Masuen v. E. L. Lien and Sons, Inc., 81-1452
| Decision Date | 19 February 1982 |
| Docket Number | No. 81-1452,81-1452 |
| Citation | 670 F.2d 87 |
| Parties | Michael MASUEN, Appellant, v. E. L. LIEN AND SONS, INC., A Corp.; Dakota Contracting Corp., A Corp., Appellees, Herb Teske, An Individual; Maynard Sommer, An Individual; Robert Kirwan, AnIndividual; John Van Lent, An Individual, Appellees, Leonard Peterson, An Individual, and Herb Teske, Maynard Sommer, Robert Kirwan, John Van Lent, Leonard Peterson, Appellees, v. Thomas MANNING. |
| Court | U.S. Court of Appeals — Eighth Circuit |
John Blackburn, Blackburn Law Offices, Yankton, S. D., J. Michael Dull (argued), Dull, Murphy, Dull & Michaelson, Le Mars, Iowa, for appellant.
David V. Vrooman (argued), Sioux Falls, S. D., Ron Kappelman (argued), John C. Wiles, Watertown, S. D., for appellees.
Before BRIGHT and ROSS, Circuit Judges, and DEVITT, * District Judge.
This is an appeal by plaintiff Michael Masuen from an order of the district court 1 granting defendants' motion for judgment notwithstanding the verdict and an order refusing Masuen's motion to alter or amend that judgment.
Background.
Masuen was injured in a collision between his motorcycle and an automobile driven by Thomas Manning at a state highway construction site in Clay County, South Dakota on May 1, 1977. Masuen commenced this action on November 6, 1978, naming as defendants E.L. Lien and Sons, Inc. (Lien), Dakota Contracting Corporation (Dakota Contracting), Herb Teske, Maynard Sommer, Robert Kirwan, John Van Lent, and Leonard Peterson. The individual defendants were employees of the state of South Dakota. Masuen claimed $300,000 damages for injuries sustained in the collision.
Masuen's complaint alleged that the proximate cause of the collision and his resultant injuries was the negligent and illegal placement of barricades and warning signs at the construction site. The state employees filed a cross-claim against Lien for indemnification based on Lien's contract with the state. The state employees also filed a cross-claim against Dakota Contracting and filed a third party complaint against Manning alleging that the accident was caused by Manning's negligence.
Manning was granted a summary judgment based on a general release executed by Masuen prior to commencement of this lawsuit. The question of Manning's negligence was submitted to the jury under the state joint tortfeasor and comparative negligence laws.
Masuen voluntarily dismissed state employees, Teske, Sommer, and Peterson, as they had no direct involvement in the construction project. On May 8, 1980, the jury returned a verdict for Masuen against the state employees, Kirwan and Van Lent, in the amount of $144,000. The jury, by special interrogatory, assessed the relative degree of fault of the defendants as follows:
E. L. Lien & Sons, Inc. 0%
Dakota Contracting Corp. 0%
Robert Kirwan 35%
John Van Lent 35%
Thomas Manning 30%
----
100%
Subsequent to the verdict a hearing was held on the state employees' cross-claim for indemnity against Lien. On August 11, 1980, the court issued a memorandum decision granting indemnity against Lien. Before this decision was reduced to judgment the South Dakota Supreme Court rendered its decision in High-Grade Oil Company v. Sommer, 295 N.W.2d 736 (S.D.1980). Based on that decision the state employees filed a motion for judgment notwithstanding the verdict. The court granted the motion on October 8, 1980, holding that based on High-Grade, the state of South Dakota was the real party in interest and the state employees were immune from suit. The court dismissed the action against all defendants.
Masuen's motion to alter or amend the judgment was denied on March 24, 1981. The court held that Lien could not be held contractually liable to Masuen because the jury did not assess any fault against Lien. Masuen appeals from the judgment n.o.v. and the denial of his motion to alter or amend the judgment.
Issues.
1. Did the district court err in holding that the state was the real party in interest and the state employees were immune from suit under the doctrine of sovereign immunity?
2. Did the district court err in holding that Lien was not contractually liable to Masuen?
Sovereign Immunity.
Defendants Kirwan and Van Lent argued and the district court agreed that the state of South Dakota was the real party in interest in this suit and thus the suit was barred by sovereign immunity. The district court stated in its memorandum decision of March 16, 1981, that High-Grade, supra, 295 N.W.2d 736, held
that any tort action against an employee of the State where the State is the real party in interest, and where judgment for the plaintiff, although nominally against the employee as an individual, could operate to subject the State to liability, is not maintainable under the doctrine of sovereign immunity.
Masuen v. E.L. Lien & Sons, Inc., No. 78-4115 (D.S.D., Mar. 16, 1981) (memorandum decision). On the basis of High-Grade the district court granted a judgment n.o.v. in favor of Kirwan and Van Lent.
The first question for this court is whether the present suit against the state employees, Kirwan and Van Lent, was barred by sovereign immunity. We hold that it was not.
The law at the time of the accident and at the time of trial in South Dakota regarding a state employee's liability for negligence was embodied in Loonan Lumber Co. v. Wannamaker, 81 S.D. 51, 131 N.W.2d 78 (1964). In Loonan the South Dakota Supreme Court held that an employee of the South Dakota Highway Department who was negligent in the performance of his duties was liable to plaintiff for damages. The court did not discuss sovereign immunity but based its holding on the principle that:
It is not the contract of the master with the servant which exposes the servant to, or protects him from, liability to third persons and liability does not arise from the master and servant relationship. The servant's liability arises from his breach of a duty owed to a third person under the law, or, as sometimes said, from the servant's common-law obligation to use that which he controls as not to injure another.
Id., 131 N.W.2d at 79 (citations omitted).
The Eighth Circuit, applying South Dakota law, held that where no damages are sought against the state and plaintiff seeks to impose liability on defendants "solely for their personal and individual negligence" the state is not the real party in interest. Schumaker v. South Dakota, 518 F.2d 653, 654 (8th Cir. 1975), aff'g, 386 F.Supp. 618 (D.S.D.1974), cert. denied, 423 U.S. 1072, 96 S.Ct. 854, 47 L.Ed.2d 82 (1976). The court in Schumaker cited Loonan in support of the holding that the state cannot "extend the concept of sovereign immunity to immunize its agents from liability for their personal negligence." Schumaker v. South Dakota, supra, 518 F.2d at 654.
In the present case Masuen seeks to impose liability on defendants Kirwan and Van Lent for their personal negligence. Masuen does not seek specific relief which will ultimately be imposed on the state. We hold that Masuen's suit against Kirwan and Van Lent for damages for their personal negligence was not a suit against the state at the time it was brought and thus was not barred by sovereign immunity.
Before the district court's decision granting indemnity against Lien was reduced to judgment the South Dakota Supreme Court held, based on facts essentially identical to those in the present case, that the state was the real party in interest and the doctrine of sovereign immunity barred a suit against the state employees. High-Grade Oil Company v. Sommer, supra, 295 N.W.2d 736. The court in High-Grade stated that
where the state is the real party against which relief is sought, and where a judgment for the plaintiff, although nominally against the officer as an individual, could operate to subject the state to liability, the action is to be deemed against the state * * *.
Id., 295 N.W.2d at 737 (citations omitted). In that opinion no mention was made of either Loonan or Schumaker.
The district court in the present case relied on High-Grade in holding that the state of South Dakota and not the individual employees was the real party in interest. Masuen v. E.L. Lien & Sons, Inc., No. 78-4115 (D.S.D., Oct. 8, 1980) (). The district court dismissed the action holding that Kirwan and Van Lent were immune from suit. The question before us is whether the district court erred in applying High-Grade to the present case. We hold that it did.
The court in High-Grade relied on the fact that the employees were acting in performance of their official duties when it held that the suit was actually against the state. 2 This distinction had not been made previously in South Dakota. In Loonan the court held a state employee liable for his negligence even though he was acting in performance of his official duties. Loonan Lumber Co. v. Wannamaker, supra, 131 N.W.2d 78.
To the extent High-Grade held that a state employee acting in performance of official duties is not liable for negligence, that case changed the law in South Dakota. Prior to High-Grade a state employee could be sued for personal negligence...
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