Nelson v. Campbell

2021 S.D. 47
CourtSouth Dakota Supreme Court
DecidedAugust 11, 2021
Docket29254
StatusPublished
Cited by6 cases

This text of 2021 S.D. 47 (Nelson v. Campbell) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nelson v. Campbell, 2021 S.D. 47 (S.D. 2021).

Opinion

#29254-dismiss-MES 2021 S.D. 47

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,

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

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 OCTOBER 5, 2020 OPINION FILED 08/11/21 DAVID L. CLAGGETT of Claggett & Dill, Prof. LLC Spearfish, South Dakota Attorneys for plaintiff, fourth- party plaintiff, and appellants.

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

KELLEN B. WILLERT of Bennett, Main, Gubbrud, & Willert, P.C. Belle Fourche, South Dakota Attorneys for fourth-party defendant and appellee, Jared Capp. #29254

SALTER, Justice

[¶1.] After one of three founding members of a cooperative grazing

association passed away, his estate invoked a provision of the association’s bylaws

to withdraw previously-contributed real estate and sell it to a third party. Another

member objected, asserting: 1) the estate was contractually obligated to sell the real

estate to him because he submitted the high bid; and 2) the estate was obligated

under the grazing association’s bylaws to allow him a right of first refusal to

purchase the real estate. The circuit court granted the estate’s motion for summary

judgment on these claims, but its decision did not resolve all of the claims among

the parties. The court certified only the summary judgment order directing the

association to allow the estate’s withdrawal as final under the provisions of SDCL

15-6-54(b). For the reasons explained below, however, we dismiss the appeal.

Background

[¶2.] Redwater Grazing Association, Inc., (Redwater or the Association) is a

cooperative grazing district operating in Butte County and incorporated under

specific provisions of South Dakota law. See SDCL ch. 40-23 (providing for

cooperative grazing districts). 1 Gordon Campbell, John Nelson, and Richard Marsh

founded Redwater by contributing land to the Association in 2010 in exchange for

stock and individual membership rights. In Campbell’s case, he contributed two

parcels totaling approximately 53 acres—one parcel he owned individually and

1. A cooperative grazing district is a “cooperative corporation organized for the purpose of aiding in the conservation of natural forage resources within a designated area to be jointly used by its members, and for aiding in the restoration and improvement of lands[.]” SDCL 40-23-1.

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another parcel he owned jointly with his two children (collectively, the Property). 2

Redwater’s articles of organization (the articles) were filed with the Secretary of

State on September 29, 2010, and its members adopted bylaws on October 30, 2010.

[¶3.] The articles and bylaws contain certain restrictions upon the members’

ability to transfer stock and membership rights. For example, the articles provide

that a member’s stock in Redwater is “subject to a first option of repurchase in the

Association in the event of a sale . . . .” In addition, the bylaws allow a member to

“sell, permanently transfer, give or assign, any or all Membership rights to another

family farmer who is qualified for membership[.]” However, where the proposed

transfer involves grazing rights, those rights “must first be offered to one or more

existing Members.”

[¶4.] At issue in this appeal is a particular provision of Redwater’s bylaws

that allows members the unilateral right to withdraw from the Association and

receive a deed, reconveying the real estate that was originally contributed:

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.

[¶5.] Gordon Campbell passed away on April 1, 2017. The Estate of Gordon

Campbell (the Estate) sought to withdraw the Property from Redwater and sell it,

but not in that order. The Estate first undertook efforts to prospectively sell the

2. The parties have not suggested that the fact Campbell contributed real estate jointly owned with his children is significant to their arguments.

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Property by soliciting bids before withdrawing from the Association and receiving a

deed. 3

[¶6.] The Estate’s first attempt yielded two bids—a $249,100 bid from

Redwater member John Nelson (Nelson), and a bid of $260,000 from Jared Capp

(Capp). Counsel for the Estate sent an email to the two bidders, explaining that the

offers were below the Property’s appraised value and were not accepted. The Estate

commenced another round of bidding and informed the would-be buyers that it

would not accept an offer below $283,000, advising further that it would accept the

second-highest bid if a sale to the highest bidder was eventually unsuccessful.

[¶7.] Capp offered $283,000 on February 15, 2018, and Nelson offered

$301,000 on February 20, 2018. The Estate sent out another letter, inviting bids

over $301,000 and informing bidders that this would be the final time it would

consider offers. Capp offered $400,000, which the Estate accepted on March 30,

2018. Nelson did not make another offer.

[¶8.] The Estate subsequently sought a deed from Redwater conveying the

Property to the Estate. Through its counsel, Redwater responded and declined to

issue the deed. This action followed, originally as an effort by Nelson to enforce

what he believed to be a binding agreement to purchase the Property resulting from

the Estate’s effort to obtain bids. The addition of other parties and claims has led to

a profusion of counterclaims, cross claims, and third- and fourth-party claims,

3. The parties have not argued that the sequence of these events—arranging a sale of the Property before withdrawing from the Association—is consequential.

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relating not only to the bidding process, but also to the Estate’s request to withdraw

from the Association as well as other, more peripheral claims.

[¶9.] Nelson’s initial claims alleged that the Estate’s email seeking bids over

$283,000 constituted an offer to sell the Property to the highest bidder. He argued

that his $301,000 bid was an acceptance of the offer, resulting in a binding

agreement. Nelson sought specific performance of the alleged contract and also

asserted a breach of contract claim seeking damages. He filed a notice of lis

pendens relating to the Property and further claimed that the Estate’s proposed sale

to Capp would result in unjust enrichment. In its counterclaims against Nelson, the

Estate asserted claims of tortious interference with a contract and slander of title.

[¶10.] Through a third-party complaint against Redwater, the Estate sought

specific performance of the bylaw requirement allowing withdrawal and the

issuance of a deed. The Estate also alleged claims of breach of contract and tortious

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Bluebook (online)
2021 S.D. 47, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nelson-v-campbell-sd-2021.