Ries v. JM Custom Homes, LLC, 29718-a-SPM

CourtSupreme Court of South Dakota
Writing for the CourtMYREN, JUSTICE
Citation2022 S.D. 52
PartiesDOUGLAS RIES, Plaintiff and Appellant, v. JM CUSTOM HOMES, LLC, Defendant and Appellee.
Docket Number29718-a-SPM
Decision Date24 August 2022

2022 S.D. 52

DOUGLAS RIES, Plaintiff and Appellant,
v.

JM CUSTOM HOMES, LLC, Defendant and Appellee.

No. 29718-a-SPM

Supreme Court of South Dakota

August 24, 2022


Considered on Briefs January 10, 2022

Appeal from the Circuit Court of the Seventh Judicial Circuit Pennington County, South Dakota the Honorable Robert Gusinsky Judge

Heather M. Lammers Bogard of Costello, Porter, Hill, Heisterkamp, Bushnell & Carpenter, LLP Rapid City, South Dakota Attorneys for plaintiff and appellant.

Gary D. Jensen Brett A. Poppen of Beardsly, Jensen & Lee, Prof. LLC Rapid City, South Dakota Attorneys for defendant and appellee.

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MYREN, JUSTICE

[¶1.] Douglas Ries received workers' compensation benefits from his employer following an employment-related injury at a construction site where his employer was a subcontractor. After receiving those workers' compensation benefits from his employer, Ries filed a negligence claim against the general contractor responsible for the construction project. After extensive discovery, the general contractor sought leave from the circuit court to amend its answer to assert statutory immunity under SDCL 62-3-10, which the circuit court granted. The general contractor subsequently moved for summary judgment based on that statutory immunity. The circuit court granted summary judgment after concluding that the general contractor remained potentially liable for workers' compensation under SDCL 62-3-10. Given the exclusivity provision found in SDCL 62-3-2, the circuit court concluded that workers' compensation was the sole remedy available to Ries. Ries appeals, and we affirm.

Facts and Procedural History

[¶2.] JM Custom Homes, LLC (JM) was the general contractor constructing a home in Rapid City, South Dakota. JM subcontracted with Pine Tree Plumbing (Pine Tree) to complete the plumbing work on the home. Pine Tree employed Ries.

[¶3.] On June 6, 2017, Ries was injured in the home when he fell through an unanchored, plywood stair leading from the main level to the basement. The stair caused him to fall and hang upside down on the staircase. Ries sustained injuries to his right knee, left hip, and forearms. He later underwent several surgeries, including a right knee replacement. Following the incident, Ries filed a workers'

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compensation claim under Pine Tree's policy because the injury occurred during the course and scope of his employment with Pine Tree. Pine Tree's insurer, Acuity Insurance, paid Ries's workers' compensation benefits. Ries then filed a negligence suit in circuit court against JM, the general contractor, alleging JM was negligent because it used unanchored, half-inch plywood on each step and failed to install handrails.

[¶4.] After the parties had engaged in extensive discovery, JM filed a motion to amend its answer to include statutory immunity as a defense. Ries opposed the motion to amend, arguing that JM waived its ability to assert statutory immunity because it failed to plead the defense in its initial answer. Both parties submitted affidavits regarding the motion to amend answer, provided briefs, and presented oral arguments to the circuit court. The circuit court signed an order granting JM's motion to amend answer on March 3, 2021. That order does not explain the circuit court's ruling, and there is no written decision in the record.[1] JM filed its amended answer on March 9, 2021, asserting statutory immunity under SDCL 62-3-10, which provides that "[a] principal, intermediate, or subcontractor is liable for compensation to any employee injured while in the employ of any subcontractor and engaged upon the subject matter of the contract, to the same extent as the immediate employer."

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[¶5.] JM moved for summary judgment on May 14, 2021, arguing that because it was subject to potential liability for workers' compensation benefits under SDCL 62-3-10, Ries's sole remedy was from workers' compensation. See SDCL 62-3-2 ("The rights and remedies granted to an employee subject to this title . . . exclude all other rights and remedies of the employee . . . except rights and remedies arising from intentional tort.").

[¶6.] In response, Ries argued that JM was not entitled to statutory immunity under SDCL 62-3-10 because of language in JM's insurance policy. Noting that Pine Tree carries workers' compensation insurance, Ries claimed that JM's insurance policy excludes liability for subcontractors who operate under the Workers' Compensation Act (Act).

[¶7.] The circuit court granted JM's motion for summary judgment and entered judgment on July 6, 2021. The circuit court determined that JM was potentially liable to Ries for workers' compensation under SDCL 62-3-10 and, because of the exclusivity provisions of SDCL 62-3-2, workers' compensation was Ries's sole remedy. Ries appeals and asserts that the circuit court abused its discretion when it allowed JM to amend its answer and that the court erred in granting JM's motion for summary judgment.

Whether Ries's notice of appeal included JM's motion to amend answer.

[¶8.] As an initial matter, we address JM's claim that Ries cannot challenge the circuit court's decision to grant JM's motion to amend because Ries's notice of appeal did not specifically indicate an intention to appeal the circuit court's decision to allow JM to amend its answer.

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[¶9.] "On an appeal from a judgment this court may review intermediate orders. However, they must involve the merits and necessarily affect the judgment appealed from." Lang v. Burns, 77 S.D. 626, 631, 97 N.W.2d 863, 866 (1959). Moreover, notices of appeal should "be liberally construed in favor of their sufficiency." People ex rel. S.D. Dep't of Soc. Servs., 2011 S.D. 26, ¶ 8, 799 N.W.2d 408, 409 (quoting Int'l Union of Operating Eng'rs Loc. No. 49 v. Aberdeen Sch. Dist. No. 6-1, 463 N.W.2d 843, 844 (S.D. 1990)) (internal quotation marks omitted).

[¶10.] The amendment to JM's answer asserted the exclusivity provisions of SDCL 62-3-2, which provided the basis for the circuit court's order granting summary judgment. Because the order granting the amendment involves the merits of summary judgment, the issue is before this Court as part of Ries's appeal of the circuit court's decision granting summary judgment.

Whether the circuit court abused its discretion by granting JM's motion to amend its answer.

[¶11.] We review the circuit court's decision to grant or deny a motion to amend pleadings using the abuse of discretion standard of review. McDowell v. Citicorp Inc., 2008 S.D. 50, ¶ 7, 752 N.W.2d 209, 212. "An abuse of discretion occurs when 'discretion [is] exercised to an end or purpose not justified by, and clearly against, reason and evidence.'" Id. (alteration in original) (quoting In re Name Change of L.M.G., 2007 S.D. 83, ¶ 6, 738 N.W.2d 71, 73-74).

[¶12.] "Under South Dakota law, a defendant is required to plead any and all affirmative defenses in the answer to plaintiff's complaint." Jurgensen v. Smith, 2000 S.D. 73, ¶ 21, 611 N.W.2d 439, 442. However, "[a] trial court may permit the amendment of pleadings before, during, and after trial without the adverse party's

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consent." Klutman v. Sioux Falls Storm, 2009 S.D. 55, ¶ 14, 769 N.W.2d 440, 446 (quoting Burhenn v. Dennis Supply Co., 2004 S.D. 91, ¶ 20, 685 N.W.2d 778, 783); see SDCL 15-6-15(a) ("[A] party may amend his pleading . . . by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires."). "An affirmative defense is not waived if the pleadings are properly amended to include the unpled defense or if the issue was tried by express or implied consent." Dakota Cheese, Inc. v. Ford, 1999 S.D. 147, ¶ 25, 603 N.W.2d 73, 78 (quoting Beyer v. Cordell, 420 N.W.2d 767, 769 (S.D. 1988) (emphasis removed)). "[T]he most important consideration in determining whether a party should be allowed to amend a pleading is whether the nonmoving party will be prejudiced by the amendment." Id. ¶ 24, 603 N.W.2d at 78 (quoting Isakson v. Parris, 526 N.W.2d 733, 736 (S.D. 1995)). "Prejudice is often shown when a party is surprised and unprepared to meet the contents of the proposed amendment." Robinson-Podoll, 2020 S.D. 5, ¶ 14, 939 N.W.2d at 38 (quoting Tesch v. Tesch, 399 N.W.2d 880, 882 (S.D. 1987)).

[¶13.] JM filed a motion to amend its answer approximately eight months after its initial answer and after the parties had engaged in extensive discovery. Although Ries had informally requested pretrial deadlines, none had been agreed to by the parties or ordered by the circuit court. The circuit court had not set a trial date. Ries's ability to prepare to challenge JM's assertion of this defense was not restricted. Further, the circuit court found that allowing the amended answer would not prejudice Ries. Accordingly, we conclude that the circuit court did not abuse its discretion in granting JM's motion to amend.

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Whether the circuit court erred in granting summary judgment.

[¶14.] "We review a circuit court's entry of summary judgment under the de novo standard of review." Wyman v. Bruckner, 2018 S.D. 17, ¶ 9, 908 N.W.2d 170, 174 (quoting Heitmann v. Am. Fam. Mut. Ins. Co., 2016 S.D. 51, ¶ 8, 883 N.W.2d 506, 508). "We will affirm a circuit court's 'grant of a motion for summary judgment when no genuine issues of material fact exist, and the legal questions have been correctly decided.'" Harvieux v. Progressive N. Ins. Co., 2018 S.D. 52, ¶ 9, 915 N.W.2d 697, 700 (quoting Wyman, 2018 S.D. 17, ¶ 9, 908 N.W.2d at 174). We do not give deference to the circuit court's decision to grant summary judgment under de novo review. Oxton v. Rudland, 2017 S.D. 35, ¶ 12, 897 N.W.2d 356, 360. "Statutory interpretation is a question of law for the court to determine, and when the trial court resolves the question in a litigant's favor, summary judgment is appropriate." Sioux Valley Hosp. Ass'n v. State, 519...

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