Jacobson v. Leisinger, No. 24491.

CourtSupreme Court of South Dakota
Writing for the CourtMiller
Citation2008 SD 19,746 N.W.2d 739
Decision Date12 March 2008
Docket NumberNo. 24491.,No. 24498.,No. 24492.
PartiesCheryl D. JACOBSON, Plaintiff and Appellant, v. Kevin LEISINGER, Defendant and Appellee. Cheryl D. Jacobson, Plaintiff and Appellee, v. Kevin Leisinger, Defendant and Appellant.
746 N.W.2d 739
2008 SD 19
Cheryl D. JACOBSON, Plaintiff and Appellant,
v.
Kevin LEISINGER, Defendant and Appellee.
Cheryl D. Jacobson, Plaintiff and Appellee,
v.
Kevin Leisinger, Defendant and Appellant.
No. 24491.
No. 24492.
No. 24498.
Supreme Court of South Dakota.
Argued January 8, 2008.
Decided March 12, 2008.

[746 N.W.2d 741]

Patricia A. Meyers of Costello, Porter, Hill, Heisterkamp, Bushnell & Carpenter, LLP, Rapid City, South Dakota, Attorneys for appellant (#24491), Attorneys for appellee (# 24492).

David M. Hosmer, Yankton, South Dakota, Attorney for appellant (# 24492), Attorney for appellee (# 24491).

MILLER, Retired Justice.


[¶ 1.] This opinion encompasses two separate appeals dealing with the same parties but involving independent issues and facts. Each will be addressed separately. In #24991, Cheryl Jacobson appeals the circuit court's decision denying her request for attorney fees, and in #24492 & #24498, Kevin Leisinger appeals the circuit court's dismissal of his defamation action against Jacobson.

JACOBSON'S APPEAL FOR ATTORNEY FEES

[¶ 2.] This dispute flows from our holding in Leisinger v. Jacobson, 2002 SD 108, 651 N.W.2d 693 (Leisinger I). In that case, this Court rejected a punitive damage award in the amount of $120,000 in favor of Leisinger and against Jacobson. We held that the punitive damage award should either be reduced to $25,000, or alternatively, should Leisinger reject the reduced award, a new trial could be conducted solely on the issue of punitive damages. Id. ¶ 25. Leisinger rejected the reduced award and thereafter failed to retry his case within one year of the remand, as required by SDCL 15-30-16. Therefore, he forfeited any right to the punitive damages which had previously been paid by Jacobson.

[¶ 3.] Despite our decision in Leisinger I, Leisinger did not return the $120,000 to Jacobson. She therefore moved the circuit court for an order requiring the return of the money. In a memorandum opinion of December 20, 2002, Circuit Judge Severson held that "on August 21, 2002[, the date of the decision of Leisinger I], [Leisinger] had an obligation to return the benefits he had received from the prior Judgment — $120,000 — to [Jacobson]." Judge Severson entered a formal order to that effect on February 24, 2003. Leisinger did not comply with nor did he appeal that order requiring him to return the money. (Apparently, no formal notice of entry of the order was served upon Leisinger.)

[¶ 4.] Jacobson then sought a contempt order against Leisinger for his failure to comply with the February 24, 2003 order, but the circuit court did not rule on that motion. Jacobson later filed a formal notice of entry of the February 24, 2003 repayment order. Leisinger then appealed that order, however, therein he merely contested the award of interest. This Court summarily affirmed the order holding that Leisinger's appeal was "without merit." (Appeal No. 23287).

[¶ 5.] On November 24, 2003, Jacobson filed a conversion action against Leisinger basing her claim on Leisinger's failure to comply with the February 24, 2003 order to return the $120,000. Leisinger countersued alleging many causes of actions, all independent of the money issues. The circuit court ultimately granted Jacobson's summary judgment motion holding that Leisinger's failure to return the money amounted to conversion as a matter of law.

[¶ 6.] While the foregoing conversion action was pending, Leisinger petitioned this Court for a rehearing of Leisinger I, and also sought to have Jacobson held in "contempt." He contended that Leisinger I was founded on Jacobson's perjured testimony. We denied the motion.

[¶ 7.] On December 21, 2004, Jacobson moved the circuit court for an order requiring

746 N.W.2d 742

Leisinger to show cause for his failure to comply with the February 24, 2003 order. At the hearing, the circuit court (Judge Zell) converted the order to a judgment. As a result of failing to be served with process, rather than for lack of notice,1 neither Leisinger nor his attorney attended the hearing. Jacobson, however, later filed a formal written motion requesting an amendment of the "order" to a "judgment." That motion was granted on February 24, 2005. Leisinger appealed such judgment which was ultimately summarily affirmed by this Court wherein we held the appeal was "without merit." (Appeal No. 23618). Jacobson ultimately recovered the $120,000 on October 28, 2005.2

[¶ 8.] Jacobson then sought recovery of the attorney fees she incurred in the various court proceedings required to recover the $120,000. The circuit court rejected her request, citing Schuldies v. Millar, 1996 SD 120, 555 N.W.2d 90. Jacobson appeals. We reverse and remand.

[¶ 9.] Whether the circuit court erred by failing to award attorney fees.

[¶ 10.] Jacobson argues that she has a right to recover the reasonable cost of attorney fees she specifically incurred in unwarranted legal proceedings to recover her wrongfully withheld property. We agree.

[¶ 11.] It is clear and undisputed that Leisinger wrongfully withheld Jacobson's $120,000. Subsequent to Leisinger's rejection of the reduced punitive damages award, in Leisinger I, the portion of the trial court judgment regarding punitive damages was vacated. 2002 SD 108, ¶ 25, 651 N.W.2d at 701. Accordingly, "[a] judgment vacated on appeal is of no further force and effect." Gluscic v. Avera St. Luke's, 2002 SD 93, ¶ 18, 649 N.W.2d 916, 920 (citations omitted); see also Hasse v. Fraternal Order of Eagles No. 2421 of Vermillion, 2003 SD 23, ¶ 9, 658 N.W.2d 410, 413 (citations omitted); Aune v. B-Y Water Dist., 505 N.W.2d 761, 764-65 (S.D. 1993) (quoting Pendergast v. Muns, 59 S.D. 135, 142, 238 N.W. 344, 347 (1931)). Therefore, Leisinger's rejection of the reduced award represented a simultaneous forfeiture of any rights in the previously acquired punitive damage award.

[¶ 12.] We conclude that Leisinger indefensibly and unlawfully withheld the $120,000. Judge Severson's decision of December 20, 2002, granting Jacobson's request for an order requiring Leisinger to return the $120,000 with interest, unequivocally informed Leisinger that his retention of the funds was unlawful. Moreover, Leisinger cannot argue in good faith that he believed the money could legally remain in his possession pending any appeals; indeed, in the original suit Leisinger acquired the $120,000, constituting the punitive damage award, via a writ of execution prior to Leisinger I reversing the same award. Leisinger may not now complain of being harmed by the forced repayment as he bore the risk by taking the money prior to completion of the appellate process. Hasse, 2003 SD 23, ¶ 11, 658 N.W.2d at 413-14.

[¶ 13.] Jacobson contends that although Schuldies v. Millar, supra, does not permit recovery of attorney fees for the actual

746 N.W.2d 743

litigation of the conversion lawsuit, reasonable attorney fees expended in pursuit of the money, unrelated to the conversion action, are separable and recoverable. We agree.

[¶ 14.] Generally, without specific authority to the contrary, attorney fees are not recoverable in civil actions. However, we agree with and now adopt the rationale that: "... in conversion cases, the reasonable and necessary expenses incurred in recovering the property are a proper element of damage. In such cases, the expense of recovery is a `further pecuniary loss' recoverable under the Restatement rule." State v. Taylor, 506 N.W.2d 767, 768 (Iowa 1993) (citing RESTATEMENT (SECOND) OF TORTS § 927(2)(b) (1977) (other citations omitted) (emphasis added)). In this case, and as is the practice in other states, the damages must be bifurcated between "attorney fees incurred as a result of the conversion litigation as compared to attorney fees incurred in recovering possession of the property. The former are not compensable, the latter are." Motors Ins. Corp. v. Singleton, 677 S.W.2d 309, 315 (Ky.Ct.App.1984).

[¶ 15.] Attorney fees are not generally recoverable in actions sounding in tort "except those fees incurred in other litigation which is necessitated by the act of the party sought to be charged." Grand State Property, Inc. v. Woods, Fuller, Shultz, & Smith, P.C., 1996 SD 139, ¶ 19, 556 N.W.2d 84, 88 (emphasis added) (noting that separate litigation necessitated by the misconduct of the other party may permit recovery of attorney fees); Isaac v. State Farm Mut. Auto. Ins. Co., 522 N.W.2d 752, 763 (S.D.1994). Moreover, Leisinger, by his intentional and calculated action, left Jacobson with only one course of action, i.e., further litigation. See Rorvig v. Douglas, 123 Wash.2d 854, 862, 873 P.2d 492, 497 (1994); RESTATEMENT (SECOND) OF TORTS § 914 cmt a (1977); Liles v. Liles, 289 Ark. 159, 177, 711 S.W.2d 447, 456 (1986).

[¶ 16.] Recovery of attorney fees expended by Jacobson to force Leisinger to release her money may be analogized with the case of Foster v. Dischner, 51 S.D. 102, 212 N.W. 506 (1927). In Foster, the plaintiff sued for attorney fees incurred in releasing an unlawful levy of his property. Although the property remained in the possession of the plaintiff, he was still entitled to attorney fees as damages incurred in releasing the levy. Id. at 507; see also Baird v. Liepelt, 62 Ill.App.2d 154, 156-57, 210 N.E.2d 1, 2 (1965). Here, Jacobson seeks similar damages, which resulted from her attempt to recover her property. Like the unlawful paper levy attached in Foster, Leisinger's unlawful possession of Jacobson's money amounted to a de facto levy/pledge. See RAY D. HENSON, SECURED TRANSACTIONS: UNDER THE UNIFORM COMMERCIAL CODE § 4-26 (West 1978). Indeed, Leisinger argued that if he "were to give said funds to [Jacobson], and [Leisinger] is later successful in a damage award against [Jacobson], then [Leisinger] will never recover said damages." Similar to the unlawful levy in Foster, Leisinger's argument demonstrates his desire to unlawfully withhold Jacobson's money as security...

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25 practice notes
  • In re Packaged Seafood Prods. Antitrust Litig., Case No.: 15–MD–2670 JLS (MDD)
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • March 14, 2017
    ...Despite the above uncertainty, South Dakota does not appear to always apply a discovery rule. See, e.g. , Jacobson v. Leisinger , 746 N.W.2d 739, 746 (distinguishing cause of action there at issue for purposes of accrual date because Strassburg addressed a different statutory section and ca......
  • Murray v. MANSHEIM, No. 25097.
    • United States
    • Supreme Court of South Dakota
    • February 24, 2010
    ...If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper. Jacobson v. Leisinger, 2008 SD 19, ¶ 24, 746 N.W.2d 739, 745 (quoting Cooper v. James, 2001 SD 59, ¶ 6, 627 N.W.2d 784, ¶ 5. When summary judgment is granted on a statute of l......
  • Jas Enters., Inc. v. BBS Enters., Inc., Nos. 26414
    • United States
    • Supreme Court of South Dakota
    • July 17, 2013
    ...which supports the ruling of the trial court, affirmance of a summary judgment is proper.” Jacobson v. Leisinger, 2008 S.D. 19, ¶ 24, 746 N.W.2d 739, 745 (quoting Cooper v. James, 2001 S.D. 59, ¶ 6, 627 N.W.2d 784, 787) (internal quotation marks omitted). Further, “[a] trial court's ruling ......
  • Klein v. Sanford USD Med. Ctr., No. 27320.
    • United States
    • Supreme Court of South Dakota
    • December 9, 2015
    ...of law." Brandt v. Cty. of Pennington, 2013 S.D. 22, ¶ 7, 827 N.W.2d 871, 874 (quoting Jacobson v. Leisinger, 2008 S.D. 19, ¶ 24, 746 N.W.2d 739, 745 ). The evidence is viewed "most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party.......
  • Request a trial to view additional results
25 cases
  • In re Packaged Seafood Prods. Antitrust Litig., Case No.: 15–MD–2670 JLS (MDD)
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • March 14, 2017
    ...Despite the above uncertainty, South Dakota does not appear to always apply a discovery rule. See, e.g. , Jacobson v. Leisinger , 746 N.W.2d 739, 746 (distinguishing cause of action there at issue for purposes of accrual date because Strassburg addressed a different statutory section and ca......
  • Murray v. MANSHEIM, No. 25097.
    • United States
    • Supreme Court of South Dakota
    • February 24, 2010
    ...If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper. Jacobson v. Leisinger, 2008 SD 19, ¶ 24, 746 N.W.2d 739, 745 (quoting Cooper v. James, 2001 SD 59, ¶ 6, 627 N.W.2d 784, ¶ 5. When summary judgment is granted on a statute of l......
  • Jas Enters., Inc. v. BBS Enters., Inc., Nos. 26414
    • United States
    • Supreme Court of South Dakota
    • July 17, 2013
    ...which supports the ruling of the trial court, affirmance of a summary judgment is proper.” Jacobson v. Leisinger, 2008 S.D. 19, ¶ 24, 746 N.W.2d 739, 745 (quoting Cooper v. James, 2001 S.D. 59, ¶ 6, 627 N.W.2d 784, 787) (internal quotation marks omitted). Further, “[a] trial court's ruling ......
  • Klein v. Sanford USD Med. Ctr., No. 27320.
    • United States
    • Supreme Court of South Dakota
    • December 9, 2015
    ...matter of law." Brandt v. Cty. of Pennington, 2013 S.D. 22, ¶ 7, 827 N.W.2d 871, 874 (quoting Jacobson v. Leisinger, 2008 S.D. 19, ¶ 24, 746 N.W.2d 739, 745 ). The evidence is viewed "most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. Th......
  • Request a trial to view additional results

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