JANUARY 9, 2018
FROM THE CIRCUIT COURT OF THE SEVENTH JUDICIAL CIRCUIT
PENNINGTON COUNTY, SOUTH DAKOTA THE HONORABLE WARREN G.
JOHNSON Retired Judge
K. NOONEY ROBERT J. GALBRAITH of Nooney & Solay LLP Rapid
City, South Dakota Attorneys for plaintiff and appellant.
A. PORTER JESS M. PEKARSKI CHRISTOPHER A. CHRISTIANSON of
Costello, Porter, Hill, Heisterkamp, Bushnell & Carpenter
LLP Rapid City, South Dakota Attorneys for defendants and
GILBERTSON, CHIEF JUSTICE
The City of Rapid City filed an action against real-estate
developers Big Sky LLC and Doyle Estes (collectively,
"Developers"), seeking to recover the prospective
cost of repairing roads in the Big Sky development outside
Rapid City. A jury returned a general verdict in favor of the
Developers. The City appeals the general verdict, arguing the
circuit court erred by: (1) denying the City's motion for
summary judgment on the issue of liability; (2) excluding
evidence of the Developers' litigation and settlement
with their subcontractors; (3) granting Estes's motion
for judgment as a matter of law; (4) instructing the jury on
period-of-limitation, waiver, and estoppel defenses; and (5)
refusing to instruct the jury on nuisance. We affirm.
and Procedural History
This case involves the development of real property known as
the Big Sky subdivision, which is located within the
extraterritorial jurisdiction of Rapid City. The Developers
acquired real property in this area and applied to the City
for approval of 15 subdivision plats. Under the City's
municipal code, a plat will not be approved unless the
subdivider completes the construction of certain public
improvements or offers a bond guaranteeing such construction.
The Developers either completed the improvements or provided
bonds for each of the 15 plats, and the City approved these
plats between 1998 and 2005.
Following approval of the plats, the City identified several
deficiencies in the public improvements installed by the
Developers' contractor and subcontractors. In particular,
some of the subdivision's streets had settled
significantly since their construction. The City indicated it
would not assume ownership of the public improvements until
the deficiencies were corrected. The Developers did not
correct the identified deficiencies, and the City did not
conduct subsequent inspections. The bonds posted by the
Developers expired without the City attempting to collect on
them. Eventually, litigation ensued.
The procedural history of this case is complex and involves
several parties. In May 2003, Big Sky filed a complaint
against J. Scull Construction Service Inc., the subcontractor
that worked on Phases 1 through 3 of the subdivision. And in
March 2007, Big Sky filed a complaint against R.C.S.
Construction Inc., the subcontractor that worked on Phase 4.
Big Sky alleged that Scull and R.C.S. breached their
contracts with Big Sky by failing to properly compact the
soil underlying the streets in Phases 1 through 4. Big Sky
and Scull settled shortly after Big Sky filed its complaint
In January 2008, the City filed a separate complaint against
the Developers, seeking specific performance and an
injunction requiring the Developers to complete the repairs.
The circuit court granted summary judgment to the Developers
on the City's complaint, reasoning that the expiration of
the bonds absolved the Developers of their obligation to
complete the public improvements. This Court reversed the
grant of summary judgment and remanded in City of Rapid
City v. Estes, 2011 S.D. 75, 805 N.W.2d 714. On remand,
the Developers filed a third-party complaint against Rapid
Construction LLC, the general contractor. Rapid Construction,
in turn, filed a fourth-party complaint against Dream Design
International Inc., the Developers' engineering firm. And
to bring things full circle, Dream Design International
counterclaimed against the City. The court then consolidated
the Developers' action against R.C.S. with the City's
suit against the Developers. In April 2016, the City amended
its complaint to allege nuisance as an additional cause of
The various parties settled most of the foregoing litigation.
As noted above, Big Sky settled with Scull in 2007. Big Sky
also settled its complaints against R.C.S. and Rapid
Construction. Rapid Construction settled with Dream Design
International. And finally, the Developers and the City
settled in regard to all disputed project phases other than
Phases 1 through 4. So prior to trial, Scull, R.C.S., Rapid
Construction, and Dream Design International were each
removed as parties, and the issues were narrowed to the
dispute between the City and the Developers regarding Phases
1 through 4 of the subdivision. Citing this Court's decision
in Estes, the City moved for summary judgment on the
issue of the Developers' liability for these phases. The
circuit court denied the motion.
A jury trial was held January 23 through 27, 2017. During the
trial, the circuit court excluded evidence offered by the
City regarding Big Sky's litigation and settlement with
Scull and R.C.S. Estes filed a motion for judgment as a
matter of law, which the court granted because the City did
not dispute that Big Sky was the sole owner of the properties
at issue in Phases 1 through 4. And over the City's
objection, the court instructed the jury on the
Developers' period-of-limitation, waiver, and estoppel
defenses. The court did not instruct the jury on the
City's nuisance theory. The jury returned a general
verdict in favor of the Developers, denying any relief to the
The City appeals, raising the following issues:
1. Whether the City was entitled to summary judgment on the
issue of the Developers' liability.
2. Whether the circuit court erred by excluding evidence of
Big Sky's claims against, and settlements ...