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2010 S.D. 77

                         IN THE SUPREME COURT
                                 OF THE
                        STATE OF SOUTH DAKOTA

                                 * * * *

LAMAR ADVERTISING OF
SOUTH DAKOTA, INC.,                        Plaintiff and Appellant,

v.

HEAVY CONSTRUCTORS, INC.
and EPIC OUTDOOR
ADVERTISING, LLP,                          Defendants and Appellees.

                                 * * * *

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

                                 * * * *

                     HONORABLE JOHN J. DELANEY
                              Judge

                                 * * * *
JOHN K. NOONEY
AARON T. GALLOWAY of
Nooney, Solay & VanNorman, LLP
Rapid City, South Dakota                   Attorneys for plaintiff
                                           and appellant.

DAVID E. LUST
REBECCA L. MANN of
Gunderson, Palmer, Nelson
 & Ashmore, LLP
Rapid City, South Dakota                   Attorneys for defendants
                                           and appellees.

                                 * * * *
                                           CONSIDERED ON BRIEFS
                                           ON AUGUST 24, 2010

                                           OPINION FILED 10/06/10
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GILBERTSON, Chief Justice

[¶1.]        Lamar Advertising of South Dakota, Inc. (Lamar) failed to adhere to

the one-year deadline imposed by SDCL 15-30-16 in which to conclude proceedings

on a matter remanded by this Court. Heavy Constructors, Inc. (Heavy), the

defendant in the matter, moved to dismiss. The trial court heard arguments in

which Lamar contended it had good cause for not having proceedings within a year.

The trial court granted Heavy’s motion to dismiss. Lamar appeals. We affirm.

                                       FACTS

[¶2.]         The underlying litigation relevant to this appeal was filed by Lamar

against Heavy and Epic Outdoor Advertising (Epic) for breach of contract in 2003.

Lamar Outdoor Adver. of S.D., Inc. v. Heavy Constructors, Inc., (Lamar I), 2008 S.D.

10, 745 N.W.2d 371. In that action, Lamar’s motion for specific performance was

denied. Id. ¶ 6, 745 N.W.2d at 374. The trial court also determined that Lamar

would be able to recover damages representing “the difference between the fair

market value of the unexpired term of the lease (market rent) and the rent reserved

in the lease (the contract rent).” Id. Lamar appealed the trial court’s order

granting Epic’s motion for summary judgment and the damages measure. Id. ¶ 9,

745 N.W.2d at 374-75. We affirmed the motion for summary judgment, but

reversed and remanded the issue of the measure of damages for retrial in an order

dated February 6, 2008. Id. ¶ 24, 745 N.W.2d at 380.

[¶3.]        On March 31, 2008, Lamar filed a Notice of Status Hearing with the

trial court in order to set a new trial date. At a hearing on April 14, 2008, a two-day

trial on the matter was scheduled for September 10-11, 2008. Both parties filed


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pre-trial submissions and Lamar submitted Plaintiff’s Supplemental Jury

Instructions in anticipation of trial. Lamar scheduled the deposition of Heavy’s

expert witness, Ken Simpson, which was taken on July 17, 2008. Heavy later

cancelled the deposition of Lamar’s expert witness originally scheduled for July 31,

2008. Heavy also failed to examine documents made available by Lamar at its

counsel’s office under a discovery request prior to the September 10-11, 2008, trial

date.

[¶4.]        On September 4, 2008, Heavy served a Motion for Continuance of Trial

Date. Heavy’s motion stated the purpose of the continuance was to explore

settlement opportunities and provide Heavy with additional time to review

discovery documents at the office of Lamar’s counsel. Lamar did not oppose the

motion to continue the trial. The trial court signed the order continuing trial and it

was filed on September 5, 2008.

[¶5.]        On September 9, 2008, Heavy sent a settlement proposal to Lamar via

email. On October 4, 2008, Lamar sent Heavy an email asking whether a resolution

could be reached. On October 17, 2008, Heavy replied via email that it was in the

process of negotiating with third parties and would respond once an offer was in

place.

[¶6.]        On January 22, 2009, Lamar once again inquired of Heavy whether

there would be additional efforts to resolve the matter. On February 8, 2009, Heavy

once again sent a settlement proposal via email. On March 2, 2009, Lamar again

inquired about settlement options, to which Heavy replied that day by providing the

same emails originally sent and dated September 9, 2008, and February 8, 2009.


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[¶7.]        On August 19, 2009, Lamar scheduled a status hearing. On October 7,

2009, Heavy filed its Motion to Dismiss for failure to comply with the provisions of

SDCL 15-30-16, which provides:

             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.

On October 26, 2009, a hearing was held on Heavy’s motion to dismiss. At that

time, the trial court tentatively scheduled trial on the matter for February 17-18,

2010, in the event it denied Heavy’s motion.

[¶8.]        At the hearing, Lamar argued that its attempts to settle the matter

and the email exchanges between the two parties were evidence that the case had

not been abandoned. It also argued that it did not schedule a trial due to the

ongoing viable settlement attempts. Lamar further contended that it was unable to

schedule a trial because Heavy’s counsel served in the state legislature during

January and February, and was unavailable during June and July due to a

vacation. Heavy argued that its counsel did not invoke unavailability under the

South Dakota Code for his service in the legislature and, thus, Lamar was not

precluded from scheduling trial in January or February. While recognizing the

courtesy extended by Lamar in not scheduling trial while Heavy’s counsel was on

vacation, Heavy also noted that the case could have been set for trial and another

attorney from his firm could have handled the matter.

[¶9.]        The trial court issued its ruling via email on November 2, 2009,

granting Heavy’s motion. Findings of fact and conclusions of law were filed by the

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trial court in which it incorporated its November 2, 2009, email. The trial court

noted that SDCL 15-30-16 requires proceedings, meaning a new trial, be completed

within one year of the date of the Supreme Court’s remand order. Such proceedings

were not completed and absent “good cause,” the trial court noted it was required to

grant Heavy’s motion. The trial court concluded that the contacts and

communications between Lamar and Heavy did not rise to the level of

extraordinary events necessary to establish good cause as has been interpreted by

this Court. The trial court’s order dismissing the matter was entered on December

19, 2009. Lamar appeals raising one issue:

             Whether the trial court erred by granting Heavy’s motion to dismiss
             under SDCL 15-30-16 when it found Lamar did not establish good
             cause for failure to try the matter within one year after this Court’s
             remand order.

                             STANDARD OF REVIEW

[¶10.]       A trial court’s dismissal of a claim for failure to prosecute within one

year after a remand by this Court is reviewed on appeal under the abuse of

discretion standard. Rex Buggy Co. v. Dinneen, 28 S.D. 640, 641, 134 N.W. 814, 814

(1912) (citing Root v. Sweeney, 17 S.D. 179, 95 N.W. 916 (1903)). We will uphold the

trial court’s decision under this standard if “‘in view of the law and the

circumstances’ it was reasonably made.” White Eagle v. City of Fort Pierre, 2002

S.D. 68, ¶ 4, 647 N.W.2d 716, 718 (citing London v. Adams, 1998 S.D. 41, ¶ 12, 578

N.W.2d 145, 148). We will reverse a trial court’s decision to dismiss if it was “not

justified by, and clearly against, reason and evidence.” Id.




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                            ANALYSIS AND DECISION

[¶11.]        Lamar argues it met the good cause exception to the failure to

prosecute requirement. It contends it demonstrated good cause under White Eagle,

2002 S.D. 68, 647 N.W.2d 716, which Lamar claims incorporated the standards in

SDCL 15-11-11 1 and SDCL 15-30-16 into one good cause standard. In the

alternative, Lamar argues it satisfied what it construes to be the stricter good cause

standard for failure to have proceedings under SDCL 15-30-16 in Sears v. McKee,

326 N.W.2d 107 (S.D. 1982), which it claims this Court subsequently abandoned in

White Eagle, 2002 S.D. 68, 647 N.W.2d 716.

[¶12.]        Heavy, citing Sears, 326 N.W.2d at 108, argues that Lamar failed to

meet the good cause standard, which it argues is limited to “an agreement

admissible under SDCL 16-18-11, fraud, accident, mistake, or some extraordinary

circumstance for which the plaintiff is not responsible.” Heavy further contends

that an implicit agreement, if one did exist between the parties, to move the

litigation forward via additional discovery and settlement negotiations was

insufficient because a written agreement is necessary under SDCL 16-18-11 to



1.       SDCL 15-11-11 provides:

              The court may dismiss any civil case for want of prosecution upon
              written notice to counsel of record where the record reflects that there
              has been no activity for one year, unless good cause is shown to the
              contrary. The term “record,” for purposes of establishing good cause,
              shall include, but not by way of limitation, settlement negotiations
              between the parties or their counsel, formal or informal discovery
              proceedings, the exchange of any pleadings, and written evidence of
              agreements between the parties or counsel which justifiably result in
              delays in prosecution.


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extend proceedings beyond the statutory timeline. Heavy also argues that this

Court did not lessen the good cause standard for failure to have proceedings under

SDCL 15-30-16 to that of the failure to prosecute under SDCL 15-11-11. Finally,

Heavy argues that even if the lower standard is used, Lamar’s argument still fails

and the trial court’s dismissal should be upheld because Lamar did not take action

to protect its interests, the record and settlement activities in this case were not

sufficient, and Lamar’s claimed unavailability of Heavy’s counsel was not sufficient

good cause.

[¶13.]        Neither party disputes that there were no proceedings within the one-

year timeframe Lamar had under SDCL 15-30-16 to conduct the proceedings. The

essence of the dispute is whether there was good cause shown as to why the

proceedings were not had within the one-year timeframe, which expired on

February 5, 2009. The activities that occurred during this timeframe included the

scheduling and continuance of the September 10-11, 2008 trial date and the

settlement attempts by the two parties. Any activities that arose after the

February 5, 2009 timeframe cannot serve as good cause to extend the deadline. See

Chapman v. Hill, 39 S.D. 58, 59-60, 162 N.W. 931, 931-32 (1917) (plaintiff’s effort to

get her case placed on the “special or disqualified calendar” would not be considered

when examining good cause under predecessor to SDCL 15-30-16, as those efforts

occurred after the one year had expired).

[¶14.]        The determination of good cause for delay is determined on a case-by-

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

for delay requires ‘contact with the opposing party and some form of excusable


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conduct or happening which arises other than by negligence or inattention to

pleading deadlines.’” White Eagle, 2002 S.D. 68, ¶ 11, 647 N.W.2d at 720 (quoting

Dakota Cheese, Inc. v. Taylor, 525 N.W.2d 713, 717 (S.D. 1995)). Good cause has

been interpreted to mean “an agreement admissible under SDCL 16-18-11, 2 fraud,

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

responsible.” Sears, 326 N.W.2d at 108 (citing Chapman, 38 S.D. 58, 162 N.W.2d at

931; Rex Buggy Co., 28 S.D. 640, 134 N.W. 814; Meadows v. Osterkamp, 23 S.D. 462,

122 N.W. 419 (1909); Root, 17 S.D. 179, 95 N.W. 916). 3 Good cause has also been

recognized to include a plaintiff’s bankruptcy in which an order staying proceedings

has been entered by the bankruptcy court. Setliff, 2005 S.D. 40, ¶67, 694 N.W.2d at

876.

[¶15.]         As we noted in White Eagle, several principles of law assist in

conducting the review:

               First, this Court ordinarily will not interfere with the trial
               court’s ruling in these matters. Second, a dismissal of an action


2.       SDCL 16-18-11 provides:

               An attorney and counselor at law has power to bind his client to any
               agreement in respect to any proceeding within the scope of his proper
               duties and powers; but no evidence of any such agreement is receivable
               except the statement of the attorney himself, his written agreement
               signed and filed with the clerk, or an entry thereof upon the records of
               the court.

3.       As noted above, Sears and the preceding cases use the phrase “extraordinary
         circumstance for which the plaintiff is not responsible.” 326 N.W.2d at 108.
         White Eagle uses the phrase “excusable conduct or happening which arises
         other than by negligence or inattention to pleading deadlines.” 2002 S.D. 68,
         ¶ 11, 647 N.W.2d at 720. For purposes of this appeal, the two appear to point
         us in the same direction.


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             for failure to prosecute is an extreme remedy and should be used
             only when there is an unreasonable and unexplained delay. An
             unreasonable and unexplained delay has been defined as an
             omission to do something “which the party might do and might
             reasonably be expected to do towards vindication or enforcement
             of his rights.” Third, the mere passage of time is not the proper
             test to determine whether the delay in prosecution warrants
             dismissal. Fourth, the plaintiff has the burden to proceed with
             the action. The defendant need only meet the plaintiff step by
             step. Finally, the dismissal of the cause of action for failure to
             prosecute should be granted when, after considering all the facts
             and circumstances of the case, the plaintiff can be charged with
             lack of due diligence in failing to proceed with reasonable
             promptitude.

2002 S.D. 68, ¶ 4, 647 N.W.2d at 718 (quoting London, 1998 S.D. 41, ¶ 12, 578

N.W.2d at 148). That is not to say we have lessened the standard as set forth in

Sears. It has consistently remained the same since our first cases construing this

statute. Root, 17 S.D. at 182, 95 N.W. at 916; Rex Buggy Co., 28 S.D at 641, 134

N.W. at 814. Rather, we acknowledged in White Eagle that there are basic guiding

principles that we must consider when a motion to dismiss is granted under SDCL

15-30-16 for failure to have proceedings, or under SDCL 15-11-11 for failure to

prosecute and a lack of good cause exists to justify such inaction. We did so in

White Eagle as we reviewed the trial court’s dismissal under both SDCL §§ 15-11-11

and 15-30-16.

[¶16.]       The flaw in the Court’s analysis in Sears is the failure to address what

constitutes the appropriate standard of review of a trial court’s decision whether or

not to dismiss a matter under the provisions of SDCL 15-30-16. See 326 N.W.2d at

108 (noting that the plaintiff argued the issue was one of law, but the Court did not

state what standard of review it was applying). In White Eagle we reaffirmed the



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abuse of discretion standard of review as the proper standard on review. 4 2002 S.D.

68, ¶ 4, 647 N.W.2d at 718. Had such a standard of review been applied in Sears,

the 3-2 decision may have well gone the other way. 5 See 326 N.W.2d at 109.

[¶17.]         The term “good cause” is a crucial standard in both SDCL 15-11-11 and

15-30-16. Although there are other textual differences, such as the express reliance

of on the “record” in 15-11-11, which are not found in 15-30-16, there is nothing in

the statutes that would cause us to construe the term “good cause” in a different

manner for each provision.

[¶18.]         There is no factual dispute that there was substantial contact between

the parties from the time the opinion in Lamar I was handed down through the one-

year timeframe that expired on February 5, 2009. Lamar argues the excusable

conduct per White Eagle justifying a reversal of the trial court’s dismissal includes

the following happenings that occurred prior to that date:



4.       This was not a change from previous cases for dismissal for failure to
         prosecute. As set forth in London, the abuse of discretion standard of review
         has been used on numerous occasions. 1998 S.D. 41, ¶ 12, 578 N.W.2d at 148
         (citing Devitt v. Hayes, 1996 S.D. 71, ¶ 7, 551 N.W.2d 298, 300 (citing Annett
         v. Am. Honda, 1996 S.D. 58, ¶ 12, 548 N.W.2d 798, 802; Opp v. Nieuwsma,
         458 N.W.2d 352, 356 (S.D. 1990); Du-Al Mfg. Co. v. Sioux Falls Constr. Co.,
         444 N.W.2d 55, 56 (S.D. 1989); Schwartzle v. Austin Co., 429 N.W.2d 69, 71
         (S.D. 1988); Holmoe v. Reuss, 403 N.W.2d 30, 31 (S.D. 1987); Duncan v.
         Pennington County Hous. Auth., 382 N.W.2d 425, 426 (S.D. 1986))); Watkins
         Prod. v. Lytle, 90 S.D. 122, 238 N.W.2d 299 (S.D. 1976). The abuse of
         discretion standard of review goes back nearly as far as SDCL 15-30-16 itself.
         See Root, 17 S.D. at 182, 95 N.W. at 917, Rex Buggy, 28 S.D at 641, 134 N.W.
         at 814.

5.       In Sears this Court reversed the circuit court. 326 N.W.2d at 109. A fair
         reading of the Court’s opinion would conclude it was basically a de novo
         review. Id. at 108.


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               1. Heavy’s motion to continue the September 10-11, 2008 trial;

               2. settlement negotiations in September 2008 and January 2009; and

               3. service by counsel for Heavy in the Legislature in January and
                  February 2009.

[¶19.]         Keeping in mind that the excusable conduct must prevent the plaintiff

from completing the proceedings and must be attributable to something other than

negligence or inattention to pleading deadlines, we do not see how any of these

factors prevented Lamar from rescheduling the trial before the expiration of the

one-year timeframe. 6 Lamar elected to move forward with settlement negotiations

with full knowledge of the looming deadline. There was no formal agreement

between the parties, written or otherwise, to extend the deadline. While Lamar’s

courtesy toward opposing counsel was commendable, it did not preclude Lamar

from obtaining a written agreement concerning an extension or scheduling trial and

forcing Heavy to ask for such an agreement. In our earliest examination of SDCL

15-30-16 we concluded, “[s]treet talk between the attorneys of the respective

parties, relative to a settlement, which resulted in no agreement, oral or otherwise,

did not justify the delay.” Root, 17 S.D. at 184, 95 N.W. at 917.

[¶20.]         The trial court did indicate some sympathy during the course of the

hearing for the position of Lamar. Its findings of fact and conclusions of law

nevertheless concluded dismissal was appropriate. While harsh, the trial court did



6.       There is no claim of “ambush” or bushwhack in this case which has arisen in
         previous cases. See Sears, 326 N.W.2d at 109 (Dunn J., dissenting). At the
         hearing, counsel for Lamar conceded, “I am not suggesting that [counsel for
         Heavy] would ever-because I know [him] much better than that—would have
         ever laid in wait, so to speak, to see what happens. It’s just coincidence.”

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not abuse its discretion when it concluded that Lamar could be held to what

amounts to “a lack of due diligence in failing to proceed with reasonable

promptitude” and thus dismissal was warranted.

[¶21.]          Affirmed.

[¶22.]          ZINTER, MEIERHENRY and SEVERSON, Justices, and SABERS,

Retired Justice, concur.

[¶23.]          SABERS, Retired Justice, sitting for KONENKAMP, Justice,

disqualified.




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