United States District Court, D. South Dakota, Western Division
CITY OF SPEARFISH, a South Dakota Municipal Corporation, and ELKHORN RIDGE MANAGEMENT, LLC, a South Dakota Limited Liability Company, Plaintiffs,
DUININCK, INC., MN, f/k/a DUININCK BROS., INC., d/b/a DBI, A Minnesota Corporation, Defendant and Third-Party Plaintiff,
AMERICAN TECHNICAL SERVICES, INC., Third-Party Defendant.
ORDER TO REDUCE VERDICT
E. SCHREIER UNITED STATES DISTRICT JUDGE
January 19, 2017, the jury returned a verdict in favor of
plaintiffs City of Spearfish and Elkhorn Ridge Management,
LLC, on their breach of contract claim against defendant and
third-party plaintiff, Duininck Inc., and in favor of
Duininck on its negligence claim against American Technical
Services (ATS). On January 23, 2017, Duininck moved to reduce
the verdict. Docket 89. Plaintiffs oppose Duininck's
motion. Docket 90. For the reasons stated below, the court
grants Duininck's motion.
18, 2007, Spearfish and Elkhorn formed an agreement with
Duininck to construct the Elkhorn Ridge Golf Course in
Spearfish, South Dakota. Under the agreement, Duininck was
the general contractor and Wyss Associates was the landscape
architect. ATS was hired to conduct geotechnical exploration
and analysis of the construction area. A pond was constructed
as part of the golf course. After construction of the golf
course was completed, the synthetic liner under the pond
leaked several times. As a result of the damages incurred
from the leaking pond, Spearfish and Elkhorn sued Duininck
alleging breach of contract. Duininick then filed a
third-party complaint alleging that, if Duininck breached its
contract to Spearfish and Elkhorn, it was the result of
negligence on the part of Wyss and ATS. Before trial,
Spearfish and Elkhorn entered into settlement agreements with
ATS for $10, 000 and Wyss for $40, 000.
to trial, Wyss and ATS moved for summary judgment. Docket 36;
Docket 37. This court granted summary judgment on behalf of
Wyss and denied summary judgment on behalf of ATS. Docket 58
at 14. This court also concluded that, because ATS and Wyss
entered into settlement agreements with Spearfish and
Elkhorn, Duininck is entitled to a reduction in damages based
either on the amount of the settlement with Wyss and ATS or
the percentage of fault of Wyss and ATS, whichever is
greater. Id. at 16-17. On January 19, 2017, the jury
awarded Spearfish and Elkhorn $131, 931.54 in damages on
their breach of contract claim against Duininck. Docket 86.
On Duininck's third-party negligence claim against ATS,
the jury found in favor of Duininck and determined that
Duininck was 70 percent liable and ATS was 30 percent liable.
Id. Duininck now moves to have the verdict reduced
because it is entitled to contribution from Wyss and ATS.
Docket 89. Plaintiffs resist Duininck's motion.
I. Whether plaintiffs waived the issue of
court must determine whether Spearfish and Elkhorn waived the
issue of contribution by not raising it prior to submitting
the verdict to the jury in a motion for judgment as a matter
of law. Rule 50(a)(2) of the Federal Rules of Civil Procedure
states that “[a] motion for judgment as a matter of law
may be made at any time before the case is submitted to the
jury. The motion must specify the judgment sought and the law
and facts that entitle the movant to the judgment.”
Fed. R. Civ. Pro. 50(a)(2). The Eighth Circuit has previously
held that an issue that is not raised in a pre-verdict motion
under Rule 50 cannot be preserved or reviewed later.
Graham Constr. Servs. Inc. v. Hammer & Steel,
Inc., 755 F.3d 611, 618 (8th Cir. 2014).
argues that plaintiffs waived the issue by not raising it in
their motion for a judgment as a matter of law. Plaintiffs
argue that the issue of contribution between Duininck, Wyss,
and ATS was not previously raised to the court because there
was no reason to raise the issue until now. Docket 96 at 2.
This court previously stated in its Memorandum Opinion and
Order dated August 3, 2016, (Docket 58) that comparative
fault applies to this case and that Duininck “is
entitled to a reduction in damages for which it is
potentially liable because Wyss and ATS executed settlement
agreements and releases.” See Docket 58 at 15.
This court also instructed the jury on contribution and
included a special interrogatory so the jury could assign a
percentage of fault on the verdict form. See Final
Jury Instructions Docket 84. Spearfish, Elkhorn, and ATS were
all represented at trial and failed to raise the issue of
contribution until now.
Elkhorn, and ATS failed to ask the court to reconsider its
ruling in its Memorandum Opinion and Order, and they failed
to object to the jury instruction and the verdict form.
Finally, and most importantly, they failed to raise the issue
under Rule 50 at the close of evidence. Because Spearfish,
Elkhorn, and ATS failed to object to the court's previous
ruling, the jury instructions, the verdict form, and failed
to raise the issue in its motion for judgment as a matter of
law at the close of evidence, they waived the issue. But the
court will briefly address plaintiffs' arguments.
Whether Duininck is entitled to contribution from Wyss and
South Dakota, joint tortfeasors are defined as “two or
more persons jointly or severally liable in tort for the same
injury to person or property, whether or not judgment has
been recovered against all or some of them.” SDCL
§ 15-8-11. The South Dakota Supreme Court has held that
under SDCL § 15-8-17 “nonsettling defendants were
entitled to credit for the greater amount of settlement of
the settling defendant's percentage of liability as
ultimately determined, regardless of whether or not the
settling defendant was later determined to be a joint
tort-feasor.” Bego v. Gordan, 407 N.W.2d 801,
812-13 (S.D. 1987)(citing Schick v. Rodenburg, 397
N.W.2d 464, 465 (S.D. 1986)). But “that rule assumes
that the injured party has a possible remedy against the
settling defendant as a joint tort-feasor.”
Bego, 407 N.W.2d at 803.
Spearfish and Elkhorn argue that Duininck is not entitled to
contribution from Wyss and ATS because plaintiffs only
asserted a claim for breach of contract against Duininck, and
thus, Duininck is not liable in tort and is not a joint
tortfeasor. Plaintiffs rely on Hagemann v. NJS
Engineering Inc., 632 N.W.2d 840, 843-44 (S.D. 2001), as
support. In Hagemann, the South Dakota Supreme Court held
that the county could not seek indemnity or contribution from
the injured party's coworker because the coworker was
immune from suit under the worker's compensation statute
and could not be considered a tortfeasor under the law.
Id. Spearfish and Elkhorn do not contend that Wyss
and ATS are immune from suit so the rationale of Hagemann is
not applicable here.
the court will consider whether Spearfish and Elkhorn had a
claim in tort against Duininck. Contribution is available
where there is common liability to an injured person in tort.
Muller v. Gateway Bldg. Sys., Inc., 743 F.Supp.2d
1096. To show negligence, “a plaintiff must prove duty,
breach of that duty, proximate and factual causation, and
actual injury.” Fisher Sand & Gravel Co. v.
S.D. Dep't of Transp., 558 N.W.2d 864, 867 (S.D.
1997). Whether or not a duty exists is a question of law.
Id. When determining whether a duty exists, the
court asks whether “a relationship exists between the
parties such that the law will impose upon the defendant a
legal obligation of reasonable conduct for the benefit of the
plaintiff.” Casillas v. Schubauer, 714 N.W.2d
84, 88 (S.D. 2006)(quoting Estate of Shuck, 577
N.W.2d 584, 586 (S.D. 1998)). Thus, a duty that arises out of