Satellite Cable Servs., Inc. v. Northern Elec. Coop., Inc.Satellite Cable Servs., Inc. v. Northern Elec. Coop., Inc.
- Reporters:
- ,
- Before:
- Konenkamp, Miller, Sabers, Amundson, Gilbertson
KONENKAMP, Justice.
[¶1] After the circuit court enjoined an electric cooperativе and its subsidiary from offering cable television service in violation of a statute, the Legislature amended the law to remove the prohibition. We therefore set aside the injunction as no longer sustainable under the amended statute, but remand the case for trial on the issue of damages incurrеd during the time the cooperative violated the former statute by competing in a municipality with an operating cable television service. Affirmed in part and reversed in part.
FACTS
[¶2] Northern Electric Cooperative, Inc., organized under
[¶3] In April 1994, Northern Cable began converting to a community antenna television system (CATV), offering cable service to subscribers in Pierpont.1 Since 1988, howevеr, Satellite Cable Services, Inc., held an exclusive franchise to provide cable television to Pierpont residents. Satellite brought suit seeking both declaratory and injunctive relief as well as damages for interference with contractual and prospective contractual relations. Shortly afterwards, Northern Cable agreed to withdraw the offending CATV system. Then, in September 1995, after obtaining a franchise from the Pierpont Board of Trustees to offer CATV, Northern Cable began reconnecting its subscribers to the same system.
[¶4] The circuit court granted summary judgment to Satellite, holding that Northern Electric violated
STANDARD OF REVIEW
[¶5] Under our well-versed standard for reviewing a grant or denial of summary judgment, we must decide if the moving party established the absence of any genuine issue of material fact and demonstrated entitlement to judgment on the merits as a matter of law. We view the evidence most favorably to the nonmoving party and resolve reasonable doubts against the moving party. When summary judgment is supported as provided in
ANALYSIS AND DECISION
1. Effect of Statutory Amendment While Appeal Pending
[¶6] At the time of the circuit court‘s decision,
Cooperatives may provide television service which includes multi-channel multi-point distribution systems, including those which utilize coaxial cable, and direct broadcast satellite service, and may provide programming to customers via a CATV system, as defined in
§9-35-16 , in any municipаlity which does not have an operating CATV system.
The circuit court held that the activities of Northern Electric and its wholly owned subsidiary, Northern Cable, violated this enactment by providing CATV service to the city of Pierpont. After judgment, the statute was amended to broaden the authorized activities for cоoperatives.
Cooperatives may be organized under this chapter for any lawful purpose except banking, securities, and insurance. Cooperatives proposing to provide local exchange telephone service in a rural telephone company‘s service area may do so only in compliance with the рrocedures contained in section 251(f) of the Communication Act of 1934, as amended by the Telecommunications Act of 1996.
[¶7] If, during an appeal, a statutory change is controlling, we see no virtue in remanding to the trial court to examine an enactment we are equally capable оf interpreting. Illinois Indep. Tel. Ass‘n v. Commerce Comm‘n, 539 NE2d 717, 722 (IllAppCt 1988) (citing Rios v. Jones, 348 NE2d 825, 828 (Ill 1976)); Haines Pipeline Const., Inc. v. MPC, 830 P2d 1230, 1238 (Mont 1991), overruled on other grounds, Porter v. Galarneau, 911 P2d 1143 (Mont 1996); State v. Board of Cty. Com‘rs of Lyon Cty., 676 P2d 134, 139 (Kan 1984); Day v. Child Support Enforce. Div., 900 P2d 296, 300 (Mont 1995); Texas Cty. Irr. & Water Res. Ass‘n v. Okl. Water Res. Bd., 803 P2d 1119, 1122 (Okl 1990). This principle applies whether the change was constitutional, judicial, or statutory. Thorpe v. Housing Auth. of the City of Durham, 393 US 268, 282, 89 SCt 518, 526, 21 LEd2d 474, 484 (1969). Because
2. Northern Electric‘s Membership in Northern Cable
[¶8] Before its most current amendment, effeсtive July 1, 1994,
A cooperative may become a member of other cooperatives, corporations or organizations engaged in the production or distribution of electricity or television business, and to own stock therein.
[¶9] Article VIII of Northern Cable‘s Articles of Incorporаtion provides: “The cooperative will not commence business until consideration of the value of at least One Thousand Dollars ($1,000) has been received for the issuance of shares.” Northern Electric‘s board minutes for January 20, 1989 show a resolution to purchase $5,000 worth of Northern Cable‘s stоck and to pay a $100 membership fee. The date of this resolution determines the time Northern Electric officially became a member of Northern Cable. Before this date, Northern Cable was a paper entity, that according to its Articles, was unable to engage in or transact any business.
[¶10] Satellite Cable argues that Northern Cable was created on October 16, 1987 as evidenced by the date its Articles of Incorporation were filed with the South Dakota Secretary of State. Satellite further contends that the version of
3. Northern Cable‘s CATV Service to Pierpont
[¶11] A. Northern Electric Acting Through Northern Cable. The circuit court ruled that Northern Electric could not bypass the prohibitions on electric cooperatives imposed in the earlier version of
[¶12] We need not decide whether the “mere instrumentality” exception to the rule of corporate separateness applies to the relationship between Northern Electric and Northern Cable because there was ample evidence in the record to simply establish that an agency relationship existed between parent and subsidiary. Glanzer v. St. Joseph Indian Sch., 438 NW2d 204, 207 (SD 1989). A parent corporation may be held accountable for the conduct of its subsidiary when an agency relationship exists between them. Id.; United States v. Reading Co., 253 US 26, 62-63, 40 SCt 425, 434, 64 LEd 760 (1920) (where subsidiary is the mere agent of parent, separate corporate existence of subsidiary may be ignored); A.G. Nelson v. Int‘l Paint Co., Inc., 734 F2d 1084, 1092 (5thCir 1984); Weisser v. Mursam Shoe Corp., 127 F2d 344, 348 (2dCir 1942); Kissum v. Humana, Inc., 479 SE2d 751, 752 (Ga 1997); J.A. Bryant, Annotation, Liability of Corporation for Contract of Subsidiary, 38 ALR3d 1102, 1116, §4 (1971 & 1997 Supp) (collecting cases). Whether an agency relationship exists is a question of law to be assessed by the interaction of the companies as shown by their аgreements or conduct. Kasselder v. Kapperman, 316 NW2d 628, 630 (SD 1982); Elvalsons v. Industrial Covers, Inc., 525 P2d 105, 111 (Or 1974). Liability under this principle may be established on the following elements: (1) the principal‘s indication that the agent is acting for the principal; (2) the agent‘s acceptance of the undertaking; and (3) an understanding between them that the principаl controls the undertaking. Glanzer, 438 NW2d at 207-08; Southard v. Hansen, 376 NW2d 56, 58 (SD 1985); Kasselder, 316 NW2d at 630; J.R. Watkins Co. v. Dutt, 84 SD 453, 457, 173 NW2d 41, 43 (1969).
[¶13] Northern Cable was created to further Northern Electric‘s growth and development and specifically to venture into the television subscription business. Dennis Hagny, the general manager of both entities, testified by deposition that it is the role of a rural electric сompany to expand the services offered to those in rural communities. The companies shared the same board of directors and the same management. Hagny controlled the day-to-day management and operations of both Northern Electric and Northern Cable. We recognize that the mere fact that one corporation owns all or a majority of the stock of another, or that two corporations have common officers or directors, will not render a parent automatically answerable for acts of its subsidiary. But here, after having reviеwed the undisputed evidence and the statutory scheme existing at the time, we are convinced that Northern Electric could not circumvent our Legislature‘s restriction on electric cooperatives under the former
[¶14] B. Electric Cooperatives Prohibited From Offering CATV. As we stated, the 1997 amendment to
[¶15] An interpretive guide courts use to decipher uncertain statutory language is the last antecedent rule: A limiting clause remains confined to the last antecedent, unless the context or obvious purpose requires a different interpretation. In re Tax Appeal of Black Hills Legal Services, Inc., 1997 SD 64, ¶8, 563 NW2d 429, 431; Nat‘l Farmers Union P. & Cas. Co. v. Universal Underwriters Ins. Co., 534 NW2d 63, 65 (SD 1995); Rogers v. Allied Mut. Ins. Co., 520 NW2d 614, 617 (SD 1994) (citing Kaberna v. School Bd. of Lead-Deadwood Sch. Dist. 40-1, 438 NW2d 542, 543 (SD 1989)); Lewis v. Annie Creеk Min. Co., 74 SD 26, 33, 48 NW2d 815, 819 (1951). The limiting clause in
CONCLUSION
[¶16] We reverse the declaratory and injunctive relief as
[¶17] Affirmed in part and reversed in part.
[¶18] MILLER, Chief Justice, and SABERS, AMUNDSON, and GILBERTSON, Justices, concur.
Notes
A co-operative shall have power to become a member of other cooperatives or corporations engaged in the produсtion or distribution of electricity or to own stock therein.