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Land dispute decision in Charles Mix Co. overruled by SD Supreme Court

A land dispute in Charles Mix County will return to legal proceedings after the South Dakota Supreme Court remanded the circuit court for calling a contract "unambiguous."...

A land dispute in Charles Mix County will return to legal proceedings after the South Dakota Supreme Court remanded the circuit court for calling a contract "unambiguous."

On Feb. 10, the state's high court ruled a contract related to the purchase of land, owned by Marlen and Patricia Laska, and sought after by Jerry Barr, Pat Cole and Gerrit Juffer - known as the Barr Partners - did not clearly define the buying party's rights nor specify a reasonable timeline, which could render the agreement invalid.

The Laskas sold property to the Barr Partners in 2000 and 2004, agreements known as Juffer I and 2, and signed an agreement titled "First Right of Refusal," which made arrangements for the potential purchase of a third plot of land for $10,500 per acre and could be executed by the parties' heirs or successors.

The Barr Partners said the plan provided an option to purchase the plan within a reasonable time period. The Laskas countered, saying the agreement only gave the Barr Partners the right to purchase the land if a third party made an offer. The Laskas also said the contract was void due to ambiguity.

The circuit court ruled that the contract was unambiguous and created only a right of first refusal, which would be terminated at the death of either Marlen or Patricia Laska.

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The S.D. Supreme Court reversed the decision and remanded the circuit court, saying the agreement was ambiguous because the right in question is called a "right of first refusal," but it stipulates a definitive purchase price of $10,500, which could signify an option contract.

It also states the Barr Partners have a right to match a third-party offer even if the Laskas do not wish to sell, which is consistent with an option contract, but the language used throughout the agreement specifies a right of refusal.

In addition to being ambiguous, the Supreme Court ruled that the agreement may constitute "an unreasonable restraint against alienation." In other words, the agreement makes the sale of the property too difficult to execute.

"Neither the parties nor the circuit court considered whether this agreement constitutes an unreasonable restraint against alienation or whether it may constitute a suspension of the absolute power of alienation," the Supreme Court decision said.

The high court remanded the circuit court to address whether the parties have the right to apply the contract to their respective heirs and to consider extrinsic evidence to determine the parties' intent.

The last time the S.D. Supreme Court reversed a circuit court decision was on Dec. 30, 2015, in the case of John and Kimberly Nooney v. Stubhub. The Supreme Court ruled that the circuit court's dismissal of a "FanProtect Guarantee," as requested by Stubhub, was not based on the actual language in the guarantee. However, the Supreme Court affirmed the circuit court's decision to review a document that was not submitted for evidence when considering the dismissal.

Of 103 opinions filed in 2015, the state Supreme Court reversed or remanded all or part of a circuit court decision in 32 cases.

Related Topics: U.S. SUPREME COURT
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