Justia Business Law Opinion Summaries

Articles Posted in South Dakota Supreme Court
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Hutterville Colony, a nonprofit religious corporation, had two opposing factions. Both factions sought exclusive power over Hutterville. Their schism led to two lawsuits, including one faction's suit seeking judicial dissolution of Hutterville. Eventually, the Supreme Court ordered dismissal of the suit, concluding that the circuit court lacked subject matter jurisdiction to order judicial dissolution of Hutterville. This appeal concerned the circuit court's actions following the Court's decision. The Supreme Court affirmed, holding (1) the circuit court did not err when it continued to exercise jurisdiction over Hutterville and its property following remittitur; (2) the circuit court had the authority and duty to wind up the receivership and discharge the receiver; (3) the circuit court did not abuse its discretion in ordering payment of the receiver's fees and expenses from receivership funds and allowing the receiver to use receivership funds to pay the expenses of third parties; (4) the circuit court did err in releasing the receiver from liability, as the receiver's appointment and receivership were valid under state law; and (5) the circuit court did not err in ordering the receiver to return receivership funds to the corporation. View "Wipf v. Hutterville Hutterian Brethren" on Justia Law

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At the start of each beekeeping season, Elllingson's Inc. placed its honey bees on the real property of others. After Ellingson's determined it would not longer own bees, it leased to other beekeepers the right to place bees on the property of some of the landowners with whom Ellingson's had been doing business. In 2011, Jim Ammann, a competing beekeeper, sought permission to place his bees on the property of landowners who had previously given Ellingson's permission to place bees. Several landowners subsequently revoked the permission they had given Ellingson's and granted Ammann permission to place his bees on their property. David Ellingson, a principal in Ellingson's, sued Ammann for interference with a business relationship and other causes of action. The circuit court granted summary judgment in favor of Ammann. The Supreme Court affirmed, holding that David had no business interference claim he could assert in his individual capacity, and thus, summary judgment in favor of Ammann was proper. View "Ellingson v. Ammann" on Justia Law

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AgFirst Farmers Cooperative (AgFirst) sued Diamond C Dairy (Diamond) for cattle feed allegedly purchased by Diamond. Diamond admitted it owed AgFirst for some of the feed but contended that some shipments could have been sent to a facility in Ft. Dodge, Iowa that was owned by another company. The trial court disallowed this defense by refusing to allow Diamond to withdraw its admissions admitting that the feed had been delivered to its facility. Diamond also contended it did not owe AgFirst for some shipments because Diamond's facility did not have sufficient storage capacity to accommodate those loads of feed. The circuit court rejected this second defense and awarded AgFirst a money judgment. The Supreme Court affirmed in part and reversed in part, holding (1) the circuit court's findings of fact were adequate to support its determination that there was sufficient storage space at Diamond's facility to have accepted AgFirst's deliveries; (2) the record was inadequate to determine whether the award of attorney's fees and expenses to AgFirst was appropriate; and (3) the court applied the wrong test in denying Diamond's request to withdraw admissions relating to the Ft. Dodge defense. Remanded for a new trial on that issue. View "AgFirst Farmers Coop. v. Diamond C Dairy, LLC" on Justia Law

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Plaintiff was the owner of a voting interest in Coldwell Banker Lewis-Kirkeby-Hall Real Estate, Inc. (CBLKH). Plaintiff and Defendant entered into a contract under which the parties agreed that Plaintiff would sell Defendant his shares of CBLKH voting stock. On the closing date of the contract, Defendant failed to attend the closing and did not pay the amount agreed upon for Plaintiff's shares. After negotiations between the parties failed, Plaintiff brought suit for breach of contract against Defendant. Defendant raised the defense that his consent to enter into the contract was obtained by fraud. After a trial, the trial court entered judgment against Defendant for $250,000. The Supreme Court reversed and remanded for a new trial, holding (1) the trial court correctly concluded that the contract was clear and unambiguous as to Defendant's receipt of financial documents; but (2) the court erred in barring Defendant's fraudulent inducement evidence under the parole evidence rule. View "Poeppel v. Lester" on Justia Law

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Homeowners obtained a default judgment against an LLC. Although the LLC's manager (Manager) was listed as an individual defendant, the default was only against the LLC. A partial satisfaction of the judgment was later entered. Afterwards, the trial court issued an order stating that any other claims against Manager were dismissed with prejudice. Later, LLC unsuccessfully challenged the amount of the partial satisfaction of judgment. Thereafter, Manager, individually and on behalf of the LLC, filed a notice of appeal appealing four separate orders made in the case. Homeowners moved to dismiss, arguing that the appeal was untimely, Manager was not an attorney and could not represent the LLC, and Manager was not an aggrieved party. The Supreme Court dismissed the appeal, holding (1) the appeal of three of the orders was untimely; (2) a non-licensed attorney is not permitted to appear pro se to represent an LLC; and (3) because all of the claims against Manager were dismissed, he was not an aggrieved party and could not appeal the remaining order, the partial satisfaction of judgment order. View "Smith v. Rustic Home Builders, LLC" on Justia Law

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Defendant-Appellant James Brown owned interests in several businesses. In late 2004, he acquired and redesigned two convenience stores on opposite sides of Exit 2 on Interstate 29 in North Sioux City, South Dakota. Plaintiff-Appellee Stern Oil, a fuel distributor for Exxon Mobil Corporation, contacted Brown while he was remodeling the properties. Although Brown was negotiating with another fuel distributor, he ultimately elected to do business with Stern Oil. When Brown notified Stern Oil that he would no longer purchase its fuel, Stern Oil initiated this breach of contract action. Brown filed a counterclaim, alleging fraudulent inducement. Stern Oil argued that Brown contracted to purchase a minimum amount of fuel for a ten-year period. The circuit court granted Stern Oil's motion for summary judgment on both the breach of contract claim and on Brown's counterclaim, but the issue of damages proceeded to trial. After trial, the circuit court awarded Stern Oil eight years of lost profits. Brown appealed. Upon review, the Supreme Court reversed the circuit court's grant of summary judgment. Both Brown's fraudulent inducement counterclaim and Stern Oil's breach of contract claim involved disputed material facts. Therefore, the Court concluded the circuit court erred in granting Stern Oil summary judgment. The case was remanded for further proceedings. View "Stern Oil Co. v. Brown" on Justia Law

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Plaintiff-Appellant Randy Kramer initiated a breach of contract action against Mike D. Murphy and the William F. Murphy Self-Declaration of Trust (Trust). Tri-State Ethanol, LLC owned an ethanol plant in Rosholt, South Dakota. Kramer was one of the members and managers of Tri-State Ethanol. Kramer was also a member of White Rock Pipeline, LLC, which owned a pipeline that supplied natural gas to Tri-State Ethanol. In order to comply with various federal regulations, Tri-State Ethanol determined it was necessary to purchase the membership interests of Kramer, Murphy, Woods, and the Trust. To accomplish this, Tri-State Ethanol entered into a loan agreement (Loan Agreement) with Murphy and the Trust. Tri-State Ethanol was unable to meet its financial obligations and eventually filed for Chapter 11 bankruptcy. During the course of the bankruptcy proceedings, Murphy and the Trust reached a settlement agreement regarding payment of the Loan Agreement and the Disbursement Agreement. Murphy and the Trust, through its trustee, represented to the bankruptcy court that they would use the settlement proceeds to pay Kramer the amounts owed under the Disbursement Agreement. The bankruptcy court approved the settlement agreement. After the settlement proceeds from Tri-State Ethanol’s bankruptcy estate were distributed, Murphy and the Trust refused to pay Kramer the full amount listed in the Disbursement Agreement. Kramer then filed a complaint against Murphy and the Trust for breach of the Disbursement Agreement. Murphy filed a motion to dismiss on the grounds of improper venue. He claimed that the forum-selection clauses contained in the Loan Agreement, the Balloon Note, and the Promissory Note controlled for any suit brought on the Disbursement Agreement. The circuit court agreed and dismissed the case. It found that while the Disbursement Agreement itself had no forum-selection clause, the other three agreements contained forum-selection clauses providing that the Fourteenth Judicial District in Rock Island County, Illinois was the proper forum. The circuit court reasoned that the agreements must be considered as a whole. After examining each of documents collectively as one contract, the Supreme Court held that the trial court did not err in finding that the parties intended the venue for any suit on the Disbursement Agreement to be the Fourteenth (14th) Judicial District in Rock Island County, Illinois. The circuit court’s dismissal of this case was affirmed. View "Kramer v. William F. Murphy Self-Declaration of Trust" on Justia Law

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Dan Prue sold his majority interest in DT-Trak Consulting, a medical coding business, for a lump-sum payment and several annual payments. DT-Trak withheld an annual payment, asserting that Prue had violated the parties' stock purchase agreement. The matter proceeded to arbitration. A three-member arbitration panel made an award in Prue's favor. DT-Trak sought to vacated the award, alleging that the arbitrator it selected demonstrated evident partiality and that the panel's findings of fact and conclusions of law were insufficient. The circuit court affirmed. The Supreme Court affirmed, holding that under either the Federal Arbitration Act or South Dakota Arbitration Act, DT-Trak failed to show that the arbitration award should be vacated, as (1) there was no support that any member of the arbitration panel exhibited evident partiality; and (2) the findings of fact and conclusions of law submitted by the panel were sufficient under the requirements of the agreement. View "DT-Trak Consulting, Inc. v. Prue" on Justia Law

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Minority shareholders (Plaintiffs) brought this action against minority shareholders (Defendants), individually and as officers or directors of Multi-Community Cooperative Dairy (MCC Dairy). Plaintiffs' amended complaint alleged six causes of action, including oppression and/or unfairly prejudicial conduct toward minority shareholders, breach of fiduciary duty, tortious interference, and restraint of trade or commerce. The circuit court granted Defendants' motion for summary judgment on the amended complaint. The court also granted Defendants' motion for sanctions on the ground that Plaintiffs and their counsel had abused the discovery process. The Supreme Court affirmed, holding (1) the circuit court id not err as a matter of law in granting summary judgment, as there was no support that Defendants engaged in any wrongdoing; and (2) the circuit court did not abuse its discretion in ordering sanctions against Plaintiffs for abuse of discovery in refusing to attend depositions scheduled by Defendants.

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Loren Pourier, the owner of a corporation that operated a gas station on reservation land, brought an action against the state Department of Revenue and Regulation to protest a state motor-fuel tax imposed on the corporation. The Supreme Court held that the fuel tax was illegal in Pourier I. Pourier then filed a motion for costs and attorneys' fees. The circuit court granted the motion. The Department appealed, contending that the position it took in Pourier I was "substantially justified" under S.D. Codified Laws 10-59-34. The Supreme Court reversed after undertaking a three-pronged analysis, holding that the circuit court erred in finding the position the Department took in the Pourier litigation was not substantially justified and thus ordering the Department to pay Pourier's costs and attorneys' fees.