Paul v. Bathurst
| Docket Number | 29957-SPM,29974-SPM |
| Decision Date | 01 November 2023 |
| Citation | 2023 S.D. 56 |
| Parties | LINDA PAUL, Plaintiff and Appellant, v. ROBERT BATHURST and SHANNON BATHURST, d/b/a WAYBACK STONEMEADOW RANCH and STONEMEADOW RANCH, LLC, Defendants and Appellees. |
| Court | South Dakota Supreme Court |
Considered on Briefs November 8, 2022
Appeal from the Circuit Court of the Seventh Judicial Circuit Custer County, South Dakota the Honorable Joshua Hendrickson Judge Craig O. Ash Milbank, South Dakota Attorney for plaintiff and appellant.
Kassie McKie Shiffermiller of Lynn Jackson Shultz & Lebrun, P.C. Rapid City, South Dakota Attorneys for defendant and appellee Robert Bathurst.
Sarah E. Baron Houy of Bangs, McCullen, Butler, Foye & Simmons LLP Rapid City, South Dakota Attorneys for defendant and Appellee Shannon Bathurst.
[¶1.] Linda Paul sued Robert Bathurst, Shannon Bathurst, and Stonemeadow Ranch, LLC, alleging breach of contract, quantum meruit, unjust enrichment, and promissory estoppel. Robert and Shannon filed a motion to dismiss for failure to state a claim upon which relief can be granted or because a statute of limitations barred Paul from bringing her claim. The circuit court denied the motion to dismiss for failure to state a claim upon which relief can be granted but granted the motion to dismiss based on a statute of limitations. Paul appeals the order granting the motion to dismiss. Robert and Shannon filed a notice of review on the order denying the motion to dismiss.[1] We affirm in part and reverse in part.
[¶2.] When reviewing orders on a motion to dismiss, this Court accepts the facts alleged in the complaint as true and construes them in the light most favorable to the pleader. Sisney v. Best Inc., 2008 S.D. 70, ¶ 8, 754 N.W.2d 804, 809. Paul's complaint asserts four causes of action: (1) breach of contract, (2) quantum meruit, (3) unjust enrichment, and (4) promissory estoppel. Each claim seeks precisely $179,058.51.
[¶3.] Paul alleged the following in her complaint. Robert and Shannon "owned and operated a ranch in Custer County South Dakota, consisting of a caretaker's residence, a hunting lodge, a shop, and approximately 730 acres of ranchland[.]" In October 2014, Robert and Shannon "contracted with [Paul] for [Paul] to provide certain labor, materials and expenses for various improvements and repairs at the Ranch." These improvement tasks included "cleaning, painting, minor repairs, flooring, organization and generally bring[ing] the property into good condition and repair[.]" In exchange, Robert and Shannon would pay Paul at her "customary rate plus materials and expenses." "The overall purpose of [Paul's] services were to get the Ranch back into good condition for the purpose of getting the property ready for sale[.]" In July 2015, Robert and Shannon "terminated their existing ranch managers, and put [Paul] in charge of managing the ranch." Robert and Shannon approved hiring a ranch hand. Paul "advanced the first payment to Mr. Grady [ranch hand] in the amount of $1,500.00 for his first one and a half pay periods and [Robert and Shannon] agreed to reimburse [Paul] for this expense, but have not yet done so."
[¶4.] Around April 2016, Robert and Shannon "entered into an agreement with [Paul] whereby [Robert and Shannon] agreed to pay [Paul] the same amount of $1,000.00 every two weeks to manage the Ranch, and to reimburse [Paul] for expenses incurred on behalf of [Robert and Shannon]." This second agreement lasted "from April 2016 until October 2017, during which time [Paul] was owed a total of $40,000.00 for her regular bi-weekly compensation." Only a portion of this amount was paid, "leaving a balance owed to [Paul] in the amount of $17,500.00." "In the courses of providing services to [Robert and Shannon], [Paul] advanced money for materials, supplies and expenses for the Ranch on behalf of [Robert and Shannon] in the unreimbursed amount of $20,360.80." "In the course of providing services to [Robert and Shannon], [Paul] utilized her own vehicle for Ranch purposes causing damages in the amount of $2,091.71, for which [Paul] is entitled to reimbursement." "As additional compensation, [Robert and Shannon] agreed to provide [Paul] with [a] trip to Ireland for two people having a value of $5,876.00, which has not been provided to [Paul]." For the first contract-from October 2014 to April 2016-Robert and Shannon owed Paul $133,230.00, which was calculated "at [Paul's] usual and customary rate[.]"
[¶5.] During the entire working relationship Paul had with Robert and Shannon, she "dealt directly with [Robert and Shannon] with no mention of Stonemeadow Ranch, LLC." However, Paul did receive "a 1099 for non-employee compensation from Stonemeadow Ranch, LLC in the spring of 2017, and another 1099 from Stonemeadow Ranch, LLC in the spring of 2018." Paul "did not receive any payments or reimbursements from Stonemeadow Ranch, LLC, and [Paul] was unaware she had any business dealings with Stonemeadow Ranch, LLC as a separate and distinct entity from [Robert and Shannon]."
[¶6.] "To the extent that [Robert and Shannon] may claim that [Paul] contracted with Stonemeadow Ranch, LLC, [Paul] alleges that [Stonemeadow Ranch, LLC] is the alter ego of [Robert and Shannon] and that the entity should be disregarded." Robert and Shannon "are the sole members and owners of Stonemeadow Ranch, LLC, and that there exists . . . a complete unity of interest between [Robert and Shannon] and [Stonemeadow Ranch, LLC]." Paul "alleges that [Stonemeadow Ranch, LLC] is and was at all times mentioned . . . a mere shell, instrumentality and conduit through which [Robert and Shannon] carried on their business in the name of [Stonemeadow Ranch, LLC] to such extent that any individuality or separateness of [Stonemeadow Ranch, LLC] and [Robert and Shannon] does not at any time mentioned . . . exist." Paul "alleges that [Stonemeadow Ranch, LLC] . . . was controlled, dominated and operated by [Robert and Shannon] as their individual business alter ego in that the business activities and business of the LLC were carried out in the individual names of [Robert and Shannon]." Paul "alleges that adherence to the fiction of the separate existence of [Stonemeadow Ranch, LLC] as an entity separate and distinct from [Robert and Shannon] would permit abuse of the corporate privilege and produce an inequitable result in that [Robert and Shannon] represented to [Paul] that [Robert and Shannon] were parties obligated in dealings with [Paul]." Paul Paul
[¶7.] Paul's breach of contract claim seeks damages resulting both from the first alleged contract (from October 2014 to April 2016) and the second alleged contract (from April 2016 to October 2017). It also seeks reimbursement for: (1) the Ireland trip; (2) the deterioration of Paul's vehicle; (3) the advance wages to the hired man, and (4) materials, supplies, and expenses. For the implied contract claim (quantum meruit), Paul seeks "the reasonable value of her labor, materials, supplies and expenses[.]" For the promissory estoppel claim, Paul claims that she "conferred a benefit on [Robert and Shannon]" based upon their "promise[s] on several occasions to fully and adequately compensate [Paul] for her labor, materials, supplies and expenses." "In reliance on [Robert and Shannon's] promise to fully compensate [Paul], [Paul] continued to provide labor, materials, supplies and expenses to [Robert and Shannon] to her detriment in the amount of the value of the labor, materials, supplies and expenses." Paul asserts this reliance was reasonable, and Paul's loss of pecuniary gain was foreseeable to Robert and Shannon.
[¶8.] Robert and Shannon filed separate answers denying Paul's claims and asserting various affirmative defenses. Simultaneously, Robert filed a motion to dismiss that alleged failure to state a claim upon which relief can be granted[2] or, in the alternative, that Paul's claims were time-barred by the statute of limitations in SDCL 15-2-15(4). Shannon joined Robert's motion to dismiss.
[¶9.] Counsel for Paul, Robert, and Shannon argued the motion to dismiss before the circuit court at a hearing held for that purpose. After hearing the arguments, the circuit court issued a brief bench ruling. First, it denied the motion to dismiss for failure to state a claim upon which relief can be granted because "there's been pled with enough facts that would make that an issue potentially for piercing a corporate veil." Second, the circuit court granted the motion to dismiss based on the two-year statute of limitations because ...
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