Rural Pennington County Tax Ass'n v. Dier
| Decision Date | 03 December 1993 |
| Docket Number | No. 18289,18289 |
| Citation | 515 N.W.2d 841 |
| Parties | RURAL PENNINGTON COUNTY TAX ASSOCIATION, for and in behalf of the taxpayers of Pennington County, South Dakota, and John McMahon, Plaintiffs and Appellants, v. Jack C. DIER, Defendant and Appellee. . Considered on Briefs |
| Court | South Dakota Supreme Court |
John Peterson and Rick Johnson, Johnson, Eklund, Nicholson, Dougherty & Abourezk, Gregory, for plaintiffs and appellants.
Gregory A. Eiesland, Quinn, Eiesland, Day & Barker, Rapid City (Lois A. Lofgren, Legal Intern, on brief), for defendant and appellee.
John McMahon (McMahon) and the Rural Pennington County Tax Association appeal a judgment dismissing their action against Jack Dier (Dier) for the recovery of certain royalties and settlement proceeds he received in connection with the development of a computer program. We affirm.
In 1979, Dier was employed by Pennington County South Dakota as its county highway superintendent. In early 1983, the county retained a consulting firm to ascertain the computer needs of the highway department. Bids were solicited according to the specifications of the consulting firm and a contract was ultimately awarded to MCS Group, Inc. (MCS). Under the terms of the contract, the county acquired a "perpetual, non-exclusive, not-transferable and not-personal license" to use the operating system software. The contract also acknowledged the ability of MCS to "sell, license or lease the Application Software to other users."
The software program MCS provided the county was not specifically designed for use by highway departments. No such program was available at that time. Thus, in order to meet the bid specifications, MCS had to find a generic software program that it could adapt to fit the needs of the highway department. The county was put on notice that MCS planned to market the software program it ultimately developed to other county highway departments. Over time, MCS installed the computer system, made the necessary program adaptations and, in that process, developed a software program that became known as C.H.R.I.S., an acronym for County Highway Resources Information Systems.
Given his position as highway superintendent, Dier played a part in the evolution of the C.H.R.I.S. program. Necessity required him to point out problems with the system so that MCS could make the adapted computer program perform the various tasks for which it was acquired. Through his past employment experience in the construction industry, Dier had also acquired a thorough working knowledge of the use of spreadsheets as a management tool. As C.H.R.I.S. developed, Dier would extract data from the C.H.R.I.S. system and format it into various spreadsheets that he used to assist him in carrying out his job responsibilities.
Through the working relationship established between MCS and Dier, MCS became aware of the spreadsheets Dier was using. MCS approached Dier and requested his assistance in developing software based on these spreadsheets that could be marketed to counties throughout the country. MCS provided Dier with computers, equipment and supplies that he could use to develop the new software. Dier also obtained the assistance of his wife, a bookkeeper knowledgeable in the use of computers, and set up an office in one of the bedrooms of his home. Over the course of several months, the Diers spent their evenings and weekends working on a program that would ultimately be called C.H.R.I.S.-MATE. C.H.R.I.S.-MATE was completed in early 1986. In January 1986, MCS and Dier entered into an independent contractor's agreement establishing ownership and marketing rights, royalties, and the relationship between MCS and Dier in regard to the new computer program.
MCS was subsequently able to market C.H.R.I.S.-MATE with sales that paid Dier some $17,000 in royalties. After approximately two years, there was a change in management at MCS. The new management felt that Dier was being overpaid and attempted to change the royalty terms of Dier's contract. Dier filed suit to require MCS to abide by the terms of the original contract. The litigation was settled out of court and Dier was paid a cash settlement in the neighborhood of $52,000.
Pennington County attempted to intervene in the litigation between Dier and MCS to receive part of Dier's royalties. That attempt was unsuccessful. In 1990, McMahon and his taxpayer group commenced the present action against Dier in the belief that Pennington County was entitled to Dier's royalties and settlement proceeds from MCS. 1 A trial to the court was held and the trial court entered its findings of fact, conclusions of law and judgment dismissing the taxpayer suit on the merits and with prejudice. This appeal followed.
SDCL 4-3-2 provides:
No county or state officer for whose services a salary is provided by law shall receive any compensation for his services other than such salary. All fees received by him shall be paid into the county or state treasury, as the case may be, not later than the time set by Sec. 7-9-17. This section shall not be so construed as to affect in any manner any officer who receives no salary other than the fees paid for his services.
SDCL 60-2-10 provides:
Everything which an employee acquires by virtue of his employment, lawfully or unlawfully, during or after the term of employment belongs to the employer, excepting any compensation due the employee.
McMahon and his taxpayer group argue that SDCL 4-3-2 and SDCL 60-2-10 require Dier to pay any monies he received from the sale of C.H.R.I.S. or C.H.R.I.S.-MATE, including settlement proceeds, into the Pennington County treasury. Accordingly, they contend that the trial court erred in determining that Pennington County had no interest in Dier's royalties or settlement proceeds from MCS. However, we agree with the decision of the trial court.
The construction of a statute is a question of law and the decision below is fully reviewable without deference to the decision of the trial court. Nelson v. School Bd. of Hill City S.D., 459 N.W.2d 451 (S.D.1990). The most important rule of statutory construction is to determine and give effect to the intention of the legislature. Id. Legislative intent is derived primarily from the language expressed in the statute. Id. "The intent of a statute must be derived from the statute as a whole, from its language, and by giving it its plain, ordinary and popular meaning." Bryant v. Butte County, 457 N.W.2d 467, 470 (S.D.1990).
By its explicit terms, SDCL 4-3-2 prohibits a county officer such as Dier from receiving any compensation "for his services" other than his salary. This Court has never had an opportunity to interpret this language. However, the Attorney General has issued a number of opinions interpreting the provision in various factual scenarios. In 1968, the Attorney General issued an opinion on the question of whether a county judge appointed as indigent defense counsel in a criminal case could retain his court appointed attorney fees or whether the judge was required to deposit those fees into the county treasury. The Attorney General concluded:
Such fees a public officer receives (in this case the County Judge) that the statute states must be deposited with the County Treasurer, are fees [received] by virtue of such public office, and do not contemplate fees received from public funds, in pursuance to statute for services performed, not by virtue of such public office but for the performance of duties, not incompatible with and outside of and in addition to such official duties.
Op. Att'y Gen. 476, 479 (1967-68) (emphasis added). More recently, the Attorney General issued an opinion as to whether county officials summoned for jury duty were entitled to retain their jury fees. Consistent with his earlier opinions, the Attorney General concluded:
It is my opinion, based upon a review of the above statutes, that all county officials and employees are entitled to the statutorily mandated fees and expenses while performing jury duty. All of the statutory restrictions to receipt of fees in excess of salary in my opinion are inapplicable. The reason for this determination is that there is no connection between services a person performs as a juror and the services a county employee or official is hired or elected to perform. Restrictions such as those contained in SDCL 4-3-2 and SDCL 7-7-17 in my opinion only apply to fees generated from work-related services.
Op. Att'y Gen. 212, 214 (1985-86) (emphasis added).
Opinions of the Attorney General are, of course, not binding on this Court. They are, however, "entitled to weight in gleaning the legislature's intention." Application of Farmers State Bank, 466 N.W.2d 158, 163 (S.D.1991). In this instance, the Attorney General's interpretations of SDCL 4-3-2 are clearly consistent with the plain language of the statute restricting a county officer's receipt of additional compensation, "for his services." Therefore, resolution of the taxpayer group's contentions under SDCL 4-3-2 requires that we determine whether MCS's compensation of Dier for his development of C.H.R.I.S.-MATE constituted compensation "for his services" in addition to the salary already paid to him by the county.
The county hired Dier and compensated him for his services as its county highway superintendent. MCS compensated Dier for his services in developing a computer program. If Dier had been hired by the county as a computer programmer so that "his services" for the county included the development of a computer program, we might be able to find a violation of SDCL 4-3-2. However, that is not what occurred in this case. Although Dier's management responsibilities as highway superintendent were undoubtedly extensive, we find nothing in the record...
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