In Re Dennis Snaza Family Trust

#28338-a-GAS
2018 S.D. 23

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

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In the Matter of the DENNIS SNAZA FAMILY TRUST.

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APPEAL FROM THE CIRCUIT COURT OF
THE FIFTH JUDICIAL CIRCUIT
DAY COUNTY, SOUTH DAKOTA

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THE HONORABLE JON S. FLEMMER
Judge

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GREGORY P. GRAJCZYK
Milbank, South Dakota Attorney for petitioner and
appellant Wayne Snaza,
individually and as trustee.

GORDON P. NIELSEN
DAVID A. GEYER of
Delaney, Nielsen & Sannes P.C.
Sisseton, South Dakota Attorneys for respondents and
appellees Ronald Snaza & Ann
Perrell.

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CONSIDERED ON BRIEFS
ON JANUARY 8, 2018
OPINION FILED 03/14/18
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SEVERSON, Justice

[¶1.] Wayne Snaza gave notice of his intent to exercise his rights under an

option agreement to purchase all the real property held by the Dennis Snaza Family

Trust, which was under court supervision at the time. Ronald Snaza and Ann

Perrell, as beneficiaries of the Trust, objected to Wayne’s claimed rights to the

property, arguing the option agreement was invalid. After a hearing, the circuit

court ruled that the option agreement was void because it could not survive the

contemporaneous execution of deeds to the same real property. The circuit court

also ruled that even if the option agreement was valid, Wayne waived his rights

when the real property was transferred to the Trust. The circuit court ordered that

Wayne, as trustee of the Trust, distribute the net income and residue of the

principle of the Trust to the beneficiaries upon completion of its term. Wayne

appeals the circuit court’s order. We affirm.

Background

[¶2.] On March 25, 2008, Anthony and Bernice Snaza executed a quitclaim

deed that transferred specific property they owned in Day County, South Dakota, to

their son Dennis Snaza. That same day, Anthony and Bernice executed an option

agreement in favor of their sons Dennis and Wayne Snaza that involved the same

real property described in the deed. The option agreement provided that Dennis or

Wayne could elect to purchase the real property described in the agreement by

tendering notice of their election within 120 days after the death of Anthony. The

right to exercise the option was conditioned upon Dennis or Wayne being actively

engaged in farming.

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[¶3.] On April 28, 2008, Dennis and Wayne signed the option agreement.

However, Dennis passed away shortly thereafter. On March 29, 2010, Wayne

executed a stipulation agreement that stated in part:

I . . . assign, set over and transfer all of my right, title and
interest in and under the Estate of Dennis James Snaza. . . .
By this instrument, I authorize and direct the Personal
Representative of the Estate of Dennis James Snaza to
distribute my interest to the Dennis Snaza Family Trust,
Anthony P. Snaza, Trustee.

On April 26, 2010, Anthony and Bernice recorded the quitclaim deed that

previously conveyed the property to Dennis. Anthony then recorded a personal

representative’s deed on August 18, 2010, that transferred the property held by

Dennis’s estate to the Dennis Snaza Family Trust. On November 5, 2013, Wayne

recorded the option agreement.

[¶4.] Anthony and Bernice were the primary beneficiaries of the Trust.

Ronald Stanza, Ann Perrell, and Wayne were secondary beneficiaries. Ronald and

Ann petitioned the circuit court to assume supervision over the Trust following the

death of Anthony and Bernice. By stipulation of the beneficiaries, the circuit court

assumed supervision over the Trust on October 28, 2016.

[¶5.] On November 30, 2016, Wayne filed notice with the circuit court of his

election to exercise his option to purchase the real property held by the Trust.

Ronald and Ann objected, claiming the option agreement was void. Wayne filed a

motion in the circuit court on June 12, 2017, to confirm the sale pursuant to the

terms of the option agreement. After a subsequent hearing on the motion, the

circuit court concluded that the option agreement could not defeat Anthony and

Bernice’s quitclaim deed to Dennis because the deed was presumed to pass fee

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simple title to the property, and it did not appear from the deed that a lesser estate

was intended. The circuit court also found that there was no indication a lesser

estate was intended in the personal representative’s deed that transferred the

property from Dennis’s estate to the Trust. In the alternative, the circuit court

stated that Wayne waived any rights he had in the property by executing the

stipulation agreement on March 28, 2010. Finally, the circuit court ordered Wayne,

as trustee, to distribute the net income and the residue of the principal in the Trust

upon the completion of the Trust’s term.

[¶6.] Wayne appeals the circuit court’s ruling, raising the following

consolidated issues:

1. Whether the circuit court erred when it ruled the option
agreement invalid.

2. Whether the circuit court erred when it ordered Wayne to
distribute the Trust’s corpus.

Analysis

[¶7.] 1. Whether the circuit court erred when it ruled the option
agreement invalid.

[¶8.] “An option to purchase real property may be defined as a contract by

which an owner of real property agrees with another person that the latter shall

have the privilege of buying the property at a specified price within a specified time,

or within a reasonable time.” Laska v. Barr, 2016 S.D. 13, ¶ 6, 876 N.W.2d 50, 53

(quoting Ziegler Furniture & Funeral Home, Inc. v. Cicmanec, 2006 S.D. 6, ¶ 17, 709

N.W.2d 350, 355). We interpret contracts as a question of law under the de novo

standard of review. Id. ¶ 5, 876 N.W.2d at 52. “Because we can review the contract

as easily as the trial court, there is no presumption in favor of the trial court’s

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determination.” LaMore Rest. Group, LLC v. Akers, 2008 S.D. 32, ¶ 12, 748 N.W.2d

756, 761 (quoting Vander Heide v. Boke Ranch, Inc., 2007 S.D. 69, ¶ 17, 736 N.W.2d

824, 831-32).

[¶9.] The construction of a deed is also a question of law. Chicoine v. Davis,

2017 S.D. 62, ¶ 4, 903 N.W.2d 544, 547. “We examine the instrument as a whole to

determine what type of conveyance was intended.” Id. (quoting Swaby v. N. Hills

Reg’l R.R. Auth., 2009 S.D. 57, ¶ 22, 769 N.W.2d 798, 808). “If the language of a

deed leaves doubt on the intention of the parties, we will consider all the attendant

circumstances existing at the time of execution.” Id. (quoting Swaby, 2009 S.D. 57,

¶ 22, 69 N.W.2d at 808). However, when the question is whether a deed was

delivered, we review a circuit court’s finding of fact and the application of law to

those facts under the clearly erroneous standard. Stockwell v. Stockwell, 2010 S.D.

79, ¶ 20, 790 N.W.2d 52, 60. “We review findings of fact for clear error and

conclusions of law de novo.” Tri-City Assocs., L.P. v. Belmont, Inc., 2014 S.D. 23,

¶ 19, 845 N.W.2d 911, 916.

[¶10.] Wayne contends the circuit court erred in holding the option

agreement invalid because Anthony and Bernice’s intent was to have the option

rights attach to the land so that any subsequent transfer of the real property would

be subject to the rights of the option holders. Wayne argues that the option

agreement and the quitclaim deed that transferred the property to Dennis must be

construed together as an integrated contract. In construing the two together,

Wayne alleges his option to purchase the property attached to the property through

the two subsequent transfers. We disagree.

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[¶11.] Upon review of the record, the crux of this appeal rests on the property

rights Anthony and Bernice possessed at the execution of both the quitclaim deed

and the option agreement on March 25, 2008; thus, we begin our analysis with the

document purporting to convey the totality of the couple’s real property interest.

Pursuant to South Dakota law, the grant of a quitclaim deed establishes implied

covenants between the grantor and the grantee, his heirs, or assigns that

previous to the time of the execution of such conveyance the
grantor has not conveyed the same estate or any right, title, or
interest therein to any person other than the grantee; and . . .
such estate is at the time of the execution of such conveyance
free from encumbrances made, done, or suffered by the grantor.

SDCL 43-25-11. As a result, “[a] fee simple title is presumed to be intended to pass

by a grant of real property unless it appears from the grant that a lesser estate was

intended.” SDCL 43-25-15. We find no such intent to convey a lesser estate in the

quitclaim deed to Dennis, as the deed stated that Anthony and Bernice “convey and

quit claim to Dennis Snaza . . . all of their right, title and interest in and to the

following described real estate.” Therefore, a presumption exists that Dennis was

granted absolute ownership of the real property conveyed by the quitclaim deed.

[¶12.] Nonetheless, before a deed can become effective, the grantor must

deliver the deed during his lifetime. Spitzer v. Spitzer, 84 S.D. 147, 151,

168 N.W.2d 718, 720 (S.D. 1969). “Whether a deed has been delivered is a question

of intent to be found from all the facts surrounding the transaction.” Hanifin v.

Marsden, 297 N.W.2d 172, 173 (S.D. 1980). However, “[t]he fact that a deed has

been duly executed, acknowledged, and recorded is prima facie evidence of its

delivery.” Id. (quoting Huber v. Backus, 79 S.D. 342, 346, 112 N.W.2d 238, 240

(S.D. 1961)); see also SDCL 43-4-7 (“A grant duly executed is presumed to have been
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delivered at its date.”). 1 Here, evidence exists on the face of the quitclaim deed that

it was executed, acknowledged, and recorded; thus, we presume the deed was

delivered. Wayne did not contest the issues of recording or delivery.

[¶13.] Once the presumptions are established, the burden is on the party

claiming that the deed conveyed a lesser estate and that the deed was not delivered

to overcome the presumptions. See Stockwell, 2010 S.D. 79, ¶ 21, 790 N.W.2d at 60.

“A presumption imposes on the party against whom it is directed the burden of

going forward with evidence to rebut or meet the presumption, but does not shift to

such party the burden of proof in the sense of the risk of nonpersuasion, which

remains throughout the trial upon the party on whom it was originally cast.” Id.

(quoting In re Estate of Gustafson, 2007 S.D. 46, ¶ 11, 731 N.W.2d 922, 926); see also

SDCL 19-19-301. “When substantial, credible evidence has been introduced to

rebut the presumption, it shall disappear from the action or proceeding.” Id.

(quoting SDCL 19-11-1).

[¶14.] In the present case, Wayne presented no evidence to rebut the

presumptions. The circuit court stated in its findings of fact that Wayne “called no

witnesses and introduced no evidence in support of [his] Motion to Confirm Sale

Pursuant to Exercise of Option to Purchase Real Property, relying instead on

argument of counsel and on the pleading that had been filed prior to [the] hearing.”

Contrarily, Ronald and Ann introduced into evidence the quitclaim deed, personal

representative’s deed, option agreement, and Wayne’s stipulation agreement.

1. South Dakota Title Standard 6-01 also evinces the presumption of delivery,
stating that “[d]elivery of an instrument, acknowledged and recorded, is
presumed. Delay in recordation . . . does not dispel the presumption.”
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[¶15.] Moreover, Wayne failed to establish the validity of the option

agreement. The ownership of property in South Dakota can be either absolute or

qualified. SDCL 43-2-4. “The ownership of property is absolute when a single

person has the absolute dominion over it, and may use it or dispose of it according

to his pleasure, subject only to general laws.” SDCL 43-2-5. “The ownership of

property is qualified: (1) When it is shared with one or more persons; (2) When the

time of enjoyment is deferred or limited; or (3) When the use is restricted.”

SDCL 43-2-6. In order to show that Dennis’s ownership was qualified, Wayne had

the ultimate burden of proving the option agreement was valid. To do so, Wayne

had to prove the option agreement was delivered to him before the purported

conveyance in order for it to have effect. See SDCL 53-7-8 (“A contract in writing

takes effect upon its intended delivery for effect to the party in whose favor it is

made or to his agent.”). Wayne presented no evidence or testimony as to the

validity or delivery of the option agreement. The only evidence of delivery of the

option agreement was when Wayne signed it in April 2008, a month after the

property was conveyed to Dennis. 2

[¶16.] Therefore, Wayne had the burden of going forward with evidence to

overcome the presumptions established by law. Other than “mere assertions,

implausible contentions, and frivolous avowals[,]” Wayne failed to produce any

evidence to overcome these presumptions. See In re Estate of Dimond, 2008 S.D.

2. Wayne argues that our holding in Speck v. Anderson, 318 N.W.2d 339 (S.D.
1982), governs the disposition of this case. However, Speck is distinguishable
from the facts at hand because in Speck, the Court found the option
agreement to be valid and thus exercisable on the property owned by the
grantor’s devisee. Id. at 344.
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131, ¶ 9, 759 N.W.2d 534, 538. We cannot say the circuit court erred in finding that

the option agreement was void because Anthony and Bernice had already conveyed

the property to Dennis. Wayne’s other arguments are premised on the circuit

court’s finding that he waived his option rights, but because Wayne had no interest

in the property due to its previous transfer, there is no need to address them.

[¶17.] 2. Whether the circuit court erred when it ordered Wayne to
distribute the Trust’s corpus.

[¶18.] The circuit court, in its conclusions of law regarding the option issue,

stated as follows:

That the Trustee should, upon the completion of the term of the
Dennis Snaza Family Trust, distribute the net income and the
residue of the principal including the real property of the Trust
that is the subject matter of these proceedings equally and as
tenants in common to the secondary beneficiaries of the Trust,
namely, Wayne Snaza, Ann Marie Perell and Ronald Snaza.

Wayne, as trustee, argues that the circuit court deprived him of due process by

usurping his discretion when it ordered that the Trust’s corpus be distributed. We

disagree.

[¶19.] We review a claim alleging a due-process violation de novo. Daily v.

City of Sioux Falls, 2011 S.D. 48, ¶ 11, 802 N.W.2d 905, 910. “To establish a

procedural due process violation, a plaintiff must demonstrate that he has a

protected property or liberty interest at stake and that he was deprived of that

interest without due process of law.” Osloond v. Farrier, 2003 S.D. 28, ¶ 16,

659 N.W.2d 20, 24 (per curiam) (quoting Hopkins v. Saunders, 199 F.3d 968, 975

(8th Cir. 1999)). “First, the property interest must be derived from a source

independent from the Constitution. Second, the individual must have been

deprived of this right by a state actor.” Id. (citations omitted).
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[¶20.] Even if we assume Wayne has a protected property interest in the

Trust, the record does not indicate he was deprived of anything by the circuit court’s

conclusion that he should distribute the Trust’s property. The term of the Trust is

for the length of the lives of Anthony and Bernice, plus one year. At the time of the

court’s ruling, the Trust was approaching its completion. At the conclusion of the

Trust’s term, Wayne was already directed by the Trust to “distribute the net income

and residue of the principal of the trust from the trust estate to the secondary

beneficiaries.” For the circuit court to conclude the same is not a deprivation of a

right. Wayne also does not establish in his brief to this Court what discretion the

circuit court is usurping. As just mentioned, upon completion of the Trust’s term,

no discretion lies in the hands of Wayne as trustee. We conclude Wayne’s due

process rights were not violated.

[¶21.] Wayne also contends that the circuit court, in concluding that the

Trust should be distributed, granted relief that was not requested by the parties.

However, Wayne stipulated to court supervision of the Trust. Within the petition

for supervision, Ronald and Ann asked the circuit court for any relief the court

deemed proper. Wayne also gave the circuit court discretion in granting relief that

it deemed necessary in his motion that kindled this appeal. The circuit court

granted the relief that was proper after ruling in favor of Ronald and Ann that the

option contract was void. See SDCL 15-6-54(c) (“[E]very final judgment shall grant

the relief to which the party in whose favor it is rendered is entitled, even if the

party has not demanded such relief in his pleadings.”). A circuit court’s decision

concerning an equitable remedy is reviewed for an abuse of discretion. Ziegler,

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2006 S.D. 6, ¶ 14, 709 N.W.2d at 354. As such, the record indicates that the circuit

court did not abuse its discretion in concluding the Trust should be distributed.

Conclusion

[¶22.] The circuit court did not err in finding the option agreement invalid, as

Wayne presented no evidence to rebut the presumption that the property was

already conveyed before the option agreement became effective. By ordering Wayne

to distribute the Trust at the conclusion of its term and in accordance with the

Trust instrument, the circuit court did not violate Wayne’s due-process rights or

abuse its discretion. Therefore, we affirm the circuit court’s order establishing that

the option agreement was void and that the Trust’s corpus be distributed.

[¶23.] GILBERTSON, Chief Justice, and ZINTER, KERN, and JENSEN,

Justices, concur.

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