Kaberna v. Brown

• Decision Date: 20 May 2015
• Docket Number: No. 27109.,27109.
• Court: South Dakota Supreme Court
• Parties: Frank J. KABERNA, Jean A. Rademacher, Robert Rademacher, The Estate of Donald Kaberna and the Donald Kaberna Trust, Plaintiffs and Appellees, v. Karen BROWN and David Brown, Defendants and Appellants.

864 N.W.2d 497

Frank J. KABERNA, Jean A. Rademacher, Robert Rademacher, The Estate of Donald Kaberna and the Donald Kaberna Trust, Plaintiffs and Appellees

v.Karen BROWN and David Brown, Defendants and Appellants.

No. 27109.

Supreme Court of South Dakota.

Considered on Briefs on March 23, 2015.

Decided May 20, 2015.

Timothy R. Whalen, Lake Andes, South Dakota, Attorney for plaintiffs and appellees.

Wanda Howey–Fox of Harmelink, Fox & Ravnsborg Yankton, South Dakota, Attorneys for defendants and appellants.

Opinion

WILBUR, Justice.

[¶ 1.] Karen and David Brown appeal a judgment by the circuit court ordering the partition in kind of real estate in which they owned an undivided one-fourth interest with Karen's siblings and their respective spouses. We affirm.

Background

[¶ 2.] Frank E. Kaberna (Frank E.) and Josephine Kaberna established two trusts, each in their respective names, on December 19, 1996, for the equal disposition of real property, “share and share alike,” to their four children: Karen, Frank, Jean, and Don. The two trusts were funded with 533 acres of real property consisting of crop land, pasture land, and a homestead (Homestead). The Homestead consisted of a residence (Homestead Residence), livestock facilities, grain storage, equipment storage, and other assorted buildings. Most of the trust property has been owned by the Kaberna family for over 70 years.

[¶ 3.] Frank E. died in 2000, and Josephine died in 2003. Karen and Don served as successor trustees. In April 2012, the trust property was finally distributed in accordance with the terms of the two trusts. Each of the four children, along with their spouses, received a one-fourth undivided interest in the real property. Don, who died prior to the commencement of the underlying action, is survived by his wife Carol Lynn Kaberna. In the end, the real property subject to this action was owned one-fourth by Frank, one-fourth by Karen and David, one-fourth by Jean and Robert Rademacher, and one-fourth by Carol individually and as the legal representative of Don's estate and trust.

[¶ 4.] Jean is married to Robert Rademacher (Bob). Jean and Bob reside in Huron, South Dakota. Carol lives outside of Wagner, South Dakota, on farmland that she and Don acquired. Frank is unmarried and lives at the Homestead Residence, where he has lived for over 20 years. Frank farms approximately 700 acres of land and stores his farm equipment in the buildings located on the Homestead. He also raises guinea hens, peacocks, geese, and ducks at the Homestead.

[¶ 5.] The Browns own and live on a farm immediately adjacent to the Homestead. The Browns own a second farm, which they are currently selling to their daughter on an installment basis. The Browns operate over 1,100 acres of land. Upon Frank E.'s death in 2000, Karen purchased Frank E. and Josephine's cattle, sheep, and hogs (the Livestock Operation). The Livestock Operation consists of about 150 cattle, 50 sheep, and 15 hogs. The Browns used most of the pasture land surrounding the Homestead for the sheep and cattle. They also used the feedlot, pens, and outbuildings for their Livestock Operation.

[¶ 6.] Upon Josephine's death in 2003, the Browns leased crop and pasture land surrounding the Homestead. Before Don died, Don and Carol met with the Browns and specifically told Karen that they would not reimburse her for the cost of any improvements that she made to the real property, and that if she did make any improvements, she did so at her own peril. The leases further required Karen to maintain and repair the facilities on the leased premises at her own expense. Indeed, the Browns made improvements to some of the property located on the Homestead. The improvements included a new fence, the replacement of old gates, the replacement of loaders at the silo, and the addition of a large livestock chute. The Browns paid for the improvements at a total cost of $41,072.

[¶ 7.] Frank, Jean, Bob, the Estate of Don, and the Donald Kaberna Trust (collectively, “the Plaintiffs”) brought the underlying partition action against the Browns. At trial, the Browns offered extensive evidence of the antagonistic history between the parties. The circuit court found, “It is abundantly clear ... that the Kaberna siblings do not get along.” The court acknowledged that “evidence of the alleged ‘fault’ between the parties is not probative of the issues before the [c]ourt, but clearly shows the [c]ourt that a partition of the real property subject of this action is paramount to the well being of the Kaberna family.” The Plaintiffs and the Browns both agreed that any partition ordered by the court should be fashioned so that Frank and Karen do not have regular contact with each other.

[¶ 8.] The Plaintiffs retained the services of Bryan Maas (Maas), a certified appraiser from Maas & Associates, Inc., to appraise the real property. Maas appraised the property at a value of $1,600,000.¹ The Browns did not dispute the value of the appraisal. In addition, Maas submitted a partition proposal for dividing the real property (the Maas Plan). The Maas Plan divided the crop and pasture land between the parties and carved out a small, six-acre tract of land for Frank that included the Homestead Residence as well as a few other buildings on the Homestead. The majority of the Homestead and livestock facilities were to be distributed to Karen.

[¶ 9.] The Browns hired Gregg Hubner, a certified appraiser, to assess the Maas Plan and craft an alternative proposal (the Hubner Plan). Hubner considered the Maas Plan impractical because Frank and Karen's joint occupancy of the Homestead proved unworkable. Hubner further thought that, under the Maas Plan, the parties would have difficulty establishing the lot lines and separating the utilities that served the property. In light of these considerations, the Hubner Plan recommended that Karen receive the entire Homestead property along with the rest of the property she would receive under the Maas Plan. This would require Frank to move from the Homestead Residence to a new location. In turn, Karen would make a $200,000 equitable adjustment payment to the Plaintiffs. The circuit court found that this proposal amounted to a “partial forced sale by some of the Plaintiffs.”²

[¶ 10.] After it became apparent to the Plaintiffs that the Maas Plan was problematic because it placed Frank and Karen in regular contact with each other, the Plaintiffs submitted a proposal that modified the Maas Plan (the Modified Maas Plan). The Modified Maas Plan essentially divided the Homestead area in half and awarded one half each to Frank and the Browns. Frank would receive the six-acre farm site with the Homestead Residence and 18 acres of surrounding land including the property that the Browns improved. The Browns would receive 16 acres of the surrounding land. If this proposal was not accepted by the court, the Plaintiffs urged the circuit court to revert back to the original Maas Plan so that Frank would not be displaced from his home.

[¶ 11.] The Browns strongly opposed the Modified Maas Plan. The Browns argued that to partition the property in any fashion that leaves them without their buildings and structures for sheep will cause them to suffer “financial ruination.” They contended that their ranching and farming operation could not continue without the improvements on the Homestead or without replicating those improvements on another property. The court, however, noted that the “bulk of the [Browns'] income is not from their sheep operation, but is from other farming activities or other sources.” Nonetheless, the court noted that the Browns “have other structures on their other farms and real property near the home place that will allow them to easily transfer their sheep operation off the home place.”

[¶ 12.] The circuit court rendered an extensive memorandum decision on February 20, 2014, and findings of fact and conclusions of law on May 7, 2014. The court ultimately adopted the Modified Maas Plan. The court found that the Modified Maas Plan was “simple, fair, equitable, and easily accomplished and effectuate[d] a plausible and equitable manner of partitioning the real property subject to this action.” The court noted that the Browns “had the burden of proving that they would suffer a ‘great prejudice’ if the land were not sold to them as they proposed.” The court found that the Browns “failed [to] present sufficient facts or evidence to carry this burden and there are no facts of any nature or sort in evidence which would support the contention that the [Browns] have met this burden.” The Browns appeal the partition order and raise the following two issues for our review:

1. Whether the circuit court erred in adopting the Modified Maas Plan.

2. Whether the circuit court erred in admitting the Modified Maas Plan in contravention of the court's pretrial order.

Standard of Review

[¶ 13.] An action for partition of property “ ‘is a proceeding in equity and the court has the inherent jurisdiction to adjust all the equities in respect to the property.’ ” Englehart v. Larson, 1997 S.D. 84, ¶ 12, 566 N.W.2d 152, 155 (quoting Braaten v. Braaten, 278 N.W.2d 448, 450 (S.D.1979) ). “Equitable actions are reviewed under an abuse of discretion standard.” Eli v. Eli, 1997 S.D. 1, ¶ 8, 557 N.W.2d 405, 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 and unreasonable.’ ” Gartner v. Temple, 2014 S.D. 74, ¶ 7, 855 N.W.2d 846, 850 (quoting Arneson v. Arneson, 2003 S.D. 125, ¶ 14, 670 N.W.2d 904, 910).

[¶ 14.] We review factual determinations under a clearly erroneous standard. Id. ¶ 8 (quoting State v. Guthrie, 2002 S.D. 138, ¶ 5, 654 N.W.2d 201, 203). “The question is not whether this Court would have made the same findings the [circuit] court did, but whether on the entire evidence we are left with a definite and firm conviction that a...