On October 6, 2015, Swier Law Firm's Michael Henderson will present oral argument before the South Dakota Supreme Court in the case of O'Neill v. O'Neill.
Brothers James Anthony O’Neill (Tony) and Richard Dean O’Neill (Rick) are co-owners of farming and ranching operations in Bennett County, South Dakota. Although Tony and Rick have farmed and ranched together since 1988, the brothers formally created two corporations in 1996: O’Neill Farms, Inc., and O’Neill Cattle Co., Inc. Tony is the president, treasurer, and a director of O’Neill Cattle Co.; Rick is the vice president and secretary, and a director. Rick is the president, treasurer, and a director of O’Neill Farms; Tony is the vice president, secretary, and a director. Each brother is a 50% shareholder in each corporation.
Tony approached Rick about dissolving their business relationship in 2011. Each corporation held assets including land and equipment. Although the brothers had not previously agreed in writing on how to divide the corporate property, they generally determined that they would divide the land first, then equipment, leases of their father’s land, cattle, tools, and then remaining assets and debt.
The brothers never reached complete agreement on the division of corporate assets, and Tony initiated a lawsuit in February 2012 asking the circuit court to divide the assets of O’Neill Cattle Co. and O’Neill Farms. Rick counterclaimed, seeking a preliminary injunction, the enforcement of asset separation agreements, and a corporate accounting. The court found that the brothers had entered into enforceable agreements regarding the division of land and equipment. The court enforced those agreements and divided the remaining assets. The court also ordered Tony to pay $450,000 in punitive damages to the two corporations.
Although the court ordered the parties to transfer certain assets, the court found that the parties agreed its order would not be considered a final judgment. Tony disputes that such agreement occurred. Instead of complying with the court’s order, Tony filed a notice of appeal. The court held Tony in contempt. After the circuit judge expressed her belief that Tony had committed perjury, Tony asked the judge to recuse herself. The judge declined.
Tony raises the following issues on appeal:
1. Whether the circuit court erred in awarding punitive damages to the corporations.
2. Whether the circuit court erred in denying Tony’s request for recusal.
3. Whether the circuit court erred by holding Tony in contempt for refusing to comply with its order.
4. Whether the circuit court erred in finding the land-separation agreement was credible and entitled to enforcement.
5. Whether the circuit court erred in finding that Rick did not lease land from Tony and Rick’s father after the preliminary injunction hearing.
To read the briefs filed with the Supreme Court earlier this year click here.
O'Neill v. O'Neill is scheduled to be heard on October 6 at 10:00 a.m. at the University of South Dakota School of Law in Vermillion.