THE ESTATE OF PAUL O‘FARRELL, individually, and, as a beneficiary of the family trust; and, for the benefit of the Estate of Victoria O‘Farrell; SKYLINE CATTLE COMPANY, a South Dakota corporation; & VOR, INC., a South Dakota corporation, Plaintiffs and Appellants, v. GRAND VALLEY HUTTERIAN BRETHREN, INC., a South Dakota corporation, THE RAYMOND AND VICTORIA O‘FARRELL LIVING TRUST, a South Dakota trust, Defendants and Appellees, and KELLY O‘FARRELL, an individual, Defendant.
#30482-r-SPM
IN THE SUPREME COURT OF THE STATE OF SOUTH DAKOTA
OPINION FILED 12/18/24
2024 S.D. 81
ARGUED APRIL 23, 2024
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DANIEL K. BRENDTRO
MARY ELLEN DIRKSEN
BENJAMIN M. HUMMEL of
Hovland Rasmus Brendtro
& Trzynka Prof. LLC
Sioux Falls, South Dakota
Attorneys for plaintiffs and appellants.
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LEE SCHOENBECK
JOE ERICKSON of
Schoenbeck & Erickson, P.C.
Watertown, South Dakota
Attorneys for appellees VOR, Inc., Revocable Trust, and Estate of Victoria O‘Farrell.
WILLIAM G. BECK
SETH A. LOPOUR
COURTNEY S. CHAPMAN of
Woods, Fuller, Shultz and Smith, P.C.
Sioux Falls, South Dakota
REED RASMUSSEN of
Siegel, Barnett & Schutz, LLP
Aberdeen, South Dakota
Attorneys for appellee Grand Valley Hutterian Brethren, Inc.
#30482
MYREN, Justice
[¶1.] Paul O‘Farrell1, individually, and ostensibly for the benefit of the Raymond and Victoria O‘Farrell Living Trust (Trust), the Estate of Victoria O‘Farrell (Estate), Skyline Cattle Co. (Skyline), and VOR, Inc. (VOR), appeals from the circuit court‘s denial of his request for change of circuit court judge, dismissal of his claims against all named defendants, and award of attorney fees. We reverse Presiding Judge Stoltenburg‘s denial of the affidavit disqualifying Judge Spears. We vacate all orders entered by Judge Spears in this case and remand for the appointment of a replacement judge.
Factual and Procedural History
[¶2.] Paul is one of Raymond and Victoria O‘Farrell‘s five children. Raymond and Victoria owned approximately 1,000 acres of farmland near Marvin, South Dakota. In 2002, they created VOR to hold their farm assets, including approximately 1,000 acres of farmland. Paul has lived on a portion of that land for many years and constructed a house and shop on the land. Paul alleged he served as an officer of VOR for numerous years аnd that attempts to remove him as such, as well as other acts by VOR, were invalid.
[¶3.] In 2011, Raymond and Victoria created the Trust and “deposited all (or most) of their assets” into the Trust, including their shares of VOR. The Trust provided for each of their five children to receive a specified portion of land. Paul alleged he was the primary beneficiary of the Trust, which named him as successor co-trustee in the event Raymond or Victoria was unable to serve.
[¶4.] Skyline is the entity through which Raymond, Victoria, and Paul conducted their farming business. Skyline rented and farmed land owned by VOR for many years. Paul has been the sole owner of Skyline since 2019.
[¶5.] There are currently five separate cases filed in Grant County involving some or all of the same parties to this action, and four have appeals pending before this Court. The cases are referred to as (1) Victoria‘s action against Raymond; (2) Victoria‘s probate proceeding; (3) Raymond‘s guardianship proceeding; (4) a declaratory judgment/tort action (this case); and (5)
[¶6.] In Victoria‘s action, she initiated a lawsuit against Raymond and her son, Kelly O‘Farrell, seeking to unwind certain actions taken by Raymond on behalf of VOR and the Trust, seeking to remove Raymond as trustee of the Trust, and seeking injunctive relief and damages for conversion and the tortious interference with her “relationship with, role in, and control of VOR.” Judge Elshere was set to preside over this lawsuit, but Raymond filed an affidavit pursuant to
[¶7.] Victoria died in 2022 while her lawsuit was pending. After Victoria‘s death, Paul filed a motion to intervene in that case. In an e-mail to Judge Spears, Paul‘s counsel (who no longer represents him) indicated that Paul had no objection to Judge Spears presiding over the case. The circuit court denied Paul‘s motion to intervene, and Victoria‘s counsel filed a notice of voluntary dismissal. Paul appealed and challenged the circuit court‘s denial of his motion to intervene and the validity of the voluntary dismissal. In an order issued concurrent with this opinion, we concluded that the voluntary dismissal was effective. (Appeal No. 30508).
[¶8.] In Victoria‘s probate proceeding, Raymond petitioned for an appointment as special administrator of Victoria‘s Estate, which Judge Elshere granted. Paul petitioned to have Raymond removed as special administrator and to have himself and his brother Lance appointed as special co-administrators. After Paul filed his petitions, Presiding Judge Stoltenburg entered an order reassigning the action to Judge Spears, noting that the reassignment was for judicial economy. The petitions filed by Paul are still pending. Over a year later, Paul filed an appeal from Judge Elshere‘s order appointing Raymond as the special administrator. In an order issued concurrent with this decision, we dismissed that appeal for lack of jurisdiction because it was not an appeal from a final order. (Appeal No. 30532).
[¶9.] Paul also sought the appointment of a guardian and conservator for Raymond—Raymond‘s guardianship proceeding. Paul alleged Raymond has been described by his family as “a person in need of prоtection” who has health problems and a “history of alcohol abuse.” Again, noting judicial economy, Presiding Judge Stoltenburg appointed Judge Spears in place of Judge Elshere. Raymond‘s guardianship proceeding is pending in the circuit court and is not before us on appeal.
[¶10.] In this case—the declaratory judgment/tort action—Paul alleges a land sale and other actions and transactions were “legally ineffective because of a failure of notice, consent, capacity, authority, undue influence, and/or estoppel.” The complaint alleges three broad causes of action: (1) declaratory judgment regarding alleged void and voidable acts, (2) rеscission of a $3.2 million land sale, and (3) tort damages.
[¶12.] After Paul commenced this lawsuit, Grand Valley and VOR commenced an action under
[¶13.] Soon after the complaint was filed in the declaratory judgment/tort action, Presiding Judge Stoltenburg, again noting judicial economy, assigned the proceeding to Judge Spears in place of Judge Elshere. Daniel Brendtro, the attorney representing both Paul and Skyline, informally requested Judge Spears to disqualify himself in both this case and the guardianship action pursuant to
guardianship proceeding, Judge Spears had substantively ruled on a request submitted by Paul.
[¶14.] That same day, Judge Spears denied the informal request and explained that he was presiding over other “closely related” cases and that in Victoria‘s action, Paul had waived the potential conflict with regard to Judge Spears’ campaign treasurer, albeit through different counsel. Judge Spears also noted he had “heard or may have ruled on several of the allegations” in the other pending cases. Judge Speаrs concluded, “given the circumstances in all three files and it is my understanding that my Presiding Judge previously consolidated all of these files and I can be fair and impartial if I remain on all of the above cases, I will deny the informal request that I recuse myself.”
[¶16.] Presiding Judge Stoltenburg then entered an order that appears to deny the request for change of judge as to both the guardianship proceeding and this case, even though the affidavit was not filed in the guardianship case. Judge Stoltenburg provided the following explanation for his denial:
[T]he issues, parties and relief requested are so intertwined and related that judicial economy and efficiency requires that all cases be consolidated with one judicial officer [and]
Plaintiff/Petitioner has previously submitted motions, argument, and testimony to the assigned Judge on substantive issues and has waived his right to file an affidavit for change of judge pursuant to
SDCL 15-12-24 [.]
[¶17.] After the denial of the requested change of judge, VOR, the Estate, and the Trust together filed an answer, counterclaim, motion to dismiss, and motion for attorney fees. Kelly filed a separate answer and counterclaim, in which he asserted affirmative defenses, including failure to state a claim upon which relief can be granted, and asserted a counterclaim for barratry. Grand Valley filed a motion to dismiss pursuant to
[¶18.] The circuit court ultimately granted all the parties’ motions to dismiss and granted the request for attorney‘s fees and costs against Paul and Skyline in the amount of $17,925.88.5
[¶19.] Paul appeals, raising four issues, including whether Presiding Judge Stoltenburg erred when he denied the affidavit for change of judge. Because we resolve the case on this issue, we need not address the other issues presented.
Decision
[¶20.] A party to an action “in circuit court has the right to a change of judge so long as certain procedural requirements are met.” Legendary Loan Link, Inc. v. Larson, 2017 S.D. 25, ¶ 7, 896 N.W.2d 267, 269 (citing
[¶21.] “The process to obtain a change of judge is straightforward. The party seeking the change must first informally request the judge to self-disqualify.” Id. ¶ 7 (citing
[¶22.] “When an affidavit for change of judge has been properly filed, the judge cannot proceed any further in the action and is deemed disqualified ‘unless otherwise ordered to proceed by the presiding judge of the circuit involved.’ Further, ‘the challenged judge has no jurisdiction to consider the propriety of the affidavit or to continue with the action.‘” Id. (citations omitted).
[¶23.]
[¶24.] Here, no party contends that the affidavit did not comply with the statutes or was untimely. Consequently, the only remaining valid consideration was whether the right to file the affidavit had been waived. A party waives the right to disqualification of a judge by the “submission to a judge or magistrate of argument or proof in support of a motion or application, or upon trial[.]”
[¶25.] Pursuant to
this request in both the declaratory judgment/tort action and the guardianship proceeding on March 20, 2023. In the guardianship proceeding, Paul had previously filed an affidavit in support of a pending application for waiver of filing of an evaluation report before submitting the informal disqualification request. However, in this declaratory judgment/tort action, Paul and Skyline filed the informal request and the affidavit for change of judge before any other submissions in the case.
[¶26.] Raymond appears to argue that because Paul submitted argument or proof in the guardianship aсtion, that constitutes a waiver in this action. The guardianship action is a separate case, and possible waiver of a conflict in that action does not apply to this action. See
[¶27.] In this case, Paul and Skyline followed the procedure for seeking a change of judge. See Legendary Loan Link, Inc., 2017 S.D. 25, ¶¶ 7–8, 896 N.W.2d at 269 (citing
[¶28.] Upon the filing of the affidavit, Judge Spears was disqualified from any further acts related to this case. See id. ¶ 7;
[¶29.] Although the dissenting writing asserts that this Court‘s directive in Peterson is based on a “fatal flaw,” suggesting that the operative language in
[¶30.] In any event, even if the statutory directives in
Peterson, 531 N.W.2d at 583; Legendary Loan Link, Inc., 2017 S.D. 25, ¶ 7, 896 N.W.2d at 269; State v. Hirning, 2020 S.D. 29, ¶ 10, 944 N.W.2d 537, 540.
[¶31.] Finally, the suggestion in the other dissenting writing that the presiding judge‘s error in failing to reassign the case does not require a reversal because “Paul failed to present any facts showing actual bias or prejudice, or other grounds for disqualification of Judge Spears” would nullify the language in
[¶32.] The error at issue in this appeal is different than other types of judicial errors that may not require a reversal absent a showing of prejudice. Unlike errors involving the misapplication of the law, erroneous factual findings, or an abuse of discretion exеrcised by a judge lawfully presiding over a case, the failure to reassign the case to another judge here resulted in a summary judgment being entered by a judge who was properly disqualified under
[¶33.] KERN and DEVANEY, Justices, concur.
[¶34.] JENSEN, Chief Justice, concurs in part and dissents in part.
[¶35.] SALTER, Justice, dissents.
[¶36.] I agree that the presiding judge erred in denying the affidavit for change of judge, but I dissent from the majority opinion‘s decision to reverse and remand this case for the assignment of a new judge. Instead, I would addrеss the merits of the court‘s judgment of dismissal.
[¶37.]
[¶38.] We should review the presiding judge‘s decision to deny the peremptory affidavit under
[¶39.] The Court‘s harmless error rule in civil cases is set forth in
[¶40.] The majority‘s resolution of this case ignores our harmless error rule, which requires a showing of actual prejudice for any error in a civil case before reversing a final judgment.10 Id. The decision
[¶41.] The affidavit submitted by Paul failed to present any facts showing actual bias or prejudice, or other grounds for disqualification of Judge Spears.12 In the absence of such a showing, Paul cannot establish his substantial rights have been harmed. The Arizona Supreme Court in Taliaferro refused to create a presumption of prejudice in cases involving the process of filing a preemptory affidavit for a change of judge, stating that “errors [in finding a waiver or the untimely filing of an affidavit] are not well suited to an appeal after final judgment.” Taliaferro, 921 P.2d at 23. I agree. While intermediate appeals are discretionary under
[¶42.] Because Paul has failed to show prejudice, the error was harmless on this record and I would not reverse.
SALTER, Justice (concurring in part and dissenting in part).
[¶43.] On its face, the Court‘s opinion appears to reflect a certain sense of responsiveness; it provides a remedy for noncompliance with the disqualification procedure set out in
[¶44.] “South Dakota circuit courts are courts of general jurisdiction, and we have held that our Constitution confers broad
[¶45.] The concept of subject matter jurisdiction is viewed broadly with reference to a class of cases, not narrowly on a case-by-case basis. The correct inquiry focuses upon “a court‘s competence to hear and determine cases of the general class to which proceedings in question belong; the power to deal with the general subject involved in the action;’ and ‘deals with the court‘s competence to hear a particular category of cases.‘” Heupel, 2018 S.D. 46, ¶ 25, 914 N.W.2d at 578 (quoting Sazama v. State ex rel. Muilenberg, 2007 S.D. 17, ¶ 14, 729 N.W.2d 335, 342).
[¶46.] A circuit court‘s authority to exercise its general subject matter jurisdiction and act “is conferred solely by constitutional or statutory provisions.” Cable v. Union Cnty. Bd. of Cnty. Comm’rs, 2009 S.D. 59, ¶ 20, 769 N.W.2d 817, 825 (quoting Application of Koch Expl. Co., 387 N.W.2d 530, 536 (S.D. 1986)). In other words, a circuit court‘s jurisdiction—and any judicial effort to ascertain subject matter jurisdiction—derives from the text of our Constitution and the statutes enacted by the Legislature.
[¶47.] The contemporary version of the Chapter 15-12 disqualification-by-affidavit rule is not constitutional or statutory. It is, instead, comprised of court rules. Though a forerunner procedure was originally created by the Legislature in 1927, see 1927 S.D. Sess. Laws ch. 89, §§ 1-7, the Chapter 15-12 procedure has been exclusively regulated by court rule since at least 1975.
[¶48.] But our authority to promulgate rules is circumscribed:
The Supreme Court shall have general superintending powers over all courts and may make rules of practice and procedure and rules governing the administration of all courts. The Supreme Court by rule shall govern terms of courts, admissiоn to the bar, and discipline of members of the bar. These rules may be changed by the Legislature.
[¶49.] Surely, the Court‘s decision here vacating the circuit court‘s orders on the strength of
[¶50.] Central to a correct understanding of the
[¶51.] The procedure set out by court rule in
[¶52.] As a result, the denial—correct or erroneous—of a request to disqualify under the Chapter 15-12 procedure does not mean parties like Paul or Skyline face an unfair judge—but, simply, a judge they do not want. And viewed in this way, the text of the rule at
[¶53.] The principal failing of the Court‘s opinion is that it confuses this “proceed no further” language with subject matter jurisdiction. But they are very different. The “proceed no further” language addresses only the administrative authority of a circuit presiding judge to assign or “unassign” a single case as part of the
[¶54.] But as the Court notes, our decision in State v. Peterson, 531 N.W.2d 581 (S.D. 1995), says otherwise. In Peterson, we reversed an otherwise final jury verdict on the sole basis that the circuit court judge who presided over the trial had not forwarded an
Once [the defendant] filed his affidavit, [the circuit court judge] had no choice but to immediately stop the proceedings and await [the presiding judge‘s] decision pursuant to statute. [The circuit court judge] had no authority to decide on his own whether the affidavit was proper; with the filing of the affidavit his disqualification was automatic and mandatory.
SDCL 15-12-22 . As a consequence of continuing with the case without jurisdiction, all subsequent orders and judgments are void.
531 N.W.2d at 583 (emphasis added) (citations omitted).
[¶55.] The difference between court rules and statutes is not merely semantic or hyper-technical. As noted, our authority to promulgate rules, though important, is limited and does not reach so far as to allow the judicial branch to originate, or, more to the point here, terminate subject matter jurisdiction. See
[¶56.] I do agree with the Court and the Chief Justice that the presiding judge here did not correctly apply the rules concerning waiver. However, the effect of this error must be placed in its proper context. The effect of this error was not so serious that it divested the circuit court of its lawful jurisdiction, and, barring any showing of prejudice, the circuit court‘s decisions should be reviewed on their merits.
Notes
Prior to filing an affidavit for change of judge, the party or his attorney shall informally request the judge or magistrate who, in the ordinary course, would preside at the hearing or trial, to disqualify himself. He shall not be required to state his reasons, but may if he desires. . . . If the judge or magistrate grants the request, he shall forthwith notify the presiding judge, who shall assign the case to some other judge or magistrate. If the judge refuses the rеquest, he shall forthwith notify in writing the parties or their attorneys. Writing may include a letter, order, or dictation into the record.
(Emphasis added.)When entitled to do so, any party to an action, or his attorney of record, in any circuit or magistrate court may within the time prescribed by this chapter, file an affidavit as provided by this chapter seeking to disqualify the judge or magistrate who is to preside or is presiding in that action and when properly filed that named judge or magistrate shall proceed no further in said action and shall thereupon be disqualified as to any further acts with reference thereto unless otherwise ordered to proceed by the presiding judge of the circuit involved.
The presiding judge of the circuit court or in his absence or disqualification as the judge sought to be changed, the senior judge of the circuit shall review the affidavit and certification, if any, and it is determined that the affidavit is timely and that the right to file the affidavit has not been waived or is not otherwise legally defective, shall assign some other circuit judge or magistrate of that circuit as is appropriate to preside in such action, by filing an order of such appointment with the clerk of the court of the county wherein said action is pending. From the filing of such order the judge or magistrate therein designated shall have full power, authority and jurisdiction to proceed in the matter.