Greeley et al v. Walters et al

Filing 55

ORDER granting 44 Motion for Summary Judgment. Signed by Chief Judge Jeffrey L. Viken on 2/5/13. (SB)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
SANFORD H. GREELEY,
SHIRLEY A. GREELEY, and
SHAWN JOHNSON,
Plaintiffs,
vs.
ROBERT D. WALTERS,
DARLA K. WALTERS, and
ANTHONY WALTERS,
Defendants.

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CIV. 10-5003-JLV

ORDER GRANTING
PLAINTIFFS’ MOTION FOR
PARTIAL SUMMARY
JUDGMENT

INTRODUCTION
On March 23, 2011, plaintiffs filed a multiple count amended
complaint against the defendants. (Docket 20). The amended complaint
asserts various claims for breach of contract, deceit and rescission of a
contract for the sale and purchase of certain property in Butte County,
South Dakota, and Goshen County, Wyoming, as well as claims for money
damages and punitive damages. Id. Through counsel, on April 13, 2011,
defendants Robert D. Walters and Darla K. Waters (“Walters”) filed their
answer to the amended complaint.1 (Docket 25). Counsel for Walters was

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Defendant Anthony Walters was served with the amended complaint on
April 27, 2011. (Docket 26-1). Anthony Walters did not file a responsive
pleading or answer to the amended complaint. Because his conduct is not
relevant to plaintiffs’ motion for partial summary judgment, the court will not
address his default status in this order.

later allowed to withdraw. (Docket 37). The order required all three
defendants to notify the court by January 6, 2012, “of replacement counsel,
or if defendants intend to proceed pro se.” Id. at p. 2. All three defendants
were notified by Walters’ former counsel of the court’s order. (Docket 38).
No notice of appearance of replacement counsel was filed and the court
concludes all three defendants intended to proceed pro se.
On August 3, 2012, plaintiffs Sanford H. Greeley and Shirley A.
Greeley (“plaintiffs” or “Greeleys”) filed a motion for partial summary
judgment against Walters. (Docket 44). Filed with the motion were
plaintiffs’ statement of material facts, a request that the court take judicial
notice of a state court file, and a legal memorandum. (Dockets 45-47).
Each document contained a certificate of service for Robert D. Walters and
Darla K. Walters at their personal address of record. (Dockets 44-47).
Under local rules, Walters had twenty-one days to respond to
plaintiffs’ motion for summary judgment, plus three days for mailing. See
D.S.D. Civ. LR 7.1(B) (“On or before 21 calendar days after service of a
motion and brief, unless otherwise specifically ordered by the court, all
opposing parties shall serve and file with the clerk of court a responsive
brief containing the specific points of law with authorities in support thereof
in opposition to the motion.”). Under the local rules and Fed. R. Civ. P. 7

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and 56, Walters’ responses to plaintiffs’ motion for partial summary
judgment were due on August 28, 2012.
On September 10, 2012, the court issued an order to show cause
directing Walters to “show cause why summary judgment should not be
entered in favor of plaintiffs . . . on their motion for partial summary
judgment for the reason that . . . [Walters] have defaulted on that motion by
not opposing the motion.”2 (Docket 48 at p. 2). Walters were required to
show cause no later than October 12, 2012. Id. They did not file a
response or otherwise comply with the show cause order.3

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The court did not have a duty to advise Walters of their obligation to
respond to plaintiffs’ partial summary judgment motion and the procedure for
doing so. See Bennett v. Dr Pepper/Seven Up, Inc., 295 F.3d 805, 808 (8th
Cir. 2002) (finding the court did not have an affirmative duty to advise a pro se
litigant of the date by which he was to respond to a motion for summary
judgment); Beck v. Skon, 253 F.3d 330, 333 (8th Cir. 2001) (finding district
court was not required to instruct a pro se litigant on how to properly respond
to a summary judgment motion).
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Copies of the order to show cause sent by certified mail by the Clerk of
Court to Walters at their Spearfish, South Dakota, address of record were
returned, but copies of the order directed to Walters’ Helena, Montana, address
of record were not returned. See Docket 49. It is presumed Mr. and Mrs.
Walters each received the order to show cause. “Where . . . [a document] is
transmitted by the United States mails, properly addressed and postage fully
prepaid, there is a strong presumption that it will be received by the addressee
in the ordinary course of the mails.” Arkansas Motor Coaches, Ltd., Inc. v.
Commissioner of Internal Revenue, 198 F.2d 189, 191 (8th Cir. 1952) (citing
Henderson v. Carbondale Coal & Coke Co., 140 U.S. 25 (1891), other citation
omitted).

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Walters’ pro se status did not entitle them to disregard the Federal
Rules of Civil Procedure. Bennett, 295 F.3d at 808. “[P]ro se litigants must
[also] comply with court rules and directives.” Soliman v. Johanns, 412
F.3d 920, 922 (8th Cir. 2005). However, their failure to respond to plaintiffs’
partial summary judgment motion “does not automatically compel
resolution of [the motion] in favor of [plaintiffs].” United States v. One
Parcel of Real Property, 27 F.3d 327, 329 n. 1 (8th Cir. 1994); see also
Canada v. Union Electric Co., 135 F.3d 1211, 1213 (8th Cir. 1997) (“When a
motion would be dispositive of the merits of the cause if granted, courts
should normally not treat a failure to respond to the motion as conclusive.”).
Fed. R. Civ. P. 56(e) allows for the possibility a party may fail to
respond to another party’s assertion of fact. In this situation, the court may
consider the fact undisputed or may “grant summary judgment if . . . the
movant is entitled to it[.]” Fed. R. Civ. P. 56(e). The court must still
determine whether summary judgment is appropriate regardless of whether
the adverse party failed to respond. One Parcel of Real Property, 27 F.3d at
329 n. 1; see also Union Electric Co., 135 F.3d at 1213 (the court “should
normally not treat a failure to respond to the motion as conclusive. . . .
instead, . . . [the court should] proceed to examine those portions of the
record properly before [it] and decide for [itself] whether the motion is well
taken.”).

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STANDARD OF REVIEW
Under Fed. R. Civ. P. 56(a), a movant is entitled to summary judgment
if the movant “shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). Once the moving party has met its burden, the nonmoving party may
not rest on the allegations or denials in the pleadings, but rather must
produce affirmative evidence setting forth specific facts showing that a
genuine issue of material fact exists. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 256 (1986). “[A]dmissions in the pleadings . . . are in the nature
of judicial admissions [and are] binding upon the parties, unless withdrawn
or amended.” Missouri Housing Development Commission v. Brice, 919
F.2d 1306, 1314 (8th Cir. 1990).
If the undisputed evidence is such that a reasonable jury could return
a verdict for the nonmoving party, then summary judgment is not
appropriate. Anderson, 477 U.S. at 256. However, the moving party is
entitled to judgment as a matter of law if the nonmoving party fails to “make
a sufficient showing on an essential element of her case with respect to
which she has the burden of proof.” Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986). In such a case, “there can be ‘no genuine issue as to any
material fact,’ since a complete failure of proof concerning an essential

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element of the nonmoving party’s case necessarily renders all other facts
immaterial.” Id. at 323.
DISCUSSION
Plaintiffs’ motion for partial summary judgment focuses on count five
of the amended complaint, the breach of contract claim. (Docket 44). The
motion requests a judgment against Walters for money improperly retained
by them relating to the 160 acre parcel in Butte County, South Dakota. Id.
Plaintiffs seek a money judgment for $232,268.47, together with
prejudgment interest from July 20, 2008. Id.
To determine whether plaintiffs’ motion for partial summary judgment
should be granted, the court must analyze plaintiffs’ statement of
undisputed material facts (Docket 45) in light of the cause of action pled.
“[F]ederal courts sitting in diversity cases, when deciding questions of
‘substantive’ law, are bound by state court decisions as well as state
statutes.” Hanna v. Plumer, 380 U.S. 460, 465 (1965) (referencing Erie R.
Co. v. Tompkins, 304 U.S. 64 (1938)). Only then can the court determine
whether summary judgment is appropriate. One Parcel of Real Property, 27
F.3d at 329 n. 1.
In South Dakota, a breach of contract claim requires proof of the
following: “1. An enforceable promise; 2. A breach of the promise; [and]
3. Resulting damages.” Guthmiller v. Deloitte & Touche, LLP, 699 N.W.2d

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493, 498 (S.D. 2005) (internal citations omitted). Applying these breach of
contract elements to plaintiffs’ statement of material facts (Docket 45), the
court concludes as follows:
1.

AN ENFORCEABLE PROMISE
On June 17, 2008, Walters agreed to sell to Greeleys the following

described real property:
The South ½ of the North ½ of Section 11, Township 9 North,
Range 4 East of the Black Hills Meridian, Butte County, South
Dakota.
(Docket 45 at ¶ 2) (“Butte County property”). The terms and conditions of
the sale and purchase were sufficiently stated. Id. at ¶ 4; see also Docket
20-1 (the “buy-sell agreement”). Greeleys paid Walters the total
$232,268.47 due under the buy-sell agreement on July 20, 2008. (Docket
45 at ¶ 5; see also Docket 20-2).
In South Dakota, an agreement for the sale of real property must be
in writing and “describe the land, the price and the parties to the contract.”
Jacobson v. Gulbransen, 623 N.W.2d 84, 89 (S.D. 2001). “It is not
necessary that [the written agreement] provide a precise description of the
land. . . . To be sufficient, the description must merely be clear enough for
extrinsic evidence to precisely identify the land.” Id. (internal citation
omitted). “A general description of the land which is the subject of the
contract is sufficient, and parol evidence may be admitted to provide the

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more particular description.” Id. (internal citation omitted). The buy-sell
agreement “meets the requirement of the statute of frauds that there be
written evidence that the parties reached an agreement.” Id. Plaintiffs had
an enforceable contract with Walters for the sale and purchase of the Butte
County property. Jacobson, supra.
2.

A BREACH OF THE PROMISE
At the time of the buy-sell agreement Walters were purchasers of the

Butte County property “under a contract for deed [with] the Leo and Irene
Erhart Living Trust, Leo L. And Irene M. Erhart, Trustees.” (“Erhart Trust”)
(Docket 45 at ¶ 7). See also Docket 47-1.4 Walters failed to make the
payments required of them under the Erhart Trust contract for deed.
(Docket 45 at ¶ 8). On July 12, 2011, the Erhart Trust obtained a judgment
of foreclosure on the contract for deed against Walters. Id. Walters failed to
redeem the property. Id. at ¶ 11. Because of the superior right of the
Erhart Trust to the Butte County property, Walters were not capable of
conveying merchantable title to Greeleys under the buy-sell agreement. Id.
at ¶ 14. Walters have failed and refused to refund to Greeleys the payments
made by plaintiffs for the purchase of the Butte County property. Id. at
¶ 13.

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The court takes judicial notice of the South Dakota state court files
produced by plaintiffs (Dockets 47-1, 47-2, 47-3 & 47-4). Fed. R. Evid.
201(c)(2).
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Because Walters could not convey merchantable title to plaintiffs and
did not refund the full purchase price to the Greeleys, defendants breached
the contract. “[A] vendor with title which cannot be remedied within a
reasonable time is automatically in default . . .” Wolken v. Wade, 406
N.W.2d 720, 724 (S.D. 1987).
3.

RESULTING DAMAGES
On July 20, 2008, plaintiffs paid their total obligation of $232,268.47

to Walters. (Docket 45 at ¶ 5; see also Docket 20-2). When Walters were
unable to convey merchantable title, they then failed and refused to refund
the total purchase price paid to plaintiffs. (Docket 45 at ¶ 13). “[A]s the
defendant vendors agreed to sell land to which they had no title, it was
impossible for them to specifically perform the contract by conveying the
land as they had agreed to do and an action at law for damages was the
only remedy . . .” Ford v. Hofer, 111 N.W.2d 214, 218 (1961).
In South Dakota, damages for breach of an agreement to convey real
property are governed by SDCL § 21-2-3. That section provides:
The detriment caused by the breach of an agreement to convey an
estate in real property is deemed to be the price paid, and the
expenses properly incurred in examining the title and preparing
the necessary papers, with interest thereon . . . .
Id.
Plaintiffs suffered breach of contract damages of $232,268.47 because
of Walters’ failure and refusal either to convey merchantable title or refund
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the total purchase price paid to them. The court finds plaintiffs have shown
by the undisputed material facts that Walters breached the buy-sell
agreement for the Butte County property and plaintiffs are entitled to a
money judgment against the Walters, both jointly and severally, for
$232,268.47.
In addition, under South Dakota law, prejudgment interest is allowed
“from the day that the loss or damage occurred . . . .” SDCL § 21-1-13.1.
That section further provides: “Prejudgment interest on damages arising
from a contract shall be at the contract rate, if so provided in the contract;
otherwise, if prejudgment interest is awarded, it shall be at the Category B
rate of interest specified in § 54-3-16.” The buy-sell agreement did not
contain a prejudgment interest rate on damages. South Dakota law directs
prejudgment interest be calculated under § 54-3-16. Id.
“Category B rate of interest is ten percent per year . . . .” SDCL § 543-16. Prejudgment interest at ten percent per year upon the sum of
$232,268.47 from July 20, 2008, to the date of entry of judgment5 is
calculated as:
Daily Interest
Rate
$63.64

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Number
of Days

Prejudgment
Interest

1,661

$105,706.04

A judgment will be entered contemporaneously with the filing of this

order.
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Post-judgment interest allowed on judgments entered in federal court
is governed by 28 U.S.C. § 1961. “Interest shall be allowed on any money
judgment in a civil case recovered in a district court. . . . Such interest shall
be calculated from the date of the entry of the judgment, at a rate equal to
the weekly average 1-year constant maturity Treasury yield, as published by
the Board of Governors of the Federal Reserve System, for the calendar week
preceding the date of the judgment.”6 28 U.S.C. § 1961(a).
ORDER
Based on the above analysis, it is hereby
ORDERED that plaintiffs’ motion for partial summary judgment
(Docket 44) is granted.
IT IS FURTHER ORDERED that plaintiffs Sanford H. Greeley and
Shirley A. Greeley are entitled to a money judgment for $232,268.47 against
defendants Robert D. Walters and Darla K. Walters, jointly and severally.
IT IS FURTHER ORDERED that plaintiffs Sanford H. Greeley and
Shirley A. Greeley are entitled to prejudgment interest of $105,706.04
against defendants Robert D. Walters and Darla K. Walters, jointly and
severally, to the judgment date of February 5, 2013.

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The Board of Governors publication is found at:
http://www.federalreserve.gov/releases/h15/current.
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IT IS FURTHER ORDERED that plaintiffs Sanford H. Greeley and
Shirley A. Greeley are entitled to post-judgment interest as calculated
pursuant 28 U.S.C. 1961(a) against defendants Robert D. Walters and Darla
K. Walters, jointly and severally, from the judgment date of February 5,
2013.
Dated February 5, 2013.
BY THE COURT:
/s/ Jeffrey L. Viken
JEFFREY L. VIKEN
CHIEF JUDGE

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