Wandler v. Lewis, 19698

Citation1997 SD 98,567 N.W.2d 377
Decision Date20 February 1997
Docket NumberNo. 19698,19698
PartiesDonald WANDLER, Plaintiff and Appellee, v. Kenneth R. LEWIS, Bernice Slocum, Marilyn Woolard, and Terry C. Kranz, Defendants and Appellants. . Considered on Briefs
CourtSupreme Court of South Dakota

Dale R. Hansen, Sturgis, for Plaintiff and Appellee.

James S. Nelson and Paul S. Swedlund of Gunderson, Palmer, Goodsell & Nelson, Rapid City, for Defendants and Appellants.

AMUNDSON, Justice.

¶1 Donald Wandler (Wandler) initiated a declaratory judgment action seeking to have the trial court determine that the quitclaim deed involved in this case is void, the default provision in the contract for deed is void, and Wandler's interest in the property is superior to any other. After a trial, the court granted judgment in favor of Wandler, thereby allowing him a ten-day right of redemption. Kenneth R. Lewis, Bernice Slocum, and Marilyn Woolard (collectively referred to as Lewis) appeal. We affirm.

FACTS AND PROCEDURAL HISTORY

¶2 On April 25, 1989, Lewis entered into a contract for deed with J.H. McLeod (McLeod) to sell real property known as the Excelsior Placers Claim in Lawrence County, South Dakota. 1 McLeod agreed to pay Lewis $200,000, plus interest at ten-percent per annum. He paid $20,000 down and agreed to pay the balance in three equal installments of $73,381.60, commencing April 25, 1989, and payable on the same day of each year thereafter.

¶3 The contract contains a provision prohibiting assignment without consent. Specifically, this provision states: "Buyer shall not have the right to assign or sell any interest in this Agreement, or any interest in the hereinbefore described property, without first receiving the express written permission of Seller, which consent shall not be unreasonably withheld."

¶4 Another provision sets up an escrow account with the law firm of Richards & Richards as the escrow agent. This section provides:

Seller and Buyer hereby designate Richards & Richards, as Escrow Agent under this Agreement. Initial escrow charges shall be paid equally by Seller and Buyer. All subsequent escrow charges shall be borne solely by Seller. All documents pertaining to this Agreement shall be placed with said Escrow Agent. Such documents shall include:

(a) This Contract for Deed;

(b) The executed Warranty Deed;

(c) The property insurance policy;

(d) The abstract of title[;]

(e) Executed Quit Claim Deed from Buyer to Seller in case of a default.

The parties hereby instruct and authorize the Escrow Agent as follows:

(a) Upon full compliance of Buyer with all of the terms and conditions of this Agreement, the Escrow Agent shall deliver to the Buyer all of the foregoing listed items;

(b) Upon receipt of written instructions and proof by the Seller that:

1. Buyer has defaulted under this Agreement;

2. Seller has given Buyer notice of such default;

3. Buyer has not cured such default within the thirty (30) day default period; and

4. Seller has terminated and canceled this Agreement;

the Escrow Agent shall deliver to Seller all of the foregoing listed documents then held by the Escrow Agent. In the event the parties are not in Agreement on whether or not there has been a default, the Escrow Agent shall deliver the documents held in escrow to the Lawrence County Clerk of Courts.

¶5 Another section provides instructions in the event of a default. It states:

In the event the Buyer defaults in the performance of any of the terms, covenants, conditions or obligations of this Agreement assumed herein, the parties agree that the Seller shall have the option to declare all deferred balances due and payable. Said option shall be exercisable by giving to the Buyer thirty (30) days' written notice setting forth the nature of such default. All notices of default shall be by certified mail[.]

...

* * *

If such default is cured within said thirty (30) day period, all provisions of this Contract shall remain in full force and effect. In the event of the failure of the Buyer to cure such default within said thirty (30) day period, then all deferred balances shall be due and payable at the end of the thirty (30) day period and Seller shall have the right to re-enter and take possession of the property, including all buildings, improvements, utilities, service lines and other such property as may be affixed to the realty and to retain all payments and improvements made on the premises by the Buyer as rent and liquidated damages for the breach of this Agreement, accurate damages being incapable or very difficult of accurate estimation at the time of execution of this Contract. That the parties hereto have made a reasonable endeavor to fix fair compensation to the Seller in the event of default and that the preceding stipulation bears a reasonable relation to probable damage and is not disproportionate to any damages reasonably to be anticipated. The parties further agree that in the event of such default, all other remedies available to the Seller under the laws of this state shall accrue to the Seller. In the event of default by either party, the prevailing party shall be entitled to recover attorney fees and costs as provided for under SDCL 21-50....

¶6 On the same day McLeod entered into this contract, he assigned all of his rights and interest in the contract to Dakota Placers, Inc. (Dakota Placers). Dakota Placers then assigned its interest to Red Ex Associates, a joint venture consisting of Blattner Placer, Inc. and Dakota Placers. A document entitled "consent to assignment" demonstrates that Lewis consented to the assignment by McLeod to Red Ex Associates. (This document apparently intends to consent to both assignments.) On September 10, 1990, the joint venture was terminated, and Blattner Placer, Inc. assigned its interest to Dakota Placers. There is no evidence of written consent to this assignment.

¶7 The first installment payment of $72,381.60, plus ten-percent interest, was due by Dakota Placers on April 25, 1990. After a discussion, the parties agreed to postpone the payment because Dakota Placers was experiencing financial difficulties. The agreement was reduced to writing wherein Dakota Placers was to pay $20,000 in consideration for modification of the contract.

¶8 When the next annual payment was due on April 25, 1991, Dakota Placers was again experiencing financial trouble. On April 24, 1991, the parties agreed to modify the contract, with Dakota Placers paying $36,190.80 by April 25, 1991, and another $36,190.80 by September 1, 1991. The first payment was made, but not the second. Therefore, Lewis, through his attorney Reed Richards (Richards), wrote a letter dated October 10, 1991, giving notice of default. After Dakota Placers received this letter on November 8, 1991, the parties again agreed that Lewis would accept $12,741.47 from Dakota Placers if made by February 7, 1992.

¶9 On January 7, 1992, Lewis was again informed that Dakota Placers did not have the money to pay the installment of $72,381.60, plus interest. Discussions ensued and Dakota Placers paid $27,603.80 on April 17, 1992, to complete the 1991 installment. They also agreed that the 1992 installment would be postponed until December of 1992, but it was later extended to January 1, 1993, which was then extended again. Dakota Placers became in default under the terms of the contract for deed and failed to make timely payments of principal and interest as required by the terms of the contract for deed as amended.

¶10 On May 4, 1993, Richards, on behalf of Lewis, sent a written notice of default, giving Dakota Placers thirty days from the date of the letter to cure the default. Otherwise, Lewis would undertake "all rights and remedies open to him under the provisions of the Contract for Deed dated April 25, 1989." Lewis later had Richards write Joe Butler (Butler), the lawyer for Dakota Placers, extending the time to cure the default to June 9, 1993, and then to June 25, 1993. Butler wrote a letter to Richards confirming the extension date, and Richards responded with a similar confirmation letter.

¶11 Meanwhile, on June 11, 1993, Lewis sold his interest in the contract to Terry Kranz (Kranz). The quitclaim deed was then delivered to Kranz by Richards, acting as the escrow agent. Richards, now representing Kranz, wrote Butler on June 24, 1993, and requested that he have Dakota Placers sign a quitclaim deed conveying any interest they had in the Excelsior Placers Claim to Lewis. On the same day, Butler telephoned Richards and informed him that Dakota Placers would not be making the payment on June 25, 1993. While Butler claims they agreed to extend the deadline, Richards maintains there was no such agreement. There was no writing to demonstrate an agreement.

¶12 Butler also testified Richards failed to inform him that he represented Kranz rather than Lewis. In the aforementioned letter of June 24, 1993, Richards states, "my client would still be open to some sort of mining venture by your clients if they find further funding." With no knowledge of the Lewis/Kranz sale, Butler claims he was justified in believing that Richard's client was still Lewis.

¶13 On June 28, 1993, Richards delivered the escrowed quitclaim to Kranz, and Kranz recorded the deed. On July 1, Richards wrote Butler, informing him of the sale to Kranz, and that Kranz recorded the deed. On July 13, Butler sent a facsimile transmission to Richards informing his client was in the position to pay the remaining balance due under the terms of the contract. Later, on July 22, 1993, Butler wrote Richards, setting forth Butler's recollection of their June 24, 1993, phone conversation.

¶14 Dakota Placers took no action until September of 1994 when it assigned its interest in the contract to Wandler without consent from the other parties. In January of 1995, Wandler initiated a declaratory judgment action. After a trial, the court entered judgment in favor of Wandler, which...

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  • Bozied v. City of Brookings, No. 21299
    • United States
    • Supreme Court of South Dakota
    • December 26, 2001
    ...BankWest v. Groseclose, 535 N.W.2d 860, 864 (S.D.1995)(citing Ford v. Hofer, 79 S.D. 257, 261, 111 N.W.2d 214, 216 (1961)); Wandler v. Lewis, 1997 SD 98, ¶ 26, 567 N.W.2d 377, 383. "Forfeitures are considered odious in the law and are not favored by the courts." BankWest, 535 N.W.2d at 864 ......
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    ...a default occurs on a contract for deed, for example, SDCL 21-50-1 provides that an action for strict foreclosure may be brought. Wandler v. Lewis, 1997 SD 98, ¶ 20, 567 N.W.2d 377, 382. However, a party is not limited to strict foreclosure under SDCL ch. 21-50. Depending on the circumstanc......
  • Brown v. Powell, 22018.
    • United States
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    • June 26, 2002
    ...of the assignment and acceptance of monthly lease payments from the assignee for approximately five years. See also Wandler v. Lewis, 1997 SD 98, 567 N.W.2d 377 (vendor's acquiescence in previous nonconsensual assignments of property and acceptance of payments made pursuant to contract afte......
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    • June 10, 1998
    ...not addressed or ruled upon by the trial court will not be addressed by this Court for the first time on appeal." Wandler v. Lewis, 1997 SD 98, p 16, 567 N.W.2d 377, 381-82 (citation omitted).Regardless, this evidence was also obtainable elsewhere; May and Kerr each testified that he was ta......
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1 books & journal articles
  • § 31.02 The Various State Laws and Views
    • United States
    • Full Court Press Negotiating and Drafting Commercial Leases CHAPTER 31 Responding to a Tenant's Assignment or Sublease Request
    • Invalid date
    ...Id.[407] State Highway Comm'n v. Pinney, 171 N.W.2d 68, 69 (S.D. 1969). [408] Id., 171 N.W.2d at 70.[409] Id.[410] Wandler v. Lewis, 567 N.W.2d 377, 386 (S.D. 1997).[411] Smith v. Hegg, 214 N.W.2d 789, 791 (S.D. 1974).[412] Baron Brothers v. National Bank, 155 N.W.2d 300, 304 (S.D. 1968).[4......

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