Tri-State Refining and Inv. Co., Inc. v. Apaloosa Co.

Decision Date14 February 1990
Docket NumberNo. 16628,TRI-STATE,16628
PartiesREFINING AND INVESTMENT COMPANY, INC., Plaintiff and Appellee, v. APALOOSA COMPANY, a South Dakota Business Trust; Sioux Enterprises-Lorentz Opdahl; and Lorentz Opdahl, an Individual Person, Defendants and Appellants.
CourtSouth Dakota Supreme Court

Richard J. Helsper of Erickson, Helsper & O'Brien, Brookings, for plaintiff and appellee.

Rick Johnson of Johnson, Eklund & Davis, Gregory, for defendants and appellants.

MORGAN, Justice.

This joint appeal stems from the litigation as reported in Tri-State Refining v. Apaloosa Company, 431 N.W.2d 311 (S.D.1988) (Tri-State I ), which decision is referred to for some of the background of this appeal. Apaloosa Company, a South Dakota Business Trust; Sioux Enterprises-Lorentz Opdahl; and Lorentz Opdahl (collectively referred to as Opdahl unless otherwise noted) are appellants and Tri-State Refining and Investment Company, Inc. (Tri-State) is the appellee. Opdahl jointly appeals from the decisions in two separate proceedings. The first is an adverse order entered in a hearing on a Rule 15-6-60(b) motion, seeking to set aside the judgment in Tri-State I on the grounds that the trial judge improperly failed to voluntarily recuse himself. The second is the amended judgment entered pursuant to the order of remand in Tri-State I, which directed the trial court to redetermine damages for the breach of the lease agreement and recalculation of prejudgment interest. Opdahl appeals only the determination of damages portion of the amended judgment. We affirm the trial courts in both appeals.

Opdahl states the issues thusly:

1. Defendants are entitled to relief under SDCL 15-6-60(b) due to the trial judge's failure to disqualify himself in violation of the Code of Judicial Conduct Canon 3 C.

2. The trial court erred in awarding damages for breach of lease when the lessee failed to prove any proximate harm resulting from the breach of lease.

We will discuss them in that order.

The first issue arises out of a collateral attack on the judgment which Opdahl had failed to overturn in Tri-State I. Before discussing the merits of the issue, it is necessary to detail some factual background pertinent to this issue only.

The Honorable Riley W. Connelly (Judge Connelly) presided over the proceedings in Tri-State I, including the trial to the court held on March 11, 12, 23 and 24, 1987. Prior to the commencement of the trial, two federal lawsuits were filed naming Judge Connelly, along with the plaintiffs in Tri-State I, their attorney, his law firm and a number of John and Jane Does as defendants. One suit, Civ. 87-4010, styled Lorentz Opdahl as plaintiff alleged diversity jurisdiction and a violation of the Federal Civil Rights Acts. The other suit, Civ. 87-4009, styled Sioux Enterprises, A Minnesota Business Trust; Raymond Ehrman, Trustee, Leroy Sveegen, Trustee, as plaintiffs, also alleged federal civil rights violations. Although both suits were filed in the federal clerk of court's office, only Civ. 87-4009 was ever formally served on Judge Connelly, which occurred on February 5, 1987.

Upon being served, Judge Connelly immediately contacted the office of the State Court Administrator, Unified Judicial System in Pierre, South Dakota, and was informed that an attorney would be retained to represent him. A few days later, Judge Connelly was told that Mr. Charles Kornmann (Kornmann) had been appointed to handle his case. On February 9, 1987, Richard J. Helsper (Helsper), the attorney representing plaintiffs in the state action before Judge Connelly, and all of the named defendants in the federal action, except Judge Connelly, sent Judge Connelly a courtesy letter informing him that he, Helsper, was filing a motion to dismiss in the federal actions and that Judge Connelly would want to forward this motion to the attorney that was representing him. Indeed, Judge Connelly did forward this correspondence to Kornmann. This letter, the principal basis for Opdahl's attack, along with other correspondence, will be discussed shortly.

The second basis for attack came about from the following scenario. Judge Connelly's attorney, Kornmann, is a registered lobbyist and is required to be in Pierre on a full-time basis during the legislative session. Judge John B. Jones, the federal district judge hearing the federal suits, set the motion hearing for March 2, 1987, a time when Kornmann was performing his lobbying duties and could not leave Pierre. As a favor to Kornmann, and unknown to Judge Connelly at the time, Kornmann arranged for Helsper to state to the court that Judge Connelly joined in the other defendants' motions. Civ. 87-4010, Lorentz Opdahl as plaintiff, was sua sponte dismissed by Judge Jones because of lack of diversity of citizenship and failure to state a cause of action under the Federal Civil Rights Acts. Civ. 87-4009, Sioux Enterprises, Ehrman/Sveegen, trustees/plaintiffs, was also dismissed and Fed.R.Civ.P. 11 sanctions imposed. This case was appealed to the United States Court of Appeals for the Eighth Circuit, and Judge Jones' ruling was upheld.

Opdahl sought to set aside the judgment under the provisions of SDCL 15-6-60(b)(4) and (6) 1, which provide, in pertinent part:

On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:

....

(4) The judgment is void;

....

(6) Any other reason justifying relief from the operation of the judgment.

Our standard of review for a Rule 60(b) motion was set out in Haggar v. Olfert, 387 N.W.2d 45, 51 (S.D.1986).

A motion to vacate a judgment under SDCL 15-6-60(b) is within the trial court's sound discretion. Rogers v. Rogers, 351 N.W.2d 129 (S.D.1984). This court will not overturn the trial court's decision unless there has been an abuse of discretion. Rogers, supra. Normally, the statute provides for extraordinary relief which may be granted only upon a showing of exceptional circumstances.

In Matter of T.M.B., 416 N.W.2d 260, 263 (S.D.1987), we established criteria that this court should consider in deciding whether to grant relief.

Whether the movant had a fair opportunity to present his claim or defense; whether there are any intervening equities which make it inequitable to grant relief; and any other factor that is relevant to the justice of the judgment under attack, bearing always in mind that the principle of finality of judgments serves a most useful purpose for society, the courts, and the litigants--in a word, for all concerned.

While Opdahl intermingles his reasons for relief, we will examine each ground separately. The gravamen of his Rule 60(b)(6) argument is Judge Connelly's failure to recuse himself. Opdahl relies on an alleged violation of the South Dakota Code of Judicial Conduct, Canon 3 C(1) as his grounds for holding the judgment to be void. That Canon provides that:

A Judge should disqualify himself in a proceeding in which his impartiality might reasonably be questioned including but not limited to instances where: (a) he has a personal bias or prejudice concerning a party, or, personal knowledge of disputed evidentiary facts concerning the proceeding[.]

Canon 3 C(1) is a broad standard by which a judge should sua sponte determine the matter of self-recusal. It stands as a guiding precept upon which every judge, by an objective in-depth search of his or her own conscience, must decide whether a fair trial dictates he or she should make way for another judge to preside in the case. Recusal may be self-initiated or triggered by the filing of a motion for change of judge predicated upon prejudice. It is for the judge under Canon 3 to initially determine whether a fair trial dictates recusal. Canon 3 provides an objective standard upon which to also determine whether a judge in a given instance should disqualify himself or herself. State v. Smith, 242 N.W.2d 320 (Iowa 1976). The right to a change of judge is not one of absolute right. The judge is entitled to consult his or her own mind and he or she, perhaps better than anyone else, knows whether or not he or she can give a defendant a fair and impartial trial in every way. Smith, supra.

Opdahl's brief baldly asserts that "Richard Helsper was acting as Plaintiff's attorney in this action over which Judge Connelly presided at the exact same time in which he served in an attorney-client relationship 2 with Judge Connelly." (Footnote added.) Then, tempering the language a bit, it is acknowledged that such a relationship is denied, but Opdahl points to the letters between Helsper and Judge Connelly as indicia of circumstances that could have affected Judge Connelly's impartiality.

Contrary to the false assertion made by Opdahl, none of the letters identify Helsper as Judge Connelly's attorney. The February 9 letter could not be clearer: "I can only assume that the Attorney General will be representing you in this particular matter, and you should forward my Motion to Dismiss to the Assistant Attorney General who has been assigned to represent you." In a February 27, 1987, letter to Judge Connelly, occasioned by Opdahl's pro se attempt to appeal directly from two intermediate state court orders, Helsper informs the court that he is still readying himself for trial in the state action on the previously ordered trial date. In a postscript, he notes the hearing date on the motions for dismissal in federal court and again points out that "I do not represent the Court" in the federal civil suit. Further, in a letter dated June 9, 1987, to the senior deputy clerk of the Eighth Circuit, Helsper unequivocally states that he represents all the defendants with the exception of Judge Connelly. Opdahl finally argues that, at the very least, Helsper should have sent a copy of the letters to opposing counsel. That might have been the better practice for Helsper but we...

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