*1
John a/k/a
Harriman, Plaintiff
Appellant, INDUSTRIES, DOMINION
UNITED Industries,
INC.; Dominion United Holdings,
Limited; Dominion United Co.; Industries,
Inc.; Mfg. Core SPX, Appel Defendants and
Inc. and
lees. 23142, 23143.
Nos. Dakota. Court South
Supreme 15, 2004. on Briefs Nov.
Considered Feb. 2005.
Decided
Rehearing Denied March *2 proposal,
final commission Harriman signed brought suit alleging and parties, wrongful venture between the of a permanent termination employment contract, fraud and deceit. At a trial matter, on the Harriman prevailed on his wrongful claim of termination of a perma- employment nent contract and was award- past ed and future damages. The verdict on judg- reversed UDI’s motion for notwithstanding ment the verdict. The court held the between Feterl Harriman and Manufacturing frauds, within of the statute and Harri- failed man’s claim for lack aof containing essential signed terms and Manufacturing. Feterl Affirmed. AND FACTS PROCEDURE John Carl Harriman (Harriman) began negotiating with United (UDI) Industries, Dominion Inc.’s prede- cessor, Manufacturing Feterl Company (Feterl Manufacturing), and produce sell a line of service bodies.1 Harriman proposed Feterl Manufacturing would on manufacture service bodies based Unke, Salem, Dakota, drawings, plans photos E. detailed line and Michael South Attorney plaintiff provided by for two models Harriman. appellant. and Harri- responsible product man would be de- Luce, L. Cheryle Michael Wiedmeier sales, all velopment and and would be com- Davenport, Evans, Gering Hurwitz and pensated on commission After basis. Falls, Dakota, Smith, Sioux South Attor- meetings, Manufacturing Feterl several neys for defendants appellees. entered and Harriman into an oral August on 1988 and at that time GILBERTSON, Chief Justice. employment filled out- an appli- John Carl Harriman into entered cation. an oral to sell service bodies for Manufacturing. Feterl The duration The terms be- the contract was never discussed tween Harriman and Manufactur- Feterl. Industries, parties. fully United Dominion Inc. ing developed were never or reduced (UDI) purchased oral writing. called sought to reduce paid Harriman’s commis- Harriman to be on the commissions sion price structure. Dissatisfied with UDI’s difference each unit was between body following components: 1. A service is intended to be mounted some or all of the chassis, crane, generally truck compressor compartment. onto a includes and a tool venture between alleged Harri- price.2 net sales for and sold termination of wrongful parties, August work began man fraud permanent Harri- August From contended In its UDI and deceit. answer representative for ser- man was the sales *3 subject employee-at-will Harriman was an ideas also contributed He vice bodies. time, Harri- any and that discharge to at several new designing expertise and of by the statute man’s claim was barred participated also body He models. service health, frauds. Manufacturing’s dental in Feterl an and was listed as plans,
and retirement 21, 2001, for UDI moved May On Internal Revenue Service for employee Harriman’s based on summary judgment purposes. who was ter- employee-at-will an status as time, and that the statute any at employment of the minable duration The 4.]
[¶ recovery. UDI’s motion frauds barred discussed the of was never opin- trial court. It its by the in Feterl was denied documents parties. Several letter, the denial the court noted that ion including W-2 Manufacturing’s possession, relating necessary disputes factual as accounting department was and statements agree- employment not the to or records, of the terms of the whether detailed some of frauds need- under the statute ment fell including how the commission at and determined However, fully developed to none of ed rate was structured. to trial. any contained reference documents the the employment of
the duration summary Harriman moved [¶8.] ment. (1) whether on the issues judgment initial contract between Fet- an corpo- there was July In of 1997 series separate Manufacturing and Harriman Manu- erl began which Feterl changes rate UDI, any employer/employee apart from first to then a and was sold facturing (2) of con- and fraud and breach lationship and SPX was exe- merger between UDI court, Boyd the Honorable tract. The trial cuted, finally company the was ac- and the mo- granted presiding, L. McMurchie Acquisition Corporation by Feterl quired on the issue of summary judgment Manufacturing Corporation. tion for Feterl n/k/a McMurchie Judge contract. sale, separate com- the Harriman’s At each successive claim of fraud motion as to the denied the altered. The final mission structure was contract. oc- and breach of structure commission alteration and resulted curred December the matter commenced Trial on resigning Feterl Manufac- Harriman from 18, 2003, the Honorable August before February 2000. turing in court in- Gienapp. The trial David R. to that Harriman had 18, 2000, jury structed February On by the entered into that the contract complaint, prove In against UDI.3 his filed suit Limited, dustries, Holdings, Dominion United price computed at actual sales was 2. The net Inc., Industries, Inc., plus percent, plus Mfg. in- ten Core cost of materials Feterl labor, plus freight, SPX, actual cost of direct Acquisition Corp., bound Fet- and n/k/a overhead, thirty-five percent over- plus office Manufacturing Corp. were The defendants erl addition, profit. Harriman was head corporate through complex struc- related up fifty percent of the chassis mark to receive ture, a verdict was returned in the event fifty profit parts. percent of the called was in favor of Harriman corporate entities determine which of to complaint amended final damages. were liable UDI, Inc., against United Dominion In- filed that time. The trial court to enter noted that there parties was either dispute or was no between the a permanent into original agreement joint enter into a venture. between to venture, and Feterl trial court enter joint prove To an oral contract. to into court de- that Harriman had instructed termined there was insufficient evidence following: all of the establish six presented support jury’s at trial proving The Plaintiff has the burden verdict that the contract was for lifetime of the elements of venture each Instead, permanent employment. are: which the contract evidence indicated was tied to venture, into a an intent to enter *4 that contingencies peri- other extended the 2) agreement, express implied, or beyond year. od of the contract group, of a among members trial court concluded that the contract fell 3) purpose a common to be carried out within the statute of frauds. Due to the by group, writing signed by absence of a or its UDI 4) joint pecuniary pur- a interest that predecessors denoting the duration of the pose, contract, Harriman’s claim was barred 5) equal right to a voice in the di- the statute of frauds. UDI’s motion for group,
rection and control of the and j.rno.v. granted. profit in the and a right share appealed two issues: in the losses. duty to share 1. trial Whether the court erred when prove If the Plaintiff fails to one or more it granted judg- UDI’s motion for elements, your of these verdict must be notwithstanding the verdict on joint for the Defendants on the venture UDI’s assertion claim. frauds, 53-8-2(1), SDCL bars Harri- venture, joint jury On the issue of man’s contract claim. pres-
found five of the six elements were 2. trial court when Whether the erred ent, equal not the fifth element of “an but jury it instructed the that all six control right to a voice the direction and of a venture must elements Therefore the found group.” of the pre- exist in order for Harriman to no venture existed. The on that issue. vail against for Harriman turned a verdict review, By appealed the notice of UDI permanent on the issue of breach of a UDI following: past and awarded employer 3. Whether UDI was $586,359.43 damages of and future dam- Harriman; $121,240. ages of UDI moved for directed employ- 4. Harriman was an Whether verdict, denied. which was ee-at-will; judgment a motion for UDI filed from estopped 5. Harriman is Whether (j.n.o.v.) notwithstanding the verdict con- claiming employee; he was an tending the contract claim was barred proved 6. all of the Whether the statute of frauds. its memorandum elements of contract. trial court opinion, noted the issue was pre-trial motion for sum- raised UDI’s STANDARD OF REVIEW
mary judgment, genuine but issues of ma- This Court’s standard of dispute prior terial fact were judgment notwith- required denying UDI’s motion at review motion 48 355, 359 Sybesma Sybesma, v. 534 N.W.2d (j.n.o.v.) is well set- verdict
standing tbe omitted). (S.D.1995)) (citation Inc., “Prejudicial 538 N.W.2d v. Karl’s Bridge tled. (citation omitted). (S.D.1995) in all must probability error is that which 521, 523 jury’s testimony produced and evidence have some effect review “We or the harmful to to the verdict verdict and is the substantial light most favorable weighing party assigning Kjerstad ‘then without it.” nonmoving party, rights of the Publications, Inc., if decide there is 517 must [we] the evidence v. Ravellette (S.D.1994) supported have v. (citing which would State evidence N.W.2d ” (S.D.1987)). Gilkyson Michalek, support verdict[.]’ did 407 N.W.2d Inc., 45, 7, 579 1998 SD Exp., Wheelchair Bland v. (citing Davison AND DECISION ANALYSIS ¶ County, trial court Whether Continental, 374 Sabag v. (quoting granted it motion erred when UDI’s (S.D.1985))). review We j.n.o.v. on UDI’s assertion j.n.o.v. by the ruling on
the trial court’s 53-8-2(1), frauds, statute SDCL (citation standard. of discretion abuse contract claim bars omitted). “The trial court’s decisions and *5 employment. permanent cor- presumed motions are rulings on such of frauds is The statute to not seek reasons and this Court will rect provides at 53-8-2. It codified SDCL 23, Kennedy, 1999 SD v. reverse.” Veeder part: relevant ¶ 610, 25, (quoting Border N.W.2d 617 589 are not enforce- Inc., following The contracts Paving, Dep’t v. S.D. States ¶ 898, by action unless the contract 10, able 21, 574 SD N.W.2d Transp., 1998 is in omitted). some memorandum thereof 901) (citations by party the to be and subscribed jury instruc review 13.] “We [¶ agent, as authorized charged or his whole, is not revers and error tions as writing: Den Burhenn v. prejudicial.” unless ible (1) by is that its terms An ¶ 91, 11, Co., 685 2004 Supply SD nis year performed not to be within 778, First (citing 782 Buxcel v. N.W.2d making the thereof[.]4 from ¶ Bank, 13, 126, 601 1999 Fidelity SD 53-8-2(1). 596). The role of the statute contending SDCL 593, The party nature, evidentiary in of frauds is demonstrating the has the burden error uncertainty by requiring that serves to remove in error and given was instruction Hess, of an enforceable obli- “written evidence Knudson v. prejudicial. error was 5 Gulbransen, 2001 73, v. 137, 6, (citing gation.” 75 Jacobson 556 N.W.2d 1996 SD Germain, Kiely v. the late 1600s. St. precludes enforcement of ment in also 4. SDCL 53-8-2 (Co.1983) (citing An Act for 768 writing, 670 P.2d agreements types of absent other Perjuries, Car. Fraud and 29 Prevention of contemplation including agreement in (1677)). to com- statute was enacted c. 3 marriage, sale of real for the perjury. perpetration via of fraud bat longer than or an in real estate estate interest significant Widespread perjury became a duration, types of year in and certain one English was problem common law when money agreements or for an for the loan of longer preclude the enforce- changed to no extension of credit. Klewin, Inc. v. of oral contracts. C.R. Inc., 600 Properties, 220 Conn. Flagship underlying 5. The rationale omitted). (1991) (citations At may purposes for A.2d be found in the frauds time, juries English allowed to de- that law of Frauds and which the "Act for Prevention personal own English a case based on their adopted by Parlia- cide Perjuries” was ¶ 26, permanent that a contract for or lifetime (quoting 623 N.W.2d SD intended employment parties. Sapari, Sabhari 58-8-2(1) it 9). argued pos- because was 886, 893, n. SDCL prior sible for Harriman to have died to making of a contract “prohibit not does year the end of the first of the it performed not to be its terms is possible for the contract to com- merely makes such year, but within year of pleted making. within one its writing.” contract invalid unless reduced Therefore, the contract would not fall with- O’Meara, 221, 222 Tróvese v. in the statute of frauds. (S.D.1992) (quoting Brown v. Wisconsin 635, 639, 201 N.W. Granite S.D. question There is no (1924)). 555, 556 parties entered into an oral contract. However, no duration or term was ever Harriman contended that at initial meetings discussed between into the contract entered representatives Harriman and of Feterl employment. Harri- permanent was for Manufacturing. Harriman was able to in- job he had a man testified that he believed writings at trial that con- troduce several up until he elect at Feterl structure, clusively showed the commission body no or the service line was ed retire writings no were introduced that but deposition, In his Har- longer profitable. of the showed the duration would oc suggested riman his retirement contract. sixty-five. At trial he testified age cur at light Even when viewed to continue to might that he have elected most favorable to Harriman as the non- seventy-five. Harriman age work moving party, it is clear from the record deposition at as gave year his his birth *6 parties perma- that the did not intend a 1940, of either suggesting a contract sev Rather, or contract. the par- nent lifetime in twenty-seven years or duration. enteen unspeci- intended a contract of some ties Feterl, the owner of Fet- Leon [¶ 17.] years to contingencies fied term of tied 1988, in testified at trial Manufacturing erl other than Harriman’s lifetime. Because between Feterl Manu- that the the contract was intended to be more than perma- was not facturing and Harriman duration, year in that is until Feterl nature, party in could nent and that either longer Harriman no Manufacturing or relationship have elected to terminate the arrangement, liked the or elect- ar- any at time. Feterl testified that the retire, ed to it falls within the statute long rangement would have continued as Lacking writing signed frauds. a UDI for Feterl Manufactur- profitable as it was or Feterl that contained ing long and as as Harriman liked the term, claim the duration is arrangement. by the of frauds. barred statute 2. the trial argued these Whether court [¶ 18.] [¶ 21.] erred it instructed the interpreted statements can be to mean when (2) cautionary knowledge perjury, for its rather than on the evidence intro- to combat at of frauds impressing duced trial. Id. The statute effect (3) placed a on this discretion significance agreement, limitation of their as a writing signed by party against quiring a distinguishes channeling device that en- sought. enforcement was Id. whom forceable contracts from unenforceable Industries, Inc., v. Anchor contracts. Wior justifications are advanced for At least three 172, (Ind.1996) (citation N.E.2d the continued use of frauds in omitted). (1) evidentiary modern times as an function 13, joint joint a venture establish a venture. 2003 SD all six elements of ¶ 13, in for Harriman to (citing must exist order at 295 Ethan prevail Austin, on that issue. Dairy v. 448 N.W.2d Products (S.D.1989) (citing 48A CJS Joint Ven- recently set forth six We [¶ 22.] (1981) (stating “usually § 10 all of tures joint necessary to a establish elements joint for a present these elements must be Johnson, A.P. & Sons Constr. v. venture. exist; venture to but no one of the ele- ¶ 13, 657 N.W.2d 2003 SD joint ments essential to the creation of include: These six elements is alone sufficient to establish venture (1) joint to enter into a ven- an intent such.”))). ture; The trial court instructed the [¶ 24.] (2) express implied, agreement, jury correctly required on the six elements among group; members of the venture, all specifying of a six (3) purpose to carried out a common be elements must exist. The trial court did group; err, correctly it law for not as stated the (4) in that joint pecuniary interest jury. Absent error court’s purpose; can be no instructions there (5) equal right voice the di- prejudicial error to Harriman. the group; rection and control of necessary It is not to reach the appealed by given holdings our issues UDI (6) in the and a right profits to share 1 and 2. Affirmed. Issue Issue duty any to share losses. ¶ Constr., 13, 13, 657 A.P. 2003 SD & Sons KONENKAMPand Owens, (citing Stallings v. at 295 MEIERHENRY, Justices, concur. ¶ 63, 11, 646 N.W.2d 2002 SD Sporleder, (quoting Weins ZINTER, Justice, concurs with 28). All six elements writing. in order to must met establish SABERS, Justice, dissents. (citing of a venture. existence *7 Austin, 448 Dairy Ethan Products ZINTER, (concurring). Justice (S.D.1989)). 226, 228 because, by I concur Harrimaris [¶ 29.] Harriman contends the trial [¶ 23.] admission, agreement own the oral was to when it court erred instructed performed period over a of time exceed- be that all six elements had to exist order Therefore, ing year. it was unenforce- to establish venture. under the statute of frauds. able Stallings, cites 646 Harriman relies on authorities proposition at 277 for that the are outside holding agreements that such trial court should have instructed they could be “most, the statute frauds because if not all” of the elements had to be if performed year in less than one death or language Stallings estabhshed. The However, contingency other arose. some imply does all six elements need not However, that was not the nature of Harriman’s holding be estabhshed. our that the AP. that all claim. Harriman testified & Sons Constr. makes it clear until six elements must in order to ment was to continue retirement6 be satisfied (in Although retirement. Harriman dis- UDI asserts that Harriman testified until his respect deposition) putes with to trial that the was to last UDI’s assertion
51
longer
no
profitable.
the business was
within the statute of frauds and was unen-
Accordingly,
expert
forceable);
witness
Schroeder v. Texas
Iron
proffered
damage
Works, Inc.,
calculation that
in-
(Tex.
813 S.W.2d
ongoing damages
up
twenty-
volved
(holding that understanding to be
years,
Similarly,
nine
or until 2029.
Harri-
employed
eight
for another
years
to ten
argued
man’s counsel
to the
that their
until retirement was within the statute of
expert witness “testified that he made
unenforceable);
frauds
Molder v.
computations
twenty-nine
years.” Fi-
Co.,
Southwestern Bell Telephone
nally,
jury actually
damages
awarded
S.W.2d
177 (Tex.App.1983) (holding
through
sustained from March
employee’s belief that he was contractually
trial,
and for
damages
further
to be
entitled to
employer
work for
until retire-
Thus,
incurred in the future.
there can be
age
ment at
65 meant that the contract fell
no dispute
that the
upon,
sued
frauds).
within the statute of
denominated,
however
was “not to
per-
The Indiana Supreme
Court
year
formed within a
making
from the
noted that a contrary ruling would “seri-
thereof;
...” within
meaning
of SDCL
ously undermine” the statute of frauds.
53-8-2(1).
Wior,
fact,
ing that a contract of employment until reasons, For these the trial retirement was within the statute of frauds court should be affirmed. though even death or contingency other *8 could end the contract earlier than one SABERS, Justice (dissenting). year). See also Gebhard v. Corp., GAF (D.D.C.1973) F.R.D. (guarantee- majority The opinion special and ing employment age 65 brought pur- writing clearly establish that the ported frauds); contract within statute of between Feterl Com- Gilliland v. Allstate pany Insurance 69 Ill. and its successors and Harriman was App.3d 26 Ill.Dec. 388 N.E.2d 68 within the statute of frauds because it (1979) (holding an agreement oral to em- could not performed year. be one within ploy an individual However, until retirement fell writing neither can see the for- event, testimony, dispute consequence this is of no performed the contract was to be over
because period record reflects exceeding year. in either of time I by of review submitted the Defendants permits and the statute the trees est for Harriman. ini- briefly a fraud address those issues and produce will frauds tially deny indicate that I would Defen- writings is The defect both position dant’s as to the other six agreement and they ignore claimed reasons. facts, they by are being blinded as of frauds. The of the statute technicalities added). at the We must look (emphasis Man- that: Harriman and Feterl facts are must not be trees to see the forest. We operated years ufacturing Company by the technicalities of the statute blinded writings ig- agreement under the frauds, produce them to permit and Manufac- by Feterl nore. As documented Gulbransen, 2001 fraud. See Jacobson treasurer, Darrell Company’s turing (“The SD Streflf, was set forth in agreement not, however, of frauds be used statute will copy of which is attached. Exhibit injustice.”). simply need to to work an We speaks itself and they the facts for what are. review by party charged, to be and subscribed binding on its successors. is speak The facts for themselves 37.] [¶ that the clearly and show addition, every paycheck In ever year af- substantially performed year after Manufacturing Company by Feterl written Every paycheck ever written year. ter successors was document its Manufacturing Company and its writing, party signed a document or successors was Incredibly, the trial court charged. to be party “in and subscribed rulings except in all of its was correct Therefore, 53-8-2. charged.” SDCL point: this same complied frauds was with in my ruling on the statute light and it was error to vacate the every way absolutely it is not neces- frauds issue in favor of Harriman for judgment sary that I address the other issues $121,240 $586,359 in future [(UDI)], damages by the Defendant but raised and remand damages. We should reverse Supreme review of anticipating Court require reinstatement. along possible case with a notice this