#28426-a-SLZ
2018 S.D. 58
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
JAMES BLUE, Plaintiff and Appellee,
v.
THOMAS E. BLUE, Defendant and Appellant.
****
APPEAL FROM THE CIRCUIT COURT OF
THE THIRD JUDICIAL CIRCUIT
BEADLE COUNTY, SOUTH DAKOTA
****
THE HONORABLE CARMEN MEANS
Judge
****
JOHN “JACK” S. THEELER
ZACHARY T. FLOOD
Morgan Theeler, LLP Attorneys for plaintiff and
Mitchell, South Dakota appellee.
DAVID J. LARSON
ALBERT STEVEN FOX
Larson Law, P.C. Attorneys for defendant and
Chamberlain, South Dakota appellant.
****
CONSIDERED ON BRIEFS
MAY 21, 2018
OPINION FILED 07/18/18
#28426
ZINTER, Justice
[¶1.] Tom and Jim Blue inherited two parcels of land as tenants in common.
Approximately ten years later, Jim commenced this action to partition one of the
parcels. Tom counterclaimed for partition and for the value of purported
improvements. He also counterclaimed for restitution for the time he spent caring
for both properties. The circuit court partitioned the land equally, awarded Tom
owelty, and denied Tom’s claims for improvements and restitution. Tom appeals.
We affirm.
Facts and Procedural History
[¶2.] In 2004, upon the death of their father George Blue, Tom and Jim Blue
inherited two interests in real estate as tenants in common. They each received an
undivided 50% interest in a half section of land in Beadle County. They also each
received an undivided 25% interest in a quarter section of land in Hughes County.
The remaining 50% interest in the Hughes County parcel was owned by another
cotenant who is not part of this case.
[¶3.] After George’s death, Tom undertook the responsibility to continue
caring for the properties. All of the Hughes County land and portions of the Beadle
County land continued to be rented to others for farming. Much of the unrented
portions of the Beadle County land continued to be put into the Conservation
Reserve Program (CRP). Tom renewed several CRP contracts in 2007 and 2009,
and he performed the work necessary for CRP qualification and compliance. The
remaining Beadle County land included two tree belts, unproductive grassland used
-1-
#28426
for hunting, and several depleted gravel pits. There was also a small manmade
lake in the middle of the property.
[¶4.] Tom and Jim had weekly conversations regarding the management
and care of the properties. However, Jim was not interested in working on or
maintaining the land, and he did not provide any of the physical or business-related
work. The record reflects that Tom had a significant attachment to the Beadle
County land based on the time he spent with George working and recreating on the
land before George’s death. Most of Tom’s time spent on the Beadle County land
involved the southwest quarter, which had poor soil quality and was less productive
than the southeast quarter. The southwest quarter was also where Tom and
George spent time hunting, developing wildlife habitat, building most of the lake,
and generally maintaining the property. Shortly before George’s death, Tom placed
a monument to George to the east of the lake, which is on the southeast quarter.
[¶5.] The income and expenses relating to both properties were divided
equally between the brothers. Until this dispute developed, Tom never asked Jim
for any compensation. In 2013, when Jim pushed to sell the Beadle County land,
Tom refused, and the brothers had a falling out. Thereafter, Jim commenced this
action to partition the Beadle County land. Tom counterclaimed for partition and a
credit for claimed improvements to the property. He also sought restitution for his
time and labor in caring for both properties. His claims for restitution were based
on theories of unjust enrichment and quantum meruit.
[¶6.] The brothers stipulated that the Beadle County land could be
partitioned in kind and that no sale was required. They also waived appointed
-2-
#28426
referees, see SDCL 21-45-15, and agreed to hire separate appraisers to value the
property and assist the circuit court in dividing the land. Jim retained certified
appraiser Bryan Maas, and Tom retained certified appraiser Tom Meekins. Both
appraisers focused on partitioning the half section into the southwest and southeast
quarters subject to certain adjustments and the payment of owelty.
[¶7.] Maas valued the southeast quarter at $555,700 and the southwest
quarter at $473,700, for a total value of $1,029,000. He opined that it would be
necessary to add twelve acres to the southwest quarter to equalize the value of the
partitioned land. However, he also opined that it would be more practical to divide
the property equally at the quarter-section line and require that whoever received
the southeast quarter pay $41,200 owelty to whomever received the less valuable
southwest quarter.
[¶8.] Meekins valued the southeast quarter at $470,800 and the southwest
quarter at $369,200, for a total value of $840,000. He opined that the party who
received the southwest quarter should receive an additional twenty-four acres from
the southeast quarter to equalize value. He also opined that if the land were
divided equally, the owelty should be $51,190. Meekins agreed that dividing land at
the quarter-section line was common practice, but he did not provide an opinion
whether that would be reasonable in this case.
[¶9.] Tom provided a third opinion. Although he did not provide a valuation
of the two parcels, he testified that the party who received the southwest quarter
should receive an additional forty acres from the southeast quarter in order to
provide each party with an equal amount of income-producing land. He also
-3-
#28426
testified that he preferred the less productive southwest quarter because that is
where he did most of the work with George.
[¶10.] At the conclusion of the trial, the court adopted Maas’s view that it
would be more practical to divide the property equally at the quarter-section line.
In accordance with Tom’s request, the court awarded the southwest quarter to Tom
and the southeast quarter to Jim. The court also adopted Meekins’s opinion on
values and ordered Jim to pay Tom $51,190 in owelty. Finally, the court denied
Tom’s claims for improvements, unjust enrichment, and quantum meruit.
[¶11.] Tom appeals, and we restate his issues as follows:
1. Whether the circuit court erred in denying Tom’s claims for unjust
enrichment and recovery in quantum meruit.
2. Whether the circuit court abused its discretion in limiting Tom’s
testimony.
3. Whether, in partitioning the Beadle County land, the circuit court
erred in (a) failing to make a monetary adjustment for inferior soil
types of some acres, (b) failing to give Tom a monetary credit for
improvements he made to the land, and (c) dividing the land
equally with owelty to Tom.
Decision
Unjust Enrichment and Quantum Meruit
[¶12.] At trial, Tom claimed Jim owed him more than $300,000 in restitution
for his time in caring for both properties between 2004 and 2014. Tom sought
restitution for services at a rate of $20 per hour for thirty hours per week for ten
and a half years. Tom argued he was entitled to recover from Jim in quantum
meruit because he claimed his services were performed with the expectation that he
would be paid. He also sought recovery on a theory of unjust enrichment. He
-4-
#28426
claimed his services conferred a benefit to Jim and that Jim would be unjustly
enriched if Jim were not required to reimburse Tom. Jim resisted these claims. He
contended that a cotenant could not be compensated for services absent an
agreement. He also emphasized that Tom’s claim regarding the amount of time
worked was inconsistent with Tom’s testimony that he only went to the land three
to nine times a year.
[¶13.] On appeal, Tom contends the circuit court erred to the extent that it
ruled a cotenant may not recover from another cotenant for services performed on
the property absent an agreement for compensation. Tom correctly points out that
the doctrines of unjust enrichment and quantum meruit contemplate that no
express agreement for compensation exists. See Johnson v. Larson, 2010 S.D. 20,
¶¶ 8-11, 14, 779 N.W.2d 412, 416-17 (noting that claims of unjust enrichment and
recovery in quantum meruit are available absent an express agreement for
compensation). However, the lack of an express agreement was not the only reason
the court rejected Tom’s claims. Other elements of quantum meruit and unjust
enrichment were not proven here. We address each claim separately.
[¶14.] “Quantum meruit implies a contract where none exists and awards
restitution for the value of the services provided under that implied contract.” Id.
¶ 14, 779 N.W.2d at 417; accord Van De Walle & Assocs., L.L.C. v. Buseman,
2003 S.D. 70, ¶ 9, 665 N.W.2d 84, 87 (“Typically, when a person provides services or
materials to another and those services or materials are voluntarily accepted, it is
inferred that the services or materials ‘were given and received in the expectation of
being paid for, and a promise to pay their reasonable worth implied.’” (quoting
-5-
#28426
Randall Stanley Architects, Inc. v. All Saints Cmty. Corp., 1996 S.D. 138, ¶ 21,
555 N.W.2d 802, 805)). For Tom to recover in quantum meruit, he must have
proven, among other things, that Jim “requested [Tom’s] services and [Tom]
reasonably expected to be paid.” Johnson, 2010 S.D. 20, ¶ 14, 779 N.W.2d at 417.
[¶15.] Here, the circuit court denied recovery in quantum meruit because it
found not only that no express agreement existed but also that “[n]o evidence
establishes any sort of implied contract existed between the parties for payment of
services.” The court first noted that Jim did not request Tom’s services. The court
found that although Jim consented to the services, Jim did not “care[] one way or
the other,” and the “services happened because [Tom] wanted them to happen.” The
court also noted that Tom did not expect compensation. The court specifically found
that Tom’s services “were provided because of his own passion for this land as
opposed to any agreement or because [he] expected compensation for his services.”
Consequently, the court found that there was insufficient evidence to imply a
contract that would provide for recovery in quantum meruit.
[¶16.] The evidence supports these findings. Jim testified that he did not
care to work on the land and that Tom never requested compensation until their
falling out ten years after they inherited the property. Tom confirmed that he never
demanded payment. He testified he would never ask for payment unless Jim
wanted to sell the land, but he could not recall whether he ever told Jim he expected
payment. These facts do not suggest the existence of an implied contract for
payment of services to Tom. The circuit court did not err in rejecting Tom’s claim
for recovery in quantum meruit.
-6-
#28426
[¶17.] “Unjust enrichment occurs ‘when one confers a benefit upon another
who accepts or acquiesces in that benefit, making it inequitable to retain that
benefit without paying.’” Hofeldt v. Mehling, 2003 S.D. 25, ¶ 15, 658 N.W.2d 783,
788 (quoting Parker v. W. Dakota Insurors, Inc., 2000 S.D. 14, ¶ 17, 605 N.W.2d
181, 187). In order to obtain restitution, it is not enough that the person retains the
benefit—retention of the benefit must be unjust. Id.
[¶18.] Jim does not dispute that he knew of and consented to Tom’s services,
that he received an equal share of profits from the land between 2004 and 2014, and
that he did not physically contribute to the management or care of the property.
However, Jim contends that retention of any benefits Tom may have provided
would not be unjust under the facts of this case because Tom’s services were
provided in Tom’s own self-interest. Jim points out that the brothers became
cotenants by inheritance from their father, that they communicated weekly
regarding what needed to be done, and that there was never any conversation or
understanding that Tom would be paid for his time. Jim also highlights Tom’s
emotional connection to and long history caring for the Beadle County land.
[¶19.] The record supports Jim’s contention. Tom testified below and
continues to emphasize his deep emotional attachment to the Beadle County land.
The record also reflects that the property was his “spiritual connection” to his
father. Jim confirmed this connection. He testified that before George died, George
asked Jim to “hang on to the land for a few years for Tom to have an opportunity to
get over his attachment to it.” Jim also testified: “Tom told me he’d take care of
everything, don’t worry about anything, no charges, don’t worry . . . .” Thus, Jim
-7-
#28426
indicated that although he could have sold the land at any time, he held on to it for
Tom’s benefit. He also indicated that he never knew Tom expected to be
compensated for his services. As previously noted, Tom conceded that he never
requested compensation from Jim until the brothers had a falling out in 2013. And
although Tom testified he would never demand compensation unless Jim wanted to
sell the land, Tom could not confirm whether he ever conveyed that information to
Jim.
[¶20.] Under these facts, the circuit court did not clearly err in finding that
Tom’s services were largely provided in his own self-interest—they “were provided
because of [Tom’s] own passion for” the land and “happened because [Tom] wanted
them to happen.” “[A] person who without mistake, coercion, or request has
unconditionally conferred a benefit upon another is not entitled to restitution.”
Dowling Family P’ship v. Midland Farms, 2015 S.D. 50, ¶ 24, 865 N.W.2d 854, 864;
accord Johnson, 2010 S.D. 20, ¶ 8, 779 N.W.2d at 416 (“Unjust enrichment
contemplates an involuntary or nonconsensual transfer, unjustly enriching one
party.”). Accordingly, the circuit court did not err in denying Tom’s claim for unjust
enrichment.
Limiting Tom’s Testimony
[¶21.] Tom claims the circuit court abused its discretion in purportedly
limiting his testimony relating to specific details concerning the land. Tom provides
one example. He claims the circuit court “cut Tom’s testimony short by telling him
that he had only 1.5 minutes to testify concerning the various CRP programs and
contracts affecting numerous issues in the case.”
-8-
#28426
[¶22.] The record does not support Tom’s claim that the circuit court
prevented him from introducing detailed testimony. Instead, the record quite
clearly shows that the court was properly attempting to limit Tom’s long narrative
answers in direct examination. The court simply requested Tom’s attorney to ask
direct questions for Tom to answer, “as opposed to Mr. Blue just telling [the court]
everything.” Moreover, the court overruled several of opposing counsel’s objections
to Tom’s subsequent nonresponsive answers. SDCL 19-19-611 grants the court
“reasonable control over the mode and order of examining witnesses and presenting
evidence so as to: (1) [m]ake those procedures effective for determining the truth;
[and] (2) [a]void wasting time.” The court’s restriction in limiting narrative answers
was a perfectly reasonable control over the method of examining witnesses and
presenting evidence.
Partition
[¶23.] “Partition is a proceeding in equity and the court has the inherent
jurisdiction to adjust all the equities in respect to the property.” Gartner v. Temple,
2014 S.D. 74, ¶ 7, 855 N.W.2d 846, 850. Tom takes issue with three of the circuit
court’s decisions regarding the partition of the Beadle County land. We review the
circuit court’s equitable decisions for an abuse of discretion. Id. An abuse of
discretion “is a fundamental error of judgment, a choice outside the range of
permissible choices, a decision, which, on full consideration, is arbitrary or
unreasonable.” Id. We review the circuit court’s findings on value for clear error.
See Engelhart v. Larson, 1997 S.D. 84, ¶ 19, 566 N.W.2d 152, 156.
-9-
#28426
[¶24.] Tom first argues the court erred in declining to make adjustments for
alleged overvaluation of some parts of the quarter section he received. He points
out that Meekins, his appraiser who personally observed the land with Tom, relied
on outdated soil maps. Meekins acknowledged that the soil maps did not correlate
with some of the soils he actually observed. For example, the maps did not show
that the manmade lake existed. He also noted that there were depleted gravel pits
that could not be used for anything productive and that there were about eleven
acres he had to designate as grassland even though those acres clearly were not
grassland.1 However, Meekins explained that due to the unique nature of the
property—primarily the southwest quarter—he could not find comparable sales to
more accurately assign a value; and therefore, he was required to rely on the
outdated soil maps in valuing the land. Ultimately, he acknowledged that although
the southwest quarter’s actual value could be lower, he declined to change his
appraised value.
[¶25.] This record does not reflect that the circuit court clearly erred in
declining to make additional downward adjustments in value in the southwest
quarter. Valuation here was relevant to the question of owelty; the acres in dispute
were a relatively small portion of the southwest quarter; the two appraisers’
1. Meekins testified that he had some disagreements with Tom regarding the
appraisal. According to Meekins, Tom did not want certain acres of CRP with
low-quality soil listed as income producing. Meekins nevertheless valued
those areas as CRP because they were currently in CRP, he did not know
whether the acres would continue to be in CRP, and he had no comparable
sales from which he could derive a discount. There were also eleven acres
that Tom wanted considered “roads and waste.” Meekins told Tom he “was
not going to change [his] value for those 11 acres [and] that it was contingent
upon [Tom] to persuade the [c]ourt in that regard.”
-10-
#28426
opinions on owelty differed by only $10,000 for the entire property; and the court
awarded Tom Meekins’s higher recommendation on owelty. Further, we cannot
assume that Meekins actually overvalued the southwest quarter. Meekins
acknowledged that the soil maps were outdated, but he adhered to his opinion of
value. Moreover, Maas valued the same quarter substantially higher than Meekins.
[¶26.] Tom, however, insists that “the best evidence of the current condition
of the property” was his testimony suggesting a lesser value; and therefore, the
amount of owelty ordered by the circuit court “fell far short of reflecting actual
values.” But Tom only makes general assertions of error based on broad soil
categories and how much income-producing land each party would possess after
partition. Tom does not identify any specific dollar adjustment that he claims the
evidence requires. Ultimately, the circuit court chose to adopt Meekins’s testimony
as to value, and Tom has not quantified an adjustment to owelty that is required by
the evidence. Tom has not established clear error in the court’s determination of
owelty.
[¶27.] Tom next argues the circuit court abused its discretion in failing to
give him credit for improvements he made to some of the property. Tom contends
he obtained CRP contracts that increased the value of 33.6 acres from $100 an acre
to $2,500 an acre. The circuit court declined to give Tom credit because “[n]either
appraiser testified to any permanent improvements or enhancements to the value of
the land” and because “[n]o one testified as to any permanent improvements.”
[¶28.] Generally, courts may “make suitable allowance, on partition, for
improvements made in good faith by a cotenant in possession, to the extent that the
-11-
#28426
value of the property has been enhanced thereby.” Johnson v. Hendrickson, 71 S.D.
392, 398-99, 24 N.W.2d 914, 917 (1946). However, the court has the “discretion to
deny entirely any award for the value of improvements in a partition action.”
Kaberna v. Brown, 2015 S.D. 34, ¶ 17, 864 N.W.2d 497, 502. Tom contends the
circuit court here erred as a matter of law in reasoning that such allowances are not
permitted unless the improvement is “permanent.”
[¶29.] “The term ‘improvement’ is generally defined to include everything,
such as buildings and fixtures, that permanently enhances the value of premises for
general uses.” In re Tax Appeal of Logan & Assocs., 331 N.W.2d 281, 283 (S.D.
1983). Tom contends that in a partition action, an improvement need not be
permanent so long as it substantially enhances the value of the property. See, e.g.,
Leinweber v. Leinweber, 385 P.2d 556, 558 (Wash. 1963) (holding that summer
fallowing was an improvement for purposes of a partition action because summer
fallowing “was not only necessary, but also substantially enhanced the valuation of
the property”).
[¶30.] We need not address the legal question concerning permanency
because there is an insufficient factual basis for Tom’s argument. Tom suggests
that 33.6 acres of CRP land worth $2,500 per acre south of the lake would be valued
as $100-per-acre “wasteland” but for his efforts.2 Tom appears to have selectively
obtained these values from separate portions of Maas’s and Meekins’s appraisals.
2. Tom makes inconsistent claims in his valuation arguments. It appears that
the acres for which Tom wants credit for improvements in this argument
include the acres that Tom claims were overvalued by his appraiser in an
earlier argument. See supra n.1.
-12-
#28426
Maas valued CRP land at $2,500 an acre, and Meekins valued wasteland at $100 an
acre.3 However, neither appraiser testified that they would value those 33.6 acres
as wasteland if the acres were not in CRP, and Meekins expressly declined to do so.
[¶31.] Moreover, the record reflects that CRP contracts have various effects
on value. CRP contracts provide government subsidies that are only ten to fifteen
years in duration, and the contracts for this property were set to expire between
2017 and 2019. There was also no evidence they would or could be renewed.
Additionally, not all CRP contracts increase value. Maas testified that when
farming practices change, CRP can actually decrease the value of land. Finally,
most of the CRP work Tom did was in the southwest quarter, which was awarded to
him, and the appraisers indicated the value of the CRP contracts was factored into
their appraisals. The circuit court has discretion to deny an allowance for
improvements, Kaberna, 2015 S.D. 34, ¶ 17, 864 N.W.2d at 502, and even when
allowable, the court is only obligated to make a “suitable allowance,” Hendrickson,
71 S.D. at 398-99, 24 N.W.2d at 917. Although the CRP contracts affected the
appraised value, Tom has not demonstrated that the circuit court abused its
discretion in declining to give him an additional credit for them. See Gartner,
2014 S.D. 74, ¶ 23, 855 N.W.2d at 854.
[¶32.] Tom next argues the circuit court abused its discretion in dividing the
Beadle County land equally along the quarter-section line with owelty to be paid to
3. Tom appears to have selected these values in order to maximize his claim for
a credit. He chose Meekins’s value for wasteland, which was less than
Maas’s $200 per acre; and he chose Maas’s fixed value for CRP, which was
more than Meekins’s valuation method that based the price on the soil
quality and income.
-13-
#28426
Tom, instead of allocating acreages of equal pecuniary value. Tom first contends
that in making the division, the court should have utilized a factors analysis like
that in Engelhart, 1997 S.D. 84, ¶ 6, 566 N.W.2d at 153-54, and Gartner, 2014 S.D.
74, ¶ 14, 855 N.W.2d at 852. However, the factors outlined in Engelhart were
instructions the circuit court provided to the appointed referees to assist them in
determining fair market value. Englehart, 1997 S.D. 84, ¶ 6, 566 N.W.2d at 153.
Here, the parties waived the referee requirement, and it is apparent that the expert
appraisers followed very similar factors in rendering their opinions of value.
Further, the Gartner factors referenced by Tom are only used to determine whether
prejudice to the owners should preclude a partition in kind, a question not at issue
here. See Gartner, 2014 S.D. 74, ¶ 14, 855 N.W.2d at 852 (“We examine the totality
of the circumstances to determine whether a partition in kind would cause great
prejudice to the owners.”). The circuit court did not err in declining to utilize either
factors analysis here.
[¶33.] Tom finally contends that dividing the land along the quarter-section
line ignores the disparity between the amount of income-producing land in the
southwest and southeast quarters, cuts through a tree belt, separates his father’s
monument from the southwest quarter, and fails to minimize owelty. However, the
circuit court had substantial discretion in dividing the property. Further, a
cotenant in a partition action is not entitled to the most economically valuable or
most functional parcel. See id. ¶ 12, 855 N.W.2d at 851. And in exercising its broad
discretion, the court was not absolutely required to partition the land with minimal
owelty. Id. ¶ 23, 855 N.W.2d at 854.
-14-
#28426
[¶34.] Here, both Jim and Maas testified that dividing the land at the
quarter-section line would be more practical, and Meekins admitted that equal
divisions were common practice. The court adopted this view, concluding that
dividing this land into two unequal quarters would be less practical and would
diminish the value of the resulting parcels. Considering Tom’s preference for the
southwest quarter, the court then stated that “it would seem appropriate . . . to
grant the southwest quarter to Tom Blue and the southeast quarter to Jim Blue.”
The Court finally ordered Jim to pay Tom owelty in the amount suggested by Tom’s
expert appraiser. Tom has not shown that division at the quarter-section line with
$51,190 in owelty was an abuse of discretion.
Conclusion
[¶35.] The circuit court did not err in denying Tom’s claims for unjust
enrichment and quantum meruit. The court did not abuse its discretion in
controlling the presentation of evidence. Finally, the court did not clearly err or
abuse its discretion in dividing the Beadle County land into equal quarter sections
and ordering that Jim pay Tom $51,190 in owelty.
[¶36.] Affirmed.
[¶37.] GILBERTSON, Chief Justice, KERN and JENSEN, Justices, and
SEVERSON, Retired Justice, concur.
[¶38.] SALTER, Justice, not having been a member of the Court at the time
this action was assigned to the Court, did not participate.
-15-