Lunstra v. Century 21 GKR-Lammers Realtors, GKR-LAMMERS

• Decision Date: 01 December 1988
• Docket Number: Nos. 16179,16247,GKR-LAMMERS,s. 16179
• Citation: 442 N.W.2d 448
• Parties: Marty R. LUNSTRA, Plaintiff and Appellant, v. CENTURY 21REALTORS, Benjamin H. Lammers, Leroy Kruse, and Irma Pohl, Defendants and Appellees, and Bill G. Kruse and Sheryl Kruse, Defendants. Marty R. LUNSTRA, Plaintiff and Appellant, v. CENTURY 21REALTORS, Benjamin H. Lammers, Leroy Kruse, Irma Pohl and Bill G. Kruse, Defendants, and Sheryl Kruse, Defendant and Appellee. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 448

442 N.W.2d 448

Marty R. LUNSTRA, Plaintiff and Appellant, v. CENTURY 21 GKR-LAMMERS REALTORS, Benjamin H. Lammers, Leroy

Kruse, and Irma Pohl, Defendants and Appellees,

and

Bill G. Kruse and Sheryl Kruse, Defendants.

Marty R. LUNSTRA, Plaintiff and Appellant, v. CENTURY 21 GKR-LAMMERS REALTORS, Benjamin H. Lammers, Leroy

Kruse, Irma Pohl and Bill G. Kruse, Defendants,

and

Sheryl Kruse, Defendant and Appellee.

Nos. 16179, 16247.

Supreme Court of South Dakota.

Considered on Briefs Dec. 1, 1988.

Decided June 21, 1989.

Michael B. Crew of Crew & Crew, Sioux Falls, for plaintiff and appellant; Cynthia J. Ahrendt of Crew & Crew, Sioux Falls, on the brief.

Barbara Anderson Lewis of Woods, Fuller, Shultz & Smith, Sioux Falls, for defendants and appellees Century 21 GKR-Lammers Realtors, Benjamin Lammers, Leroy Kruse and Irma Pohl.

Dennis Duncan of Zimmer & Duncan, Parker, for defendant and appellee Sheryl Kruse.

MORGAN, Justice.

Marty Lunstra (Lunstra) appeals from summary judgments entered against him in his actions for damages allegedly arising from his purchase of residential real property from Bill and Sheryl Kruse (Sellers) through the offices of Century 21 GKL-Lammers Realtors, Benjamin H. Lammers, Leroy Kruse and Irma Pohl (Realtors). We affirm.

On July 8, 1983, Sellers listed with Realtors their residential property located at 8009 Oak Trail Road, Sioux Falls, South Dakota, also described as Lot 102 ¹ of Oak Trails Addition, a platted subdivision. As listing broker, Leroy Kruse obtained information regarding the property from Sellers, which was published in the Sioux Falls Listing Book. As to lot size, the listing stated: "Irregular aprox. 3 1/2 acres."

Lunstra first viewed the property during an open house held there in August 1983. In May 1984, after several months of negotiations, Lunstra's offer to purchase the property for $125,000 was accepted by Sellers. On June 28, 1984, Lunstra moved in ² and the transaction was closed on July 6, 1984.

On May 30, 1986, Lunstra filed separate complaints against Realtors and Sellers alleging that, in the course of selling him the property, Realtors and Sellers had made "false and fraudulent misrepresentations" about the property. Basically, the alleged misrepresentations were as follows: (1) that the property consisted of 3.5 acres whereas, in fact, it consisted of 2.2 acres; and (2) that the boundaries which had been specifically identified were not as specified.

In the meantime, Sellers had been divorced. A default judgment was ultimately taken against Bill Kruse who failed to answer. Realtors and Sheryl Kruse moved for summary judgments in their respective actions. The trial court granted both motions, holding that: (1) Lunstra had been provided a legally sufficient description of the property; (2) Lunstra had actual or constructive notice of all information contained in the plat on record including boundaries and number of acres involved; (3) Lunstra inspected the property and agreed to purchase the same in its 'as is' condition; and (4) Lunstra accepted an unambiguous deed describing the real property and that all prior negotiations are merged in that deed.

On appeal, Lunstra raises two issues:

1) Whether a purchaser's claim for damages against sellers, based upon fraud and misrepresentation in representing the quantity and boundaries of real estate, is barred by the recording of a plat which correctly describes the real estate; and

2) Whether sellers are liable for the misrepresentations of their realtor agents.

We first define our scope of review from an order granting summary judgment.

[O]ur scope of review on appeal is not under the 'clearly erroneous' doctrine, but rather under the strict standards attendant upon entry of summary judgment as delineated in Wilson [v. Great Northern Railway Co., 83 S.D. 207, 157 N.W.2d 19 (1968) ]:

(1) Evidence must be viewed most favorable to the nonmoving party;

(2) The burden of proof is on the movant to show clearly that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law;

(3) Summary judgment is not a substitute for a court trial or for trial by jury where any genuine issue of material fact exists;

(4) Surmise that a party will not prevail upon trial is not sufficient basis to grant summary judgment on issues which are not shown to be sham, frivolous or so unsubstantial that it is obvious that it would be futile to try them;

(5) Summary judgment is an extreme remedy which should be awarded only when the truth is clear and reasonable doubts touching the existence of a genuine issue as to material fact should be resolved against the movant;

(6) When no genuine issue of fact exists, summary judgment is looked upon with favor and is particularly adaptable to expose sham claims and defenses.

Nizielski v. Tvinnereim, 429 N.W.2d 483, 485 (S.D.1988) (quoting Time Out, Inc. v. Karras, 392 N.W.2d 434, 436-37 (S.D.1986)).

From our review of the record, we are of the opinion that there are no material issues of fact. On July 29, 1975, a plat of the Oak Trails Addition was recorded in the Lincoln County Courthouse. ³ In 1983, Sellers purchased Lot 102 and built a home. Lunstra attended an open house in the fall of 1983. When asked about acreage and boundaries, Realtors identified "approximate" boundaries and "approximate" acreage from information given by Sellers. Several offers and counter offers were made. ⁴ In late May 1984, Lunstra ultimately made an offer of $125,000 to purchase Lot 102, Oak Trails Addition. Sellers accepted Lunstra's written offer to purchase. A deed correctly describing the real estate was delivered, accepted and recorded by or on behalf of Lunstra. ⁵

For his first issue, Lunstra argues that in the absence of actual notice of the boundaries and acreage he is entitled to rely upon Realtors' representations. As a corollary, he further argues that the Realtors were under an obligation to substantiate the accuracy of their information obtained from Sellers. In response, Realtors and Sheryl Kruse argue that notice was given by the filing and recording of the plat; therefore, constructive notice must be imputed to Lunstra as a matter of law.

In Fullerton Lumber Co. v. Tinker, 22 S.D. 427, 432, 118 N.W. 700, 703 (1908), this court, relying on statutory provisions identical in content to SDCL 7-9-8 and -9, stated that:

While in some jurisdictions it has been held by the courts that a party purchasing property is only charged with constructive notice of conveyances made in the chain of his title, such a ruling is not applicable in this state, in view of the provisions of our Code before quoted, and the purchaser must be held here as charged with notice of all the information that might have been obtained by an examination of all the indexes required to be kept by the register of deeds relating to the property.

In somewhat that same vein and in a more recent decision, Aetna Life Ins. Co. v. McElvain, 363 N.W.2d 186, 189 (S.D.1985) (citing 66 Am.Jur.2d Records & Recording Laws Sec. 145 (1973)), we stated:

The constructive notice furnished by a recorded instrument, so far as every material fact recited therein is concerned, is equally as conclusive as would be actual notice acquired by a personal examination of the recorded instrument or actual notice acquired by or through other means.

The legislature has defined circumstances constituting constructive notice in SDCL 17-1-4, which provides:

Every person who has actual notice of circumstances sufficient to put a prudent man upon inquiry as to a particular fact, and who omits to make such inquiry with reasonable diligence, is deemed to have constructive notice of the fact itself.

In this case, the plat was properly recorded and contained a correct description of the boundaries. "The recordation of an instrument serves as constructive notice of what the instrument actually contains. SDCL 43-28-15." Aasland v. County of Yankton, 280 N.W.2d 666, 668 (S.D.1979). Lunstra's reliance on Rasmussen v. Reedy, 14 S.D. 15, 84 N.W. 205 (1900) is misplaced, inasmuch as Lunstra conceded that Realtors' boundary line locations given him at the open house were "approximations" as was the size of the lot shown on the information sheet. In Rasmussen, the true boundary was represented to be along a certain...