#25847-rev & rem-JKK

2011 S.D. 67

                           IN THE SUPREME COURT
                                   OF THE
                          STATE OF SOUTH DAKOTA

                                  ****
KJERSTAD REALTY, INC.,
A SOUTH DAKOTA CORPORATION,                Plaintiff and Appellant,

      v.

BOOTJACK RANCH, INC.,
A SOUTH DAKOTA CORPORATION,                Defendant and Appellee,

and

PATRICK X. TRASK,                          Defendant.
                                  ****

                  APPEAL FROM THE CIRCUIT COURT OF
                    THE SEVENTH JUDICIAL CIRCUIT
                  PENNINGTON COUNTY, SOUTH DAKOTA

                                  ****

                     THE HONORABLE WALLY EKLUND
                                Judge

                                  ****
THOMAS E. BRADY of
Brady Pluimer, PC
Spearfish, South Dakota                    Attorneys for plaintiff
                                           and appellant.

JOHN K. NOONEY
AARON T. GALLOWAY of
Nooney, Solay & Van Norman, LLP
Rapid City, South Dakota                   Attorneys for defendant
                                           and appellee.

                                  ****
                                           CONSIDERED ON BRIEFS
                                           ON AUGUST 23, 2011

                                           OPINION FILED 09/28/11
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KONENKAMP, Justice

[¶1.]        The circuit court dismissed this case when plaintiff was unable to

bring the matter to trial within one year after we remanded in a previous appeal.

Because good cause existed to extend the deadline, we reverse and remand.

                                    Background

[¶2.]        In December 2007, Kjerstad Realty, Inc. brought suit against Bootjack

Ranch, Inc. for breach of a realty contract. Kjerstad sought and obtained summary

judgment. Bootjack appealed, and, on October 28, 2009, we reversed and remanded

for trial. Kjerstad Realty, Inc. v. Bootjack Ranch, Inc., 2009 S.D. 93, 774 N.W.2d

797. We concluded that an issue of material fact was in dispute on “[w]hether the

efforts of Kjerstad Realty constituted substantial performance” under the contract.

Id. ¶ 17.

[¶3.]        On remand, Kjerstad pursued further discovery, amended its

complaint, and added party defendants. In January 2010, the assigned judge,

Circuit Judge Merton B. Tice, retired. A hearing was held on February 9, 2010,

before Circuit Judge John J. Delaney, who had been temporarily assigned to the

case. Judge Delaney informed counsel that he would preside only until Judge Tice’s

replacement was named.

[¶4.]        On May 4, 2010, Judge Delaney held another hearing, this time on

Kjerstad’s motion to compel the defendants to produce certain documents requested

in a December 2009 subpoena duces tecum. Judge Delaney ordered production of

the documents. Kjerstad also moved for an award of attorney’s fees because of the

defendants’ failure to produce the documents. A hearing was set for June 29, 2010.


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At that hearing, counsel for Kjerstad remarked, “In this case we’ve gotten nothing

but obstruction in our discovery requests from both the defendants. And to not

sanction them for this action only gives them a license.” Judge Delaney agreed,

saying, “That kind of strikes me as a true statement.” He awarded Kjerstad

$2,660.16 in fees and costs.

[¶5.]        On June 18, 2010, Circuit Judge Wally Eklund was appointed to the

bench and assigned to the case, relieving Judge Delaney of this temporary

assignment. A little over a month after Judge Eklund took the bench, Kjerstad

moved for a scheduling order and trial date. On July 20, 2010, Kjerstad moved for a

hearing to proceed with exemplary damages. On the same day, Bootjack and

Patricia Hanson moved for summary judgment, asserting that Hanson did not act

fraudulently or with deceit in selling Bootjack Ranch. Kjerstad moved for summary

judgment on its breach of contract claim. On September 22, 2010, Judge Eklund

held a hearing on all the motions. He granted summary judgment to Hanson and

denied Kjerstad’s motion.

[¶6.]        During the summary judgment hearing, counsel discussed trial

scheduling. The court asked about the timing of the trial in relation to the date the

Supreme Court issued its decision remanding the case. Counsel for Bootjack

indicated that the case was remanded in October 2009 and that after the one-year

deadline passed, he planned to move for dismissal under SDCL 15-30-16. Counsel

for Kjerstad responded that he was ready to try the case “tomorrow.” Counsel for

Bootjack also was ready for trial tomorrow. The court responded, “We aren’t going




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to do it tomorrow.” Thereafter, a pretrial order was entered setting the trial date

for February 15, 2011.

[¶7.]          On November 16, 2010, Bootjack moved to dismiss for Kjerstad’s

failure to commence trial within one year from the date of remand. See SDCL 15-

30-16. A hearing was held on December 14, 2010. After considering arguments

from counsel, the court granted Bootjack’s motion. It believed it was “just duty-

bound to dismiss the action as against Bootjack,” because it concluded that “under

the circumstances [it did not] have discretion to exercise . . . under the rulings of”

the Supreme Court. Kjerstad’s suit against another party remained on schedule,

but we granted Kjerstad’s petition for intermediate appeal and stayed further

proceedings.

                                Analysis and Decision

[¶8.]          We review a court’s decision to dismiss a case under SDCL 15-30-16 for

an abuse of discretion. Lamar Adver., Inc. v. Heavy Constructors, Inc. (Lamar II),

2010 S.D. 77, ¶ 10, 790 N.W.2d 45, 48; White Eagle v. City of Fort Pierre, 2002 S.D.

68, ¶ 4, 647 N.W.2d 716, 718. An abuse of discretion “is a fundamental error of

judgment, a choice outside the range of permissible choices, a decision, which, on

full consideration, is arbitrary or unreasonable.” Stavig v. Stavig, 2009 S.D. 89, ¶

13, 774 N.W.2d 454, 458 (citations omitted).

[¶9.]          Kjerstad asserts that the circuit court abused its discretion when it

granted Bootjack’s motion to dismiss because Kjerstad “had requested a trial date

be set within the one year period and the [circuit court] denied the request.”

Kjerstad also contends that good cause existed to delay the deadline under SDCL

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15-30-16. It points to the undisputed record showing that after this Court’s

remand, counsel for Kjerstad conducted “legitimate discovery,” “pursued and

prosecuted the case,” engaged in no “unreasonable delay,” “acted with due

diligence,” and progressed “with reasonable promptitude.” For a long time, Kjerstad

notes, there was no permanent trial judge assigned to the case.

[¶10.]         Bootjack, on the other hand, argues that SDCL 15-30-16 is inflexible,

and the circuit court correctly applied the law on Kjerstad’s failure to proceed to

trial within one year of this Court’s remand decision. Bootjack deems immaterial

Kjerstad’s discovery efforts because this Court’s rulings require a trial before the

deadline in SDCL 15-30-16.

[¶11.]         SDCL 15-30-16 provided:

               In every case on appeal, in which the Supreme Court shall order
               a new trial or further proceedings in the court below, the record
               shall be transmitted to such court and proceedings had therein
               within one year from the date of such order in the Supreme
               Court, or in default thereof, the action shall be dismissed, unless
               upon good cause shown the court shall otherwise order. *

We have interpreted “proceedings had therein” to mean “proceedings contemplated

by the decision of this [C]ourt.” Chapman v. Hill, 39 S.D. 58, 162 N.W. 931 (1917);

see also Sears v. McKee (Sears II), 326 N.W.2d 107, 108 (S.D. 1982). Here, the

decision of this Court was: “Whether Kjerstad Realty has substantially performed

under the agreement is a question for the fact finder . . . . We reverse and remand

for trial.” Kjerstad Realty, Inc., 2009 S.D. 93, ¶¶ 17, 18, 774 N.W.2d at 802.



*        By unanimous vote, this Court repealed SDCL 15-30-16 at its August 2011
         rules hearing, effective August 24, 2011.


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Therefore, the “proceedings contemplated” would be a trial on whether Kjerstad

substantially performed under the contract. It is undisputed that a trial was not

conducted within one year, thus implicating SDCL 15-30-16.

[¶12.]       Yet merely because Kjerstad was unable to bring the matter to trial

within one year does not mean Kjerstad’s case must necessarily be dismissed. The

rule explicitly allows for “good cause” not to dismiss. SDCL 15-30-16. Good cause

supports extending the deadline if there was excusable conduct preventing Kjerstad

from complying with SDCL 15-30-16, which conduct “must be attributable to

something other than negligence or inattention to pleading deadlines[.]” See Lamar

II, 2010 S.D. 77, ¶ 19, 790 N.W.2d at 51.

[¶13.]       We determine good cause on a case-by-case basis. Id. ¶ 14 (citing

Setliff v. Stewart, 2005 S.D. 40, ¶ 66, 694 N.W.2d 859, 876). “Good cause has been

interpreted to mean ‘an agreement admissible under SDCL 16-18-11, fraud,

accident, mistake, or some extraordinary circumstance for which the plaintiff is not

responsible.’” Id. (quoting Sears II, 326 N.W.2d at 108) (additional citation

omitted). In many instances, good cause is cause beyond a party’s control.

[¶14.]       The circuit court thought itself bound by our decisions in Sears II and

Lamar II, but the facts of this case are markedly different from Sears II and Lamar

II. In Sears v. McKee (Sears I), this Court remanded for a new trial with proper jury

instructions. 298 N.W.2d 521, 522-23 (S.D. 1980). After remand, and in response to

a motion to dismiss under SDCL 15-30-16, Sears argued that “proceedings” occurred

within one year because she filed an amended complaint within the time period.

Sears II, 326 N.W.2d at 108. The circuit court agreed and declined to dismiss the


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case. On appeal, this Court reversed, ruling that filing an amended pleading does

not constitute proceedings consistent with SDCL 15-30-16. But the Court still

remanded for the circuit court to determine whether Sears established good cause.

Id. at 109. Here, Kjerstad did not merely file a pleading during the one-year period.

Rather, counsel continuously pursued discovery and, more importantly, specifically

requested a trial date within the deadline.

[¶15.]       In Lamar Adver., Inc. v. Heavy Constructors, Inc. (Lamar I), we

ordered a retrial on the issue of the measure of damages. 2008 S.D. 10, ¶ 24, 745

N.W.2d 371, 380. On remand, the parties originally agreed to a trial date within

the deadline, but they continued that date to engage in settlement negotiations.

Lamar II, 2010 S.D. 77, ¶ 3, 790 N.W.2d at 47. These negotiations persisted until

just before the deadline, and after the deadline passed, Heavy Constructors moved

to dismiss Lamar’s suit under SDCL 15-30-16. Lamar argued that its efforts to

settle the case and the email exchanges between the parties established good cause

to extend the deadline. The circuit court disagreed and ruled that despite the

parties’ settlement negotiations, no excusable conduct prevented Lamar from

complying with SDCL 15-30-16. We affirmed, writing that “Lamar elected to move

forward with settlement negotiations with full knowledge of the looming deadline.”

Id. ¶ 19. Here, Kjerstad did not elect to move forward, heedless of the time limit.

Rather, with knowledge of the deadline, counsel specifically requested an

immediate trial.

[¶16.]       On the facts of this case, good cause existed to extend the deadline

under SDCL 15-30-16. Following retirement of the assigned judge, the case was


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presided over temporarily by Judge Delaney from January 2010 until late June

2010. With no permanently assigned judge, the case could not proceed to trial. In

the interim, however, Kjerstad diligently pursued discovery and fought discovery

“obstruction.” Shortly after Judge Eklund was appointed, counsel submitted a

request for a scheduling order and trial date. And at the first hearing before Judge

Eklund, counsel asked for a trial date within the deadline. Although aware that

time was running out, Judge Eklund did not grant this request. These

circumstances established good cause: they were beyond Kjerstad’s control. The

court abused its discretion when it dismissed Kjerstad’s suit against Bootjack.

[¶17.]       Reversed and remanded.

[¶18.]       GILBERTSON, Chief Justice, and ZINTER and SEVERSON, Justices,

and MEIERHENRY, Retired Justice, concur.

[¶19.]       WILBUR, Justice, did not participate.




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