#26154, #26161-a-LSW

2012 S.D. 78

                        IN THE SUPREME COURT
                                OF THE
                       STATE OF SOUTH DAKOTA

                               ****
JORGENSEN FARMS, INC., d/b/a
JORGENSEN LAND & CATTLE
PARTNERSHIP,                            Plaintiff,

     v.

COUNTRY PRIDE COOPERATIVE, INC.,
A SOUTH DAKOTA CORPORATION,             Defendant, Third-Party
                                        Plaintiff and Appellant,
     v.

AGRILIANCE, LLC; DAKOTA
GASIFICATION COMPANY,
and AGRIUM U.S. INC.,                   Third-Party Defendants and
                                        Appellees,
     and

CHARLES BAKER TRUCKING
COMPANY, and SPAANS TRUCKING,
INC.,                                   Third-Party Defendants.


                               ****

                 APPEAL FROM THE CIRCUIT COURT OF
                     THE SIXTH JUDICIAL CIRCUIT
                    TRIPP COUNTY, SOUTH DAKOTA

                               ****

                   THE HONORABLE MARK BARNETT
                              Judge

                               ****


                                        CONSIDERED ON BRIEFS
                                        ON MARCH 19, 2012

                                        OPINION FILED 11/20/12
AMY AMUNDSON
THOMAS D. JENSEN of
Lind, Jensen, Sullivan &
 Peterson, PA
Minneapolis, Minnesota       Attorneys for defendant, third-
                             party plaintiff and appellant.

MARGO D. NORTHRUP of
Riter, Rogers, Wattier &
 Brown, LLP
Pierre, South Dakota

      and

EMILY MURPHY
Stillwater, Minnesota        Attorneys for third-party
                             defendant and appellee
                             Agriliance N.O.R. #26161.


PAUL E. BACHAND of
Schmidt, Schroyer, Moreno,
 Lee & Bachand, PC
Pierre, South Dakota

TODD LANGEL of
Faegre & Benson, LLP
Des Moines, Iowa

      and

KRISTIN R. EADS of
Faegre & Benson, LLP
Minneapolis, Minnesota       Attorneys for third-party
                             defendant and appellee
                             Agrium.

STEVEN J. OBERG of
Lynn, Jackson, Shultz &
 Lebrun, PC
Rapid City, South Dakota     Attorneys for third-party
                             defendant and appellee
                             Dakota Gasification.
#26154, #26161

WILBUR, Justice

[¶1.]         Jorgensen Farms (Jorgensen) sued Country Pride Cooperative

(Country Pride) alleging that Country Pride sold Jorgensen fertilizer contaminated

with rye damaging its 2007 wheat crop. Country Pride settled with Jorgensen but

preserved its claims against third-party defendants Agriliance, Agrium, and Dakota

Gasification Co. (Dakota Gas). The trial court granted the third-party defendants’

motions for summary judgment. We affirm.

                  FACTS AND PROCEDURAL BACKGROUND

[¶2.]         Jorgensen grows certified and registered winter wheat seed. During

late spring or early summer 2007, rye plants contaminated Jorgensen’s winter

wheat crop. According to Jorgensen’s expert, Jorgensen suffered a loss of $556,070

as a result of the rye contamination as Jorgensen was unable to sell the crop as

certified seed, and instead, sold the wheat for a lower price as commodity grain.

[¶3.]         Jorgensen, who believed the source of the contamination was fertilizer

it purchased from Country Pride, brought suit against Country Pride to recover

damages. Subsequently, Country Pride brought third-party complaints against a

number of parties alleging that, if Jorgensen proved that the fertilizer it purchased

from Country Pride was contaminated, the rye contamination must have occurred

in the chain of fertilizer distribution. 1 Country Pride alleges that the third-party



1.      Country Pride concedes that it only joined the Agriliance-Charles Baker
        Trucking (Baker Trucking)-Dakota Gas chain of distribution, and thereby
        excluded other parties who supplied or transported ammonium sulfate and
        urea to Country Pride during 2006 and who could also have been joined in
        the lawsuit.


                                          -1-
#26154, #26161

defendants’ negligence, breach of contract, and/or breach of warranty entitles

Country Pride to indemnification or contribution. 2

[¶4.]         Country Pride settled with Jorgensen and the two carriers named as

third-party defendants: Charles Baker Trucking (Baker Trucking) and Spaans

Trucking, Inc. The only remaining issue is whether Country Pride is entitled to

indemnification or contribution from any or all remaining third-party defendants:

Agriliance, Agrium, or Dakota Gas.

[¶5.]         The remaining third-party defendants were involved in selling either,

or both, ammonium sulfate and urea, the two chemicals used in mixing the

fertilizer. Agriliance, a sales broker, and Country Pride entered into a verbal

agreement whereby Country Pride would purchase ammonium sulfate from

Agriliance. As the intermediate seller, Agriliance never possessed or handled the

ammonium sulfate. Rather, Agriliance purchased the ammonium sulfate from

third-party defendant Dakota Gas. Agrium is a producer of both ammonium sulfate

and urea. Country Pride dismissed its claim based on Agrium’s sale of ammonium

sulfate but, on appeal, is pursuing a claim for the urea sold by Agrium.

[¶6.]         The trial court granted summary judgment in favor of Agriliance,

Agrium, and Dakota Gas, reasoning that Country Pride failed “to provide a specific



2.      Contribution and indemnification, although similar, are distinct remedies. A
        right to contribution arises when “[a] party to a joint, or joint and several,
        obligation . . . satisfies more than his share of the claim against all[.]” SDCL
        20-1-6. In contrast, “indemnity is an ‘all-or-nothing’ proposition where the
        party seeking indemnification must show an absence of proportionate fault to
        shift the entire liability[.]” Weiszhaar Farms, Inc. v. Tobin, 522 N.W.2d 484,
        492 (S.D. 1994).


                                           -2-
#26154, #26161

fact upon which a jury could find a party responsible without resorting to

speculation.” Country Pride appeals. We review Country Pride’s remaining claims

against each Agriliance, Agrium, and Dakota Gas separately to determine whether

summary judgment was appropriate as to each. 3

                             STANDARD OF REVIEW

[¶7.]         In reviewing a trial court’s grant or denial of summary judgment under

SDCL 15-6-56(c), we must view evidence in the light most favorable to the non-

moving party and decide both “‘whether the moving party has demonstrated the

absence of any genuine issue of material fact’” and whether the trial court correctly

decided all legal questions. Bertelsen v. Allstate Ins. Co., 2011 S.D. 13, ¶ 15, 796

N.W.2d 685, 692 (quoting Advanced Recycling Sys., L.L.C. v. Se. Prop., Ltd., 2010

S.D. 70, ¶ 10, 787 N.W.2d 778, 783). We make these determinations de novo, with

“‘no deference to the [trial] court’s ruling.’” Highmark Fed. Credit Union v. Hunter,

2012 S.D. 37, ¶ 7, 814 N.W.2d 413, 415 (quoting Adrian v. Vonk, 2011 S.D. 84, ¶ 8,

807 N.W.2d 119, 122).



3.      The trial court noted Country Pride provided a “handful” of “evolving
        theories.” Alternative theories are allowed by SDCL 15-6-8(e)(2), which
        provides:

              A party may set forth two or more statements of a claim or
              defense alternatively or hypothetically, either in one count or
              defense or in separate counts or defenses. When two or more
              statements are made in the alternative and one of them if made
              independently would be sufficient, the pleading is not made
              insufficient by the insufficiency of one or more of the alternative
              statements. A party may also state as many separate claims or
              defenses as he has regardless of consistency and whether based
              on legal or on equitable grounds or on both.


                                           -3-
#26154, #26161

                          ANALYSIS AND DECISION

[¶8.]        On appeal, the parties dispute whether Country Pride has set forth

sufficient evidence to survive summary judgment. Country Pride concedes that it

has not provided direct evidence as to which of the three third-party defendants, if

any, are responsible for the rye contamination. However, Country Pride argues,

despite the absence of direct evidence, it has provided sufficient circumstantial

evidence to survive summary judgment.

[¶9.]        Country Pride’s position at the summary judgment hearing was that

circumstantial evidence of “inspection negligence” established that rye entered the

ammonium sulfate due to Baker Trucking’s negligence in its failure to properly

inspect its delivery trucks. With this backdrop in mind, we examine the evidence

presented in this case, viewing it “in [the] light most favorable to the nonmoving

part[ies][.]” Cashman v. Van Dyke, 2012 S.D. 43, ¶ 6, 815 N.W.2d 308, 311.

[¶10.]      1.      Agriliance is not liable as a matter of law under either a
                    breach of contract or negligence theory.

[¶11.]       Country Pride presents alternative theories under which Agriliance

could be liable for the damages to Jorgensen’s wheat crop. First, Country Pride

argues that a September 17, 2006 delivery of ammonium sulfate by Baker Trucking,

which Country Pride ordered from Agriliance, contained the rye contamination.

Second, Country Pride argues that Agriliance supplied approximately 65.3% of

Country Pride’s ammonium sulfate prior to September 2006 and that this supply

contained the contamination.




                                          -4-
#26154, #26161

[¶12.]         There are disputed facts regarding the date the first load of ammonium

sulfate was delivered to Country Pride by Baker Trucking. 4 In addition, Country

Pride offered the testimony of former Baker Trucking employee, David Sherman,

regarding the presence of rye in Baker Trucking’s trucks. 5 When the evidence is

viewed in the light most favorable to Country Pride, the non-moving party, the date

of delivery, and whether the trailer used by Baker Trucking was contaminated are

disputed facts that should ordinarily be decided by a jury. In this case, however,

resolution of those disputed facts is not determinative as to any liability on the part

of Agriliance.

[¶13.]         Country Pride is suing Agriliance for breach of warranty 6 and

negligence. Country Pride conceded that the ammonium sulfate was defect-free

when it was manufactured and shipped from Dakota Gas. In light of this

4.       Country Pride and Agriliance dispute when the first load of ammonium
         sulfate was delivered to Country Pride. Based on its timeline of events,
         Country Pride asserts that it received its first load of ammonium sulfate from
         Baker Trucking on September 17 or 18. Agriliance argues that Country
         Pride’s own receipt, or “hand ticket,” which contains handwritten notations
         providing a date of “9/14/06” and “delivered by Ted @ 1:00 PM,” establishes a
         September 14 delivery date. Country Pride concedes that if Baker Trucking
         delivered the ammonium sulfate to Country Pride on September 14,
         Agriliance cannot be held liable.

5.       Sherman, after initially stating that he had never come across rye seed in
         any of his deliveries, recanted, and stated that Charles Baker, owner of
         Baker Trucking, told Sherman he had rye in his fields and that, if Baker had
         gotten rye in his fields, “there’s a good possibility that rye got in between the
         two floors” of the trailer that delivered ammonium sulfate to Country Pride,
         and therefore, was the source of Jorgensen’s rye contamination.

6.       Country Pride advances that Agriliance violated the implied warranty of
         merchantability (SDCL 57A-2-314); the implied warranty of fitness for a
         particular purpose (SDCL 57A-2-315); and an express warranty by
         affirmation, promise, description, sample (SDCL 57A-2-313).

                                             -5-
#26154, #26161

concession, Agriliance cannot be liable as a matter of law for breach of warranty

because the goods were as warranted from the manufacturer when the goods were

shipped. See Shaffer v. Honeywell, Inc., 249 N.W.2d 251, 256 (S.D. 1976) overruled

on other grounds by First Premier Bank v. Kolcraft Enters., Inc., 2004 S.D. 92, 686

N.W.2d 430 (stating that, in a case with claims for breach of warranty, negligence,

and strict liability involving a valve manufactured by Honeywell, “plaintiff [injured

homeowner] has the burden of showing that the defect existed when the product left

the manufacturer’s hands”).

[¶14.]         Additionally, Country Pride’s negligence claim against Agriliance is

based upon its failure to inspect the shipper’s, Baker Trucking, trucks. Agriliance,

however, cannot be liable for negligence because it is the carrier’s duty, under state

law, to inspect its truck. 7 Berry v. Chicago, M. & St. P. Ry. Co., 24 S.D. 611, 124



7.       The parties disagree whether the Carmack Amendment affects the outcome
         of this case. The Carmack Amendment governs the liability of carriers and
         freight forwarders for damage to goods during transportation. 49 U.S.C. §§
         11706 and 14706. Although this case involves transportation by truck, both
         motor carriers and rail carriers, are “carriers” under the Carmack
         Amendment. And, as the Supreme Court has explained, “in cases where it
         applies,” the Carmack Amendment

               imposes upon receiving rail carriers and delivering rail carriers
               liability for damage caused during the rail route under the bill of
               lading, regardless of which carrier caused the damage.
               Carmack’s purpose is to relieve cargo owners of the burden of
               searching out a particular negligent carrier from among the
               often numerous carriers handling an interstate shipment of
               goods.

         Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., __ U.S. __, __, 130 S. Ct.
         2433, 2441, 177 L. Ed. 2d 424 (2010) (internal citations and quotations
         omitted). See generally Royal & Sun Alliance Ins., PLC v. Ocean World
         Lines, Inc., 612 F.3d 138, 145-46 (2nd Cir. 2010) (considering whether a
                                                                        (continued . . . )
                                            -6-
#26154, #26161

N.W. 859, 862-63 (1910). Country Pride has settled with and dismissed Baker

Trucking from this lawsuit. Based on the undisputed material fact that the

ammonium sulfate was defect-free when manufactured and shipped, as conceded by

Country Pride, and that Agriliance did not have a duty to inspect the carrier,

Agriliance is entitled to summary judgment as a matter of law.

[¶15.]         Country Pride offered the possibility that the doctrine of alternative

liability could apply in this case. 8 However, because Country Pride did not join all

potential defendants, i.e., all parties who produced, shipped, manufactured, or sold

ammonium sulfate or urea to Country Pride in 2006, even if this Court were to

consider adopting the doctrine, it would not be applicable for that reason. See

Bradley v. Firestone Tire and Rubber Co., 590 F. Supp. 1177, 1179 (D.S.D. 1984)

(quoting Starling v. Seaboard Coast Line R.R. Co., 533 F. Supp. 183, 188 (S.D. Ga.


________________________________
( . . . continued)
          United States Supreme Court case involving rail carriers is applicable to a
          case involving motor carriers and freight forwarders).

         We first observe that the Carmack Amendment does not apply here because
         Agriliance is neither a carrier nor freight forwarder. See 49 U.S.C. §§
         13102(3), (8). Second, even if the Carmack Amendment applied, it would only
         impose liability on the carrier, Baker Trucking, not Agriliance, a sales broker.
         See, e.g., Windows, Inc. v. Jordan Panel Sys. Corp., 177 F.3d 114, 117-18 (2nd
         Cir. 1999).

8.       The alternative liability theory is

               [w]here the conduct of two or more actors is tortious, and it is
               proved that harm has been caused to the plaintiff by only one of
               them, but there is uncertainty as to which one has caused it, the
               burden is upon each such actor to prove that he has not caused
               the harm.

         Restatement (Second) of Torts § 433B(3) (1965).

                                               -7-
#26154, #26161

1982) (stating that “[u]nder alternative liability, however, all the possible

wrongdoers responsible for the injury must be before the Court, and the negligent

acts must have been committed simultaneously”)).

[¶16.]         2.    Country Pride’s claims against Agrium are barred
                     by (a) Country Pride’s failure to give notice, (b) the
                     economic loss doctrine, and (c) the statute of limitations.

[¶17.]         Country Pride argues, in the alternative, that if the ammonium sulfate

it purchased from Agriliance was not the source of the rye contamination, the urea

Country Pride purchased from Agrium in fall 2006 caused the contamination.

Country Pride concedes that the more likely source of the rye contamination is the

fertilizer sold by Agriliance. Despite this concession, Country Pride believes it has

set forth sufficient facts for a jury to determine that Agrium is the source of the rye

contamination.

[¶18.]         Country Pride asserts that it can prove that: (1) it purchased 100% of

its August 2006 urea from Agrium; (2) Jorgensen purchased 66,090 pounds of urea

from Country Pride on September 14; (3) on one or more occasions, Agrium used

Drueke Trucking, a party not joined in this action, to deliver urea to Country Pride;

and (4) that Country Pride has previously discovered contaminated urea in Drueke

Trucking deliveries. 9 Thus, according to Country Pride, a reasonable jury could

infer that the urea supplied by Agrium in August 2006 contained the offending rye.




9.       Dale Vogt, a Country Pride employee, testified that, on several occasions, he
         discovered corn contaminated urea in fertilizer delivered by Drueke. Vogt did
         not testify, nor does Country Pride allege, that it previously discovered rye
         contaminated urea delivered by Drueke.

                                           -8-
#26154, #26161

[¶19.]       In response, Agrium argues that summary judgment was appropriate

for four reasons: (1) the trial court correctly concluded that there was no genuine

issue of material fact regarding the source of the contamination; (2) Country Pride’s

breach of warranty claims fail because Country Pride did not give reasonable notice

as required by SDCL 57A-2-607(3); (3) Country Pride’s tort claims are barred by the

economic loss doctrine; and (4) Country Pride’s claims are barred by the statute of

limitations contained in SDCL 57A-2-725.

[¶20.]       This Court has often stated that, “‘[i]f there exists any basis which

supports the ruling of the trial court, affirmance of a summary judgment is proper.’”

Murray v. Mansheim, 2010 S.D. 18, ¶ 4, 779 N.W.2d 379, 382 (quoting Jacobson v.

Leisinger, 2008 S.D. 19, ¶ 24, 746 N.W.2d 739, 745). We hold that Country Pride’s

breach of warranty claims are barred by its failure to give reasonable notice; its tort

claims are barred by the economic loss doctrine; and its indemnification and

contribution claim is barred by the statute of limitations. Therefore, we affirm

summary judgment in favor of Agrium.

             (a) Country Pride’s breach of warranty claims against Agrium are
                 barred by the notice requirement contained in SDCL 57A-2-607(3).

[¶21.]       Both Country Pride and Agrium agree that Agrium’s sale of urea to

Country Pride was a sales transaction, and thus governed by the Uniform

Commercial Code (UCC). See City of Lennox v. Mitek Indus. Ins., 519 N.W.2d 330,

332 (S.D. 1994) (stating that “[i]n order for the UCC to govern the transaction, the

sale must be for a sale of goods”). Accordingly, Country Pride must comply with the

notice requirement contained in SDCL 57A-2-607(3)(a). This statute provides,

“[w]here a tender [of goods] has been accepted[,] . . . [t]he buyer must within a

                                          -9-
#26154, #26161

reasonable time after he discovers or should have discovered any breach notify the

seller of breach or be barred from any remedy[.]” (Emphasis added.)

[¶22.]       We previously interpreted this notice requirement in Hepper v. Triple

U Enterprises., Inc., 388 N.W.2d 525 (S.D. 1986). In Hepper, we reasoned that

“[t]he purpose of requiring notice within a reasonable time is to give the seller

sufficient time to investigate the breach of warranty claim while facts are still

fresh[,] . . .foster[ ] settlement through negotiation, permit[ ] a seller to avoid future

defects, allow[ ] a seller to minimize damages, and protect[ ] a seller from stale

claims.” Id. at 527 (additional citations omitted). Importantly, “[n]otice is an

element that must be specifically proven; it is not an affirmative defense” and

“[n]otice of breach by summons and complaint is obviously insufficient.” Id. at

527,529.

[¶23.]       Agrium argues that Country Pride “never even pleaded notice in its

complaint and cannot provide that it ever gave Agrium anything resembling notice

of the breach it claims.” We agree. Notably, Country Pride, in its reply brief,

responds to Agrium’s notice argument by stating “notice was . . . given to Agrium in

a reasonable time per the statute” without stating, nor citing to the record, when

this notice was provided and through what means. Thus, Country Pride has not

shown facts in the record to support its assertion that it provided reasonable notice,

nor did our review of the record bear out this assertion. As a result, we affirm

summary judgment on its breach of warranty claims on the basis that Country

Pride failed to provide notice.

             (b) Country Pride’s negligence claim against Agrium is barred by the
                 economic loss doctrine.

                                           -10-
#26154, #26161


[¶24.]         In addition to its warranty theory, Country Pride also argues that

Agrium is liable under a negligence theory. In UCC cases, this Court has adopted

the economic loss doctrine which provides that “‘economic losses are not recoverable

under tort theories’” such as negligence. Diamond Surface, Inc. v. State Cement

Plant Comm’n, 1998 S.D. 97, ¶ 24, 583 N.W.2d 155, 161 (quoting City of Lennox,

519 N.W.2d at 333). Rather, a plaintiff is “‘limited to the commercial theories found

in the UCC.’” Id. 10

[¶25.]         This doctrine has two exceptions. Id. ¶ 25. First, tort damages are not

barred in cases where personal injury is involved. Id. ¶ 25 n.5 (citing City of

Lennox, 519 N.W.2d at 333). Neither Country Pride nor Agrium asserts that this

first exception applies in this case. Rather, the parties dispute the application of

the second exception. The second exception, commonly referred to as the “other

property exception,” applies “when the damage is to ‘other property’ as opposed to

the specific goods that were part of the transaction.” Id.

[¶26.]         Country Pride reasons that the “other property” exception applies

because the damage was to the winter wheat crop, rather than the specific goods

that were part of the transaction (the fertilizer). This Court has previously noted,

“[o]ther property has been defined as damage to property collateral to the product

itself.” City of Lennox, 519 N.W.2d at 333. Examples include, “1) [a] defective

heater that exploded and destroyed a major portion of a refinery” and “2) defective


10.      The underlying purpose of the rule “is to maintain the separateness of tort
         law and contract law.” Lesiak v. Cent. Valley Agric. Coop., Inc., 808 N.W.2d
         67, 83 (Neb. 2012).


                                          -11-
#26154, #26161

brakes that hypothetically caused [a] truck to run into [a] home.” Id. (internal

footnotes omitted). However “[w]hen a defect in a component part damages the

product into which that component was incorporated, economic losses to the product

as a whole are not losses to ‘other property’ and are therefore not recoverable in

tort.” Id.

[¶27.]       Here, the urea was a component part that was later incorporated into

both the fertilizer and the wheat crop. The alleged defect, the rye-contamination,

damaged the fertilizer and wheat crop, resulting in lost profits. “Economic loss . . .

is defined as that loss resulting from the failure of the product to perform to the

level expected by the buyer and the consequential losses resulting from the buyer’s

inability to make use of the ineffective product, such as lost profits.” Diamond

Surface, 1998 S.D. 97, ¶ 25, 583 N.W.2d at 161 (quoting City of Lennox, 519 N.W.2d

at 333). Country Pride’s claimed damages are consequential losses, specifically lost

profits, from defective fertilizer rather than damage to collateral property.

Accordingly, Country Pride’s claimed damages fall under the scope of the general

rule and not the “other property” exception; thus, the economic loss doctrine bars

Country Pride’s negligence claim against Agrium.

             (c) Country Pride’s indemnity and contribution claim against Agrium
                 is barred by the statute of limitations.

[¶28.]       Country Pride’s initial complaint in December 2008 did not include any

claims against Agrium. On April 20, 2010, Country Pride amended its complaint to

assert an indemnification claim against Agrium. Country Pride pleaded that

ammonium sulfate supplied by Agrium was the source of the contamination. This



                                         -12-
#26154, #26161

ammonium sulfate claim was later dismissed. Only Agrium’s supply of urea is now

at issue.

[¶29.]       However, Country Pride never amended its complaint to plead that

urea purchased from Agrium was the source of contamination. Indeed, Agrium was

not notified that its urea deliveries to Country Pride were the subject of Country

Pride’s suit until October 2010.

[¶30.]       SDCL 57A-2-725(1) provides, “[a]n action for breach of any contract for

sale must be commenced within four years after the cause of action has accrued.”

This Court has “consistently held that ‘compliance with statutes of limitations is

strictly required and doctrines of substantial compliance or equitable tolling are not

invoked to alleviate a claimant from a loss of his right to proceed with a claim.’”

Murray, 2010 S.D. 18, ¶ 21, 779 N.W.2d at 389 (quoting Dakota Truck Underwriters

v. S.D. Subsequent Injury Fund, 2004 S.D. 120, ¶ 17, 689 N.W.2d 196, 201).

[¶31.]       The parties agree that this action accrued when the urea was delivered

to Country Pride in August 2006. Country Pride never formally commenced an

action regarding the urea claim nor did it move to amend under SDCL 15-6-15(a).

Agrium was not put on notice that its August 2006 urea delivery would be the

subject of this suit until October 2010. As a result, Country Pride’s indemnification

and contribution claim against Agrium is barred by the four-year statute of

limitations for an action for breach of a sales contract.

[¶32.]       3.     Dakota Gas did not have a duty to inspect Baker
                    Trucking’s vehicles.

[¶33.]       The only claim that Country Pride makes with respect to Dakota Gas

is negligence. Country Pride argues that Dakota Gas, as the manufacturer of the

                                          -13-
#26154, #26161

ammonium sulfate sold by Agriliance, had a duty to ensure that trailers used by

Baker Trucking for delivery were free from contaminants, and therefore, Dakota

Gas was negligent when it failed to inspect Baker Trucking’s vehicles. The trial

court granted Dakota Gas’s motion for summary judgment on the basis that,

regardless of any factual disputes, under South Dakota law, the duty to ensure a

properly cleaned trailer rested solely upon the carrier, Baker Trucking. We agree.

[¶34.]       This Court has previously stated that:

             [T]he duty of furnishing suitable vehicles rests upon the carrier,
             and not upon the shipper, and the failure to discharge this duty
             is negligence from the consequences of which the carrier is not
             permitted to free himself by a stipulation in the bill of lading
             which devolves upon the shipper the duty of selecting vehicles
             which are suitable. Such a stipulation is void, as an attempt by
             the carrier to limit his liability against his own negligence in
             providing defective vehicles.

Berry, 24 S.D. 611, 124 N.W. at 862 (emphasis added).

[¶35.]       Based on Berry, we hold that the duty to provide a contaminant-free

vehicle rested upon Baker Trucking, the carrier, not Dakota Gas, the shipper.

“‘Summary judgment in a negligence case is appropriate when the trial judge

resolves the duty question in the defendant’s favor.’” Highmark Fed. Credit Union,

2012 S.D. 37, ¶ 7, 814 N.W.2d at 415 (quoting Hendrix v. Schulte, 2007 S.D. 73, ¶ 8,

736 N.W.2d 845, 847). Consequently, because Dakota Gas did not breach any duty

owed to Country Pride, we affirm the trial court’s grant of summary judgment.

                                  CONCLUSION

[¶36.]       We affirm the summary judgment motions granted in favor of

Agriliance, Agrium, and Dakota Gas.



                                         -14-
#26154, #26161

[¶37.]     GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and

SEVERSON, Justices, concur.




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