author: MARING, Justice. SANDSTROM, Justice,

text:
    2006 ND 179
    STATE of North Dakota, Plaintiff and Appellee v. Jami Erin WOINAROWICZ, Defendant and Appellant.
    No. 20060032.
    Supreme Court of North Dakota.
    Aug. 16, 2006.

      Tracy Jo Peters, Assistant State’s Attorney, Fargo, N.D., for plaintiff and appel-lee.
    Robin L. Olson, Grand Forks, N.D., for defendant and appellant.
   MARING, Justice.

[¶ 1] Jami Woinarowicz appeals from her conviction entered upon a conditional plea of guilty to charges of possession of a controlled substance with intent to deliver and possession of drug paraphernalia. Woinarowicz claims evidence discovered during a search of the hotel room should have been suppressed, and the district court erred in allowing hearsay testimony at the suppression hearing. We affirm Woinarowicz’s conviction.

I

[IT 2] On April 25, 2005, Fargo Police Officer Robert Stanger and two other officers were dispatched to the Holiday Inn after employees reported “suspicious activity” in one of the rooms. Hotel employees told the officers that a female, who they believed was under the influence of drugs, paid cash to rent a room at 11:30 p.m. The employees noticed a lot of activity coming and going from the room, including someone bringing a 22 inch PVC pipe and a gas can into the room.

[¶ 3] The officers knocked on the door to the hotel room. Woinarowicz and Randy Novak were the only people in the hotel room at that time. Officer Stanger testified Novak answered the door, Officer Stanger asked for the woman the room was registered to and Novak told him she had returned to Grand Forks. According to Officer Stanger, he asked Novak if the officers could enter the room and Novak said “yes.” Woinarowicz disputed Officer Stanger’s version of the events; she testified the officers knocked on the door, No-vak opened it and the officers pushed their way in. She also claimed Novak told the officers they could not enter the room.

[¶ 4] According to Officer Stanger, after the officers entered the room, he asked if he could search the room and Novak said “yes.” Officer Stanger searched the bathroom and found some burned plastic in the bottom of the trash can. Officer Stanger testified he believed the burned plastic was a methamphetamine “bindle,” which drug users make by placing a small amount of methamphetamine in a piece of plastic and then burning the plastic so it shrivels into a small ball encasing the drug.

[¶ 5] Officer Stanger informed the room’s occupants that he found what he believed was evidence of methamphetamine activity. The officers blocked the door, and Novak and Woinarowicz were informed that they were being detained pending further investigation. Officer Stanger handcuffed and searched Woina-rowicz and Novak. While searching Woi-narowicz’s purse, Officer Stanger found a large purple cloth bag and heard the sound of metal or glass clinking. Officer Stanger opened the purple bag and found a pipe containing methamphetamine residue. Officer Stanger informed Woinarowicz she was under arrest for possession of the pipe. Officer Stanger continued searching Woinarowicz’s purse and found five ounces of methamphetamine.

[¶ 6] Woinarowicz was charged with possession of drug paraphernalia and possession of a controlled substance with intent to deliver. She moved to suppress the evidence seized during the search of the hotel room arguing the officers illegally entered the hotel room, the officers illegally seized her without probable cause, and the officers illegally searched her and her purse. The district court denied her motion to suppress, concluding the officers had consent to enter and search the hotel room, the officers had probable cause to arrest Woinarowicz, and the officers searched her purse incident to a lawful arrest. Woinarowicz conditionally pled guilty to the charges, reserving her right to appeal the denial of her motion to suppress.

II

[¶ 7] Woinarowicz argues Officer Stan-ger’s testimony at the suppression hearing about Novak giving the officers consent to enter the hotel room was hearsay and the district court erred in admitting that testimony. Relying on Crawford v. Washington, 541 U.S. 36, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004), she also argues that she was denied her Sixth Amendment right to confront the witness because No-vak was not available to testify at the suppression hearing.

A

[¶ 8] The Confrontation Clause of the U.S. Const, amend. VI, states, “[i]n all criminal prosecutions, the accused shall enjoy the right ... to be confronted with the witnesses against him.... ” The Confrontation Clause provides two protections to criminal defendants: the right to physically face someone who testifies against them, and the right to cross examine. Pennsylvania v. Ritchie, 480 U.S. 39, 51, 107 S.Ct. 989, 94 L.Ed.2d 40 (1987). In Crawford, the United States Supreme Court held, “[w]here testimonial evidence is at issue, ..., the Sixth Amendment demands what the common law required: unavailability and a prior opportunity for cross-examination.” Crawford, 541 U.S. at 68, 124 S.Ct. 1354; see also Davis v. Washington, — U.S. —, —, 126 S.Ct. 2266, 2273, 165 L.Ed.2d 224 (2006). Woinarowicz argues Novak’s statement to law enforcement officers giving them consent to enter the hotel room is a testimonial statement, and therefore her Sixth Amendment right to confront the witness was violated because she did not have a prior opportunity to cross examine Novak.

[¶ 9] Although Woinarowicz argues that Crawford applies to suppression hearings, the United States Supreme Court has said, “the process due at a suppression hearing may be less demanding and elaborate than the protections accorded the defendant at the trial itself.” United States v. Raddatz, 447 U.S. 667, 679, 100 S.Ct. 2406, 65 L.Ed.2d 424 (1980). “[T]he right of confrontation does not apply to the same extent at pretrial suppression hearings as it does at trial.” United States v. Boyce, 797 F.2d 691, 693 (8th Cir.1986). “[T]he right to confrontation is a trial right,.... ” Ritchie, 480 U.S. at 52, 107 S.Ct. 989 (emphasis in original). See also Barber v. Page, 390 U.S. 719, 725, 88 S.Ct. 1318, 20 L.Ed.2d 255 (1968). In McCray v. Illinois, the United States Supreme Court held a defendant’s Sixth Amendment rights were not violated when, at a pretrial hearing, the court allowed officers to testify to what a confidential informant told them, even though the confidential informant was not testifying at the pretrial hearing and the informant’s identity was not disclosed. McCray v. Illinois, 386 U.S. 300, 312-13, 87 S.Ct. 1056, 18 L.Ed.2d 62 (1967). The Court said the prosecution did not need to call a confidential informant at the pretrial hearing to satisfy the defendant’s confrontation rights; it was enough that the officers testified, under oath, and were subject to cross examination. Id.

[¶ 10] In the past we have applied the Sixth Amendment’s Confrontation Clause to suppression hearings saying, “a hearing on a motion to suppress is a critical stage of the prosecution, and that the Confrontation Clause of the Sixth Amendment guarantees an accused the right to confront witnesses against him at a hearing.” State v. Mondo, 325 N.W.2d 201, 203 (N.D.1982). However, the United States Supreme Court has held, “the question whether a particular proceeding is critical to the outcome of a trial is not the proper inquiry in determining whether the Confrontation Clause has been violated.” Kentucky v. Stincer, 482 U.S. 730, 744 n. 17, 107 S.Ct. 2658, 96 L.Ed.2d 631 (1987). We overrule Mondo to the extent it applies the Confrontation Clause to suppression hearings.

[¶ 11] In Crawford, the United States Supreme Court did not indicate it intended to change the law and apply the Confrontation Clause to pretrial hearings. In Crawford the Court considered the admission of testimonial statements against an accused at trial, not at a suppression hearing. We conclude Cranford does not apply to suppression hearings. The Sixth Amendment right to confrontation is a trial right, which does not apply to pretrial suppression hearings.

[¶ 12] We conclude Woinarowicz’s Sixth Amendment confrontation rights were not violated by Officer Stanger’s suppression hearing testimony that Novak gave the officers consent to enter and search the hotel room.

B

[¶ 13] Although Woinarowicz’s Sixth Amendment confrontation rights were not violated, we must also consider whether the court erred in admitting Officer Stanger’s testimony about the consent. Woinarowicz objected to Officer Stanger’s testimony arguing that it was inadmissible hearsay because Novak was not available to testify at the hearing. The district court initially overruled the objection, then sustained the objection, and later allowed the answer after finding it was not hearsay. Woinarowicz argues the district court erred in allowing Officer Stanger’s testimony.

[¶ 14] We generally review a district court’s evidentiary ruling under an abuse-of-discretion standard. State v. Ramsey, 2005 ND 42, ¶ 8, 692 N.W.2d 498. “A [district] court abuses its discretion in evidentiary rulings when it acts arbitrarily, capriciously, or unreasonably or if it misinterprets or misapplies the law.” Id.

[¶ 15] The district court is not bound by the rules of evidence at a suppression hearing, under N.D.R.Ev. 104(a), which states, “[p]reliminary questions concerning ... the admissibility of evidence, shall be determined by the court,.... In making its determination it is not bound by the rules of evidence except those with respect to privileges.” Rule 1101(d)(1), N.D.R.Ev., states, “[t]he rules, other than those with respect to privileges, do not apply in ... [t]he determination of questions of fact preliminary to admissibility of evidence when the issue is to be determined by the court under Rule 104.” These rules are patterned after and use the same language as the Fed.R.Evid. 104(a) and 1101(d)(1), and when a “ ‘rule is patterned on a Federal rule, the Federal courts’ interpretation of the Federal rule is highly persuasive.’ ” City of Grand Forks v. Ramstad, 2003 ND 41, ¶ 37, 658 N.W.2d 731 (quoting State v. Meier, 422 N.W.2d 381, 386 (N.D.1988)).

[¶ 16] Under Fed.R.Evid. 104(a) and 1101(d)(1), the United States Supreme Court held a court is not bound by the Federal Rules of Evidence, except for those with respect to privileges, when determining preliminary evidentiary questions, including suppression hearings. See e.g., United States v. Matlock, 415 U.S. 164, 173-74, 94 S.Ct. 988, 39 L.Ed.2d 242 (1974). “[T]he interests at stake in a suppression hearing are of a lesser magnitude than those in the criminal trial itself. At a suppression hearing, the court may rely on hearsay and other evidence, even though that evidence would not be admissible at trial.” See Raddatz, 447 U.S. at 679, 100 S.Ct. 2406.

[¶ 17] A district court is not bound by the rules of evidence in suppression hearings. Therefore, we do not need to decide whether the testimony of Officer Stanger is hearsay because the court had discretion to admit Officer Stanger’s testimony concerning consent. We cannot say the court acted arbitrarily, capriciously, or unreasonably, or that it misinterpreted or misapplied the law, and therefore we conclude the district court did not abuse its discretion in admitting Officer Stanger’s testimony at the suppression hearing about No-vak’s consent.

[¶ 18] Woinarowicz offered an affidavit from Novak stating he did not give the officers consent to enter the hotel room. She argued the affidavit should have been admitted into evidence since the court admitted Officer Stanger’s hearsay testimony about the consent issue. The decision whether to allow the affidavit was in the court’s discretion. The admission of Novak’s affidavit is different than the admission of Officer Stanger’s testimony, because there would not be any person to cross-examine as to the content of the affidavit. In addition, Woinarowicz was allowed to testify that Novak refused to give consent for the officers to enter. We conclude the court did not abuse its discretion in denying Woinarowicz’s request to admit Novak’s affidavit.

Ill

[¶ 19] Woinarowicz claims the evidence seized during the warrantless search should have been suppressed because the police officers did not have consent to enter and search the hotel room.

[¶ 20] When reviewing a district court’s decision on a motion to suppress, this Court will:

defer to a trial courts findings of fact in the disposition of a motion to suppress. Conflicts in testimony will be resolved in favor of affirmance, as we recognize the trial court is in a superior position to assess credibility of witnesses and weigh the evidence. Generally, a trial court’s decision to deny a motion to suppress will not be reversed if there is sufficient competent evidence capable of supporting the trial court’s findings, and if its decision is not contrary to the manifest weight of the evidence.

State v. Linghor, 2004 ND 224, at ¶ 3, 690 N.W.2d 201 (quoting State v. Kitchen, 1997 ND 241, ¶ 11, 572 N.W.2d 106). Questions of law are fully reviewable. Linghor, at ¶ 3.

[¶ 21] Unreasonable searches and seizures are prohibited by the U.S. Const, amend. IV and N.D. Const, art. I, § 8. Warrantless entry and searches are unreasonable unless they fall within a recognized exception to the warrant requirement. State v. Genre, 2006 ND 77, ¶ 17, 712 N.W.2d 624. Consent is one exception to the warrant requirement. Id. Whether an officer has consent is a question of fact. State v. Mitzel, 2004 ND 157, ¶ 13, 685 N.W.2d 120.

[¶ 22] The district court found Novak gave the officers consent to enter the hotel room. Officer Stanger’s testimony supports the court’s finding. Although Woinarowicz was not allowed to introduce Novak’s affidavit as evidence, she was allowed to testify Novak did not give the officers consent to enter the room and the officers pushed the door open after they were denied entrance. Whether the court believed Officer Stanger or Woinarowicz’s testimony is an issue of credibility. The district court is in a superior position to assess the witnesses’ credibility and we therefore resolve the conflicts in testimony in favor of affirmance. We conclude the district court had sufficient evidence to support its finding that Novak gave the officers consent to enter the hotel room.

[¶ 23] The district court also found Novak consented to the search of the hotel room. Officer Stanger testified that he asked Novak if they could search the room, and Novak said “yes.” Woina-rowiez testified the officers began searching the room then asked Novak if they could look in his bag, and he said “yeah, go ahead.” She claims Novak only gave consent to search the bag not the whole room. The district court is in a superior position to assess the witnesses’ credibility, and we resolve the conflicts in testimony in favor of affirmance. We conclude there is sufficient evidence to support the court’s finding that Novak gave the officers consent to search the hotel room.

IV

[¶ 24] Woinarowiez claims she was arrested when the officers handcuffed her after they found the possible methamphetamine bindle during the search of the bathroom. She argues the officers did not have probable cause to arrest her because she was not in constructive possession of the bindle and there is no proof the burned plastic contained methamphetamine. She also claims the search of her purse was illegal because the search was not incident to a legal arrest and the officers did not have a warrant.

A

[¶ 25] The district court found Woinarowiez was under arrest when officers placed her in handcuffs, even though formal words of arrest were not used. “‘The existence of an arrest is a question of law,’ ” which is fully renewable on appeal. Linghor, 2004 ND 224, ¶ 14, 690 N.W.2d 201 (quoting City of Wahpeton v. Johnson, 303 N.W.2d 565, 567 (N.D.1981)).

[f 26] “An arrest is made by an actual restraint of the person of the defendant, or by his submission to the custody of the person making the arrest.” N.D.C.C. § 29-06-09. “[A]n officer’s subjective intent or outward statements do not necessarily control whether, or when, a party is under arrest.” Linghor, at ¶ 14. An individual is arrested when “circumstances existed that would have caused a reasonable person to conclude he was under arrest and not free to leave.” Id.

[¶ 27] Woinarowiez was handcuffed after Officer Stanger searched the bathroom and found the methamphetamine bindle. Although Officer Stanger did not inform Woinarowiez that she was under arrest, a reasonable person in her situation would have concluded she was under arrest when Officer Stanger found what he believed was a methamphetamine bindle, the officers blocked the door, the officers told her she was being detained, and handcuffed her behind her back. We conclude Woina-rowiez was not free to leave and was under arrest.

B

[¶ 28] Whether probable cause exists is a question of law fully reviewable on appeal. In re L.A.G., 1999 ND 219, ¶ 11, 602 N.W.2d 516. There is probable cause to arrest, if looking at the surrounding circumstances from the view of an objectively reasonable officer, the officer has sufficient knowledge that would give a prudent person reasonable grounds to believe an offense has been committed or is being committed. Linghor, 2004 ND 224, ¶ 10, 690 N.W.2d 201.

[¶ 29] The district court found the officers had probable cause to arrest Woinarowicz because she was in constructive possession of the materials found in the bathroom garbage, which the officers believed was evidence of methamphetamine activity. A person may be guilty of willful possession of a controlled substance by either being in actual or constructive, and exclusive or joint possession. State v. Morris, 331 N.W.2d 48, 53 (N.D.1983); L.A.G., 1999 ND 219, ¶12, 602 N.W.2d 516. This Court has said, “[c]on-structive possession may be established by showing the defendant had the power and ability to exercise dominion and control over the controlled substance.” L.A.G., at ¶ 12. Constructive possession can be inferred from the totality of the circumstances. Morris, at 54. Mere presence in the same location as the contraband is not enough, there must be some link between the individual and the contraband. See City of Wahpeton v. Wilkie, 477 N.W.2d 215, 217 (N.D.1991). In assessing constructive possession, a court may consider the accused’s presence in the place where the substance is found, the accused’s proximity to the place where the substance is found, and whether the substance is in plain view. Morris, at 54.

[¶ 30] Woinarowicz claims the officers did not have probable cause to arrest her because tests were not conducted on the plastic wrap and there is no evidence that it contained methamphetamine. But determining whether the plastic wrap actually contained methamphetamine is not necessary to deciding whether the officer had probable cause to arrest. “To establish probable cause, the officer does not have to possess knowledge of facts sufficient to establish guilt; all that is necessary is knowledge that would furnish a prudent person with reasonable grounds for believing a violation has occurred.” State v. Spidahl, 2004 ND 168, ¶ 10, 686 N.W.2d 115. At the time of the arrest, the officers need only have sufficient knowledge to believe an offense has been or is being committed in order to establish probable cause. “Probable cause does not require that commission of the offense be established with absolute certainty, or proved beyond a reasonable doubt.” Id. at ¶11.

[¶ 31] Whether the plastic wrap actually contained methamphetamine is not necessary to establish probable cause, and the issue is whether an objectively reasonable officer would have believed an offense has been or is being committed. Officer Stan-ger testified about his knowledge gained through training and experience. Based on his experience, he believed the burned plastic wrap was evidence that Woinarow-icz and Novak were in possession of methamphetamine. The officers also had information from the hotel employees that the occupants of the room had been behaving suspiciously, coming and going from the room a lot, and bringing materials into the room that may be used to manufacture methamphetamine, including a 22 inch PVC pipe and a gas can. The hotel room was a locked room, Woinarowicz and No-vak were the only people in the room, and they were the only people with access to the bathroom where the substance was found. While these facts may not have been sufficient to sustain a conviction, looking at these circumstances from the view of an objectively reasonable officer, there was sufficient knowledge that would give a prudent person reasonable grounds to believe Woinarowicz was in constructive possession of methamphetamine. We conclude the officers had probable cause to arrest Woinarowicz for possession of methamphetamine.

c

[¶ 32] A search incident to a legal arrest is an exception to the warrant requirement. State v. Lanctot, 1998 ND 216, ¶ 5, 587 N.W.2d 568. Warrantless searches incident to arrest are “justified by the reasonableness of searching for weapons, instruments of escape, and evidence of crime when a person is taken into official custody and lawfully detained.” United States v. Edwards, 415 U.S. 800, 802-03, 94 S.Ct. 1234, 39 L.Ed.2d 771 (1974). A search incident to arrest includes a search of the arrestee’s person and the area “within her immediate control.” Lanctot, at ¶ 6, see also Chimel v. California, 395 U.S. 752, 763, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969). An arrestee’s purse is generally considered an object immediately associated with a person or an extension of the person, similar to a search of the arrestee’s pocket or clothing. See, e.g., Curd v. City Court of Judsonia, Arkansas, 141 F.3d 839, 843 (8th Cir.1998) (purse is an object “immediately associated” with arrestee); 3 Wayne R. LaFave, Search and Seizure § 5.5(a) (4th ed.2004) (a purse is “immediately associated” with the person and may be searched incident to arrest).

[¶ 33] The district court found Woinarowiez and her purse were legally searched incident to arrest. We agree. Woinarowiez was clutching her purse when she was placed under arrest. Woinarow-icz’s purse was within her immediate control, and we therefore conclude Woinarow-icz’s purse and her person were legally searched incident to arrest.

V

[¶ 34] We affirm Woinarowicz’s conviction.

[¶ 35] GERALD W. VANDE WALLE, C.J., DANIEL J. CROTHERS, and CAROL RONNING KAPSNER, JJ., concur.

SANDSTROM, Justice,

concurring specially.

[¶ 36] I agree with the majority that Crawford v. Washington, 541 U.S. 36, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004), does not apply to preliminary hearings. I write separately to note that an utterance of a consent to search is a verbal act, and is not hearsay.

[¶ 37] “A verbal act is an utterance of an operative fact that gives rise to legal consequences.” 5 Weinstein’s Federal Evidence § 801.11[3] (2d ed.2006).

[¶ 38] In U.S. v. Moreno, 233 F.3d 937, 940 (7th Cir.2000), holding that the “utterance of consent to the search, and [the] subsequent retraction, amount to verbal acts, and as such are not inadmissible hearsay,” the court explained:

Moreno’s appeal focuses on the admission of testimony regarding Evaristo Moreno’s initial consent to the search of their home and the withdrawal of that consent upon the heels of her yelled remark to him. She contends that Evaristo’s out-of-court statements constitute hearsay, so that it was improper for the government to elicit his change of heart about the search, in conjunction with her own shouted comment to him, as proof of her knowledge that the home contained narcotics.
We agree with the government that Mr. Moreno’s utterance of consent to the search, and his subsequent retraction, amount to verbal acts, and as such are not inadmissible hearsay. Like the classic examples of verbal acts, offer and acceptance, see Hydrite Chem. Co. v. Calumet Lubricants Co., 47 F.3d 887, 892 (7th Cir.1995), statements that grant or withhold permission to the authorities to conduct a search carry legal significance independent of the assertive content of the words used. See generally 4 Christopher B. Mueller & Laird C. Kirkpatrick, Federal Evidence, § 385 (2d ed.1994); see also, e.g., United States v. Rojas, 53 F.3d 1212, 1216 (11th Cir.) (consent to exercise of jurisdiction over vessel), cert. denied, 516 U.S. 976, 116 S.Ct. 478, 133 L.Ed.2d 407 (1995); State v. Welker, 536 So.2d 1017, 1019-20 (Fla.1988) (consent to record telephone conversation); State v. Gillespie, 18 Wash.App. 313, 569 P.2d 1174, 1175 (1977) (consent to search residence).

[¶ 39] Similarly, the U.S. District Court, in Dragani v. Bryant, 2005 WL 3542498, *6 n. 7 (M.D.Fla. Dec.23, 2005), said:

To the extent that Petitioner claims that his counsel failed to object to the testimony of the law enforcement officers regarding Mr. Costillo’s granting permission to search his apartment for Petitioner, the claim is meritless. Mr. Cos-tillo’s consent to search his residence was admissible because it constituted a verbal act which is not hearsay under Florida law. State v. Welker, 536 So.2d 1017, 1020 (Fla.1988) (“[T]he giving of consent is a verbal act, and therefore testimony that someone has given consent is not hearsay.”); Palmer v. State, 448 So.2d 55, 56 (Fla. 5th DCA 1984) (testimony that the defendant’s wife gave consent to search was not hearsay, but a verbal act). Thus, the failure to object was neither deficient nor prejudicial.

[¶ 40] In this case, the verbal consent search is an operative fact that gives rise to legal consequences. The officer’s testimony about the consent he heard given was not hearsay.

[¶ 41] GERALD W. VANDE WALLE, C.J.


source: Caselaw Access Project

author: ZINTER, Justice.

license: Public Domain

text:
    2006 SD 74
    The ESTATE OF Merritt A. SEEFELDT, Sr., Deceased.
    No. 23843.
    Supreme Court of South Dakota.
    Considered on Briefs April 24, 2006.
    Decided Aug. 9, 2006.

      Gary W. Schumacher, Todd D. Wilkinson of Wilkinson & Wilkinson, DeSmet, South Dakota, Jonathan K. Van Patten, Vermillion, South Dakota, Attorneys for appellant Estate.
    Roger W. Ellyson, Roger W. Ellyson, P.C., Watertown, South Dakota, Attorney for appellee Melanie Smith.
   ZINTER, Justice.

[¶ 1.] Testator’s Last Will and Testament granted his three sons an option to purchase certain farm land from the Estate. The will “suggested” that one or all of three friends (two neighbors and an attorney) would appraise the land to determine the option price. The two neighbors ultimately appraised the land on a cash flow basis. Testator’s daughter objected and submitted a fair market value appraisal from an independent, professional appraiser. The circuit court sustained the daughter’s objection and adopted the professional appraiser’s fair market valuation. The Estate appeals. We affirm.

Facts and Procedural History

[¶2.] Merritt A. Seefeldt, Sr. (Testator) farmed in Clark County, South Dakota. Testator had three sons and one daughter: Merritt Jr., Michael, Marshall, and Melanie Smith. Testator executed his Last Will and Testament on November 10, 1980, and executed a codicil to that will on December 15, 1982. On December 25, 2003, Testator died, survived by his wife and four children.

[¶ 3.] Testator’s will named Marshall as the personal representative. The will also granted his three sons an option to purchase farm land that Testator had acquired from his parents. “Item IV” of the will provided:

As to such other real property that I may own at the time of my decease, the property that I have acquired from my father, August C., and my mother, Jessie B. Seefeldt, it is my desire remain in the Seefeldt family. I prefer that it be purchased by my sons, who have operated it for many years, but in considering the appraisal of that property, my sons, together with myself have constructed feed lots and improvements on said property, which should be deducted from the value thereof prior to the appraisal, it should then be offered for sale to my sons, Merritt, Jr., Michael and Marshall for the appraised valuation, and they would become the owners thereof, upon payment to my daughter, Melanie Smith, a one-fourth interest therein. They shall have the privilege of installment purchase of her interest, paying to her one-tenth of her principal and interest annually, interest at the rate presently paid on passbook savings in the local banks at Clark on the unpaid balance. My Executor would be authorized to execute an Executor’s Deed, issuing same to my sons on the purchase thereof, with a Note and Mortgage in favor of my daughter, pursuant to said terms.
I would suggest that my Executor use one or all of the following appraisers, if I have not disposed of this land prior to my decease, and it is necessary to appraise same: my fñends and neighbors, Jack Bailey and Alfred Overlie, and my friend and attorney, Ellsworth F. Wil kinson ofDe Smet, South Dakota. If, of course, I have already conveyed the property, then the Executor can use such appraiser as he desires.

[¶ 4.] Following Testator’s death, Marshall selected Jack Bailey and Alfred Overlie to appraise the property for the sale to the sons. Bailey appraised the land at $140,400 ($851 per acre). Overlie appraised the land at $139,600 ($349 per acre). Ellsworth Wilkinson, the Estate’s attorney, did not appraise the property, but he did “sign off’ on Bailey’s and Overlie’s appraisals.

[¶ 5.] Marshall subsequently filed an inventory of Testator’s property. The inventory listed the “fair market value” of the land in question at $140,000 ($350 per acre). Melanie objected to this valuation and, at trial, called Allan Engstrom as an expert witness. Mr. Engstrom was an experienced and disinterested professional appraiser. According to Mr. Engstrom, the land’s fair market value was $290,000 ($725 per acre) with or without the feedlots and other excluded improvements.

[¶ 6.] The circuit court concluded that Testator intended the land to be valued at its fair market value. After considering all of the evidence, the court further determined that Mr. Engstrom’s appraisal most accurately represented the land’s fair market value. The Estate appeals, presenting the following issues:

1) Whether the circuit court erred in concluding that the land was to be appraised at its “fair market value” despite the will’s provision suggesting that certain friends act as appraisers to determine the option price.
2) Whether either party is entitled to appellate attorney’s fees.

Decision

[¶ 7.] The issue in this case involves the interpretation of Testator’s will. We review the interpretation of a will under the de novo standard of review, with no deference given to the circuit court’s interpretation. In re Estate of Brownlee, 2002 SD 142, ¶ 13, 654 N.W.2d 206, 210.

[¶ 8.] The primary goal in interpreting a will is to determine the testator’s intent. Id. ¶ 16 (citation omitted). In determining testamentary intent, “[a]ll the words and provisions appearing in [a] will must be given effect as far as possible, and none should be cast aside as meaningless.” Matter of Estate of Jetter, 1997 SD 125, ¶ 20, 570 N.W.2d 26, 31 (quoting In re Estate of Bock, 85 S.D. 113, 115, 177 N.W.2d 734, 735 (1970)). “If the intent is clear from the language used, that intent controls.” In re Estate of Martin, 2001 SD 123, ¶ 20, 635 N.W.2d 473, 477. “If doubt exists as to the testator’s intent, ‘the language used and the circumstances surrounding the execution of the writing will again be examined in light of pertinent rules of construction.’ ” Estate of Brownlee, 2002 SD 142, ¶ 16, 654 N.W.2d at 210 (quoting In re Estate of Klauzer, 2000 SD 7, ¶ 9, 604 N.W.2d 474, 477 (quoting In re Estate of Nelson, 250 N.W.2d 286, 288 (S.D.1977))).

Testamentary Intent

[¶ 9.] In granting the sons an option to purchase, Testator’s will describes the option price in terms of “value” and “appraised value” without further definition or qualification as to the type of value contemplated. While the Estate contends that “value” or “appraised value” is whatever value was determined by the two appraisers the personal representative selected, Melanie argues that “value” or “appraised value” means fair market value. We acknowledge that a mere disagreement between the parties over the interpretation of testamentary language is not enough to make the language ambiguous. Id. ¶ 17 (citation omitted). However, we conclude that the terms “value” and “appraised value” are ambiguous because, in this will, those terms are “reasonably capable of being understood in more than one sense.” See id. (stating that testamentary “[l]an-guage is ambiguous when it is reasonably capable of being understood in more than one sense”) (citations omitted).

[¶ 10.] Our conclusion that “value” and “appraised value” are susceptible to more than one meaning is supported by the South Dakota Uniform Standards of Professional Appraisal Practice (USPAP). The USPAP indicates that appraised value has different meanings because the value of property is dependent upon the relationship of the parties and how they intend to use the property; i.e., value is “the monetary relationship between properties and those who buy, sell, or use those properties.” Appraisal Standards Board, US-PAP: Uniform Standards of Professional Appraisal Practice and Advisory Opinions 5 (2005). The comment following this provision explains:

Value expresses an economic concept. As such, it is never a fact but always an opinion of the worth of a property at a given time in accordance with a specific definition of value. In appraisal practice, value must always be qualified — for example, market value, liquidation value, or investment value.

Id. This comment illustrates that the same property often has different appraised values. Furthermore, because the Testator’s sons and daughter have a different relationship with this property, the terms “value” and “appraised value” have different meanings in this case.

[¶ 11.] Here, Testator’s neighbors explained that they appraised the land based solely on its cash flow value; i.e., “what you could pay for it and make it pay for itself.” Mr. Engstrom, on the other hand, appraised the land at its fair market value. Therefore, the dispositive question is whether Testator intended the land to be appraised at the neighbors’ cash flow value or the appraiser’s fair market value. After considering the entire will, the circuit court concluded that Testator intended that the property be appraised at its fair market value. We agree.

[¶ 12.] The Estate contends that the circuit court’s interpretation of the will was incorrect because the court did not consider the second paragraph of Item IV, which suggested that Testator’s friends and neighbors would appraise the property. The Estate concedes that the circuit court’s fair market value interpretation would have been correct if the will did not contain the suggested appraisers provision. However, the Estate argues that if the court had considered the language regarding the suggested appraisers, it would have concluded that Testator intended the neighbors’ appraisal to be controlling. The Estate relies on the general rule that absent bad faith or fraud, a named appraiser’s valuation is generally deemed conclusive. The Estate cites four cases applying this general rule: Matter of Bock’s Estate, 198 Neb. 121, 251 N.W.2d 872 (1977); In re Lorimor’s Estate, 216 N.W.2d 349 (Iowa 1974); In re Giffin’s Estate, 166 N.W.2d 800 (Iowa 1969); and In re Eckey’s Estate, 192 Iowa 572, 185 N.W. 118 (1921).

[¶ 13.] Although these cases apply the rule suggested by the Estate, the cases are distinguishable. We initially note that in Bock and Lorimor, the wills specifically provided that the appraisals were to be made at the properties’ fair market values. See Bock, 198 Neb. at 122, 251 N.W.2d at 873-74 (requesting that the land be appraised at “its fair and reasonable market value”); Lorimor, 216 N.W.2d at 350 (stating that the land “shall be appraised ... at its fair and reasonable market value”). In contrast, Testator’s will does not describe the type of value to be used.

[¶ 14.] More importantly, in all four cases, the wills mandated that a particular' person or group of persons would perform the appraisal and determine the option price. In Bock, the will stated that the option price “shall he determined and fixed by” the Federal Land Bank appraiser, and if he was unavailable, the will “directfed] that the real estate firm of Eyth-Krecklow” would perform the appraisal. 198 Neb. at 122, 251 N.W.2d at 873-74. The will in Lorimor provided that the farm land “shall be appraised by three competent disinterested appraisers appointed by the Court.” 216 N.W.2d at 350 (emphasis added). In Giffin, the will specifically stated that the real estate “shall be appraised by the inheritance tax appraisers.” 166 N.W.2d at 800. And, in Eckey, the will provided that the real estate was “to be appraised by three disinterested parties” who were, thereafter, specifically named. 185 N.W. at 119.

[¶ 15.] However, in this case, the will merely stated, “I would suggest that my Executor use one or all of the following appraisers ... my friends and neighbors, Jack Bailey and Alfred Overlie, and my friend and attorney, Ellsworth F. Wilkinson of De Smet, South Dakota.” This distinction is significant because the word “suggest” gave the personal representative discretion over who would perform the appraisal and, through that choice, the type of appraisal that would be conducted. Because the will gave the personal representative discretion, the general rule involving a controlling provision is inapplicable.

[¶ 16.] The Estate, however, argues that the word “suggest” is precatory and that we should not be “distracted” by it because the personal representative followed Testator’s suggestion in choosing two of the three suggested appraisers. However, ignoring Testator’s use of the word “suggest” is contrary to the well established requirement that, in determining testamentary intent, all words and provisions in a will should be given effect “and none should be cast aside as meaningless.” Estate of Jetter, 1997 SD 125, ¶20, 570 N.W.2d at 31. Failing to acknowledge the difference between “suggest” and a controlling provision would render the word “suggest” meaningless in this will. In each of the Estate’s cited cases, the wills contained a controlling provision mandating that a particular person or group of persons would perform the appraisal and determine the option price. The Estate, however, concedes in its brief that “[t]he use of Bailey and Overlie clearly was not mandated by [this] Will.” Under these circumstances, the word “suggest” has a very different meaning than the controlling language in the Estate’s cited cases, and it cannot be ignored.

[¶ 17.] It is also significant that, as previously noted, the word “suggest” provided Marshall with discretion in choosing the appraisers. Furthermore, as the personal representative, Marshall was “a fiduciary,” who was required to “observe the standards of care in dealing with the estate assets” and to “use ... the terms of the will” to act in “the best interests of the estate.” SDCL 29A-3-703. See also Ward v. Lange, 1996 SD 113, ¶ 12, 553 N.W.2d 246, 250 (“When such relationship exists, the fiduciary has a ‘duty to act primarily for the benefit of the other.’ ”) (citations omitted). Thus, Marshall’s fiduciary duties along with the discretion granted by the terms of the will, ie., the word “suggest,” required use of a fair market value appraisal because only a fair market valuation would satisfy Marshall’s fiduciary duties of acting in the best interest of Melanie, the other sons, and the estate.

[¶ 18.] Considering the discretion this will afforded the personal representative, a more analogous case is Estate of Blouin, 490 A.2d 1212 (Me.1985).

In that case, a decedent’s son was appointed to serve as the executor. Id. at 1214. The son also had an option to purchase estate property “at its appraised value,” and he had the discretion to choose the appraiser. See id. The appraiser selected by the son valued the property at $16,000. Id. The decedent’s two daughters, who were residuary beneficiaries, objected to the appraised value, and the probate court concluded that the fair value of the property was $28,000. Id. On appeal, the son challenged the probate court’s power to amend the appraisal. Id. In upholding the probate court’s decision, the Supreme Court of Maine stated:

We recognize that the terms of the will authorized the sale to [the son] at the property’s “appraised value.” From an examination of the will, however, we agree with the Probate Court that “appraised value” is the functional equivalent of “fair value.”
The will evinces the testator’s intention to treat his children equally. To interpret “appraised value” as anything but fair value would result in [the son] benefiting from the sale at the expense of the other beneficiaries. After hearing, the Probate Court determined the fair value of the property to be $28,000, which we have held conclusive. The original appraisal of $16,000 represents only 57% of the court’s determination of fair value.

Id. at 1216.

[¶ 19.] Similarly, this will quite clearly indicates that Testator intended to treat his children equally. In Item II, Testator bequeathed eighty acres of land to his three sons and required them to pay Melanie a pro rata share of the value of the land. Item III provided that any notes and mortgages held by Testator from the sale of his real and personal property should be considered assets of the estate and “divided equally” among the children. Item IV provided that although the sons were to have the option to purchase the farm land, they were required to pay Melanie one-quarter of the value of the property. And, finally, Item V provided that the remainder of the estate was to be distributed to all four children, “share and share alike.”

[¶ 20.] Therefore, considering Testator’s desire to treat his children equally, and absent a controlling appraisal provision, we agree with the circuit court that Testator intended the property to be appraised at its fair market value. To conclude otherwise would subvert Testator’s intent to treat his children equally as it would benefit the sons at Melanie’s expense. Such a result would be especially inappropriate in a case like this where one of the sons possessing the option to purchase was also the personal representative who had discretion to select the appraisers, and the selected appraisers valued the land at approximately 48% of its fair market value.

[¶ 21.] Considering the absence of a controlling provision in the will, the personal representative’s fiduciary duties, and the Testator’s intent to treat all of his children equally, we hold that the Testator intended the terms “value” and “appraised value” to mean fair market value. Therefore, we affirm the trial court.

Appellate Attorney’s Fees

[¶ 22.] Both parties moved for appellate attorney’s fees under SDCL 15-26A-87.3. “SDCL 15-26A-87.3 permits an award of appellate attorney fees if they are otherwise allowable.... ” Schaefer ex rel. S.S. v. Liechti, 2006 SD 19, ¶20, 711 N.W.2d 257, 264 (quoting In re Writ of Certiorari as. to Wrongful Payments of Attorney Fees Made by Brookings Sch. Dist. Sch. Bd., 2003 SD 101, ¶25, 668 N.W.2d 538, 547). SDCL 29A-3-720 permits an award of beneficiary’s attorney’s fees when the services resulted “in a substantial benefit to the estate.” See Wag ner v. Brownlee, 2006 SD 38, ¶¶ 14-15, 713 N.W.2d 592, 597 (concluding that beneficiary attorney’s fees are available when the beneficiary’s actions resulted in a substantial benefit to the estate) (citing In re Estate of Siebrasse, 2004 SD 46, ¶ ¶ 26-29, 678 N.W.2d 822, 828-29). Here, Melanie was successful in arguing that the land should have been appraised at its $290,000 fair market value rather than the $140,000 cash flow value. This increase substantially benefited the estate, and therefore, we grant Melanie’s motion for attorney’s fees in the amount of $5,916.05. Because the Estate was unsuccessful in this appeal, its motion for attorney’s fees is denied.

[¶ 23.] Affirmed.

[¶ 24.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, and MEIERHENRY, Justices, concur.

      . Testator specified in Item IV that these improvements were not to be included in the option price valuation.

        . South Dakota statutes and administrative rules regulate appraisal practice. SDCL 36-21B-2 provides that an "appraisal is the act or process of estimating value of real estate for another and for compensation.” SDCL 36-21B-3(2) and (3) authorize the South Dakota Department of Revenue and Regulation to promulgate rules defining terms and establishing uniform standards of professional appraisal practice. In promulgating these rules, the Department of Revenue and Regulation has stated that "[a]n appraisal must conform to the Uniform Standards of Professional Appraisal Practice, 2005 Edition.” ARSD 20:14:06:01.

      . The neighbors testified that they appraised the land at the value that "you could pay for it and make it pay for itself.” No other explanation was provided. It appears the neighbors used a net cash flow approach to determine the value. See Black’s Law Dictionary, 230 (8th ed. 2004) (defining "net cash flow” as "[c]ash inflow minus cash outflow” and defining "cash flow” as "[c]ash receipts minus cash disbursements for a given period”).

      ."[F]air market value is 'the price a willing buyer would pay a willing seller, both under no obligation to act.’ ” Fausch v. Fausch, 2005 SD 63, ¶ 9, 697 N.W.2d 748, 752 (quoting First Western Bank Wall v. Olsen, 2001 SD 16, ¶ 17, 621 N.W.2d 611, 617).

      . In Matter of Bock’s Estate, 198 Neb. 121, 251 N.W.2d 872 (1977), the testatrix’s will granted her son the option to purchase property. See id. at 122, 251 N.W.2d at 873-74. The will provided that the option price was to "be determined and fixed by the individual or person who appraises real estate for the Federal Land Bank in Gage County, Nebraska.” Id. at 122, 251 N.W.2d at 873. The executor of the estate was to "request that he make an appraisal of said real estate to determine its fair and reasonable market value as of the date of ... death.” Id. at 122, 251 N.W.2d at 873-74. And, "[i]f the Federal Land Bank appraiser [was] unavailable or unable to make said appraisal, ... the real estate firm of Eyth-Krecklow, Beatrice, Nebraska, [was to] make said appraisal.” Id. at 122, 251 N.W.2d at 874.
      Due to company policy, the appraiser at Federal Land Bank was prohibited from making the appraisal. Id. at 123, 251 N.W.2d at 874. Mr. Krecklow then submitted an appraisal reporting the fair market value of the land at $36,800. Id. Appellant argued that the appraisal was too low. Id. at 123-24, 251 N.W.2d at 874. The court overruled appellant’s objection stating:
      Under a will providing that a son of the testatrix who, also, was designated as executor of her estate be granted an option to purchase certain real estate at its fair market value to be fixed by an appraiser named in the will, the value fixed by the appraiser named in the will is controlling in the absence of bad faith or fraud.

        Id. at 125, 251 N.W.2d at 875 (citations omitted).

      . In In re Lorimor's Estate, 216 N.W.2d 349 (Iowa 1974), the testator’s will granted his two sons the option to purchase farm land at a fair and reasonable price. Id. at 350. Testator directed in his will that the land "shall be appraised by three competent disinterested appraisers appointed by the Court, at its fair and reasonable market value, as determined by the appraisers ... and that said beneficiaries ... [s]hall have the right to acquire the farm at the appraised value.” Id. The court appointed the Iowa Inheritance Tax Appraisers for Fremont County to make the appraisal. See id. at 351. Appellants objected to the appraisal. Id. The Iowa Supreme Court held:
      In clear unambiguous terms he chose to authorize the court admitting his will to probate to name three disinterested persons to fix the price to be paid — its fair and reasonable market value as determined by the appointed appraisers. The fair and reasonable market value fixed by the appraisers was controlling in the absence of bad faith or fraud. Hence, in the absence of an allegation of bad faith or fraud the objectors set forth no basis upon which the relief asked for could have been granted.

        Id. at 354 (citation omitted).

      .Testatrix’s will in In re Giffin's Estate, 166 N.W.2d 800 (Iowa 1969), contained an option to purchase her real estate. Id. at 800. The will provided that the real estate "shall be appraised by the inheritance tax appraisers” and that certain individuals "shall have the opportunity to purchase said real estate at the appraised value thereof.” Id. Appellants objected to the appraisal, claiming that it was $272.13 per acre below the real estate's fair market value and that the appraisers failed to follow provisions in the Iowa code that provided "the appraised value shall be the 'market value in the ordinary course of trade.’ ” Id. at 801. The Iowa Supreme Court agreed with the trial court's conclusion:
      That an option to purchase may be granted by will. That the testatrix had the right to grant such an option to whomever she chose and to prescribe the method for arriving at the price to be paid. Having done so, and absent a showing of bad faith affecting the appraisal which is not alleged, the optionee is entitled to purchase at the valuation thus determined.

        Id.

      . In In re Eckey’s Estate, 192 Iowa 572, 185 N.W. 118 (1921), the will provided that decedent’s real and personal property was to “be appraised and divided equally between [the] children”; that the real estate was "to be appraised by three disinterested parties,” who were specifically named; and that if any of the children resided on the real estate, they were to have the first chance to purchase the property at the appraised value. Id. at 119. When the two children that were residing on certain parcels of property elected to purchase the property at the appraised value, the other children objected, alleging, inter alia, that the appraisals did not represent the fair market value of the property. Id. The Iowa Supreme Court rejected Appellants’ argument, stating:
      The appraisers fixed the values, and there is no claim or evidence that they acted otherwise than in good faith. The testator had the right to dispose of his property as he saw fit, either by absolute gift or by sale at a price to be fixed in manner agreeable to him.

        Id.

      . We acknowledge the last sentence of Item IV stating: “If, of course, I have already conveyed the property, then the Executor can use such appraiser as he desires.” We view this conflicting provision as only creating further ambiguity. If the property was "already conveyed" there would be no need for an appraisal.

      . SDCL 29A-3-703 provides the general fiduciary duties of the personal representative. The statute provides, in part:
      (a) A personal representative is a fiduciary who, except as otherwise provided in the will, shall observe the standards of care in dealing with the estate assets that would be observed by a prudent person dealing with the property of another. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of tiny probated and effective will and this code, and as expeditiously and efficiently as is consistent with the best interests of the estate. A personal representative shall use the authority conferred by this code, the terms of the will, if any, and any order in proceedings to which the personal representative is party for the best interests of the estate.

      . Other jurisdictions have concluded that “appraised value” means "fair market value.” See Estate of Blouin, 490 A.2d 1212 (Me.1985); Pate v. Ford, 293 S.C. 268, 287, 360 S.E.2d 145, 156 (Ct.App.1987) rev'd on other grounds by Pate v. Ford, 297 S.C. 294, 376 S.E.2d 775 (1989). In Pate, the will provided the children with the option to purchase the family home "at its appraised value.” Id. The court stated: " 'Appraised value’ usually means ‘fair market value' or the price property will bring on the market after reasonable efforts to find a buyer who would give the highest price for it.” Id. (citing Blouin, 490 A.2d 1212; McAdams v. Bolsinger, 57 Ohio Op 338, 129 N.E.2d 878 (1950)); cf. Housing Auth. of City of Charleston v. Olasov, 282 S.C. 603, 320 S.E.2d 478 (Ct.App.1984).


author: LOVRIEN, Circuit Judge.

text:
    2006 SD 72
    DAKOTA, MINNESOTA & EASTERN RAILROAD CORPORATION, Plaintiff and Appellee, v. ACUITY, a Mutual Insurance Co. f/k/a Heritage Mutual Insurance Company, d/b/a Heritage Insurance, Defendant and Appellant.
    No. 23601.
    Supreme Court of South Dakota.
    Argued March 21, 2006.
    Decided Aug. 9, 2006.
    See also 2002 SD 7, 639 N.W.2d 513.

      Brian J. Donahoe and Meredith A. Moore of Cutler & Donahoe, Sioux Falls, South Dakota, Attorneys for plaintiff and appellee.
    Gary P. Thimsen and Jennifer L. Woll-man of Woods, Fuller, Shultz & Smith, Sioux Falls, South Dakota, Attorneys for defendant and appellant.
   LOVRIEN, Circuit Judge.

[¶ 1.] Dakota, Minnesota and Eastern Railroad (DM & E) sued its automobile insurance company, Acuity, alleging that the negligence of an unidentified and uninsured motorist caused an accident involving a vehicle driven by DM & E employee Julian Olson (Olson) and that the business automobile policy issued by Acuity to DM & E covered the loss. A Beadle County jury found for DM & E and the trial court entered judgment accordingly. We affirm.

FACTS AND PROCEDURE

[If 2.] On July 28, 1998, DM & E employee Olson was operating a motor vehicle within the scope of his employment on 1-90 near Rapid City. Olson was involved in a serious rollover accident which rendered him a paraplegic. DM & E held a business automobile policy with Acuity which was in effect on the day of Olson’s accident.

[¶ 3.] Olson brought suit against DM & E under the Federal Employers’ Liability Act, 45 U.S.C. § 51 et seq (FELA), for negligent maintenance of the vehicle’s Hy-Rail System. DM & E tendered defense of the suit to Acuity. Acuity refused. The case went to trial. On the last day of trial, before the jury reached a verdict, a settlement was reached between Olson and DM & E.

[¶ 4.] DM & E then brought a declaratory judgment action against Acuity to determine whether Acuity was obligated to defend and provide coverage for Olson’s FELA action against DM & E. Acuity claimed that coverage was barred due to valid policy exclusions. The trial court agreed and granted summary judgment in favor of Acuity. It concluded that the employee indemnification and employer’s liability exclusion in the policy barred coverage for Olson’s accident. We affirmed the trial court’s grant of summary judgment in DM & E v. Heritage Mut. Ins. Co., 2002 SD 7, 639 N.W.2d 513 (DM & E I).

[¶ 5.] During the pendency of DM & E (I), Olson brought a products liability suit against the manufacturer of the Hy-Rail system. That lawsuit was settled in April 2003. On July 26, 2001, also during the pendency of DM & E (I), DM & E brought the present Uninsured Motorist (UM) action against Acuity. DM <& E claimed the negligence of an unidentified and uninsured motorist was the cause of Olson’s accident.

[¶ 6.] On November 21, 2001, Acuity moved to dismiss the present action based upon res judicata and collateral estoppel. Acuity also moved for summary judgment, claiming it had no obligation under the policy to pay uninsured motorist benefits to DM & E for injuries suffered by a DM & E employee. DM & E moved to hold the case in abeyance until this Court decided DM & E (I). On February 28, 2002, after our decision in DM & E (I), the trial court denied Acuity’s motion to dismiss. In April 2002 Acuity filed an application for stay and petition for discretionary appeal. Both motions were denied. On February 3, 2004, the trial court dismissed Acuity’s motion for summary judgment. In April 2004 Acuity filed a second application for stay and petition for discretionary appeal. These motions were denied on April 5, 2004.

[¶ 7.] On April 9, 2004, DM & E moved to amend its complaint to add a cause of action for bad faith. The motion was granted. Acuity moved to bifurcate the bad faith and UM claim. The motion to bifurcate was granted. After the trial court ruled on preliminary discovery motions in the bad faith matter, the parties agreed to suspend any further action on that claim until resolution of the UM claim.

[¶ 8.] The UM claim was tried on January 24-25, 2005, in Beadle County, Huron, South Dakota. The jury returned a verdict in favor of DM & E, finding an unidentified motorist negligently caused Olson’s accident. An amended partial judgment was filed on February 15, 2005. Over Acuity’s objection, DM & E sought and was granted prejudgment interest. Acuity moved for judgment notwithstanding the verdict and a new trial. Both motions were denied. Acuity filed its notice of appeal on April 6, 2005. While a number of issues were raised by Acuity on appeal, we conclude that only a few issues merit discussion.

ANALYSIS

ISSUE ONE

[¶ 9.] Did the trial court err in failing to grant Acuity’s motion to dismiss based upon res judicata and collateral estoppel?

[¶ 10.] Acuity claims that DM & E (I) settled, or should have settled, all of the issues between the parties and that the trial court committed error when it refused to grant Acuity’s motion to dismiss based upon the doctrines of res judicata and collateral estoppel. We affirm the trial court’s decision to deny Acuity’s motion to dismiss.

[¶ 11.] This Court’s review of such motions is well settled. Our standard of review of a trial court’s grant or denial of a motion to dismiss is the same as our review of a motion for summary judgment: is the pleader entitled to judgment as a matter of law. See Jensen Ranch, Inc. v. Marsden, 440 N.W.2d 762, 764 (S.D.1989).

Summary judgment is authorized “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law.” SDCL 15 — 6—56(c). We will affirm only when there are no genuine issues of material fact and the legal questions have been correctly decided. Bego v. Gordon, 407 N.W.2d 801, 804 (S.D.1987). All reasonable inferences drawn from the facts must be viewed in favor of the non-moving party. Morgan v. Baldwin, 450 N.W.2d 783, 785 (S.D.1990). The burden is on the moving party to clearly show an absence of any genuine issue of material fact and an entitlement to judgment as a matter of law. Wilson v. Great Northern Ry. Co., 83 S.D. 207, 212, 157 N.W.2d 19, 21 (1968).

Holzer v. Dakota Speedway, Inc., 2000 SD 65, ¶ 8, 610 N.W.2d 787, 792 (citing Kimball Investment Land, Ltd. v. Chmela, 2000 SD 6, ¶ 7, 604 N.W.2d 289, 292 (citing Mattson v. Rachetto, 1999 SD 51, ¶ 8, 591 N.W.2d 814, 816-17 (quoting Estate of Shuck v. Perkins County, 1998 SD 32, ¶ 6, 577 N.W.2d 584, 586))). We make an independent review of the record and are not bound by the trial court’s factual assessments in granting summary judgment. Spenner v. City of Sioux Falls, 1998 SD 56, ¶ 7, 580 N.W.2d 606, 609; Carpenter v. City of Belle Fourche, 2000 SD 55, ¶ 6, 609 N.W.2d 751, 756.

[¶ 12.] Res judicata and collateral estoppel are two distinct doctrines. Nelson v. Hawkeye Ins. Co., 369 N.W.2d 379, 380 (S.D.1985); Schell v. Walker, 305 N.W.2d 920, 922 (S.D.1981). While these two doctrines are very similar in nature, they produce different results. Schell, 305 N.W.2d at 922.

[¶ 13.] Collateral estoppel prevents relitigation of issues that were actually litigated in a prior proceeding. Id. It also precludes a party which

successfully maintains a certain position in a legal proceeding ... from later assuming a contrary position simply because that party’s interests have changed, especially if the change works to the prejudice of one who acquiesced in the position formerly taken by that party.

Watertown Concrete Products, Inc. v. Foster, 2001 SD 79, ¶ 10, 630 N.W.2d 108, 112 (citing New Hampshire v. Maine, 532 U.S. 742, 749, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001)). The purpose of collateral estoppel is to “protect the integrity of the judicial process by prohibiting parties from deliberately changing positions according to the exigencies of the moment.” New Hampshire, 532 U.S. at 749-50, 121 S.Ct. 1808. This Court has held that three elements must be satisfied in order to apply collateral estoppel: (1) the later position must be clearly inconsistent with the earlier one; (2) the earlier position was judicially accepted, creating the risk of inconsistent legal determinations; and (3) the party taking the inconsistent position would derive an unfair advantage or impose an unfair detriment to the opponent if not estopped. Watertown Concrete Products, 2001 SD 79, ¶ 12, 630 N.W.2d at 112.

[¶ 14.] We conclude that the doctrine of collateral estoppel is inapplicable here. The uninsured motorist issue was not “actually litigated” in the prior proceeding, DM & E (I). In addition, DM & E took no position in DM & E (I) that is clearly inconsistent with its position in this case. In both cases it maintained that Olson’s accident was caused by something other than a malfunction of the Hy-Rail System equipment. The trial court did not err by refusing to grant Acuity’s motion to dismiss based on the doctrine of collateral estoppel.

[¶ 15.] Res judicata prevents the relitigation of a claim or issue that was “actually litigated or which could have been properly raised.” Nelson, 369 N.W.2d at 381; see also Keith v. Willers Truck Serv. Inc., 64 S.D. 274, 266 N.W. 256 (1936). Res judicata is founded upon two premises: “A person should not be twice vexed for the same cause and public policy is best served when litigation has a repose.” Black Hills Mfg. Inc. v. Felco Jewel Ind., Inc., 336 N.W.2d 153, 157 (S.D.1983). In Commissioner of Internal Revenue v. Sunnen, 333 U.S. 591, 597, 68 S.Ct. 715, 719, 92 L.Ed. 898 (1948), the United States Supreme Court noted that:

The general rule of res judicata applies to repetitious suits involving the same cause of action. It rests upon considerations of economy of judicial time and public policy favoring the establishment of certainty in legal relations. The rule provides that when a court of competent jurisdiction has entered a final judgment on the merits of a cause of action, the parties to the suit and their privies are thereafter bound ‘not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose.’ Cromwell v. County of Sac, 94 U.S. 351, 352, 24 L.Ed. 195 (1876). The judgment puts an end to the cause of action, which cannot again be brought into litigation between the parties upon any ground whatever, absent fraud or some other factor invalidating the judgment. See von Mos-chzisker, ‘Res Judicata,’ 38 Yale L.J. 299; Restatement of the Law of Judgments, §§ 47, 48.

Id.

[¶ 16.]This Court has previously held that a final judgment on the merits is a bar to any future action between the same parties or their privies upon the same cause of action settling not only every issue actually presented to sustain or defeat the right asserted, but every issue that might have been raised in the first action. Adam v. Adam, 254 N.W.2d 123, 130 (S.D.1977)(citing Chicago & N.W. Ry. Co. v. Gillis, 80 S.D. 617, 622, 129 N.W.2d 532, 534 (1964)). A judgment which bars a second action upon the same claim extends not only to every matter offered and received to sustain or defeat the claim or demand but also to all other admissible matters which might have been offered to the same purpose. Id. at 130-31.

[¶ 17.] This Court has held that four elements must be satisfied in order to apply res judicata: (1) the issue in the prior adjudication must be identical to the present issue, (2) there must have been a final judgment on the merits in the previous case, (3) the parties in the two actions must be the same or in privity, and (4) there must have been a full and fair opportunity to litigate the issues in the prior adjudication. Matter of Guardianship of Janke, 500 N.W.2d 207, 209 (S.D.1993)(citing Raschke v. DeGraff, 81 S.D. 291, 295, 134 N.W.2d 294, 296 (1965)).

[¶ 18.] As to the first element, whether the issue in DM & E (I) is identical to the present issue, the Eighth Circuit Court of Appeals in Hanson v. Hunt Oil Co., 505 F.2d 1237, 1240 (8th Cir.1974), established the test which this Court has repeatedly applied: “whether the wrong for which redress is sought is the same in both actions.” Woodbury v. Porter, 158 F.2d 194, 195 (8th Cir.1946); Barnes v. Matzner, 2003 SD 42, ¶ 16, 661 N.W.2d 372, 377. In DM & E (I), DM & E sought defense and indemnification from Acuity in its suit with Olson. DM & E based its claim on the terms of its business automobile insurance contract with Acuity. In this case, DM & E seeks recovery under the uninsured motorist provisions of the same insurance contract. Acuity correctly asserts that in both DM & E (I)-, and the present case, the wrong for which redress is sought by DM & E is Acuity’s alleged breach of the same insurance contract. See Great West Cas. Co. v. Hovaldt, 1999 SD 150, ¶8, 603 N.W.2d 198, 201 (recognizing an action on the policy is contractual). Therefore, Acuity argues that DM & E should have brought all of the claims it had against Acuity under the provisions of the insurance contract, including the claim of unidentified motorist coverage, in DM & E (I). Acuity argues that since it did not, DM & E is now precluded by the doctrine of res judicata from raising the issue of unidentified motorist coverage in a second lawsuit.

[¶ 19.] In support of its argument, Acuity relies on this Court’s decision in Nelson, 369 N.W.2d at 379. There, in the initial case between the parties (Nelson I), Nelson instituted a declaratory judgment action against Hawkeye. Id. at 380. This Court held that, pursuant to the provisions and exceptions of its policy, Hawkeye had no duty to defend. Id. In the second action (Nelson II), Nelson brought an action against the insurer seeking reimbursement of counsel fees and judgment for death loss of his pigs caused by the insured’s negligence. Id. Summary judgment was entered in favor of Hawkeye. Id. Based upon pre-trial investigation by both parties, this Court determined that the death loss of pigs suffered by the original plaintiff Schultz was either known or should have been known in the first declaratory judgment action. Id. at 381. As a result, the judgment in Nelson I was held to be res judicata. Id.

[¶20.] The issue in DM & E I was whether, under the terms of the insurance policy, Acuity had a duty to defend and indemnify DM & E in the suit brought by Olson. The issue in the present case is whether, under the terms of the same insurance policy, DM & E is entitled to UM benefits due to the negligence of an unidentified driver. While the specific issue in DM & E I is not identical to the specific issue in this ease, both issues relate to the same accident, the same set of facts, the same insurance contract and can only be resolved by making a determination of DM & E’s rights under that contract. In addition, DM & E knew or should have known of the existence of an unidentified slow moving vehicle when DM & E I was tried. In fact, DM <& E used evidence of an unidentified slow moving vehicle to bolster its claims in DM & E I that the accident was caused by something other than the Hy-Rail equipment. We conclude that all claims DM & E had against Acuity under the provisions of the insurance contract could have been brought in DM & E I. Acuity has demonstrated a technical basis to conclude the first element has been satisfied.

[¶ 21.] Concerning the second and third elements, it is undisputed that there has been a final judgment on the merits in DM & E I, and the parties in the two actions are the same. Therefore, we turn to the fourth element, was there or would there have been a full and fair opportunity to litigate all of the contract issues in DM & E I? We hold that the fourth element has not been established.

[¶ 22.] First, while all issues could have been brought in DM & E I, we conclude that the fact that they were not did not violate the policy considerations underlying the doctrine of res judicata. Given the particular facts of this case, even if DM & E’s claims against Acuity for defense and indemnification and unidentified motorist coverage were all brought in DM & E I, it would be reasonable to expect that the trial court would have bifurcated these issues and tried each separately. A resolution of the various issues would almost certainly have followed the same course as has been followed here, whether these issues had been raised in a single lawsuit or in separate lawsuits. Acuity would have had to defend the two causes of action. The only question is whether Acuity would do this at separate trials in a bifurcated lawsuit or at separate trials in separate lawsuits. Since two trials were inevitable, the policy behind the doctrine of res judi-cata would not have been served by application of the doctrine. Acuity would have still been twice vexed for DM & E’s claims under the insurance contract, this litigation would not have found repose until both issues were resolved and the use of judicial resources would not have been conserved in any significant way.

[¶ 23.] Second, while both actions are based on the terms and provisions of the same insurance contract, each cause of action is different. Because each cause of action is different, the doctrine of res judi-cata is applied much more narrowly.

[But] where the second action between the same parties is upon a different cause or demand, the principle of res judicata is applied much more narrowly. In this situation, the judgment in the prior action operates as an estoppel, not as to matters which might have been litigated and determined, but ‘only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered.’ Cromwell, 94 U.S. at 353. See also Russell v. Place, 94 U.S. 606, 24 L.Ed. 214 (1876); Southern Pacific R. Co. v. United States, 168 U.S. 1, 48, 18 S.Ct. 18, 27, 42 L.Ed. 355 (1897); Mercoid Corp. v. Mid-Continent Inv. Co., 320 U.S. 661, 671, 64 S.Ct. 268, 273, 88 L.Ed. 376 (1944). Since the cause of action involved in the second proceeding is not swallowed by the judgment in the prior suit, the parties are free to litigate points which were not at issue in the first proceeding, even though such points might have been tendered and decided at that time. But matters which were actually litigated and determined in the first proceeding cannot later be relitigated. Once a party has fought out a matter in litigation with the other party, he cannot later renew that duel.

Sunnen, 333 U.S. at 597-98, 68 S.Ct. 715.

[¶24.] Here the unidentified motorist claim was not “swallowed” by the judgment in DM & E (I), even though all issues could have been tendered in that cause of action. Accordingly, we conclude the parties were free to litigate the unidentified motorist claim, which was not at issue in the first proceeding, even though it might have been brought and decided at that time. The trial court did not err by refusing to grant Acuity’s motion to dismiss based on the doctrine of res judicata.

ISSUE TWO

[¶ 25.] Was DM & E entitled to recover prejudgment interest on the jury’s verdict?

[¶ 26.] Acuity argues that the prejudgment interest determination is controlled by the insurance policy. As such, DM & E would not be entitled to prejudgment interest until there was a determination that DM & E was legally entitled to recover under the terms of that policy. This would be the date of the jury verdict: January 25, 2005. DM & E contends that South Dakota law is clear on this issue and that prejudgment interest is required from the date a demand is made for the policy benefits: July 23, 2001. See Isaac v. State Farm Mut. Auto. Ins. Co., 522 N.W.2d 752, 764 (S.D.1994). Prejudgment calculations are done as a matter of law. As such, the standard of review is de novo. City of Sioux Falls v. Johnson, 2001 SD 108, ¶ 8, 632 N.W.2d 849, 852; City of Colton v. Schwebach, 1997 SD 4, ¶ 8, 557 N.W.2d 769, 771.

[¶27.] We find DM & E’s argument persuasive and a correct statement of the law.

Any person who is entitled to recover damages ... is entitled to recover interest thereon from the day that the loss or damage occurredf.] ... Prejudgment interest on damages arising from a contract shall be at the contract rate, if so provided in the contract; otherwise, if prejudgment interest is awarded, it shall be at the category B rate of interest specified in § 54-3-16.

SDCL 21-1-13.1. The trial court determined that the date of DM & E’s demand was July 23, 2001, the date this action was commenced. Acuity relies on case precedent from other jurisdictions in support of its argument that the date of the jury verdict controls. We find this authority unpersuasive. A determination of prejudgment interest is mandated by statute. South Dakota law is clear as to the date and rate from which prejudgment interest shall run. Therefore, the trial court correctly determined the proper date from which prejudgment interest should run is from the commencement of this action: July 23, 2001.

ISSUE THREE

[¶28.] Did the trial court abuse its discretion in granting DM & E’s motion to compel discovery and denying Acuity’s motion to quash?

[¶ 29.] As noted earlier, the trial court allowed DM & E to amend its complaint to add a cause of action for bad faith and also granted Acuity’s motion to bifurcate the UM and bad faith causes of action. DM & E began discovery on the bad faith claim, issuing subpoenas to Acuity’s attorney Gary Thimsen and his partner James Moore. Acuity did not respond to discovery. DM & E then moved to compel discovery. Acuity moved to quash the subpoenas. DM & E’s motion to compel was granted and Acuity’s motion to quash was denied. Acuity has appealed these rulings.

[¶ 30.] We note the request to bifurcate the trial of the UM claim and the bad faith claim was made by Acuity. It sought two trials. An appeal of the UM matter is properly before us because the trial court has entered a final judgment as to the UM matter. However, an appeal of the trial court’s rulings related to the bad faith cause of action is not properly before us because that action is still pending. The trial court has entered no final judgment concerning the bad faith cause of action. No appeal from a final judgment concerning the bad faith claim has been filed with this Court. Therefore, the issues surrounding the bad faith claim are not properly before us on appeal. In reality, Acuity is seeking a discretionary appeal of the trial court’s discovery orders entered in the bad faith action. Acuity has not followed the statutory requirements for a discretionary appeal found at SDCL 15-26A-13. Acuity cannot put these issues before us by simply including them in its appeal of the UM action. Accordingly, we conclude we lack jurisdiction to review the decisions of the trial court on the bad faith claim.

[¶ 31.] Acuity has also raised a number of other issues on appeal. We have carefully considered these issues and find them to be without merit. The decisions and rulings of the trial court were within the trial court’s sound discretion and were clearly supported by the law and the facts. Accordingly, as to the trial court’s rulings on the bad faith claim we conclude we have no jurisdiction. On all other issues, we affirm.

[¶ 32.] GILBERTSON, Chief Justice, and MEIERHENRY, Justice, and GORS, Circuit Judge, and ENG, Circuit Judge, concur.

[¶ 33.] LOVRIEN, Circuit Judge, for SABERS, Justice, disqualified.

[¶ 34.] GORS, Circuit Judge for KONENKAMP, Justice, disqualified.

[¶ 35.] ENG, Circuit Judge for ZINTER, Justice, disqualified.

      . The Hy-Rail System is equipment that when attached to a motor vehicle allows the vehicle to be driven on either railroad tracks or the public roadway.

      . Since the first element of collateral estoppel has not been satisfied, there is no need to consider the remaining two elements.

      . See SDCL 15-26A-3.

      . SDCL 15-26A-13 provides:

      An appeal from an intermediate order made before trial as prescribed by subdivision 15-26A-3(6) may be sought by filing a petition for permission to appeal, together with proof of service thereof upon all other parties to the action in circuit court, with the clerk of the Supreme Court within ten days after notice of entry of such order.

      . In addition to the issues discussed herein, Acuity claims on appeal:
      1. That the uninsured motorist endorsement in the automobile liability policy between Acuity and DM & E did not provide coverage for DM & E in the event one of its employees sustained injury as the result of the negligence of a third party.
      2. That the trial court should have granted Acuity's motions for directed verdict or in the alternative, its motions for judgment notwithstanding the verdict and new trial because the trial court:
      a. Allowed witness Barbara Radlinger's recorded recollection to be received in evidence under SDCL 29-26-9;
      b. Allowed expert witness Michael Selves to give his opinion;
      c. Allowed the jury to view a video tape showing the operation of Hy-Rail equipment;
      d. Found that sufficient evidence was presented at trial for the jury to find negligence on the part of the unidentified driver, and;
      e. Instructed the juxy on proximate cause rather than the specific language of the insurance policy and did not use a form of verdict requested by Acuity.


text:
    2006 SD 73
    Ezra PAULEY, Elizabeth J. Pauley, Gregory Allen Pauley, and Amy Hughes Pauley, Plaintiffs and Appellees, v. Mark J. SIMONSON and Mira M. Simonson, Defendants and Appellants.
    No. 23791.
    Supreme Court of South Dakota.
    Considered on Briefs May 23, 2006.
    Decided Aug. 9, 2006.

      Michael A. Jacldey of Jaekley & Flint, Sturgis, South Dakota, Attorneys for plaintiffs and appellees.
    John K. Nooney of Thomas, Nooney, Braun, Solay & Bernard, L.L.P., Rapid City, South Dakota, Attorneys for defendants and appellants.
   ZINTER, Justice.

[¶ 1.] Ezra Pauley and Elizabeth J. Pauley (Pauley) leased agricultural property to Mark J. Simonson and Mira M. Si-monson (Simonson). The lease included an option to purchase the property. When Simonson failed to make a lease payment, Pauley filed an action for forcible entry and detainer. After the circuit court determined that the disputed payment was required and that the lease was breached and terminated, both parties moved for summary judgment to determine whether the option to purchase survived. The circuit court concluded that the option to purchase was not severable, and therefore, the option did not survive the termination of the lease. Simonson appeals. We affirm.

Facts and Procedural History

[¶ 2.] Pauley owned agricultural land in Butte County, South Dakota. After expressing an interest in leasing the land, Simonson prepared a lease agreement and presented it to Pauley. The parties subsequently negotiated further terms of the agreement. The final agreement provided that Simonson would lease the land for $36,000 for the first year. Simonson was to pay Pauley $6,000 upon execution of the lease and make $10,000 payments on July 4, 2002, October 4, 2002, and January 4, 2003. After the first year, the annual lease was $40,000, and Simonson was required to make quarterly payments of $10,000 on January 4, April 4, July 4, and October 4 of each year. The lease was set to expire ninety days upon the last to die of Ezra and Elizabeth Pauley, unless it terminated under the terms of the agreement.

[¶ 3.] The final agreement also contained an option provision. The provision gave Simonson the option to purchase the property upon the last to die of Ezra and Elizabeth Pauley. The provision further provided that Simonson was to make a $4,000 nonrefundable payment for the option at the time the lease was executed.

[¶ 4.] Upon execution of the lease, Si-monson paid the first lease payment of $6,000 and, with a separate check, paid the $4,000 option payment. Simonson also made the three remaining $10,000 payments for the first year of the lease. However, Simonson failed to make the $10,000 payment on January 4 for the second year. Pursuant to Section XXIII of the lease, Pauley notified Simonson that he intended to terminate the lease for failing to make the payment. Pauley also filed the forcible entry and detainer action.

[¶ 5.] Following the forcible entry and detainer proceeding, the circuit court concluded that Simonson failed to make the $10,000 payment on January 4 for the second year of the lease, and the lease was terminated. Thereafter, both sides moved for summary judgment to determine whether the option to purchase was a separate and distinct contract that survived the termination of the lease.

[¶ 6.] Following a hearing on these motions, the circuit court concluded that the option to purchase was not severable from the lease, and therefore, the option did not survive the termination of the lease. This is the sole issue on appeal.

Decision

[¶ 7.] “Summary judgment is authorized ‘if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.’ ” Krier v. Dell Rapids Twp., 2006 SD 10, ¶ 12, 709 N.W.2d 841, 844-45 (citing SDCL 15 — 6—56(c)). “Once we determine that the material facts are undisputed, our review is limited to whether the law was correctly applied.” Id. (citation omitted). “We review questions of law de novo with no discretion given to the circuit court.” Wagner v. Brownlee, 2006 SD 38, ¶ 24, 713 N.W.2d 592, 600 (citing Blenner v. City of Rapid City, 2003 SD 121, ¶41, 670 N.W.2d 508, 514).

[¶ 8.] The interpretation of a contract is a question of law. Ziegler Furniture and Funeral Home, Inc. v. Cicmanec, 2006 SD 6, ¶ 14, 709 N.W.2d 350, 354 (citations omitted). This Court looks “to the language that the parties used in the contract to determine their intention.” Id. ¶ 16 (citation omitted). “If that intention is clearly manifested by the language of the [agreement], it is the duty of this [Cjourt to declare and enforce it.” Id. (citations omitted). However, if the contract “is uncertain or ambiguous,” parol and extrinsic evidence may be used for clarification. Jensen v. Pure Plant Food Intern., Ltd., 274 N.W.2d 261, 263-64 (S.D.1979). “[A] contract is ambiguous only when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement.” Ziegler Furniture, 2006 SD 6, ¶ 16, 709 N.W.2d at 355 (internal citations and quotations omitted). If the agreement is ambiguous, parol and extrinsic evidence may be utilized “to show what they meant by what they said, but not to show that the parties meant something other than what they said.” Jensen, 274 N.W.2d at 264 (citing Christiansen v. Strand, 81 S.D. 187, 193, 132 N.W.2d 386, 389 (1965)).

[¶ 9.] The parties agree that there are no genuine issues of material fact in dispute; therefore, this Court need only determine whether the circuit court correctly applied the law in concluding that the option was not severable from the lease. In Commercial Trust & Sav. Bank v. Christensen, 535 N.W.2d 853 (S.D.1995), we set forth the requirements for sever-ability. First, two preliminary requirements must be satisfied: “(1) the parties’ performances must be separable into corresponding pairs of part performances and (2) the parts of each pair must be regarded as agreed equivalents.” Id. at 857 (citing E. Allen Farnsworth, Contracts § 5.8, at 382 (2nd ed. 1990); Restatement (Second) of Contracts § 183 (1979)). These preliminary requirements highlight that “a distinguishing mark of a divisible contract is that the consideration is not single, but can be apportioned to correspond with separate consideration offered by the other party.” Id. (citations omitted). Second, courts may also consider two additional limitations “if part of the agreement offends public policy: (1) the agreement must not be an integrated scheme to contravene public policy and (2) the party seeking enforcement must not have engaged in serious misconduct.” Id. at 858 n2 (citation omitted). We need only address the two preliminary requirements in this case.

[¶ 10.] The circuit court concluded that the $4,000 consideration was not an agreed equivalent for the option. After analyzing a previous draft of the lease, the court concluded that there was “no equivalent value because the parties merely carved out the option payment from the annual lease payment.” Thus, the circuit court concluded that the $4,000 payment for the option was merely form over substance because it was, in reality, a part of the first quarterly lease payment. We agree.

[¶ 11.] Pauley and Simonson’s agreement does not address their intention regarding termination of the option upon default and termination of the lease. Section XXIII, which contains the landlord’s remedies upon default, merely provides that: “Landlord, either before or after reentry, may notify Tenant, if Tenant can be located, that he elects to terminate this Lease.” (Emphasis added.) However, the other terms of the agreement do not reveal whether “this Lease” meant the entire agreement, including the lease and the option, or just the lease. Thus, we turn to extrinsic evidence to clarify this ambiguity.

[¶ 12.] The record indicates that Si-monson sent Pauley an outline of a proposed lease agreement on February 5, 2002. This proposal, which was drafted by Simonson, provided that the annual lease would be $40,000. However, on March 13, 2002, Simonson sent Pauley a more formal second draft of the lease. This draft reduced the annual payment for the first year by $4,000 and added the provision that gave Simonson the option to purchase the property for $4,000. Simonson also sent Pauley a note with the second draft, which stated:

One important point: he made the first $10,000 payment split into a $6,000 lease payment plus a $4,000 option-to-purchase payment. He did this to ensure that my option to purchase will stand the test of time; otherwise, the executor of your estate would not be obligated to honor our agreement.

The drafts and this note reflect that although the parties intended to make the option binding on Pauley’s estate, the consideration for the option was merely a reallocation of the first quarterly lease payment. Considering the prior drafts as well as Simonson’s note, we agree with the circuit court that this did not evince equivalent value for both parts of the agreement, i.e., the consideration for the option was merely a part of the first quarterly lease payment.

[¶ 13.] Our decision today is supported by our holding in Commercial Trust. In that case, farm land was leased for a ten year period, and the agreement contained an option to purchase the property. Commercial Trust, 535 N.W.2d at 855. A subsequent addendum to the lease provided an option to extend “the lease for a period of twenty (20) years.” Id. The lessor’s successors subsequently questioned whether the agreement violated the twenty year limitation on the lease of agricultural land in SDCL 43-32-2. Id. at 855-56. The lessees argued that even if the agreement violated the statute and was invalid, the option to purchase was enforceable because it could “be severed from the invalid portion of the contract.” Id. at 857. This Court concluded that the option was not severable from the invalid lease because “when the lease was declared unenforceable, there was no separate consideration to support the continuation of the option [to purchase].” Id. at 858. This Court relied on the fact that the addendum merely “increased the purchase price o[f] the land by $1,000,” which the lessees “only promised to pay ... if they chose to exercise the option.” Id. Thus, “[t]he option itself was not supported by any additional consideration.” Id.

[¶ 14.] Similarly, in Mattson v. Rachetto, 1999 SD 51, 591 N.W.2d 814, this Court considered a contract for the sale of land that contained an agricultural leaseback provision. Id. ¶ 4. The contract was rescinded by the trial court on the ground of a mistake of law because neither party was aware that the leaseback was void under SDCL 43-32-2. Id. ¶¶5, 14. In determining whether the contract for sale was separate and distinct from the leaseback, this Court analyzed the language of the contract and concluded that, like the option in Christensen, the leaseback was inseparable because it was not supported by separate consideration. See id. ¶¶ 22-25.

[¶ 15.] This case is similar to Commercial Trust and Mattson because there was no separate consideration for the option to purchase the land. Rather, the two drafts and Simonson’s note reveal that the parties intended to enter into an agreement to lease the land for $40,000 per year and that the $4,000 option price was merely a part of the first quarterly lease payment. Because there was no separate consideration for the option, there were no agreed equivalents for the parts of each pair of part performances. Therefore, the preliminary requirements set forth in Commercial Trust are not satisfied, and the option to purchase cannot be severed from the invalidated lease.

[¶ 16.] Affirmed.

[¶ 17.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, and MEIERHENRY, Justices, concur.

      . Simonson made one payment of $10,000 on January 4, 2003. However, the trial court concluded that under Section IV of the lease, Simonson was required to make two payments of $10,000. Section IV provided:
      For the first year of this Lease, the rent shall be Thirty-six Thousand Dollars ($36,-000) with the payments to be as follows: Six Thousand Dollars ($6,000) upon the date of execution of this Lease; Ten Thousand Dollars ($10,000) on July 4, 2002; Ten Thousand Dollars ($10,000) on October 4, 2002; and Ten Thousand Dollars ($10,000) on January 4, 2003.

      After the first year of this Lease, the annual rental shall be Forty Thousand Dollars ($40,000) per year, paid in Ten Thousand Dollar ($10,000) quarterly installments due and payable on January 4, April 4, July 4, and October 4 of each year.
      (Emphasis added.)

      . Section XXIII provides:
      In the event Tenant should be in default of the performance of any terms, covenants or conditions of this Lease, Landlord may, in addition to every remedy now or hereafter available at law or in equity, have the rights and remedies herein set forth and the same shall be deemed cumulative and not exclusive of those available at law or in equily. Upon default Landlord shall have the right to re-enter the premises. Landlord, either before or after re-entry, may notify Tenant, if Tenant can be located, that he elects to terminate this Lease. Upon default Landlord shall have the right to take possession of all crops, both harvested and unharvested, the right to remove all property and persons from the leased premises, and the right to store in public warehouse at Tenant’s expense all property so removed.

      .A third trial was later held regarding damages.

      . SDCL 43-32-2 states, in pertinent part:
      No lease or grant of agricultural land for a longer period than twenty years, in which shall be reserved any rent or service of any kind, shall be valid.

      . The agreement provided:
      1) For and in consideration of the sum of Twenty-six Thousand Nine Hundred Fifty-nine Dollars and Fifty Cents ($26,959.50), [Sellers] agree to convey by Warranty Deed to [Purchasers] [Tract C]:

      2) For and in consideration of the agreement by [Sellers] to sell the above-described property to [Purchasers], [Purchasers] hereby lease to [Sellers] the above-described property.

        Mattson, 1999 SD 51, ¶24, 591 N.W.2d at 819.