District Court Awards Punitive and Compensatory Damages to Trusting Land Purchasers Defrauded by Seller.

Plaintiffs, a retired farm couple and their daughter, were Minnesota residents looking for land investments. Plaintiffs knew the first defendant, a South Dakota resident, because the husband had attended farm auctions where the first defendant was the auctioneer, and the husband had participated in a number of consignment sales with him. The second defendant was the auctioneer’s son. Without seeking professional assistance, the plaintiffs entered into several major land transactions with the defendants. The couple purchased from the first defendant a 1,040-acre tract that was supposed to be planted with corn by the defendant and his son. They also purchased from the first defendant a 160-acre tract in South Dakota and 50 percent of a 480-acre tract (CRP ground) for their daughter. The latter tract was jointly owned by the daughter and the second defendant. After plaintiffs discovered that the 1,040 acre tract was 1,000 acres of weeds and that the 160-acre tract was not even owned by the defendant, the plaintiffs filed an action against defendants for breach of contract, deceit, and rescission. Pursuant to a default judgment, the court found the second defendant liable to the daughter for CRP payments, real estate taxes, and shared expenses. The court also entered judgment against the first defendant (and his wife), finding that the first defendant committed actual fraud in connection with the sale of the 160-acre tract. The plaintiffs were awarded $20,000 in punitive damages, in addition to their $337,974.51 in compensatory damages. The court determined that the first defendant’s conduct was reprehensible, shocking and evidenced a manipulative mind bent on taking advantage of others who trusted him. Although the plaintiffs were not entitled to rescind their contract for the 1,040-acre tract, they were awarded $149,286.69 in compensatory damages. Greeley v. Walters, No. 105003JLV, 2014 U.S. Dist. LEXIS 42627 (D. S.D. Mar. 30, 2014).