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had been repealed in 2000 and that, as a result of its repeal, attorney fees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
