Stene v. State Farm Mut. Auto. Ins. Co., No. 20342

CourtSupreme Court of South Dakota
Writing for the CourtMcMURCHIE
Citation1998 SD 95,583 N.W.2d 399
Decision Date19 August 1998
Docket NumberNo. 20342
PartiesDelmer STENE, Plaintiff and Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Defendant and Appellee.

Page 399

583 N.W.2d 399
1998 SD 95
Delmer STENE, Plaintiff and Appellant,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Defendant and Appellee.
No. 20342.
Supreme Court of South Dakota.
Argued June 1, 1998.
Decided Aug. 19, 1998.

Thomas K. Wilka of Hagen, Wilka & Archer, P.C., Sioux Falls, for plaintiff and appellant.

James E. Moore and William P. Fuller of Woods, Fuller, Shultz & Smith, P.C., Sioux Falls, for defendant and appellee.

McMURCHIE, Circuit Judge.

¶1 This is an appeal from a circuit court judgment dismissing Delmer Stene's (Stene) complaint, with prejudice, and holding that a contract for insurance provided for the actual cash value of the cost of repair. We are also asked to review a prior order granting partial summary judgment. SDCL 15-26A-7. There the circuit court held in favor of State Farm Mutual Automobile Insurance (State Farm) in regard to Stene's claims of fraud and bad faith, demands for punitive damages, and damages arising as a result of emotional distress. We affirm.

FACTS

¶2 Stene purchased a policy of insurance (Farm/Ranch Policy # 91-09-4844-2) from State Farm insuring him against specific loss in the course of his farming operation. As part of that policy, State Farm insured his 1982 combine for $50,000. This $50,000 value that Stene assessed to the machine, and reported to State Farm, was based on the advice of his John Deere dealer.

¶3 On December 13, 1991, Stene's combine broke down while he was traveling on a country road. Stene left the combine on the side of the road. Sometime during that night or the following night, the combine was vandalized by juveniles with shotguns. The juveniles shot through the combine's cab, shot out the combine's glass, and fired shots into the panel that housed the combine's electronic controls. Shortly thereafter, State Farm was notified of the loss.

¶4 A representative from State Farm, Agent Bruning, began investigating the loss. At the same time, Stene contacted various implement dealers and salvage yards asking for estimates. From the beginning, Stene and State Farm disagreed about the amount of the coverage and loss. Stene alleged that he was informed that the combine could not

Page 401

be reliably repaired. Because of this, he claimed he was entitled to the replacement cost of the machine. This would have amounted to $50,000, the policy's limit, minus the salvage value represented in his estimates.

¶5 State Farm's agent, citing the insurance policy, informed Stene that State Farm was only required to "repair or replace" the combine and offered the actual cash value of the loss not to exceed the necessary cost of repairs. Stene was dissatisfied with this offer and demanded that State Farm pay him the replacement cost.

¶6 State Farm sent Stene a draft for $11,696.31, without seeking a release in return, so that the combine could be repaired as quickly as possible. This was done with the understanding that any newly discovered damages would also be repaired and paid for by State Farm. Stene endorsed the check under protest. Thereafter, all settlement negotiations failed due to Stene's demand for replacement, and State Farm's insistence that the machine could be reliably repaired. While Stene argued that salvaging the combine was appropriate, State Farm felt that repair was the best option. Stene then sued State Farm.

¶7 The circuit court granted State Farm's motion for partial summary judgment and dismissed Stene's claims based on fraud and bad faith, demands for punitive damages, and damages arising as a result of emotional distress. Then, upon stipulation, the circuit court heard and decided the legal issue of the insurance contract's interpretation. The circuit court again found in State Farm's favor and held that State Farm need only repair the combine under the terms of the insurance contract.

¶8 The following issues have been presented on appeal:

1. Did the circuit court's interpretation of the insurance contract constitute an error of law? No.

2. Do material issues of fact preclude summary judgment on Stene's bad faith and fraud claims? No.

3. Was summary judgment in favor of State Farm dismissing Stene's claim of emotional distress appropriate? Yes.

4. Was Stene's claim for punitive damages supported by clear and convincing evidence of fraudulent, malicious, or oppressive conduct by State Farm entitling Stene to submit this question to a jury? No.

STANDARDS OF REVIEW

¶9 This appeal raises the issue of insurance contract interpretation which is a question of law, reviewable de novo. National Farmers v. Universal, 534 N.W.2d 63, 64 (S.D.1995); State Farm Mut. Auto. Ins. Co. v. Vostad, 520 N.W.2d 273, 275 (S.D.1994).

¶10 This appeal also presents issues pursuant to the granting of partial summary judgment in favor of State Farm. Our standard of review of a circuit court's grant or denial of a motion for summary judgment is well-settled. In reviewing the circuit court's decision:

We must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the non-moving party and reasonable doubts should be resolved against the moving party. The non-moving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.

Petersen v. Dacy, 1996 SD 72, p 5, 550 N.W.2d 91, 92 (quoting Trippet Special Trust v. Blevins, 1996 SD 29, p 6, 545 N.W.2d 216, 221); Waddell v. Dewey County Bank, 471 N.W.2d 591, 593 (S.D.1991); see also Wilson v. Great Northern Railway Company, 83 S.D. 207, 157 N.W.2d 19 (1968).

¶11 Lastly, it is well settled that deposition testimony receives de novo review.

Page 402

Hanten v. Palace Builders, Inc., 1997 SD 3, p 8, 558 N.W.2d 76, 78.
ISSUE ONE

¶12 Stene's combine was insured under Section I, Coverage D--Scheduled Farm Personal Property, of the farm/ranch policy issued by State Farm. The policy stated the following under the heading SECTION I--CONDITIONS:

Loss Settlement. Covered property losses are settled as follows:

a. Actual Cash Value. The following covered property losses are settled at actual cash value, up to the applicable limit of liability, at the time of loss:

(1) personal property;

(2) carpeting, domestic appliances, awnings and outdoor antennas, whether or not attached to buildings;

(3) scheduled farm personal property;

...

We will not pay an amount exceeding that necessary to repair or replace.

¶13 The policy also contained an option which would provide Stene with replacement cost for certain items. That option states:

Option RC--Replacement Cost--Contents. Under SECTION I--CONDITIONS, items a. (1) and (2) of the Loss Settlement Condition are replaced with the following:

(1) (a) The following personal property at actual cash value at the time of loss:

i. antiques, fine arts, painting, statuary and similar articles which by their inherent nature cannot be replaced with new articles;

ii. articles whose age or history contribute substantially to their value including, but not limited to memorabilia, souvenirs and collector items;

iii. property not useful for its intended purpose.

(b) We will not...

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47 practice notes
  • SDCP v. Wausau Underwriters Ins. Co., No. 20789
    • United States
    • Supreme Court of South Dakota
    • 23 Agosto 2000
    ...adopted by South Dakota; in fact, this Court has repeatedly declined to adopt the doctrine. See Stene v. State Farm Mut. Auto. Ins. Co., 1998 SD 95, ¶ 18, 583 N.W.2d 399, 402-03; Alverson, 1997 SD 9, ¶ 14, 559 N.W.2d at 6. I further part company with the Court in its erroneous use of the co......
  • Stanton v. State Farm Fire and Cas. Co., Inc., No. Civ 99-1033.
    • United States
    • U.S. District Court — District of South Dakota
    • 27 Diciembre 1999
    ...SDO 874, 522 N.W.2d 752, Grynberg v. Citation Oil & Gas Corp., 1997 SD 121, 573 N.W.2d 493, and Stene v. State Farm Mutual Auto. Ins. Co., 1998 SD 95, 583 N.W.2d 399. Stene tells us, relying in part on Matter of Cert. of a Question of Law, supra, that a violation of State Farm's "duty of go......
  • Christians v. Christians, No. 21543.
    • United States
    • Supreme Court of South Dakota
    • 5 Diciembre 2001
    ...is of a nature especially calculated to cause, and does cause, mental distress of a very serious kind." Stene v. State Farm Mut. Auto., 1998 SD 95, ¶ 32, 583 N.W.2d 399, 404 (citations omitted). The conduct required 637 N.W.2d 389 to support a claim of intentional infliction of emotional di......
  • Paint Brush Corp. v. Neu, No. 20701
    • United States
    • Supreme Court of South Dakota
    • 1 Septiembre 1999
    ...specific material facts to substantiate them will not prevent summary judgment." Stene v. State Farm Mutual Automobile Insurance Co., 1998 SD 95, 26, 583 N.W.2d 399, 404 (quoting Taggart v. Ford Motor Credit Co., 462 N.W.2d 493, 498 (S.D.1990)); Western Cas. & Sur. Co. v. Gridley, 362 N.W.2......
  • Request a trial to view additional results
47 cases
  • SDCP v. Wausau Underwriters Ins. Co., No. 20789
    • United States
    • Supreme Court of South Dakota
    • 23 Agosto 2000
    ...adopted by South Dakota; in fact, this Court has repeatedly declined to adopt the doctrine. See Stene v. State Farm Mut. Auto. Ins. Co., 1998 SD 95, ¶ 18, 583 N.W.2d 399, 402-03; Alverson, 1997 SD 9, ¶ 14, 559 N.W.2d at 6. I further part company with the Court in its erroneous use of the co......
  • Stanton v. State Farm Fire and Cas. Co., Inc., No. Civ 99-1033.
    • United States
    • U.S. District Court — District of South Dakota
    • 27 Diciembre 1999
    ...SDO 874, 522 N.W.2d 752, Grynberg v. Citation Oil & Gas Corp., 1997 SD 121, 573 N.W.2d 493, and Stene v. State Farm Mutual Auto. Ins. Co., 1998 SD 95, 583 N.W.2d 399. Stene tells us, relying in part on Matter of Cert. of a Question of Law, supra, that a violation of State Farm's "duty of go......
  • Christians v. Christians, No. 21543.
    • United States
    • Supreme Court of South Dakota
    • 5 Diciembre 2001
    ...is of a nature especially calculated to cause, and does cause, mental distress of a very serious kind." Stene v. State Farm Mut. Auto., 1998 SD 95, ¶ 32, 583 N.W.2d 399, 404 (citations omitted). The conduct required 637 N.W.2d 389 to support a claim of intentional infliction of emotional di......
  • Paint Brush Corp. v. Neu, No. 20701
    • United States
    • Supreme Court of South Dakota
    • 1 Septiembre 1999
    ...specific material facts to substantiate them will not prevent summary judgment." Stene v. State Farm Mutual Automobile Insurance Co., 1998 SD 95, 26, 583 N.W.2d 399, 404 (quoting Taggart v. Ford Motor Credit Co., 462 N.W.2d 493, 498 (S.D.1990)); Western Cas. & Sur. Co. v. Gridley, 362 N.W.2......
  • Request a trial to view additional results

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