Yankton Cnty. v. McAllister

Citation977 N.W.2d 327
Decision Date22 June 2022
Docket Number#29616
Parties YANKTON COUNTY, State of South Dakota, A Political Subdivision, Plaintiff and Appellee, v. Luke E. MCALLISTER, McAllister TD, LLC, and B-Y Internet, LLC, Defendants and Appellants, and Yankton County Commission; Yankton County Board of Adjustment; Yankton County Planning Commission; Patrick E. Garrity, in his capacity as Yankton County Zoning Administrator, and in his Individual Capacity; and Robert W. Klimisch, in his capacity as Yankton County State's Attorney, and in his Individual Capacity, Third-Party Defendants and Appellees.
CourtSupreme Court of South Dakota

977 N.W.2d 327

YANKTON COUNTY, State of South Dakota, A Political Subdivision, Plaintiff and Appellee,
v.
Luke E. MCALLISTER, McAllister TD, LLC, and B-Y Internet, LLC, Defendants and Appellants,
and
Yankton County Commission; Yankton County Board of Adjustment; Yankton County Planning Commission; Patrick E. Garrity, in his capacity as Yankton County Zoning Administrator, and in his Individual Capacity; and Robert W. Klimisch, in his capacity as Yankton County State's Attorney, and in his Individual Capacity, Third-Party Defendants and Appellees.

#29616

Supreme Court of South Dakota.

ARGUED FEBRUARY 16, 2022
OPINION FILED June 22, 2022
Rehearing Denied August 2, 2022


JONATHAN A. HEBER, MEREDITH A. MOORE of Cutler Law Firm, LLP, Sioux Falls, South Dakota, Attorneys for defendants and appellants.

DOUGLAS M. DEIBERT of Cadwell, Sanford, Deibert & Garry LLP, Sioux Falls, South Dakota, Attorneys for plaintiff and appellee and third-party defendants and appellees.

MARK D. FITZGERALD of Fitzgerald, Vetter, Temple & Bartell, Norfolk, Nebraska, Attorneys for third-party defendant and appellee Patrick E. Garrity.

JENSEN, Chief Justice

¶1.] Yankton County brought an action seeking an injunction against Luke McAllister, McAllister TD, LLC (MTD), and B-Y Internet, LLC (B-Y) (collectively referred to as "McAllisters") to cease a wireless internet provider business that Yankton County alleged was operating in violation of a county zoning ordinance. McAllisters answered the complaint. Luke and MTD also asserted counterclaims for barratry, alleging the complaint against them was frivolous. Later, B-Y counterclaimed against Yankton County for barratry and abuse of process, while Luke and MTD added counterclaims for abuse of process and expanded their barratry claims against Yankton County. McAllisters also filed a third-party complaint asserting an abuse of process claim against Yankton County Commission (Commission), Yankton County Board of Adjustment (BOA), and Yankton County Planning Commission (collectively referred to as "Yankton County Entities"), Yankton County Zoning Administrator Patrick Garrity, and Yankton County State's Attorney Robert Klimisch. McAllisters also included a claim for civil conspiracy to commit abuse of process against Garrity and Klimisch.

[¶2.] The circuit court granted summary judgment dismissing McAllisters’ claims, concluding that they had failed to provide timely notice to the county auditor of their

[977 N.W.2d 332

injuries as required by SDCL 3-21-2 and SDCL 3-21-3. The circuit court also determined that Klimisch was entitled to prosecutorial immunity. McAllisters appeal raising two issues: (1) whether the circuit court erred in concluding that SDCL 3-21-2 and SDCL 3-21-3 barred their claims, and (2) whether the circuit court erred in concluding that Klimisch is entitled to prosecutorial immunity. We affirm in part and reverse in part.

Facts and Procedural History

¶3.] Luke McAllister owned and operated MTD d/b/a Fire & Ice.1 Luke's brother, Cam McAllister, is a co-owner of MTD. In October 2017, Cam emailed Garrity regarding a separate business which would provide wireless internet services. Cam's specific question for Garrity was whether a Yankton County zoning ordinance (Ordinance) required any permits or licenses to operate the new business in Yankton County. Garrity responded that he believed a similar wireless internet provider had obtained a conditional use permit (CUP) and asked if Cam's business was associated with that project. Cam told Garrity that he would be starting a new business, B-Y, that would provide the same services as current providers in the area. Garrity did not respond further. Luke formed B-Y on November 29, 2017, and registered the fictitious business name, South Dakota Wireless Internet.

[¶4.] On March 12, 2018, Garrity sent a letter to Luke stating that B-Y was operating in violation of the Ordinance and needed to obtain a CUP. This letter was also sent to Klimisch and some members of the Commission. Following this letter, Garrity, Klimisch, Luke, and Cam engaged in further discussions regarding the potential need for a CUP. In late March 2018, Garrity told Luke that he would place B-Y on the Commission meeting agenda to address whether B-Y needed a CUP. The issue was never placed on the Commission calendar.

[¶5.] Yankton County commenced a civil action against Luke, MTD, and B-Y on June 8, 2018, alleging they were operating a wireless internet business in violation of the Ordinance. The complaint sought a cease and desist injunction against McAllisters, as well as a request for fines and other monetary relief. Klimisch signed the complaint on behalf of Yankton County.

[¶6.] Luke and MTD filed separate answers alleging that B-Y was a stand-alone legal entity, therefore they could not be held liable for any of the claims against B-Y under SDCL 47-34A-303. Luke and MTD also filed counterclaims for barratry alleging Yankton County's action against Luke and MTD was frivolous and meritless, and undertaken without probable cause to believe it would succeed on the merits. B-Y filed an answer denying that B-Y is a wireless communication facility under the Ordinance and, in the alternative, alleged that it was exempt from obtaining a CUP.

[¶7.] Between July 2018 and April 2019, the parties engaged in discussions and conducted discovery concerning the issues in the action. On April 17, 2019, the parties entered into a stipulated agreement to dismiss all claims without prejudice, which was conditioned upon reaching a mutual settlement. Luke and MTD later withdrew their consent for the dismissal of the counterclaims. On April 25, 2019, the Yankton County Planning and Zoning Commission (P&Z) held a meeting and voted unanimously (7–0) that B-Y fell within an exception

[977 N.W.2d 333

to the Ordinance and had not been operating in violation of the Ordinance. The P&Z recommended their findings to the Commission. There is no indication that the Commission considered or voted on the recommendation.

¶8.] On May 8, 2019, McAllisters delivered a letter to Klimisch and several Commissioners that described the events underlying their claim for barratry. McAllisters asserted that Yankton County's claims were frivolous and meritless, and that the County had an insufficient factual basis to file the claim. McAllisters also asserted that no other local wireless internet provider had obtained a CUP or been sued by Yankton County for allegedly operating in violation of the Ordinance.

[¶9.] Cam met with Commissioners Don Kettering and Dan Klimisch (Commissioner Klimisch) to discuss the lawsuit on May 17, 2019. At this meeting, Cam asked Kettering if he recalled the decision to file the suit and who made the decision to file a lawsuit. Kettering replied, "I think so"; and "I think it was, the issue was over something out at Fire and Ice." Kettering continued when pressed by Cam: "that was, the Fire and Ice reason was, the reason that—the, the issue at Fire and Ice had not been resolved so that was I think the logic of the commission at the time was—[.]"2

[¶10.] On July 3, 2019, McAllisters emailed a letter to Klimisch demanding payment to settle and dismiss their claims against Yankton County. The letter warned that if the parties did not reach a mutual settlement, Luke and MTD intended to amend their counterclaims to add claims for abuse of process. The letter detailed their abuse of process claims asserting that Yankton County was using the lawsuit to stop B-Y from doing business and competing with other local wireless internet providers. The letter stated that McAllisters believed that the lawsuit was motivated by Garrity's close relationship with an individual who owned a competing business in Yankton. McAllisters stated that they may also have claims for civil conspiracy to commit abuse of process and other claims. McAllisters asked Klimisch to share the letter with the members of the Commission and P&Z. Luke emailed a copy of the letter to the Commission and BOA members on July 15, 2019. On August 23, 2019, Klimisch informed McAllisters that...

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