Schuldies v. Millar

• Decision Date: 22 May 1996
• Docket Number: 19292,Nos. 19269,s. 19269
• Citation: 555 N.W.2d 90,1996 SD 120
• Parties: Gerald SCHULDIES and Carolyn Schuldies, Plaintiffs and Appellees, v. Charles MILLAR, Russell Millar, Rosalie Millar, individually and as Trustee of the Lyla May Stephens Johnson Trust and as Guardian of the Lyla May Stephens Johnson Guardianship, Lyla Johnson, individually and as Beneficiary of the Lyla May Stephens Johnson Trust and as Ward of the Lyla May Stephens Johnson Guardianship, LYLA May Stephens Johnson Trust, and Lyla May Stephens Johnson Guardianship, Defendants and Appellants. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 90

555 N.W.2d 90

1996 SD 120

Gerald SCHULDIES and Carolyn Schuldies, Plaintiffs and Appellees, v. Charles MILLAR, Russell Millar, Rosalie Millar, individually

and as Trustee of the Lyla May Stephens Johnson Trust and as

Guardian of the Lyla May Stephens Johnson Guardianship, Lyla

Johnson, individually and as Beneficiary of the Lyla May

Stephens Johnson Trust and as Ward of the Lyla May Stephens

Johnson Guardianship, LYLA May Stephens Johnson Trust, and

Lyla May Stephens Johnson Guardianship, Defendants and Appellants.

Nos. 19269, 19292.

Supreme Court of South Dakota.

Considered on Briefs May 22, 1996.

Decided Sept. 25, 1996.

Rehearing Denied Nov. 1, 1996.

Kenneth E. Barker of Quinn, Eiesland, Day and Barker, Belle Fourche, for plaintiffs and appellees.

Leroy Hill, Belle Fourche, for defendants and appellants.

KONENKAMP, Justice.

¶1 Defendants appeal a jury verdict awarding damages against them for breach of contract, interference with contractual relations, slander and conversion, along with prejudgment interest and punitive damages. We affirm in part, reverse in part and remand.

FACTS

¶2 Lyla May Johnson owns a 3000 acre cattle ranch spreading across Butte and Lawrence counties. A rancher almost all her life, she moved there when she was twenty-one after marrying her first husband, Bernie Stephens. They had one daughter, Rosalie. After Bernie died, Lyla married Dick Johnson, now deceased, who also ranched with her. At the time of trial Lyla was eighty-years-old and a resident at a nursing home in Broadus, Montana, where her daughter lives. In this suit, her former hired hand, Gerald Schuldies, and his wife, Carolyn, obtained a $123,000 judgment against Lyla, Rosalie Millar, her husband, Charles, and their son, Russell, as well as against Lyla's trust and guardianship estates (collectively defendants).

¶3 Lyla hired Gerald as a ranch hand on February 12, 1979. His wife, Carolyn, lived and worked on the ranch with him. As partial compensation, Gerald received four, two-year-old heifers and their calves for each year of employment. The Schuldies' relationship with Lyla evolved from a pure employment arrangement into a close friendship of over fourteen years. Lyla participated in the Schuldies' family celebrations, outings and holidays and they assumed much responsibility for Lyla's personal needs including driving her to the doctor, to church and to see friends. Lyla publicly acknowledged that much of the credit for the success of the ranch belonged to Gerald and Carolyn as a result of their hard work. When the Schuldies' youngest child was diagnosed with muscular dystrophy, Lyla gave them $5000 to defray medical expenses. She asked them not to tell Rosalie of this gift. This and other circumstances caused the Schuldies to perceive themselves as being closer to Lyla than her own family. Neighbors attested that Lyla saw the Schuldies as successors, running the ranch with a long-term lease.

¶4 Lyla's health declined in 1991. In the latter part of 1992, after a short hospitalization, she was placed in a residential nursing home. The Millars began to suspect the Schuldies had been taking advantage of Lyla's condition. Vested with her mother's power of attorney, on January 7, 1993, Rosalie established the "Lyla May Stephens Johnson Trust," with herself as Trustee and Lyla as Trustor. An inventory of trust assets is not of record, but the corpus apparently envelops most, if not all, of Lyla's holdings, including the ranch real estate, cattle and equipment. Net income from this revocable trust is devoted to Lyla's use and benefit during her lifetime, with the remainder to the corpus. Upon Lyla's death the designated beneficiaries are Rosalie, her husband, and their two sons. On March 30, 1993, Lyla, in her capacity as Trustor, signed a "Letter of Instruction to Trustee," which had been prepared for her at the instance of Rosalie and her family. It stated in part:

You are further instructed to expedite the termination of the employment of Gerald Schuldies and removal from the ranch of Gerald Schuldies' family, keeping in mind the removal of all of Schuldies' livestock and equipment, must be done so as not to cause them unnecessary financial loss, but as soon as possible and no later than July 1, 1993.

Disputes arose over the ownership of cattle and equipment, eventually resulting in this lawsuit. Both the Millars and the Schuldies accused each other of exploiting Lyla's weakened condition. The Millars took it a notch further, suggesting to some that Gerald could not be trusted, even calling for a criminal investigation. After the trust was established Rosalie learned that in late 1992 Lyla had instructed her attorney to draw a ten-year ranch lease with the Schuldies. For their part, the Schuldies insisted Lyla wanted to favor them with an advantageous lease in return for their kindness to her over the years. Unfortunately, by the time this matter came to trial Lyla suffered from a hydrocephalic condition resulting in memory loss and confused thinking, so she was unable to remember, much less explain, her intentions.

¶5 The Schuldies asserted several claims, which will be detailed below, but are briefly summarized as follows: (1) breach of contract regarding a purported ten-year lease agreement between the Schuldies and Lyla; (2) tortious interference with this prospective contract; (3) breach of contract over a sale of sixteen broken mouth cows; (4) conversion of cattle and other personal property located on the ranch, including disputes over cattle brands and certain bills of sale; (5) conversion of a $10,000 certificate of deposit Lyla held in joint tenancy with Gerald; (6) slander; and (7) punitive damages. Defendants counterclaimed for conversion, slander, and punitive damages. The jury returned a verdict for the Schuldies. ¹

¶6 We consider the following issues from defendants' appeal:

I. Whether the trial court erred in denying defendants' motions for directed verdict, judgment notwithstanding the verdict, and new trial.

II. Whether the trial court abused its discretion in awarding $1644.50 in photocopy disbursements.

By notice of review Schuldies raise one issue:

III. Whether the trial court erred in denying their request for attorney fees.

ANALYSIS

¶7 I. Motions for Directed Verdict, Judgment NOV and New Trial

¶8 Our standard of review on motions for directed verdict and judgment NOV:

A motion for a directed verdict under SDCL 15-6-50(a) questions the legal sufficiency of the evidence to sustain a verdict against the moving party. Upon such a motion, the trial court must determine whether there is any substantial evidence to sustain the action. The evidence must be accepted which is most favorable to the nonmoving party and the trial court must indulge all legitimate inferences therefrom in his favor. If sufficient evidence exists so that reasonable minds could differ, a directed verdict is not appropriate. The trial court's decisions and rulings on such motions are presumed correct and this Court will not seek reasons to reverse.

A motion for judgment [notwithstanding the verdict] is based on and relates back to a directed verdict motion made at the close of all the evidence. Thus, the grounds asserted in support of the directed verdict motion are brought before the trial court for a second review. We review the testimony and evidence in a light most favorable to the verdict or the nonmoving party then without weighing the evidence we must decide if there is evidence which would have supported or did support a verdict.

Bauman v. Auch, 539 N.W.2d 320, 325 (S.D.1995) (citations omitted). We review a trial court's denial of motion for new trial under the following standard:

Whether a new trial should be granted is left to the sound judicial discretion of the trial court, and this Court will not disturb the trial court's decision absent a clear showing of abuse of discretion. If the trial court finds an injustice has been done by the jury's verdict, the remedy lies in granting a new trial. We determine that an abuse of discretion occurred only if no judicial mind, in view of the law and the circumstances of the particular case, could reasonably have reached such a conclusion. Finally, we note a decision to grant a new trial stands on firmer footing than a decision to deny a new trial.

Junge v. Jerzak, 519 N.W.2d 29, 31 (S.D.1994) (citations omitted). The Millars cite various trial errors to justify reversal of the trial court's denial of their motions for directed verdict, judgment NOV and new trial.

¶9 A. Statute of Frauds--Real Property Lease

¶10 On October 22, 1992, Lyla first advised her then attorney, Reed Richards, of her plan to lease the ranch for ten years to the Schuldies. Attorney Richards testified that although the terms of the lease document were close to completion and Lyla wanted to sign it on November 27, 1992, it was not executed due to his concerns over tax and income problems. The Schuldies asserted two claims regarding the ten-year lease: (1) breach of the lease contract itself; and (2) the Millars' tortious interference with the contractual relationship between Lyla and the Schuldies. The jury awarded $10,000 on each claim.

¶11 Defendants unsuccessfully argued that the statute of frauds precludes a claim for breach of lease because Lyla never signed one. SDCL 53-8-2 provides in part:

The following contracts are not enforceable by action unless the contract or some memorandum thereof is in writing and subscribed by the party to be charged or his agent, as authorized in writing....

(3) An agreement for sale of real estate or an interest therein, or lease of the same, for a period longer than one year. However, this does not abridge the power of any court to compel specific performance of any agreement for sale of real estate in case of part performance thereof[.]

The Schuldies do not raise the partial performance exception, but instead contend the statute...