Stern Oil Co. v. Border States Paving, Inc.
2014 SD 28
| S.D. | 2014Background
- Border States Paving, Inc. obtained a performance bond from Liberty Mutual for a South Dakota DOT Highway 281 project.
- Weatherton Contracting, Inc. subcontracted to supply crushed aggregate for the project; Stern Oil supplied fuel and petroleum products to Weatherton.
- Stern Oil was not paid by Weatherton, yielding a judgment against Weatherton in June 2009 for unpaid bills.
- Stern Oil mistakenly filed a bond claim in November 2010 in a separate Aberdeen airport project against Upper Plains and its bond company, after which deposition evidence emerged re: use on Highway 281.
- In November 2008, Weatherton provided a ledger showing $111,012.37 due to Stern Oil, which Border States did not pay.
- The subcontract between Border States and Weatherton gave Border States discretion to withhold payments to third-party suppliers; there was no contract obligating Border States to pay Stern Oil.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Third-party beneficiary contract: did Border States consent to pay Stern Oil? | Stern Oil contends a third-party contract existed obligating Border States to pay Stern Oil. | Border States argues there was no consent to a third-party payment obligation to Stern Oil. | No genuine issue of material fact; no consent to pay Stern Oil. |
| Unjust enrichment: did Border States retain a benefit at Stern Oil’s expense? | Border States’ payment to Weatherton conferred an unjust benefit that Stern Oil should recover. | Border States paid more than final subcontract amount; no unjust enrichment because no contractual obligation to pay Stern Oil. | No unjust enrichment; no basis to equitably retain benefit. |
| Bond claim timeliness: should equitable tolling apply to Stern Oil’s bond claim against Border States and Liberty Mutual? | Equitable tolling should apply due to inequitable circumstances delaying filing. | Equitable tolling does not apply; the delay was Stern Oil’s own mistake, not exceptional circumstances. | Equitable tolling not recognized; bond claim time-bar not tolled. |
Key Cases Cited
- De Smet Farm Mut. Ins. Co. of S.D. v. Busskohl, 834 N.W.2d 831 (S.D. 2013) (summary judgment standards; tolling and contract principles applied)
- Dakota Truck Underwriters v. S.D. Subsequent Injury Fund, 689 N.W.2d 196 (S.D. 2004) (arcane procedural snare and tolling considerations)
- A EG Processing Center No. 58, Inc. v. S.D. Dept. of Revenue & Regulation, 838 N.W.2d 843 (S.D. 2013) (timeliness and jurisdictional bonding concerns; timely appeals guidance)
- Anson v. Star Brite Inn Motel, 788 N.W.2d 822 (S.D. 2010) (equitable tolling discussed in SD tolling contexts)
- Jennings v. Rapid City Reg’l Hosp., Inc., 802 N.W.2d 918 (S.D. 2011) (third-party beneficiary and contract enforceability considerations)