Vivos Xpoint Investment Group, LLC v. Sindorf

Summary

The South Dakota Supreme Court reversed a summary judgment ruling that a 99-year bunker lease was an illusory contract because the lessor could modify community rules and regulations. The court held that the lease was supported by valid consideration and that the lessor's rulemaking authority was constrained by reasonableness, good faith, nondiscriminatory enforcement, and the implied covenant of good faith and fair dealing. The case was remanded for further proceedings in the forcible detainer action.

Holdings

1. The lease was not illusory. Vivos's ability to modify the community rules and regulations did not eliminate the consideration supporting the lease or make the lease unenforceable.
2. The community rules and modifications were enforceable because Vivos's discretion had to be exercised reasonably and in good faith.
3. The circuit court erred by granting Sindorf summary judgment on the ground that the lease was illusory.

Questions Presented

1. Whether a 99-year lease is illusory and unenforceable because it permits the lessor to modify incorporated community rules and regulations on thirty days' written notice.
2. Whether the lease's modification provision eliminates consideration or otherwise prevents the lease from being a valid contract.
3. Whether the circuit court properly granted summary judgment to the tenant in the forcible detainer action.

Disposition

reversed_and_remanded