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City of Aberdeen v. Rich3/5/2003
Considered on Briefs October 7, 2002
[ .] This case stems from two land transactions between the City of Aberdeen (City) and: former mayor Timothy Rich; former city attorney Thomas Tobin; Roger Huff and Huff Development, Inc.; and, SEA, Inc. City brought a declaratory judgment action against Rich, Tobin, Huff, Huff Development and SEA to determine whether the two land transactions should be declared null and void due to violations of SDCL 6-1-1. In a previous appeal, this Court affirmed the trial court's finding that the statute of limitations had run with regard to the first transaction. However, this Court reversed a trial court ruling with respect to amendment of the complaint on the second transaction and remanded the case for further proceedings to determine the liability of the defendants to City and to subsequent purchasers. The trial court awarded City $60,728.23 in damages. This Court affirms in part and reverses in part the trial court's award.
FACTS AND PROCEDURE
[ .] This case stems from two land transactions between City and Rich, Tobin, Huff and Huff Development and SEA. During all times relevant to this action, Rich was mayor of Aberdeen and Tobin was the Aberdeen City Attorney.
[ .] City brought a declaratory judgment action against Rich, Tobin, Huff, Huff Development and SEA to determine whether the two land transactions should be declared null and void pursuant to SDCL 6-1-1 which provides in pertinent part that: It shall be unlawful for any officer of a . . . municipality . . . who has been elected or appointed, to be interested, either by himself or agent, in any contract entered into by said . . . municipality . . . in the purchase of any real or personal property belonging to the . . . municipality. . . . Such contract shall be null and void from the beginning.
[ .] The trial court found that any action based upon the first land transaction was time barred when there was no evidence of fraud or deceit. This Court affirmed that finding in a previous appeal. This Court also upheld the trial court's finding that the defendants' involvement in the second land transaction violated SDCL 6-1-1 and that the actions of the city attorney and mayor were fraudulent and deceitful. City of Aberdeen v. Rich, 2001 SD 55, 625 NW2d 582.
[ .] This appeal concerns the issue of liability under the second land transaction. That transaction involved a trade and sale of land between SEA and City that took place on May 30, 1995. On that date, Rich, in his capacity as mayor, quitclaimed some city land to SEA and SEA quitclaimed its property to City in addition to making a cash payment of $817. On that same date, SEA sold seven lots in the newly purchased/traded land to a third party for $77,000.
[ .] In the previous appeal, this Court remanded the case to the trial court for a determination of defendants' liability to City and to subsequent purchasers. This Court also instructed the trial court to give due consideration to its rulings in Carlson v. City of Faith, 75 SD 432, 67 NW2d 149 (1954); Speckels v. Baldwin, 512 NW2d 171 (SD 1994); and, Himrich v. Carpenter, 1997 SD 116, 569 NW2d 568. On remand, the parties entered into a stipulation of facts and submitted briefs to the trial court. The trial court heard oral argument and made its decision from the bench, entering a judgment for City in the amount of $60,728.23. The judgment consisted of: the entire profit Rich, Tobin and SEA received on the sale of the property; half of the audit fee; and half of the abstract fee. However, the parties agreed to set-off the damages award by the amount expended by the defendants in making the property suitable for residential housing. The
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