Ellingson v. Ammann

#26438-a-SLZ
2013 S.D. 32
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
DAVID ELLINGSON, Plaintiff and Appellant,
v.
JIM AMMANN, Defendant and Appellee.
****
APPEAL FROM THE CIRCUIT COURT OF
THE THIRD JUDICIAL CIRCUIT
GRANT COUNTY, SOUTH DAKOTA
****
THE HONORABLE RONALD K. ROEHR
Judge
****
ROBERT L. SPEARS
Watertown, South Dakota Attorney for plaintiff
and appellant.
JACK H. HEIB
ZACHARY W. PETERSON of
Richardson, Wyly, Wise,
Sauck & Hieb, LLP
Aberdeen, South Dakota Attorneys for defendant
and appellee.
****
CONSIDERED ON BRIEFS
ON FEBRUARY 12, 2013
OPINION FILED 04/10/13
#26438
ZINTER, Justice
[¶1.] At the start of each beekeeping season, Ellingson’s Inc. placed its
honey bees on the real property of others, a common practice in the beekeeping
industry. After Ellingson’s Inc. determined it would no longer own bees, it sought to
lease to other beekeepers the right to place bees on the property of some of the
landowners with whom Ellingson’s Inc. had been doing business. In the spring of
2011, Jim Ammann (Ammann), a competing beekeeper, sought permission to place
his bees on the property of a number of the landowners who had previously given
Ellingson’s Inc. permission to place bees. At least six landowners subsequently
revoked the permission they had given Ellingson’s Inc. and granted Ammann
permission to place his bees on their property. David Ellingson (David), a principal
in Ellingson’s Inc., then sued Ammann for interference with a business relationship
and other related causes of action. The circuit court granted summary judgment in
favor of Ammann on procedural and substantive grounds. We affirm because David
had no business interference claim that he could assert in his individual capacity.
Facts and Procedural History
[¶2.] David was the president of Ellingson’s Inc., a corporation involved in
beekeeping and the manufacture and marketing of honey. During his years in the
beekeeping business, David never personally owned bees outside of Ellingson’s Inc.
As is common in the beekeeping industry, Ellingson’s Inc. placed its bees on the
property of others during the honey-producing season. In return, at the close of
each season, Ellingson’s Inc. provided the landowners with a package of honey,
known as “yard rent.”
-1-
#26438
[¶3.] In the fall of 2010, Ellingson’s Inc. provided its landowners with a
letter informing them that David would be retiring. The landowners were also
informed that although some aspects of the business would continue, Ellingson’s
Inc. would no longer own bees. However, the letter assured the landowners that
Ellingson’s Inc. would arrange for other beekeepers to bring bees to the landowners’
property. The record reflects that Ellingson’s Inc. was planning to “lease” to other
beekeepers the right to place bees on the landowners’ property.
[¶4.] South Dakota law requires that beekeepers file a permission slip,
signed by each landowner, confirming that the beekeeper is authorized to place bees
on the landowner’s property. 1 In preparing for the 2011 season, Ellingson’s Inc.
obtained permission slips from individual landowners in January 2011. In May
2011, David learned that six landowners cancelled the permission slips given to
Ellingson’s Inc. and granted permission slips to Ammann.
[¶5.] David subsequently filed suit against Ammann for interference with a
business relationship, fraud and misrepresentation, and unfair competition. After
discovery, Ammann moved for summary judgment. The circuit court issued a
memorandum decision granting Ammann’s motion. A final order was filed four
days later. Although David contends there were issues of fact precluding summary
judgment on the merits, it is only necessary to address two questions on appeal: (1)
1. SDCL 38-18-3 provides: “Any person owning, leasing, or possessing bees shall
file an application registering the bees and each apiary with the secretary. . .
. The landowner or lessee authorizing the placement of an apiary on a
location may revoke the authorization by notifying the owner of the apiary
and the secretary in writing.”
-2-
#26438
whether David was entitled to relief in his individual capacity, and (2) whether
David is entitled to appellate attorney’s fees.
Decision
[¶6.] The circuit court first granted Ammann summary judgment reasoning
that David was not entitled to relief in his individual capacity. 2 “The general rule is
that the corporation is looked upon as a separate legal entity until there is sufficient
reason to the contrary.” Mobridge Cmty. Indus., Inc. v. Toure, Ltd., 273 N.W.2d
128, 132 (S.D. 1978). Further, “[e]very action shall be prosecuted in the name of the
real party in interest.” SDCL 15-6-17(a). “The real party in interest rule is
satisfied ‘if the one who brings the suit has a real, actual, material, or substantial
interest in the subject matter of the action.’” Biegler v. Am. Family Mut. Ins. Co.,
2001 S.D. 13, ¶ 27, 621 N.W.2d 592, 600. “The purpose of the real party in interest
provision is to assure that a defendant is required only to defend an action brought
by a proper party plaintiff and that such an action must be defended only once.” Id.
[¶7.] David brought this suit in his individual capacity. But David conceded
that he “does not and has never personally owned any bees, outside of Ellingson’s
[Inc.].” Further, the “Bee Location Permission” slips, which granted the right to
place bees on the landowners’ property, granted that right to Ellingson’s Inc., rather
2. “This Court reviews entry of summary judgment de novo.” Hass v. Wentzlaff,
2012 S.D. 50, ¶ 11, 816 N.W.2d 96, 101. “Our task on appeal is to determine
only whether a genuine issue of material fact exists and whether the law was
correctly applied.” Id.
-3-
#26438
than David as an individual. 3 Because David had no business expectancy with the
landowners other than through Ellingson’s Inc., the circuit court did not err in
granting summary judgment on the basis that David had no individual claims.
[¶8.] On appeal, however, David argues that he “should have been given an
opportunity to amend his complaint” and that the grant of summary judgment on
this basis was “unduly harsh.” We disagree because David failed to seek this relief
below. A memorandum decision is not a binding decision ending the case.
Poindexter v. Hand Cnty. Bd. of Equalization, 1997 S.D. 71, ¶ 18, 565 N.W.2d 86,
91. “As its name implies, a memorandum opinion is merely an expression of the
trial court’s opinion of facts and law.” Jones v. Jones, 334 N.W.2d 492, 494 (S.D.
1983). Therefore, “[i]t is the prerogative of the [circuit] court to re-think a decision
from the bench or a memorandum decision.” Id. David did not ask the circuit court
to reconsider or move to amend his complaint to substitute parties before the
judgment became final.
[¶9.] David also failed to seek relief from the final judgment. “On motion
and upon such terms as are just, the court may relieve a party . . . from a final
judgment, order, or proceeding[.]” SDCL 15-6-60(b). A party may seek such relief
on the basis of “[m]istake, inadvertence, surprise or excusable neglect[.]” SDCL 15-
6-60(b)(1). But David did not seek relief from the judgment on the ground of
surprise or excusable neglect.
3. Only one of the permission slips at issue even mentions David, and even that
permission slip appears to grant permission to the corporation.
-4-
#26438
[¶10.] David’s first request to amend his complaint was made in his reply
brief filed with this Court. “A party may not raise an issue for the first time on
appeal, especially in a reply brief when the other party does not have the
opportunity to answer.” Agee v. Agee, 1996 S.D. 85, ¶ 21 n.4, 551 N.W.2d 804, 807
n.4; see also State v. Engesser, 2003 S.D. 47, ¶ 32, 661 N.W.2d 739, 750. Failing to
raise an issue prior to appeal effectively serves as a waiver. Engesser, 2003 S.D. 47,
¶ 32, 661 N.W.2d at 750. David failed to preserve his appellate arguments that he
should have been given the opportunity to amend his complaint and that summary
judgment was unduly harsh.
[¶11.] Given that David has no individual claims against Ammann, the
circuit court’s summary judgment is affirmed. Because David was not the proper
party plaintiff, we do not address the grant of summary judgment on the merits.
[¶12.] David seeks appellate attorney’s fees under SDCL 15-26A-87.3. SDCL
15-26A-87.3 provides that appellate attorney’s fees may be sought “in actions where
such fees may be allowable . . . .” “We have interpreted this to mean that appellate
attorney fees may be granted ‘only where such fees are permissible at the trial
level.’” Grynberg Exploration Corp. v. Puckett, 2004 S.D. 77, ¶ 33, 682 N.W.2d 317,
324. The failure to cite authority that “appellate attorney fees are proper in this
type of action” serves as a waiver of the motion for attorney’s fees. SBS Fin. Servs.,
Inc. v. Plouf Family Trust, 2012 S.D. 67, ¶ 25, 821 N.W.2d 842, 847. Although
David’s motion demonstrates technical compliance with the requirements of SDCL
15-26A-87.3, his motion fails to demonstrate that “such fees [are] allowable[.]” See
-5-
#26438
SDCL 15-26A-87.3. Further, David has not prevailed on appeal. Accordingly,
David’s motion for appellate attorney’s fees is denied.
[¶13.] GILBERTSON, Chief Justice, and KONENKAMP, SEVERSON, and
WILBUR, Justices, concur.
-6-