In re French

• Decision Date: 10 March 2021
• Docket Number: #29225
• Citation: 956 N.W.2d 806
• Parties: In the MATTER OF the ESTATE OF Norman D. FRENCH, Deceased.
• Court: South Dakota Supreme Court

956 N.W.2d 806

In the MATTER OF the ESTATE OF Norman D. FRENCH, Deceased.

#29225

Supreme Court of South Dakota.

CONSIDERED ON BRIEFS AUGUST 24, 2020

OPINION FILED March 10, 2021

CASEY N. BRIDGMAN of Bridgman & Anderson Law Firm, Wessington Springs, South Dakota, Attorneys for petitioner and appellant, Norman D. French Estate.

DOUGLAS E. KLUDT of Churchill, Manolis, Freeman, Kludt & Shelton, LLP, Huron, South Dakota, Attorneys for respondent and appellee, Noreen French.

SALTER, Justice

[¶1.] The Estate of Norman D. French (the Estate) appeals the circuit court's decision to apply the doctrine of equitable tolling, allowing Noreen French to commence an action to enforce a contract for deed relating to the sale of two quarter sections of farmland. We reverse the circuit court's order applying equitable tolling and remand the case to the circuit court with instructions to discharge the contract for deed pursuant to SDCL 21-51-1.

Background

[¶2.] Norman French farmed two quarters (320 acres) of land in Beadle County. In 1982, he entered into a contract for deed with Alan and Noreen French, his son and daughter-in-law, to sell the two quarters to them for $100,000. The terms of the contract required Alan and Noreen to pay $48,000 when the contract was signed and make annual principal and interest payments of $3,100 commencing on May 1, 1982, and continuing for twenty years. Assuming full payment, Norman would have been obligated to convey the land to Alan and Noreen after the anticipated completion date of May 1, 2002.

[¶3.] In 1982, Alan and Noreen moved onto the property and farmed the two quarters. Although they moved off their farmstead in 1996, they continued farming the two quarters. Norman passed away on March 11, 2010, and Alan passed away on June 9, 2014. Noreen and her three sons farmed the land until 2017. Alan and Noreen, and later just Noreen, paid the real estate taxes on the property each year, from 1982 to 2017.

[¶4.] In 2016, Noreen attempted to use the land as collateral for a loan and learned that Norman had never conveyed the two quarters. A title search confirmed that the property was still titled in Norman's name. Noreen approached Diane Breitag, one of Norman's daughters, requesting that she and her sister, Denise Hofeman, as Norman's successors in interest, help her clear the title. They were unwilling to do so and retained counsel.

[¶5.] Although there were no estate proceedings when Norman died six years earlier, Diane and Denise commenced the current estate action. Denise was appointed to serve as the personal administrator of her father's estate. Noreen also retained counsel, and the parties engaged in unsuccessful efforts to resolve their dispute beginning in late 2016. At issue was whether Alan and Noreen had, in fact, paid all of the money due under the contract for deed. Noreen's attorney expressed her position in a January 18, 2017 letter to counsel for the Estate:

Noreen states that although she can't find proof of payment as it was over 30 years ago, she knows that payments were made to Norman by Al[an] whenever Norman needed money. She believes that the property had been paid in full and that discussions between herself and Al[an] indicated that Al[an] had spoken to Norman and Norman had stated that he just wanted Al[an] to have the property and that any debts owed had been taken care of through the money that had been given. So basically there was an Accord and Satisfaction.

[¶6.] The explanation was not satisfying to the Estate, whose attorney explained in an April 6, 2017 response, "We wanted to give Noreen the chance to prove any payments that have been made on this land; however, she comes forth with no payments ...." Citing the fact that the contract price for the land "was supposed to have been paid off in 2002[,]" counsel for the Estate argued that Norman had several years before his death in 2010 to either gift the land to Alan and Noreen or convey the property under the terms of the contract. Yet, he did neither.

[¶7.] Although the negotiations between the parties were unfruitful, Noreen did not commence an action to enforce the contract for deed, at least not before the Estate acted. On August 17, 2018, over 16 years after the anticipated contract completion date, the Estate petitioned the court to discharge the contract for deed under the provisions of SDCL 21-51-1. The statute provides that a contract for the purchase of real property will be discharged if an action seeking performance is not commenced within 15 years after accrual of the cause of action or 15 years after the last payment was due. In instances where "there be no conveyance of record from the vendor or his successor in interest to the purchaser or his successor in interest, such contract or bond shall be conclusively presumed to have been terminated ...."¹ Id.

[¶8.] The circuit court held a hearing on the Estate's petition to discharge the contract for deed and ultimately decided to hold the petition in abeyance to facilitate additional discovery. These efforts confirmed certain peripheral facts, such as Norman had a good relationship with Alan, Norman retained mental clarity up until his death, and both Norman and Alan personally handled their financial affairs throughout their lifetimes. However, additional discovery did not answer the principal question of whether Alan and Noreen had paid the entire purchase price for the two quarters of land.

[¶9.] The Estate did acknowledge proof that $65,138.01 was paid by Alan and Noreen under the contract.² The Estate suggests that the $34,861.99 balance necessary to fulfill the contract was not paid.

[¶10.] For her part, Noreen continued to assert all of the payments were made under the contract, but she admitted in an affidavit that she "has no proof that all such payments were made." Beyond a brief initial affidavit and a subsequent affidavit to which Noreen attached certain Farm Service Agency (FSA) documents, the record contains no testimony from Noreen. The FSA documents contain references to the contract for deed, but they do not support the view that all the payments were made.

[¶11.] The FSA documents include Farm and Home Plans and actual statements of income and expenses dating back from 2003. The FSA Plans consistently show a long-term debt obligation for the "N. French CFD," or Norman French contract for deed. However, a significant balance due remained up to and through the anticipated May 1, 2002 completion of the contract for deed. The 2002 FSA Plan listed the remaining balance as $15,951, and the 2003 FSA Plan stated an increased balance of $16,900.

[¶12.] In any event, the parties completed their discovery efforts over the course of approximately eleven months, and the circuit court conducted another hearing on the Estate's petition to terminate the contract for deed under SDCL 21-51-1. In its subsequent findings of fact and conclusions of law, the court found that Noreen "believes all of the remaining purchase price was paid under the Contract for Deed but has no direct written proof that it was." The court determined that the "statute of limitations set forth in SDCL 21-51-1 elapsed in this case."³ Nevertheless, the court denied the Estate's petition and applied the doctrine of equitable tolling to extend the statute of limitations for an action Noreen had not filed. Although three years had elapsed since Noreen first engaged counsel, the court concluded that she should "be given a short amount of time ... to file an action against the Estate to enforce the Contract for Deed."

[¶13.] Noreen filed her complaint in a separate action on November 1, 2019. In it, she alleged, among other things, that "Noreen ... and ... Alan have satisfied their obligations under the Contract for Deed" and requested that the court order the Estate to deliver a deed conveying legal title to the two quarters of farmland.

[¶14.] The Estate raises several issues for our review. We consolidate and restate the principal issue as: Whether the circuit court erred when it failed to discharge the contract for deed and instead applied the doctrine of equitable tolling to allow Noreen to file suit after the 15-year limitation period had expired.

Analysis

[¶15.] The text of SDCL 21-51-1 provides in relevant part:

An action upon a contract ... for the purchase or sale of real property ... must be commenced within fifteen years after the cause of action shall have accrued, or within fifteen years after the last payment thereunder shall have become due and payable, and, if not so commenced, such action shall be forever barred, and such contract ... shall become null and void and if there be no conveyance of record ..., such contract ... shall be conclusively presumed to have been terminated, and such contract or bond shall cease to be notice of any rights of the purchaser and said period of fifteen years shall not be extended by ... partial payment.

[¶16.] By its express terms⁴ , the statute applies to contracts for the purchase of real property and provides two potential dates for the commencement of the 15-year limitation period—either the date on which an action to enforce the contract accrued⁵ or the date on which the last payment was due. However, SDCL 21-51-1 does more than simply provide for a limitation period.

[¶17.] The provisions of SDCL 21-51-1 also seek to clarify the status of real property that was the subject of a contract for purchase in instances where the contract remains unfinished or unenforced at the end of the applicable 15-year period. In the event there has been no action and the seller has not conveyed a deed to the purchaser within the 15-year period, the clear and unambiguous terms of the statute provide that: (1) any action to enforce the contract is "forever barred[;]" (2) the contract becomes null and void; and (3) the contract "shall be conclusively presumed to have been terminated[.]" If not completely self-executing, these provisions are close. To invoke the...