Articles Posted in South Dakota Supreme Court

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The Supreme Court reversed the circuit court’s determination that Owners Insurance Company did not have a duty to defend Lowery Construction & Concrete, LLC in an action filed by homeowners Tony and Stephanie Hague. The Hagues sued Lowery for breach of contract, breach of implied warranty, and negligent construction. Lowery filed a declaratory judgment action against Owners seeking a declaration that Owners had a duty to defend Lowery. The circuit court determined that coverage was excluded because the damage to the Hagues’ home was caused by Lowery’s defective work. The Supreme Court reversed, holding that Owners had a duty to defend Lowery because the Hagues’ complaint arguably stated a claim covered under Lowery’s commercial general liability policy. View "Lowery Construction & Concrete, LLC v. Owners Insurance Co." on Justia Law

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In 2012, the South Dakota Department of Revenue (Department) commenced an audit of Taxpayer’s excise tax and sales tax licenses for tax period 2009 through 2012. At issue in this case was whether Taxpayer’s construction management at-risk services provided to public and non-profit entities were subject to a contractor’s excise tax under S.D. Codified Laws 10-46A-1. Taxpayer did not remit excise tax on the gross receipts it received from its construction management at-risk services provided to public and non-profit entities. As a result of the audit, the Department issued Taxpayer a certificate of assessment for $43,020, which included excise tax and interest. The circuit court reversed the Department’s certificate of assessment, ruling that Taxpayer’s services were not subject to a contractor’s excise tax under section 10-46A-1. The Supreme Court reversed, holding that Taxpayer’s act of entering into a contract with a public entity to guarantee a satisfactorily completed public improvement project by a specific date for a specific cost was subject to excise tax under section 10-46A-1. View "Puetz Corp. v. S.D. Dep’t of Revenue" on Justia Law

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Plaintiffs entered into a contract with DJ Construction (DJ) to build a home on their property. Construction was halted two years later after Plaintiffs discovered significant water damage in the home. Plaintiffs sued DJ, seeking to recover for the damage to their home and DJ's failure to complete the house. Auto-Owners Insurance Company, DJ's insurer, denied DJ's requests for defense and indemnity against Plaintiffs' claims, determining coverage was not provided for under the terms of the policy. Plaintiffs subsequently entered into a stipulated judgment and settlement agreement with DJ in which DJ confessed judgment and assigned its rights and claims against Owners to Plaintiffs. Plaintiffs then filed suit against Owners based on Owners' failure to defend and indemnify DJ. The circuit court granted summary judgment in favor of Owners, determining there was no coverage under the policy because multiple policy exclusions applied. The Supreme Court affirmed, holding that the circuit court did not err in granting summary judgment in favor of Owners on Plaintiffs' breach of contract and bad faith claims based upon its determination that multiple policy exclusions applied. View "Swenson v. Owners Ins. Co." 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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Border States Paving was awarded the prime contract by the state DOT for a road project. Border States entered into a subcontract with Morris, Inc. for aggregates and work on the project. During work on the project, the DOT orally informed Morris that certain materials passed the soundness test. However, the materials actually failed. Ultimately, the paving was not completed by the seasonal deadline. When the project was completed the next year, the DOT paid Border States in full. Border States withheld several thousand dollars from Morris for costs associated with the project because it believed Morris defaulted in its contractual obligations under the subcontract. Morris brought suit against the DOT, alleging that the DOT breached its express and implied contractual obligations owed to Morris and that the DOT breached its implied contractual obligation of good faith and fair dealing. The circuit court ruled in favor of Morris and awarded Morris damages. The Supreme Court reversed, holding that there was insufficient evidence that the DOT's erroneous pass report proximately damaged Morris where there was no evidence in the record that this error alone caused the project to not get completed by the deadline. View "Morris, Inc. v. State ex rel. Dep't of Transp." on Justia Law