Huston v. Martin

#28365-aff in pt & rev in pt-JMK
2018 S.D. 73

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

****
JUNE J. HUSTON, Plaintiff and Appellant,

v.

VANCE MARTIN and THE
ESTATE OF DALE M. JARMAN, Defendants and Appellees.

****
APPEAL FROM THE CIRCUIT COURT OF
THE SIXTH JUDICIAL CIRCUIT
HAAKON COUNTY, SOUTH DAKOTA
****
THE HONORABLE JOHN L. BROWN
Judge
****

ROGER A. TELLINGHUISEN
MICHAEL V. WHEELER of
DeMersseman, Jensen, Tellinghuisen
& Huffman, LLP
Rapid City, South Dakota Attorneys for plaintiff and
appellant.

WILLIAM M. VAN CAMP of
Olinger, Lovald, McCahren,
Van Camp & Konrad, PC
Pierre, South Dakota Attorneys for defendants and
appellee Vance Martin.

MARGO D. NORTHRUP of
Riter, Rogers, Wattier
& Northrup, LLP
Pierre, South Dakota Attorneys for defendant and
appellee the Estate of Dale M.
Jarman.
****
CONSIDERED ON BRIEFS
ON MAY 21, 2018
OPINION FILED 10/10/18
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KERN, Justice

[¶1.] At Father’s insistence, Daughter conveyed considerable amounts of

land to her father and nephew. In return, Father promised to “make things right”

with Daughter by leaving her half of his estate. However, Father left Daughter

only $30,000 in his will after conveying the vast majority of his multi-million-dollar

estate to Daughter’s nephew. Daughter sued her nephew and the estate, alleging

breach of contract, fraud, and unjust enrichment. Nephew and the estate moved for

summary judgment on several grounds, including that Daughter’s claims were

untimely under SDCL 29A-3-803 and prohibited because a contract to devise by will

must be in writing. The circuit court dismissed the case, granting the motion for

summary judgment. We affirm in part and reverse in part.

Facts and Procedural History

[¶2.] Prior to his death, Dale Jarman (Jarman) owned and operated a large

cattle ranch in Haakon County. Jarman operated the property via Jarman Ranch,

LLC, which possessed significant assets. Jarman and his wife (Joyce) had two

daughters, June Huston (Huston) and Susan Martin (Susan), and a grandson,

Vance Martin (Martin). In 2002, Susan transferred 640 acres of property to Huston

via a series of deeds made without consideration due to concerns about the health of

Susan’s husband. The family worried that Susan’s retention of the property would

affect Medicaid payments or could be targeted by creditors. When Joyce died in

July 2010 Huston inherited an undivided one-half interest in the family ranch.

[¶3.] On March 31, 2011, Huston, at Jarman’s insistence, executed and

delivered a warranty deed transferring her undivided one-half interest in 147.77

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acres of land to Jarman for and in consideration of one dollar. Huston claims she

did not wish to transfer the land. When deposed, Susan substantiated Huston’s

claim, observing that Jarman was “persistent” in his efforts to convince Huston to

transfer the property. On March 13, 2013, Huston also transferred by quitclaim

deed her ownership interest in 560 acres of real estate to Martin. Huston averred

that Jarman threatened to disinherit her if she did not comply and promised to

“make things right” with her in his will if she made the transfers. Specifically,

Huston alleged that Jarman promised to leave her 50% of his estate.

[¶4.] However, Jarman favored Martin in his estate planning. In May 2011,

shortly after Jarman received Huston’s land, Jarman requested that his attorney

revise his will to devise nearly the entirety of his estate to Martin. Unbeknownst to

Huston, by the end of 2012, Jarman had transferred more than $2,500,000 in cash

and assets to Martin. Martin did not give consideration for the gratuitous

transfers. After his death in March 2014, Jarman’s will revealed that he had

devised almost all his property to Martin, including the land Huston had conveyed

to him. Although the property was worth millions of dollars, Jarman left only

$30,000 to Huston in his will.

[¶5.] On July 24, 2014, Jarman’s estate published a notice to creditors. On

July 8, 2015—nearly a year later—Huston filed a complaint against Martin and the

estate, alleging fraud, breach of contract, promissory estoppel, and unjust

enrichment. On June 9, 2017, Martin and the estate moved for summary judgment,

raising numerous grounds for dismissal. The circuit court held a hearing to

consider the motion on August 18, 2017. Martin and the estate argued that SDCL

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29A-3-803 barred Huston’s claims for breach of contract and fraud because Huston

failed to file her claim within four months from the date notice was given to

creditors pursuant to SDCL 29A-3-801(a).1 They also argued that Huston’s contract

claim could not survive without written evidence memorializing the alleged contract

under the statute of frauds or SDCL 29A-2-514, which require that any contract to

make a will or devise be in writing.

[¶6.] While acknowledging that this Court has enforced oral agreements in

the past, Martin and the estate contended that those cases predated the enactment

of SDCL 29A-2-514. According to Martin and the estate, because SDCL 29A-2-514

bars the claim irrespective of any partial performance, our precedent enforcing oral

agreements is irrelevant in the present case. Further, they contended that Huston’s

fraud claim could not survive apart from the contract claim because the fraud

allegation did not arise from a breach of an independent legal duty, i.e., that “all of

their assertions . . . are formed or arise from the formation and enforceability of the

contract.” Finally, Martin and the estate asserted that Martin was not unjustly

enriched by retaining the land because he was unaware of any contract between

Jarman and Huston and engaged in no wrongdoing.

1. SDCL 29A-3-801(a) provides:
A personal representative upon appointment may publish a
notice to creditors once a week for three successive weeks in a
legal newspaper in the county in which the proceeding is
pending giving the personal representative’s name and address
and notifying creditors of the decedent to present their claims
within four months after the date of the first publication of the
notice or the claim may be barred.

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[¶7.] In response, Huston argued her claims were not time barred by SDCL

29A-3-803 because, in her view, the four month limitations period did not apply to

her claims. Specifically, she contended that SDCL 29A-3-803 applied only to claims

that arose prior to the decedent’s death—her claims, she emphasized, only became

actionable after Jarman’s death when she realized her father bequeathed assets to

Martin in violation of their contract. Further, Huston argued that when she

transferred the property to Jarman, she triggered the partial-performance exception

to the statute of frauds. Jarman argued that the exception must equally apply to

SDCL 29A-2-514 because claiming a contrary conclusion would lead to an unjust

result. As to the fraud claim, Huston observed that fraud involves questions of fact

and summary judgment at this stage would be premature. Regarding unjust

enrichment, Huston noted Martin had both received a benefit and knew of the

benefit, and, as such, it would be inequitable for Martin to keep the land without

paying consideration.

[¶8.] After hearing argument from the parties, the court remarked that the

case involved “a great number of . . . potential inequities[.]” However, the court

concluded that “under the circumstances . . . and the statutory language,” it would

“grant summary judgment on all claims,” observing that “obviously, this is

something the Supreme Court is going to have to sort out as to, certainly, the

breach of contract and matters.” The court did not elaborate further as to what

statutory language it was referencing, nor did it provide citations to authority in its

order granting Martin and the estate’s motion for summary judgment.

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[¶9.] Huston argues that the circuit court erred in granting summary

judgment. To answer this question, we restate Huston’s issues as follows:

1. Whether the circuit court erred by dismissing Huston’s
breach-of-contract claim.

2. Whether the circuit court erred by dismissing Huston’s
fraud claim.

3. Whether the circuit court erred by dismissing Huston’s
unjust-enrichment claim.

Standard of Review

[¶10.] Under our well-settled standard of review, “[s]ummary judgment is

proper where, the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no genuine

issue as to any material fact and that the moving party is entitled to judgment as a

matter of law.” Hofer v. Redstone Feeders, LLC, 2015 S.D. 75, ¶ 10, 870 N.W.2d

659, 661 (citing SDCL 15-6-56(c)). The moving party bears “the burden of clearly

demonstrating an absence of any genuine issue of material fact and an entitlement

to judgment as a matter of law[,]” and we view the evidence and draw all reasonable

inferences in a light most favorable to the nonmoving party. Id. ¶ 10, 870 N.W.2d

at 661–62. “The nonmoving party, however, must present specific facts showing

that a genuine, material issue for trial exists.” Saathoff v. Kuhlman, 2009 S.D. 17,

¶ 11, 763 N.W.2d 800, 804. Even if the circuit court grants summary judgment

without offering the basis for its decision, “[i]f there exists any basis which supports

the ruling of the [circuit] court, affirmance of a summary judgment is proper.” Id.

¶¶ 11, 19, 763 N.W.2d at 804, 806. We review the circuit court’s legal conclusions,

including statutory interpretation, de novo. Hofer, ¶ 11, 870 N.W.2d at 662.

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Analysis

1. Huston’s breach-of-contract claim.

[¶11.] Huston argues that the circuit court erred by granting summary

judgment on her breach of contract claim. Specifically, she alleges that viewed in

the light most favorable to her claim, the evidence established a contract between

Jarman and Huston, and that the contract, though oral, overcame the statute of

frauds defense. Although Huston recognizes that SDCL 29A-2-514 requires some

form of writing pertaining to the alleged contract, Huston notes that under the

statute of frauds, partial performance obviates the need for a written contract.

Huston claims that “to the extent the statute of frauds defense even applies in this

instance, whether found at SDCL 29A-2-514 or elsewhere, it is clearly defeated

based upon the fact that” Huston performed under the contract. Huston cites

Hahne v. Burr, 2005 S.D. 108, 705 N.W.2d 867 in support of her argument that an

oral promise to convey real property may be enforced where partial performance has

occurred.2

[¶12.] SDCL 53-8-2, South Dakota’s statute of frauds, provides that a court

may “compel specific performance of any agreement for sale of real estate in case of

part performance thereof[.]” (Emphasis added.) However, SDCL 29A-2-514 states

that

[a] contract to make a will or devise . . . may be established only
by (i) the provisions of a will stating material provisions of the
contract, (ii) an express reference in a will to a contract and

2. The other cases cited by Huston predate SDCL 29A-2-514 and therefore do
not control our analysis.

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extrinsic evidence proving the terms of the contract, or (iii) a
writing signed by the decedent evidencing the contract.

(Emphasis added). The Legislature patterned the language of SDCL 29A-2-514

after provisions contained in the Uniform Probate Code (UPC), specifically § 2-514

of the UPC, which “tighten[s] the methods by which contracts concerning succession

may be proved.” Unif. Prob. Code § 2-514 cmt. (Unif. Law Comm’n 2010).

[¶13.] Here, no such writings exist, and the statute contains no

partial-performance exception. Indeed, the statute limits the means by which a

contract to convey by will can be established to “only” those listed.

SDCL 29A-2-514. We have held that even if a verbal promise was made, an

agreement will fail if “not in writing” as required by statute. Niesche v. Wilkinson,

2013 S.D. 90, ¶ 29, 841 N.W.2d 250, 258 (citing SDCL 29A-2-514).3

[¶14.] Additionally, other states that have examined identical statutes

adopting language from the UPC have concluded that, absent a writing, a contract

to will or devise does not exist. See, e.g., Cragle v. Gray, 206 P.3d 446, 452 (Alaska

2009); Orlando v. Prewett, 705 P.2d 593, 596–98 (Mont. 1985) (“To recognize a part

3. Although Huston notes that in Niesche, no “allegations of fraud” were made
and “SDCL 29A-2-514 by its terms does not apply to fraud claims,” Huston
does not elaborate how distinguishing the case in this way affects the
analysis of whether there must be a writing to support her breach-of-contract
claim.
Additionally, Huston claims that “[t]he facts supporting [a] claim of
[promissory] estoppel exist in the record, have been pled, and constitute yet
another ground for denying summary judgment.” But although we have said
that “the doctrine of equitable estoppel may prevent a party to an oral
agreement from invoking the Statute of Frauds[,]” Farmers Elevator Co. of
Elk Point v. Lyle, 90 S.D. 86, 238 N.W.2d 290, 293 (1976), Huston cites no
authority supporting such an exception under SDCL 29A-2-514.

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performance exception to this statute would once again create the uncertainties and

litigation that the statute was designed to reduce and eliminate.”); Johnson v.

Anderson, 771 N.W.2d 565, 569–70 (Neb. 2009). Because Huston has not alleged a

valid breach-of-contract claim, we need not address whether the claim was time

barred under SDCL 29A-3-803. The circuit court did not err by granting summary

judgment on the contract claim.

2. Huston’s fraud claim.

[¶15.] Huston claims that the circuit court erred in granting summary

judgment on her claims of fraud.4 She argues that her claim should survive

regardless of the validity of her contract with Jarman because fraud may be based

in tort as well as in contract. In Huston’s view, she established the basic elements

of fraud by presenting evidence of a letter from Jarman to his attorney directing the

attorney to redraft his will to make Martin his primary beneficiary. She also

contends that she identified evidence suggesting Jarman carried out his intent to

gift Martin a vast majority of his estate in violation of their agreement.

Accordingly, Huston argues that the circuit court prematurely granted summary

judgment.

[¶16.] The circuit court did not specify its reason for granting Martin and the

estate’s motion for summary judgment on Huston’s fraud claim. Huston argues her

claim was both validly pled and timely because the statute of limitations in SDCL

4. Huston’s complaint alleges that “Martin was knowledgeable and had actual
knowledge of [Jarman’s] representations.” However, Huston has failed to
identify any facts in the record to support a fraud claim against Martin. To
the extent Huston’s fraud claim included Martin, the circuit court properly
granted summary judgment.

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29A-3-803 did not apply to it. In response, Martin and the estate argue that,

pursuant to SDCL 29A-3-803, the circuit court properly dismissed Huston’s fraud

claim against the estate. SDCL 29A-3-803 bars “[a]ll claims against a decedent’s

estate which arose before the death of the decedent . . . .” unless, in the case of

creditors notified by publication, their claim is presented to the estate “within the

time set in the published notice to creditors[.]” (Emphasis added). Considering

this, Martin and the estate assert that Huston’s fraud claim is untimely because

Huston did not pursue the claim within four months after publication of the notice

to creditors. See SDCL 29A-3-801(a).

[¶17.] In support of this proposition, Martin and the estate cite Spohr v.

Berryman, 589 So. 2d 225 (Fla. 1991), a Florida Supreme Court decision. Spohr

involved a divorce agreement directing the husband, Spohr, to prepare and

maintain in his possession a will that “would bequeath and devise to his wife and

children not less than one half of his estate.” Id. at 226. Despite this agreement,

Spohr left his entire estate to his surviving spouse. Id. Spohr’s ex-wife and

children failed to bring a claim against the estate within the time permitted under

Florida’s nonclaim statute. Id. at 226–27.

[¶18.] The Florida Supreme Court concluded that although “the claim of [the

ex-wife] and the children did not come to fruition until the contents of Mr. Spohr’s

will were ascertained following his death, the claim itself, . . .” arose out of an

agreement entered into many years prior. Id. at 227. The court labeled the claim

as contingent, reasoning that “liability depend[ed] on some future event, which may

or may not happen, [and] render[ed] it uncertain whether there ever will be a

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liability.” Id. Because Florida’s nonclaim statute—like South Dakota’s—

contemplated contingent claims, the court held that the claims were untimely. Id.

The court also expressed concern about claims being brought years after the

decedent’s passing, which could “substantially delay[] or disrupt[]” distributions to

beneficiaries. Id. at 227.

[¶19.] South Dakota’s nonclaim statute applies to all claims “which arose

before the death of the decedent.” SDCL 29A-3-803(a). These include claims

“whether due or to become due, absolute or contingent, liquidated or unliquidated,

founded in contract, tort, or other legal basis, if not barred earlier by another

statute of limitations or nonclaim statute[.]” Id. “Words and phrases in a statute

must be given their plain meaning and effect.” Reints v. Pennington Cty., 2015 S.D.

74, ¶ 11, 869 N.W.2d 466, 469. In determining whether SDCL 29A-3-803 applies to

a claim, we have analyzed whether the claim arose prior to the decedent’s passing.

See In re Estate of Ginsbach, 2008 S.D. 91, ¶ 14, 757 N.W.2d 65, 69 (observing that

plaintiff knew, among other things, that decedent “had no intention to transfer”

ownership of property to plaintiff while decedent was alive).

[¶20.] If a contingent claim for fraud arose before Jarman’s passing, then the

claim would be untimely under SDCL 29A-3-803. A contingent claim is one “that

has not yet accrued and is dependent on some future event that may never happen.”

Claim, Black’s Law Dictionary (10th ed. 2014). “The distinguishing feature of a

contingent claim is that the cause of action has not accrued.” Turner v. Meek,

284 S.W.2d 848, 850 (Ark. 1955); see also In re Weinberger’s Estate, 279 N.W.2d 849,

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853 (Neb. 1979) (“Until that future event happens a right of action upon the

contingent claim does not arise.”).

[¶21.] For example, in Le Sueur v. Quillian, 56 S.D. 289, 228 N.W. 380

(1929), we held that a claim was contingent and therefore barred as untimely when

the claim depended on the potential actions of one of the parties. The dispute in

Quillian arose after Quillian conveyed land by warranty deed to Le Sueur in 1921.

Id. Quillian had previously mortgaged the land, and in 1923, Quillian died. Id. Le

Sueur did not present a claim within the time given by the notice to creditors. Id. at

381. In 1925, the “mortgage, not being paid, was foreclosed,” and Le Sueur was

evicted under a sheriff’s deed. Id. at 380. In 1926, Le Sueur presented a claim for

the amount of consideration recited in her deed with Quillian plus interest from the

date of eviction. Id. at 381.

[¶22.] The Quillian Court observed that the “covenant against

[e]ncumbrances was broken as soon as the warranty deed to [Le Sueur] was

delivered. Therefore, at the time of Quillian’s death and during the period within

which creditors might present claims was running, [Le Sueur] had a claim which

could have been presented to the executrix.” Id. The Court further noted that “the

claim was contingent” because “if Quillian’s executrix or heirs . . . pa[id] off the

[e]ncumbrance, no claim in favor of [Le Sueur] would thereafter exist[.]” Id.

Because “[Le Sueur’s] claim for the amount of the consideration named in her deed

could have been presented as a contingent claim,” the claim was barred under the

nonclaim statute. Id. at 382.

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[¶23.] In the instant case, Huston possessed a contingent claim against

Jarman. The facts, taken in the light most favorable to Huston, show Jarman

misrepresented his intentions for his estate plan, causing Huston to rely on those

false statements when she transferred her land to Jarman. Thus, the basis for the

claim arose out of an agreement made during Jarman’s lifetime. However, the

claim was contingent because Jarman could have modified his will to “make things

right” at any time while he was still alive. Thus, Huston’s claim had “not yet

accrued” and was “dependent on some future event that may never happen,” Claim,

Black’s Law Dictionary (10th ed. 2014), namely, Jarman fulfilling his promise. As

such, SDCL 29A-3-803 bars the fraud claim because it first arose as a contingent

claim during Jarman’s lifetime and was not timely filed within four months after

notice of publication to creditors. Unlike some other courts that have recognized an

exception to nonclaim statutes “where the claim is a contingent one[,]” see, e.g.,

Moore v. Stephens, 84 So. 2d 752, 754 (Ala. 1956), South Dakota’s nonclaim statute

expressly includes contingent claims.

[¶24.] To support her position that SDCL 29A-3-803 does not apply to her

fraud claim, Huston relies primarily on In re Estate of Green, 516 N.W.2d 326, 329

(S.D. 1994), which analyzed South Dakota’s prior nonclaim statute, SDCL 30-21-17.

In Green, Husband and Wife executed a joint will in 1964 providing that after their

death, their estate would be divided equally between their nieces and nephews. Id.

at 327. After Husband’s death, Wife executed a new will leaving her estate to her

siblings and their children instead. Id. After Wife’s death, Husband’s nieces and

nephews successfully challenged Wife’s new will. Id. at 328. The trial court

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imposed a constructive trust for the benefit of Husband’s nieces and nephews. Id.

It determined the 1964 joint and reciprocal will created a contract between

Husband and Wife that the property pass consistent with the 1964 will upon the

death of the second spouse. Id. When the Wife’s heirs appealed the decision

imposing the constructive trust the court dismissed it as untimely. Id. Wife’s heirs

subsequently objected to the petition proposing to distribute the property consistent

with the constructive trust ruling. Wife’s heirs claimed the contract claim

supporting the constructive trust ruling was time barred under SDCL 30-21-17

because Husband’s heirs had failed to timely assert the contract claim in the

probate following Husband’s death. Id. at 330. The probate court denied the

objection and ordered the property to be distributed consistent with the court

imposed constructive trust. The Green Court affirmed. Id. at 331.

[¶25.] The Green Court, focusing on the date on which the claim accrued,

rejected the argument that the time restraints in SDCL 30-21-17 were applicable to

the breach-of-contract claim. It held “South Dakota case law on claims arising

under this statute is clear—the statute is limited in application to “claims” which

are collectible from the decedent during his or her lifetime.” Id. at 329. Thus, the

Court concluded that a claim for breach of contract to devise property sounded in

contract rather than probate, so the nonclaim limitations period for creditor claims

against an estate did not apply. Id.

[¶26.] We conclude that Huston’s reliance on Green and the repealed

language of SDCL 30-21-17 is inapposite. While the Green Court correctly rejected

the attempt to use SDCL 30-21-17 to collaterally attack the trial court’s final

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decision imposing a constructive trust, Green’s reading of SDCL 30-21-17 was

incomplete. Specifically, the Green Court, when holding the breach of contract to

devise property was not a creditor’s claim under SDCL 30-21-17, did not consider

the meaning of a “contingent claim.” Rather, its analysis focused on when the

Green’s contract claim “accrued.” Id. at 328–29. But, as our opinion today

emphasizes, a contingent claim may be different than a claim that has accrued—a

contingent claim is dependent on a potential future event and an accrued claim is

one that has already come into existence as an enforceable claim. Thus, the Green

Court incorrectly focused on when the claim could be “filed.” Discussing only

“accrual” and “filing” overlooked the statutory “contingent claim” language that we

must interpret today.5 See id. Therefore, we conclude Green’s analysis of the prior

non-claim statute in SDCL 30-21-17 is not controlling of our reading of the current

non-claim statute in SDCL 29A-3-803(a).

[¶27.] Moreover, our holding today that Huston’s contingent claim for fraud

is governed by the provisions of SDCL 29A-3-803 is aligned with the majority of

jurisdictions that have adopted statutes identical to SDCL 29A-3-803(a). See

5. The Green court reasoned:

An action for breach of a contract to convey by will does not
accrue until the death of the promisor. Kitchen, 498 N.E.2d at
45; Stratmann, 806 P.2d at 464 (finding the contract is breached
when prior will is revoked). Greens could not have filed a
creditor’s claim against Carrol Green because the breach of
which they complain (her failure to honor the contract contained
in the 1964 joint will) did not occur until her death. Therefore,
their claim could only be filed against her estate and does not
fall within the ambit of SDCL 30-21-17. 516 N.W.2d at 330.
(Emphasis added.)

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generally, e.g., Spohr, 589 So. 2d at 228 (applying a nearly identical nonclaim

statute to an ex-wife and her children’s claims that the husband failed to provide for

their maintenance in his will); Underwood v. Underwood, 999 S.W.2d 716 (Ky. Ct.

App. 1999) (holding a wife’s claim for pension benefits was subject to a nonclaim

statute identical to South Dakota’s provision); Phillip v. Quick, 731 S.E.2d 327 (S.C.

Ct. App. 2012) (holding that a daughter’s allegation that her father took funds

belonging to her pursuant to the Uniform Gift to Minors Act without notifying her

was barred by the nonclaim statute); In re Estate of Ostler, 2009 UT 82, 227 P.3d

242 (holding that a mother’s wrongful death action against an estate for the death

of her husband must be brought within the nonclaim period).

[¶28.] Further, because the claim became actionable after Jarman’s death,

we need not address those situations where the contingent event does not or cannot

occur until after the close of the claims-filing period. See generally Johnson v.

Larson, 216 N.W. 895 (N.D. 1927). Here, a contingent claim for fraud arose prior to

Jarman’s death. Huston did not timely file her claim within the applicable four-

month time frame, and the claim is barred by SDCL 29A-3-803. The circuit court

did not err by granting summary judgment on this claim.

3. Huston’s unjust-enrichment claim.

[¶29.] Huston also argues that the circuit court improperly granted summary

judgment on her unjust enrichment claim.6 She alleges that when reviewing the

6. Huston’s complaint for unjust enrichment appears to allege claims of unjust
enrichment against the estate. To the extent the unjust-enrichment claim is
alleged against the estate, the claim suffers from the same timeliness
infirmity under SDCL 29A-3-803 discussed in Issue 2 above and summary
(continued . . .)
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evidence in the light most favorable to her claim, she has established that Martin

received a benefit and knew he received that benefit. She asserts that whether

Martin had actual knowledge of Jarman’s promise involves a question of fact.

Finally, she argues that allowing Martin to retain the benefit without paying for it

would be inequitable. In response, Martin and the estate argue that Huston failed

to identify facts establishing the necessary elements of unjust enrichment because,

according to them, absent some “inequitable behavior on [Martin’s] behalf,” no

unjust-enrichment claim can lie.

[¶30.] An unjust-enrichment action sounds in equity. Hofeldt v. Mehling,

2003 S.D. 25, ¶ 14, 658 N.W.2d 783, 788. “Unjust enrichment contemplates an

involuntary or nonconsensual transfer, unjustly enriching one party. The equitable

remedy of restitution is imposed because the transfer lacks an adequate legal

basis.” Johnson v. Larson, 2010 S.D. 20, ¶ 8, 779 N.W.2d 412, 416. A party alleging

unjust enrichment must show that the other party both received and knew he was

receiving a benefit. Additionally, it must be inequitable to allow the enriched party

to retain the benefit without paying for it. Id. ¶ 11, 779 N.W.2d at 416–17.

[¶31.] Even assuming Martin did not engage in any wrongdoing, the actual

question is whether “it would be inequitable to allow [him] to retain the benefit

without paying for it.” Larson, 2010 S.D. 20, ¶ 11, 779 N.W.2d at 416; see also DFA

Dairy Fin. Servs., L.P. v. Lawson Special Tr., 2010 S.D. 34, ¶ 28, 781 N.W.2d 664,

671 (“Unjust enrichment occurs ‘when a party confers a benefit upon another party

________________________
(. . . continued)
judgment was properly granted on any unjust-enrichment claim against the
estate.

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who accepts or acquiesces in that benefit and it is inequitable to receive that benefit

without paying.’”).

[¶32.] Despite this, Martin cites Commercial Trust and Savings Bank v.

Christensen, 535 N.W.2d 853, 858 (S.D. 1995), where we said that an unjust-

enrichment claim does not arise simply because a landlord benefits from a tenant’s

efforts to permanently improve the property. We held that an unjust-enrichment

claim in this context “implies illegal or inequitable behavior by the landlord in

obtaining the benefits conferred by the tenant,” such as by “request[ing] they

make . . . improvements to the property or otherwise suggest[ing] they would

reimburse” the tenant for the cost incurred in doing so. Id. at 858–59. However,

Christensen is distinguishable from the present circumstances because Huston’s

situation does not involve a disagreement between a landlord and tenant. As

articulated by Christensen, landlord–tenant disputes involve the “well-settled

principle that, in the absence of an agreement that the landlord will pay for

improvements or a statute imposing liability on the landlord, a tenant is not

entitled to compensation for improvements made to the leasehold even though they

cannot be removed by the lessee.” Id. at 858.

[¶33.] Although a court may, after weighing the equities in a particular case,

grant or deny a remedy, Hofeldt, 2003 S.D. 25, ¶ 14, 658 N.W.2d at 788, here the

court dismissed the claim on summary judgment without providing a reason. Doing

so at this stage of the proceedings was premature because genuine issues of

material fact exist as to what Martin knew and did with respect to Huston and

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Jarman’s alleged agreement. The circuit court erred by granting summary

judgment on this claim against Martin.

Conclusion

[¶34.] Huston’s breach-of-contract claim fails under SDCL 29A-2-514 because

it is not evidenced in writing. SDCL 29A-3-803 bars Huston’s fraud claim because

it arose as a contingent claim during Jarman’s lifetime and was filed more than four

months after notice of publication to creditors. The court’s order granting summary

judgment on these two claims is affirmed. However, because Huston may have an

unjust-enrichment claim against Martin, we reverse the court’s grant of summary

judgment on this issue.

[¶35.] Affirmed in part and reversed in part.

[¶36.] GILBERTSON, Chief Justice, and ZINTER and JENSEN, Justices,

and SEVERSON, Retired Justice, concur.

[¶37.] SALTER, Justice, not having been a member of the Court at the time

this action was assigned to the Court, did not participate.

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