Richards v. Lenz, s. 18783

• Decision Date: 27 November 1995
• Docket Number: 18784,Nos. 18783,18849 and 18855,s. 18783
• Parties: Tammy RICHARDS, Plaintiff and Appellant, v. Eldon LENZ and West River Mental Health Center, Defendants and Appellees. Edward A. RICHARDS, Plaintiff and Appellant, v. Eldon LENZ and West River Mental Health Center, Defendants and Appellees.
• Court: South Dakota Supreme Court

Page 80

539 N.W.2d 80

Tammy RICHARDS, Plaintiff and Appellant, v. Eldon LENZ and West River Mental Health Center, Defendants

and Appellees.

Edward A. RICHARDS, Plaintiff and Appellant, v. Eldon LENZ and West River Mental Health Center, Defendants

and Appellees.

Nos. 18783, 18784, 18849 and 18855.

Supreme Court of South Dakota.

Argued Jan. 9, 1995.

Decided Oct. 18, 1995.

Rehearing Denied Nov. 27, 1995.

Steven C. Beardsley and Mary A. Gubbrud of Lynn, Jackson, Shultz & Lebrun, P.C., Rapid City, for plaintiffs and appellants.

Robert L. Lewis of Costello, Porter, Hill, Heisterkamp & Bushnell, Rapid City, for defendant and appellee Eldon Lenz.

J. Crisman Palmer and Talbot Wieczorek of Gunderson, Palmer, Goodsell & Nelson, Rapid City, for defendant and appellee West River Mental Health Center.

LEE D. ANDERSON, Circuit Judge.

In this consolidated appeal, we hold that the trial court erred in granting a motion to dismiss by defendant, West River Mental Health Center and in granting a motion for summary judgment in favor of defendant, Eldon Lenz. Thus, we reverse and remand for trial.

FACTS AND PROCEDURAL HISTORY

In October 1987 Edward and Tammy Richards (Richards) approached West River Mental Health Center (WRMH) seeking marriage counseling. WRMH assigned Eldon Lenz (Lenz), a licensed psychologist who worked at WRMH to provide counseling services for the Richards. The counseling included joint and individual sessions.

Shortly after beginning therapy, Tammy Richards and Lenz began a personal, romantic relationship, although not a sexually physical relationship. Tammy would meet with Lenz outside his office both at home and at a public restaurant. Lenz was aware that Tammy was experiencing transference ^* and that it was inappropriate to continue his personal relationship with her. Lenz also knew that his involvement with Tammy would be detrimental to the Richards' marriage. Lenz discussed with Tammy that he could not have a personal, physical relationship while she was his patient. Lenz left WRMH in September 1988 and began an independent counseling practice on his own. The Richards continued counseling with Lenz at his private practice.

In August 1989 Edward stopped seeing Lenz for therapy because Edward felt Lenz's relationship with Tammy was improper. Tammy stopped seeing Lenz professionally in July 1989, but continued to meet with him out of his office. Lenz moved to Indiana in August 1990 and Tammy continued to talk on the telephone with Lenz while he lived in Indiana. Lenz met personally with Tammy when he visited Spearfish in the summer of 1991, and in Rapid City in January 1992. During these meetings, Lenz and Tammy continued to discuss personal issues and problems and they would discuss their personal feelings for each other. Tammy's feelings for Lenz did not change after he moved.

During 1990 and 1991 Edward and Tammy were still pursuing marriage counseling with WRMH through other counselors. Although these counselors were aware of Tammy's relationship with Lenz, neither counselor confronted the relationship nor informed the Richards of the detrimental effect it might be having on their marriage. Tammy finally terminated all contact with Lenz in April 1992.

Edward served a summons and complaint against the defendants on or about April 15, 1992. Tammy filed a summons and complaint against the defendants with service in April 1993. After some discovery was completed WRMH moved to dismiss and Lenz moved for summary judgment. Both motions were presented on the grounds that the two-year statute of limitations in the matter had run prior to the completed service of the summons and complaints against the defendants. Shortly after the filing of the motion to dismiss, the Richards moved to file their second amended complaints. There is no record of any hearing being held on this motion to file second amended complaints, nor any ruling by the trial court on said motion. The second amended complaints contained eight counts, including the causes of action alleging negligence, misrepresentation or fraud, and breach of contract.

The trial court issued a lengthy letter decision which granted WRMH's motion to dismiss and Lenz's motion for summary judgment. In the written decision, reference was made to the allegations in Richards' second amended complaints. Therefore, it appears that the trial court was considering all of the causes of action in the second amended complaints when ruling on the motions to dismiss and for summary judgment. Approximately six months later the trial judge filed a lengthy written decision ruling on both the motion to dismiss and the motion for summary judgment filed by Lenz.

ISSUE I

WHETHER THE TRIAL COURT IMPROPERLY TREATED WRMH'S MOTION TO DISMISS AS A MOTION FOR SUMMARY JUDGMENT.

A motion to dismiss tests the legal sufficiency of the pleading; for purposes of the pleading, the court must treat as true all facts properly plead in the complaint. SDCL 15-6-12(b)(5); Johnson v. Kreiser's, Inc., 433 N.W.2d 225, 226 (S.D.1988). Pleadings should not be dismissed merely because the court entertains doubts as to whether the pleader will prevail in the action as this is a matter of proof, not pleadings. Janklow v. Viking Press, 378 N.W.2d 875, 877 (S.D.1985).

In this case, the trial court's written decision does not indicate that the trial court considered the legal sufficiency of the Richards' pleadings with respect to the various causes of action in deciding the motion to dismiss. Rather, the trial court focused on WRMH's duty to disclose its knowledge of Lenz's activities. Specifically the trial court stated, "[T]here could be no fraudulent concealment of a legal act to which the plaintiff was a participant in and had full knowledge of as evidenced by her own testimony." Our review of the second amended complaints reveals that the Richards have each plead legally sufficient causes of action for negligence, misrepresentation, and breach of contract. On the basis of the sufficiency of the pleadings, the trial court should not have granted WRMH's motion to dismiss.

Further, the trial court's written decision indicates that it considered matters outside of the pleadings, including the deposition testimony of Tammy, in ruling on the motion to dismiss. As we expressed in Norwest Bank Black Hills v. Rapid City Teachers Federal Credit Union, 433 N.W.2d 560, 562 (S.D.1988):

Under SDCL 15-6-12(b)(5), where one moves to dismiss for failure to state a claim and "matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in § 15-6-56, and all parties shall be given the reasonable opportunity to present all material made pertinent to such a motion by § 15-6-56."

See also, Jensen Ranch, Inc. v. Marsden, 440 N.W.2d 762, 764 (S.D.1989); In re P.A.M., 505 N.W.2d 395, 396 & n. 1 (S.D.1993); Wasserburger v. Consolidated Management Corp., 459 N.W.2d 561, 565 (S.D.1990).

Here the trial court made extensive reference to testimony taken from Tammy's deposition, including her diary which was admitted as an exhibit as part of that deposition. The record clearly shows that the trial court did not advise or notify the parties of its intent to convert the motion to dismiss into one for summary judgment, although such notice is mandatory. Id. The reason for this rule has previously been stated by Wright & Miller:

It is important that the court give the parties notice of the changed status of the motion and a 'reasonable opportunity to present all material made pertinent to such a motion by rule 56.' In this way no one will be taken by surprise by the conversion. Once the proceeding becomes one for summary judgment, the moving parties' burden changes and he is obliged to demonstrate that there exists no genuine issue as to a material fact and that he is entitled a judgment as a matter of law.

Norwest, 433 N.W.2d at 562 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1366 (1969) (footnotes omitted)). Since the trial court failed to follow these mandatory steps, we hold it erred in treating the motion to dismiss of WRMH as one for summary judgment and in granting the motion.

ISSUE II

WHETHER THE TRIAL COURT ERRED IN HOLDING THAT THE TWO-YEAR STATUTE OF LIMITATION FOR MEDICAL MALPRACTICE GOVERNED THE RICHARDS' CAUSES OF ACTION AND GRANTING SUMMARY JUDGMENT IN FAVOR OF DEFENDANT LENZ.

The pertinent summary judgment principles are well settled and were summarized in Morgan v. Baldwin, 450 N.W.2d 783, 785 (S.D.1990):

The party moving for summary judgment has the burden to show that here is no genuine issue as to any material fact and that he is entitled to judgment as a matter of law. SDCL 15-6-56(c). The evidence, including all pleadings, affidavits and deposition testimony, must be viewed in the light most favorable to the non-moving party, and reasonable doubts should be resolved against the moving party. All reasonable inferences that may be drawn from the facts must be accepted in favor of the non-moving party. Groseth International, Inc. v. Tenneco, Inc., 410 N.W.2d 159 (S.D.1987); Wilson v. Great Northern Railway Co., 83 S.D. 207, 157 N.W.2d 19 (1968). Summary judgment is a drastic remedy, and should not be granted unless the moving party has established the right to a judgment with such clarity as to leave no room for controversy. Jewson v. Mayo Clinic, 691 F.2d 405 (8th Cir.1982).

The trial court granted summary judgment against the Richards and in favor of Lenz. The trial court held that the gravamen of the Richards' complaints was one alleging medical malpractice. The trial court ruled that Lenz was a practitioner of the healing arts in providing marital counseling and that the two-year statute of limitations under SDCL 15-2-14.1 barred all of the Richards' claims against Lenz.

The Richards argue that the trial court erred in holding that the allegations in their amended...