Tolle v. Lev , 2011 S.D. LEXIS 122 ( 2011 )

#25931-aff in pt, rev in pt & rem-SLZ
2011 S.D. 65IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
CINDY TOLLE, Plaintiff and Appellant,
v.
PETER LEV, Defendant and Appellee.
****
APPEAL FROM THE CIRCUIT COURT OF
THE FOURTH JUDICIAL CIRCUIT
LAWRENCE COUNTY, SOUTH DAKOTA
****
THE HONORABLE WARREN G. JOHNSON
Judge
****
PATRICK M. GINSBACH of
Farrell, Farrell & Ginsbach, PC
Hot Springs, South Dakota Attorneys for plaintiff
and appellant.
TIMOTHY R. JOHNS of
Johns & Kosel, Prof. LLC
Lead, South Dakota Attorneys for defendant
and appellee.
****
CONSIDERED ON BRIEFS
ON AUGUST 22, 2011
OPINION FILED 09/28/11
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ZINTER, Justice
[¶1.] Cindy Tolle sued Peter Lev for damages for failing to transfer
ownership of a cabin situated on land owned by the government in a national park.
She also sued Lev for tortious interference with a business relationship she claimed
with an employer. The circuit court granted summary judgment on both claims.
We affirm the dismissal of the tortious interference claim but reverse and remand
on the claim for damages for failure to transfer the cabin.
Facts and Procedural History
[¶2.] Tolle worked as a mountaineering guide at Exum Mountain Guides
and School of Mountaineering, Inc. (Exum) in Wyoming. Lev also worked for Exum
as a guide, and he served on Exum’s Board of Directors (Board).
[¶3.] In 2000, Tolle agreed to sell real property in Lawrence County, South
Dakota to Lev and Christine Coolidge. During the preliminary discussions relating
to this sale, Lev agreed to transfer ownership of his guide cabin to Tolle when Lev
retired from Exum. The cabin was a plywood structure located on land owned by
the National Park Service in Grand Teton National Park. Tolle claims that because
of Lev’s agreement to transfer the cabin, she reduced her sale price of the Lawrence
County property by $25,000.
[¶4.] A written purchase agreement dated May 18, 2000, was executed
finalizing the Lawrence County sale. According to the purchase agreement, Tolle
agreed to sell the property to Coolidge and Lev as tenants in common for $131,590.
The written agreement did not reflect how the sales price had been negotiated, and
the agreement did not mention the oral statement that Lev would transfer the
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guide cabin in Wyoming. Further, the purchase agreement contained an
integration clause merging all prior negotiations and representations into the final
written agreement. On August 17, 2000, Tolle signed a warranty deed conveying
the property to Lev and Coolidge. The deed also made no mention of the cabin.
[¶5.] In 2005, Lev sent Tolle an email confirming his agreement to transfer
ownership of the cabin to Tolle. The email read:
You are right to be bummed for me not (so far) indicating I
would not [sic] keep up my end of the bargain about you getting
my cabin as part of the land deal we had. . . . I did make that
agreement with you. But I haven’t left Exum yet. . . . As long as
I was still at Exum I had no intention of giving up the place; you
knew that.
...
P
When Lev retired from Exum in 2009,1 Tolle learned that Lev had already sold the
cabin to his niece for $1,000.
[¶6.] Tolle apparently threatened litigation because on April 7, 2009, Lev
sent an email to Jack Turner, President of the Exum Board, and Cyndi Hargis,
Secretary of the Board, disclosing that Tolle was threatening litigation for the loss
of the cabin. In the email, Lev also told Turner that Lev needed to know sale prices
for similar guides’ camp cabins.2 Turner responded stating he would get back to
1. Lev sold the last of his shares in January 2009 and resigned from the Board
in July 2009.
2. Lev’s first April 7 email stated:
Cindy Tolle is strong-arming me saying I owe her considerable
money for the cabin (in addition to which I originally paid for
her farm). She says the cabin is rightfully hers, and I had no
right to sell it to Kim. This time she is serious. What I need to
(continued . . .)
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Lev on prices, but thought Lev did not owe Tolle anything because the cabins
belonged to Exum. Turner also wrote: “If there is something on paper, then you
should copy it to us for our attorney to look at. If Cindy [Tolle] gets too nasty, send
her to me.” Lev responded twice, admitting there had been an agreement, adding
more details about the cabin dispute, and stating that his plan was to have no
further communication with Tolle, though he expected to be sued by her.3 Turner
________________________
(. . . continued)
know is what have been the various sale prices for guides camp
cabins to date, as far as you know.
...
P
3. Lev’s first responsive email on April 7 stated:
Thanks for your reply. Unfortunately the present issue is that
Cindy says she sold the farm to me and Chris at below normal
price (that isn’t true; I have the valuations from then) and I
agreed to give her the cabin in exchange. Double unfortunately,
I did some years ago (2005) in an email (which she kept and just
sent back to me) saying that I had told her when we purchased
the farm in 1999 she could have the cabin when I left, but there
was never as far as either me or Chris can remember a cost deal
relating to the farm sale. I may be screwed; that is why I
wanted to know what the sale prices for the cabins have been. A
few years ago when this first came up I wrote her that she
overcharged us for the two additional lots (according to local
valuations) and therefore we didn’t owe her anything, cabin or
whatever. She has just written me that the sale of those lots
were our tough luck and I still owe her the cabin or money (she
hasn’t yet said how much). I am also getting a lawyer.
She is getting ugly.
P
Lev’s second responsive email on April 8 stated:
See below. Tolle is reading what I said about the difference in
the cost of the original farm property in 2000 backwards; I paid
her $25,000 more than what it was assessed at (I have the
(continued . . .)
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replied on April 8, volunteering: “I will deal with Cindy [Tolle] this afternoon in a
letter to the [B]oard. Cindy has been messing with Exum, the Exum board, and the
Exum cabins for over a decade now, and I’m going to end it.”
[¶7.] Later on April 8, Turner emailed the Board about Tolle’s employment
with Exum. Tolle’s claim of employment with Exum started that year in February,
when Exum sent letters inviting their guides to return for the upcoming season.
Exum had not sent a letter to Tolle, who had guided for Exum in past seasons, so
she contacted two members of the Board, Mark Newcomb and Nat Patridge.
Newcomb responded on March 12 with an email telling Tolle that she should return
to Exum and guide. Turner learned of the invitation and was concerned about
Tolle’s return. In his April 8 email to the Board, Turner disclosed several problems
Tolle caused in the past and his concern about hiring her for the upcoming season.
These concerns were unrelated to the cabin transfer issue. He asked the Board
members to vote on whether to rescind the offer of employment to Tolle and not hire
her in future years. The Board conducted a conference call on the matter. The
Board, including Lev, unanimously voted to rescind the offer of employment.4
Turner then sent Tolle a letter notifying her Exum was not going to employ her.
________________________
(. . . continued)
original assessment). My plan for moving forward is to not
respond to this email, and have no further communication with
her, ever. I expect her to sue me (or her lawyer husband).
P
4. Lev admitted in his affidavit that he participated in the Board’s conference
call discussion, but stated that he “just listened” except for responding to two
points: (1) he came to Tolle’s defense regarding her guiding and safety skills,
and (2) after a lengthy discussion at which time consensus about not
(continued . . .)
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[¶8.] Tolle subsequently commenced this action. In her first count, Tolle
sought $25,000 from Lev under a theory of promissory estoppel for failing to
transfer the cabin. Tolle claimed damages in the amount of $25,000 because that
was the amount by which she claimed she reduced the price of the Lawrence County
property in return for the agreement to transfer the cabin. In her second count,
Tolle sought damages for tortious interference with her claimed business
relationship (employment) with Exum.
[¶9.] Lev moved for summary judgment arguing that Tolle’s cabin claim was
barred by the statute of frauds, the doctrine of merger, and the parol evidence rule.
The court ruled that Tolle’s claim was barred by the statute of frauds, specifically
SDCL 53-8-2(1) and (3). Lev also moved for summary judgment on Tolle’s tortious
interference claim. The court ruled that “there [were] no genuine issues of material
fact in the record to support one or more of the elements constituting [Tolle’s]
tortious interference with a contractual relationship claim.” Tolle appeals both
rulings.
Decision
[¶10.] 1. Whether the circuit court erred in granting summary judgment
on Tolle’s promissory estoppel claim.
[¶11.] “This Court reviews a grant of summary judgment ‘to determine
whether the moving party has demonstrated the absence of any genuine issue of
material fact and entitlement to judgment on the merits as a matter of law.’”
________________________
(. . . continued)
employing Tolle was reached, he agreed to vote in response to Turner’s
request for unanimity because Lev had yet to speak up. Tolle did not refute
this affidavit.
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Johnson v. Sellers, 2011 S.D. 24, ¶ 11, 798 N.W.2d 690, 694 (quoting DRD Enters.,
L.L.C. v. Flickema, 2010 S.D. 88, ¶ 10, 791 N.W.2d 180, 183-84). “The circuit court’s
conclusions of law are reviewed de novo.” Id. “All reasonable inferences drawn
from the facts must be viewed in favor of the non-moving party.” Gail M. Benson
Living Trust v. Physicians Office Bldg., Inc., 2011 S.D. 30, ¶ 9, 800 N.W.2d 340,
342-43. Nevertheless, the party challenging summary judgment “must substantiate
his allegations with sufficient probative evidence that would permit a finding in his
favor on more than mere speculation, conjecture, or fantasy.” Schwaiger v. Mitchell
Radiology Assocs., P.C., 2002 S.D. 97, ¶ 7, 652 N.W.2d 372, 376. “We will affirm the
circuit court’s ruling on a motion for summary judgment when any basis exists to
support its ruling.” United Bldg. Centers v. Ochs, 2010 S.D. 30, ¶ 10, 781 N.W.2d
79, 82.
Statute of Frauds
[¶12.] The circuit court dismissed Tolle’s cabin claim, relying on the statute
of frauds, SDCL 53-8-2(1) and (3). Subsection (1) prohibits enforcement of an oral
agreement “that by its terms is not to be performed within a year from the making
thereof.” Subsection (3) prohibits enforcement of an oral agreement “for sale of real
estate.” These types of oral agreements are “not enforceable by action unless the
contract or some memorandum thereof is in writing and subscribed by the party to
be charged.” SDCL 53-8-2.
[¶13.] Tolle argues that SDCL 53-8-2 does not bar her claim because Lev’s
2005 email was a sufficient writing and because the cabin agreement was for the
sale of personal property, not real estate. We agree with both contentions. The
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2005 email was a written confirmation of the agreement subscribed by Lev5 that
satisfied the writing requirement in SDCL 53-8-2. Additionally, SDCL 53-8-2(3) is
inapplicable because the agreement was for the sale of personal property. The
record reflects that these cabins were routinely transferred for nominal sums
among guides while working for Exum. The record also reflects that the transfers
included no interest in real estate – the land was owned by the National Park
Service and could not be sold by Lev.6
Merger
[¶14.] Lev argues that the doctrine of merger bars Tolle from claiming that
Lev agreed to transfer the cabin as a part of the consideration for the Lawrence
County property. Lev points out that the purchase agreement contained an
integration clause, and neither the purchase agreement nor the warranty deed
mentioned any obligation to transfer the cabin. The doctrine of merger provides:
“[U]pon delivery and acceptance of an unambiguous deed, all prior negotiations and
agreements are deemed merged within.” Estate of Fisher v. Fisher, 2002 S.D. 62, ¶
5. “The writing requirement of the statute of frauds ensures reliable evidence is
presented before a contract[ual] obligation is enforced against one of the
parties to the contract.” Northstream Invs., Inc. v. 1804 Country Store Co.,
2007 S.D. 93, ¶ 11, 739 N.W.2d 44, 48. “[T]he term ‘subscribed’ contained in
SDCL 53-8-2 may include a typewritten name or other symbol of
authentication where the party intends such act to be his or her signature on
the document.” Id. ¶ 14. Peter Lev does not dispute that he intended to sign
the email by typewriting “P” at the end of the email.
6. Tolle also argues that the statute of frauds is not a defense where a party can
prove promissory estoppel. See Jacobson v. Gulbransen, 2001 S.D. 33, ¶ 26,
623 N.W.2d 84, 90-91 (stating that an agreement is not subject to the statute
of frauds when there is proof of promissory estoppel). In light of our ruling,
we do not address this argument.
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15, 645 N.W.2d 841, 846. Lev also points out that under the integration clause in
the purchase agreement, the parties’ written agreement became the complete and
final statement of the parties’ obligations.
[¶15.] Tolle argues that the collateral contract exception to the doctrine of
merger applies.7 There are two tests to determine if the collateral contract
exception applies: “(1) whether the collateral contract forms an integral part of the
principal purpose of the deed, namely conveyance of title and quantity of land, and
(2) whether the parties intended the contract to be collateral.” Hammerquist v.
Warburton, 458 N.W.2d 773, 776 (S.D. 1990).
[¶16.] In this case, the principal purpose of the purchase agreement and deed
was to convey title to Lawrence County real property. The oral agreement to
transfer the cabin in the Grand Tetons involved personal property in Wyoming,
making the cabin agreement a collateral contract unnecessary to convey title to the
Lawrence County property. Additionally, the parties clearly intended the cabin
agreement to be collateral to the Lawrence County sale because the cabin transfer
was not to take place until Lev retired at some unknown point in the future. The
cabin agreement and the Lawrence County property agreement also involved
different parties. We conclude that the cabin agreement was a collateral contract,
and neither the doctrine of merger nor the integration clause defeated Tolle’s claim
to enforce the oral agreement.
7. Tolle also argues that where the doctrine of promissory estoppel can be
applied, merger cannot be used to defeat the claim. We do not address this
argument because we conclude that the collateral contract exception applies.
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Parol Evidence
[¶17.] Lev argues that Tolle is attempting, by the admission of parol
evidence, to vary the consideration term of the purchase agreement. The parol
evidence rule, as codified in SDCL 53-8-5, provides that “[t]he execution of a
contract in writing, whether the law requires it to be written or not, supersedes all
the oral negotiations or stipulations concerning its matter which preceded or
accompanied the execution of the instrument.” However, in this case, Tolle is not
seeking to use Lev’s oral statements to vary any term of the written agreement to
sell the Lawrence County land. She is seeking to use the statements to prove a
collateral oral agreement to transfer personal property. Moreover, Lev’s emails
were authored after the written purchase agreement and deed. The parol evidence
rule does not bar conduct and discussions that occur after parties execute a
contract. Hofeldt v. Mehling, 2003 S.D. 25, ¶ 11, 658 N.W.2d 783, 787.
[¶18.] We reverse the circuit court’s grant of summary judgment on Tolle’s
promissory estoppel claim regarding the cabin.
[¶19.] 2. Whether the circuit court erred in granting summary judgment
on Tolle’s claim for tortious interference with a business
relationship.
[¶20.] The circuit court granted Lev’s motion for summary judgment,
concluding there were no genuine issues of material fact to support one or more of
the elements of tortious interference. There are six elements a plaintiff must prove
to sustain a claim of intentional interference with a business relationship: “(1) the
existence of a valid contractual relationship, (2) intentional interference with that
relationship, (3) by a third party, (4) accomplished through improper means or for
an improper purpose, (5) a causal effect between the interference and damage to the
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relationship, and (6) damages.” Gruhlke v. Sioux Empire Fed. Credit Union, Inc.,
2008 S.D. 89, ¶ 12, 756 N.W.2d 399, 406. Tolle carried the burden of proving each
of these elements. See id.[¶21.] Tolle argues that, in resisting summary judgment, she produced
sufficient evidence to support a claim for tortious interference. Tolle alternatively
claims that she introduced sufficient evidence to create genuine issues of fact for a
trial on the elements necessary for tortious interference.
[¶22.] The party resisting summary judgment is required to “show that they
will be able to place sufficient evidence in the record at trial to support findings on
all the elements on which they have the burden of proof.” Lawrence Cnty. v. Miller,
2010 S.D. 60, ¶ 14, 786 N.W.2d 360, 367. The resisting party cannot overcome a
motion for summary judgment with mere general allegations and denials. Id. Lev
argues that Tolle’s showing in opposition of summary judgment involved nothing
more than unsupported statements and speculation, which are not sufficient to
create a genuine issue of material fact. See id. We hold that Tolle failed to meet
her responsive burden of placing sufficient evidence in the record to support
findings in her favor on element two (intentional interference) and element five
(causation).
[¶23.] Tolle relies on the emails between Lev and Turner, and Turner’s email
to the Board to establish intentional interference and causation. But there is no
indication in the record that Lev knew, at the time of his emails to Turner, that
Tolle had been offered a guide position at Exum for the 2009 guiding season.
Without such knowledge, Lev could not have intended his emails to Turner to
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interfere with any prospective employment relationship Tolle may have had with
Exum. Moreover, Lev’s emails merely requested information about prior cabin
sales and disclosed the nature of the dispute so he could collect evidence to defend
against Tolle’s impending suit. Lev made no mention of Tolle’s employment, and
there is no suggestion he requested Turner or the Board to do anything with respect
to Tolle’s employment. This record does not even create an inference that Lev’s
emails requesting historical cabin sale information were attempts to intentionally
interfere with Tolle’s employment relationship.
[¶24.] With respect to causation, we acknowledge that Lev did vote as a
director on the decision to rescind the offer of employment. We also acknowledge
that Turner made a passing reference to the cabin dispute in his email to the Board.
But the record reflects that Turner’s email and the Board discussion concerned
numerous and substantial Tolle employment problems that were unrelated to the
cabin. Moreover, Tolle did not contest the affidavits of Turner and Hargis
indicating that the Board’s decision had nothing to do with any dispute between Lev
and Tolle. Tolle failed to identify any evidence, other than argument and
speculation, even suggesting that Lev’s emails were the legal cause of the Board’s
decision to rescind Exum’s invitation to Tolle.
[¶25.] We affirm the circuit court’s grant of summary judgment on Tolle’s
tortious interference claim.
[¶26.] GILBERTSON, Chief Justice, and KONENKAMP and SEVERSON,
Justices, concur.
[¶27.] WILBUR, Justice, did not participate.
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