#27109-a-LSW

2015 S.D. 34

                            IN THE SUPREME COURT
                                    OF THE
                           STATE OF SOUTH DAKOTA

                                   ****
FRANK J. KABERNA, JEAN A.
RADEMACHER, ROBERT
RADEMACHER, THE ESTATE OF
DONALD KABERNA and
THE DONALD KABERNA TRUST,                   Plaintiffs and Appellees,

     v.

KAREN BROWN and DAVID BROWN,                Defendants and Appellants.


                                   ****

                 APPEAL FROM THE CIRCUIT COURT OF
                    THE FIRST JUDICIAL CIRCUIT
                 CHARLES MIX COUNTY, SOUTH DAKOTA

                                   ****

                 THE HONORABLE BRUCE V. ANDERSON
                              Judge

                                   ****

TIMOTHY R. WHALEN
Lake Andes, South Dakota                    Attorney for plaintiffs
                                            and appellees.


WANDA HOWEY-FOX of
Harmelink, Fox & Ravnsborg
Yankton, South Dakota                       Attorneys for defendants
                                            and appellants.

                                   ****
                                            CONSIDERED ON BRIEFS
                                            ON MARCH 23, 2015

                                            OPINION FILED 05/20/15
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WILBUR, Justice

[¶1.]        Karen and David Brown appeal a judgment by the circuit court

ordering the partition in kind of real estate in which they owned an undivided one-

fourth interest with Karen’s siblings and their respective spouses. We affirm.

                                    Background

[¶2.]        Frank E. Kaberna (Frank E.) and Josephine Kaberna established two

trusts, each in their respective names, on December 19, 1996, for the equal

disposition of real property, “share and share alike,” to their four children: Karen,

Frank, Jean, and Don. The two trusts were funded with 533 acres of real property

consisting of crop land, pasture land, and a homestead (Homestead). The

Homestead consisted of a residence (Homestead Residence), livestock facilities,

grain storage, equipment storage, and other assorted buildings. Most of the trust

property has been owned by the Kaberna family for over 70 years.

[¶3.]        Frank E. died in 2000, and Josephine died in 2003. Karen and Don

served as successor trustees. In April 2012, the trust property was finally

distributed in accordance with the terms of the two trusts. Each of the four

children, along with their spouses, received a one-fourth undivided interest in the

real property.   Don, who died prior to the commencement of the underlying action,

is survived by his wife Carol Lynn Kaberna. In the end, the real property subject to

this action was owned one-fourth by Frank, one-fourth by Karen and David, one-

fourth by Jean and Robert Rademacher, and one-fourth by Carol individually and

as the legal representative of Don’s estate and trust.




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[¶4.]        Jean is married to Robert Rademacher (Bob). Jean and Bob reside in

Huron, South Dakota. Carol lives outside of Wagner, South Dakota, on farmland

that she and Don acquired. Frank is unmarried and lives at the Homestead

Residence, where he has lived for over 20 years. Frank farms approximately 700

acres of land and stores his farm equipment in the buildings located on the

Homestead. He also raises guinea hens, peacocks, geese, and ducks at the

Homestead.

[¶5.]        The Browns own and live on a farm immediately adjacent to the

Homestead. The Browns own a second farm, which they are currently selling to

their daughter on an installment basis. The Browns operate over 1,100 acres of

land. Upon Frank E.’s death in 2000, Karen purchased Frank E. and Josephine’s

cattle, sheep, and hogs (the Livestock Operation). The Livestock Operation consists

of about 150 cattle, 50 sheep, and 15 hogs. The Browns used most of the pasture

land surrounding the Homestead for the sheep and cattle. They also used the

feedlot, pens, and outbuildings for their Livestock Operation.

[¶6.]        Upon Josephine’s death in 2003, the Browns leased crop and pasture

land surrounding the Homestead. Before Don died, Don and Carol met with the

Browns and specifically told Karen that they would not reimburse her for the cost of

any improvements that she made to the real property, and that if she did make any

improvements, she did so at her own peril. The leases further required Karen to

maintain and repair the facilities on the leased premises at her own expense.

Indeed, the Browns made improvements to some of the property located on the

Homestead. The improvements included a new fence, the replacement of old gates,


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the replacement of loaders at the silo, and the addition of a large livestock chute.

The Browns paid for the improvements at a total cost of $41,072.

[¶7.]        Frank, Jean, Bob, the Estate of Don, and the Donald Kaberna Trust

(collectively, “the Plaintiffs”) brought the underlying partition action against the

Browns. At trial, the Browns offered extensive evidence of the antagonistic history

between the parties. The circuit court found, “It is abundantly clear . . . that the

Kaberna siblings do not get along.” The court acknowledged that “evidence of the

alleged ‘fault’ between the parties is not probative of the issues before the [c]ourt,

but clearly shows the [c]ourt that a partition of the real property subject of this

action is paramount to the well being of the Kaberna family.” The Plaintiffs and the

Browns both agreed that any partition ordered by the court should be fashioned so

that Frank and Karen do not have regular contact with each other.

[¶8.]        The Plaintiffs retained the services of Bryan Maas (Maas), a certified

appraiser from Maas & Associates, Inc., to appraise the real property. Maas

appraised the property at a value of $1,600,000. 1 The Browns did not dispute the

value of the appraisal. In addition, Maas submitted a partition proposal for

dividing the real property (the Maas Plan). The Maas Plan divided the crop and

pasture land between the parties and carved out a small, six-acre tract of land for

Frank that included the Homestead Residence as well as a few other buildings on



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1.    Maas had been retained prior to the commencement of the action as well. He
      made several appraisals of the property at issue. The parties attempted to
      craft a division plan for the property based on Maas’s earlier appraisal, but
      they were unable to come to an agreement. As a result, the Plaintiffs brought
      the underlying action.

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the Homestead. The majority of the Homestead and livestock facilities were to be

distributed to Karen.

[¶9.]            The Browns hired Gregg Hubner, a certified appraiser, to assess the

Maas Plan and craft an alternative proposal (the Hubner Plan). Hubner considered

the Maas Plan impractical because Frank and Karen’s joint occupancy of the

Homestead proved unworkable. Hubner further thought that, under the Maas

Plan, the parties would have difficulty establishing the lot lines and separating the

utilities that served the property. In light of these considerations, the Hubner Plan

recommended that Karen receive the entire Homestead property along with the rest

of the property she would receive under the Maas Plan. This would require Frank

to move from the Homestead Residence to a new location. In turn, Karen would

make a $200,000 equitable adjustment payment to the Plaintiffs. The circuit court

found that this proposal amounted to a “partial forced sale by some of the

Plaintiffs.” 2

[¶10.]           After it became apparent to the Plaintiffs that the Maas Plan was

problematic because it placed Frank and Karen in regular contact with each other,

the Plaintiffs submitted a proposal that modified the Maas Plan (the Modified Maas

Plan). The Modified Maas Plan essentially divided the Homestead area in half and

awarded one half each to Frank and the Browns. Frank would receive the six-acre

farm site with the Homestead Residence and 18 acres of surrounding land including



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2.    The circuit court further found that Hubner “appears to have relied upon
      inaccurate information which was provided to him by the Defendants, was
      guided by Dave throughout the visit he made to the property, and appears to
                                                   (continued . . .)
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the property that the Browns improved. The Browns would receive 16 acres of the

surrounding land. If this proposal was not accepted by the court, the Plaintiffs

urged the circuit court to revert back to the original Maas Plan so that Frank would

not be displaced from his home.

[¶11.]         The Browns strongly opposed the Modified Maas Plan. The Browns

argued that to partition the property in any fashion that leaves them without their

buildings and structures for sheep will cause them to suffer “financial ruination.”

They contended that their ranching and farming operation could not continue

without the improvements on the Homestead or without replicating those

improvements on another property. The court, however, noted that the “bulk of the

[Browns’] income is not from their sheep operation, but is from other farming

activities or other sources.” Nonetheless, the court noted that the Browns “have

other structures on their other farms and real property near the home place that

will allow them to easily transfer their sheep operation off the home place.”

[¶12.]         The circuit court rendered an extensive memorandum decision on

February 20, 2014, and findings of fact and conclusions of law on May 7, 2014. The

court ultimately adopted the Modified Maas Plan. The court found that the

Modified Maas Plan was “simple, fair, equitable, and easily accomplished and

effectuate[d] a plausible and equitable manner of partitioning the real property

subject to this action.” The court noted that the Browns “had the burden of proving


________________________________________
(. . . continued)

         have been coached heavily by the Defendants to recommend a partition plan
         which merely parroted the Defendants’ desires.”

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that they would suffer a ‘great prejudice’ if the land were not sold to them as they

proposed.” The court found that the Browns “failed [to] present sufficient facts or

evidence to carry this burden and there are no facts of any nature or sort in

evidence which would support the contention that the [Browns] have met this

burden.” The Browns appeal the partition order and raise the following two issues

for our review:

             1.     Whether the circuit court erred in adopting the Modified
                    Maas Plan.

             2.     Whether the circuit court erred in admitting the Modified
                    Maas Plan in contravention of the court’s pretrial order.

                                Standard of Review

[¶13.]       An action for partition of property “‘is a proceeding in equity and the

court has the inherent jurisdiction to adjust all the equities in respect to the

property.’” Englehart v. Larson, 1997 S.D. 84, ¶ 12, 566 N.W.2d 152, 155 (quoting

Braaten v. Braaten, 278 N.W.2d 448, 450 (S.D. 1979)). “Equitable actions are

reviewed under an abuse of discretion standard.” Eli v. Eli, 1997 S.D. 1, ¶ 8, 557

N.W.2d 405, 408. “An abuse of discretion ‘is a fundamental error of judgment, a

choice outside the range of permissible choices, a decision, which, on full

consideration, is arbitrary and unreasonable.’” Gartner v. Temple, 2014 S.D. 74,

¶ 7, 855 N.W.2d 846, 850 (quoting Arneson v. Arneson, 2003 S.D. 125, ¶ 14, 670

N.W.2d 904, 910).

[¶14.]       We review factual determinations under a clearly erroneous standard.

Id. ¶ 8 (quoting State v. Guthrie, 2002 S.D. 138, ¶ 5, 654 N.W.2d 201, 203). “The

question is not whether this Court would have made the same findings the [circuit]


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court did, but whether on the entire evidence we are left with a definite and firm

conviction that a mistake has been committed.” Id. (quoting Estate of Olson, 2008

S.D. 97, ¶ 9, 757 N.W.2d 219, 222). We review the circuit court’s conclusions of law

de novo with no deference given to the circuit court. Id. (quoting Guthrie, 2002 S.D.

138, ¶ 5, 654 N.W.2d at 204).

                                        Analysis

[¶15.]        1.     Whether the circuit court erred in adopting the Modified
                     Maas Plan.

[¶16.]        The partition and sale of real estate is governed by SDCL chapter 21-

45. SDCL 21-45-1 provides:

              When several cotenants hold and are in possession of real
              property as partners, joint tenants, or tenants in common, in
              which one or more of them have an estate of inheritance or for
              life or lives or for years, an action may be brought by one or
              more of such persons for a partition thereof according to the
              respective rights of the persons interested therein and for a sale
              of such property or a part thereof, if it appear that a partition
              cannot be made without great prejudice to the owners.

“If it appear to the satisfaction of the court that the property, or any part of it, is so

situated that partition cannot be made without great prejudice to the owners, the

court may order a sale thereof[.]” SDCL 21-45-28. “‘Unless great prejudice is

shown, a presumption prevails that partition in kind should be made. Forced sales

are strongly disfavored.’” Eli, 1997 S.D. 1, ¶ 10, 557 N.W.2d at 408 (quoting Schnell

v. Schnell, 346 N.W.2d 713, 716 (N.D. 1984)). “The proponent of the forced sale has

the burden of proving great prejudice.” Gartner, 2014 S.D. 74, ¶ 11, 855 N.W.2d at

851.




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[¶17.]       The Browns argue that the circuit court’s decision was unfair,

inequitable, unreasonable, and has caused “great prejudice” to them. 3 The Browns

advance several arguments in support of their claim that the court erred when it

adopted the Modified Maas Plan. First, the Browns argue that the court erred

when it refused to award them with the property that they improved and when it

refused to compensate them for the value of the improvements. A circuit court has

“discretion to deny entirely any award for the value of improvements in a partition

action[.]” Iverson v. Iverson, 87 S.D. 628, 633, 213 N.W.2d 708, 711 (1973). The

court personally inspected the Homestead and found that “many of the

improvements are antiquated, outdated, in poor condition, and of little value,” and

there “is clearly nothing unique about the improvements aside from their


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3.    It is important to note, however, that although the Browns repeatedly claim
      on appeal that they were greatly prejudiced by the circuit court’s decision,
      they do not argue that a partition in kind cannot be made without great
      prejudice to them. Instead, the Browns merely argue that the Modified Maas
      Plan causes great prejudice to them. In their appellate brief, the Browns
      contend that “the manner that the trial court allocated the land greatly
      prejudices the Defendants,” and therefore “the case should be reversed
      allowing them to continue their farming operation and allocating the real
      property in a manner to allow the family farm to be maintained and
      partitioned in an equitable fashion for all of the parties not just some of the
      parties.” We have said that “a party has access to the remedy of partition by
      sale only in limited circumstances—when ‘it appears to the satisfaction of the
      court that the property, or any part of it, is so situated that partition cannot
      be made without great prejudice to the owners.’” Gartner, 2014 S.D. 74, ¶ 11,
      855 N.W.2d at 851 (quoting SDCL 21-45-28). Because the Browns do not
      present any argument or cite to any authority that tends to suggest that the
      property “is so situated that partition cannot be made without great prejudice
      to the owners[,]” the Browns have failed to satisfy their burden of proving
      whether a forced sale is appropriate under these facts. See id. Accordingly,
      our review is limited only to whether the circuit court abused its discretion
      when it adopted the Modified Maas Plan. See Eli, 1997 S.D. 1, ¶ 8, 557
      N.W.2d at 408.

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sentimental value.” This finding is supported by the testimony at trial of both Maas

and Hubner. Hubner testified that all of the buildings were “functionally obsolete,”

and Maas agreed with this conclusion.

[¶18.]       The Browns have not presented any argument that persuades us that

these findings were clearly erroneous. Consequently, the circuit court did not err

when it fashioned a partition in kind that distributed the improved property to

Frank. Nor did the court err when it refused to award any extra compensation to

the Browns for the improvements they made. The court explicitly found Karen was

told that she would not be compensated for any improvements that were made

while she leased the property. “The rule at common law is that a tenant in common

cannot compel his cotenants to contribute to his expenditures for improvements

placed by him on the common property without the consent or agreement of the

cotenants.” Johnson v. Hendrickson, 71 S.D. 392, 398, 24 N.W.2d 914, 917 (1946).

“It is a 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.” Commercial Trust and Sav. Bank v.

Christensen, 535 N.W.2d 853, 858 (S.D. 1995).

[¶19.]       Next, we address the Browns’ argument that the circuit court erred

because the adoption of the Modified Maas Proposal “forces [them] out of the

livestock business and/or forces them to expend significant sums of money to

replicate the improvements that they have paid for and that they need to continue

their operation.” The court considered this argument and found that “although


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Karen does have significant capital invested in her [livestock] operation, . . . only a

small portion can be attributed to the livestock improvements on the homestead, as

most of the capital is in farming equipment, the livestock itself, and other items.”

Furthermore, the court found that, while the Browns “point to their tax returns to

show the financial impact on their operation, such returns fail to show the

breakdown of the improvements made at the homestead site, but rather shows all

capital improvements for the Browns’ total farming operation[.]” Lastly, the court

noted that “the tax returns Karen submitted in evidence do not show a significant

income from her livestock business, and it is certainly not her only means of living

or getting by in life.”

[¶20.]        Again, the Browns have failed to show that the circuit court erred in

this regard. In fact, this argument is wholly unsupported by the evidence presented

at trial. The Browns own two farms and operate over 1,100 acres of land. The

Livestock Operation is only a fraction of their total farming income. The Browns

may relocate the Livestock Operation if they desire. 4 On this point, the court stated

that it was “sympathetic to the displacement and relocation of the Browns’ livestock

operation, . . . but the [c]ourt was ultimately swayed by the great impact of

removing [Frank] from [his] home of twenty-years when compared to [the] impact of

displacement and relocation of the livestock operations that were operating based

upon antiquated improvements.” This can hardly be described as an abuse of

discretion.


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4.    The Browns presented no evidence about the cost of moving the Livestock
      Operation.

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[¶21.]       The remaining arguments asserted by the Browns on this issue lack

sufficient merit for our consideration. In fashioning the partition in kind, the

circuit court addressed the character and location of the land, the accessibility to

the various parcels of property, practicality of partitioning the land, improvements

to the property, and the importance of agricultural land to family members. The

court concluded that the Modified Maas Plan was “the most fair and equitable

partition plan in this matter.” We agree. There is nothing in the record that leads

us to believe that this conclusion was “a fundamental error of judgment, a choice

outside the range of permissible choices, a decision, which, on full consideration, is

arbitrary and unreasonable.” See Gartner, 2014 S.D. 74, ¶ 7, 855 N.W.2d at 850

(quoting Arneson, 2003 S.D. 125, ¶ 14, 670 N.W.2d at 910).

[¶22.]       2.     Whether the circuit court erred in admitting the
                    Modified Maas Plan in contravention of the court’s
                    pretrial order.

[¶23.]       The Browns argue that the circuit court erred when it admitted the

Plaintiff’s Modified Maas Plan into evidence (Exhibit 19). The court entered a

pretrial order stating that “the parties hereto shall . . . submit copies of said exhibits

and a list of exhibits to each other and the court on or before June 7, 2013.” The

Plaintiffs notified the court and the Browns on the first day of trial, June 13, 2013,

that they intended to offer Exhibit 19 into evidence as a demonstrative exhibit. The

Browns objected. The next day of trial, June 14, 2013, the Plaintiffs reoffered the

exhibit into evidence as an actual exhibit as opposed to a demonstrative exhibit.

The court admitted the exhibit as a demonstrative exhibit.




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[¶24.]       “This Court reviews evidentiary rulings under an abuse of discretion

standard.” Eagle Ridge Estates Homeowners Ass’n, Inc. v. Anderson, 2013 S.D. 21, ¶

12, 827 N.W.2d 859, 864 (quoting Meadowland Apartments v. Schumacher, 2012

S.D. 30, ¶ 24, 813 N.W.2d 618, 624) (internal quotation marks omitted). “‘With

regard to the rules of evidence, abuse of discretion occurs when a trial court

misapplies a rule of evidence, not when it merely allows or refuses questionable

evidence.’” Wilcox v. Vermeulen, 2010 S.D. 29, ¶ 7, 781 N.W.2d 464, 467 (quoting

State v. Asmussen, 2006 S.D. 37, ¶ 13, 713 N.W.2d 580, 586).

[¶25.]       The Plaintiffs argue that “the Browns do not come to this Court with

clean hands on this issue.” At the pretrial conference on May 29, 2013, the Browns

disclosed their partition proposal to the circuit court and the Plaintiffs. On June 7,

2013, the Browns provided the court with three new proposals, Exhibits C, DD, and

JJ. According to the Plaintiffs, they reviewed the new partition proposals from the

Browns and prepared Exhibit 19 as a result. The court addressed Exhibit 19 and

Exhibit JJ on the second day of trial.

             The court: Well my issue is neither of them prove a fact.
             Plaintiffs’ counsel: No, they don’t.
             The court: They just demonstrate each party’s proposal so I
             consider them both demonstrative, and I’m going to consider
             both of them - -
             Counsel: Okay.
             The court: - - in my analysis.
             Counsel: That was my concern.
             The court: Yeah. No, ah, neither of them prove a fact.
             Counsel: Correct.
             The court: They just assist the court in understanding a
             proposal.
             Counsel: That’s, that’s exactly what I wanted the [c]ourt to do.
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             The court: All right. Any problem with that, [Defendants’
             counsel]?
             Defendants’ counsel: No, Your Honor.

[¶26.]       Even assuming that the circuit court abused its discretion in admitting

Exhibit 19 into evidence, the Browns have failed to demonstrate prejudice. Exhibit

19 modified the Maas Plan (Exhibit 16). The difference between Exhibit 19 and

Exhibit 16 is that Exhibit 19 provided Frank with 18 more acres of the Homestead

property. This property included the improvements made by the Browns. Karen

testified about the improvements. Furthermore, the court received the Browns’

income tax returns containing depreciation schedules and itemized deductions for

farm related expenses. Karen testified as to these exhibits as well. We conclude

that the court did not abuse its discretion. See Eagle Ridge, 2013 S.D. 21, ¶ 12, 827

N.W.2d at 864.

[¶27.]       We affirm.

[¶28.]       GILBERTSON, Chief Justice, and ZINTER, SEVERSON, and KERN,

Justices, concur.




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