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Hoffman v. Bob Law, Inc., 888 N.W.2d 569 (2016)
We’re all familiar with the concept of buyer beware, right? If someone purchases something without doing some due diligence, that person may very well be stuck with some unfortunate consequences. In the 2016 South Dakota case of Hoffman versus Bob Law, Incorporated, we examine the boundaries of this idea within the context of a real estate transaction in which an overeager buyer decided to skip one critical step.
Bob Law and his excavation and land-development company owned a residential development project called the Crestview Addition. Law’s company contracted with Rick DeJager, a general contractor, to jointly develop Crestview. DeJager was responsible for construction and selling the homes and lots. Law was responsible for grading the roads and doing the excavation and dirt work.
During the land-survey process, an error was made with respect to the boundary between two of the development’s lots, lot 3 and lot 4. Both Law and DeJager thought the property lines were accurate and proceeded to install a septic system and water line. Shortly thereafter, Law transferred lot three to DeJager and his wife in 2003. DeJager continued to make improvements to what he thought was lot 3. He installed a concrete retaining wall and pad, as well as a lamp pole. As a result of the error, some or all of these improvements Law and DeJager made were actually on lot four, which Law owned.
DeJager and his wife lived in their lot-3 home for 6 or 7 years before defaulting on the mortgage. Their bank proceeded to acquire lot 3. Kenneth Hoffmann subsequently contracted to buy lot 3 from the bank and decided to forgo a land survey, which he was entitled to conduct, on the lot. The day after Hoffman’s closing, Law notified him of his lot’s encroachments, or intrusions, onto lot 4 and proposed moving the septic system for $150,000 and selling Hoffman an easement for the septic tank.
Upon Law’s threat to remove the septic system, Hoffman obtained a temporary restraining order, then a preliminary injunction, to prevent this, contending that he had an implied easement on lot 4 for the encroachments. Law counterclaimed for trespass and sought a mandatory injunction for removal of the encroachments. The trial court denied Hoffman’s implied easement and although it determined the encroachments constituted trespass, it denied Law’s injunction request. Law appealed, contending it was entitled to the mandatory injunction.
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