Court Opinion

ID: 9739893
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:22:58.396789+00
Date Added: 2024-06-11T07:24:14.453952
License: Public Domain

AMUNDSON, Justice
(dissenting).
[¶ 23.] I respectfully dissent.
[¶ 24.] In this case, we are faced with a determination of whether a ten-year lease and a subsequently drafted option for two additional ten-year periods violates SDCL 43-32-2 which prohibits agricultural leases for a period greater than twenty years.
[¶ 25.] “An option to renew a lease is a unilateral contract under which the lessee retains an irrevocable right to extend the lease during the option period.” See Norton v. McCaskill, 12 S.W.3d 789, 792 (Tenn.2000) (citations omitted). Further, “[w]hen an individual grants an option he ties up his rights and property for a specified period of time without binding the other side.” Cotter v. James L. Tapp Co., 267 S.C. 647, 230 S.E.2d 715, 719 (1976).
[¶ 26.] In the present case, it is clear that Reuers granted, in addition to the original ten-year lease, two ten-year options. Reuers, in essence, have contractually tied up their property for a total period of thirty years. Thunderstik Lodge has an irrevocable right to extend its lease for the full thirty years. A problem arises, however, because SDCL 43-32-2 does not allow this type of lease to extend longer than twenty years.
[¶ 27.] The majority opinion argues that the lease is not void for violating SDCL 43-32-2 because the agreement is severa-ble. While the majority correctly notes the requirements for determining sever-ability of an agreement under Commercial Trust & Savings v. Christensen, 535 N.W.2d 853 (S.D.1995), I do not agree that this lease is severable.
[¶ 28.] An essential element in determining severability is that the lease can not manifest an “intrinsic scheme to violate public policy.” The majority argues that no intrinsic scheme to violate public policy existed and that the “core design of the agreement was to access land for hunting.” In Christensen, we held “ ‘[a] contract should be considered as a whole and all of its parts and provisions will be examined to determine the meaning of any part .’ ” 535 N.W.2d at 854 (quoting Enchanted World Doll Museum v. Buskohl, 398 N.W.2d 149, 151-52 (S.D.1986) (quotation omitted)). An examination of this contract shows that the “core design” was to tie up the property for thirty years through the use of two unilateral ten-year options inserted at the request of Thunderstik. Thunderstik has an irrevocable right to extend its lease, through the exercise of the two options, for a period of thirty years. This is undoubtedly a clear violation of SDCL 43-32-2. I would find that the second ten-year renewal option is not severable and the entire lease is void for violating our prohibition of such leases extending for longer than twenty years. To *50-60hold otherwise would be to allow scriveners off the hook for intentionally circumventing the laws of this state through artful drafting.