One new decision by SD Supreme Court (Former employee prevails in dispute over non-compete agreement)

 

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

 

1. Former employee prevails in dispute over non-compete agreement.

 

DT-TRAK CONSULTING, INC. v. KOLDA, 2022 S.D. 50:  This is an intermediate appeal from the trial court’s ruling on cross-motions for summary judgment in regard to Plaintiff Employer’s action to enforce a non-compete agreement.  The trial court had denied both motions, holding that there were sufficient facts to allow the case to proceed before a jury.  The SD Supreme Court reversed and remanded, holding that the employee should have received a favorable summary judgment on Counts 1, 2, and 4.  The Court also notes that Plaintiff Employer “is no longer seeking relief under Count III of its Complaint.”  This decision is unanimous (5-0) with opinion authored by Justice Kern.

NOTE:  We are told in¶2 of the opinion that Plaintiff Employer is a “medical consulting firm and independent contractor” that “provides consulting services to hospitals and other medical providers, such as medical coding, compliance auditing, billing, medical staffing, workflow analysis, and other support services. DT-Trak alleges that it provides its services throughout the United States; specifically, that it has active contracts with clients in 19 states and potential clients or pending bids for clients in several other states.”

 

This decision may be accessed at

 

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

 

3 reversals by SD Supreme Court today, Opinions by Justice DeVaney

 

The SD Supreme Court handed down three decisions this morning:

 

1)    Post-divorce squabble addressed;

 

2)   Reversible error to dismiss claims involving members of LLC;

 

3)   Tort claim against employer denied.

 

Summaries follows:

 

FARMER v. FARMER and FIRST WESTERN V. LAKOTA LAKE CAMP, LLC and FARMER, 2022 S.D. 47: This decision addresses consolidated appeals in a post-divorce squabble for H & W who “acquired a significant amount of land in the Black Hills and formed multiple legal entities for the development and sale of the land.”  The 1^st and 47^th paragraphs of the Court’s decision are set forth here:

 

[¶1.] In this consolidated appeal, James Farmer challenges orders entered by two different circuit court judges related to his distributional interest in Lakota Lake Camp, LLC. James and Lakota Lake also challenge orders related to the release of funds to James’s wife, Lori Lieberman, previously held by the clerk of courts following an execution sale of property owned by Lakota Lake. We affirm in part, reverse in part, and remand for further proceedings.

 

[¶47.] Nevertheless, we need not decide at this juncture whether the collection court erred in denying Lakota Lake’s motion for release of funds because at the time Lakota Lake filed the motion with the collection court, the divorce court had already ordered that the funds be released to Lori. Having now concluded that the divorce court erred in ordering the release of the funds, the proper disposition of the excess sale proceeds remains to be determined. We therefore vacate the collection court’s order denying Lakota Lake’s motion and remand for further proceedings before the collection court related to the proper disposition of the funds at issue.

 

The Court’s decision is unanimous (5-0), with opinion authored by Justice DeVaney. 

 

MACH v. CONNORS, 2022 S.D. 48: The essence of this appeal is, as described in the opening paragraph, as follows:

 

[¶1.] A limited liability company and one of its members, Ronita Mach, brought suit against Toni Connors, who is also a member of the company. The complaint alleges claims for breach of fiduciary duty, breach of the duty of loyalty, breach of the duty of care, conversion, and unjust enrichment related to conduct allegedly occurring in connection with the ownership and operation of a pet grooming and bathing business. The circuit court dismissed the complaint for failure to state a claim upon which relief can be granted. The plaintiffs appeal. We affirm in part, reverse in part, and remand.

 

This opinion methodically reviews each of the various claims asserted – alleged breach of duty of loyalty, alleged breach of duty of care, alleged conversion, and alleged unjust enrichment – and holds that the trial court erred in dismissing each one. This opinion also holds that the Plaintiff’s claim for punitive damages was sufficiently pled as part of the conversion claim. 

 

This decision is unanimous (4-0), with opinion authored by Justice DeVaney.  Justice Salter did not participate. 

 

ALTHOFF v. PRO-TEC ROOFING, INC., 2022 S.D. 49:  Estate of employee brought this tort action against the employer, asserting that causation of the death of the employee was essentially an intentional tort, actionable outside the scope of Work Comp.  The trial court denied Employer’s motion for summary judgment.  Intermediate appeal was granted.  The SD Supreme Court reversed, holding that the “undisputed facts” fail to establish an intentional tort and that employer is entitled to summary judgment.  The Court’s ruling is unanimous (5-0), with opinion authored by Justice DeVaney.

 

These decisions may be accessed at

 

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

 

 

 

SD Supreme Court hands down 4 new decisions today

 

The SD Supreme Court handed down four decisions this morning:

 

1. Brule County real estate dispute resolved;

 

2. Brule County real estate dispute resolved;

 

3. Wind Energy Farm in NE South Dakota approved;

 

4. Wind Energy Farm in NE South Dakota approved.

 

Summaries follows:

 

HEALY RANCH v. HEALY, 2022 S.D. 43: The situation in this appeal is described in the first two paragraphs of the Court’s opinion, as follows:

 

[¶1.] This case arises under the South Dakota Marketable Title Act (SDMTA) as a quiet title action by Healy Ranch, Inc., (HRI), seeking to defeat a notice of claim filed by Bret Healy to certain real property in Brule County. HRI asserts that doing so will establish for itself marketable record title to the property. In its complaint, HRI also sought costs and attorney fees, alleging that Bret had filed the notice for the purpose of slandering title to the property. Bret filed a counterclaim in which he sought to quiet title to the property in the name of Healy Ranch Partnership (HRP).

[¶2.] The circuit court granted HRI’s motion for summary judgment, voiding Bret’s notice of claim, but denied HRI’s request for attorney fees. HRI appeals this latter decision, and by notice of review, Bret appeals the circuit court’s determination that HRI possesses marketable record title to the property. We affirm, but under a different analysis than the circuit court.

 

This decision is unanimous (5-0), with opinion authored by Justice Salter.  Circuit Judge Sogn sat on this case, in lieu of Chief Justice Jensen. 

 

HEALY RANCH v. MINES, 2022 S.D. 44: The situation in this appeal is described in the first paragraph of the Court’s opinion, as follows:

 

[¶1.] Healy Ranch Partnership (HRP) commenced this action to quiet title to a parcel of land located in Brule County. The complaint named multiple defendants, including the current possessors of the land, the previous possessors, and another member of HRP. The individuals currently in possession of the land filed a counterclaim, alleging they had acquired title through adverse possession. The circuit court decided motions to dismiss and for summary judgment adversely to HRP, determining that the current possessors of the land acquired title by adverse possession. HRP appeals. We reverse the court’s decision to grant the motion to dismiss but affirm its summary judgment decision quieting title in favor of the current possessors.

 

This decision is unanimous (5-0), with opinion authored by Justice Salter. 

 

CHRISTENSON v. CROWNED RIDGE WIND, LLC, 2022 S.D. 45:  South Dakota PUC granted Crowned Ridge a permit for construction of wind energy farm in NE South Dakota, over objection by area residents.  The Circuit Court affirmed.  The SD Supreme Court also affirmed. This decision is unanimous (5-0), with opinion authored by Justice Salter.  Circuit Judge Krull sat on this case, in lieu of Chief Justice Jensen.

 

CHRISTENSON v. CROWNED RIDGE WIND, LLC, 2022 S.D. 46: South Dakota PUC granted Crowned Ridge a permit for construction of large wind energy farm in NE South Dakota, over objection by neighboring residents.  The Circuit Court affirmed.  The SD Supreme Court also affirmed. This decision is unanimous (5-0), with opinion authored by Justice Salter.  Retired Justice Severson sat on this case, in lieu of Chief Justice Jensen.

 

These decisions may be accessed at

 

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

adverse ruling for lessee on right of 1st refusal

 

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

 

1. Adverse ruling for lessee attempting to enforce right of 1^st refusal

 

MCCOY v. MCCALLUM, 2022 S.D. 42:  This dispute concerns a right of first refusal extended by lessor to lessee for leased property, “the Gold Nugget Trading Post (Gold Nugget), a retail store for gift and tourist items” in Deadwood.  Lessor sold the leased property to a party other than lessee.  Lessee filed suit.  The trial court ruled favorably for the lessor, holding that the. “offer was bona fide, [that lessee] had been offered the right of first refusal,  and [lessee] did not exercise that right.”  Lessee appealed, asserting that the 1) offer was conditional upon circumstances beyond the control of lessee (financing for offeror) and, as such, was not bona fide, and 2) that lessee’s two offers made to lessor constituted an appropriate exercise of the right of refusal. The SD Supreme Court affirmed, stating:

 

[¶26.] We affirm the circuit court’s entry of summary judgment in favor of  [lessor] on Count III of [lessee’s] complaint, determining that [lessor] received  a bona fide offer to purchase from [offeror] and that [lessee] was given the same  opportunity to purchase the Leased Premises at the same price and on the same  terms as [offeror] and failed to exercise the option to purchase. We remand the case to the circuit court for further proceedings on the remaining claims in the complaint  and counterclaim.

 

This decision is unanimous (5-0), with opinion authored by Justice Myren.

 

This decision may be accessed at

 

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

 

 

8th Circuit Upholds Denial of Fireworks Permit @ Mount Rushmore

 

Today the 8^th Circuit handed down many decisions, one of which is from the D.S.D. 

 

This decision addresses the appeal by the State of South Dakota, supported by amici briefing filed by 16 additional states (Kansas, Alabama, Arizona, Arkansas, Indiana, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Tennessee, Texas, & West Virginia) in connection with the federal government’s (U.S. Secretary of Interior, National Park Service) decision denying a fireworks permit for the 4^th of July celebration at Mount Rushmore. 

 

Fireworks have been denied consistently for some 12 years, with the exception of 2020 (for which President Trump attended the celebration).  The State of South Dakota was denied permission in 2021.  Thereafter, the State of South Dakota instituted this action seeking injunctive and declaratory relief.  The trial court denied relief.  This decision vacates the trial court’s ruling (because it was moot when rendered) and dismisses this appeal.  In so doing, the 8^th Circuit opinion (authored by Judge Stras) states:

 

The bottom line is that we cannot change what happened last year, and South Dakota has not demonstrated that deciding this otherwise moot case will impact any future permitting decision. Any controversy has, in other words, fizzled out.

 

In support of the decision by the National Parks Service, the Cheyenne River Sioux Tribe intervened as a party Defendant/Appellee. 

The Court's decision may be accessed at 212542P.pdf (uscourts.gov) 

SD Supreme Court hands down 2 decisions today

 

The SD Supreme Court handed down two decisions this morning:

 

1)    Work comp claim for total permanent disability for PTSD and PCS denied;

 

2)   Mutual wills litigation resolved;

 

 

Summaries follows:

 

BAKER v. RAPID CITY REGIONAL HOSPITAL, 2022 S.D. 40: Employee was injured as a result of assaults by patients.  He made this work comp claim for permanent total disability, asserting that his head injuries generated PTSD (Post-Traumatic Stress Disorder) and PCS (Post-Concussive Syndrome).  The DOL denied his claim on the bases of 1) failure to show causation (that work injuries were a major contributing cause) and 2) failure to establish permanent total disability.  The circuit court reversed on causation and remanded.  On remand, the DOL awarded medical expenses but again denied permanent total disability.  Worker appeals denial of permanent total disability.  The SD Supreme Court affirmed, holding that evidence did not establish permanent total disability.  This decision is unanimous (5-0), with opinion authored by Chief Justice Jensen.  Retired Justice Konenkamp and Circuit Judge Vinberg-Wickre sat on this case, in lieu of Justices Kern and DeVaney, disqualified.

 

ESTATE OF SMEENK, 2022 S.D. 41: In 2017 H & W (Neil and Denise) “executed mutual wills” together with “an agreement that neither party would revoke their respective wills without the other’s consent.”  In 2019, H executed a new will without W’s consent.  H died.  This dispute deals with the aftermath.  The result at the trial level and on appeal is set forth in the opening paragraph of the opinion:

 

After Neil’s death, the circuit court ordered the 2019 Will to be probated and appointed Denise as personal representative of Neil’s estate (Estate). Denise filed a motion for approval and payment of claim (Motion) in her capacity as personal representative and sought specific performance of the Agreement [not to revoke without consent Denise’s consent]. The circuit court determined the Motion was not properly presented as a creditor claim and was untimely under the  nonclaim statute. However, the court considered the merits of the Motion and  determined that Denise was not entitled to specific performance. Denise appeals, arguing that the Motion was a timely and properly presented creditor’s claim and  that she is entitled to specific performance as the remedy for Neil’s alleged breach of  the Agreement. We conclude that the circuit court erred in determining that  Denise’s claim was not timely and properly presented but correctly ruled that  Denise was not entitled to specific performance. We therefore affirm in part and  reverse in part.

 

Details concerning the SD Supreme Court’s holding are also found in the final paragraph of the opinion:

 

[¶41.] The circuit court erred in determining that Denise failed to             substantially comply with SDCL 29A-3-804 in presenting the creditor claim within the time requirements of SDCL 29A-3-803, and we vacate the circuit court’s  findings of fact and conclusions of law from February 2, 2021, to the extent that  they are inconsistent with this opinion. However, the court properly considered  whether Denise could seek court approval of her request for specific performance of  he Agreement. We affirm the circuit court’s determination that Denise is not  entitled to the remedy of specific performance on her claim for the alleged breach of  the Agreement.  

 

This ruling is unanimous (5-0), with opinion authored by  Chief Justice Jensen. 

 

 

 

 These decisions may be accessed at

 

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

Non-resident UIM insurer held not subject to personal jurisdiction in SD

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

 

1. Non-resident UIM insurer is not subject to personal jurisdiction in SD simply because its non-resident insured is injured in SD

DAVIS v. OTTEN and MEEMIC INSURANCE, 2022 S.D. 39:  Michigan Passenger on motorcycle driven by another Michigan citizen sustained medical expenses and damages exceeding $300K in accident near Sturgis.  Passenger, receiving offer of  policy limit of $25K from other driver, is pursuing UIM and no-fault benefits under Passenger’s Michigan insurer.  Michigan insurer sought dismissal on basis of “lack of personal jurisdiction” in South Dakota.  Trial Court asserted personal jurisdiction.  The SD Supreme Court reversed, agreeing with Michigan insurer.  The issue, as framed and resolved in the concluding paragraph of the opinion is set forth here:

 

[¶27.] A South Dakota court’s exercise of personal jurisdiction over [the Michigan insurer] under these circumstances is improper under SDCL 15-7-2.  [A] court faced with the facts presented here cannot exercise personal jurisdiction over a non-resident insurer on the basis of a breach of contract claim between a non-resident  insured and non-resident insurer who has not engaged in significant activities  within the state.  As such, the minimum contacts necessary to support the exercise of personal jurisdiction in accordance with due process requirements are not satisfied.

 

This ruling is unanimous (5-0), with opinion authored by Justice Kern.

 

 

This decision may be accessed at

 

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