High court upholds rent reduction in drought

By Chet Brokaw, Associated Press Writer | Friday, November 17, 2006

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PIERRE — A circuit judge used a reasonable method of calculating how much the rent should be reduced for Butte County grazing land that was hit by drought, the South Dakota Supreme Court ruled Thursday.

The high court’s unanimous decision upheld a circuit judge’s decision to order a reduction in grazing rent based on the decline in the number of cattle the land could support.

Tim and Linda Burch leased grazing land from Stanley and Diana Bricker beginning in 1997, and they agreed on a second lease for 2001 through 2006, according to court records. The annual rent was $40,000 for the extensive ranch.

The lease said the land had a carrying capacity of 300 cows and their calves. The agreement also said if the leased land was damaged or destroyed by weather, fire or any other event not caused by the renters, the rent would be adjusted according to the acreage damaged or destroyed for that year.

The Burches eventually sued for a rent reduction because lingering drought conditions had reduced the number of cattle that could be kept on the land.

Circuit Judge John W. Bastian of Belle Fourche allowed a rent reduction of $80,212 plus interest after hearing testimony about how the drought had reduced the number of cow-calf pairs that could graze on the land in 2001 through 2004. The calculations indicated there was a nearly 47 percent loss of carrying capacity in 2001, a loss of nearly 63 percent in 2002, another loss of about 54 percent in 2003, and a similar method was used for 2004, according to court records.

The Brickers agreed that the lease allowed a rent reduction for damage because of drought, but they objected to the use of carrying capacity to calculate the reduction. The Brickers contended that under the language of the lease, the reduction should be calculated on the specific number of acres that became unavailable because of drought.

However, the Supreme Court said the method used by Bastian was reasonable and generally accepted in the agricultural community. The Brickers failed to demonstrate that the loss of forage and carrying capacity was an irrational way to calculate the loss, the justices said.

“After all, this was a grazing lease, and there was no evidence that the drought only damaged a certain number of the acres leased,” Justice Steve Zinter wrote for the court.

The Brickers also argued that the renters waited too long to file a lawsuit seeking a reduction in rent. They contended that the delay prevented them from viewing the land and the cattle grazing there during the years involved in the dispute.

But the Supreme Court said there is no evidence of a delay. And because the Brickers lived on the property during the years involved in the dispute, they were able to view the effect of the drought and the number of cattle that the land could support, the high court said.