R.B.O. v. Congregation of the Priests of the Sacred Heart, Inc.

• Citation: 806 N.W.2d 907,2011 S.D. 87,274 Ed. Law Rep. 1030
• Decision Date: 14 December 2011
• Docket Number: No. 25845.,25845.
• Parties: R.B.O., J.H.C., N.T.H., L.M., L.Z., K.T., J.J., and B.S., Plaintiffs and Appellees, v. (The) CONGREGATION OF the PRIESTS OF the SACRED HEART, INC., Defendant and Appellant,andThe Catholic Diocese of Sioux Falls; Priests of the Sacred Heart; Brother Russ; Father William Pitcavage, S.C.J.; Brother Dave; Brother Bill; and Deacon Marion Quagliariello, S.C.J.; Father Thomas Lind, S.C.J.; Brother Matthew L. Miles, Defendants.
• Court: Supreme Court of South Dakota

2011 S.D. 87

274 Ed. Law Rep. 1030

806 N.W.2d 907

R.B.O., J.H.C., N.T.H., L.M., L.Z., K.T., J.J., and B.S., Plaintiffs and Appellees,

v.(The) CONGREGATION OF the PRIESTS OF the SACRED HEART, INC., Defendant and Appellant,andThe Catholic Diocese of Sioux Falls; Priests of the Sacred Heart; Brother Russ; Father William Pitcavage, S.C.J.; Brother Dave; Brother Bill; and Deacon Marion Quagliariello, S.C.J.; Father Thomas Lind, S.C.J.; Brother Matthew L. Miles, Defendants.

No. 25845.

Supreme Court of South Dakota.

Considered on Briefs Oct. 3, 2011.Decided Dec. 14, 2011.

Michael Shubeck, Law Offices of Gregory A. Yates, Rapid City, South Dakota and Rebecca Rhoades of Manly & Stewart, Newport Beach, California, Attorneys for plaintiffs and appellees.

Richard W. Orr, Timothy M. Gebhart of Davenport, Evans, Hurwitz & Smith, L.L.P., Sioux Falls, South Dakota and Steven R. Smith of Andera & Smith, Chamberlain, South Dakota, Attorneys for defendant and appellant.

SEVERSON, Justice.

[¶ 1.] Former students of a parochial school brought an action against the Congregation of the Priests of the Sacred Heart, Inc. (PSHI) and other defendants, asserting claims of childhood sexual abuse. PSHI filed a motion to dismiss the action on the grounds that the former students failed to timely serve process on PSHI in accordance with South Dakota law. The circuit court denied PSHI's motion to dismiss, finding that the former students substantially complied with the applicable service-of-process statute. The circuit court also found service of process on PSHI was valid under SDCL 15–2–31. We affirm.

BACKGROUND

[¶ 2.] R.B.O., J.H.C., N.T.H., L.M., L.Z., K.T., J.J. and B.S. (Plaintiffs) are members of a recognized Native American tribe who attended St. Joseph's Indian Mission School (St.Joseph's) when they were minors. St. Joseph's is located on the Lower Brule Indian Reservation in South Dakota. While they attended St. Joseph's, Plaintiffs allege that employees or agents of the school sexually molested and assaulted them. Plaintiffs claim that St. Joseph's was operated by PSHI at the time of the alleged abuse.

[¶ 3.] On June 28, 2010, Plaintiffs delivered a summons to the Brule County Sheriff's Office with the intent that it be served on PSHI. On June 29, 2010, the Brule County Sheriff served a copy of the summons on Mike Tyrell, the Executive Director of Child Services at St. Joseph's. Tyrell is not the registered agent of PSHI and does not hold any office in PSHI.

[¶ 4.] During the 2010 Legislative Session, the South Dakota Legislature amended the applicable statute of limitations in civil actions for childhood sexual abuse. The amended statute went into effect July 1, 2010. It provides that “no person who has reached the age of forty years may recover damages from any person or entity other than the person who perpetrated the actual act of sexual abuse.” SDCL 26–10–25.

[¶ 5.] On July 16, 2010, PSHI filed a motion to dismiss, alleging service of process on Tyrell was insufficient. Plaintiffs then delivered another summons and complaint to a private process server in Rapid City. On July 26, 2010, the private process server served Father Huffstetter, the President of PSHI and one of its directors.

[¶ 6.] In an order entered December 20, 2010, the circuit court denied PSHI's motion to dismiss. The circuit court found that the June 29, 2010 service on Tyrell substantially complied with SDCL 15–6–4(d)(1), South Dakota's statute governing the requirements for personal service on a business entity. The circuit court further held that service of process on PSHI was in compliance with SDCL 15–2–31.

STANDARD OF REVIEW

[¶ 7.] “[W]hen a defendant moves to dismiss for insufficient service of process, the burden is on the plaintiff to establish a prima facie case that the service was proper.” Grajczyk v. Tasca, 2006 S.D. 55, ¶ 22, 717 N.W.2d 624, 631 (citing Northrup King Co. v. Compania Productora Semillas Algodoneras Selectas, S.A., 51 F.3d 1383, 1387 (8th Cir.1995)). We review a circuit court's determination regarding whether a plaintiff presented a prima facie case of sufficient service de novo, giving no deference to the circuit court's legal conclusions. Id. (citing Northrup King Co., 51 F.3d at 1387).

DISCUSSION

[¶ 8.] 1. Whether the circuit court erred when it determined that service on PSHI was valid under South Dakota Law.

[¶ 9.] SDCL 15–6–4(d)(1) governs the requirements for personal service of process on a business entity. The statute requires that the summons be delivered to the following individuals:

the president, partner or other head of the entity, officer, director, or registered agent thereof. If any of the above cannot be conveniently found, service may be made by leaving a copy of the summons and complaint at any office of such business entity within this state, with the person in charge of such office....

SDCL 15–6–4(d)(1). Although SDCL 15–6–4(d)(1) uses the word “may,” instead of “shall,” compliance with the statute is not discretionary. White Eagle v. City of Fort Pierre, 2000 S.D. 34, ¶¶ 9–11, 606 N.W.2d 926, 929 (citing Matter of Gillespi, 397 N.W.2d 476, 478 (S.D.1986)). “[T]he statutory list of serviceable parties is exhaustive.” Id. ¶ 11 (citing Gillespi, 397 N.W.2d at 478).

[¶ 10.] Because Tyrell signed an interrogatory answer in his capacity as Executive Director of Child Services at St. Joseph's, the circuit court concluded Tyrell was an agent of PSHI that was authorized to receive service of process on behalf of the company. Yet SDCL 15–6–4(d)(1) does not authorize service on an agent of a business entity. The statute only authorizes service on the entity's registered agent. Tyrell is not the registered agent of PSHI. He also is not “the president, partner or other head of [PSHI]” and he does not hold a position as an officer or director of PSHI. Thus, Tyrell is not one of the parties authorized to receive service of process under the first sentence of SDCL 15–6–4(d)(1).¹

[¶ 11.] SDCL 15–6–4(d)(1) permits service on a “person in charge” of any office of the entity if the listed parties in the first sentence of the statute cannot be “conveniently found.” Plaintiffs argue that Tyrell was a “person in charge” of an office of PSHI. But in making this argument, Plaintiffs present no evidence that the individuals authorized to receive process under the first sentence of SDCL 15–6–4(d)(1) could not be conveniently found. In fact, there is not even a pro forma recitation to that effect in the return of service. By failing to present evidence that these parties could not be conveniently found, the Plaintiffs have failed to comply with the statutory requirements for effectuating service on a business entity.

Substantial Compliance

[¶ 12.] Plaintiffs argue service of process in this case was effective because there was substantial compliance with the personal service mandates of SDCL 15–6–4(d)(1). In Wagner v. Truesdell, we recognized that “actual notice coupled with substantial compliance is sufficient to satisfy personal service of process requirements....” 1998 S.D. 9, ¶ 9, 574 N.W.2d 627, 629. Substantial compliance is defined as follows:

“Substantial compliance” with a statute means actual compliance in respect to the substance essential to every reasonable objective of the statute. It means that a court should determine whether the statute has been followed sufficiently so as to carry out the intent for which it was adopted. Substantial compliance with a statute is not shown unless it is made to appear that the purpose of the statute is shown to have been served. What constitutes substantial compliance with a statute is a matter depending on the facts of each particular case.

Id. ¶ 7 (quoting State v. Bunnell, 324 N.W.2d 418, 420 (S.D.1982)).

[¶ 13.] We have held that “the purpose of service of process is to ‘advise the defendant that an action or proceeding has been commenced against him by plaintiff, and warn him that he must appear within a time and at a place named and make such defense as he has.’ ” Id. ¶ 8 (quoting Hartley v. Jerry's Radio & Elec. Shop, 74 S.D. 87, 90, 48 N.W.2d 925, 927 (1951)). Although one purpose of SDCL 15–6–4(d) is to provide notice to a defendant that an action or proceeding has been commenced against him, we have emphasized notice alone is not sufficient. Id. ¶ 9. “Actual notice will not subject defendants to personal jurisdiction absent substantial compliance with [the governing service-of-process statute].” Id. (quoting Thiele v. Stich, 425 N.W.2d 580, 584 (Minn.1988)).

[¶ 14.] In Wagner, the applicable service-of-process statute was SDCL 15–6–4(d)(10), which requires the plaintiff to serve the defendant personally. Id. ¶ 6. The defendant in Wagner suffered from Alzheimer's Disease and was unable to manage his own personal or business affairs. Id. ¶ 3. Service was made on a caretaker who was living with the defendant. Id. ¶ 4. Service was not made on the defendant personally. Id. Nonetheless, after considering “the realities” of the case, we held that a strict reading of SDCL 15–6–4(d)(10) “would be an absurdity.” Id. ¶ 10. We noted that even if service had been made on the defendant, the caretaker would have immediately taken the papers away from the defendant to give to the defendant's attorney. Id. We concluded, “[t]here logically is no need in this case for that ‘middle-person’ step to fulfill the purpose of SDCL 15–6–4(d)(10).” Id.

[¶ 15.] The unique circumstances of Wagner that warranted the application of the substantial compliance doctrine are not present in this case. SDCL 15–6–4(d)(1) plainly states that service on a “person in charge” of any office of the entity is only permitted if the parties listed in the first sentence of the statute cannot be “conveniently found.” Despite the plain language of SDCL 15–6–4(d)(1), Plaintiffs made no showing that these individuals could not be conveniently found.

[¶ 16.] In White Eagle, the plaintiff attempted to commence an...