#27383-a-GAS

2015 S.D. 79

IN THE SUPREME COURT

OF THE

STATE OF SOUTH DAKOTA

* * * *

AGGREGATE CONSTRUCTION, INC., Plaintiff and Appellant,

v.

AARON SWAN & ASSOCIATES, INC., Defendant and Appellee.

* * * *

APPEAL FROM THE CIRCUIT COURT OF

THE SIXTH JUDICIAL CIRCUIT

HUGHES COUNTY, SOUTH DAKOTA

* * * *

THE HONORABLE KATHLEEN F. TRANDAHL

Judge

* * * *

RONALD G. SCHMIDT

JASON M. SMILEY of

Gunderson, Palmer, Nelson

 & Ashmore, LLP

Rapid City, South Dakota Attorneys for plaintiff and 

appellant.

MICHAEL F. TOBIN

MEGHANN M. JOYCE of

Boyce Law Firm, LLP

Sioux Falls, South Dakota Attorneys for defendant and 

appellee.

* * * *

CONSIDERED ON BRIEFS

ON AUGUST 31, 2015

OPINION FILED 10/28/15
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SEVERSON, Justice

[¶1.] Aggregate Construction, Inc. (Aggregate) brought a breach of contract 

and negligence action against Aaron Swan & Associates, Inc. (Swan) based on 

Swan’s alleged failure to adequately test the sodium-sulfate soundness of material 

to be used in a construction project for the South Dakota Department of 

Transportation (SDDOT). The circuit court dismissed the action on summary 

judgment, finding that a release executed between Aggregate and SDDOT barred 

the actions against Swan. Aggregate appeals. We affirm.

Background

[¶2.] On December 31, 2007, Aggregate delivered samples of Type 2A 

aggregate to Swan for sodium-sulfate soundness testing.1 Aggregate planned to 

quote prices for the material to prime contractors that intended to bid on a SDDOT 

project requiring the material. Before quoting prices, Aggregate engaged Swan to 

test material from the Ophiem pit in Perkins County, South Dakota, to determine 

whether it met SDDOT specifications, which required a maximum soundness loss of 

15. In January 2008, Swan informed Aggregate that preliminary testing indicated 

that the material from the Ophiem pit met SDDOT specifications and that the 

soundness result would be further lowered after the unprocessed pit-run material 

was processed. Aggregate subsequently quoted a price for the material to prime 

contractors, one of which, Bituminous Paving, Inc., was awarded the contract for 

 

1. See Bowes Constr., Inc. v. S.D. Dep’t of Transp., 2010 S.D. 99, ¶¶ 3-4, 793 

N.W.2d 36, 38-39 for a discussion of the sodium-sulfate soundness testing 

procedure and purpose.
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the project. Thereafter Bituminous and Aggregate entered into a subcontract for 

the supply of the material.

[¶3.] In August 2008, SDDOT sampled and tested the material from the 

Ophiem Pit. SDDOT advised Aggregate that the sample failed sodium-sulfate 

soundness testing with a score of 19. Aggregate contacted Swan to inform it that 

the material had failed SDDOT testing. Swan informed Aggregate that there had 

been an error in Swan’s calculation and that the correct result should have been 

21.3.

[¶4.] SDDOT determined that the Ophiem Pit aggregate would need to be 

blended with other material to ensure compliance with specifications. In September 

2008, Aggregate started blending “Fisher Chips” with the Ophiem Pit aggregate 

and stockpiled the blend at three locations: Ophiem, Shade Hill, and Bison. SDDOT 

took samples from the three stockpiles, consolidating the samples for purposes of 

sodium-sulfate soundness testing. SDDOT notified Aggregate in October that the 

material still failed testing with a score of 16. In December, SDDOT informed 

Aggregate that the material could not be used absent corrective action.

[¶5.] In February 2009, Aggregate challenged the composite sample of 

aggregates from the stockpiles. It requested split sampling and submission to an 

independent laboratory for testing. It also gave notice of a potential claim due to 

alleged improper sampling and testing. SDDOT refused to resample or retest the 

stockpiles. After further dispute of SDDOT testing procedures, in March 2009,

SDDOT admitted that its sampling techniques had not been followed and it would 
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therefore obtain new samples and test each stockpile separately. Finally, in April 

2009, SDDOT informed Aggregate that all three samples passed soundness testing.

[¶6.] These problems with the blend resulted in multiple delays in 

Aggregate’s ability to provide the material to Bituminous. As a result, Bituminous 

obtained Type 2A cover aggregate from a different pit to use on a segment of the 

project. Bituminous alleged that Aggregate had breached its contract. Thereafter, 

it charged increased costs to Aggregate and withheld payment. Aggregate filed a 

claim with SDDOT for damages in the amount of $453,006.47; SDDOT denied the 

claim. Aggregate then initiated a lawsuit against SDDOT. Aggregate and SDDOT 

settled the lawsuit and executed a “Full and Final Release of All Claims.” 

[¶7.] After settling the lawsuit against SDDOT, Aggregate filed this action 

against Swan, alleging breach of contract and negligence. Swan moved for 

summary judgment and argued that the release between Aggregate and SDDOT 

barred the claims against it. The circuit court agreed. It granted summary 

judgment and dismissed the claims against Swan. Aggregate appeals, and we 

restate its issues as follows: whether the circuit court erred in determining that the 

release applies to the contract and negligence claims against Swan.

Standard of Review

[¶8.] “We will affirm the [circuit] court’s grant or denial of a motion for 

summary judgment when no genuine issues of material fact exist, and the legal 

questions have been correctly decided.” Arch v. Mid-Dakota Rural Water Sys., 2008 

S.D. 122, ¶ 7, 759 N.W.2d 280, 282 (quoting A-G-E Corp. v. State, 2006 S.D. 66, ¶ 

13, 719 N.W.2d 780, 785). “The interpretation of a contract is a question of law, 
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which is reviewed de novo.” Id. (quoting A-G-E Corp., 2006 S.D. 66, ¶ 15, 719 

N.W.2d at 786).

Analysis

[¶9.] Aggregate contends that the circuit court erred because Swan’s alleged 

negligence or breach of contract2 occurred in January 2008 rather than “during 

construction season 2008-2009” as required by the release. Therefore, according to 

Aggregate, neither its contract nor negligence claim against Swan should have been 

dismissed because the release does not apply. 

[¶10.] The release executed between SDDOT and Aggregate provides in 

relevant part: 

In sole consideration of the payment of One Hundred SeventyTwo Thousand Five Hundred Dollars ($172,500.00) to the 

undersigned [(Aggregate)] made by or on behalf of the South 

Dakota Department of Transportation and the agents and 

employees of SDDOT, hereinafter called Releasee, the receipt 

and sufficiency of which is hereby acknowledged, the 

undersigned for itself, its heirs, personal representatives and 

assigns, releases and forever discharges the aforesaid Releasee, 

and all others directly or indirectly liable, from any and all 

claims, demands, liabilities, obligations, damages, costs, 

expenses, loss of profits, loss of use, loss of services and 

consortium, actions and causes of action, including each and 

every right of payment for damages said undersigned may now 

or hereafter have, arising from any act, occurrence or omission 

up to the present time and particularly on account of all loss and 

damage of any kind heretofore sustained, presently existing, or 

that may hereafter be sustained or that may arise in 

consequence of incidents that occurred during construction 

season 2008-2009 on: (1) the Butte County Project, which is the 

subject matter of Butte County lawsuit 10-298; and (2) the 

Ziebach County Project, which is the subject matter of Ziebach 

County lawsuit 10-15.

 

2. We offer no opinion whether the allegations set forth in the complaint 

constitute a tort claim, contract claim, or both.
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There are hereby discharged and released not only the Releasee 

specifically named herein as discharged and released, but also in 

like manner and to the same extent all other persons, 

corporations and partnerships whatsoever such as are classified 

as joint tortfeasors, it being intended hereby to completely bar 

any right of action against any of such joint tortfeasors whether 

or not named herein, and vest in the person or persons, 

corporation or corporations, partnerships or limited 

partnerships, specifically named herein as released and 

discharged, all rights as to contribution from any such joint 

tortfeasor not specifically named herein. 

[¶11.] Aggregate contends that Swan’s negligence or breach of contract is not 

an “incident[ ] that occurred during construction season 2008-2009.” Swan asserts 

that the release applies because its work was performed for a project to be 

completed in the 2008-2009 construction season. The circuit court determined that 

the release “bars any cause of action related to harms or injuries from the 2008-

2009 Project.” We reject each of these three interpretations of the contract’s 

language. 

[¶12.] The release applies more broadly than to only those claims arising out 

of the 2008-2009 construction season. The release bars all “causes of action . . . 

arising from any act, occurrence or omission up to the present time[.]” According to 

its language, the release bars any claim that Aggregate has against SDDOT from 

any “act, occurrence or omission” by SDDOT “and all others directly or indirectly 

liable” that had occurred up to the date the release was executed. The phrase 

“incidents that occurred during construction season 2008-2009” is part of the 

broader phrase: “and particularly on account of all loss and damage of any kind 

heretofore sustained, presently existing, or that may hereafter be sustained or that 
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may arise in consequence of incidents on: (1) the Butte County Project . . . and (2) 

the Ziebach County Project[.]” Therefore, “arise in consequence of incidents that 

occurred during construction season 2008-2009” modifies the immediately preceding 

phrase “and particularly on account of all loss and damage” rather than “any and all 

claims, demands, liabilities, obligations, damages, costs, expenses, loss of profits, 

loss of use, loss of services and consortium, actions and causes of action, including 

each and every right of payment for damages said undersigned may now or 

hereafter have, arising from any act, occurrence or omission up to the present 

time[.]” To read the release otherwise would render the phrase “arising from any

act, occurrence or omission up to the present time” meaningless. (Emphasis added.) 

See Nelson v. Schellpfeffer, 2003 S.D. 7, ¶ 14, 656 N.W.2d 740, 744 (“An 

interpretation which gives a reasonable and effective meaning to all the terms is 

preferred to an interpretation [that] leaves a part unreasonable or of no effect.”). 

[¶13.] Contrary to Aggregate’s interpretation, this last phrase in the first 

paragraph of the release is not a limitation on the release’s applicability. Rather, 

the words “and particularly” indicate that the words that follow are those of 

emphasis. Therefore, the release applies to the Butte and Ziebach County Projects 

in addition to any other claims against SDDOT and “all others directly or indirectly 

liable” up to that time. Because of the broad language of the release, Swan’s actions 

need only to have occurred by the time the release was executed rather than during 

the construction season of 2008-2009. The parties do not dispute that Swan’s 

soundness testing occurred in December 2007 or January 2008, which is clearly 

prior to the settlement reached with SDDOT and thus covered by the release.
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[¶14.] According to Aggregate, the circuit court’s grant of summary judgment 

only applied to its negligence claims. Further, Aggregate asserts that the release 

does not bar a contract claim and that it could not do so as a matter of law. 

Summary judgment was granted on the entire case, which included the contract 

claims against Swan. The court’s order denying Aggregate’s motion to reconsider 

and its order “denying [Aggregate’s] motion for trial of breach of contract claims” 

clarify that the memorandum decision applied to the contract claims. The court 

explicitly states in its order denying the motion for trial on the contract claims that 

“the summary judgment decision issued by the [c]ourt on January 10, 2015,

included the breach of contract claim.” Aggregate has not provided any authority

for the proposition that “the release could not have released the contract claim as a 

matter of law.” The release’s language barring “any and all claims . . . and causes of 

action” is sufficiently broad to release contract claims that Aggregate may have had 

against “all others directly or indirectly liable[.]” Lastly, the second paragraph of 

the release does not restrict the release’s applicability to joint tortfeasors. Rather, it 

expands applicability to joint tortfeasors. Therefore, we affirm the circuit court’s 

grant of summary judgment.3

[¶15.] Because Aggregate and SDDOT executed a release that applied to the 

causes of action brought by Aggregate against Swan, we need not reach the other 

issues raised by Aggregate. 

 

3. Although the circuit court determined the release applied based on a different 

interpretation of the release’s language, “a [circuit] court may still be upheld 

if it reached the right result for the wrong reason.” Schmiedt v. Loewen, 2010 

(continued . . .)
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[¶16.] GILBERTSON, Chief Justice, and ZINTER, WILBUR, and KERN, 

Justices, concur.

_________________________________________________

(. . . continued)

S.D. 76, ¶ 20 n.3, 789 N.W.2d 312, 318 n.3 (quoting Flugge v. Flugge, 2004 

S.D. 76, ¶ 35, 681 N.W.2d 837, 846).