J.K. Dean, Inc. v. Ksd, Inc.

• Decision Date: 28 December 2005
• Docket Number: No. 23559.,No. 23534.,23534.,23559.
• Citation: 2005 SD 127,709 N.W.2d 22
• Parties: J.K. DEAN, INC., d/b/a Roosevelt Inn, Plaintiff and Appellant, v. KSD, INC., Rushmore Helicopters, Inc., and Bruce Schiltz, in his individual and corporate capacity, d/b/a Rushmore Helicopter Tours, Defendants and Appellees, and Town of Keystone, Acting by and Through its Board of Trustees, Defendant.
• Court: South Dakota Supreme Court

Page 22

709 N.W.2d 22

2005 SD 127

J.K. DEAN, INC., d/b/a Roosevelt Inn, Plaintiff and Appellant, v. KSD, INC., Rushmore Helicopters, Inc., and Bruce Schiltz, in his individual and corporate capacity, d/b/a Rushmore Helicopter Tours, Defendants and Appellees, and Town of Keystone, Acting by and Through its Board of Trustees, Defendant.

No. 23534.

No. 23559.

Supreme Court of South Dakota.

Considered on Briefs October 3, 2005.

Decided December 28, 2005.

Marty J. Jackley of Gunderson Palmer Goodsell & Nelson, Rapid City, South Dakota, Attorneys for plaintiff and appellant.

Jess M. Pekarski of Costello, Porter, Hill, Heisterkamp, Bushnell & Carpenter, Rapid City, South Dakota, Attorneys for appellees KSD Inc. & Bruce Schiltz/Rushmore Helicopter Tours.

GILBERTSON, Chief Justice.

[¶ 1.] J.K. Dean, Inc., (Dean), brought an action to abate an alleged nuisance created by KSD, Inc.'s, (KSD), obstruction of a shoulder of Cemetery Road adjoining KSD's property. Dean commenced the suit against KSD, and then attempted to join the Town of Keystone. The matter was tried to the court, which found the road was dedicated to the public but only within the paved boundaries of the road. The trial court denied Dean's application for permanent injunctive relief against KSD. The trial court also dismissed the Town of Keystone from the action after a lack of proper initial service was later corrected, finding that the Town was not a necessary party to the action. Dean appeals the trial court's denial of his request for injunctive relief. By notice of review, KSD appeals the trial court's dismissal of the Town of Keystone. We reverse and remand.

FACTS AND PROCEDURE

[¶ 2.] Dean owns and operates a commercial hotel in the Town of Keystone, in Pennington County, South Dakota. Dean acquired the property in 1996. KSD owns and operates a commercial helicopter tour business also located in Keystone. KSD has owned its property since 1961. Dean's and KSD's properties are separated by Old Cemetery Road, formerly known as Mine Roadway.

[¶ 3.] The history of Old Cemetery Road dates back to 1883. Old Cemetery Road is the only means of public access to Keystone Cemetery. It also serves as a connecting route to Greyhound Gulch Road, and as a connecting route between the southerly end of Keystone and Alternate Highway 16 for both residential and commercial traffic. It provides the only means of public access for Dean's restaurant and hotel customers.

[¶ 4.] The road was originally maintained by Pennington County until approximately 1961, and was paved at some point by the County. The Town of Keystone assumed responsibility for maintaining the road following the Town's incorporation in 1973. The maintenance by the Town of Keystone was performed primarily on the paved portion of the road to ensure safe travel. Maintenance included fixing potholes, snow removal, pavement improvements, line painting, bridge repairs, bridge inspections and other routine road maintenance. The Town also moved speed limit signs, provided weed and mosquito control spraying, and mowing along the road.

[¶ 5.] Town Board Minutes indicate some shoulder improvements were made to Old Cemetery Road in 1984 when five loads of gravel were delivered and leveling was performed. However, the minutes are silent as to which shoulder areas were affected. There is no indication in the minutes that improvements were made at Town expense to the specific road shoulder of Cemetery Road that adjoins KSD's property.

[¶ 6.] In 1991 the Town, apparently believing the disputed ditch to be owned by KSD, formally requested that KSD dedicate the land in question to public use. KSD's vice president, Bruce Schiltz, declined to sign the dedication document mailed to him by the Town. Instead, Schiltz granted the Town permission to use the edge of the road shoulder to access sewer lines. Schiltz also informed the Town that if it had problems with snow removal, he would not object to the Town placing extra snow on the shoulder if there was a need.

[¶ 7.] A strong rainstorm in 1999 or 2000 washed out part of the road shoulder in question. Schiltz asked the Town to gravel and level the shoulder. Schiltz testified at the hearing that the washout occurred when the bridge to the south of the shoulder would not allow the flow of water to pass through. The runoff came down the east side of the road and onto the shoulder area in question, creating a twelve to eighteen inch drop-off running approximately seventy-five feet along the edge of the roadway. Schiltz asked the Town to gravel and level the area as it presented a danger to the public traveling the road. The Town brought in several loads of gravel and did a minor rebuild of the area. The Town informed KSD that any additional work would be the responsibility of KSD. KSD performed additional work to finish the repairs to the road shoulder adjoining its property.

[¶ 8.] Sometime between 2001 and 2003, KSD erected signs, staking and ropes on the shoulder of Old Cemetery Road that adjoins its property. The signs indicated that parking along the shoulder was for helicopter tour customers only. Apparently previous to this, Dean's hotel customers had used this ditch area to park their cars. KSD also asked the Pennington County Sheriff to ask hotel customers to remove their vehicles from the posted area. Dean objected to the limitations imposed by KSD upon the shoulder that precluded his customers from parking in the disputed ditch area, and brought suit for a permanent injunction barring KSD from cordoning off the area and preventing all but helicopter tour customers from utilizing the area for parking. Dean's complaint alleged Cemetery Road was dedicated to the public, and that the dedication included the shoulder area in question.

[¶ 9.] Dean commenced the action against KSD by summons and complaint on July 7, 2004, but neglected to join the Town. Dean attempted to bring in the Town, but failed to make proper service when the original summons and complaint were delivered to the Town's attorney. Despite the failure, the Town's attorney attended a deposition taken August 12, 2004, and the trial on August 13, 2004, but did not enter an appearance. The trial court announced its decision on August 23, 2004, and proposed findings of fact and conclusions of law were forwarded to all three parties. The Town entered objections to proposed findings of fact and conclusions of law on September 7, 2004, raising for the first time an objection that the Town had not been served with process and demanded the Town be stricken as a named Defendant. Thereafter, Dean obtained proper service on the president of the Keystone Board of Trustees on October 13, 2004.

[¶ 10.] On November 10, 2004, at the motion hearing on the matter, the trial court found that the Town was never personally served with the summons and was not subject to the jurisdiction of the trial court. The trial court dismissed the Town in its judgment dated December 11, 2004, finding that it was not a necessary party to the action. In its findings of fact and conclusions of law, the trial court specifically found that Cemetery Road had been dedicated to the public prior to 1985, but that the dedication included only those portions of the roadway that had been paved by Pennington County and maintained by the Town of Keystone.

[¶ 11.] Dean appeals one issue:

Whether the trial court erred when it found Dean possessed no legal basis upon which his hotel customers could park their vehicles in the disputed road shoulder area.

[¶ 12.] By notice of review, KSD appeals one issue:

Whether the trial court erred when it dismissed the Town of Keystone.

[¶ 13.] KSD's issue concerning the dismissal of the Town must be addressed first, as it pertains to the Town's role as an indispensable party to the underlying litigation.

STANDARD OF REVIEW

[¶ 14.] The determination of whether a party is indispensable is a conclusion of law and is reviewed by this Court de novo. Titus v. Chapman, 2004 SD 106, ¶ 15, 687 N.W.2d 918, 923 (citing Thieman v. Bohman, 2002 SD 52, ¶ 14, 645 N.W.2d 260, 262). "As such, a trial judge has no discretion whether to join an indispensable party, as the language of SDCL 15-6-19(a) is mandatory." Id. (citing Smith v. Albrecht, 361 N.W.2d 626, 628 (S.D.1998) (citing Kapp v. Hansen, 79 S.D. 279, 286, 111 N.W.2d 333, 337 (1961))).

ANALYSIS AND DECISION

[¶ 15.] Whether the trial court erred when it dismissed the Town of Keystone.

[¶ 16.] KSD contends that it was error for the trial court to dismiss the Town of Keystone as it was a necessary party to the litigation. KSD further argues that because Dean was subsequently able to obtain proper service of process, the lack of initial proper services was timely cured.

[¶ 17.] As this Court has previously noted,

There are three classes of parties to an action by equity: "Formal parties," who may be omitted at the option of the complainant; "necessary parties," who have an interest in the controversy, and should ordinarily be joined unless their interests are separable so that the court can, without injustice, proceed in their absence; and "indispensable parties," whose interest is such that a final decree cannot be entered without affecting them, or that termination of controversy in their absence would be inconsistent with equity.

Kapp, 79 S.D. at 284, 111 N.W.2d at 336 (quoting Weitzel v. Felker, 76 S.D. 216, 218, 76 N.W.2d 225, 226 (1956)). The inclusion of a necessary party is within the trial court's discretion. Thieman, 2002 SD 52, ¶ 13, 645 N.W.2d at 262-63 (quoting Smith, 361 N.W.2d at 628 (citing Kapp, 79 S.D. 279, 111 N.W.2d 333)). However, there is no discretion as to the inclusion of an indispensable party. Id.

[¶ 18.] When an action is brought seeking or having the effect of declaring a road as dedicated to the public, the public entity that will be forced to maintain the dedicated road is an indispensable party to the action. Smith, ...