Sioux Enterprises, Minnesota v. Tri-State Refining Co., TRI-STATE

Citation456 N.W.2d 774
Decision Date17 October 1989
Docket NumberTRI-STATE,No. 16577,16577
PartiesSIOUX ENTERPRISES, MINNESOTA, Plaintiff/Appellant, v.REFINING CO., a Trust, and Robert Hoff and Linda Hoff, Defendants and Appellees. . Considered on Briefs
CourtSupreme Court of South Dakota

Rick Johnson, Johnson, Eklund & Davis, Gregory, for plaintiff/appellant.

Richard Helsper, Erickson & Helsper, P.C., Brookings, for defendants and appellees.

HENDERSON, Justice.

PROCEDURAL HISTORY

This case concerns issues that were raised, or should have been raised, in Tri-State Refining and Inv. Co., Inc. v. Apaloosa Co., 431 N.W.2d 311 (S.D.1988) (Tri-State I ). It should be noted that after remand, we heard this case again in Tri-State Refining and Inv. Co., Inc. v. Apaloosa Co., 452 N.W.2d 104 (S.D.1990).

Tri-State I was an action filed by Tri-State, as the real party in interest after Robert Hoff conveyed his rights to it in 1981 (Tri-State I, at 313). The complaint, often amended, alleged that Lorentz Opdahl (and Apaloosa, a trust he had established) was guilty of fraud, conversion of silver, breach of a lease contract, and willful interference with use of leased property. Initially Tri-State prevailed, the case was appealed to this Court in Tri-State I, and thereafter affirmed in part, reversed in part. The reversal was for redetermination of damages for breach of lease and recalculation of prejudgment interest.

On November 28, 1988, nineteen days after Tri-State I was decided, Sioux Enterprises, Minnesota (which we dub Sioux II), claiming to be successor of "Sioux Enterprises" (we denominate as Sioux I), a trust established by Lorentz Opdahl and identified in Tri-State I, at p. 312, as such, filed a complaint in the circuit court for Lincoln County. Named as defendants in the complaint were "Tri-State Refining Co., a trust, and Robert Hoff and Linda Hoff". Robert Hoff (Robert) is the same person involved in Tri-State I, and Linda Hoff was his wife. Said complaint of Sioux II alleged that the defendants entered a sales contract with Sioux I, and, on January 3, 1980, executed a $275,000 note payable to Sioux I "after August 28, 1980, by the delivery of 13,750 troy ounces of raw silver to Sioux Enterprises" (Sioux I), and that a total of $223,339 was to be paid in installments commencing September 1, 1980, but failed to pay $121,060 due on the contract. Also, Sioux II alleges that it had not received the 13,750 ounces of silver.

On December 8, 1988, Richard Helsper, Tri-State's counsel in Tri-State I, filed a "Motion for Intervention by Von Hoff International, Inc.", (International) a South Dakota corporation claiming to be successor in interest of Tri-State (Tri-State had amended its articles of incorporation, on March 17, 1988, changing its name to Von Hoff International, Inc.). This same document included a "MOTION TO DISMISS (SDCL 15-6-12(b)) AND MOTION FOR JUDGMENT ON THE PLEADINGS (SDCL 15-6-12(c))," alleging that everything had been decided by Judge Riley Connelly and this Court in Tri-State I. Notice of hearing on "Motions" was part of this document, served on Sioux II's counsel. Extensive documentation from the record in Tri-State I accompanied the motions.

Linda Hoff (now Linda McCauliffe) filed an answer to Sioux II's complaint including a cross-claim against co-defendant claiming Robert Hoff had breached his duties as a trustee of Tri-State, converting the trust's property by incorporating its assets into Von Hoff International. She sought dismissal of Sioux II's suit and damages from Robert Hoff.

The circuit court held a hearing (of which no transcript has been provided to this Court) on January 12, 1989, at which Linda Hoff (McCauliffe) did not appear. On January 26, 1989, the court issued an order allowing International's intervention. It also ordered that International's motion judgment on the pleadings be treated as a motion for summary judgment under SDCL 15-6-12(c), and that Sioux II's complaint be dismissed on the pleadings, based upon res judicata and estoppel grounds.

ISSUES

Sioux II now appeals, alleging that the circuit court erred in three regards:

1. The trial court lacked jurisdiction because notice of International's motions was not served on co-defendant Linda Hoff;

2. The trial court lacked jurisdiction to order judgment on the pleadings when the pleadings were not closed and Sioux II received no notice of conversion to summary judgment; and,

3. Granting summary judgment was inappropriate res judicata and collateral estoppel decisions because Tri-State's contractual debt to Sioux II was unadjudicated.

--Holding--

We affirm.

FACTS

The facts of this case may be gleaned from Tri-State I.

Robert Hoff (Robert) and Linda Hoff (Opdahl's daughter) married in 1973. Robert went to work for Opdahl, managing a film products business Opdahl owned. In 1978, Opdahl put his property into three trusts: Sioux I, Tri-State (plaintiff in Tri-State I ), and Apaloosa (defendant in Tri-State I ). In November 1979, Tri-State leased a farm which was the corpus of the Apaloosa trust. The next events, common to both Tri-State I and this case, are set out in Tri-State I:

Opdahl approached Hoff in 1980 concerning the purchase of Tri-State. In April of 1980, Opdahl and Hoff agreed upon a proposal, drawn up by Opdahl, for the sale of Tri-State. Opdahl was to receive 13,750 ounces of silver, valued at $275,000. In addition, Hoff agreed to pay a bank note owed by Tri-State before May 1, 1980. Finally, the proposal provided that Hoff was to make monthly payments over a period of ten years, beginning September 1, 1980. The proposal indicated that these payments would cover one-half the equity of Tri-State, plus certain other equipment.

A purchase and sale agreement, modeled after the proposal, was signed by Opdahl and Hoff on August 28, 1980. The sales agreement additionally provided that Hoff would continue to pay $200 per month rent for the lease of Apaloosa and that this rent was to be included in each monthly payment over ten years.

In December 1980, Hoff moved much of the Tri-State business to Sioux Falls. In February 1981, Hoff incorporated the Tri-State business. Tri-State continued to make monthly rental payments as some of the business remained on the leased property. Shortly thereafter, Opdahl made several attempts to evict Tri-State from the Apaloosa property. Opdahl sent a notice purporting to terminate the lease agreement and engaged in numerous physical interferences the Tri-State's use of the property. When Opdahl took possession of 75% of the property in October 1981, Tri-State reduced its monthly rental payments by $100. Eventually, Tri-State abandoned the remaining equipment on the property in 1983.

Tri-State experienced financial difficulties in 1981. Hoff suspected these difficulties stemmed from internal problems and hired a private investigator. This investigation led to a 1982 confession by an employee, Nathan Clary (Clary), that he had stolen silver from Tri-State. Clary also admitted that he assisted Opdahl in removing excessive silver during 1980. It was undisputed that Opdahl received silver from Tri-State several times during the first six months of 1980. However, there was conflicting testimony concerning the amount of silver Opdahl received. Opdahl claimed that he did not even receive the amount he was entitled to under the sales agreement. In contrast, Tri-State, through its witnesses Clary and Paul East (East), a certified public accountant who reviewed Tri-State's financial records, claimed the amount received by Opdahl greatly exceeded what he was entitled to under the contract. This testimony indicated Opdahl received nearly $1,000,000 in silver.

Tri-State sued Apaloosa and Opdahl in 1984. The complaint alleged damages for breach of the lease contract and willful interference with Tri-State's use of the leased property. In 1986, Tri-State amended its complaint to include a claim for conversion of silver by Opdahl and his agents. After the close of the evidence at trial, the trial court permitted Tri-State to again amend its complaint to include an action for fraud and deceit. The trial court awarded Tri-State damages of $210,000 for fraud, $544,682.14 in prejudgment interest, and $13,400 for breach of the Apaloosa lease. The trial court also imposed sanctions of $5,500 on Opdahl.

Tri-State I, 312-3.

DECISION
I. The trial court had jurisdiction to hear and enter its rulings on Von Hoff International's motions, regardless of the fact that the motions had not been served on Linda Hoff.

When Robert Hoff and Tri-State Refining Company, Inc. brought their motions to intervene, to dismiss, and for judgment on the pleadings, no notice of motions was served upon Linda pursuant to SDCL 15-6-5(a). 1

Although there was a technical failure to comply with the service statute, we hold that the trial court did have jurisdiction to hear and enter its rulings on these motions. Sioux II was properly served with the notice of motion of intervention and is in no position to complain. It is attempting to present this issue on appeal when Linda is the only party with standing to do so. "The right of appeal is limited to a party aggrieved." Olesen v. Snyder, 249 N.W.2d 266, 269 (S.D.1976). Sioux II was not aggrieved or prejudiced by Linda not receiving the notice of motions filed by Von Hoff International. The record does not reflect that Linda objected to or disputes in any manner the disposition by the trial court and she has further elected to not participate in these appeal proceedings. Further, Sioux II had full knowledge of the motions and the hearing and was present at the hearing through counsel.

II. The trial court properly treated Von Hoff International's motion for judgment on the pleadings as one for summary judgment.

Schaub by Schaub v. Moerke, 338 N.W.2d 109 (S.D.1983) appears to govern this issue. In Schaub, the plaintiffs filed a complaint against the City of Aberdeen and a fire truck...

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