Nelson v. Estate of Campbell

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2023 S.D. 14

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

****

JOHN NELSON, Plaintiff and Appellant,

v.

ESTATE OF GORDON CAMPBELL, Defendant, Third-Party
Plaintiff, and Appellee,

v.

REDWATER GRAZING ASSOCIATION,
INC., a South Dakota Cooperative Grazing
District, Third-Party Defendant, Fourth-
Party Plaintiff, and Appellant,

v.

JARED CAPP, Fourth-Party Defendant and
Appellee.

****

APPEAL FROM THE CIRCUIT COURT OF
THE FOURTH JUDICIAL CIRCUIT
BUTTE COUNTY, SOUTH DAKOTA

****

THE HONORABLE MICHAEL W. DAY
Judge

****

CONSIDERED ON BRIEFS
JANUARY 9, 2023
OPINION FILED 03/15/23
****

DAVID L. CLAGGETT of
Claggett & Dill, Prof. LLC
Spearfish, South Dakota Attorneys for appelants John
Nelson and Redwater Grazing
Association.

ROGER A. TELLINGHUISEN
NATHAN R. CHICOINE of
DeMersseman, Jensen, Tellinghuisen
& Huffman, LLP
Rapid City, South Dakota Attorneys for appellee Estate of
Gordon Campbell.

KELLEN B. WILLERT of
Bennett, Main, Gubbrud
& Willert, P.C.
Belle Fourche, South Dakota

ERIC DAVIS of
Nelson Law
Sturgis, South Dakota Attorneys for appellee Jared
Capp.
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KERN, Justice

[¶1.] The Estate of Gordon Campbell (Estate) sought to withdraw real

property from the Redwater Grazing Association (Redwater), a cooperative grazing

association, previously formed by several members, including Campbell, who had

contributed property to Redwater. Another member of Redwater, John Nelson,

asserted that the Estate was not authorized to remove the land from Redwater.

Alternatively, he claimed that he had entered into a contract with the Estate to

purchase the land from the Estate. Nelson and Redwater both filed various claims

and counterclaims against the Estate and against Jared Capp, another party

seeking to purchase the land from the Estate. The circuit court granted specific

performance to the Estate, requiring Redwater to deliver the deed for the property

to the Estate. The court also granted summary judgment against Nelson and

Redwater and dismissed the remaining claims. Nelson and Redwater appeal. 1 We

affirm in part, reverse in part, and remand.

Facts and Procedural History

[¶2.] Redwater Grazing Association, Inc. is incorporated as a cooperative

grazing association under SDCL chapter 40-23. Campbell, Nelson, and Richard

Marsh, as founding members of the corporation, each contributed land to Redwater

in 2010. Campbell contributed two parcels of land totaling approximately 53 acres.

Redwater filed articles of incorporation and later adopted governing bylaws.

[¶3.] Campbell passed away in 2017. After his death, his Estate sought to

withdraw the property contributed by him from Redwater pursuant to a provision

1. Nelson and Redwater have been represented by the same attorney
throughout the prior proceedings and on appeal.
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in the bylaws which allowed any member to withdraw his or her property from

Redwater upon 30 days written notice provided that the member had paid all

charges due to Redwater.

[¶4.] Prior to attempting to withdraw the property, the Estate began the

process of selling the property by soliciting bids from only Nelson and Jared Capp.

Nelson submitted an initial bid of $249,100, and Capp submitted a bid of $260,000.

In a letter dated February 14, 2018, the Estate informed both parties that it was

rejecting their first offers and beginning a new round of bidding to end on February

21, with an asking price of $283,000 and a provision that “[i]f the high bidder’s deal

falls through for any reason, the second highest bid will be accepted if: it meets the

above conditions, is above appraised price and within $100/acre of the winning bid.”

The letter to the parties also indicated that the Estate reserved the right to sell the

property to the general public if an agreement could not be reached.

[¶5.] The Estate received an offer of $301,000 from Nelson and an offer of

$284,000 from Capp. The Estate sent another letter on March 26 informing both

parties that it would be taking offers for a final time. The letter notified the parties

that this process was not an auction and stated that the Estate “reserve[d] its

unequivocal right to sell this property to whomever it chooses, and in any manner of

offering it chooses.” Additionally, this time, in order to make a bid, the bidders were

required to sign a release stating that they discharged any and all claims against

the Estate. Nelson did not make another offer, but Capp made a third offer of

$400,000, which the Estate accepted.

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[¶6.] When the Estate sought the deed for the property from Redwater in

order to convey the property to Capp, Redwater refused to turn over the deed and

Nelson filed a complaint against the Estate. 2 Nelson’s central claim was for specific

performance of what he viewed to be a binding contract with the Estate to sell the

property to him resulting from the second round of bids. He also asserted claims for

breach of contract and unjust enrichment. The Estate filed counterclaims against

Nelson for tortious interference with contract and slander of title.

[¶7.] The Estate then filed a third-party complaint against Redwater

seeking specific performance for the withdrawal of the property from Redwater and

the issuance of the deed to the property. In addition, the Estate asserted claims for

breach of contract and tortious interference with a contract. Redwater filed a

counterclaim against the Estate seeking a declaration that any deed issued should

be delivered to Nelson. Further, Redwater filed a claim for tortious interference

with a business relationship.

[¶8.] Redwater also filed a fourth-party complaint against Capp, seeking a

declaration that Capp was not entitled to the deed, but rather that the deed should

be issued to Nelson, and charging Capp with tortious interference with a business

relationship. Capp counterclaimed against Redwater for interference with a

contractual relationship and breach of contract, while also seeking a declaratory

2. Nelson’s complaint began litigation involving what was aptly described as “a
profusion of counterclaims, cross claims, and third- and fourth-party
claims[.]” Nelson v. Estate of Campbell, 2021 S.D. 47, ¶ 8, 963 N.W.2d 560,
564.
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judgment that Redwater was obligated to return the property to the Estate

pursuant to Redwater’s bylaws.

[¶9.] Finally, Nelson filed a cross-complaint against Capp for a declaratory

judgment that Capp was not entitled to a deed to the property and that the deed

should be issued to Nelson. He also asserted claims against Capp for tortious

interference with a contractual relationship, tortious interference with an

agricultural lease, and claim and delivery for some personal property that was

located on the disputed property. Capp responded with counterclaims against

Nelson for conversion, interference with a contractual relationship, unjust

enrichment, waste, and breach of a fiduciary duty.

[¶10.] The Estate filed a motion for summary judgment against Redwater on

the Estate’s claims for specific performance and breach of contract. After a hearing

on the matter, the circuit court entered an order dated September 9, 2019, holding

that there was neither an express nor an implied contract between the Estate and

Nelson to sell the property to Nelson. However, the court also concluded that

pursuant to Redwater’s bylaws, members of Redwater had a right of first refusal on

the sale of any membership grazing rights based on the relevant bylaw which

states:

Section 1. A Member may sell, permanently transfer, give or
assign any or all Membership rights to another family farmer
who is qualified for membership under the provisions of Article
XII subject to prior written approval of the Association.
However, Membership grazing rights must first be offered to one
or more existing Members. If no Member desires to purchase
the available Membership grazing rights they may then be
transferred to qualified third parties. The right of first refusal
vested in current members shall apply only in situations of
proposed sale, assignment or transfer to unrelated third parties.

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The first right of first refusal provided herein shall not apply to
intra-family or intra-family farm corporation transfers, sales,
assignments or gifts.

The circuit court held that the Estate was required to offer all existing members of

Redwater the opportunity to purchase such rights before it could convey the

property.

[¶11.] The Estate then filed a motion asking the court to reconsider its order

or, in the alternative, to direct an entry of final judgment on its third-party

complaint pursuant to Rule 54(b)3 so that it could be appealed while the rest of the

action was pending. In its brief to the court, the Estate emphasized that rather

than selling its membership interest in Redwater, it was seeking to withdraw the

property from Redwater that Campbell had previously contributed. A hearing on

that and several additional motions was held on October 21. The circuit court, in a

decision dated December 26, 2019, held that the Estate had a right to withdraw

from Redwater and that its earlier ruling on September 9, 2019, was based on the

portion of the bylaws dealing with the sale of membership interests rather than the

withdrawal of the property itself. The court revised its earlier decision and granted

specific performance requiring Redwater to “perform its obligations under the By-

Laws and deliver the deeds to the Estate.” The court also granted the Estate’s

motion for Rule 54(b) certification. Additionally, the court granted summary

judgment in favor of Capp, dismissing all of Nelson’s claims against Capp, and

3. Under SDCL 15-6-54(b), “the court may direct the entry of a final judgment
as to one or more but fewer than all of the claims or parties only upon an
express determination that there is no just reason for delay and upon an
express direction for the entry of judgment.”
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granted summary judgment to the Estate, dismissing all of Redwater’s

counterclaims.

[¶12.] After the December 26, 2019 ruling, Nelson and Redwater appealed

because the circuit court had certified its decision as final under SDCL 15-6-54(b). 4

This Court, in a written opinion, dismissed the appeal, holding that there was no

appellate jurisdiction because the justification for the Rule 54(b) certification was

not readily apparent from the record and there were outstanding claims pending,

including “allegations by the Estate and Capp of wrongful interference with a

contract against Nelson and Redwater, the Estate’s slander of title claim, and

Capp’s claim for waste, conversion, and breach of fiduciary duty against Nelson.”

Nelson, 2021 S.D. 47, ¶ 33, 963 N.W.2d at 570.

[¶13.] After the case was remanded to the circuit court, the Estate sought

voluntary dismissal of their remaining claims against Nelson and Redwater. The

Estate also filed a motion to bifurcate the remaining claims involving Capp

pursuant to SDCL 15-6-42(b). The court granted the motion to bifurcate on October

7, 2021 and granted the motions to dismiss the claims against Nelson and Redwater

in an amended judgment filed November 8, 2021. These orders resolved the claims

between the Estate, Nelson, and Redwater and bifurcated all of the claims involving

Capp, directing that they be subject to separate trials. These claims include

Redwater’s fourth-party complaint against Capp and Capp’s counterclaims against

Nelson and Redwater. The circuit court also issued an order on December 13 to

4. In addition to filing the appeal, on February 4, 2020, Nelson and Redwater’s
attorney deposited with the circuit court clerk a quit claim deed for the
property and a certificate of discharge of lis pendens.
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release the deed for the property to the Estate and to discharge the lis pendens filed

against the property.

[¶14.] Dissatisfied with this resolution, Nelson and Redwater again appealed

to this Court. We dismissed the appeal by order stating “the amended judgment

filed on November 8, 2021, is not a final judgment from which there would be an

appeal of right under SDCL 15-26A-3(1), and further, to the extent appellants seek

to appeal the November 8, 2021 order under any of the other sections of SDCL 15-

26A-3, appellant’s notice of appeal was untimely[.]”

[¶15.] Next, Capp filed motions to dismiss his remaining claims against

Nelson and Redwater and a motion for summary judgment on Redwater’s

remaining claims against him. After a hearing on the motions on April 27, 2022,

the circuit court granted both motions in an order dated April 28. This left no

outstanding claims between any of the parties. Nelson and Redwater now appeal,

raising several issues which we restate as follows:

1. Whether the circuit court abused its discretion in
granting the Estate’s claim for specific performance
requiring Redwater to deliver the deed for the property to
the Estate.

2. Whether the circuit court erred in granting summary
judgment to the Estate on Nelson and Redwater’s claims
having concluded there was no contract between the
Estate and Nelson to sell the property to Nelson.

3. Whether the circuit court erred in granting summary
judgment to the Estate thereby dismissing Nelson’s action
for claim and delivery of personal property.
The Estate also raises the issue of appellate jurisdiction, which we analyze first.

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Analysis

Appellate Jurisdiction

[¶16.] “Our authority to review civil judgments and orders is described in

SDCL 15-26A-3.” Huls v. Meyer, 2020 S.D. 24, ¶ 14, 943 N.W.2d 340, 343. Such

appellate jurisdiction “is generally limited to a review of final judgments.” MGA

Ins. Co. v. Goodsell, 2005 S.D. 118, ¶ 33, 707 N.W.2d 483, 489 (Zinter, J.,

concurring), quoted in Huls, 2020 S.D. 24, ¶ 14, 943 N.W.2d at 344. In determining

whether a decision is final and appealable, “we examine the substance of the circuit

court’s order over its designation to determine whether the order ‘ends the litigation

on the merits and leaves nothing for the court to do but execute the judgment.’”

Huls, 2020 S.D. 24, ¶ 14, 943 N.W.2d at 344 (quoting Knecht v. Evridge, 2020 S.D.

9, ¶ 42, 940 N.W.2d 318, 331). “When a circuit court’s ruling does not determine the

claims of all parties in an action, ‘the ruling was not appealable as a matter of right

unless the circuit court determined that there was no just cause for delay and

directed entry of a final judgment [pursuant to SDCL 15-6-54(b)].’” Goens v. FDT,

LLC, 2022 S.D. 71, ¶ 4, 982 N.W.2d 415, 417–18 (emphasis added) (alteration in

original) (quoting Weisser v. Jackson Twp. of Charles Mix Cnty., 2009 S.D. 43, ¶ 2,

767 N.W.2d 888, 889).

[¶17.] The Estate asserts that the November 8, 2021 amended judgment left

no remaining claims involving the Estate, and any remaining claims were between

Capp, Nelson, and Redwater. It asserts that because the circuit court granted

bifurcation, the November 8 judgment was a final judgment regarding any claims

involving the Estate. In the Estate’s view, Nelson and Redwater had thirty days

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therefrom, per SDCL 15-26A-6, to appeal any claims involving the Estate. Because

there was no appeal timely filed within thirty days of November 8, the Estate

argues that this Court does not have jurisdiction to hear this case.

[¶18.] SDCL 15-6-42(b) allows “[t]he court, in furtherance of convenience or to

avoid prejudice” to conduct separate trials “of any number of claims, cross-claims,

counterclaims, third-party claims, or issues[.]” While the claims involving the

Estate were resolved by the November 8 judgment, the claims of all parties in the

action were not yet decided. The bifurcation did not separate the claims into

separate cases, but rather separated the claims for trial in furtherance of

convenience or to avoid prejudice. All claims were still part of the same overall

action. Because the claims of all parties were not yet resolved when bifurcation was

granted, the case was not yet appealable as a final judgment. The April 28, 2022

order resolved all remaining claims rendering the judgment final and appealable.

Nelson and Redwater’s appeal, having been timely filed, is properly before this

Court.

1. Whether the circuit court abused its discretion in
granting the Estate’s claim for specific performance
requiring Redwater to deliver the deed for the
property to the Estate.

[¶19.] “Specific performance is an equitable remedy and this [C]ourt’s

standard of review addresses whether there has been an abuse of discretion by the

circuit court after reviewing the facts and circumstances of each case.” In re Estate

of Smeenk, 2022 S.D. 41, ¶ 34, 978 N.W.2d 383, 394 (alteration in original) (quoting

Johnson v. Sellers, 2011 S.D. 24, ¶ 21, 798 N.W.2d 690, 696). “[A]n essential

element to equitable relief is the lack of an adequate remedy at law.” McCollam v.

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Cahill, 2009 S.D. 34, ¶ 15, 766 N.W.2d 171, 176 (quoting Rindal v. Sohler, 2003

S.D. 24, ¶ 12, 658 N.W.2d 769, 772). “The presumed remedy for the breach of an

agreement to transfer real property is specific performance.” Id. (quoting Wiggins v.

Shewmake, 374 N.W.2d 111, 115 (S.D. 1985) (citing SDCL 21-9-9)). The circuit

court’s conclusions of law are reviewed de novo. Smeenk, 2022 S.D. 41, ¶ 15, 978

N.W.2d at 388.

[¶20.] Nelson and Redwater assert that pursuant to Redwater’s articles of

incorporation and bylaws, Redwater’s members have a right of first refusal to

purchase the stock owned by the Estate before it is sold to a third party. They point

to Article VII of Redwater’s articles of incorporation, which states: “all stock issued

shall be subject to a first option of repurchase in the corporation in event of sale at

the proposed sale price.” Additionally, Article XI, Section 1 of Redwater’s bylaws

gives other members the right to be offered membership grazing rights before being

offered to qualified third parties. Alternatively, Nelson and Redwater assert that

pursuant to the bylaws, a unanimous vote of approval is required before the Estate

is permitted to remove the land from Redwater. Article XI of the Redwater bylaws,

titled “Transfer of Membership Rights” provides in relevant part:

Section 5. Any member desiring to withdraw from the
association shall be entitled, upon 30 days written notice to the
association, to receive a deed from the association of the land
which that member had previously transferred to the
association. A member’s right to receive his land pursuant to
this section shall be contingent on said member’s payment of all
charges due from him pursuant to Article XIII.

Section 6. Any member desiring to withdraw land previously
contributed by him to the association, in an amount not to
exceed five (5) acres, shall give 10 days notice to the association
of his intent to do so, as well as any required legal descriptions

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necessary to accurately describe said parcel. Upon receipt of
such notice, the corporation shall immediately cause the
appropriate deed to be prepared and submitted to the requesting
member for recordation. A unanimous vote of the membership
of the association shall be required for any removal of land that
could cause the association’s land totals to drop below the
minimum required for Butte County agricultural status.

The Estate responds that based on the text of Section 5, it has the right to receive

the deed to the property at any time as long as it has paid all charges due and

owing. It reiterates that the Estate was never seeking to sell stock or membership

rights, but rather the land itself; thus, the right of first refusal does not apply. It

also contends that a unanimous vote of Redwater’s members is only required when

a member seeks to remove only a portion of their land while still remaining a

member of Redwater.

[¶21.] When called upon to construe bylaws of a corporation, we apply the

standard principles for construction and interpretation of contracts. Mahan v.

Avera St. Luke’s, 2001 S.D. 9, ¶ 15, 621 N.W.2d 150, 154. “When interpreting a

contract, this Court looks to the language that the parties used in the contract to

determine their intention. In order to ascertain the terms and conditions of a

contract, we examine the contract as a whole and give words their plain and

ordinary meaning.” McCoy v. McCallum as trustee of Sandra K. McCallum Living

Trust, 2022 S.D. 42, ¶ 16, 978 N.W.2d 473, 478 (internal citation and quotation

marks omitted). Agreements must “be construed in their entirety giving contextual

meaning to each term.” Spiska Eng’g, Inc. v. SPM Thermo-Shield, Inc., 2007 S.D.

31, ¶ 21, 730 N.W.2d 638, 645 (quoting Bunkers v. Jacobson, 2002 S.D. 135, ¶ 15,

653 N.W.2d 732, 738).

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[¶22.] Based on our review of the record, it is apparent that after Campbell’s

death, the Estate sought to withdraw the property from Redwater in order to sell

the property itself, not a stock interest or grazing rights. The Estate’s letter to

Nelson and Capp seeking bids for the property refers to the “sale of the property.”

Further, Nelson submitted bids to purchase the property, not stock or grazing

interests. Indeed, Nelson’s second offer to the Estate specified, “Please consider my

offer of $301,000 for the 53.38 acres more or less of ranch land on the Redwater,

Butte County.” (Emphasis added.) Moreover, Nelson’s request for specific

performance in his complaint sought “delivery of good and merchantable title to the

said real property[.]”

[¶23.] Additionally, it is illuminating to compare the differences in the

governing provisions for selling grazing rights or stock with the provisions for the

sale of land. As per the articles of incorporation and bylaws, only “Membership

grazing rights must first be offered to one or more existing Members” and “all stock

issued shall be subject to a first option of repurchase in the corporation[.]”

(Emphasis added.) The articles of incorporation and bylaws include this right of

first refusal only with respect to the sale of stock and membership grazing interests.

The circuit court correctly ruled as such in its revised ruling on December 26, 2019.

[¶24.] Redwater’s bylaws do contemplate a vote by the members regarding

the withdrawal of previously contributed real estate, but not in circumstances like

we confront here where a member is seeking to withdraw all of the previously

contributed real estate. In instances where a member seeks to remain a member of

Redwater but withdraw a smaller acreage amount not exceeding five acres and the

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reduction would cause Redwater to lose its agricultural land status, 5 Article XI,

Section 6 of the bylaws states that the members must unanimously agree to the

withdrawal of the smaller parcel. Accordingly, because Section 6 is inapplicable

here, the Estate’s removal of the property was not subject to a vote by Redwater’s

members and the circuit court did not err when it granted specific performance

directing Redwater to deliver the deed for the property to the Estate. 6

2. Whether the circuit court erred in granting
summary judgment to the Estate on Nelson and
Redwater’s claims having concluded there was no
contract between the Estate and Nelson to sell the
property to Nelson.

[¶25.] A grant or denial of summary judgment is reviewed de novo. Davies v.

GPHC, LLC, 2022 S.D. 55, ¶ 17, 980 N.W.2d 251, 258. “In reviewing a grant or a

denial of summary judgment under SDCL 15-6-56(c), we must determine whether

the moving party demonstrated the absence of any genuine issue of material fact

and showed entitlement to judgment on the merits as a matter of law.” Id. (quoting

5. According to the parties, to qualify for Butte County agricultural status, the
grazing association must contain a minimum of 145 acres.

6. Nelson and Redwater also allege that the circuit court erred when it denied
their motion for leave to amend their pleadings. They sought to add breach
of contract claims for alleged violations of Redwater’s articles of incorporation
and its bylaws for failing to give Redwater members the right of first refusal
of the transfer of stock. The circuit court denied the motion after concluding
that the right of first refusal did not apply to the sale of the land, so the
proposed amendment would be futile. See In re Wintersteen Revocable Trust
Agreement, 2018 S.D. 12, ¶ 11, 907 N.W.2d 785, 789 (“[A] court ‘may
appropriately deny leave to amend where there are compelling reasons such
as . . . futility of the amendment[.]’” (citations and quotation marks omitted)).
Because we conclude that the circuit court was correct in its determination
that the right of first refusal does not apply to the sale of the land, we agree
that amendment of the pleadings would have been futile.
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Ridley v. Sioux Empire Pit Bull Rescue, Inc., 2019 S.D. 48, ¶ 11, 932 N.W.2d 576,

580). “We view the evidence most favorably to the nonmoving party and resolve

reasonable doubts against the moving party.” Id. (quoting Burgi v. East Winds

Court, Inc., 2022 S.D. 6, ¶ 15, 969 N.W.2d 919, 923).

[¶26.] In Nelson’s view, the Estate made an offer to sell the land through a

bidding process. He asserts that whoever submitted the highest bid would be

deemed to have accepted the Estate’s offer. Nelson contends that he submitted the

highest bid, thereby accepting the Estate’s offer, which he argues created a valid

contract requiring the Estate to sell him the property.

[¶27.] The Estate responds that it never made such an offer to Nelson, but

rather, it merely solicited bids. The Estate further asserts that the bids made by

Nelson and Capp were only offers to purchase the land. Because Nelson’s offers

were never accepted by the Estate, the Estate asserts there is no contract between

the parties.

[¶28.] “The existence of a contract is a question of law.” Harvey v. Reg’l

Health Network, Inc., 2018 S.D. 3, ¶ 55, 906 N.W.2d 382, 398. The “[e]lements

essential to existence of a contract are: (1) Parties capable of contracting; (2) Their

consent; (3) A lawful object; and (4) Sufficient cause or consideration.” SDCL 53-1-

2. Regarding the element of consent, “the creation of a contract requires an offer by

one party and an acceptance by the other.” Advanced Recycling Sys., LLC v.

Southeast Properties Ltd. P’ship, 2010 S.D. 70, ¶ 16, 787 N.W.2d 778, 784. “An offer

‘is the manifestation of willingness to enter into a bargain, so made as to justify

another person in understanding that his assent to that bargain is invited and will

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conclude it.’” McCoy, 2022 S.D. 42, ¶ 17, 978 N.W.2d at 478 (quoting Restatement

(Second) of Contracts § 24 (1981)). “Acceptance of an offer is a manifestation of

assent to the terms thereof made by the offeree in a manner invited or required by

the offer.” Restatement (Second) of Contracts § 50 (1981). “An acceptance must be

absolute and unqualified[.]” SDCL 53-7-3.

[¶29.] The Estate’s communications with Nelson could not have been

properly construed as an offer that whoever submits the highest bid would be

entitled to have the property sold to him or her. Rather, the Estate only made

solicitations for offers in the form of bids. The February 14, 2018 correspondence

from the Estate to Nelson and Capp stated that it was rejecting all previous offers

and that it would be “accepting written offers until Wednesday, February 21[.]”

While the letter stated that “the heirs would be willing in good faith to reduce their

asking price to . . . $283,000,” it is evident from the language of the entire letter

that it was merely a solicitation for further offers. The letter was sent to multiple

parties and addressed them as “prospective bidders.” (Emphasis added.) The

Estate also indicated that while it “would prefer to deal with this sale without

offering to the general public, [it] reserve[d] the right to do so if an agreement can’t

be reached.” The recipient of such a letter would not be reasonably justified in

thinking their response to the letter would conclude any agreement between the

parties.

[¶30.] Further, Nelson understood his communication with the Estate was an

offer to purchase the property at a certain price, as opposed to an acceptance. His

letter to the Estate provides, “Please consider my offer of $301,000[.]” (Emphasis

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added.) The Estate was free to accept or reject any of the offers to purchase the

property and was not required to accept Nelson’s offer because, as previously

discussed, he did not possess a right of first refusal to purchase the property.

[¶31.] While neither party asserts that the Estate conducted a public auction

for the land, Nelson seems to claim that there was an auction through sealed

bidding and that as the high bidder, he entered into a contract. “An ‘auction’ is a

sale by consecutive bidding, intended to reach the highest price of the article by

competition for it.” 7 Am. Jur. 2d Auctions and Auctioneers § 1 (2023). There is no

indication that the Estate intended its solicitation to be an auction. In fact, it

expressly reserved the right to deal with the general public if an agreement could

not be reached.

[¶32.] Even if the Estate’s process was construed as an auction, the auction

would have been with reserve. An auction can be either “with reserve” or “without

reserve.” The distinction is set out in the Uniform Commercial Code (UCC) which,

although applying only to the sale of goods, codifies the “prevailing law” in auction

sales. Biegler v. Kraft, 924 F. Supp. 2d 1074, 1089 (D.S.D. 2013). See also

Equitable Life Assur. Soc. of U.S. v. First Nat’l Bank, 1999 S.D. 144, ¶ 13, 602

N.W.2d 291, 294–95 (applying the UCC provision regarding auctions to a real estate

auction).

In an auction with reserve the auctioneer may withdraw the
goods at any time until he announces completion of the sale. In
an auction without reserve, after the auctioneer calls for bids on
an article or lot, that article or lot cannot be withdrawn unless
no bid is made within a reasonable time.

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SDCL 57A-2-328(3). “An auction is presumed to be held ‘with reserve’ unless there

is an express announcement or advertisement to the contrary before the auction

takes place.” 7 Am Jur. 2d Auctions and Auctioneers § 34 (2023).

In an “auction with reserve,” the placing of the property for sale
is an invitation for bids, not an offer to sell, such that each bid
constitutes an offer that may be accepted by the seller; bids are
accepted on the seller’s behalf and a contract is formed when the
auctioneer closes the bidding, typically by the fall of the hammer
or other method that notifies the high bidder that the bid has
been accepted.

Id.

[¶33.] Here, there was no indication that the auction was one without

reserve, so if it was an auction, it was an auction with reserve and the Estate was

not required to accept any of the bids. The Estate never informed Nelson that it

was accepting his offer to purchase the property at his stated price, so there was

never a contract to sell Nelson the land.

[¶34.] Because the Estate did not accept Nelson’s offer, there was no consent

between the parties and no enforceable contract between Nelson and the Estate.

The circuit court did not err in failing to find a valid contract for the sale of the

property between Nelson and the Estate. We affirm the circuit court’s summary

judgment rulings based on the absence of a valid contract between Nelson and the

Estate.

3. Whether the circuit court erred in granting
summary judgment to the Estate thereby dismissing
Nelson’s action for claim and delivery of personal
property.

[¶35.] Nelson’s cross-complaint against Capp includes an action for claim and

delivery. In support of his claim, Nelson presented an affidavit averring that he

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purchased in cash certain items of personal property from Campbell including a

steel staircase, stone steps, a cast iron lamppost, and timber. The affidavit stated

that because he had leased the land in question for many years, Nelson left the

items on the property until his negotiations with the Estate were unsuccessful. He

then removed the staircase, steps, and light pole from the property, but soon after

returned the items after Capp informed the Butte County Sheriff’s Office that

Nelson had stolen the property. Nelson stated in his affidavit that after the Estate

and Capp accused him of stealing the items, he gave a signed statement to the

Butte County Sheriff explaining “Some years ago I was to purchase a steel staircase

with railing + steps for $1500[.] [A]t that time I was to also purchase a steel lamp

post for $150.” He further explained that use of the phrase “I was to” was a manner

of speech he frequently used and here meant that he had already purchased the

property.

[¶36.] The circuit court, relying on the statute of frauds as codified in SDCL

53-8-2, granted summary judgment to Capp, dismissing this claim. SDCL 53-8-2

provides in relevant part:

The following contracts are not enforceable by action unless the
contract or some memorandum thereof is in writing and
subscribed by the party to be charged or his agent, as authorized
in writing:
(1) An agreement that by its terms is not to be performed within
a year from the making thereof[.]
[¶37.] The circuit court concluded that Nelson’s admission to the sheriff

proved that any such agreement to sell the property “was not to be performed

within a year, which makes the Statute of Frauds applicable.” The court’s ruling,

however, was based on an incorrect interpretation of the statute of frauds because,

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“an oral contract that could be performed within one year is not within the statute.”

Knigge v. B & L Food Stores, Inc., 2017 S.D. 4, ¶ 9, 890 N.W.2d 570, 573. If Nelson

and Campbell had a contract to sell the property in question, the act of selling the

property could be performed within one year. Therefore, regardless of whether the

sale actually happened within one year, the contract was not required to be in

writing under the statute of frauds to be enforceable. 7

[¶38.] When viewing the facts in the light most favorable to Nelson, as is

required in summary judgment proceedings, we conclude that the circuit court erred

by determining that there were no material facts in dispute regarding this claim.

Nelson’s affidavit indicated that he had previously purchased the items from

Campbell in cash. Therefore, we conclude that the circuit court erred by granting

summary judgment to Capp on Nelson’s claim against him for claim and delivery of

personal property. Accordingly, we reverse and remand this issue for further

proceedings.

[¶39.] JENSEN, Chief Justice, and SALTER, DEVANEY, and MYREN,

Justices, concur.

7. The UCC’s statute of frauds found in SDCL 57A-2-201 applies to contracts for
the sale of goods more than five hundred dollars and requires a writing
signed by the party against whom enforcement is sought for the contract to
be enforceable. However, there are exceptions to this statute found in SDCL
57A-2-201(3)(c), including “[w]ith respect to goods for which payment has
been made and accepted or which have been received and accepted[.]” The
facts in the record, when viewed in the light most favorable to Nelson, are
enough to meet one or both of the exceptions in subsection (3) and therefore
would also preclude summary judgment on the basis of the UCC statute of
frauds.
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