-15. We find no such intent to convey a lesser estate in the quitclaim deed to Dennis, as the deed stated that Anthony and Bernice "convey and quit claim to Dennis Snaza ... all of their right, title and interest in and to the following described real estate." Therefore, a presumption exists that Dennis was granted absolute ownership of the real property conveyed by the quitclaim deed.
[¶12.] Nonetheless, before a deed can become effective, the grantor must deliver the deed during his lifetime. Spitzer v. Spitzer , 84 S.D. 147, 151, 168 N.W.2d 718, 720 (S.D. 1969). "Whether a deed has been delivered is a question of intent to be found from all the facts surrounding the transaction." Hanifin v. Marsden , 297 N.W.2d 172, 173 (S.D. 1980). However, "[t]he fact that a deed has been duly executed, acknowledged, and recorded is prima facie evidence of its delivery." Id. (quoting Huber v. Backus , 79 S.D. 342, 346, 112 N.W.2d 238, 240 (S.D. 1961) ); see also SDCL 43-4-7 ().1 Here, evidence exists on the face of the quitclaim deed that it was executed, acknowledged, and recorded; thus, we presume the deed was delivered. Wayne did not contest the issues of recording or delivery.
[¶13.] Once the presumptions are established, the burden is on the party claiming that the deed conveyed a lesser estate and that the deed was not delivered to overcome the presumptions. See Stockwell , 2010 S.D. 79, ¶ 21, 790 N.W.2d at 60. "A presumption imposes on the party against whom it is directed the burden of going forward with evidence to rebut or meet the presumption, but does not shift to such party the burden of proof in the sense of the risk of nonpersuasion, which remains throughout the trial upon the party on whom it was originally cast." Id. (quoting In re Estate of...
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Wellin v. Wellin, 2:13-cv-01831-DCN
...be substituted that were part of the "trust corpus." A trust corpus is defined as property of the trust. See Matter of Snaza Family Tr., 909 N.W.2d 719, 725 (S.D. 2018) (referring to "distribute the Trust's property" when reviewing lower court's order to "distribute" the "corpus" of the tru......