Rindal v. Sohler

Decision Date05 March 2003
Docket Number No. 22246, No. 22258.
Citation658 N.W.2d 769,2003 SD 24
PartiesDaniel C. RINDAL and Raymond J. Shape, Plaintiffs and Appellees, v. Gail SOHLER and Janet Sohler, Defendants and Appellants.
CourtSouth Dakota Supreme Court

Frank B. Morrison, Jr. of Morrison Law Offices Whitefish, Montana, William F. Day, Jr. of Lynn, Jackson, Shultz & LeBrun, Sioux Falls, South Dakota, Attorneys for plaintiffs and appellees.

Steven M. Johnson and Ronald A. Parsons, Jr. of Johnson, Heidepriem, Miner, Marlow & Janklow, Sioux Falls, South Dakota, Attorneys for defendants and appellants.

GORS, Circuit Judge.

[¶ 1.] Daniel C. Rindal (Rindal) and Raymond J. Shape (Shape) sued Gail Sohler and Janet Sohler (Sohlers) for failure to carry out the provisions of an agreement for cancellation of contracts for deed. The trial court entered an order for equitable adjustment. Sohlers appealed. Rindal and Shape filed a notice of review. We reverse.

FACTS

[¶ 2.] Rindal and Shape bought a 2,700 acre ranch from Sohlers in 1987 for $840,000 on two contracts for deed. Rindal and Shape were feeding up to 20,000 to 30,000 head of cattle for the Louis Dreyfus Company. The Dreyfus deal soured over the disappearance of about 4,000 head of cattle. Rindal and Shape were indicted in Yankton County in November 1991. State v. Shape, 517 N.W.2d 650 (S.D.1994). The charges were eventually dismissed.

[¶ 3.] In 1989, Rindal and Shape quit paying on the contracts for deed after they had paid $180,000 principal and $219,450 interest for a total of $339,450. Shape subsequently filed a Chapter 12 bankruptcy. Sohlers obtained relief from the automatic stay on August 27, 1991. On October 16, 1991, an agreement for cancellation of contracts for deed was signed. Rindal and Shape agreed to deed back the ranch and Sohlers agreed to make immediate efforts to resell the ranch. If the ranch was resold, Sohlers would pay Rindal and Shape any excess over Sohlers' expenses.1 Rindal and Shape quitclaimed the ranch back to Sohlers. Sohlers took various steps to resell the ranch.2 Shape did not leave. In November 1992, Sohlers obtained a court order to evict Shape who left the property in such deplorable condition that it took years and thousands of dollars to return it to serviceable condition. For example, the pasture land was overgrazed, the property was infested with weeds, dead cattle were left all over the property, holes were cut in buildings and the water was left running which flooded a large area.

[¶ 4.] After the deed-back, Sohlers restored the property and land values increased over the years. In May 1997, Rindal and Shape sued the Sohlers to get the ranch back claiming the Sohlers had breached the agreement for cancellation of contracts for deed by not reselling the ranch and giving them the excess money referred to in the agreement.

[¶ 5.] The trial court held a trial with an advisory jury. When the jury found that Sohlers had not breached the agreement for cancellation of contracts for deed, the trial court rejected the advisory verdict and found that the Sohlers had breached the agreement. The trial court then concluded that an equitable adjustment under Beitelspacher v. Winther, 447 N.W.2d 347 (S.D.1989), and former SDCL 21-50-2, repealed 1992 SessL ch 157, was the appropriate remedy. Sohlers appealed and Rindal and Shape filed a notice of review.

STANDARD OF REVIEW

[¶ 6.] The trial court's findings of fact are reviewed under the clearly erroneous standard. Estate of Fountain v. Schroeder, 2001 SD 139, ¶ 6, 637 N.W.2d 27, 28. "The question is not whether this Court would have made the same finding that the trial court did, but whether on the entire evidence we are left with a definite and firm conviction that a mistake has been committed." Id. Questions of law are reviewed de novo. Bergee v. Bd. of Pardons and Paroles, 2000 SD 35, ¶ 4, 608 N.W.2d 636, 638

. This Court will only overturn a trial court's conclusions of law when the trial court erred as a matter of law. Estate of Fountain, 2001 SD 139, at ¶ 6, 637 N.W.2d at 28. When there is a mixed question of fact and law, the court will review the issue de novo. Id.

DECISION
A. Res Judicata and Claim Preclusion.

[¶ 7.] In 1992, after signing the cancellation of contracts for deed and quitclaim deeds returning the property to Sohlers, Shape refused to vacate the premises. Sohlers then filed an action for forcible entry and detainer to evict Shape. Sohlers argued that the 1992 judgment evicting Shape precluded the present lawsuit under the doctrine of res judicata. The trial court held that the only issue addressed in 1992 was possession and that the alleged breach of contract was not raised and was not precluded.

[¶ 8.] Res judicata precludes relitigation of issues that were litigated between the same parties in a prior action. Faulk v. Faulk, 2002 SD 51, ¶ 16, 644 N.W.2d 632, 635. Shape did not raise a claim for breach of contract in the forcible entry and detainer action even though the Sohlers had already failed to resell the property by the time the action for forcible entry and detainer was commenced (which was obvious since Sohlers were evicting Shape). Claim preclusion forecloses litigation of matters that could have been asserted in a prior action. Lee v. Rapid City Area School Dist., 526 N.W.2d 738, 740 (S.D.1995).

[¶ 9.] To determine whether Shape could have asserted the claimed breach of contract in the forcible entry and detainer action, we turn first to SDCL 21-16-4, which provides:

An action under the provisions of this chapter cannot be brought in connection with any other except for rents and profits or damages but the plaintiff may bring separate actions for the same if he so desire.

Construing this provision, this Court has sometimes allowed additional equitable claims in actions for forcible entry and detainer. LPN Trust v. Farrar Outdoor Advertising, 1996 SD 97, ¶ 10, 552 N.W.2d 796, 798-99. However, this Court has also held that a vendor could not combine strict forfeiture of a contract for deed in an action for forcible entry and detainer. BankWest, N.A. v. Groseclose, 535 N.W.2d 860, 863-64 (S.D.1995). Forcible entry and detainer is a summary remedy for speedy possession of real estate. LPN Trust, 1996 SD 97 at ¶ 10, 552 N.W.2d at 798. However, courts should also hear other relevant matters to avoid a multiplicity of suits. Id.

[¶ 10.] It does not matter whether Shape could have raised Sohlers' claimed failure to make adequate efforts to resell the property. Rindal was not a party to the forcible entry and detainer action. Therefore, Rindal is not foreclosed by res judicata or claim preclusion from litigating the claim that Sohlers breached the agreement for cancellation of contracts for deed. The issue of equitable adjustment under Beitelspacher is the same whether the plaintiffs are Rindal and Shape or only Rindal.

B. Breach of contract.

[¶ 11.] Rindal and Shape and the Sohlers entered into an agreement for cancellation of contracts for deed. The agreement called for cancellation of the contracts for deed and for Rindal and Shape to quitclaim the property back to the Sohlers. Sohlers agreed to make immediate efforts to resell the ranch. If the ranch was resold, Sohlers would pay Rindal and Shape any excess over Sohlers' expenses. Rindal and Shape claimed Sohlers failed to make the immediate efforts to sell the ranch required under the contract. Sohlers claimed they made immediate and extensive efforts to resell the ranch. The facts were in dispute and the evidence was conflicting. Rindal and Shape's suit is based on an alleged breach of the agreement for cancellation of contracts for deed. They asked for specific performance, reconveyance of the property, an order canceling the quitclaim deeds and for money damages. On the day of trial, in an apparent effort to avoid a jury trial, Rindal and Shape disclaimed their request for money damages for breach of contract and indicated they were proceeding only for equitable relief.

[¶ 12.] An essential element to equitable relief is the lack of an adequate remedy at law. Knodel v. Kassel Tp., 1998 SD 73, ¶ 8, 581 N.W.2d 504, 507; Bienert v. Yankton School Dist., 63-3, 507 N.W.2d 88, 90 (S.D.1993); Gross v. Conn. Mut. Life Ins. Co., 361 N.W.2d 259, 265 (S.D. 1985); Hein v. Marts, 295 N.W.2d 167, 171 (S.D.1980); Anderson v. Kennedy, 264 N.W.2d 714, 717 (S.D.1978). Rindal and Shape cannot disclaim their remedy at law and elect to sue in equity to avoid a jury trial. Haberer v. Rice, 476 N.W.2d 276, 277 (S.D.1991).

[¶ 13.] Rindal and Shape's suit is not a proper suit for equity. Rindal and Shape have a plain, adequate and speedy remedy at law for money damages for breach of contract. Dairy Queen v. Wood, 369 U.S. 469, 473, 82 S.Ct. 894, 897, 8 L.Ed.2d 44, 48 (1962); First W. Bank, Sturgis v. Livestock Yards Co., 466 N.W.2d 853, 856-57 (S.D.1991). Breach of contract presents a pure question of fact, Moe v. John Deere Co., 516 N.W.2d 332, 335 (S.D.1994), for a jury, C & W Enterprises v. City of Sioux Falls, 2001 SD 132, ¶ 19, 635 N.W.2d 752, 758; Harms v. Northland Ford Dealers, 1999 SD 143, ¶ 21, 602 N.W.2d 58, 63; Swiden Appliance v. Nat. Bank of S.D., 357 N.W.2d 271, 277 (S.D.1984). A suit for money damages also preserves the Sohlers' right to a jury trial.

[¶ 14.] The court recognized that the present action was really only for money damages during the hearing held before the trial commenced:

The only question is monetary damages that they're going to get if there was a breach of the contract and how that's accomplished....

The court's comment was correct. The equitable adjustment ordered by the court will only result in a money judgment for breach of contract. The circuit court turned a breach of contract case into an equitable adjustment case and denied the Sohlers a jury trial to which they were not only entitled but which they also subsequently won.

[¶ 15.] Even though the...

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