Huston v. Martin ( 2018 )

#28365-aff in pt & rev in pt-JMK
2018 S.D. 73
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
JUNE J. HUSTON, Plaintiff and Appellant,
v.
VANCE MARTIN and THE
ESTATE OF DALE M. JARMAN, Defendants and Appellees.
****
APPEAL FROM THE CIRCUIT COURT OF
THE SIXTH JUDICIAL CIRCUIT
HAAKON COUNTY, SOUTH DAKOTA
****
THE HONORABLE JOHN L. BROWN
Judge
****
ROGER A. TELLINGHUISEN
MICHAEL V. WHEELER of
DeMersseman, Jensen, Tellinghuisen
& Huffman, LLP
Rapid City, South Dakota Attorneys for plaintiff and
appellant.
WILLIAM M. VAN CAMP of
Olinger, Lovald, McCahren,
Van Camp & Konrad, PC
Pierre, South Dakota Attorneys for defendants and
appellee Vance Martin.
MARGO D. NORTHRUP of
Riter, Rogers, Wattier
& Northrup, LLP
Pierre, South Dakota Attorneys for defendant and
appellee the Estate of Dale M.
Jarman.
****
CONSIDERED ON BRIEFS
ON MAY 21, 2018
OPINION FILED 10/10/18
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KERN, Justice
[¶1.] At Father’s insistence, Daughter conveyed considerable amounts of
land to her father and nephew. In return, Father promised to “make things right”
with Daughter by leaving her half of his estate. However, Father left Daughter
only $30,000 in his will after conveying the vast majority of his multi-million-dollar
estate to Daughter’s nephew. Daughter sued her nephew and the estate, alleging
breach of contract, fraud, and unjust enrichment. Nephew and the estate moved for
summary judgment on several grounds, including that Daughter’s claims were
untimely under SDCL 29A-3-803 and prohibited because a contract to devise by will
must be in writing. The circuit court dismissed the case, granting the motion for
summary judgment. We affirm in part and reverse in part.
Facts and Procedural History
[¶2.] Prior to his death, Dale Jarman (Jarman) owned and operated a large
cattle ranch in Haakon County. Jarman operated the property via Jarman Ranch,
LLC, which possessed significant assets. Jarman and his wife (Joyce) had two
daughters, June Huston (Huston) and Susan Martin (Susan), and a grandson,
Vance Martin (Martin). In 2002, Susan transferred 640 acres of property to Huston
via a series of deeds made without consideration due to concerns about the health of
Susan’s husband. The family worried that Susan’s retention of the property would
affect Medicaid payments or could be targeted by creditors. When Joyce died in
July 2010 Huston inherited an undivided one-half interest in the family ranch.
[¶3.] On March 31, 2011, Huston, at Jarman’s insistence, executed and
delivered a warranty deed transferring her undivided one-half interest in 147.77
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acres of land to Jarman for and in consideration of one dollar. Huston claims she
did not wish to transfer the land. When deposed, Susan substantiated Huston’s
claim, observing that Jarman was “persistent” in his efforts to convince Huston to
transfer the property. On March 13, 2013, Huston also transferred by quitclaim
deed her ownership interest in 560 acres of real estate to Martin. Huston averred
that Jarman threatened to disinherit her if she did not comply and promised to
“make things right” with her in his will if she made the transfers. Specifically,
Huston alleged that Jarman promised to leave her 50% of his estate.
[¶4.] However, Jarman favored Martin in his estate planning. In May 2011,
shortly after Jarman received Huston’s land, Jarman requested that his attorney
revise his will to devise nearly the entirety of his estate to Martin. Unbeknownst to
Huston, by the end of 2012, Jarman had transferred more than $2,500,000 in cash
and assets to Martin. Martin did not give consideration for the gratuitous
transfers. After his death in March 2014, Jarman’s will revealed that he had
devised almost all his property to Martin, including the land Huston had conveyed
to him. Although the property was worth millions of dollars, Jarman left only
$30,000 to Huston in his will.
[¶5.] On July 24, 2014, Jarman’s estate published a notice to creditors. On
July 8, 2015—nearly a year later—Huston filed a complaint against Martin and the
estate, alleging fraud, breach of contract, promissory estoppel, and unjust
enrichment. On June 9, 2017, Martin and the estate moved for summary judgment,
raising numerous grounds for dismissal. The circuit court held a hearing to
consider the motion on August 18, 2017. Martin and the estate argued that SDCL
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29A-3-803 barred Huston’s claims for breach of contract and fraud because Huston
failed to file her claim within four months from the date notice was given to
creditors pursuant to SDCL 29A-3-801(a).1 They also argued that Huston’s contract
claim could not survive without written evidence memorializing the alleged contract
under the statute of frauds or SDCL 29A-2-514, which require that any contract to
make a will or devise be in writing.
[¶6.] While acknowledging that this Court has enforced oral agreements in
the past, Martin and the estate contended that those cases predated the enactment
of SDCL 29A-2-514. According to Martin and the estate, because SDCL 29A-2-514
bars the claim irrespective of any partial performance, our precedent enforcing oral
agreements is irrelevant in the present case. Further, they contended that Huston’s
fraud claim could not survive apart from the contract claim because the fraud
allegation did not arise from a breach of an independent legal duty, i.e., that “all of
their assertions . . . are formed or arise from the formation and enforceability of the
contract.” Finally, Martin and the estate asserted that Martin was not unjustly
enriched by retaining the land because he was unaware of any contract between
Jarman and Huston and engaged in no wrongdoing.
1. SDCL 29A-3-801(a) provides:
A personal representative upon appointment may publish a
notice to creditors once a week for three successive weeks in a
legal newspaper in the county in which the proceeding is
pending giving the personal representative’s name and address
and notifying creditors of the decedent to present their claims
within four months after the date of the first publication of the
notice or the claim may be barred.
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[¶7.] In response, Huston argued her claims were not time barred by SDCL
29A-3-803 because, in her view, the four month limitations period did not apply to
her claims. Specifically, she contended that SDCL 29A-3-803 applied only to claims
that arose prior to the decedent’s death—her claims, she emphasized, only became
actionable after Jarman’s death when she realized her father bequeathed assets to
Martin in violation of their contract. Further, Huston argued that when she
transferred the property to Jarman, she triggered the partial-performance exception
to the statute of frauds. Jarman argued that the exception must equally apply to
SDCL 29A-2-514 because claiming a contrary conclusion would lead to an unjust
result. As to the fraud claim, Huston observed that fraud involves questions of fact
and summary judgment at this stage would be premature. Regarding unjust
enrichment, Huston noted Martin had both received a benefit and knew of the
benefit, and, as such, it would be inequitable for Martin to keep the land without
paying consideration.
[¶8.] After hearing argument from the parties, the court remarked that the
case involved “a great number of . . . potential inequities[.]” However, the court
concluded that “under the circumstances . . . and the statutory language,” it would
“grant summary judgment on all claims,” observing that “obviously, this is
something the Supreme Court is going to have to sort out as to, certainly, the
breach of contract and matters.” The court did not elaborate further as to what
statutory language it was referencing, nor did it provide citations to authority in its
order granting Martin and the estate’s motion for summary judgment.
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[¶9.] Huston argues that the circuit court erred in granting summary
judgment. To answer this question, we restate Huston’s issues as follows:
1. Whether the circuit court erred by dismissing Huston’s
breach-of-contract claim.
2. Whether the circuit court erred by dismissing Huston’s
fraud claim.
3. Whether the circuit court erred by dismissing Huston’s
unjust-enrichment claim.
Standard of Review
[¶10.] Under our well-settled standard of review, “[s]ummary judgment is
proper where, the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to judgment as a
matter of law.” Hofer v. Redstone Feeders, LLC, 2015 S.D. 75, ¶ 10, 870 N.W.2d
659, 661 (citing SDCL 15-6-56(c)). The moving party bears “the burden of clearly
demonstrating an absence of any genuine issue of material fact and an entitlement
to judgment as a matter of law[,]” and we view the evidence and draw all reasonable
inferences in a light most favorable to the nonmoving party. Id. ¶ 10, 870 N.W.2d
at 661–62. “The nonmoving party, however, must present specific facts showing
that a genuine, material issue for trial exists.” Saathoff v. Kuhlman, 2009 S.D. 17,
¶ 11, 763 N.W.2d 800, 804. Even if the circuit court grants summary judgment
without offering the basis for its decision, “[i]f there exists any basis which supports
the ruling of the [circuit] court, affirmance of a summary judgment is proper.” Id.
¶¶ 11, 19, 763 N.W.2d at 804, 806. We review the circuit court’s legal conclusions,
including statutory interpretation, de novo. Hofer, ¶ 11, 870 N.W.2d at 662.
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Analysis
1. Huston’s breach-of-contract claim.
[¶11.] Huston argues that the circuit court erred by granting summary
judgment on her breach of contract claim. Specifically, she alleges that viewed in
the light most favorable to her claim, the evidence established a contract between
Jarman and Huston, and that the contract, though oral, overcame the statute of
frauds defense. Although Huston recognizes that SDCL 29A-2-514 requires some
form of writing pertaining to the alleged contract, Huston notes that under the
statute of frauds, partial performance obviates the need for a written contract.
Huston claims that “to the extent the statute of frauds defense even applies in this
instance, whether found at SDCL 29A-2-514 or elsewhere, it is clearly defeated
based upon the fact that” Huston performed under the contract. Huston cites
Hahne v. Burr, 2005 S.D. 108, 705 N.W.2d 867 in support of her argument that an
oral promise to convey real property may be enforced where partial performance has
occurred.2
[¶12.] SDCL 53-8-2, South Dakota’s statute of frauds, provides that a court
may “compel specific performance of any agreement for sale of real estate in case of
part performance thereof[.]” (Emphasis added.) However, SDCL 29A-2-514 states
that
[a] contract to make a will or devise . . . may be established only
by (i) the provisions of a will stating material provisions of the
contract, (ii) an express reference in a will to a contract and
2. The other cases cited by Huston predate SDCL 29A-2-514 and therefore do
not control our analysis.
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extrinsic evidence proving the terms of the contract, or (iii) a
writing signed by the decedent evidencing the contract.
(Emphasis added). The Legislature patterned the language of SDCL 29A-2-514
after provisions contained in the Uniform Probate Code (UPC), specifically § 2-514
of the UPC, which “tighten[s] the methods by which contracts concerning succession
may be proved.” Unif. Prob. Code § 2-514 cmt. (Unif. Law Comm’n 2010).
[¶13.] Here, no such writings exist, and the statute contains no
partial-performance exception. Indeed, the statute limits the means by which a
contract to convey by will can be established to “only” those listed.
SDCL 29A-2-514. We have held that even if a verbal promise was made, an
agreement will fail if “not in writing” as required by statute. Niesche v. Wilkinson,
2013 S.D. 90, ¶ 29, 841 N.W.2d 250, 258 (citing SDCL 29A-2-514).3
[¶14.] Additionally, other states that have examined identical statutes
adopting language from the UPC have concluded that, absent a writing, a contract
to will or devise does not exist. See, e.g., Cragle v. Gray, 206 P.3d 446, 452 (Alaska
2009); Orlando v. Prewett, 705 P.2d 593, 596–98 (Mont. 1985) (“To recognize a part
3. Although Huston notes that in Niesche, no “allegations of fraud” were made
and “SDCL 29A-2-514 by its terms does not apply to fraud claims,” Huston
does not elaborate how distinguishing the case in this way affects the
analysis of whether there must be a writing to support her breach-of-contract
claim.
Additionally, Huston claims that “[t]he facts supporting [a] claim of
[promissory] estoppel exist in the record, have been pled, and constitute yet
another ground for denying summary judgment.” But although we have said
that “the doctrine of equitable estoppel may prevent a party to an oral
agreement from invoking the Statute of Frauds[,]” Farmers Elevator Co. of
Elk Point v. Lyle, 90 S.D. 86, 238 N.W.2d 290, 293 (1976), Huston cites no
authority supporting such an exception under SDCL 29A-2-514.
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performance exception to this statute would once again create the uncertainties and
litigation that the statute was designed to reduce and eliminate.”); Johnson v.
Anderson, 771 N.W.2d 565, 569–70 (Neb. 2009). Because Huston has not alleged a
valid breach-of-contract claim, we need not address whether the claim was time
barred under SDCL 29A-3-803. The circuit court did not err by granting summary
judgment on the contract claim.
2. Huston’s fraud claim.
[¶15.] Huston claims that the circuit court erred in granting summary
judgment on her claims of fraud.4 She argues that her claim should survive
regardless of the validity of her contract with Jarman because fraud may be based
in tort as well as in contract. In Huston’s view, she established the basic elements
of fraud by presenting evidence of a letter from Jarman to his attorney directing the
attorney to redraft his will to make Martin his primary beneficiary. She also
contends that she identified evidence suggesting Jarman carried out his intent to
gift Martin a vast majority of his estate in violation of their agreement.
Accordingly, Huston argues that the circuit court prematurely granted summary
judgment.
[¶16.] The circuit court did not specify its reason for granting Martin and the
estate’s motion for summary judgment on Huston’s fraud claim. Huston argues her
claim was both validly pled and timely because the statute of limitations in SDCL
4. Huston’s complaint alleges that “Martin was knowledgeable and had actual
knowledge of [Jarman’s] representations.” However, Huston has failed to
identify any facts in the record to support a fraud claim against Martin. To
the extent Huston’s fraud claim included Martin, the circuit court properly
granted summary judgment.
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29A-3-803 did not apply to it. In response, Martin and the estate argue that,
pursuant to SDCL 29A-3-803, the circuit court properly dismissed Huston’s fraud
claim against the estate. SDCL 29A-3-803 bars “[a]ll claims against a decedent’s
estate which arose before the death of the decedent . . . .” unless, in the case of
creditors notified by publication, their claim is presented to the estate “within the
time set in the published notice to creditors[.]” (Emphasis added). Considering
this, Martin and the estate assert that Huston’s fraud claim is untimely because
Huston did not pursue the claim within four months after publication of the notice
to creditors. See SDCL 29A-3-801(a).
[¶17.] In support of this proposition, Martin and the estate cite Spohr v.
Berryman, 589 So. 2d 225 (Fla. 1991), a Florida Supreme Court decision. Spohr
involved a divorce agreement directing the husband, Spohr, to prepare and
maintain in his possession a will that “would bequeath and devise to his wife and
children not less than one half of his estate.” Id. at 226. Despite this agreement,
Spohr left his entire estate to his surviving spouse. Id. Spohr’s ex-wife and
children failed to bring a claim against the estate within the time permitted under
Florida’s nonclaim statute. Id. at 226–27.
[¶18.] The Florida Supreme Court concluded that although “the claim of [the
ex-wife] and the children did not come to fruition until the contents of Mr. Spohr’s
will were ascertained following his death, the claim itself, . . .” arose out of an
agreement entered into many years prior. Id. at 227. The court labeled the claim
as contingent, reasoning that “liability depend[ed] on some future event, which may
or may not happen, [and] render[ed] it uncertain whether there ever will be a
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liability.” Id. Because Florida’s nonclaim statute—like South Dakota’s—
contemplated contingent claims, the court held that the claims were untimely. Id.
The court also expressed concern about claims being brought years after the
decedent’s passing, which could “substantially delay[] or disrupt[]” distributions to
beneficiaries. Id. at 227.
[¶19.] South Dakota’s nonclaim statute applies to all claims “which arose
before the death of the decedent.” SDCL 29A-3-803(a). These include claims
“whether due or to become due, absolute or contingent, liquidated or unliquidated,
founded in contract, tort, or other legal basis, if not barred earlier by another
statute of limitations or nonclaim statute[.]” Id. “Words and phrases in a statute
must be given their plain meaning and effect.” Reints v. Pennington Cty., 2015 S.D.
74, ¶ 11, 869 N.W.2d 466, 469. In determining whether SDCL 29A-3-803 applies to
a claim, we have analyzed whether the claim arose prior to the decedent’s passing.
See In re Estate of Ginsbach, 2008 S.D. 91, ¶ 14, 757 N.W.2d 65, 69 (observing that
plaintiff knew, among other things, that decedent “had no intention to transfer”
ownership of property to plaintiff while decedent was alive).
[¶20.] If a contingent claim for fraud arose before Jarman’s passing, then the
claim would be untimely under SDCL 29A-3-803. A contingent claim is one “that
has not yet accrued and is dependent on some future event that may never happen.”
Claim, Black’s Law Dictionary (10th ed. 2014). “The distinguishing feature of a
contingent claim is that the cause of action has not accrued.” Turner v. Meek,
284 S.W.2d 848, 850 (Ark. 1955); see also In re Weinberger’s Estate, 279 N.W.2d 849,
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853 (Neb. 1979) (“Until that future event happens a right of action upon the
contingent claim does not arise.”).
[¶21.] For example, in Le Sueur v. Quillian, 56 S.D. 289, 228 N.W. 380
(1929), we held that a claim was contingent and therefore barred as untimely when
the claim depended on the potential actions of one of the parties. The dispute in
Quillian arose after Quillian conveyed land by warranty deed to Le Sueur in 1921.
Id. Quillian had previously mortgaged the land, and in 1923, Quillian died. Id. Le
Sueur did not present a claim within the time given by the notice to creditors. Id. at
381. In 1925, the “mortgage, not being paid, was foreclosed,” and Le Sueur was
evicted under a sheriff’s deed. Id. at 380. In 1926, Le Sueur presented a claim for
the amount of consideration recited in her deed with Quillian plus interest from the
date of eviction. Id. at 381.
[¶22.] The Quillian Court observed that the “covenant against
[e]ncumbrances was broken as soon as the warranty deed to [Le Sueur] was
delivered. Therefore, at the time of Quillian’s death and during the period within
which creditors might present claims was running, [Le Sueur] had a claim which
could have been presented to the executrix.” Id. The Court further noted that “the
claim was contingent” because “if Quillian’s executrix or heirs . . . pa[id] off the
[e]ncumbrance, no claim in favor of [Le Sueur] would thereafter exist[.]” Id.
Because “[Le Sueur’s] claim for the amount of the consideration named in her deed
could have been presented as a contingent claim,” the claim was barred under the
nonclaim statute. Id. at 382.
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[¶23.] In the instant case, Huston possessed a contingent claim against
Jarman. The facts, taken in the light most favorable to Huston, show Jarman
misrepresented his intentions for his estate plan, causing Huston to rely on those
false statements when she transferred her land to Jarman. Thus, the basis for the
claim arose out of an agreement made during Jarman’s lifetime. However, the
claim was contingent because Jarman could have modified his will to “make things
right” at any time while he was still alive. Thus, Huston’s claim had “not yet
accrued” and was “dependent on some future event that may never happen,” Claim,
Black’s Law Dictionary (10th ed. 2014), namely, Jarman fulfilling his promise. As
such, SDCL 29A-3-803 bars the fraud claim because it first arose as a contingent
claim during Jarman’s lifetime and was not timely filed within four months after
notice of publication to creditors. Unlike some other courts that have recognized an
exception to nonclaim statutes “where the claim is a contingent one[,]” see, e.g.,
Moore v. Stephens, 84 So. 2d 752, 754 (Ala. 1956), South Dakota’s nonclaim statute
expressly includes contingent claims.
[¶24.] To support her position that SDCL 29A-3-803 does not apply to her
fraud claim, Huston relies primarily on In re Estate of Green, 516 N.W.2d 326, 329
(S.D. 1994), which analyzed South Dakota’s prior nonclaim statute, SDCL 30-21-17.
In Green, Husband and Wife executed a joint will in 1964 providing that after their
death, their estate would be divided equally between their nieces and nephews. Id.
at 327. After Husband’s death, Wife executed a new will leaving her estate to her
siblings and their children instead. Id. After Wife’s death, Husband’s nieces and
nephews successfully challenged Wife’s new will. Id. at 328. The trial court
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imposed a constructive trust for the benefit of Husband’s nieces and nephews. Id.
It determined the 1964 joint and reciprocal will created a contract between
Husband and Wife that the property pass consistent with the 1964 will upon the
death of the second spouse. Id. When the Wife’s heirs appealed the decision
imposing the constructive trust the court dismissed it as untimely. Id. Wife’s heirs
subsequently objected to the petition proposing to distribute the property consistent
with the constructive trust ruling. Wife’s heirs claimed the contract claim
supporting the constructive trust ruling was time barred under SDCL 30-21-17
because Husband’s heirs had failed to timely assert the contract claim in the
probate following Husband’s death. Id. at 330. The probate court denied the
objection and ordered the property to be distributed consistent with the court
imposed constructive trust. The Green Court affirmed. Id. at 331.
[¶25.] The Green Court, focusing on the date on which the claim accrued,
rejected the argument that the time restraints in SDCL 30-21-17 were applicable to
the breach-of-contract claim. It held “South Dakota case law on claims arising
under this statute is clear—the statute is limited in application to “claims” which
are collectible from the decedent during his or her lifetime.” Id. at 329. Thus, the
Court concluded that a claim for breach of contract to devise property sounded in
contract rather than probate, so the nonclaim limitations period for creditor claims
against an estate did not apply. Id.
[¶26.] We conclude that Huston’s reliance on Green and the repealed
language of SDCL 30-21-17 is inapposite. While the Green Court correctly rejected
the attempt to use SDCL 30-21-17 to collaterally attack the trial court’s final
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decision imposing a constructive trust, Green’s reading of SDCL 30-21-17 was
incomplete. Specifically, the Green Court, when holding the breach of contract to
devise property was not a creditor’s claim under SDCL 30-21-17, did not consider
the meaning of a “contingent claim.” Rather, its analysis focused on when the
Green’s contract claim “accrued.” Id. at 328–29. But, as our opinion today
emphasizes, a contingent claim may be different than a claim that has accrued—a
contingent claim is dependent on a potential future event and an accrued claim is
one that has already come into existence as an enforceable claim. Thus, the Green
Court incorrectly focused on when the claim could be “filed.” Discussing only
“accrual” and “filing” overlooked the statutory “contingent claim” language that we
must interpret today.5 See id. Therefore, we conclude Green’s analysis of the prior
non-claim statute in SDCL 30-21-17 is not controlling of our reading of the current
non-claim statute in SDCL 29A-3-803(a).
[¶27.] Moreover, our holding today that Huston’s contingent claim for fraud
is governed by the provisions of SDCL 29A-3-803 is aligned with the majority of
jurisdictions that have adopted statutes identical to SDCL 29A-3-803(a). See
5. The Green court reasoned:
An action for breach of a contract to convey by will does not
accrue until the death of the promisor. Kitchen, 498 N.E.2d at
45; Stratmann, 806 P.2d at 464 (finding the contract is breached
when prior will is revoked). Greens could not have filed a
creditor’s claim against Carrol Green because the breach of
which they complain (her failure to honor the contract contained
in the 1964 joint will) did not occur until her death. Therefore,
their claim could only be filed against her estate and does not
fall within the ambit of SDCL 30-21-17. 516 N.W.2d at 330.
(Emphasis added.)
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generally, e.g., Spohr, 589 So. 2d at 228 (applying a nearly identical nonclaim
statute to an ex-wife and her children’s claims that the husband failed to provide for
their maintenance in his will); Underwood v. Underwood, 999 S.W.2d 716 (Ky. Ct.
App. 1999) (holding a wife’s claim for pension benefits was subject to a nonclaim
statute identical to South Dakota’s provision); Phillip v. Quick, 731 S.E.2d 327 (S.C.
Ct. App. 2012) (holding that a daughter’s allegation that her father took funds
belonging to her pursuant to the Uniform Gift to Minors Act without notifying her
was barred by the nonclaim statute); In re Estate of Ostler, 2009 UT 82, 227 P.3d
242 (holding that a mother’s wrongful death action against an estate for the death
of her husband must be brought within the nonclaim period).
[¶28.] Further, because the claim became actionable after Jarman’s death,
we need not address those situations where the contingent event does not or cannot
occur until after the close of the claims-filing period. See generally Johnson v.
Larson, 216 N.W. 895 (N.D. 1927). Here, a contingent claim for fraud arose prior to
Jarman’s death. Huston did not timely file her claim within the applicable four-
month time frame, and the claim is barred by SDCL 29A-3-803. The circuit court
did not err by granting summary judgment on this claim.
3. Huston’s unjust-enrichment claim.
[¶29.] Huston also argues that the circuit court improperly granted summary
judgment on her unjust enrichment claim.6 She alleges that when reviewing the
6. Huston’s complaint for unjust enrichment appears to allege claims of unjust
enrichment against the estate. To the extent the unjust-enrichment claim is
alleged against the estate, the claim suffers from the same timeliness
infirmity under SDCL 29A-3-803 discussed in Issue 2 above and summary
(continued . . .)
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evidence in the light most favorable to her claim, she has established that Martin
received a benefit and knew he received that benefit. She asserts that whether
Martin had actual knowledge of Jarman’s promise involves a question of fact.
Finally, she argues that allowing Martin to retain the benefit without paying for it
would be inequitable. In response, Martin and the estate argue that Huston failed
to identify facts establishing the necessary elements of unjust enrichment because,
according to them, absent some “inequitable behavior on [Martin’s] behalf,” no
unjust-enrichment claim can lie.
[¶30.] An unjust-enrichment action sounds in equity. Hofeldt v. Mehling,
2003 S.D. 25, ¶ 14, 658 N.W.2d 783, 788. “Unjust enrichment contemplates an
involuntary or nonconsensual transfer, unjustly enriching one party. The equitable
remedy of restitution is imposed because the transfer lacks an adequate legal
basis.” Johnson v. Larson, 2010 S.D. 20, ¶ 8, 779 N.W.2d 412, 416. A party alleging
unjust enrichment must show that the other party both received and knew he was
receiving a benefit. Additionally, it must be inequitable to allow the enriched party
to retain the benefit without paying for it. Id. ¶ 11, 779 N.W.2d at 416–17.
[¶31.] Even assuming Martin did not engage in any wrongdoing, the actual
question is whether “it would be inequitable to allow [him] to retain the benefit
without paying for it.” Larson, 2010 S.D. 20, ¶ 11, 779 N.W.2d at 416; see also DFA
Dairy Fin. Servs., L.P. v. Lawson Special Tr., 2010 S.D. 34, ¶ 28, 781 N.W.2d 664,
671 (“Unjust enrichment occurs ‘when a party confers a benefit upon another party
________________________
(. . . continued)
judgment was properly granted on any unjust-enrichment claim against the
estate.
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who accepts or acquiesces in that benefit and it is inequitable to receive that benefit
without paying.’”).
[¶32.] Despite this, Martin cites Commercial Trust and Savings Bank v.
Christensen, 535 N.W.2d 853, 858 (S.D. 1995), where we said that an unjust-
enrichment claim does not arise simply because a landlord benefits from a tenant’s
efforts to permanently improve the property. We held that an unjust-enrichment
claim in this context “implies illegal or inequitable behavior by the landlord in
obtaining the benefits conferred by the tenant,” such as by “request[ing] they
make . . . improvements to the property or otherwise suggest[ing] they would
reimburse” the tenant for the cost incurred in doing so. Id. at 858–59. However,
Christensen is distinguishable from the present circumstances because Huston’s
situation does not involve a disagreement between a landlord and tenant. As
articulated by Christensen, landlord–tenant disputes involve the “well-settled
principle that, in the absence of an agreement that the landlord will pay for
improvements or a statute imposing liability on the landlord, a tenant is not
entitled to compensation for improvements made to the leasehold even though they
cannot be removed by the lessee.” Id. at 858.
[¶33.] Although a court may, after weighing the equities in a particular case,
grant or deny a remedy, Hofeldt, 2003 S.D. 25, ¶ 14, 658 N.W.2d at 788, here the
court dismissed the claim on summary judgment without providing a reason. Doing
so at this stage of the proceedings was premature because genuine issues of
material fact exist as to what Martin knew and did with respect to Huston and
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Jarman’s alleged agreement. The circuit court erred by granting summary
judgment on this claim against Martin.
Conclusion
[¶34.] Huston’s breach-of-contract claim fails under SDCL 29A-2-514 because
it is not evidenced in writing. SDCL 29A-3-803 bars Huston’s fraud claim because
it arose as a contingent claim during Jarman’s lifetime and was filed more than four
months after notice of publication to creditors. The court’s order granting summary
judgment on these two claims is affirmed. However, because Huston may have an
unjust-enrichment claim against Martin, we reverse the court’s grant of summary
judgment on this issue.
[¶35.] Affirmed in part and reversed in part.
[¶36.] GILBERTSON, Chief Justice, and ZINTER and JENSEN, Justices,
and SEVERSON, Retired Justice, concur.
[¶37.] SALTER, Justice, not having been a member of the Court at the time
this action was assigned to the Court, did not participate.
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