*1 of the value of remand for determination remedy of his fraud, entitled to he is Camp- occupation and use of the Holmes’ choice. ground. to Couturier. Compensation 5. motion to 6. Denial of contends, and Holmes complaint. Couturier amend setting erred in agrees, $400 that the court review, Holmes claimed By notice of possession Holmes’ value of a month as the amend denying his motion to court erred Campground. Couturier and use of the include complaint during the low, while Holmes amount is too claims the position This the roof. problems with high. Holmes also concedes claims it is too dur- expressly waived Holmes’ counsel necessary no evi because that remand argument. ing oral presented at trial. point was dence on this require of rescission “should All the concur. Justices for the rea- plaintiffs to account use, occupation and their sonable value of [property] ... as an off-
possession of the payments right to recover
set their the contract.” Halvorson v.
made under 328, 333,
Birkland, 84 S.D. granted on rescission When fraud, the reasonable value of the basis of BAATZ and use, occupation, possession of the Appellants, Plaintiffs and lesser of net property' is measured the. explained in 1 profits or rental value. As Palmer, 3.14 G. The Law Restitution BAR Ed- ARROW a/k/a § Neuroth, Neuroth, (1978): E. at 319 mond LaVella J. Neuroth, Defendants J. gone posses- purchaser who has into [A] Appellees. held accountable in some sion will be land, frequent- manner for his use of No. 16597. ly by deduction of its reasonable rental Supreme Court of South Dakota. subject If the matter of the sale value. interest, example was a business for Considered on Briefs Nov. restaurant, the maximum benefit to the Decided Feb.
purchaser profits of his net consists 16, 1990. operation of the business. He should April Rehearing Denied profits never be held accountable for net
in excess of rental the net value.... [I]f value,
profits are less than rental he will only profits.
be held for such accountable profits, if there there
Or are no will be recovery,
no deduction from his
(footnotes omitted); see also LeTrace v.
Elms, Or.App. 595 P.2d (1979) (“[B]uyers charge- actually
able to the extent of the benefit during
derived from the use of the land occupation.”).
their commercial When
property housing, includes residential
here, separate determined values should be aspect property.
for each
Since the court evidence of did profits,
rental values or Holmes’ net we *2 Fischer, Springs, for Wessington
Flynn appellants. plaintiffs and Palmer, Strange & Palmer of David Alan Falls, appel- P.C., for defendants Sioux lees.
SABERS, Justice. (Baatz), appeal Peggy Baatz
Kenny and
dismissing Ed-
Neuroth, as
mond, LaVella,
Jacquette
action.
defendants
Vella,
Facts
moved for and
ob-
summary judgment dismissing
tained
them
seriously
injured
Kenny and
appeals.
as individual defendants. Baatz
McBride crossed the
in 1982 when Roland
We affirm.
center line of a
Falls street with his
Sioux
*3
automobile and struck them while
Summary Judgment
riding
motorcycle. McBride
on a
was
may grant summary
A trial court
the time
the accident
uninsured at
of
and
judgment only
genuine
when there are no
apparently
judgment proof.
6—56(c);
issues of material fact. SDCL 15 -
alleges
that Arrow Bar served al-
Gordon,
Bego v.
(S.D.
In 1987 the trial court
entered
of care created
They
SDCL 35-4-78.
judgment
in favor of Arrow Bar and the
claim
corporation,
the licensee is the
appealed
defendants. Baatz
leaving
them liable
if one of
them,
and we reversed and
employee,
remanded
as an
served alcoholic bev
supra.
to the trial court
erages
for trial.
to McBride while he
intoxicat
Shortly
date, Edmond,
before the trial
They
La-
ed.
claim the
record is void of
of a
indicating
recognition
one of them
as a
evidence
“produce
day
legal entity
injustices
the accident.
would
McBride on the
served
inequitable consequences,”
a court
then
argues that
decision
this court’s
corpo
reason to pierce
has sufficient
Selchert,
of action
supra, allowed a cause
Seed,
rate veil. Farmers Feed
&
liquor
and the
licensee
against both
Enter.,
Magnum
employees. Baatz claims
licensee’s
injustices
Factors that indicate
deposition
the Neuroths admitted
each of
inequitable consequences
and allow a
employee
corporation.
an
are:
court
reasoning,
cause
Consequently, under
representation by corpora-
fraudulent
against the Neu-
brought
action
directors;
tion
capacities.
How-
roths
their individual
*4
ever,
2)
Baatz reads the
undercapitalization;
decision
Selchert
That
in-
broadly.
decision was never
too
3)
corporate
failure to observe
formali-
against
a
action
tended to allow cause of
ties;
liquor
the
employee of a
licensee when
4)
corporate records;
absence of
35-4-78.
licensee had violated SDCL
5) payment by
corporation
the
of individ-
brought
be
a cause
action
While
obligations; or
ual
employee,
a licensee’s
it must be
corporation
promote
use of the
to
that
the
employee
violated
established
fraud, injustice,
illegalities.
or
care
the statute.
standard of
established
appropriate
the court
it
Id. When
deems
to
Employee status
insufficient
alone is
veil,
corporate
corporation
the
the
a cause of action. Baatz failed
sustain
and its stockholders will
treated identi-
be
that any
offer evidence
of the Neuroths
cally. Mobridge, supra.
day of
personally served McBride on the
the accident.
arguments
Baatz advances several
support
corporate
his claim that
veil
the
also argues
Baatz
Bar,
pierced,
Inc.
but
of Arrow
should be
Neuroth,
manager
bar,
as
the
is liable
facts,
support them
or miscon
fails to
superior.
of respondeat
under the doctrine
strues the facts.
doctrine,
employer may be
Under this
an
First, Baatz claims
Edmond
that since
employee.
for the conduct
Bu
liable
of an
personally
corpo-
guaranteed
and LaVella
322,
Falls,
77
cholz v.
Sioux
S.D.
per-
obligations,
should also be
rate
However,
(1958).
However,
per-
sonally
to Baatz.
liable
case, Jacquette
employ
Neuroth is not
guarantee of a loan is a contractual
sonal
employer of
er. The
the individuals who
enlarged
im-
agreement and cannot be
corpora
may have served McBride is the
Moreover,
personal
pose
liability.
tort
tion,
Bar,
Therefore, Baatz’
Inc.
creates
for a
guarantee
misapplies
argument
of re-
the doctrine
obligation, the
of factor
corporate
opposite
spondeat superior.
such,
5),
supports,
As
rather
above.
from, recognition of the cor-
piercing
than detracts
liability by
Individual
entity.
porate
corporate
veil.
even if Arrow
argues
corpora
claims that
Baatz also
that the
licensee,
veil
simply
ego
Inc. is
the alter
the Neu
tion is
Neuroths,
and,
pierced, leaving
roths,
Loving
should
accord with
Saviour
States,
F.Supp.
688
corporation,
the shareholders
individ
556
Church United
corporation
(D.S.D.1983),
(8th
ually
aff'd,
shall be con
through he 47-2-36 as which [is] business,” may disregard poration corporation, a court to contain the word sonal limited, incorporated, corporate entity. company, Un or or an Larson Western 163, derwriters, spite for such a word. S.D. abbreviation contentions, Baatz fails to is in Baatz’ compliance how the Neuroths were trans with the statute because its cor demonstrate acting personal through corpo porate Inc.—includes business name—Arrow fact, incorporated. the evidence indicates the the abbreviation of the word ration. Furthermore, corporation separate upon Neuroths treated the the “mere failure occa prescribed by their affairs. all the ly from sion follow forms law for the conduct of activities argues that the Baatz next cor justify” disregarding will not undercapitalized. poration is Shareholders Larson, entity. supra, 77 S.D. at equip corporation with a reasonable must Realties, (quoting N.W.2d at 887 A. P.S. & capital for the nature of the amount of Forest, Inc., Lodge Gate 205 Misc. business involved. See Curtis v. Feu (1954)). 127 N.Y.S.2d rhelm, improperly using if Even claims the was started with name, its that alone is' not a sufficient *5 $5,000 only capital, in does borrowed but corporate reason to the veil. This is explain equip not how that amount failed to especially where, here, so as there is no corporation the with a reasonable amount relationship the defect between claimed addition, capital. of In Baatz fails to con resulting the harm. personal guarantees sider the off addition, any In the record is void of purchase the contract in the amount of support imposition evidence which would of $150,000, subscrip and the stock liability by piercing corporate the agreement. simply tion is no There evi any under the other factors listed corporation’s capital dence that the in 1), 4) 6). or above inadequate whatever amount was for the operation Normally ques of the business. summary, present spe- Baatz fails to relating tions to individual shareholder lia cific facts that would trial allow the court bility resulting corporate undercapi- genuine to find the existence of a issue of talization should not be reached until the material fact. There is no indication that primary question corporate liability is any personally of the Neuroths served an Questions depending part determined. beverage day alcoholic to McBride on the upon normally other determinations are not of the accident. Nor is there evidence ready summary judgment. for See Van indicating the the Neuroths treated Erection, Knight Housing Steel any way produce that would Paul, City and Redev. Auth. the St. injustices inequitable consequences (Minn.Ct.App.1988); see also necessary justify corporate piercing Co., Candee Constr. Inc. v. South Dakota fact, evidence offered is veil. Dep’t Transp., 447 otherwise. we affirm (S.D.1989) J., (Sabers, dissenting). How dismissing the Neuroths as indi- ever, simply asserting that the vidual defendants. undercapitalized is does not make it so. inadequacy Without some evidence of the C.J., WUEST, and MORGAN and capital, present specif Baatz fails to MILLER, JJ., concur. demonstrating ic facts issue of HENDERSON, J., dissents. Ruane, supra. material fact. HENDERSON, (dissenting). Justice Finally, argues that Arrow Bar, Inc. failed to for This has no exist observe instrumentality malities because none of the business’ ence. It is the of three officers, signs shareholders, employees. advertising or indicated that the busi Here, corporation. ness was a Baatz cites SDCL fiction should be dis favorably to Feu dence must be viewed most v. regarded. The factors of Curtis party. nonmoving Indian (S.D.1983) American rhelm, N.W.2d 575 Consortium, Inc. v. Ft. Pierre Agr. Credit by the court. disregarded Inc., Livestock, shield here created A testified, by deposition, police officer relating holding of this Court escape the drunken that uninsured motorist was shop ac liability in drama an individual’s at the Bar. stupor while Arrow Thus, v. Arrow holdings our tion. lia- subject personal Are the Neuroths 426 N.W.2d Selchert record, undisputed, bility? It is (S.D.1985)and Lien, Walz (Neuroths) are defendants the dismissed (S.D. Hudson, 327 N.W.2d family and stockhold- immediate members totally been circumvented. By pleadings, of Arrow Bar. at settled ers message holding, result of As a expressed the dis- record is Incorporate, mortgage is now clear: employees are missed defendants Arrow your liquor corporation of a assets not Bar. of the Arrow Bar would Seller banker, proceed carefree friendly accept buyer. Arrow Seller entrepreneuring. incorporators, that the insisted briefs, argue, parties these In both of equally respon- capacity their individual all, reason- all in about facts. One Thus, selling price. indi- sible for questions of ably that there exists conclude party the real in interest and viduals are Inc., Ranch, See, Deuchar Foland fact. entity, (S.D.1987) holding justify wrongs perpetrat- used to mat- “Issues of or related that: incorporators in their individual ed ordinarily susceptible of sum- ters are perpetrat- capacity. Conclusion: Fraud adjudication.” mary deposition of upon public. At a ed *6 (filed record), this Neuroth Edmond had their thrown out of Baatzes case was corporation” of “the “President” many dispute. I facts were court when family incorporat- why the Neuroth asked lawyer, before a am reminded old counsel, “Upon answer: advice of ed. His expressed corpora- jury, who his woe of liability.” as a shield corpo- jury: He cried out to the “A tions. (Neu- undercapitalized was The you soul hind end ration haveth no and its au- capital). For roths borrowed can kicketh not.” establishing undercapitalization as thorities legitimate, that a an indication TRIAL FACTS JUSTIFYING JURY maintained, see, entity is not Vol. Baatz, mother, a lost her young Fletcher, Cyclopedia Corporations, 1 W. limb; Ken- leg; she wears an left artificial 44.1, (rev. 1983); Curtis at 528 ed. section father, young has had most of ny a (S.D.1983); Feurhelm, amputated; un- foot he has been his left 362, Abbott, 321 U.S. Anderson tragic accident. to work since this able L.Ed. S.Ct. a cane. uses crutches. Peggy uses Church, ma- by cited Loving Saviour injured gone have since Years Appeals Eighth jority, the Circuit Court asunder. their lives been torn in cast- upon this Court’s stance reflected drunk, and had a motorist veils, Uninsured expressing ing aside drunkard; being reputation generis a habitual sui decides each case this Court serving a reputation Bar had with with the outcome accordance by deposi- persons. (Supported Loving underlying intoxicated facts of each case. file). unin- eyewitness Church, An saw it that a chiro- tions on was held Saviour escape extremely in an intoxicated motorist could not use a church practor sured accident, here, condition, being taxes; con- shortly a before income shield,” ques- undercapitalization as “a a served Arrow Bar. ceived President,” of “the should fact exists as vio- in the words tion of the intent of 35-4-78(2). an artifice to avoid under This evi- be used as lated SDCL Curtis, by the 35-4-78(2). In cited SDCL Dakota, held that
majority opinion, we Plaintiff STATE of South disregarded if use of the Appellee, entity should be promote employed corporation was fraud, illegality. injustice, and LANIER, Christopher Defendant question arises as to Clearly, appears Appellant. fiction established to there is a whether No. 16592. holdings and the intent escape previous our Truly, there are Legislature. of our State Supreme of South Dakota. Court (1) determine: questions jury for a fact negligence of the defen- negligence or no on Briefs Oct. Considered (2) family falsely did the Neuroth dants and Decided Feb. themselves to shield establish i.e., liability, do facts veil? scenario exist
CONCLUSION jury un- are entitled to a
Plaintiffs jury to have a
der the State Constitution Dako- these two issues. The South
resolve Constitution, VI, 6, begins art.
ta § by jury right “The of trial
these words: extend to
shall remain inviolate and shall regard to the
all cases at law without controversy,_” majori- The
amount writer, Sabers,
ty Justice wrote in Klatt v. Company, Insurance
Continental majori- for the “Therefore,
ty expressed: we affirm mate-
only if there are no issues of *7 legal questions
rial fact and the have been
correctly decided.” Genuine issues of ma-
terial fact on should be resolved jury questions and there are con-
cerning legality been, my opinion, have not cor-
which
rectly decided. respectfully I dissent.