Stock v. Garrett

2025 S.D. 8

• Court: South Dakota Supreme Court
• Decided: February 12, 2025
• Docket: 30255
• Status: Published

Opinion

#30255-a-SRJ 2025 S.D. 8

IN THE SUPREME COURT OF THE STATE OF SOUTH DAKOTA

****

RONALD STOCK and KRISTIN STOCK, Plaintiffs and Appellees,

v.

JAMES E. GARRETT, SANDRA E. GARRETT, and LEVI E. GARRETT, Defendants and Appellants.

APPEAL FROM THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT SULLY COUNTY, SOUTH DAKOTA

THE HONORABLE CHRISTINA L. KLINGER Judge

ELLIOT J. BLOOM STEVEN C. BEARDSLEY MICHAEL S. BEARDSLEY of Beardsley Jensen & Lee, Prof. LLC Rapid City, South Dakota Attorneys for defendants and appellants.

ANDREW S. HURD JAMES S. SIMKO of Cadwell, Sanford, Deibert & Garry, LLP Sioux Falls, South Dakota Attorneys for plaintiffs and appellees.

ARGUED NOVEMBER 9, 2023 OPINION FILED 02/12/25 #30255

JENSEN, Chief Justice

[¶1.] Facing significant, delinquent indebtedness, James, Sandra, and Levi

Garrett (collectively the Garretts) agreed to sell their farmland to Ronald and

Kristin Stock (collectively the Stocks). In return, the Stocks agreed to lease the

farmland back to the Garretts for five years. The lease also provided the Garretts

with an option to purchase the farmland from the Stocks during the term of the

lease. Approximately two years into the lease, the Stocks commenced an eviction

action for possession of the farmland, alleging the Garretts had failed to make

timely lease payments and committed waste. After a two-day trial, the jury entered

a verdict in favor of the Stocks for immediate possession of the farmland. The

Garretts appeal, alleging the circuit court erred by denying their motion to dismiss,

their motion for judgment as a matter of law, and their motion for a new trial. The

Garretts also argue the court erred in denying their proposed jury instructions. The

Stocks filed a motion to dismiss the appeal arguing this Court lacks appellate

jurisdiction. We affirm.

Factual and Procedural Background

[¶2.] The Garretts owned 5,200 acres of farmland (the Property) in Sully

County. The Garretts experienced financial difficulties and eventually filed for

bankruptcy. In lieu of seeking confirmation of a bankruptcy plan of reorganization,

the Garretts began considering other options to resolve their outstanding debt. One

of these alternatives included selling the Property, which the Garretts claim had

significant equity.

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[¶3.] The Garretts were approached by Ronald Stock, a resident of

Columbus, Nebraska, who offered to purchase the Property from the Garretts. The

Stocks and the Garretts eventually agreed to terms on the sale of the Property and

executed three separate agreements on June 20, 2019. The agreements included a

real estate purchase agreement (purchase agreement), a farm lease agreement

(lease agreement), and a closing/escrow agreement (escrow agreement). 1 The

purchase agreement provided for the Stocks to purchase the Property from the

Garretts for a price of $10,010,000. The Stocks also granted the Garretts “an

exclusive irrevocable lease on the [P]roperty for a term beginning on June 20, 2019,

and terminating on December 31, 2024.” The Garretts were also given “an option to

repurchase [the Property for $10,410,000, plus $185,000 for each year the Property

was leased from the Stocks], conditioned upon the Garretts meeting all obligations

described in [the purchase] agreement[.]” The purchase agreement also provided

that the Stocks would finance their purchase by obtaining a mortgage on the

Property through Rabo AgriFinance (Rabo). The mortgage required semi-annual

payments to Rabo which were due in May and November of each year.

[¶4.] The lease agreement required the Garretts to make annual lease

payments by June 20 of each year, with the first payment due June 20, 2020. The

annual lease payment was “equal to two semi-annual mortgage payments as . . .

shown on the Rabo [] amortization schedule.” Because the first lease payment was

not due until June 20, 2020, the Stocks were responsible for making the first

mortgage payment in November 2019. All three agreements provided that the

1. The agreements were drafted by counsel for the Garretts.

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remaining Rabo mortgage payments would be paid from an escrow account that was

created to collect the Garretts’ lease payments.

[¶5.] The escrow agreement set forth the procedures for closing on the

purchase of the Property and managing the Garretts’ annual lease payments, which

were required to be paid to the escrow agent. After receiving the Garretts’ lease

payment, the escrow agent was required to send “each payment to Rabo [] as

mortgage payments.” BankWest of Pierre (Escrow Agent) was named as the escrow

agent.

[¶6.] All three agreements provided that “[i]f any annual payment is not

paid on or before June 20 of each year then the lease shall terminate immediately

and the purchase option provided in this agreement will be void.” However, the

lease agreement also included a default provision, which provided that “[i]n case of

a default in the payment of any lease payment, the [Garretts] shall have the right to

cure the default or breach upon the same being corrected upon sixty (60) days’

notice.” The provision stated that if the Garretts failed to cure the default within

sixty days of receiving written notice, “then this lease shall terminate at the option

of [the Stocks.]” The lease agreement required that any notice from the Stocks “be

made by the escrow agent effective upon delivery to the [Garretts].”

[¶7.] Consistent with the terms of the agreements, the Stocks made the first

mortgage payment to Rabo in November 2019. Before the second mortgage

payment became due in May 2020, Ronald contacted the Escrow Agent to inquire

whether there were any funds in the escrow account. The Escrow Agent informed

Ronald that it had not received any payments and that there were no funds in the

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escrow account. To avoid default on the mortgage, the Stocks personally made the

second mortgage payment to Rabo in May 2020. The Garretts did not pay the first

annual lease payment, due on June 20, 2020, to the Escrow Agent. Instead, the

Garretts issued a check payable to Rabo for the amount of the lease payment and

delivered it to the Escrow Agent in June 2020. The Escrow Agent forwarded the

check to Rabo, but Rabo returned the check because the Stocks had already paid the

mortgage payment. The Garretts made no other effort to pay the June 2020 lease

payment to the Escrow Agent.

[¶8.] In December 2020, the Garretts made a partial payment of the June

20, 2020, lease payment by directly making a payment to Rabo for the amount equal

to the Stocks’ December 2020 mortgage payment. Following a mediation between

the Garretts and the Stocks, the Garretts made an additional payment directly to

the Stocks in April 2021. The December 2020 and April 2021 payments were equal

to the amount that was due under the lease agreement in June 2020.

[¶9.] The Garretts never paid the second lease payment to the Escrow Agent

that was due on June 20, 2021. On August 27, 2021, the Stocks sent the Garretts a

notice of default and a letter stating that the default had to be cured by October 15,

2021. The notice stated that if the Garretts failed to cure by October 15, 2021, the

lease would terminate on March 1, 2022. The Garretts did not respond to the notice

and have not made any lease payments since the notice was delivered. 2

2. At trial, the Garretts claimed that they attempted to make an additional partial payment directly to Rabo in November 2021, however these funds were rejected because the mortgage payment was already paid by the Stocks. The Stocks responded that the Garretts were required to make their (continued . . .) -4- #30255

[¶10.] On September 3, 2021, the Stocks entered into a settlement agreement

involving a boundary dispute with a neighboring landowner to the Property. The

neighboring landowner had commenced an action against the Garretts in 2016

alleging that the Garretts’ fence wrongfully encroached upon their property by 33

feet at certain locations along the Property. Under the terms of the settlement

agreement, the Stocks agreed, based upon a survey, that the neighbor owned the

disputed property and the boundary line would be re-fenced in accordance with the

survey. In return, the lawsuit against the Garretts was dismissed.

[¶11.] The Garretts commenced an action in the Federal District Court for

the District of South Dakota in January 2022, alleging the Stocks breached the

agreements by paying the mortgage payments to Rabo, which prevented the

Garretts from making lease payments. The Garretts also claimed the Stocks had

breached the lease agreement by conveying a portion of the Property to the

neighboring landowner under the settlement agreement. The Stocks filed an

answer and counterclaim seeking a declaratory judgment that the lease agreement

had terminated and sought collection of the outstanding lease payments.

[¶12.] On May 19, 2022, the Stocks received a letter from the Sully County

weed and pest supervisor concerning a Canadian thistle infestation on the Property

that violated county ordinances. The letter informed the Stocks that a fine would

be imposed if the weed issue was not timely resolved. The Stocks hired someone to

enter the Property and disc the weeds. The Garretts subsequently amended their

________________________ (. . . continued) payments to the Escrow Agent, and their attempts to directly pay Rabo were inconsistent with the terms of their agreement.

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federal court complaint to further allege that the Stocks breached the lease

agreement by entering the Property to disc the weeds without permission.

[¶13.] On July 1, 2022, the Stocks served the Garretts with a notice to quit

pursuant to SDCL 21-16-2. On July 6, 2022, the Stocks served the Garretts with a

verified complaint for forcible entry and detainer seeking immediate possession of

the Property. The complaint alleged, as grounds for the eviction action under SDCL

21-16-1(4), that the Garretts breached the lease agreement by failing to pay rent,

and “by abandoning the [Property], committing waste on the [Property], and by

failing to plant crops before insurance deadlines.” The Garretts filed a motion to

dismiss, alleging that the Stocks: (1) failed to provide a notice of three days before

commencing the action, as required by SDCL 21-16-2(4); (2) failed to request

mandatory mediation before commencing the action, as required by SDCL 54-13-10;

and (3) did not provide a sixty-day notice of default, as required by the lease

agreement. The Garretts also argued in the motion that because of the pending

federal court action, the Stocks were precluded from splitting their claims by

bringing a state action. The circuit court denied the Garretts’ motion to dismiss.

[¶14.] During a two-day jury trial, the Stocks presented evidence that the

Garretts breached the lease by failing to pay rent. The Stocks also presented

evidence that the Garretts had not planted crops on the land during the 2021 and

2022 crop years and had allowed a significant infestation of Canadian thistle that

the Sully County weed supervisor described as “[o]ne of the worst I’ve seen.” The

Garretts claimed that the Stocks breached the lease agreement by preventing the

Garretts from making lease payments, conveying a portion of the Property to

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neighbors under the settlement agreement, and entering the Property to disc weeds

without the Garretts’ consent. The court denied the motions for judgment as a

matter of law made by both parties. The jury returned a verdict granting the

Stocks immediate possession of the Property. The circuit court entered a judgment

of eviction on December 8, 2022. On December 9, the Stocks filed and served a

notice of entry of the judgment on the Garretts.

[¶15.] The Garretts timely filed a request to stay the execution of the

judgment of eviction and a motion for judgment as a matter of law, and

alternatively, for a new trial. The court entered an order on January 11, 2023,

denying the Garretts’ motions. On February 10, 2023, the Garretts filed a notice of

appeal referencing the January 11 order. The notice of appeal did not reference the

underlying judgment of eviction entered by the court on December 8, 2022.

[¶16.] The Garretts appeal, raising three issues:

1. Whether the circuit court erred when it denied the Garretts’ motion to dismiss.

2. Whether the circuit court erred when it denied the Garretts’ proposed jury instructions regarding the notice provision in the lease agreement.

3. Whether the circuit court erred when it denied the Garretts’ motion for judgment as a matter of law or for a new trial.

[¶17.] Before briefing was completed, the Stocks filed a motion to dismiss this

appeal arguing that this Court lacks appellate jurisdiction because the Garretts

failed to appeal from a final appealable order under SDCL 15-26A-3. We took the

motion under consideration and ordered the parties to address the jurisdictional

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issue along with the merits of the case at the time briefs were submitted. We

address the question of jurisdiction before considering the merits of the appeal.

Appellate Jurisdiction

[¶18.] The Garretts’ notice of appeal was timely filed and served as to both

the January 11 order denying their request to stay the execution of the judgment of

eviction and their motion for judgment as a matter of law or a new trial. The notice

of appeal did not, however, reference the underlying judgment of eviction entered by

the court on December 8, 2022. In addressing the Stocks’ motion to dismiss, we

must determine whether this omission precludes review of the December 8 order.

[¶19.] In support of their claim that this Court lacks jurisdiction, the Stocks

rely on SDCL 15-26A-3(3), arguing that the statute merely provides for an appeal

from an order granting a new trial but does not include an appeal of right from an

order denying a new trial. They contend that this case is controlled by Wilge v.

Cropp, where this Court determined there was no jurisdiction to consider an appeal

solely from an order denying a motion for a new trial and a motion for a judgment

notwithstanding the verdict. 3 74 S.D. 511, 54 N.W.2d 568 (1952). The Stocks also

rely on language from Johnson v. Lebert Construction, Inc. that “[i]n the absence of

a properly perfected appeal from the judgment, the denial of the post-judgment

motions is not reviewable.” 2007 S.D. 74, ¶ 9, 736 N.W.2d 878, 882. 4

3. A motion for judgment notwithstanding the verdict was renamed to a motion for judgment as a matter of law when SDCL 15-6-50 was amended in 2006.

4. Johnson v. Lebert Construction, Inc. is distinguishable from this case because any effort to appeal the underlying judgment in Johnson would have been untimely when the notice of appeal was filed, and the Court could not (continued . . .) -8- #30255

[¶20.] The Garretts respond that their notice of appeal was timely filed and

served as to the underlying judgment and the order denying the post-judgment

motions. They argue that their intent to appeal the underlying judgment and the

order denying the motion for new trial and judgment as a matter of law was

unmistakable at the time the notice of appeal was filed. 5 They contend that “the

technicality of missing the word ‘Judgment’ should not be an appropriate reason for

the Court to deem the appeal dismissed.” As long as the notice of appeal was

timely, the Garretts argue the failure to reference the underlying judgment in their

notice of appeal is not jurisdictionally fatal, nor does it present appropriate grounds

for dismissal because the Stocks were not prejudiced by the error. See W. States

Land & Cattle Co. v. Lexington Ins. Co., 459 N.W.2d 429, 432 (S.D. 1990) (“[O]nly

failure to timely serve and file the notice of appeal is jurisdictionally fatal to an

appeal’s validity, while lesser omissions may be subject to sanctions.”).

[¶21.] “This Court has only such appellate jurisdiction as may be provided by

the legislature. The right to appeal is statutory and therefore does not exist in the

absence of a statute permitting it.” Wegner v. Siemers, 2018 S.D. 76, ¶ 4, 920

________________________ (. . . continued) have obtained jurisdiction to consider the underlying judgment. 2007 S.D. 74, ¶¶ 5–8, 736 N.W.2d at 879–81.

5. The docketing statement filed with the notice of appeal stated that the “[Garretts] now appeal from the Circuit Court’s orders denying the [Garretts’] Motion to Dismiss, striking [the Garretts’] counterclaim, Motion for Judgment as a Matter of Law or New Trial, and the Judgment of Eviction.” The docketing statement also identified the issues presented for appeal as: (1) the denial of the motion for judgment as matter of law and for new trial; (2) the denial of the Garretts’ request to present counterclaims and defenses in the eviction action; (3) the denial of the motion to dismiss; and (4) the denial of certain jury instructions proposed by the Garretts at trial.

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N.W.2d 54, 55 (quoting State v. Schwaller, 2006 S.D. 30, ¶ 5, 712 N.W.2d 869, 871);

see also S.D. Const. art. V, § 5 (“The Supreme Court shall have such appellate

jurisdiction as may be provided by the Legislature[.]”). Thus, our jurisdiction is

limited by our state constitution and statutory provisions.

[¶22.] “SDCL 15-26A-3 identifies the judgments and orders of circuit courts

that may be appealed to this Court.” Goens v. FDT, LLC, 2022 S.D. 71, ¶ 4, 982

N.W.2d 415, 417. This Court has consistently interpreted SDCL 15-26A-3 as a limit

to its jurisdictional authority. See Weisser v. Jackson Twp., 2009 S.D. 43, ¶ 3, 767

N.W.2d 888, 889 (“SDCL 15-26A-3 limits our appellate jurisdiction.”); Nelson v.

Estate of Campbell, 2023 S.D. 14, ¶ 16, 987 N.W.2d 675, 682 (“Our authority to

review civil judgments and orders is described in SDCL 15-26A-3.”); Smith v. Tobin,

311 N.W.2d 209, 210 (S.D. 1981) (“An appeal may not be taken from an order unless

it is authorized under SDCL 15-26A-3.”).

[¶23.] Since at least 1919, the Legislature has also required timely filing and

service of a notice of appeal to perfect an appeal. See Sections 3145 and 3146, Rev.

Code 1919; see also SDCL 15-26A-6 (“An appeal from a judgment or order must be

taken within thirty days after the judgment or order shall be signed, attested, filed

and written notice of entry thereof shall have been given to the adverse party.”).

We have consistently held that timely filing and service of a notice of appeal is a

jurisdictional prerequisite to perfecting an appeal. See Long v. Knight Constr. Co.,

Inc., 262 N.W.2d 207, 209 (S.D. 1978) (“This [C]ourt is without jurisdiction of an

untimely appeal.”); Wright v. Temple, 2023 S.D. 34, ¶ 22, 993 N.W.2d 553, 559 (“The

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‘[f]ailure to timely serve and file a notice of appeal is jurisdictionally fatal to the

appeal.’” (alterations in original) (citation omitted)).

[¶24.] On the other hand, the Legislature has authorized this Court to “make

all rules of practice and procedure [deemed] necessary for the administration of

justice in all civil and criminal actions[.]” SDCL 16-3-2. These Court instituted

procedural rules are not jurisdictional prerequisites but instead promote the orderly

progression and resolution of cases and appeals. See Piedmont Indep. Sch. Dist. No.

34 of Meade Cnty v. Meade Cnty Bd. of Ed., 78 S.D. 384, 386, 103 N.W.2d 177, 178

(1960) (“While it is often said that the time and manner of the exercise of the right

to appeal is statutory, that is not entirely accurate because of the right of this

[C]ourt to regulate the procedural aspects of appeals under its rule-making

power.”). For example, SDCL 15-26A-4 sets forth a number of Court created

procedural rules for filing appeals, including a requirement that the notice of appeal

“shall designate the judgment, order, or part thereof appealed from[.]” However,

this rule concludes by providing that the “[f]ailure of an appellant to take any step

other than timely service and filing of a notice of appeal does not affect the validity

of the appeal, but is ground only for such action as the Supreme Court deems

appropriate, which may include dismissal of the appeal.” Id. (emphasis added).

[¶25.] The United States Supreme Court has recently discussed the

distinction between statutory jurisdictional requirements and court rules for

processing appeals:

Jurisdictional requirements mark the bounds of a “court’s adjudicatory authority.” Yet not all procedural requirements fit that bill. Many simply instruct “parties to take certain procedural steps at certain specified times” without conditioning

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a court’s authority to hear the case on compliance with those steps. These nonjurisdictional rules “promote the orderly progress of litigation” but do not bear on a court’s power. The distinction matters. Jurisdictional requirements cannot be waived or forfeited, must be raised by courts sua sponte, and, as relevant to this case, do not allow for equitable exceptions. Mindful of these consequences, we have endeavored “to bring some discipline” to use of the jurisdictional label. To that end, we treat a procedural requirement as jurisdictional only if Congress “clearly states” that it is. Congress need not “incant magic words,” but the “traditional tools of statutory construction must plainly show that Congress imbued a procedural bar with jurisdictional consequences.”

Boechler, P.C. v. Comm’r of Internal Revenue, 596 U.S. 199, 203, 142 S. Ct. 1493,

1497, 212 L. Ed. 2d 524 (2022) (internal citations omitted). “A requirement ‘does

not become jurisdictional simply because it is placed in a section of a statute that

also contains jurisdictional provisions.’” Id. at 206–07 (quoting Sebelius v. Auburn

Reg’l Med. Ctr., 568 U.S. 145, 154, 133 S. Ct. 817, 184 L. Ed. 2d 627 (2013)).

Rather, the critical feature is “a clear tie between the [requirement] and the

jurisdictional grant.” Id. at 207.

[¶26.] The question remains whether the Garretts’ failure to reference the

underlying judgment in the notice of appeal is a jurisdictional defect, or merely a

failure to comply with a procedural requirement of this Court. In contrast with

jurisdictional prerequisites for timely filing and service of a notice of appeal, the

requirement in SDCL 15-26A-4 that a notice of appeal “shall specify the . . . order,

or part thereof appealed from” has never been treated as jurisdictional by any

statute. To the contrary, SDCL 15-26A-4 provides that the failure “to take any step

other than timely service and filing of a notice of appeal does not affect the validity

of the appeal[.]”

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[¶27.] Moreover, our decisions have tacitly recognized that a defect in a

timely filed and serviced notice of appeal is not jurisdictional, as we have held that

“notices of appeal are liberally construed [in favor of their sufficiency] where the

intent to appeal an unmentioned or mislabeled ruling is apparent and there is no

prejudice to the adverse party.” State v. Gutnik, 2010 S.D. 82, ¶ 5, 790 N.W.2d 495,

496 (quoting Raven Indus., Inc. v. Lee, 2010 S.D. 49, ¶ 6 n.3, 783 N.W.2d 844, 847

n.3); see also Watts v. Medics Pharm. Corp., 342 P.3d 847, 851 (Ariz. Ct. App. 2015)

(“Absent such prejudice, ‘society’s interests in adjudicating appeals on the merits

should govern.’” (citation omitted)). Therefore, we conclude that the Garretts’

failure to reference the underlying judgment in the notice of appeal, which was

timely filed and served, does not preclude our review of the December 8 order.

[¶28.] Contrary to the Stocks’ claim, Wilge does not control this issue. In

Wilge, this Court held that the predecessor statute to SDCL 15-26A-3 did not allow

for an appeal of right from an order denying a motion for new trial. 6 74 S.D. at 513,

54 N.W.2d at 569. Significantly, the appellants in Wilge did not argue that they

6. At the time Wilge was decided, “SDC 33.0701 enumerate[ed] the orders from which appeals may be taken to this court.” 74 S.D. at 512, 54 N.W.2d at 568. Like the current version of SDCL 15-26A-3(3), subsection (3) of SDC 33.0701 provided for an appeal of right from “[a]n order granting a new trial[,]” but did not provide a right of appeal from an order denying a motion for new trial. In rejecting the argument that an appeal of right could be had from an order denying a motion for new trial, Wilge noted that subsection 3 of § 3168 of the 1919 Code, the precursor to SDC 33.0701(3), had “specifically authorized an appeal from an order granting or denying a new trial.” 4 S.D. at 513, 54 N.W.2d at 568 (emphasis in original). In contrast, when the Legislature enacted SDC 33.0701(3) the language permitting an appeal from “an order denying a new trial [had] been removed from the list of appealable orders.” Id. Thus, an order denying a new trial was only “reviewable in an appeal from a judgment under SDC 33.0710.” Id.

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intended to appeal both the order denying the motion for new trial and the

underlying judgment and we rejected the appellants’ sole argument that, even if

SDC 33.0701(3) did not allow for an appeal of right from an order denying a motion

for new trial, the order was appealable under SDC 33.0701(2) and (4). 7 Id.

[¶29.] While the Garretts’ failure to reference the judgment of eviction in

their notice of appeal is not jurisdictional, the Garretts did not comply with the

procedural requirement of SDCL 15-26A-4(1) when they failed to “designate the

judgment, order, or part thereof appealed from[.]” In such circumstances, we must

determine whether any party was prejudiced by the irregularity, or if any other

reason exists to dismiss the appeal. See SDCL 15-26A-4.

[¶30.] The Stocks have not claimed they were prejudiced or misled by the

omission and the record does not support a claim of prejudice from the procedural

irregularity in the Garretts’ notice of appeal. The Garretts’ accompanying docketing

statement specifically referenced the underlying judgment and identified alleged

errors relating to matters outside of the court’s final order. While the docketing

statement cannot create jurisdiction, it removed any doubt about the issues the

Garretts were raising on appeal.

[¶31.] We deny the Stocks’ motion to dismiss for lack of appellate jurisdiction

and proceed to address the merits of the appeal.

7. These subsections are nearly identical to the current language in SDCL 15- 26A-3(2) and (4). At the time those subsections permitted appeals of right for: “(2) An order affecting a substantial right, made in any action, when such order in effect determines the action and prevents a judgment from which an appeal might be taken; [and] (4) Any final order affecting a substantial right, made in special proceedings, or upon a summary application in an action after judgment.”

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Standard of Review

[¶32.] When a court’s decision on a motion to dismiss is “purely grounded in

applying the applicable law to presumed facts, we apply a de novo standard of

review.” Paul v. Bathurst, 2023 S.D. 56, ¶ 11, 997 N.W.2d 644, 650. “[A] circuit

court’s decision to grant or deny a motion for judgment as a matter of law must be

reviewed de novo on appeal.” Magner v. Brinkman, 2016 S.D. 50, ¶ 13, 883 N.W.2d

74, 81. However, a circuit court’s decision on a motion for new trial is reviewed

under an abuse of discretion standard. Alvine Fam. Ltd. P’ship v. Hagemann, 2010

S.D. 28, ¶ 18, 780 N.W.2d 507, 513. As such, “a motion for new trial will not be

granted if the jury’s verdict can be explained with reference to the evidence, and the

evidence is viewed in the light most favorable to the verdict.” Id. This Court

reviews a circuit court’s denial of a proposed jury instruction under an abuse of

discretion standard. Sedlacek v. Prussman Contracting, Inc., 2020 S.D. 18, ¶ 17,

941 N.W.2d 819, 823 (citing Vetter v. Cam Wal Elec. Co-op., Inc., 2006 S.D. 21, ¶ 10,

711 N.W.2d 612, 615).

Analysis

1. Whether the circuit court erred when it denied the Garretts’ motion to dismiss.

a. Adequacy of the notice to quit

[¶33.] The Garretts argue that the Stocks commenced the forcible entry and

detainer action before the three-day notice to quit period expired under SDCL 21-

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16-2. 8 They rely on the computation of time rule in SDCL 15-6-6(a) to support their

claim that the Stocks did not provide them with adequate time to cure before

commencing this action. 9 The Garretts argue that failure to comply with SDCL 21-

16-2 was jurisdictional. See Meservy v. Stoner, 50 S.D. 147, 208 N.W. 781, 782

(1926) (“The statute means that the three days’ notice must be given before the

summons can be issued. This statute makes the service of the notice

jurisdictional.”).

[¶34.] The Stocks respond that the notice to quit was served on July 1 and

four days passed before the forcible entry and detainer action was commenced on

July 6. The Stocks argue that they complied with the three-day notice to quit

requirement under SDCL 21-16-2, and that the computation of time rule found in

SDCL 15-6-6(a) has no application to SDCL 21-16-2. In support, they cite SDCL 15-

6-81(a), Appendix A, which states that SDCL chapter 15-6 does not apply to special

proceedings “insofar as they are inconsistent or in conflict with the procedure and

practice provided by these rules[.]” Since SDCL chapter 21-16, which is titled as

“Forcible entry and detainer”, is included as a special proceeding under SDCL 15-6-

8. The three-day notice to quit requirement was repealed effective July 1, 2024, and a notice requirement no longer exists for actions commenced after the date of the repeal. See 2024 S.D. Sess. Laws ch. 75, § 1.

9. The notice to quit was served on Friday July 1. July 2 and 3 were weekend days, and July 4 was a legal holiday. In computing time after service, SDCL 15-6-6(a) excludes the day of service and includes the last day “unless it is a Saturday, a Sunday or a legal holiday[.]” Additionally, “[w]hen the period of time prescribed or allowed is less than eleven days, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation.” SDCL 15- 6-6(a). Applying these rules, the Garretts claim that July 1, 2, 3, and 4 are excluded from the computation and that the Stocks commenced the action on July 6, two days before the notice to quit period ran.

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81(a), Appendix A, the Stocks argue that the “computation of time set forth in SDCL

15-6-6(a) . . . conflicts with the expedited nature” of SDCL 21-16-2 which seeks to

provide accelerated proceedings to landlords attempting to evict breaching tenants.

[¶35.] At the time this action was commenced, SDCL 21-16-2 required that

“[i]n all cases arising under subdivisions 21-16-1(4), (5), and (6), three days’ written

notice to quit must be given to the lessee . . . before proceedings can be instituted[.]”

We have held that the statutory three-day notice to quit prerequisite to commencing

an eviction action is jurisdictional. Capp Homes, Inc. v. Ferguson, 86 S.D. 65, 67,

191 N.W.2d 171, 171 (1971) (dismissing the eviction action for lack of jurisdiction

against one of the tenants who was not served with a notice to quit before the action

was commenced); Meservy, 208 N.W. at 782 (dismissing the eviction action for lack

of jurisdiction when the eviction action was commenced before the statutory three

days had passed after service of the notice to quit). We have not addressed,

however, the proper calculation of the three-day notice period following service of

the notice to quit, nor whether SDCL 15-6-6(a) should be applied to calculate

whether the three-day time period under SDCL 21-16-2 was satisfied.

[¶36.] SDCL 15-6-81(a) provides that the Rules of Civil Procedure do not

apply to forcible entry and detainer actions “insofar as they are inconsistent or in

conflict with [chapter 15-6].” On its face, SDCL 21-16-2 simply required that “three

days’ written notice to quit must be given to the . . . party in possession, before

proceedings can be instituted[.]” The statute did not direct how the three-day notice

period should be calculated. However, SDCL 2-14-14, provides that “[t]he time in

which any act provided by law is to be done is computed by excluding the first day

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and including the last, unless the last is a holiday and then it also is excluded.”

SDCL 2-14-32, states that the sections of SDCL chapter 2-14 are intended to apply

to “the South Dakota Codified Laws[.]” Applying SDCL 2-14-14 to SDCL 21-16-2

leads to a calculation that the three-day period after service of the notice to quit ran

on July 5. Unlike the rule of civil procedure found at SDCL 15-6-6, which excludes

weekends when a notice period is less than ten days, the statute at SDCL 2-14-14

does not exclude weekends. Thus, calculating the time under SDCL 2-14-14

conflicts with SDCL 15-6-6, precluding the time calculation in SDCL 15-6-6. 10

[¶37.] Therefore, the circuit court did not err in denying the Garretts’ motion

to dismiss on this basis.

b. Mandatory mediation

[¶38.] The Garretts also argue that the circuit court erred in denying their

motion to dismiss under SDCL 54-13-10. SDCL 54-13-10 requires a creditor to

submit a request for mediation before pursuing any action to enforce a debt against

agricultural property equal to or greater than fifty thousand dollars. The Garretts

claim that the Stocks never made this request, and the court should have dismissed

the Stocks’ complaint as a result. The Stocks respond by asserting that this dispute

is not subject to SDCL 54-13-10 because the Stocks and the Garretts were involved

in a lessor/lessee relationship rather than a creditor/borrower relationship.

10. This computation of time is consistent with Meservy v. Stoner where this Court relied on a statutory provision identical to SDCL 2-14-14 when calculating the three-day time period after serving the notice to quit. 208 N.W. at 782. At the time, Section 10665 of the Revised Code of 1919 provided that “[t]he time in which any act provided by law is to be done is computed by excluding the first day and including the last, unless the last is a holiday and then it is also excluded.” Id. (quoting S.D. Rev. Code 1919, § 10665).

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[¶39.] The text of SDCL 54-13-10 applies only to creditor and borrower

transactions for actions “to enforce a debt . . . against agricultural land or

agricultural property of the borrower.” While this arrangement was designed to

satisfy the Garretts’ outstanding debt to other creditors, the Stocks did not extend

any credit to the Garretts. More importantly, the document at issue is a lease. The

Stocks only seek possession of the agricultural property they own. They do not seek

to enforce any debt against any land or property owned by the Garretts. As such,

any claim arising from this relationship is not subject to the mandatory mediation

provisions in SDCL 54-13-10.

c. Parallel litigation

[¶40.] The Garretts also argue that the circuit court should have dismissed

the Stocks’ forcible entry and detainer action because a parallel action involving

essentially the same issues had already been commenced in federal court. The

Garretts argue that the court improperly permitted the Stocks to split their claims

by filing a state court action for immediate possession while maintaining a

counterclaim for damages in the federal court action. They assert that “parties are

required to bring forward their whole case” and may not try it piecemeal. The

Garretts maintain that the federal court action constitutes the “same convenient

trial unit” and that the matters resolved in this forcible entry and detainer action

will necessarily resolve and be conclusive of matters to be determined in the federal

court action. 11 Because the federal court action was filed before the forcible entry

11. The Garretts cite First National Bank in Sioux Falls v. First Nat. Bank S.D., 679 F.3d 763, 767 (8th Cir. 2012), and Arnold v. K-Mart Corp., 747 S.W.2d (continued . . .) -19- #30255

and detainer action, the Garretts contend that the circuit court should have

refrained from exercising jurisdiction over the action in state court to avoid

exposing their claims to potentially inconsistent results.

[¶41.] Other courts have applied a “claim splitting rule” prohibiting a party

from maintaining parallel claims arising from the same facts against a defendant in

separate actions. See 1 Am. Jur. 2d Actions § 99, (updated January 2025) (“A

plaintiff should not engage in ‘claim-splitting,’ in which the plaintiff seeks to

maintain two actions on the same subject in the same court, against the same

defendant at the same time.”). These courts have likened the rule to claim

preclusion before a final judgment. See Kezhaya v. City of Belle Plaine, 78 F.4th

1045, 1050 (8th Cir. 2023)12 (explaining that claim splitting, or “duplicative

litigation,” occurs when a plaintiff attempts to maintain two actions against the

same defendant based on the same facts). “A dismissal on this ground has been

viewed as a matter of docket management, reviewed for abuse of discretion, even in

________________________ (. . . continued) 130 (Ky. Ct. App. 1988), in support of their contention that this action and the pending federal court action involve parallel claims. However, these cases involved the application of res judicata because of a judgment previously entered in a prior case involving the same issues. Neither First National Bank nor Arnold involved a motion to dismiss based upon parallel litigation currently pending in another action.

12. Notably, the facts in Kezhaya, 78 F.4th 1045 (8th Cir. 2023), differ from this case. In Kezhaya, the district court denied a plaintiff’s motion to amend the complaint to assert additional causes of action. Thereafter, the plaintiff filed a second action alleging the same causes of action for which the district court had denied the motion to amend. Applying both res judicata and the claims splitting rule, the district court dismissed the second action and imposed sanctions, which were subsequently challenged and affirmed on appeal.

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decisions that with some exaggeration describe the theory ‘as an aspect of res

judicata.’” 18 Fed. Prac. & Proc. Juris. § 4406 (3d ed.) (updated June 2024).

[¶42.] The Garretts make a general argument that the Stocks improperly

split their claims for immediate possession and damages, and that the circuit court

should have dismissed the forcible entry and detainer action because of parallel

litigation that was already pending in federal court. However, they have not cited

authority or developed an argument to show how the circuit court abused its

discretion by denying the motion to dismiss and permitting the forcible entry and

detainer action to proceed in state court. 13 We conclude, based upon the nature of

the forcible entry and detainer action and the record before us, that the circuit court

neither erred nor abused its discretion in denying the Garretts’ motion to dismiss.

[¶43.] The Stocks’ forcible entry and detainer action split their claim for

immediate possession from their claim for damages under the lease agreement,

leaving the latter for resolution in the federal court action. While splitting these

claims may result in two separate determinations as to which party breached the

lease agreement, the Legislature has specifically authorized such a split. See SDCL

21-16-4 (“An action under the provisions of this chapter cannot be brought in

13. Courts reviewing a motion to dismiss an action because of other pending parallel litigation apply an abuse of discretion standard of review. See 18 Fed. Prac. & Proc. Juris. § 4406 (3d ed.) (updated June 2024) (explaining that dismissal on the basis of claim splitting is reviewed for abuse of discretion). See also Lexington Ins. Co. v. Integrity Land Title Co., Inc., 721 F.3d 958, 967 (8th Cir. 2013) (applying abuse of discretion review for federal court abstention where parallel proceedings are pending in state court). The Garretts have not argued that the circuit court was without discretion to decide whether to dismiss the forcible entry and detainer action because of the pending federal court litigation.

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connection with any other except for rents and profits or damages but the plaintiff

may bring separate actions for the same if he so desire.” (emphasis added)).

[¶44.] In addressing the motion to dismiss, the circuit court appears to have

concluded that the federal court did not have jurisdiction over the forcible entry and

detainer action under chapter 21-16. But we need not decide whether this

conclusion was erroneous. Even if the federal court had jurisdiction to hear the

forcible entry and detainer action, the Stocks were specifically authorized by state

law to split the claim for immediate possession from the claim for damages.

Assuming the federal court had jurisdiction, the Stocks could file the forcible entry

and detainer action separately from the claim for damages in either state or federal

court.

[¶45.] Finally, the Garretts contend that the circuit court “should have

abstained from jurisdiction based on the fact that parallel litigation had already

commenced,” relying on Fru-Con Construction Corp. v. Controlled Air, Inc., 574 F.3d

527, 534 (8th Cir. 2009). 14 The Garretts argue that application of the federal

abstention factors set forth in Fru-Con warrants the circuit court’s abstention from

the forcible entry and detainer action to allow their federal action to proceed first.

However, even when parallel proceedings exist, abstention is not mandated, and “a

14. Although the federal abstention doctrine is distinct, we have recognized similar doctrines, such as forum non conveniens and comity, affording the circuit court discretion to stay or dismiss a case in deference to a parallel case pending in a foreign tribunal, or to a judgment that has previously been entered. See Peterson v. Feldmann, 2010 S.D. 53, ¶ 9, 784 N.W.2d 493, 496 (affirming a circuit court’s dismissal on the grounds of forum non conveniens); SDDS, Inc. v. State, 1997 S.D. 114, ¶ 17, 569 N.W.2d 289, 295 (applying comity to a judgment previously entered in federal court). The Garretts did not ask the circuit court to apply either doctrine in this case.

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district court enjoys broad discretion” in deciding whether to abstain. Lexington

Ins. Co., 721 F.3d at 967; see also Avera McKennan Hosp. v. EMC - Employers Mut.

Cas. Co., No. CIV 18-4007, 2018 WL 4290400, at *2 (D.S.D. Sept. 7, 2018) (“[W]here

there exists a ‘parallel’ state court action to the federal declaratory judgment action,

and the federal case involves questions of state law, the district court’s discretion is

at its peak due to principles of federalism and comity.”).

[¶46.] Aside from the fact that the federal court action was already pending,

the Garretts have not cited any factors from Fru-Con supporting their argument

that the circuit court should have deferred to the federal court and dismissed the

forcible entry and detainer action. Moreover, Fru-Con notes that case priority is not

necessarily determined by which case was filed first but rather places “a greater

emphasis on the relative progress made in the cases[.]” Id. at 534.

[¶47.] At the time the motion to dismiss was heard in the forcible entry and

detainer action, the case was ready to proceed to trial. After denying the motion to

dismiss, the court scheduled a trial within sixty days. There is nothing in the

record to show that the federal court action was ready to proceed to trial or that

discovery had been completed. Additionally, the Stocks began legal efforts to

terminate the lease agreement in August 2021, by sending a notice to the Garretts

that the lease agreement would terminate on March 1, 2022, if the alleged rent

default was not cured. The Garretts would have been well aware at the time they

filed the federal court action that the Stocks would likely be seeking immediate

possession of the real property soon thereafter.

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[¶48.] Although the outcome of this case may have preclusive effect on some

of the issues in the federal case, it will not fully determine the federal action,

particularly the claims for damages by either party. Moreover, the claims for

breach of the lease agreement were litigated before a Hughes County jury over the

course of two days. The Garretts have not argued that they were unable to fully

present their claims and defenses relating to breach of the lease agreement, or that

they were otherwise prejudiced by the state court proceedings for immediate

possession.

[¶49.] For all these reasons, we affirm the circuit court’s denial of the motion

to dismiss.

2. Whether the circuit court erred when it denied the Garretts’ proposed jury instructions regarding the notice requirement provision in the lease agreement.

[¶50.] The Garretts argue that the circuit court erred when it denied their

proposed jury instruction explaining the lease agreement’s requirement that the

Stocks provide the Garretts with written notice of default through the Escrow

Agent. 15 The Garretts allege that without an instruction explaining the notice

requirement, the jury was unaware “that the Stocks’ failure to strictly comply with

the notice provisions entitled the Garretts to continued possession.”

15. The Garretts’ proposed instruction provided:

The [Garretts] claim that the [Stocks] were required to provide written notice of default to the escrow agent pursuant to paragraph 13 of the Farm Lease Agreement, which provides the Garretts 60 days to cure any alleged defect pursuant to Section 12 of the Farm Lease Agreement. If you find that [Stocks] violated these requirements, then the complaint for forcibly entry and detainer must be denied.

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[¶51.] The Stocks respond that the Garretts were not “entitled to instructions

highlighting specific pieces of evidence that the Garretts believe support their

theory of the case[,]” as long as the jury was “aware of the notice defense or the

contractual basis for the defense.” They maintain that the final jury instructions

adequately instructed the jury on the applicable principles of law that were relevant

to the case.

[¶52.] While the court is afforded discretion in giving instructions, “no court

has discretion to give incorrect, misleading, conflicting or confusing instructions

[and] to do so constitutes reversible error if it is shown not only that the

instructions were erroneous, but also that they were prejudicial.” Vetter, 2006 S.D.

21, ¶ 10, 711 N.W.2d at 615. “Erroneous instructions are prejudicial . . . when in all

probability they produced some effect upon the verdict and were harmful to the

substantial rights of a party.” Id. “A circuit court does not err simply by refusing

‘to amplify instructions which substantially cover the principle embodied in the

requested instruction.’” State v. Kryger, 2018 S.D. 13, ¶ 41, 907 N.W.2d 800, 814

(quoting State v. Klaudt, 2009 S.D. 71, ¶ 20, 772 N.W.2d 117, 123). Thus,

“[i]nstructions are adequate when, considered as a whole, they give a full and

correct statement of the applicable law.” Jahnig v. Coisman, 283 N.W.2d 557, 560

(S.D. 1979) (citation omitted).

[¶53.] The court provided instructions explaining that each party claimed the

other party had breached the lease agreement, and defined a material breach that

would excuse the other party’s performance. The court also instructed the jury that

if the jury found “[the Stocks] first materially breached the Lease Agreement, [the

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Garretts’] breaches would thereby be excused.” The Garretts did not object to these

instructions and their proposed instruction was merely an amplification of the

instructions given by the court. The agreements were put into evidence and the

Garretts were afforded the opportunity to argue their breach claims against the

Stocks. The circuit court did not abuse its discretion in denying the Garretts’

proposed instruction.

3. Whether the circuit court erred when it denied the Garretts’ motion for judgment as a matter of law or for new trial.

[¶54.] The Garretts argue that the undisputed evidence showed that the

Stocks failed to comply with the provisions of the lease agreement when they did

not provide a sixty day notice to cure to the Garretts through the Escrow Agent.

They contend this was a material breach of the lease agreement and “[n]o

reasonable juror could have, or should have, issued a finding for the Stocks” because

of this breach. As such they argue the court erred in failing to grant their motion

for judgment as a matter of law, or alternately, the court should have granted their

motion for a new trial.

[¶55.] The Stocks respond that the Garretts were the first party to materially

breach the lease agreement by failing to make timely lease payments, thereby

relieving the Stocks of any notice requirement contained in the lease agreement.

They further argue that once the jury was instructed—without objection—that the

Garretts had to make their lease payments to avoid materially breaching the

agreement, it became the law of the case and foreclosed the Garretts’ ability to

challenge the jury’s finding of a material breach.

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[¶56.] In considering a motion for judgment as a matter of law, “we apply the

same standard as the circuit court: we view the evidence in the light most favorable

to the verdict or to the nonmoving party.” Center of Life Church v. Nelson, 2018

S.D. 42, ¶ 18, 913 N.W.2d 105, 110 (citing Magner, 2016 S.D. 50, ¶ 14, 883 N.W.2d

at 81). Then, without weighing the evidence, this Court must determine whether

there is evidence supporting the verdict. Id. “If sufficient evidence exists so that

reasonable minds could differ, judgment as a matter of law is not appropriate.” Id.

(quoting Magner, 2016 S.D. 50, ¶ 14, 883 N.W.2d at 81). In similar manner, “a

motion for new trial will not be granted if the jury’s verdict can be explained with

reference to the evidence, and the evidence is viewed in a light most favorable to the

verdict.” Alvine Fam. Ltd. P’ship., 2010 S.D. 28, ¶ 18, 780 N.W.2d at 512.

[¶57.] “As a lease is a contract we will follow the law of contract in regard to

breach.” Tri-City Assoc., L.P. v. Belmont, Inc., 2014 S.D. 23, ¶ 9, 845 N.W.2d 911,

915 (quoting Icehouse, Inc. v. Geissler, 2001 S.D. 134, ¶ 21, 636 N.W.2d 459, 465).

“It is well established that a material breach of a contract excuses the non-

breaching party from further performance.” FB & I Bldg. Prod.’s, Inc. v. Superior

Truss & Components, a Div. of Banks Lumber, Inc., 2007 S.D. 13, ¶ 15, 727 N.W.2d

474, 478 (citing S & S Trucking v. Whitewood Motors, Inc., 346 N.W.2d 297, 301

(S.D. 1984)). “Whether a party’s conduct constitutes a material breach of contract is

a question of fact.” Icehouse, Inc., 2001 S.D. 134, ¶ 21, 636 N.W.2d at 465 (citing

Moe v. John Deere Co., 516 N.W.2d 332, 335 (S.D. 1994)).

[¶58.] The three agreements contain conflicting provisions concerning the

parties’ obligations in the event of breach. Sections 12 and 13 of the lease

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agreement require a sixty-day notice of default to “be made by the escrow agent

effective upon delivery to the parties.” The lease agreement further provided the

breaching party with the right to cure the breach within sixty days of receiving

proper notice. In contrast, Section 13 of the purchase agreement, Section 4 of the

lease agreement, and Section 17 of the escrow agreement all state that “[i]f any

annual lease payment is not paid on or before June 20 of each year, then the lease

shall terminate immediately and the purchase option provided in this agreement

will be void.”

[¶59.] The evidence at trial showed that the Garretts failed to pay any

portion of their June 2021 lease payment. Despite not providing notice through the

Escrow Agent, the Stocks gave a written notice of breach directly to the Garretts on

August 27, 2021. The written notice sent to the Garretts set forth the amount of the

delinquent lease payment and provided that if the delinquent balance was not paid

by October 15, 2021, the lease would terminate on March 1, 2022. Although the

notice directed the Garretts to cure the default in less than sixty days, the notice

informed the Garretts that the lease would not terminate until March 1, 2022, more

than 180 days after the notice of default was sent. Despite receiving the Stocks’

notice, the evidence shows that the Garretts failed to make any effort to pay the

delinquent balance before the lease terminated on March 1, 2022.

[¶60.] A material breach is one that defeats “the very object of the contract.”

Icehouse, Inc., 2001 S.D. 134, ¶ 21, 636 N.W.2d at 465 (quoting Thunderstik Lodge,

Inc. v. Reuer, 1998 S.D. 110, ¶ 25, 585 N.W.2d 819, 824). Based upon the evidence

at trial the jury could have reasonably determined that the Garretts materially

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breached the lease agreement by failing to pay the June 20, 2021, lease payment.

While the evidence showed the Stocks’ notice of default did not fully comply with

Sections 12 and 13 of the lease agreement, this did not require the court to

determine as a matter of law that the Stocks materially breached the lease

agreement. Rather, in light of the conflicting termination provisions in the

agreements and that the Garretts received the Stocks’ written notice of default that

set forth the amount due and failed to cure the default for more than six months

before the lease terminated, a reasonable juror could have found any noncompliance

by the Stocks was not a material breach of the lease agreement. “[A] jury’s verdict

should be affirmed if it can be explained with reference to the evidence, ‘rather than

passion, prejudice, or mistake of law.’” Matter of Estate of Tank, 2023 S.D. 59, ¶ 39,

998 N.W.2d 109, 122 (quotation omitted). On this record, the court did not err in

denying the Garretts’ motion for judgment as a matter of law or abuse its discretion

by denying the motion for a new trial.

[¶61.] The Stocks also filed a motion to tax attorney fees on appeal in the

amount of $14,421.96. We award appellate attorney fees to Stocks in the amount of

$5,000.

[¶62.] We affirm.

[¶63.] SALTER and MYREN, Justices, concur.

[¶64.] KERN and DEVANEY, Justices, concur in result.

DEVANEY, Justice (concurring in result).

[¶65.] I concur with the majority opinion, but I write separately on the

parallel litigation issue because I arrive at the same result in a different manner.

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This case presents a similar scenario as the one presented in VOR, Inc. v. O’Farrell,

2025 S.D. 2, ___ N.W.3d ___. Both cases involve disputes between parties regarding

the termination of an agricultural lease wherein the landlord commenced a forcible

entry and detainer action after the tenants had filed a lawsuit alleging claims

relating to the underlying dispute. In both cases, the tenants moved to dismiss the

forcible entry and detainer action so that the disputed issues could be resolved in

the preexisting lawsuit.

[¶66.] While O’Farrell’s motion to dismiss centered on the argument that

VOR’s claim for immediate possession should have been brought as a compulsory

counterclaim under SDCL 15-6-13(a) in a preexisting lawsuit, here, unlike the

eviction plaintiff in O’Farrell, the Stocks had already filed a counterclaim in the

Garretts’ preexisting federal lawsuit seeking a declaration that the farm lease

agreement was terminated. The Garretts’ motion to dismiss thus focused on the

parallel nature of the existing claims raised in both suits and the case law

governing when one of the courts should abstain from proceeding on a parallel

claim, particularly when one suit is brought in federal court and the other in a state

[¶67.] In its denial of the Garretts’ motion to dismiss, the circuit court agreed

that the state and federal actions were parallel, as do I. However, the circuit court

then determined that the federal court could not exercise jurisdiction over the

eviction claim. I disagree with this conclusion. The cases cited by the Stocks to

support this view involved parties attempting to challenge an eviction order already

entered by a state court in a later filed federal action. See, e.g., Ally v. Sukkar, 128

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F. App’x 194 (2d Cir. 2005) (dismissing a complaint seeking damages associated

with a state court eviction judgment); Jordan v. Levine, No. 12CV3527, 2012 WL

2921024 (E.D.N.Y. July 17, 2012) (a lawsuit against a state court judge by a tenant

seeking damages and a stay of an eviction ordered by the judge). That is not what

the Garretts requested here. Instead, they asked the circuit court to allow the

federal court to address the parallel claim for termination of the lease and

possession of the property in the first instance. A federal court exercising diversity

jurisdiction has jurisdiction to decide accompanying state law claims, which may

include eviction claims, as in the case here. See Barrington Bank & Tr. Co., Nat’l

Ass’n v. Fed. Deposit Ins. Corp., No. 14C06710, 2015 WL 1888284 at *4–5 (N.D. Ill.

Apr. 24, 2015) (also concluding a federal court exercising subject matter jurisdiction

has supplemental jurisdiction under 28 U.S.C. § 1367 over a state law eviction

claim which is a compulsory counterclaim); BEM I, LLC v. Anthropologie, Inc., 301

F.3d 548, 551–54 (7th Cir. 2002) (holding that the federal court had diversity

jurisdiction over a state law eviction claim).

[¶68.] For the reasons I expressed in my dissent in O’Farrell, it is my view

that the circuit court should have held the state eviction action in abeyance to allow

the underlying breach of contract claims relating directly to the right to possession

of the property to be litigated along with the parties’ other related claims raised in

the preexisting federal suit. See O’Farrell, 2025 S.D. 2, ¶ 71, ___ N.W.3d ___, ____

(DeVaney, J., dissenting); Raich v. Weisman, 58 S.D. 4, 234 N.W. 664 (1931)

(directing the dismissal without prejudice of a forcible entry and detainer action to

allow the issues to be tried in other pending lawsuits or a consolidation thereof so

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that the issues could be tried and determined in one action); Bjorklund v. Bjorklund

Trucking, Inc., 753 N.W.2d 312, 318–19 (Minn. Ct. App. 2008) (holding that “when

the counterclaims and defenses are necessary to a fair determination of the eviction

action, it is an abuse of discretion not to grant a stay of the eviction proceedings

when an alternate civil action that involves those counterclaims and defenses is

pending”).

[¶69.] While I agree that SDCL 21-16-4 allows landlords or property owners

to split their claims when bringing an eviction action under SDCL chapter 21-16,

this statute does not preclude a court from holding a forcible entry and detainer

action in abeyance and allowing the disputed issues underlying the right to

possession of property to be litigated in a preexisting civil action. In some cases, an

action brought under the abbreviated timeframes in chapter 21-16 may not be well-

suited to address underlying disputes which are more complicated than the run-of-

the-mill eviction claims. Also, an eviction action is not the only way in which

landlords could reacquire possession of the property at issue. Temporary injunctive

relief or an intermediate order could be sought in a preexisting lawsuit to resolve

who should maintain possession of the property while the underlying disputed

issues are being litigated.

[¶70.] However, I ultimately concur in the affirmance on this issue because,

as noted in the majority opinion, the Garretts have not established how they were

prejudiced by the circuit court’s denial of their motion to dismiss. Unlike the

tenants in the O’Farrell eviction action, the Garretts were granted a continuance

and allowed to present their evidence and arguments to a jury regarding the

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underlying breach of contract dispute governing who was entitled to immediate

possession of the property.

[¶71.] KERN, Justice, joins this writing.

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