Western Consolidated Cooperative v. Pew
795 N.W.2d 390
S.D.2011Background
- WestCon sues Pew for conversion of grain Pew stole and sold, and sues LaBolt for its role in purchasing that stolen grain.
- Pew stole grain from WestCon’s Milbank elevator from 2003 to 2005, one truckload at a time, totaling about 89,000 bushels.
- WestCon’s internal inventory controls failed to detect the theft as it occurred gradually; initial theories included shrinkage, miscount, miscalculation of Harvest States’ January 2003 inventory, or customer misstatement.
- Pew sold stolen WestCon grain to LaBolt (82,370.87 bushels), paying Pew $424,334.05; WestCon recovered some proceeds after Pew’s arrest.
- WestCon moved for summary judgment; the circuit court held Pew and LaBolt jointly and severally liable for $424,334.05, with a further credit for amounts already recovered; LaBolt appeals challenging ownership, fault allocation under SDCL 15-8-15/15.1/15.2, and damages/mitigation.
- The court addressed three issues: (1) unwarranted interference by LaBolt; (2) LaBolt’s proportion of fault under the Uniform Contributions Act framework; (3) the amount of damages and whether mitigation applies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was LaBolt’s conduct unwarranted interference constituting conversion? | WestCon owned the grain; LaBolt’s purchase from Pew constituted control over WestCon’s property. | LaBolt argues it acted as a good-faith purchaser with no knowledge Pew lacked title; damages should be limited. | Yes; WestCon showed prima facie ownership and LaBolt’s control over the grain; laBolt’s ownership challenge failed. |
| What is LaBolt’s proportion of fault under SDCL 15-8-15.1 and -15.2 (and whether Pew and LaBolt can be treated as a single party)? | WestCon seeks joint and several liability given interrelated wrongful conduct. | LaBolt contends it did not participate in wrongful conversion and fault should be allocated by individual portions; seek proportional fault. | There is a genuine issue of material fact on fault allocation under SDCL 15-8-15.1 and -15.2; remand for the trial court to determine fault percentages or whether to treat Pew and LaBolt as a single party. |
| Are there genuine issues as to damages and mitigation under SDCL 21-3-3 (mitigation of damages)? | WestCon should recover damages for ongoing, ongoing conversion; mitigation should not bar recovery. | LaBolt argues WestCon should have mitigated by securing premises earlier; the defense applies to ongoing damages once specific information is known. | The mitigation issue is fact-intensive and should be remanded for trial on damages and mitigation under SDCL 21-3-3; the court affirms in part and remands. |
Key Cases Cited
- Fin-Ag, Inc. v. Pipestone Livestock Auction Mkt., Inc., 754 N.W.2d 29 (S.D. 2008) (ownership and weight of evidence in conversion cases; no knowledge requirement for liability to attach to purchaser)
- Rensch v. Riddle’s Diamonds of Rapid City, Inc., 393 N.W.2d 269 (S.D. 1986) (foundation of conversion does not depend on the defendant’s knowledge or intent)
- Sanborn Cnty. Bank, Inc. v. Magness Livestock Exch., Inc., 410 N.W.2d 565 (S.D. 1987) (no requirement of knowledge for liability when possession is unlawfully transferred)
- Security State Bank v. Benning, 433 N.W.2d 232 (S.D. 1988) (mitigation not precluded by statute; not to anticipate injury; post-injury conduct weighs in damages)
- Stone v. Chicago, M. & St. P. Ry. Co., 53 N.W. 189 (S.D. 1892) (mitigation evidence may be considered; early formulation of damages proportionality)