Farm Bureau v. Dolly , 910 N.W.2d 196 ( 2018 )

#28273-a-DG
2018 S.D. 28IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
FARM BUREAU LIFE INSURANCE
COMPANY and FARM BUREAU
PROPERTY & CASUALTY
INSURANCE COMPANY, Plaintiffs and Appellants,
v.
RYAN DOLLY, Defendant and Appellee.
****
APPEAL FROM THE CIRCUIT COURT OF
THE SEVENTH JUDICIAL CIRCUIT
PENNINGTON COUNTY, SOUTH DAKOTA
****
THE HONORABLE MATTHEW M. BROWN
Judge
****
CASSIDY M. STALLEY of
Lynn, Jackson, Shultz
& Lebrun, P.C.
Rapid City, South Dakota Attorneys for plaintiffs
and appellants.
SARAH E. BARON HOUY
KELSEY B. PARKER of
Bangs, McCullen, Butler,
Foye & Simmons, LLP
Rapid City, South Dakota Attorneys for defendant
and appellee.
****
CONSIDERED ON BRIEFS
ON JANUARY 8, 2018
OPINION FILED 03/21/18
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GILBERTSON, Chief Justice
[¶1.] Farm Bureau Life Insurance Co. and Farm Bureau Property and
Casualty Insurance Co. appeal the circuit court’s partial denial of their request for
preliminary injunctive relief against their former agent Ryan Dolly. They argue the
court erred by enjoining Dolly only from soliciting business from Farm Bureau’s
existing customers without also enjoining Dolly from selling to those customers. We
affirm.
Facts and Procedural History
[¶2.] On December 10, 2012, Dolly entered into two agency contracts with
Farm Bureau Life Insurance Co. and Farm Bureau Property and Casualty
Insurance Co. (collectively, “Farm Bureau”). Under the contracts, Dolly operated as
a captive agent—an independent contractor limited to selling insurance and
financial products produced or approved by Farm Bureau. Unlike an independent
insurance agent, Dolly did not obtain ownership of renewals on the policies he sold;
Farm Bureau retained ownership. Dolly’s contracts with Farm Bureau were
terminated on January 12, 2017, after Dolly notified Farm Bureau that he was
leaving to work for a competing insurer, American National Insurance Co.
[¶3.] The contracts at issue contain provisions that expressly restrain
Dolly’s post-termination conduct. Paragraph 11 of the contracts states, in part:
It is hereby understood and agreed that upon the termination of
this . . . [c]ontract for any reason, [Dolly] will neither sell nor
solicit, directly or indirectly, or initiate replacements or
exchanges of any insurance or annuity product, with respect to
any policyholder of [Farm Bureau], its subsidiaries or affiliates
or any company with which [Farm Bureau] has a marketing
agreement, within any counties in which [Dolly] sold or serviced
any products pursuant to this [c]ontract. . . . This provision will
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be enforceable for a period of eighteen (18) months following the
termination of this [c]ontract.
And paragraph 18 states, in part:
In performing his . . . duties as an [a]gent, [Dolly] will have
access to and receive certain confidential or proprietary
information from or on behalf of [Farm Bureau] (hereinafter
“Confidential Information”). [Dolly] shall take all reasonable
steps necessary to protect the confidential and proprietary
nature of all Confidential Information . . . . [Dolly] shall not
directly or indirectly disclose or make available to any third
party any Confidential Information. [Dolly] agrees not to
appropriate any Confidential Information for his . . . own use
either during the course of or subsequent to termination of this
[c]ontract. Confidential Information shall include, but not be
limited to, any information received by [Dolly] from or on behalf
of [Farm Bureau], including but not limited to customer and
consumer information.
Less than three months after leaving Farm Bureau, Dolly sold American National
insurance policies to clients to whom he had previously sold Farm Bureau policies.
[¶4.] On April 7, 2017, concluding that Dolly had breached paragraphs 11
and 18 of the agency contracts, Farm Bureau filed an action against Dolly seeking
damages and injunctive relief. That same day, Farm Bureau also filed a motion
requesting a temporary restraining order and a preliminary injunction. On
April 11, the circuit court granted Farm Bureau’s request for a temporary
restraining order and enjoined Dolly from “selling or soliciting, or initiating
replacements or exchange of any insurance or annuity product, directly or
indirectly, to [Farm Bureau’s] policyholders within the counties Dolly sold [Farm
Bureau’s] insurance products for a period of eighteen months from January 12,
2017.”
[¶5.] On April 18, 2017, the circuit court held an evidentiary hearing to
consider Farm Bureau’s request for a preliminary injunction. Dolly testified at the
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hearing. On cross-examination, he admitted to having direct contact with, and
selling replacement policies to, Farm Bureau’s existing customers:
[Farm Bureau’s attorney]: Okay. Since leaving Farm
Bureau, you’ve been posting to Facebook, signing customers to
American National, and you’ve had direct contact with Farm
Bureau policyholders; right?
[Dolly’s attorney]: I’m going to object. It’s compound.
[Circuit court]: Sustained.
[Farm Bureau’s attorney]: You’ve texted, e-mailed, and
contact—directly contacted Farm Bureau policyholders; right?
[Dolly’s attorney]: I’m going to object to the extent the
question is vague and doesn’t seek to clarify who initiated the
contact.
[Circuit court]: Well, she said you have. Set a time frame.
[Farm Bureau’s attorney]: Since leaving Farm Bureau.
[Dolly]: Yes.
[Farm Bureau’s attorney]: And you’ve sold and initiated
replacements of American National policies to Farm Bureau
policyholders since you’ve left Farm Bureau; right?
[Dolly]: Yes.
On direct examination, Dolly clarified that while he sold American National policies
to Farm Bureau’s existing customers, he had not solicited those sales:
[Dolly’s attorney]: You left Farm Bureau in January of 2017;
right?
[Dolly]: Uh-huh.
[Dolly’s attorney]: Okay. Since that time have you reached
out to any Farm Bureau customer and sought to persuade them
to leave Farm Bureau?
[Dolly]: No.
[Dolly’s attorney]: Any contact that you have had with an
existing Farm Bureau policyholder, who has initiated that
contact?
[Dolly]: The customer.
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After considering the testimony and other evidence presented, the court readopted
its earlier factual findings and legal conclusions but explicitly struck the word
selling from its order. Thus, while the temporary restraining order prohibited Dolly
from selling or soliciting to Farm Bureau’s existing customers, the preliminary
injunction prohibited Dolly only from soliciting to Farm Bureau’s existing
customers. In the court’s view, the portions of the agency contracts that prohibited
Dolly from selling to Farm Bureau’s existing customers was an invalid restraint on
trade under SDCL chapter 53-9.
[¶6.] Farm Bureau appeals, raising the following issue: Whether an
agreement between an insurance company and its former captive agent that
precludes the agent from soliciting or selling other insurance products to the
company’s existing customers for a period of 18 months is valid under SDCL
chapter 53-9.
Standard of Review
[¶7.] The central issue presented in this appeal is the interpretation of a
statute. “Questions of statutory interpretation and application are reviewed under
the de novo standard of review with no deference to the circuit court’s decision.”
Deadwood Stage Run, LLC v. S.D. Dep’t of Revenue, 2014 S.D. 90, ¶ 7, 857 N.W.2d
606, 609 (quoting Argus Leader v. Hagen, 2007 S.D. 96, ¶ 7, 739 N.W.2d 475, 478).
Analysis and Decision
[¶8.] Farm Bureau argues the circuit court erred by enjoining Dolly only
from soliciting business from Farm Bureau’s existing customers without also
enjoining Dolly from selling to those customers. Since before statehood, the general
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rule in South Dakota is that “[a]ny contract restraining exercise of a lawful
profession, trade, or business is void to that extent, except as provided by §§ 53-9-9
to 53-9-12, inclusive.” SDCL 53-9-8 (emphasis added). 1 In 2005, the Legislature
enacted SDCL 53-9-12, which contains an exception to this general rule for
contracts between an insurance company and “[a]ny independent contractor who is
an insurance producer as defined in subdivision 58-1-2(16) and is a captive agent
who is not an independent agent and who works exclusively for a single insurance
company or an affiliated group of insurance companies[.]” Under this exception, the
captive agent may agree
(1) Not to engage directly or indirectly in the same business or
profession as that of the insurer for any period not exceeding
two years from the date of termination of the independent
contractor’s agreement with the insurer; and
(2) Not to solicit existing customers of the insurer within a
specified county, first or second class municipality, or other
specified area for any period not exceeding two years from
the date of termination of the agreement, if the insurer
continues to carry on a like business within the specified
area.
Id. Farm Bureau contends that the legislative history of SDCL 53-9-12 suggests
that a captive agent and an insurance company may enter into an agreement
prohibiting the agent from soliciting or selling (unsolicited) to existing customers.
Farm Bureau also contends that a literal reading of SDCL 53-9-12 is absurd
because it “nullifies” what Farm Bureau perceives to be the legislative intent.
[¶9.] Farm Bureau’s reliance on legislative history is misplaced. “This
[C]ourt assumes that statutes mean what they say and that legislators have said
1. This code provision dates back to Dakota Territory’s civil code. See Dak. Rev.
Codes, Civ. Code § 959 (1877).
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what they meant.” In re Petition of Famous Brands, Inc., 347 N.W.2d 882, 885 (S.D.
1984). “[R]esorting to legislative history is justified only when legislation is
ambiguous . . . .” Id. “When interpreting a statute, we begin with the plain
language and structure of the statute.” Magellan Pipeline Co. v. S.D. Dep’t of
Revenue & Reg., 2013 S.D. 68, ¶ 9, 837 N.W.2d 402, 404 (quoting In re Pooled
Advoc. Tr., 2012 S.D. 24, ¶ 32, 813 N.W.2d 130, 141). “When the language in a
statute is clear, certain[,] and unambiguous, there is no reason for construction, and
the Court’s only function is to declare the meaning of the statute as clearly
expressed.” Rowley v. S.D. Bd. of Pardons & Paroles, 2013 S.D. 6, ¶ 7, 826 N.W.2d
360, 363-64 (quoting In re Estate of Hamilton, 2012 S.D. 34, ¶ 7, 814 N.W.2d 141,
143). Thus, ambiguity is a prerequisite of construction. People ex rel. J.L.,
2011 S.D. 36, ¶ 4, 800 N.W.2d 720, 722. Ambiguity “may exist where the literal
meaning of a statute leads to an absurd or unreasonable conclusion[,]”id. (quoting
In re Sales Tax Refund Applications of Black Hills Power & Light Co., 298 N.W.2d
799, 803 (S.D. 1980)), or when a statute “is capable of being understood by
reasonably well-informed persons in either of two or more senses[,]” Kling v. Stern,
2007 S.D. 51, ¶ 6, 733 N.W.2d 615, 617 (quoting Petition of Famous Brands,
347 N.W.2d at 886).
[¶10.] The circuit court’s conclusion that SDCL 53-9-12 permits an agreement
not to solicit—rather than not to sell to—an insurer’s existing customers is the only
reasonable interpretation of that statute. Under the plain language of SDCL 53-9-
12(1), a captive agent may agree to abstain entirely from the insurance business.
But when the agent does not agree to abstain entirely from the insurance
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business—as is the case here—SDCL 53-9-12(2) permits the agent to agree “[n]ot to
solicit existing customers of the insurer[.]” (Emphasis added.) The word solicit is
not defined in SDCL Title 53, which addresses the topic of contracts, but it is
defined in SDCL Title 58, which addresses the topic of insurance. Under Title 58,
the word solicit is defined as “attempting to sell insurance or asking or urging a
person to apply for a particular kind of insurance from a particular company[.]”
SDCL 58-30-142(10) (emphasis added). The Legislature has declared that
“[w]henever the meaning of a word or phrase is defined in any statute such
definition is applicable to the same word or phrase wherever it occurs except where
a contrary intention plainly appears.” SDCL 2-14-4. No such contrary intention is
apparent here. Thus, while SDCL 53-9-12(2) permits a captive agent to agree not
to, e.g., ask or urge an insurance company’s existing customers to purchase new
policies from the agent, that statute contains no provision for permitting an agent
who continues to sell insurance to agree not to sell policies to existing customers
who—unsolicited—request such policies.
[¶11.] Even so, Farm Bureau contends the plain meaning of SDCL 53-9-12 is
absurd. In Farm Bureau’s view, that statute is meant to protect an insurance
company from having a captive agent “resign and immediately start selling
insurance products of a competitor to former customers[.]” Yet, permitting an agent
to agree not to ask or urge an insurance company’s existing customers to buy new
policies does protect that company. An agent who does not actively seek out a
company’s existing customers to try to convince them to buy new policies will
naturally draw less business away from that company than an agent who does.
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While adding the words or sell to to SDCL 53-9-12 would broaden the protection
available to an insurance company under that statute, this increased protection
would be achieved by curtailing the options available to the company’s existing
customers. The plain language of SDCL 53-9-12, as discussed above, balances the
interests of an insurance company with the consumer’s interest in deciding whether
he or she would rather purchase a new policy from a familiar agent or renew a
familiar policy with a new agent. This balanced approach is not absurd simply
because the Legislature could have broadened SDCL 53-9-12’s exception to
SDCL 53-9-8. 2
2. As does Farm Bureau, the special writing argues our reading of SDCL 53-9-
12 is “absurd.” Infra ¶ 21. The special writing reasons that because
SDCL 53-9-12(1) permits a captive agent to agree not to sell insurance to any
consumer, and because SDCL 53-9-12(2) permits the agent to agree not to
solicit from only some consumers, this Court should infer that the Legislature
intended to permit an agent to agree not to sell to only some consumers as
well. Infra ¶ 22.
But the special writing’s view of SDCL 53-9-12 presents a scenario altogether
different from those presented by the plain text of SDCL 53-9-12(1)
and -12(2). Regardless of whether Dolly agreed to leave the insurance
business altogether under SDCL 53-9-12(1) or whether he agreed only to
refrain from soliciting business from previous customers under SDCL 53-9-
12(2), in neither case would those customers be prohibited from buying
insurance policies from American National. But under the special writing’s
view of SDCL 53-9-12, Dolly and Farm Bureau could essentially agree to
prohibit Dolly’s previous customers from entering into business transactions
with American National. This Court has previously rejected agreements that
attempt to limit a third party’s power to contract. See Commc’n Tech. Sys.,
Inc. v. Densmore, 1998 S.D. 87, ¶¶ 11-20, 583 N.W.2d 125, 127-30.
More importantly, the special writing’s argument overlooks that SDCL 53-9-
12 is an exception to SDCL 53-9-8’s general prohibition against contracts that
restrain trade. Thus, any expansion of SDCL 53-9-12 necessarily diminishes
SDCL 53-9-8. As such, SDCL 53-9-12 “must be construed narrowly so as to
promote the prohibition against contracts in restraint of trade.” Commc’n
Tech. Sys., 1998 S.D. 87, ¶ 15, 583 N.W.2d at 128 (emphasis added) (quoting
(continued . . .)
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[¶12.] Even if resorting to legislative history were appropriate, the history
Farm Bureau relies on is not persuasive. To support its view of the Legislature’s
intent in passing SDCL 53-9-12, Farm Bureau primarily relies on statements made
by lobbyists at a hearing before the South Dakota House of Representatives’
Commerce Committee. Farm Bureau also quotes the commentary of a single
legislator. This Court has “consistently held that statements of individual
legislators are not persuasive to establish the intent of the Legislature for a
particular statute. There are 105 legislators and there may be 105 different[,]
individual reasons they vote for or against a bill.” Benson v. State, 2006 S.D. 8, ¶ 72
n.15, 710 N.W.2d 131, 159 n.15 (citation omitted). And while a lobbyist’s
statements may be evidence of a statute’s legislative history, they are not evidence
of the Legislature’s intent. As noted above, this Court’s rule of statutory
interpretation “is that the Legislature said what it meant and meant what it said
from the text of the statute.” Id. (emphasis added).
Conclusion
[¶13.] In light of the foregoing, the plain meaning of SDCL 53-9-12 supports
the circuit court’s decision to adhere to that statute’s language. And even if
SDCL 53-9-12 were ambiguous, Farm Bureau’s legislative-history analysis is not
persuasive. The general rule against contracts in restraint of a lawful profession,
________________
(. . . continued)
Cent. Monitoring Serv. v. Zakinski, 1996 S.D. 116, ¶ 9, 553 N.W.2d 513, 516).
The special writing’s suggestion that this Court should infer an exception not
reflected in the plain text of SDCL 53-9-12 is not a narrow construction of
that statute. If SDCL 53-9-12 is to be expanded, it should be done
legislatively and not judicially.
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trade, or business is a legislative expression of public policy, Kidder Equity Exch. v.
Norman, 42 S.D. 229, 232, 173 N.W. 728, 729 (1919), and exceptions like SDCL 53-
9-12 “must be construed narrowly so as to promote the prohibition against contracts
in restraint of trade[,]” Commc’n Tech. Sys., Inc. v. Densmore, 1998 S.D. 87, ¶ 15,
583 N.W.2d 125, 128 (quoting Cent. Monitoring Serv. v. Zakinski, 1996 S.D. 116,
¶ 9, 553 N.W.2d 513, 516). Therefore, we affirm.
[¶14.] ZINTER, SEVERSON, and KERN, Justices, concur.
[¶15.] JENSEN, Justice, concurs in result.
JENSEN, Justice (concurring in result).
[¶16.] I concur in result but disagree with the majority’s statement that “[t]he
circuit court’s conclusion that SDCL 53-9-12 permits an agreement not to solicit—
rather than not to sell to—an insurer’s existing customers is the only reasonable
interpretation of that statute.” Supra ¶ 10.
[¶17.] SDCL 53-9-12 is one of the statutorily created exceptions to SDCL 53-
9-8, which declares contracts that restrain trade to be void against public policy.
SDCL 53-9-12 authorizes contracts between an insurer and an independent, captive
agent that restrain the agent. Under the statute, a captive agent may agree:
(1) Not to engage directly or indirectly in the same business
or profession as that of the insurer for any period not
exceeding two years from the date of termination of the
independent contractor’s agreement with the insurer; and
(2) Not to solicit existing customers of the insurer within a
specified county, first or second class municipality, or
other specified area for any period not exceeding two
years from the date of termination of the agreement, if
the insurer continues to carry on a like business within
the specified area.
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SDCL 53-9-12.
[¶18.] Subsection (1) authorizes a noncompete agreement that prohibits a
captive agent from engaging directly or indirectly in the same business as the
insurer for a period of two years from the date of termination of the captive agent’s
employment with the insurance company. Subsection (2) authorizes a
nonsolicitation agreement that prohibits an agent from soliciting customers of the
insurance company for a period of two years within a defined geographical area.
The two subsections in SDCL 53-9-12 are separated by the conjunction “and,” so
that an insurance company and captive agent may include both a noncompete and
nonsolicitation provision in an agreement.
[¶19.] I agree with the majority that subsection (2) sanctions nonsolicitation
agreements, and that an agreement preventing a former captive agent from selling
to a customer is not included in the term solicit under subsection (2). However, I
part company with the majority’s reading of subsection (1). The majority
acknowledges under subsection (1) that a captive agent “may agree to abstain
entirely from the insurance business[.]” Supra ¶ 10. But the majority then
concludes that “when the agent does not agree to abstain entirely from the
insurance business,” SDCL 53-9-12 limits the insurance company to the
nonsolicitation language of SDCL 53-9-12(2). Supra ¶ 10. This incorrectly suggests
an either/or reading of the two subsections and misreads subsection (1) of the
statute.
[¶20.] “We begin our interpretation of a statute with an analysis of its plain
language and structure.” Puetz Corp. v. S.D. Dep’t of Revenue, 2015 S.D. 82, ¶ 16,
871 N.W.2d 632, 637. The language of SDCL 53-9-12(1) provides that an insurer
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and a captive agent may agree that the agent will not “engage directly or indirectly
in the same business or profession as that of the insurer.” (Emphasis added.) The
statutory exception does not define or further modify the language “same business
or profession.” I agree with the majority that the language of the statute is broad
enough to allow a noncompete agreement that completely forecloses a captive agent
from engaging in the insurance industry to whatever extent that is the same
business as the insurer. However, that same language also encompasses a
noncompete agreement that restricts an agent from selling insurance products to
policyholders of the insurer since that is the same business of the insurer.
[¶21.] The majority’s reading of SDCL 53-9-12(1) suggests the Legislature
only intended to authorize a noncompete agreement that mimics the full breadth of
the exception created in the statute. Adopting this reading of the statute leads to
an absurd conclusion. The majority’s reading suggests that the Legislature
intended to create a broad exception to the public policy against restraints on trade
for a noncompete agreement that completely prevents a captive agent from
engaging in the business of the insurer, including selling insurance to the insurer’s
policyholders. But the majority’s reading also suggests that the Legislature did not
intend to authorize a more narrowly tailored noncompete agreement that only
restricts the agent from selling insurance to the insurer’s policyholders. Such a
narrower noncompete agreement falls well within the breadth of the exception
created by the Legislature in SDCL 53-9-12(1). 3 When construing statutes, we
3. The majority states that its interpretation is a “balanced approach [that] is
not absurd simply because the Legislature could have broadened SDCL 53-9-
(continued . . .)
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“presume[] that the legislature did not intend an absurd or unreasonable result.”
Argus Leader Media v. Hogstad, 2017 S.D. 57, ¶ 9, 902 N.W.2d 778, 782 (quoting
Hayes v. Rosenbaum Signs & Outdoor Advert., Inc., 2014 S.D. 64, ¶ 28, 853 N.W.2d
878, 885). This Court has stated that “ambiguity is a condition of construction, and
may exist where the literal meaning of a statute leads to an absurd or unreasonable
conclusion.” People ex rel. J.L., 2011 S.D. 36, ¶ 4, 800 N.W.2d 720, 722 (quoting In
re Sales Tax Refund Applications of Black Hills Power & Light Co., 298 N.W.2d 799,
803 (S.D. 1980)).
[¶22.] I submit that a proper reading of SDCL 53-9-12 harmonizes both
subsections together. An insurance company and captive agent may agree to both a
noncompete and a nonsolicitation agreement that is no broader than the exception
created in each subsection of the statute. If the insurer determines that it
adequately protects itself to limit the definition of business in the noncompete
agreement to restricting the agent from selling insurance to its policyholders, that is
well within the parameters of the exception set by the legislature and is not void
under SDCL 53-9-8. This reading is consistent with the plain language of the
statute and this Court’s requirement that the statutory exceptions to restraints on
trade “must be construed narrowly so as to promote the prohibition against
________________
(. . . continued)
12’s exception to SDCL 53-9-8.” Supra ¶ 11. This statement highlights the
focus of this special writing: the Legislature did, in fact, create a broad
exception in SDCL 53-9-12 by sanctioning a noncompete agreement that
restricts a captive agent from engaging in the same business as the insurer.
As long as the noncompete agreement only restricts the agent from engaging
in the same business as the insurer, such as selling insurance, the agreement
is not void under the broad exception in SDCL 53-9-12.
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contracts in restraint of trade.” Commc’n Tech. Sys., Inc. v. Densmore, 1998 S.D. 87,
¶ 15, 583 N.W.2d 125, 128 (quoting Cent. Monitoring Serv., Inc. v. Zakinski,
1996 S.D. 116, ¶ 9, 553 N.W.2d 513, 516). This reading also accomplishes the
Legislature’s apparent intent in SDCL 53-9-12 to protect the business interests of
the insurer. It also furthers the Legislature’s stated public policy against restraints
on trade in SDCL 53-9-8 by lessening the noncompete agreement’s burden on the
agent.
[¶23.] Although I believe the agreement here is not a restraint on trade under
the legislatively created exception in SDCL 53-9-12(1), I concur in result because
Farm Bureau claimed before the circuit court that the agreement was solely a
nonsolicitation agreement under SDCL 53-9-12(2). Farm Bureau’s senior in-house
counsel testified as follows at the hearing on the preliminary injunction:
[Dolly’s counsel]: You’re referring to 53-9-12?
[In-house counsel]: Yes. If that’s the one with the two
subsections.
[Dolly’s counsel]: Okay.
[In-house counsel]: In the first subsection of that, it allows for
a two-year non-compete, which says we would be within our
rights, written into our contract that Mr. Dolly be not allowed to
sell insurance for two years.
[Dolly’s counsel]: And you didn’t do that, did you?
[In-house counsel]: No. But we do ask that he not solicit his
contract, his former agents, for 18 months, which seems to me to
be a much more reasonable provision than the first subsection of
that statute.
[¶24.] As a result, the circuit court focused only on SDCL 53-9-12(2) in
determining whether the contractual provision that prohibited Dolly from selling
insurance to any Farm Bureau policyholders was void as a restraint on trade. The
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court stated, “I find that under the statutes and the plain reading of the statutes in
53-9-8, which is the statute in which essentially voids restraints on trade and then
gives exceptions, one of those being 53-9-12 and specifically 53-9-12 Subsection 2,
only exempts solicitation and not sales.” Farm Bureau is critical of the circuit court
for failing to address subsection (1) of SDCL 53-9-12 in its ruling. But Farm Bureau
affirmatively claimed before the circuit court that it did not ask Dolly to sign a
noncompete agreement, but only a nonsolicitation agreement under subsection (2).
When a party fails to argue or object to an issue below, thereby denying the circuit
court an opportunity to correct its mistakes, the party waives its right to argue the
issue on appeal. See Veith v. O’Brien, 2007 S.D. 88, ¶ 35, 739 N.W.2d 15, 26.
Because Farm Bureau failed to assert below that the agreement with Dolly was also
a valid noncompete agreement under SDCL 53-9-12(1), I concur in result with the
majority opinion.
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