#24685-a-RWS 

2008 SD 84 

IN THE SUPREME COURT 

OF THE 

STATE OF SOUTH DAKOTA 

* * * * 

DJBAS LIVING TRUST, Appellant, 

SOUTH DAKOTA HOUSING 

DEVELOPMENT AUTHORITY, Plaintiff and Appellee, 

 v. 

PAMELA MEINHARDT, JEREMY 

M. MEINHARDT, and MINNEHAHA 

COUNTY, SOUTH DAKOTA, Defendants. 

* * * * 

APPEAL FROM THE CIRCUIT COURT OF 

THE SECOND JUDICIAL CIRCUIT 

MINNEHAHA COUNTY, SOUTH DAKOTA 

* * * * 

HONORABLE STUART L. TIEDE 

Judge 

* * * * 

STEVEN K. RABUCK of 

Nichols & Rabuck, PC 

Sioux Falls, South Dakota Attorneys for appellant. 

ROBERT E. HAYES 

ROCHELLE R. CUNDY of 

Davenport, Evans, Hurwitz and Smith, LLP 

Sioux Falls, South Dakota Attorneys for plaintiff 

and appellee SD Housing 

Development Authority. 

* * * * 

CONSIDERED ON BRIEFS 

ON MAY 19, 2008 

 OPINION FILED 08/13/08 
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SABERS, Justice. 

 

[¶1.] DJBAS Living Trust (Trust) bid $10,000 for real property at a sheriff’s 

sale. The judgment on the real property was $99,507.56 plus post-judgment 

interest, attorney’s fees, taxes, and other advancements. CorTrust Mortgage, Inc. 

(CorTrust) was authorized to bid the judgment amount, but missed the sheriff’s sale 

by three minutes. South Dakota Housing Development Authority (SD Housing) 

moved to vacate the sheriff’s sale and certificate of sale due to excusable neglect. 

The motion was granted and Trust appeals. We affirm. 

FACTS 

[¶2.] On March 14, 2005, Pamela and Jeremy Meinhardt executed a 

promissory note in favor of CorTrust. This loan was used to purchase a home in 

Sioux Falls, South Dakota and CorTrust received a mortgage to the real property.1 

The mortgage and promissory note were assigned to SD Housing. 

[¶3.] Meinhardts became delinquent on their payments and SD Housing 

brought a foreclosure action against them on March 15, 2007. After Meinhardts did 

not respond to the foreclosure complaint, a default judgment was entered on May 4, 

2007. The judgment set the amount due at $99,507.56 and authorized the real 

property to be sold at a sheriff’s sale, which was scheduled to be held on the steps of 

1. South Dakota’s One-hundred Eighty Day Redemption Mortgage Act governed 

the mortgage. See SDCL ch 21-49. Additionally, Meinhardts received a loan 

from the Mortgage Assistance Program and this debt was secured by a second 

mortgage on the home. SD Housing holds both these loans. 
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the Minnehaha County Courthouse, Sioux Falls, South Dakota on June 6, 2007 at 

11:25 a.m. 

[¶4.] Jody Fredericks from CorTrust planned to attend the sheriff’s sale on 

behalf of SD Housing and was authorized to bid the judgment amount. Fredericks 

is a collection specialist and has attended twenty-five to thirty judicial sales every 

year for twelve years on behalf of SD Housing. She testified that she left her office, 

twenty-three blocks away, at approximately 11:15 a.m. the morning of the sale. She 

stopped at the Argus Leader to obtain the affidavit of publication concerning the 

foreclosure sale. According to her testimony, this was her practice on all the 

previous occasions and she had never been late to any sale. 

[¶5.] On this occasion, however, Fredericks arrived approximately three 

minutes late, 11:28 a.m., to the sale.2 An agent for Trust was waiting for a different 

sale, but decided to place a bid on this real property when he saw no one was 

bidding. He bid $10,000, which was accepted, and the sheriff’s certificate of sale 

was issued to the Trust. 

[¶6.] Fredericks testified that there were two reasons she was late. First, 

after leaving the Argus Leader she had to follow a fire truck for a couple blocks, 

which hindered her travel. Second, she had knee surgery less than a month prior to 

the sale and her knee was not yet healed. This impeded her timely arrival because 

2. According to the record, Fredericks arrived at 11:28 a.m. She arrived after a 

sale scheduled to take place at 11:30 a.m., but it had already concluded even 

though it was only 11:28 a.m. 
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of construction at the Minnehaha County Courthouse; she had to park farther than 

usual from the sale and she was unable to run or hurry to the sale. 

[¶7.] On June 13, 2007, SD Housing filed a motion to vacate the sheriff’s 

sale and certificate of sale. Trust opposed the motion and a hearing was held on 

July 30, 2007. SD Housing alleged that excusable neglect supported vacating the 

sale. The circuit court found that the price of $10,000, accompanied by Fredricks’ 

excusable neglect and the surrounding circumstances, justified vacating the sale 

and entered an order to that effect. Trust appeals raising one issue. 

STANDARD OF REVIEW 

[¶8.] Circuit courts have “broad equitable powers . . . to set aside a sale” if 

equities require. Federal Land Bank of Omaha v. Fenske, 67 SD 236, 291 NW 596, 

598 (1940); see also Kirby v. Ramsey, 9 SD 197, 68 NW 328, 329 (1896) (noting a 

sale under a decree of foreclosure should be governed by equitable rules). 

Therefore, we review a circuit court’s order vacating a foreclosure sale under the 

abuse of discretion standard. Fenske, 67 SD 236, 291 NW at 600. “An abuse of 

discretion occurs when ‘discretion [is] exercised to an end or purpose not justified 

by, and clearly against, reason and evidence.’” State ex rel. White v. Brandt, 2008 

SD 33, ¶11, 748 NW2d 766, 770 (additional citations omitted). We do not determine 

if we would have arrived at the same result, but rather “whether we believe a 

judicial mind, in view of the law and the circumstances, could reasonably have 

reached that conclusion.” Id. 

[¶9.] Whether the circuit court abused its discretion by vacating the 

sheriff’s sale and certificate of sale. 
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[¶10.] Trust argues that the circuit court abused its discretion when it 

vacated the sheriff’s sale because the situation was created by Bank’s “inexcusable 

negligence” not excusable neglect and the price of $10,000 was not “wholly 

inadequate.” Trust also alleges that fraud or unfairness should be present before a 

sale can be set aside. Finally, it claims that the only party that will be harmed if 

the circuit court’s order is affirmed is Trust. 

[¶11.] “While . . . mere inadequacy of consideration is not a ground for setting 

aside a foreclosure sale, this rule has been rather carefully circumscribed by the 

court.” Fenske, 67 SD 236, 291 NW at 599. This rule: 

Must be strictly confined to cases where there is absolutely no 

fact appearing, except that the price is inadequate. Whenever 

other facts appear, such as mistake, misapprehension, or 

inadvertence on the part of the interested parties or of intending 

bidders, as a result of which it seems to the court the failure to 

obtain a fair and adequate price for the property was due in 

whole or in part to such mistake, misapprehension, or 

inadvertence, the court will readily refuse to approve the sale. 

Id. (emphasis added). Therefore, if the circumstances surrounding the sale indicate 

mistake, misapprehension or inadvertence by a party or interested bidder and the 

sale failed to obtain a fair and adequate price for the property, the court may 

exercise its discretion and vacate the sale. Id. Contrary to Trust’s claim, fraud is 

not necessary in order to vacate the sale. See id. at 599-600. 

[¶12.] Fredericks was the only witness to testify at the hearing. She also 

submitted an affidavit in support of the motion to vacate the sheriff’s sale and 

certificate of sale. Within the affidavit, she testified she had knee surgery on May 

16, 2007, and was still recovering, so on the morning of the sale she could not run or 

hurry to the sale. During the hearing, she testified that for the last twelve years 
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she had attended the judicial sales for CorTrust, attending an average of twentyfive to thirty a year. She testified that she always left her office at the same time 

and always stopped at the Argus Leader on her way to the sale and had never been 

late prior to this occasion. This time, she was stuck behind a fire truck for a couple 

blocks, construction forced her to park father away than usual, and her knee 

surgery made her unable to quickly get to the sale. 

[¶13.] Additionally, Trust received the property for only $10,000. Since there 

was no deficiency judgment, SD Housing would have to accept $10,000 in 

satisfaction of a debt near $100,000. While Trust argues that there is no evidence 

this is an inadequate price, SD Housing was willing to bid the judgment price and 

the original loan was for $95,247. The facts of this case indicate the price was 

inadequate. 

[¶14.] Our case law discusses inadequate prices. In State ex rel. Kunz v. 

Campbell, 5 SD 636, 60 NW 32 (1894), our Court affirmed the lower court’s decision 

to vacate the sale when the attorney for mortgagee intended to bid $1,500, but the 

real estate was sold for $800 at sale. 5 SD 636, 60 NW at 35-36 overruled in part on 

other grounds by, Langeberg v. Perry, 62 SD 286, 252 NW 882, 884 (1934) (finding a 

confirmation hearing only examined the regularity of the proceedings; not 

addressing a motion to set aside a sale). Additionally, in Stacy v. Smith, 9 SD 137, 

68 NW 198 (1896), our Court noted that a bid of $10.60 was inadequate on property 

valued at $600. Id. at 200. 

[¶15.] The Arizona Court of Appeals affirmed a lower court’s order to set 

aside a sale where the mortgagee arrived eight minutes late to the sale. Johnson v. 
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Jefferson Std. Life Ins. Co., 429 P2d 474, 475-76 (ArizCtApp 1967). In Johnson, the 

judgment debt was $56,228 and the appraised value was $73,000, but the accepted 

bid at the foreclosure sale was $5,000. Id. at 475. The court noted that mere 

inadequacy of price is generally not sufficient to set aside a sale, but there is 

authority to set aside the sale “when the inadequacy is so great as to ‘. . . shock the 

conscience of the court[.]’” Id. However, the court continued: “When there is 

inadequacy of price which in itself might not be grounds for setting aside the sale, ‘. 

. . slight additional circumstances or matters of equity . . .’ justify the court in 

setting aside the sale.” Id. (quoting AmJur2d Executions § 733) (additional citation 

omitted). Therefore, the court concluded that “[i]n view of the gross inadequacy of 

the price obtained, and in light of surrounding circumstances, we see no abuse of 

discretion in setting aside the sale.” Id. at 476. 

[¶16.] Similarly in the present case, Trust has not demonstrated that the 

circuit court abused its discretion in vacating the sheriff’s sale and certificate of 

sale. First, the price is inadequate when SD Housing authorized a bid for the 

judgment amount of almost $100,000, the original loan was for $95,247, but the 

accepted bid was only $10,000. Second, the circumstances surrounding Fredericks’ 

inability to arrive at the sale on time support the circuit court’s decision that her 

untimely arrival was due to mistake, misapprehension, or inadvertence. Fredericks 

has attended twenty-five to thirty sales per year for twelve years, utilizing the same 

procedure each time and was never late prior to this occasion. Finally, Trust will 

receive the amount of its bid plus interest. It is not prejudiced by the decision, other 

than it will not be able to take advantage of the windfall of receiving a property for 
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$10,000 that is worth substantially more. Under these facts, we find no abuse of 

discretion. 

[¶17.] Affirmed. 

[¶18.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and 

MEIERHENRY, Justices, concur.