CONSIDERED ON BRIEFS ON JANUARY 7, 2019
FROM THE CIRCUIT COURT OF THE FIRST JUDICIAL CIRCUIT DOUGLAS
COUNTY, SOUTH DAKOTA THE HONORABLE BRUCE J. ANDERSON Judge
R. KERKVLIET DANA VAN BEEK PALMER ROSS M. WRIGHT of Lynn,
Jackson, Shultz, & Lebrun, P.C. Sioux Falls, South Dakota
Attorneys for plaintiff and appellant.
JESSICA L. LARSON of Beardsley, Jensen & Lee, Prof. LLC
Rapid City, South Dakota Attorneys for defendant and
SEVERSON, RETIRED JUSTICE.
Delray Geidel was insured under a farm liability policy
issued by De Smet Farm Mutual Insurance Company. He sold a
portion of his farm property, and the purchaser constructed a
hog confinement facility on that property. Geidel's
neighbors brought suit against him and the owner of the hog
facility, alleging nuisance, trespass, and negligence. De
Smet refused to defend Geidel against the neighbors'
lawsuit. Geidel retained counsel and successfully defended
the lawsuit. He then filed a breach of contract action
against De Smet, alleging De Smet had a duty to defend. The
parties filed cross-motions for summary judgment, and the
circuit court granted De Smet summary judgment. Geidel
appeals. We affirm.
On April 16, 2013, Geidel conveyed a portion of his real
property to Cedar Creek Feeders, LLC for the construction of
a hog confinement facility. As part of the sale, Geidel
retained a right of first refusal to repurchase the property.
He also retained the right to acquire manure from the
property. Geidel was aware Cedar Creek would construct the
hog facility within one-quarter of a mile of property owned
by Herman and Jeanette Fink and other property owned by Karl
and Alene Fink (collectively "Finks"). The Finks
claimed they had informed Geidel of their objection to the
location of the facility prior to construction.
Cedar Creek finished constructing the hog facility in July
2013 and began operations. On April 30, 2014, the Finks
brought suit against Cedar Creek and Geidel. They alleged
claims for nuisance, trespass, and negligence based on the
construction and operation of the hog confinement facility.
They sought injunctive relief and compensatory and punitive
In May 2014, Geidel submitted a claim to De Smet Farm Mutual
Insurance Company under his farm liability policy requesting
that De Smet defend him against the Finks' lawsuit. A
property claims manager contacted Geidel, and after reviewing
the claim, De Smet declined to defend. In a letter sent to
Geidel, De Smet explained that the Finks' complaint did
not allege bodily injury, property damage, or an occurrence
within the provisions of the insurance policy. The letter
further indicated De Smet determined that "none of the
claims being made come within the coverage[, ]" and even
if coverage existed, two policy exclusions applied.
After receiving De Smet's letter, Geidel retained his own
counsel and defended the Finks' lawsuit. The jury
returned a verdict in favor of Cedar Creek and Geidel on all
claims. Thereafter, Geidel brought suit against De Smet,
alleging breach of contract in failing to defend him against
the Finks' lawsuit. The parties filed cross-motions for
summary judgment. After a hearing, the circuit court granted
De Smet summary judgment and denied Geidel summary judgment.
The court concluded De Smet had no duty to defend Geidel. It
determined the allegations within the Finks' complaint
fell outside Geidel's policy coverage. Alternatively, it
held that if coverage arguably existed, two policy exclusions
Geidel appeals, asserting the circuit court erred when it
granted De Smet summary judgment.
We review a circuit court's decision on a motion for
summary judgment under the de novo standard of review. N.
Star Mut. Ins. v. Korzan, 2015 S.D. 97, ¶ 12, 873
N.W.2d 57, 61. "Summary judgment is appropriate 'if
the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a
matter of law.'" Id. (quoting SDCL
We recently explained an insurer's duty to defend in
Lowery Construction & Concrete, LLC v. Owners
Insurance Company, 2017 S.D. 53, 901 N.W.2d 481.
Importantly, "[a]n insurer's duty to defend is
distinct from-and broader than-its duty to indemnify."
Id. ¶ 8. One distinguishing feature is the fact
"[t]he duty to defend arises prior to the completion of
litigation[.]" Id. (quoting 14 Steven Plitt et
al., Couch on Insurance § 200:3 (3d ed.)).
"[T]herefore insurers are required ...