Colburn v. Hartshorn

#26697, #26704-rev & rem-JKK
2013 S.D. 92
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
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DAVID COLBURN and
CHRISTINE COLBURN, Plaintiffs and Appellants,
v.
ROBERT HARTSHORN, Defendant and Appellee,
and
FIRST INTERSTATE BANK Defendant.
****
APPEAL FROM THE CIRCUIT COURT OF
THE SEVENTH JUDICIAL CIRCUIT
CUSTER COUNTY, SOUTH DAKOTA
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THE HONORABLE ROBERT A. MANDEL
Judge
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PATRICK M. GINSBACH of
Farrell, Farrell and Ginsbach, PC
Hot Springs, South Dakota Attorneys for plaintiffs
and appellants.
COURTNEY R. CLAYBORNE of
Clayborne, Loos & Sabers, LLP
Rapid City, South Dakota Attorneys for defendant
and appellee.
****
CONSIDERED ON BRIEFS
ON NOVEMBER 4, 2013
OPINION FILED 12/11/13
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KONENKAMP, Justice
[¶1.] This is an action to recover on a cattle caretaking agreement and to
foreclose an agister’s lien. The circuit court awarded compensation on the
agreement, but ruled the agister’s lien invalid because the cattle were cared for on
the cattle owner’s land, not the caretakers’ land. Yet nothing in our laws governing
such liens defeats their validity when cattle are entrusted to a caretaker on the
cattle owner’s land. Accordingly, we reverse and remand.
Background
[¶2.] In January 1998, to run a cow-calf operation, Christine and David
Colburn began leasing real property from Christine’s father, Robert Hartshorn, in
Custer County, South Dakota. According to the Colburns, Hartshorn agreed to
lease the property to them for $20,000 a year, with the term beginning January 1
and ending December 31. Each year, the Colburns were to make a $10,000
payment on or before April 1 and a second payment of $10,000 on or before
November 1. In addition to leasing Hartshorn’s real property, the Colburns agreed
to care for Hartshorn’s cattle, which included providing feed, cake, minerals,
pasturing, watering, herding, calving, weaning, and arranging for calf sales. In
exchange, Hartshorn would give the Colburns one half the net calf sale proceeds
when the cattle were sold in the fall of each year. Neither the terms of the cattle
care agreement nor the lease agreement were reduced to writing.
[¶3.] This arrangement continued from 1999 until 2007, when drought
conditions forced Hartshorn to move his cattle from the Colburns’ care to a ranch in
Wyoming. In January 2010, Hartshorn resumed the same arrangement with the
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Colburns, placing some 50 head of cattle on the land the Colburns leased. Following
the October 2011 sale and Hartshorn’s receipt of the Colburns’ $10,000 lease
payment, Hartshorn placed in the Colburns’ care 58 cows and 3 bulls. On April 1,
2012, the Colburns paid the first half of their annual lease payment.
[¶4.] In September, a dispute David Colburn and Hartshorn had over some
hay intensified when Hartshorn allegedly drew a gun on David. In response, David
obtained a temporary protection order against Hartshorn. Hartshorn did not
challenge it, saying he wanted nothing to do with David. According to Hartshorn,
after their relationship deteriorated, he no longer wanted the Colburns to lease his
land or care for his cattle. In response to a letter from the Colburns’ attorney
seeking a stipulation that would allow the Colburns to sell Hartshorn’s cattle and
divide the net calf sale proceeds, Hartshorn replied that any attempt by the
Colburns to sell the cattle would be deemed theft. Hartshorn then attempted,
unsuccessfully, to obtain another rancher to care for his cattle.
[¶5.] In October 2012, the Colburns served on Hartshorn and First
Interstate Bank an agister’s lien for caring for Hartshorn’s 58 cows and 3 bulls. See
SDCL ch. 40-27. They also gave notice of their intent to retain possession of the
cattle until payment. That same month, the Colburns brought an action to recover
amounts due for their care of Hartshorn’s cattle in 2012 and to foreclose on the lien
at a rate of $1.34 per day per head after October 15, 2012, for their continued care of
the cattle after what would have been the ordinary sale date. 1 Ultimately, the
1. Hartshorn brought a separate civil action for forcible entry and detainer and
served a notice to quit on the Colburns in November 2012. CIV 12-111.
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Colburns sought and received a court order to sell the calves in February 2013, at
the St. Onge Livestock Exchange. The sale yielded a net return of $42,384.75,
which the Custer County Clerk of Courts held in trust. 2
[¶6.] In a bench trial, David testified about the terms of the land lease and
cattle care agreement. He explained that because they began leasing Hartshorn’s
land in January 1998, he believed the lease ran from January 1 to December 31. He
said that Hartshorn agreed to pay them one half the net calf sale proceeds each
October for the care the Colburns provided the cattle during the year. Because
Hartshorn did not sell the cattle in October 2012 and did not pay the Colburns for
the care provided before October 2012, David claimed Hartshorn owed them one
half the net calf sale proceeds from the February 2013 sale. The Colburns also
sought to recover $1.34 per head per day after October 15, 2012, for the care they
provided for Hartshorn’s cattle until they were sold in February 2013. As support,
the Colburns offered expert testimony from Perle O’Daniel. O’Daniel testified that
the Colburns’ lien for $1.34 per head per day was fair and reasonable.
[¶7.] Hartshorn testified that the terms of the land lease and cattle care
agreement with the Colburns were intended to be consistent with his previous
written lease and cattle care agreement with Travis Bies. Under that agreement,
Bies leased Hartshorn’s property from April to March, made two lease payments
(April and November), cared for Hartshorn’s cattle, received one half the net calf
sale proceeds, provided 20 tons of hay to Hartshorn in non-drought years, and
2. From this amount, the court ordered that First Interstate Bank be paid
$10,000 to satisfy its security interest.
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allowed Hartshorn’s granddaughter to run cattle on the property. According to
Hartshorn, beginning in 1998, the Colburns agreed to abide by the terms of the Bies
Lease, and in fact, provided the 20 tons of hay to Hartshorn in non-drought years,
allowed Hartshorn’s granddaughter to run cattle on the land, paid rent in April and
November, and took care of Hartshorn’s cattle. By the terms of the Bies Lease, the
Colburns, in Hartshorn’s view, were entitled to no money for their care of
Hartshorn’s cattle from October 2012 to February 2013, because the Colburns had
yet to fulfill the terms of their April 1, 2012 to March 31, 2013 cattle care
agreement.
[¶8.] In its amended findings of fact and conclusions of law, the circuit court
found that “[t]he totality of the parties’ conduct reasonably indicate[d] assent that
the parties intended to be bound by the terms of an implied contract.” The court
ruled that the Colburns were entitled to one half the net calf sale proceeds from the
February 2013 sale based on the parties’ past practices. Also, the court ordered the
Colburns to pay Hartshorn $10,000 representing the lease payment for November 1,
2012 through April 1, 2013. But the court found the agister’s lien “invalid, as under
the terms of the implied contract, Hartshorn retained an interest in the use of the
leased premises.” Ultimately, the court ruled that the Colburns were entitled to
$11,192.37, constituting one half of $42,384.75 ($21,192.37) minus $10,000 rent
owed to Hartshorn.
[¶9.] In this appeal, the Colburns challenge the court’s decision on their
agister’s lien and order denying prejudgment interest. By notice of review,
Hartshorn asserts that the court erred in finding a valid and enforceable contract.
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Analysis and Decision
[¶10.] The Colburns assert error in the court’s ruling that their agister’s lien
was invalid after specifically finding that the parties had an implied contract
whereby Hartshorn entrusted his cattle to the Colburns for the purpose of feeding,
herding, pasturing, etc., in exchange for one half the net calf sale proceeds. In
addition to the court’s implied contract award, the Colburns contend that they are
entitled to recover for their continued care of Hartshorn’s cattle after October 2012,
because the implied contract only obligated them to provide care until October 2012.
[¶11.] Hartshorn, on the other hand, argues that the circuit court properly
concluded that the Colburns’ agister’s lien was invalid because “the court gave
Colburns full consideration which would be due for those services.” In Hartshorn’s
view, the term of the parties’ cattle care agreement was from April 1, 2012 to March
31, 2013, and therefore, when the cattle were sold on February 2013, the Colburns
had yet to complete their obligations under the agreement. Hartshorn also asserts,
by notice of review, that the court erred in finding a valid and enforceable lease and
cattle care agreement because there was no meeting of the minds on certain
essential terms. Yet Hartshorn advises us that despite the error, the court made an
equitable decision that “was just” and can be “sustainable under the facts presented
and the law applied.” We, therefore, need not address Hartshorn’s claim that the
court erred, because “[i]f there is any basis to support the court’s ruling, affirmance
of its decision is proper[,]” and Hartshorn concedes there was a proper basis for the
decision. See Zoss v. Schaefers, 1999 S.D. 105, ¶ 5, 598 N.W.2d 550, 551-52.
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[¶12.] We think it significant that the circuit court made no finding of fact or
conclusion of law favoring Hartshorn’s position that the term of the cattle care
agreement was from April 2012 to March 2013. Rather, the court found an implied
agreement based on the past practice of Hartshorn entrusting cattle to the
Colburns’ care, selling the cattle in October, and giving the Colburns one half the
net calf sale proceeds. Because Hartshorn entrusted the cattle to the Colburns’ care
in October 2011, but did not sell the cattle in October 2012, the court ruled that
“[t]he Colburns are entitled to one half of the net calf sale proceeds for 2012 in the
amount of $21,192.37.”
[¶13.] In addressing the Colburns’ additional claim under the agister’s lien
for caring for the cattle after October 2012, the court did not deny recovery because
it found that the cattle care agreement already covered the same period, but
because it concluded that the agister’s lien was invalid. If the cattle care agreement
ended in October 2012, as the court apparently concluded, then the fact that the
Colburns were entitled to recover under the terms of their implied contract in no
way invalidated their additional request for relief under the agister’s lien. And,
contrary to the court’s conclusion, Hartshorn’s possessory interest in the leased land
would not, as a matter of law, mean he did not entrust his cattle to the Colburns for
the purpose of feeding, herding, pasturing, or ranging. Nothing in SDCL 40-27-1
defeats a lien’s validity when cattle are entrusted to a caretaker on the cattle
owner’s land. Rather, that statute provides that “[a]ny person to whom any
domesticated animal shall be entrusted by the owner . . . for the purpose of feeding,
herding, pasturing, or ranging shall have a lien thereon for the amount that may be
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due for such service and supplies[.]” A claim under an agister’s lien focuses on
whether an owner of domesticated animals entrusted those animals to any person
for the purpose of feeding, pasturing, herding, or ranging. 3
[¶14.] Here, the court specifically found that Hartshorn placed 58 cows and 3
bulls in the Colburns’ care for the purpose of providing feed, cake, minerals,
pasturing, watering, herding, calving, weaning, and arranging calf sales. The court
further found that the parties’ past practices included Hartshorn selling the cattle
in October and paying the Colburns one half the net calf sale proceeds. Hartshorn
did not sell the cattle in October 2012, which led the Colburns to impose a lien,
retain possession of the cattle, and continue caring for them until their sale in
February 2013. See SDCL 40-27-1 (the lien entitles “the person to retain possession
of such domesticated animals until the amount due is paid”). The Colburns’
agister’s lien, therefore, was valid and the court erred in concluding otherwise. The
Colburns are entitled to recover for the caretaking services and supplies provided to
Hartshorn’s cattle from the time they would have ordinarily been sold in October
2012.
[¶15.] The Colburns further contend that the court erred when it failed to
award them prejudgment interest. SDCL 21-1-13.1 provides that “[a]ny person who
3. Compare Hannahs v. Noah, 83 S.D. 296, 158 N.W.2d 678 (1968) (tenant
owned the livestock the landlord’s mortgagor attempted to assert a lien
against), and Peyton v. Nielsen, 60 S.D. 351, 244 N.W. 384 (1932) (no lien
because tenant owned the sheep and pastured them on the leased land), with
Seremetis v. Cook, 42 N.W.2d 135 (Mich. 1950) (landlord had given tenant
possession of the livestock to be cared for, which entitled tenant to a lien and
right to retain possession until lien was paid).
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is entitled to recover damages, . . . is entitled to recover interest thereon from the
day that the loss or damage occurred[.]” Here, the Colburns were entitled to recover
damages, and therefore, under SDCL 21-1-13.1, the court was required to compute
and award prejudgment interest. “Prejudgment interest is now mandatory, not
discretionary.” Alvine v. Mercedes-Benz of N. Am., 2001 S.D. 3, ¶ 29, 620 N.W.2d
608, 614. On remand, the court is directed to award the Colburns prejudgment
interest on the amounts due to them.
[¶16.] Reversed and remanded.
[¶17.] GILBERTSON, Chief Justice, and ZINTER, SEVERSON, and
WILBUR, Justices, concur.
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