South Dakota Supreme Court: Partition Upheld Where Deed Severs Joint Tenancy Of Husband And Wife

In a July 2020 opinion from the South Dakota Supreme Court, Moeckly v. Hanson, the court upheld a partition judgment against a surviving spouse where a corrective deed executed by the couple failed to contain express language of joint tenancy and thus created a tenancy in common.

The Facts of Moeckly v. Hanson

Sharon and Bennet Hanson were married in December 1994.  On the day they married, they entered into an antenuptial contract, which stated: In the event of death of either party, any property, real or personal, jointly held by the parties acquired either prior to marriage or thereafter, shall be that of the survivor.

In 1996, they purchased real property in South Dakota, as “joint tenants with right of survivorship and not as tenants in common” – the Lot 13 Property.

In 1998, Sharon and Hanson purchased the lot next door as joint tenants with right of survivorship – the Lot 14 Property.

In 2006, a South Dakota attorney, Thompson, drafted a warranty deed for Hanson and Sharon that conveyed Lot 14 to themselves.  The deed did not contain any language that it would be held as joint tenants.

In April 2007, Thompson drafted another warranty deed, entitled “Corrective Warranty Deed.” The corrective deed added Lot 13 to the already transferred Lot 14. The corrective deed also contained no language that the property would be held as joint tenants.

Hanson and Sharon sold Lot 14 in May 2007.

Sharon passed away in February 2017.

Sharon’s son from her first marriage and her granddaughter were appointed as personal representatives of Sharon’s estate in Iowa, where Sharon had been living.  Regarding the Lot 13 Property, Sharon’s will stated:

I give, devise and bequeath my one-half interest in and to my current residence which is located at 32193 Ponderosa Drive, Burbank South Dakota, to my children, . . . in equal shares, share and share alike, they to have and to hold the same absolutely and forever in fee.

An ancillary estate was opened in South Dakota to deal with Sharon’s ½ interest in the Lot 13 Property, which the personal representatives believed was held as tenants in common.

The personal representatives brought a partition action to have the Lot 13 Property sold and the proceeds split evenly between the estate and Hanson.

After a partition hearing, the South Dakota circuit court held that the corrective deed terminated the joint tenancy and created a tenancy in common.  Because partition was impractical, the circuit court ordered the property sold and the proceeds divided between the one-half interests held by Hanson and Sharon’s estate.

Joint Tenancy v. Tenancy In Common in South Dakota

In South Dakota, a “joint tenancy exists when the four unities of time, title, interest, and possession are present.” A joint tenancy interest is defined in SDCL 43-2-12 as follows:

A joint tenancy interest is one owned by several persons in equal shares, by a title created by a single will or transfer, when expressly declared in the will or transfer to be a joint tenancy, or when granted or devised to personal representatives or trustees as joint tenants.

A tenancy in common is defined under South Dakota law SDCL 43-2-16 as:

An interest in common is one owned by several persons not in joint ownership or partnership.

Every interest created in favor of several persons is an interest in common unless declared otherwise.  SDCL 43-2-17 states:

Every interest created in favor of several persons in their own right is an interest in common, unless acquired by them in partnership, for partnership purposes, or unless declared in its creation to be a joint interest, as provided in §§ 43-2-12 to 43-2-14, inclusive.

 

How Is A Joint Tenancy Dissolved In South Dakota?

A joint tenancy can be dissolved by destruction of one of the four unities of time, title, interest, and possession. A joint tenancy can also be severed if the joint tenants agree, expressly or as implied from the parties’ conduct, to hold the title as tenants in common.

Here, the circuit court found intent to sever the joint tenancy within the corrective deed, as an agreement between the parties.  The South Dakota Supreme Court agreed, stating:

In South Dakota, a joint tenancy must be expressly declared in the property transfer. SDCL 43-2-12. If it is not expressly declared, the interest created is a tenancy in common. SDCL 43-2-17. Hanson argues that SDCL 43-2-17 does not apply here because it involves creation of interests and he believes the corrective deed did not create an interest. But changing the property interest by transfer, even to oneself, creates a new interest. The corrective deed’s lack of express declaration of a joint tenancy results in a tenancy in common.

The Antenuptial Agreement v. The Corrective Deed

Hanson argued that the corrective deed rendered the antenuptial agreement meaningless.

The relevant section of the antenuptial agreement states: “In the event of death of either party, any property, real or personal, jointly held by the parties acquired either prior to marriage or thereafter, shall be that of the survivor.”

The South Dakota Supreme Court stated:

While the corrective deed could not modify the antenuptial agreement, here, the agreement states only that jointly held property be given to the survivor upon the other’s death. Nowhere in the agreement does it state that property is required to be held jointly. Hanson argues that the contract “contemplates that whenever the parties acquire property together . . . that property must go to the surviving spouse.” But the agreement does not state that. It does not mandate that property be acquired jointly, or that once property is acquired jointly its status cannot be changed to a tenancy in common.

Do You Have A Right To A Jury Trial In A South Dakota Partition Action?

Hanson also argued that the circuit court erred in concluding that this was an equitable action so that Hanson was not entitled to a jury trial.

Partition actions in South Dakota are equitable proceedings.  The right to a jury trial in South Dakota does not exist in all civil cases.  The South Dakota Supreme Court stated:

Where the pleadings request equitable relief, or where the legal relief is incidental, the decision to grant or deny a jury trial is at the trial court’s discretion. Id. “[D]isputed questions of fact can be involved in either legal or equitable actions.”  “Therefore, the mere existence of a dispute of fact does not dictate whether a claim is equitable or is one at law to which the jury trial attaches.” Id. The question in determining if an action is at law or equitable “is whether the ‘subject’ of the action ‘is the type of case in which the movant would have been entitled to a jury trial in the common-law courts.'”

The South Dakota Supreme Court upheld the circuit court’s determination that the corrective deed severed the joint tenancy and created a tenancy in common.  There was no joint tenancy express language in the corrective deed as required by South Dakota law, and the antenuptial contract did not prevent Hanson and Sharon from holding the property as tenants in common.

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