SD Supreme Court Addresses Contracts for State Legislators

 

 

NOTE:  This case was orally argued yesterday.

 

The SD Supreme Court handed down one decisions this afternoon, holding, inter alia:

 

1. Contracts for State Legislators Addressed;

 

 

Summary follows:

 

IN THE MATTER OF THE INTERPRETATION OF SOUTH DAKOTA CONSTITUTION AND STATE LAW RE: STATE LEGISLATOR’S INTEREST IN STATE OR COUNTY CONTRACTS, 2024 S.D. 11:

 

The Court’s decision is authored by Chief Justice Jensen.  Justice Kern provided a separate opinion, dissenting in part.

The Court’s Final Conclusion, as expressed in ¶¶ 63-64 is as follows: 

 

Conclusion

 

[¶63.] This case presents an appropriate instance to exercise our advisory opinion jurisdiction under Article V, § 5. The current state of our decisional law concerning Article III, § 12 is not sustainable. Our holdings in Asphalt Surfacingand Pitts, which equated general appropriation for ordinary and current expenses with legislative authorization to enter into specific contracts, are contrary to well[1]established constitutional limits on general appropriation legislation set out inArticle XII, § 2 and our cases. These holdings expressed in Asphalt Surfacing and Pitts are, therefore, overruled.

 

[¶64.] Our answer to the Governor’s restated question whether Article III, § 12 prohibits all contracts between legislators and the State is: No, it does not. The ontract restriction stated in Article III, § 12 is not a categorical bar on all contracts funded by the State. Instead, it prohibits a legislator, or former legislator within one year following the expiration of the legislator’s term, from being interested, directly or indirectly, in contracts that are authorized by laws passed during the legislator’s term. The purpose and effect of general appropriation legislation is restricted to simply allocating money to fund state government; it does not, itself, authorize specific contracts relating to ordinary or current expenses.

 

Justice Kern filed a separate opinion in which she expresses a dissent in part and a concurrence in part.  Justice Kern’s view, as articulated in ¶67, is as follows:

 

[¶67.] I respectfully dissent from the portion of the majority opinion which overrules decades of established precedent to exempt general appropriations from Article III, § 12 of the South Dakota Constitution. This approach disregards the constitutional text and may ultimately prove difficult to interpret as the majority opinion adopts a capacious understanding of interest, prohibiting legislators from having any interest whatsoever—no matter how indirect or attenuated—in contracts authorized by special appropriations. Nevertheless, I join the majority opinion’s important holding that Article III, § 12 applies to “law[s] passed duringthe legislator’s term. . . not merely. . . laws for which the legislator cast a vote.” (Emphasis added.) Additionally, although I agree that the circumstances surrounding the Governor’s request indeed constitute a solemn occasion under Article V, § 5, which permits this Court to exercise our original jurisdiction, I question whether the submitted interrogatories present “important questions of law involved in the exercise of [her] executive power.” Rather, they seem more akin to questions from legislators regarding their individual concerns, which is not properly within the purview of an advisory opinion. See S.D. Const. art. V, § 5.

 

This decision may be accessed at

 

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

Five Decisions by the SD Supreme Court today

 

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

 

1. City of Sturgis rebuffed;

 

2. New decision on Tax Deed dispute;

 

3. “Use tax” dispute resolved;

 

4. Health Plan must allow other providers to participate;

 

5. Sellers prevail in dispute with Realtor.

 

Summaries follows:

 

BOHN v. BUENO, 2024 S.D. 6: This dispute involves the City of Sturgis and an effort to remove the position of City Manager from City Government.  Upon receipt of a petition with 900 signatures, Sturgis City officials refused to certify an election.  The trial court refused to issue a mandamus requiring the election.  The SD Supreme Court reversed, stating:

 

Because a petition to remove the city manager position was presented to the city council, and the petition requested an election on the proposition of employing a city manager, the city council had a clear duty to schedule an election. We remand to the circuit court to enter a writ of mandamus directing the city council to schedule and hold an election consistent with SDCL 9-10-1 as presented in the petition.

 

This decision is unanimous (5-0), with opinion authored by Justice Myren. Justice DeVaney filed a separate concurring opinion.  Petitioning Citizens were denied appellate attorney fees (because not authorized by statute or other authority), but were awarded costs.

 

BIALOTA v. LAKOTA LAKES, LLC, 2024 S.D. 7:  (NOTE: the Court handed down a written decision in this dispute on 10/25/23, but subsequently withdrew the opinion, granted a rehearing, and rendered this decision today.)  Trial court set aside a tax deed issued by Pennington County, at the request of the title owner of the real estate, accepting the title owner’s argument that proper notice had not been delivered.  The SD Supreme Court reversed and remanded, upholding the tax deed.  The Court’s ruling is 3-2, with majority opinion authored by Chief Justice Jensen upon reassignment.  Justice Kern filed a dissenting opinion, in which Justice DeVaney joined.

 

ELLINGSON DRAINAGE v. DEP’T OF REVENUE, 2024 S.D. 8:  This is a contest regarding South Dakota’s use tax.  The dispute, its history and result on appeal are described in the opening paragraph of the opinion, as follows:

 

[¶1.] The South Dakota Department of Revenue (DOR) imposed a use tax on Ellingson Drainage, Inc. (Ellingson), after an audit revealed it had not paid use tax on equipment used in 30 South Dakota projects but purchased elsewhere. Ellingson filed an administrative appeal challenging the constitutionality of the tax, but the appeal was dismissed because the claim was deemed not cognizable in an administrative forum. Ellingson then appealed to the circuit court, which affirmed the imposition of the tax, holding it did not violate the Due Process Clause of the Fourteenth Amendment or the Interstate Commerce Clause, as applied to Ellingson. Ellingson appeals, and we affirm.

 

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

 

ORTHOPEDIC INSTITUTE, ET AL v. SANFORD HEALTH PLAN, INC., 2024 S.D. 9: This is an action by humerous health care providers, seeking a declaratory judgment that they should be permitted to participate as “any willing provider” (pursuant to SDCL 58-17J-2) under Sanford Health Plan.  The trial court ruled for the providers.  The SD Supreme Court affirmed. This decision is unanimous (5-0) with opinion authored by Chief Justice Jensen, stating:

 

[¶1.]  The [trial] court determined that SDCL 58-17J-2 does not permit SHP to exclude a fully qualified and willing health care provider from participating as a panel provider in every health benefit plan offered by SHP. We affirm.

 

Circuit Judge Lovrien participated in this decision, in lieu of Justice Salter.

 

UHRE REALTY v. TRONNES, 2024 S.D. 10: This is a dispute between the Sellers and Realtor and the Realtor’s related Property Management Company.  The trial court ruled for Sellers (except on their claim for tortious interference) and awarded attorney fees to the Sellers.  The SD Supreme Court affirmed the victory for Sellers but reversed the attorney fee award.  This decision is unanimous (5-0), with opinion authored by Justice Salter.

 

These decisions may be accessed at

 

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

 

Trustees protected against claim of imprudent investment

 

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

 

1)    Trustees protected against claim of imprudent investment;

 

 

Summary follows:

 

REDLIN TRUST v. FIRST INTERSTATE BANK, 2024 S.D. 5: Daughter of deceased trustor brought suit against  co Trustees (her brother and a bank) for imprudent handling of funds.  Some $3 million in cash assets were simply deposited in a money market account, earning only modest interest income.  Daughter proceeds on numerous theories including breach of fiduciary duty, gross negligence, & bad faith.  The trial court granted summary judgment for the Defendant Trustees, relying, inter alia, on the provision of the trust instrument which established a waiver of the Prudent Investor Rule.  The SD Supreme Court affirmed.  This decision is unanimous (5-0) with opinion authored by Justice Kern.

 

These decisions may be accessed at

 

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

Consecutive Sentencing Upheld in Criminal Conviction Appeals

 

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

 

1. Consecutive sentencing for drug offenses upheld;

 

2. Consecutive sentence for 3^rd degree rape upheld

 

Summaries follows:

 

STATE v. STEVENS, 2024 S.D. 3: Defendant was convicted, by jury, of drug offenses and sentenced to 1 year, 5 years and 10 years, to run consecutively.  The state’s primary witness was Defendant’s “former roommate and fellow methamphetamine user, testified for the State in exchange for immunity.” Defendant’s appeal is premised upon “the circuit [court’s failure to] give corroboration or cautionary accomplice jury instructions” in regard to the roommate’s testimony and the assertion of ineffective assistance counsel in regard to his trial counsel’s “for failing to propose accomplice testimony instructions.”  Since the 1^st issue was not preserved for appeal at trial, this appeal is addressed under the plain error standard of review.  The SD Supreme Court affirmed the trial court, holding that trial counsel’s effective cross-examination of the roommate foreclosed the issue of “prejudice” need for reversal on the basis of plain error. The holding in regard to lack of prejudice further dictates a rejection of the ineffective-assistance-of-counsel  assertion.  The Court’s ruling is unanimous (5-0) with opinion authored by Chief Justice Jensen.  Justice Salter filed a concurring opinion in which he opined , “I do not believe that absence of a corroboration instruction should be categorically regarded as error, plain or otherwise.”  NOTE: the rule that the testimony of an accomplice requires corroborating evidence is found in SDCL 23A-22-8 which is cited and discussed in both opinions.

 

STATE v. HORSE, 2024 S.D. 4: Defendant was convicted, by jury, of 3^rd degree rape and was sentenced, “to serve twenty years in the penitentiary, consecutive to a sentence he was already serving.” Defendant’s appeal raises three (3), “issues involving the validity of a search warrant for location data from his phone, comments made during trial by the State about the victim’s motivation to testify, and opinion testimony given by the detective who investigated the case.”  The SD Supreme Court rejected all three issues and affirmed the lower court. This ruling is unanimous (5-0) with opinion authored by Justice Kern.

 

These decisions may be accessed at

 

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

 

 

Taxpayer Denied refund of overpayment; McCook County Ordinance divides Justices 3/2

 

The SD Supreme Court handed down two decisions this morning:

 

1. Taxpayers request for refund of overpayment denied under “make whole” doctrine;

 

2. McCook County Zoning Ordinance divides Justices 3/2.

 

Summaries follows:

 

MCLANE WESTERN, INC. v. S.D. DEPARTMENT OF REVENUE, 2024 S.D. 1: Taxpayer is a wholesaler of tobacco products in South Dakota.  Through a miscalculation, Taxpayer overpaid its sales tax obligation by some $530,000.  Taxpayer sought a refund from the SD Dept. of Revenue (DOR).  DOR eventually denied the request.  After a contested hearing before the Office of Hearing Examiner, the DOR’s denial was confirmed.  Appeal to the Circuit Court also resulted in an affirmance.  On appeal, the SD Supreme Court agreed with the taxpayer that it had overpaid the required sales tax, thereby disagreeing with the DOR and lower court.  Nonetheless, the Taxpayer was denied relief on appeal because it had passed the overpaid tax obligation on to its purchasers and had been “made whole” in regard to the obligation. The Court stated in ¶¶ 15-16:

 

[¶15.] Because McLane calculated the tax it owed based on the higher  price it paid to UST Sales, it overpaid the tobacco taxes due under SDCL 10-50-61. The Department erred in concluding otherwise.

 

[¶16.] However, this does not mean that McLane was entitled to a refund for these overpaid amounts.  Although McLane overpaid its advance tax obligation, it fully recovered the advance tax it paid from the dealers to whom it subsequently sold the OTP.  McLane was made whole by its resale of the OTP and is not entitled to any refund. On this basis, we affirm the Department’s denial of McLane’s request for a refund.

 

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

 

STOCKWELL v. MCCOOK COUNTY BOARD OF COMMISSIONERS, 2024 S.D. 2:  This dispute involves the interpretation of a County Zoning Ordinance in McCook County which was enacted in 2014.  BACKGROUND:  In 1999, Landowner had sought to re-zone some 5 platted lots (ranging in size from 3.8 to 5.4 acres) from agricultural to rural residential.  The county officials approved the request at that time, but that decision was overturned by an election in the County, initiated by County Residents.  In 2022, Landowner made a 2^nd Zoning request, arguing that the plain language of the County’s 2014 Zoning Ordinance in fact permitted “single family dwellings” in land previously zoned as agricultural for “lots of record.”  The County Officials and the Trial Court ruled against the Landowner, holding the history and overall effect of the 2014 Ordinance was intended to grandfather in the prior determination.  The SD Supreme Court reversed, stating:

 

[¶23.] The circuit court erred by deviating from these well-established rules of statutory construction in favor of its effort to ascertain what it believed to be the broader “intent of the zoning regulations.” In so doing, the court failed to apply the unambiguous text of the 2014 ordinance, which the court acknowledged made clear that Stockwell’s lots were, indeed, lots of record

 

[¶35.] The 2014 ordinance’s lot of record definition unambiguously refers to the effective date of the 2014 ordinance. Despite recognizing that Stockwell’s lots satisfy this definition, the circuit court erroneously supplanted a plain application of the text with a determination of the BOC’s intent to hold Stockwell’s lots were in fact not buildable. We reverse.

 

The Court’s decision is a 3/2 ruling.  Justices DeVaney and Kern dissent, with the dissenting opinion authored by Justice DeVaney. 

 

These decisions may be accessed at

 

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

 

City of Wall exonerated; 2 criminal convictions affirmed, 2 family law disputes resolved

 

The SD Supreme Court handed down five decisions this morning:

 

1. 1^st degree rape conviction affirmed;

 

2. City of Wall exonerated:

 

3. Defense of lack of personal jurisdiction preserved adequately;

 

4. Child dependency exemption clarified; and

 

5. LWOP sentence for 2^nd Degree Murder affirmed.

 

 

Summaries follows:

 

STATE v. CARTER, 2023 S.D. 67: Defendant was convicted by jury of 1^st degree rape and sentenced to 45 years in prison, with 25 years suspended.  The SD Supreme Court Affirmed, rejecting the following assertions of error made on appeal:

 

1. Whether the circuit court abused its discretion when it allowed the State to publish to the jury three short videos of child pornography.

2. Whether the circuit court abused its discretion when it refused to allow Carter’s expert the opportunity to testify as to the reliability of the NAAT testing.

3. Whether the circuit court’s decision to admit E.W.’s unsworn statements into evidence was an abuse of discretion and violated Carter’s right of confrontation.

4. Whether the circuit court erred by denying Carter’s motion for judgment of acquittal on the grounds of insufficient evidence.

5. Whether Carter’s trial counsel was so ineffective that Carter was denied his due process right to counsel.

 

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

 

LOVE’S TRAVEL STOPS v. CITY OF WALL, 2023 S.D. 68: The City of Wall secures relief from the trial court’s orders of mandamus and contempt in connection with an effort by Love’s Travel Stops to build a facility in Wall.  The dispute and its history are described in the first 2 paragraphs of the Court’s Opinion, as follows:

 

[¶1.] Love’s Travel Stops & Country Stores, Inc. (Loves) entered into a conditional agreement to purchase property in Wall, South Dakota (City). Loves applied to rezone the property and sought a building permit to develop a new travel stop on the property. After the City Council denied these requests, Loves filed a petition for writ of mandamus, writ of certiorari, and request for declaratory relief with the circuit court. The circuit court granted Loves’ petition in part (Mandamus Order) declaring that the City’s Zoning Ordinance did not apply to the subject property and granted mandamus relief requiring the City to reconsider Loves’ application for a building permit after it “review[ed] and determine[d] whether any member of the City Council is disqualified” from considering Loves’ application under SDCL 6-1-17. Neither party appealed the circuit court’s ruling.

[¶2.] The City Council subsequently conducted a conflict-of-interest analysis and determined that no member was disqualified from considering Loves’ application under SDCL 6-1-17. Thereafter, the City Council reconsidered and again denied Loves’ building permit application. Following the denial, Loves filed a motion for order to show cause requesting the circuit court to find the City in contempt of the court’s order and sought issuance of a building permit. The circuit court found the City to be in contempt for willfully and contumaciously disobeying its Mandamus Order and ordered the City to issue Loves a building permit. The City appeals the circuit court’s contempt order. We reverse.

 

The Court’s holding is unanimous (5-0) with opinion by Chief Justice Jensen and is explained in the concluding paragraph, set forth here:

 

[¶35.] While the circuit court erred in the first instance in finding the City in contempt of its mandamus order, the circuit court’s remedy also exceeded its authority by imposing a punitive, rather than coercive civil contempt remedy. Therefore, for the reasons stated above, we reverse the circuit court’s finding of contempt and the order issuing a building permit to Loves.

 

ENGEL v. GEARY, 2023 S.D. 69: Defendant Husband (in California) was sued for divorce in South Dakota. Through a pro se’ affidavit, Defendant Husband asserted, inter alia, lack of personal jurisdiction.  The trial court conducted hearings and rendered a divorce decree and orders relating to division of property, including “specific directives as it relates to the parties’ property, including bank accounts and debts.” The SD Supreme Court reversed and remanded, holding as follows:

 

[¶32.] We therefore conclude that the circuit court erred when it entered orders relating to the division of property and when it imposed obligations on Geary personally. On remand, the circuit court is directed to vacate these directives from the judgment and decree of divorce.

 

The SD Supreme Court held that while the defense of personal jurisdiction is easily waived, the Defendant’s pro se’ affidavit was adequate to preserve it, notwithstanding the fact the words “personal jurisdiction” were not specifically set forth in it.   The decision is unanimous (5-0), with opinion authored by Justice DeVaney.

 

ERICKSON v. ERICKSON, 2023 S.D. 70: This is post-divorce dispute involving the Mother’s entitlement to declare the parties’ children as “depcndents” on her income tax filings.  The underlying stipulation, upon which the divorce decree was granted, is ambiguous.  The trial court modified the divorce decree to as to clearly favor Mother.  The trial court additionally awarded Mother attorney fees stating, “[w]e shouldn’t be here, and [Mother] shouldn’t have to pay for it. [Father] tried to take advantage of the situation, and he should have to pay for it.”

 

The SD Supreme Court affirmed the trial court’s modification of the divorce decree, but reversed and remanded on the issue of attorney fees.  The closing paragraph of the opinion, which explains the ruling, is set forth below:

 

[¶44.] Though the case did not implicate Rule 60(b), the circuit court, nevertheless, possessed authority to clarify its own judgment. Because the Agreement was ambiguous, the court could properly consider parol evidence, and its factual determination that the parties intended to allow Tara to claim the children as dependents was not clearly erroneous; nor was its related conclusion that the Agreement should have been written to allow Tara to claim the children as dependents. As a result, the court’s determination that Tara did not deliberately violate the court’s order was equally supportable. However, the court did not make the required findings of fact to support its award of attorney fees. Therefore, we affirm in part, reverse in part, and remand for further proceedings.

 

This decision is unanimous (5-0) with opinion authored by Justice Salter.  It should also be noted that the SD Supreme Court declined the opportunity to award Mother appellate attorney fees.

 

STATE v. RICHARD, 2023 S.D. 71: Defendant was found guilty by jury of 2^nd Degree Murder and sentenced to Life without Parole.   The SD Supreme Court affirmed.  This decision is unanimous (5-0) with opinion authored by Justice Salter. 

 

This decision addresses two issues urged on appeal:  1) the trial court’s refusal to grant Defendant’s Motion In Limine seeking to prohibit the state from introducing evidence of his gang affiliation; and 2) the trial court’s refusal to grant a mistrial when it because apparent that the State had not complied with a specific order of the trial court to provide Defendant with all expert reports. 

 

As to issue # 1, the Court held that the trial court’s ruling was within its discretion. 

 

As to issue # 2, the Court stated, “Here, the State complied with its statutory obligations, but it does not appear it complied with the circuit court’s specific discovery order which required it to produce copies of all expert reports.”  The Court next proceeded to hold that the Defendant had failed to establish prejudice as a result of the non-disclosure.

 

These decisions may be accessed at

 

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

SD Supreme Court holds Injured Motorist has actionable claim against DOT

 

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

 

1. Injured motorist has actionable claim against DOT

 

MCGEE v. SPENCER QUARRIES, INC., 2023 S.D. 66:  Plaintiff was injured when he “rolled his pickup while driving on a portion of Highway 45 that was being resurfaced.”  He filed suit against “the contractor responsible for the resurfacing project and against the South Dakota Department of  Transportation (DOT) and several DOT employees.”  This decision pertains only to Plaintiff’s claims against the DOT and its employees.  The trial court denied the DOT’s Motion for Summary Judgment premised, inter alia, on sovereign immunity.  The SD Supreme Court granted an intermediate appeal and, in this decision, the Court affirms the trial court’s holding that Plaintiff may proceed against the DOT and its employees.  The Court holds that a portion of the DOT’s Standards impose a ministerial duty, the breach of a portion of which is actionable.  The Court holds, inter alia, that Plaintiff’s claim is not barred under the law related to 3^rd Party Beneficiaries.  But, this decision also holds that not all of Plaintiff’s assertions relate to ministerial duties.  The case is affirmed in part, reversed in part remanded for further proceedings.

 

The issues in this case have divided the Justices.  Justice DeVaney is the author of most of the Court’s decision.  Chief Justice Jensen is the author of a portion of the Court’s Opinion.

 

For clarity (or perhaps suggesting the lack thereof), I have copied ¶ ¶ 1-4 and ¶ ¶ 53-56 below”

 

[¶1.] Justice DeVaney delivers the majority opinion on Issues 1, 2, and 3(b). Chief Justice Jensen delivers the majority opinion on Issue 3(a).

 

[¶2.] DEVANEY, Justice, writing for the Court on Issues 1, 2, and 3(b).

 

[¶3.] After Austin McGee rolled his pickup while driving on a portion of Highway 45 that was being resurfaced, he brought suit against the contractor responsible for the resurfacing project and against the South Dakota Department of Transportation (DOT) and several DOT employees. Relevant here is his suit against the DOT and its employees. McGee claims that the crash and his injuries resulted from the DOT employees’ negligent failure to inspect and to ensure the contractor’s compliance with the DOT standards governing the project, the requirements of the construction contract, and industry customs and practices. The DOT moved for summary judgment, asserting multiple defenses, including that sovereign immunity bars McGee’s suit. The circuit court denied the motion, and this Court granted the DOT’s petition for intermediate appeal.

 

[¶4.] We affirm the circuit court’s decision rejecting the DOT’s claims that McGee’s suit is barred under the law governing a third-party beneficiary’s standing to seek damages for a breach of contract and that McGee failed to plead an actionable duty. We further affirm the court’s decision denying the DOT’s motion for summary judgment on the question whether the DOT’s Standard Specification 330.3(E) set forth a ministerial duty not protected by sovereign immunity. However, because neither the Federal Highway Administration’s Manual on Uniform Traffic Control Devices (MUTCD) nor a document the parties refer to as “the Hot Mix Handbook” set forth ministerial duties for the actions at issue in this case, we reverse the portion of the court’s denial of summary judgment relating to the precautionary measures McGee alleges the DOT should have taken and remand for further proceedings consistent with this opinion.

 

AND

 

[¶53.] Affirmed in part, reversed in part, and remanded.

 

[¶54.] JENSEN, Chief Justice, and KERN and MYREN, Justices, concur.

 

[¶55.] SALTER, Justice, concurs in part and dissents in part.

 

[¶56.] DEVANEY, Justice, dissents in part.

 

This decision may be accessed at

 

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