South Dakota Supremes Say "No Sale" In Equitable Mortgage Cases
The South Dakota Supreme Court has held that a purported realty sale by its owner to a buyer (ie. foreclosure rescue operator) coupled with a "buy back" (contract for deed) agreement entered into simultaneously is an equitable mortgage, and not a true sale (see Myers v. Eich).
One point that I feel needs highlighting in this case is that in reaching its decision, the South Dakota high court cites both to its own prior decisions (including at least one case over 100 years old) as well as to equitable mortgage cases from other states (ie. Missouri, Washington, Nebraska, South Carolina, New Mexico, Iowa, Rhode Island, New Jersey, Minnesota, West Virginia, Louisiana, and New York).
(Editor's Note: As I read these cases, its becoming quite clear that there may not be anything novel about asking a judge to declare a foreclosure rescue arrangement to be an "equitable mortgage." Lately, I've reported on some recent court decisions (click here for a list of other equitable mortgage posts on this blog) on how this doctrine has been applied in a couple of states; what's notable is that in reaching these decisions, the courts are citing cases that are both pretty old and come from numerous states.)
Click here for a more extensive post regarding this case and the invocation of South Dakota's equitable mortgage doctrine.
Representing the property owner in this case was attorney Thomas K. Wilka of Hagen, Wilka & Archer, P.C., Sioux Falls, South Dakota.
Myers v. Eich is the second equitable mortgage decision by the South Dakota high court in the last five years. The prior case, Adrian v. McKinnie, similarly held that a deed, absolute in form, was an equitable mortgage under facts involving a title transfer of realty with a simultaneous lease back coupled with a purchase option.
Representing the property owner in this case was attorney Michael W. Strain of the Morman Law Office Sturgis, South Dakota
Case Law Citations:
Myers v. Eich, 2006 SD 69; 720 N.W.2d 76; (S.D. 2006)
Adrian v. McKinnie, 2002 SD 10, 639 N.W.2d 529 (S.D. 2002)
One point that I feel needs highlighting in this case is that in reaching its decision, the South Dakota high court cites both to its own prior decisions (including at least one case over 100 years old) as well as to equitable mortgage cases from other states (ie. Missouri, Washington, Nebraska, South Carolina, New Mexico, Iowa, Rhode Island, New Jersey, Minnesota, West Virginia, Louisiana, and New York).
(Editor's Note: As I read these cases, its becoming quite clear that there may not be anything novel about asking a judge to declare a foreclosure rescue arrangement to be an "equitable mortgage." Lately, I've reported on some recent court decisions (click here for a list of other equitable mortgage posts on this blog) on how this doctrine has been applied in a couple of states; what's notable is that in reaching these decisions, the courts are citing cases that are both pretty old and come from numerous states.)
Click here for a more extensive post regarding this case and the invocation of South Dakota's equitable mortgage doctrine.
Representing the property owner in this case was attorney Thomas K. Wilka of Hagen, Wilka & Archer, P.C., Sioux Falls, South Dakota.
Myers v. Eich is the second equitable mortgage decision by the South Dakota high court in the last five years. The prior case, Adrian v. McKinnie, similarly held that a deed, absolute in form, was an equitable mortgage under facts involving a title transfer of realty with a simultaneous lease back coupled with a purchase option.
Representing the property owner in this case was attorney Michael W. Strain of the Morman Law Office Sturgis, South Dakota
Case Law Citations:
Myers v. Eich, 2006 SD 69; 720 N.W.2d 76; (S.D. 2006)
Adrian v. McKinnie, 2002 SD 10, 639 N.W.2d 529 (S.D. 2002)
posted by Home Equity Theft Reporter at 7:21 AM
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