$45 Million Bad Faith Verdict Reversed, and 3 other decisions by SD Supreme Court today

The SD Supreme Court handed down four decisions this morning, holding inter alia: 

1)    State has no right of appeal from dismissal of Counts;

2)   Engineer loses claim against City for work as employee;

3)   State agencies are immune from EB5 litigation;

4)   $45 million bad faith verdict reversed and remanded

Summaries follow:

STATE v. STEFFENSEN, 2020 S.D. 36:  This decision is adverse to the State, holding that the state has no right of appeal in regard to the dismissal of counts in an indictment/information.   The disposition in this case is nicely summarized in ¶1:

The State filed a separate notice of appeal as to each of three jointly indicted defendants from a trial court order dismissing certain counts of the indictment against them. We consolidate the three appeals for disposition in this decision. Because the State has no right of appeal from the dismissal of counts of an indictment or information, the appeals are dismissed.

This decision is unanimous, with opinion by Justice Kern.  (This decision is handed down less than 2 months after submitted to the court on April 30, 2020.)

KOOPMAN v. CITY OF EDGEMONT, 2020 S.D. 37:  This suit originated in small claims court as an action by an engineer against the City of Edgemont for benefits due him as an employee.  The trial court awarded engineer $11,372.28 plus interest of $4,651.87, but denied him attorney fees. Both sides appealed.  The SD Supreme Court ruled for the City on the appeal, reversing the cash award.  The SD Supreme Court also affirmed the denial of attorney fees since the engineer was defeated on his claim for wages.  NOTE:  The trial court was required to wrestle with the problematic issue that SDCL 60-11-24 only authorized attorney fees on wage claims removed for a jury trial under SDCL 15-39-59, which had been repealed – an issue removed on appeal because of the SD Supreme Court’s ruling for the City on the underlying wage claim.

This decision is unanimous, with opinion authored by Justice Jensen.  (This decision is handed down about 2 months after submitted to the court on April 20, 2020.)

LP6 CLAIMANTS v. S.D. DEPT OF TOURISM, 2020 S.D. 38:  This case is neatly summarized in ¶1:

A group of investors in the EB5 immigrant investment program sued various agencies that implemented the program in South Dakota, claiming fraud in procuring their investments, which were lost when the project went bankrupt. The circuit court granted a motion to dismiss by the state agencies involved based on sovereign immunity. The investors appeal the circuit court’s decision, and we affirm.

This decision is unanimous with opinion authored by Chief Justice Gilbertson.  Retired Justice Wilbur sat on this case, in lieu of Justice DeVaney.  .  (This decision is handed down about 2 months after submitted to the court on April 21, 2020.)

JOHNSON v. UPS, 2020 S.D. 39:  The SD Supreme Court reverses and remands jury verdict for plaintiff on bad faith claim in the amount of $500,000 for bad faith, $2,750 on "conversion" claim, and $45 million in punitive damages.  This bad faith claim arose in the contest of work comp proceeding.  The concluding paragraph of the Court’s opinion, ¶ 57 states:

The circuit court correctly determined that the Appellants lacked a reasonable basis for terminating Johnson’s medical benefits because her claim to continued benefits was not fairly debatable. However, the court’s subsequent decision to extend its fairly debatable ruling into a broader prohibition of any argument or evidence suggesting that the Appellants knew they lacked a reasonable basis for terminating Johnson’s benefits was erroneous. The error led to the exclusion of relevant evidence and incorrect jury instructions that impacted the jury’s verdict. Under the circumstances, the Appellants were prejudiced. The judgment for Johnson is reversed, and the case is remanded to the circuit court for retrial.     

This decision is unanimous (5-0) with opinion by Justice Salter.  Circuit Judge Means sat on this case which was presented to the Court prior to the appointment of Justice DeVaney. 

These decisions may be accessed at

http://ujs.sd.gov/Supreme_Court/opinions.aspx .

3 new decisions today, SD Supreme Court

The SD Supreme Court handed down two decisions this morning, holding inter alia: 

1)    Summary judgment on real estate agreement reversed;

2)   Summary judgment on employee’s wrongful termination lawsuit affirmed;

3)   Trial Court’s suppression of evidence order reversed by virtue of attenuation doctrine.

Summaries follow:

HANNA v. LANDSMAN, 2020 S.D. 33: This opinion reverses the trial court’s grant of summary judgment.  The nature of this dispute and disposition by the lower court and the SD Supreme Court’s reversal is nicely summarized in ¶ 1 of the opinion:

In this breach of contract case, the circuit court granted summary judgment to the defendant, concluding that the alleged agreement relating to the transfer of real property was unenforceable because it was for an unlawful purpose, lacked consideration, and violated the statute of frauds. The plaintiff appeals, and we reverse and remand.

This decision is unanimous with opinion authored by Justice DeVaney.

HENNING v. AVERA MCKENNAN, 2020 S.D. 34: This opinion affirms the trial court’s grant of summary judgment.  The nature of this dispute and disposition by the lower court and the SD Supreme Court’s reversal is nicely summarized in ¶ 1 of the opinion:

Avera McKennan Hospital terminated Stephanie Henning, a nurse in its intensive care unit, after it discovered errors in Henning’s documentation of controlled substances. Henning brought suit against Avera alleging multiple claims including: wrongful discharge, breach of contract, and defamation. The circuit court granted Avera summary judgment on all claims. Henning appeals, and we affirm.  

This decision is unanimous with opinion authored by Justice DeVaney.

STATE v. MOUSSEAUX, 2020 S.D. 35: The trial court sustained the Motion to Suppress filed by Defendant facing possession of meth and a related charge.  The SD Supreme Court reversed on the basis of the attenuation doctrine which is an exception to the 4^th Amendment’s exclusionary rule.  In this case the attenuation doctrine was triggered by the police officer’s discovery of “an outstanding, unrelated traffic warrant.”  The Court’s decision is unanimous, with opinion authored by Justice Kern.

These decisions may be accessed at

http://ujs.sd.gov/Supreme_Court/opinions.aspx .

Attorney Fees denied on successful claim for unpaid wages, Supreme Court divided 2-1-2

The SD Supreme Court handed down one decision this morning, holding inter alia: 

'

   Attorney fees denied on successful claim for unpaid wages by divided Supreme Court in 2-1-2 opinion

Summary follows:

GOIN v. HOUDASHELT, 2020 S.D. 32: This dispute originated in small claims court as a claim for unpaid wages.  The Defendant removed the small claims action to Circuit Court. The Circuit Court found for the Plaintiff, awarding $215. The Circuit Court also awarded Plaintiff $10,850.09 for her attorney fees, pursuant to SDCL 60-11-24 which provided at the time,

“In any action for wages brought in small claims court which is removed to magistrate court or circuit court under § 15-39-59, the court may, in addition to awarding judgment to the plaintiff, allow costs of the action including reasonable attorney fees to be paid by the defendant.”

Subsequently, the Circuit Court realized that the cross-referenced statute, § 15-39-59, had been repealed in 2000 and that, as a result of its repeal, attorney fees were not available. 

The SD Supreme Court affirmed.  Additionally, the Plaintiff’s request for appellate attorney fees was denied. 

The Court’s affirmance comes about in a 2-1-2 decision, with 3 Justices voting to affirm.  Chief Justice Gilbertson authored an opinion in which Justice Jensen fully concurs. Justice Salter concurs in the result but filed a separate opinion.

Justice DeVaney filed a dissenting opinion, in which Justice Kern concurs. 

Chief Justice Gilbertson’s opinion accepts the anomaly that attorney fees would have been awardable had the case been tried to a jury, recognizing in ¶19:

This Court’s repeal of SDCL 15-39-59 did not nullify the Legislature’s allowance of attorney fees under SDCL 60-11-24 when a wage claim is removed from small claims court for a jury trial.  This action was removed for a bench trial.        

The dissenting opinion states in ¶48:

Considering this reality, it is unreasonable to interpret SDCL 60-11-24 to allow attorney fees only when a jury trial is ultimately held. It is well settled that we presume “the [L]egislature did not intend an absurd or unreasonable result.” [citing prior cases].  The majority opinion’s suggestion—that the Legislature intended to force wage claimants to play the hand out after removal by insisting on jury trials over more cost-effective court trials or settlements to avoid forfeiting their ability to recoup considerable costs already expended in discovery and pretrial practice—is contrary to the overall purpose of SDCL chapter 60-11. Moreover, this suggestion is clearly not tied to the express language in SDCL 60-11-24. As [Plaintiff] points out, were it not for the ability to recover attorney fees, employers would have an incentive to litigate these claims out of existence, and wage claimants would be unable to obtain legal counsel because it would be too cost prohibitive to litigate cases that are unlikely to generate a recovery sufficient to cover the litigation costs.

The dissent also accepts the trial court’s initial determination as to the reasonableness of $10,850.09 for Plaintiff’s attorney fees and would impose that assessment.

This decision may be accessed at

http://ujs.sd.gov/Supreme_Court/opinions.aspx .

Prison Fairness for South Dakota

We are looking for folks to join our ranks regarding Prison Fairness in South Dakota. We are seeking relief for prison overcrowding, relief for those receive inappropriate and lengthy sentences, relief for those serving sentences for manslaughter and who are automatically denied parole.  If you would like to join our ranks, please send an e-mail message to Roger.Baron@usd.edu

Two Decisions by SD Supreme Court this morning

The SD Supreme Court handed down two decisions this morning:

1)    Dispute over video billboards in Rapid City;

2)   Petitioners for supervision of judicial trust may challenge validity of trust

Summaries follows:

LAMAR ADVERTISING OF SOUTH DAKOTA, L.L.C. v. CITY OF RAPID CITY, 2020 S.D. 30:  This is a dispute between two advertising agencies regarding certain video billboards in Rapid City.  This dispute is summarized in ¶1 of the opinion as follows:

In this appeal, Lamar Advertising contends that the circuit court erred in failing to declare that the City of Rapid City unlawfully bargained away its police power when it entered into a settlement agreement with Epic Outdoor Advertising under which the City agreed to amend certain sign code ordinances and grant Epic two sign permits. By notice of review, Epic asserts the circuit court erred in denying Epic’s request that the court declare invalid a similar settlement agreement previously executed between Lamar and the City. We affirm.

This decision is unanimous, with opinion authored by Justice DeVaney.  Circuit Judge Maher sat on this case, in lieu of Justice Kern. 

MATTER OF CARVER REVOCABLE TRUST, 2020 S.D. 31:  In this proceeding which was instituted for the purpose of securing “judicial supervision of the trust under SDCL 21-22-9,” the circuit court refused to adjudicate the validity of the original trust as requested by Petitioners – interpreting, “SDCL 55-4-57(a)(1) in conjunction with SDCL 21-24-7 to mean that a petition for judicial supervision is not sufficient to commence a challenge to the validity of a trust” and that Petitioners had been “required to commence their trust challenge by service of summons within one year after [decedent’s] death.”   The SD Supreme Court reversed, holding in ¶ 36:

Because a circuit court may consider the validity of a trust in a petition for judicial supervision under SDCL chapter 21-22, the McFarlands’ petition, filed pursuant to SDCL 21-22-9, which included a request that the circuit court determine the validity of the various trust amendments, properly commenced a judicial proceeding as contemplated by SDCL 55-4-57(a). The McFarlands’ trust challenge was timely because they filed their petition within the one-year timeframe after Russell’s death. Therefore, the circuit court erred when it dismissed the portion of the McFarlands’ petition requesting that the circuit court determine the validity of the trust or its amendments.

This decision is unanimous with opinion authored by Justice DeVaney. 

These decisions may be accessed at

http://ujs.sd.gov/Supreme_Court/opinions.aspx .