#24978-a-JKK 

2009 SD 30

IN THE SUPREME COURT 

OF THE 

STATE OF SOUTH DAKOTA 

* * * * 

DEBORAH AND DARNELL OKERSON, Petitioners and Appellants, 

 v. 

THE COMMON COUNCIL OF 

THE CITY OF HOT SPRINGS, CARL 

OBERLITNER, IN HIS CAPACITY AS 

MAYOR, AND CHERYL WAIT, IN HER 

CAPACITY AS CITY FINANCE OFFICER, 

ALL IN THEIR REPRESENTATIVE 

CAPACITIES AND INCLUDING ANY 

SUCCESSORS IN INTEREST, Respondents and Appellees. 

* * * * 

APPEAL FROM THE CIRCUIT COURT 

OF THE SEVENTH JUDICIAL CIRCUIT 

FALL RIVER COUNTY, SOUTH DAKOTA 

* * * * 

HONORABLE JEROME A. ECKRICH, III 

Judge 

* * * * 

COURTNEY R. CLAYBORNE of 

Clayborne, Loos, Strommen & Sabers LLP Attorneys for petitioners 

Rapid City, South Dakota and appellants. 

JAMES G. SWORD of 

Farrell, Farrell and Ginsbach PC Attorneys for respondents 

Hot Springs, South Dakota and appellees. 

* * * * 

 CONSIDERED ON BRIEFS 

 FEBRUARY 17, 2009 

 OPINION FILED 4/29/09 
#24978 

KONENKAMP, Justice 

[¶1.] Deborah and Darnell Okerson petitioned the circuit court for a writ of 

mandamus to compel the Common Council of the City of Hot Springs, the Mayor 

and City Finance Officer (collectively Council) to submit to the voters a referendum 

on the settlement of a lawsuit concerning the construction of an addition to the golf 

course in the City of Hot Springs. The circuit court denied the writ. Because the 

stipulated facts presented to the circuit court do not support the grant of the writ, 

we affirm. 

Background 

[¶2.] The parties determined that no evidentiary hearing was necessary, 

and this matter was submitted to the circuit court on stipulated facts and exhibits. 

The facts before the circuit court indicate as follows: 

[¶3.] On June 17, 2002, the Council voted to enter into an agreement with 

Steve and Carla Simunek for the construction of an additional nine holes to the Hot 

Springs golf course. On July 1, 2002, the Council amended the agreement to add 

Kelvin Lorenz as a party to the development and construction of the addition. Both 

meetings were properly called and appropriate notice was given to the public. In 

2006, the City of Hot Springs commenced litigation against the Simuneks, Lorenz 

and other entities involved in that project. To resolve that litigation the parties 

entered into a stipulation for settlement. The stipulation for settlement was signed 

by all parties and the Attorney General. The stipulation for settlement was also 

approved by the court handling the litigation. On February 19, 2008, the Council 

approved the settlement. In the settlement, the parties were to enter a land 

exchange, transfer certain land, make a lump sum payment of $625,000, close a 
#24978 

-2- 

rubble pit, move the city transfer station, and adopt appropriate zoning ordinances 

to lift a moratorium on building permits related to the golf course. One of the stated 

reasons for the settlement was because “the parties are desirous of fulfilling the 

terms of what they understand the original agreement was for the construction of 

the addition Nine Holes of the Golf Course.” 

[¶4.] Referendum petitions were filed seeking to challenge the approval of 

the settlement by the Council. The Council rejected the referendum petitions and 

subsequently amended the terms of the stipulation to reflect certain parcels of real 

estate in the land transfer. The amended stipulation for settlement was again 

approved by the parties, the Attorney General and the court. The Okersons filed a 

petition for a writ of mandamus seeking to compel the referendum vote. 

[¶5.] The circuit court found that the 2002 decision to construct the 

additional nine holes to the golf course was a legislative act subject to referendum. 

However, no referendum petition was filed challenging that action. Significantly, 

the court found the terms of the 2002 agreement and the 2008 stipulation for 

settlement “consistent in all material respects” and that the stipulation for 

settlement “merely put into execution” the 2002 agreement. Further, the Okersons 

did not allege that the stipulation for settlement violated or was inconsistent with 

the 2002 agreement. Therefore, the circuit court determined that the referendum 

petitions related to a subsequent administrative action concerning the golf course 

settlement and was not subject to the referendum process. The circuit court denied 

the writ of mandamus. The Okersons appeal contending that the circuit court 

abused its discretion in denying mandamus relief. 
#24978 

-3- 

Analysis and Decision 

[¶6.] “Mandamus is a potent, but precise remedy. Its power lies in its 

expediency; its precision in its narrow application. It commands the fulfillment of 

an existing legal duty, but creates no duty itself, and acts upon no doubtful or 

unsettled right.” Sorrels v. Queen of Peace Hosp., 1998 SD 12, ¶ 6, 575 NW2d 240, 

242. “To prevail in seeking a writ of mandamus, the petitioner must have a clear 

legal right to performance of the specific duty sought to be compelled and the 

respondent must have a definite legal obligation to perform that duty.” Id.; see also 

Woodruff v. Bd. of Com’rs for Hand County, 2007 SD 113, ¶ 3, 741 NW2d 746, 747. 

“The circuit court has discretion in granting or denying a writ of mandamus. 

Consequently, the standard of review on appeal is abuse of discretion.” Black Hills 

Cent. R. Co. v. City of Hill City, 2003 SD 152, ¶ 9, 674 NW2d 31, 34. 

[¶7.] The facts, as set forth above, are those that appear in the rather 

limited record before the circuit court. In arguing that the circuit court abused its 

discretion, however, the Okersons insert in their appellate brief additional facts 

about the 2002 decision to develop the addition to the golf course. They assert that 

following the 2002 decision by the Council to proceed with the golf course 

construction, the Attorney General’s office declared the Council’s agreement invalid. 

No reasoning, explanatory facts, or evidence is provided related to that decision. 

These facts are introduced without adequate citation to any portion of the record 

and were not included in the stipulated facts the parties submitted to the circuit 

court. Notably, the Okersons’ petition does not allege that the original agreement 
#24978 

-4- 

was void ab initio as they now contend on appeal. The Okersons also proposed no 

finding of fact or conclusion of law that the original agreement was void ab initio. 

[¶8.] On appeal, the Okersons argue that because the agreement in 2002 

was later ruled void by the Attorney General the action taken in 2008 was the first 

valid and binding decision on the construction of the golf course development by the 

Council. As a result, the Okersons assert that the settlement decision essentially 

became a “legislative” act. While this may be an interesting question, it was not the 

one presented to the circuit court. It is advanced here for the first time. The 

Okersons' position requires this Court to speculate on the legal relationship 

between the parties and the validity of the underlying agreement in contravention 

to the stipulated facts and settled record. Given the absence of any supportive 

record evidence or any indication this argument was presented to the circuit court, 

we will not address this issue for the first time on appeal. See Argus Leader v. 

Hagen, 2007 SD 96, ¶ 34, 739 NW2d 475, 484 (holding a claim not previously raised 

or ruled on by the circuit court was waived in an appeal from the denial of a writ of 

mandamus). The Okersons’ argument suffers from the fatal flaw of being premised 

upon facts that are not contained within the settled record. “This Court has 

repeatedly instructed that the party claiming error carries the responsibility of 

ensuring an adequate record for review.” State v. Andrews, 2007 SD 29, ¶ 9, 730 

NW2d 416, 420. 

[¶9.] An analysis of the facts as contained in the record is controlled by 

SDCL 9-20-19. That statute provides: 

Any legislative decision of a governing body is subject to 

the referendum process. A legislative decision is one that 
#24978 

-5- 

enacts a permanent law or lays down a rule of conduct or 

course of policy for the guidance of citizens or their 

officers. Any matter of a permanent or general character 

is a legislative decision. 

No administrative decision of a governing body is subject 

to the referendum process, unless specifically authorized 

by this code. An administrative decision is one that 

merely puts into execution a plan already adopted by the 

governing body itself or by the Legislature. Supervision 

of a program is an administrative decision. Hiring, 

disciplining and setting the salaries of employees are 

administrative decisions. 

Based on the stipulated facts, the circuit court was correct determining that the 

decision made in 2002 to develop the addition to the golf course and specify terms 

was a “legislative” decision as defined in SDCL 9-20-19. That initial decision 

established a “rule of conduct or course of policy for the guidance of citizens or their 

officers” and was a matter of “permanent character.” As such it was subject to the 

referendum process. However, as the circuit court recognized, no challenge was 

filed at that time. 

[¶10.] Later, in 2008, the Council approved the stipulation for settlement to 

resolve the litigation surrounding the decision to build the nine-hole addition to the 

golf course. At that point, as the statute provides, the decision “merely put[ ] into 

execution a plan already adopted by the governing body itself.” The circuit court 

also found that the stipulation for settlement was “within the parameters of the 

2002 agreement.” A comparison of these two documents supports that conclusion. 

The 2002 agreement set forth a plan for the private development of a nine-hole golf 

course to be later acquired by the City. That agreement projected an actual cost of 

between one and one-and-one-half million dollars. The payments were based on 
#24978 

-6- 

one-half of the increase in revenue for golf course fees. In addition, land exchanges 

were set forth and the establishment of a rural service district was provided. The 

2008 stipulation for settlement also contemplated the acquisition of the privately 

built nine-hole addition to the golf course; the use of land exchanges and rural 

service districts; a lump sum payment of $625,000 made contingent on financing 

and payment by June 1, 2008; and, in the event payment was not made by that 

date, the annual payment reverted to one-half of the increase in revenue from golf 

course fees as in the 2002 agreement. 

[¶11.] Although there are admittedly differences in the terms from the 

original agreement, as one would most likely expect in a settlement, the circuit 

court aptly described the situation: 

The 2002 decision contemplated a general plan to 

accomplish the goal via construction by private parties, 

land swap and purchase. The plan, though not specific in 

every detail, fairly describes a rather comprehensive and 

reasonably specific mechanism to acquire, develop, 

construct, acquire and pay for the golf course. 

 

The [t]erms of the Settlement Agreement (or as amended) 

when compared with the City’s 2002 decision to 

purchase/construct the golf course—as embodied in the 

July 2002 Amended Memorandum Agreement—are 

consistent in all material respects. 

 

For example, paragraph 1 of the 2002 Amended 

Memorandum provides: “Owners agree to develop an 

additional 9-holes for the golf course. . . . When the 

course is developed it will be deeded by the Owners to the 

City with the price to be set as the actual cost for the 

owners developing said golf course. Said cost is projected 

by the architect between One and One and One-half 

million dollars. 

The settlement price is $625,000.00. Significantly, the 

Okersons do not claim that the 2008 Settlement 
#24978 

-7- 

Agreement (as amended) violates or is otherwise 

inconsistent with the provisions of the 2002 Amended 

Agreement. 

* * * 

In this case, the 2002 Amended Memorandum does not 

provide a liquidated price for the golf course. However, a 

citizen on notice of the City’s 2002 decision would know 

the City intended to enter into an agreement for the 

construction of a golf course and pay up to 1 1⁄2 million 

dollars for the construction. 

 

The City agreed in 2002 to a sufficiently identifiable 

formula to determine a payment price—along with other 

terms of payment and obligations of performance. The 

golf course construction is substantially complete. The 

City has determined it has an obligation to perform under 

the 2002 Agreement, pending lawsuit notwithstanding. 

The decision to settle the lawsuit within the parameters 

of the 2002 agreement is simply an administrative 

decision. 

The dissent’s position was neither argued to nor considered by the trial court. Yet, 

even if we were to accept the dissent’s argument that the settlement agreement 

required payment from “a completely different revenue source,” there is a broader 

question presented by this appeal that has been lost between the procedural posture 

of this case and the lack of an adequate record for our review: Whether a decision 

to enter into a settlement to resolve pending litigation is referable as a legislative 

act. 

[¶12.] In analyzing the administrative versus legislative distinction, we have 

noted that the determination is informed by the statutes, case law, and also general 

principles of law. Wang v. Patterson, 469 NW2d 577, 579 (SD 1991). A review of 

those sources has led this Court to the general observation that: 

The [distinction] is rooted in realism. Clearly, all 

municipal action cannot be subject to local review by the 
#24978 

-8- 

electorate. If government is to function there must be 

some area in which representative action will be final. In 

many situations it is difficult to determine how far the 

limitations should go. The courts must draw the line in 

these situations and in so doing must balance two 

interests–the protection of city government from 

harassment as against the benefits of direct legislation by 

the people. 

Id. As a leading commentator has recognized, the settlement of claims in litigation 

has been determined not to be subject to the initiative and referendum process. 5 

McQuillin, Municipal Corporations, §16:56 (3rd ed 2004 & Supp 2008). 

[¶13.] We agree that classifying a decision to settle a pending lawsuit as an 

administrative act not subject to the initiative or referendum process is based on a 

“distinction rooted in realism.” Wang, 469 NW2d at 579. In rejecting an initiated 

measure aimed at requiring the settlement of certain claims of a city against former 

city officials, the Minnesota Supreme Court recognized: 

It is the exercising of an administrative function. We 

think the measure is one that calls for investigation and 

discretion, and, if such matters are not to be met and 

handled as a part of the daily routine of business of a 

municipality, but must be submitted to the people to 

make a law for each controversy that may arise, we are 

drifting from the ideals of representative government. 

* * * 

The matter involved in the proposed ordinance is one that 

calls for investigation and the exercise of discretion and 

business judgment. It is inherently of such character that 

the voters, no matter how intelligent, cannot be expected 

to investigate and have access to all the information 

which we may assume the city council, with the aid of 

their attorney, acquire. Full information should be 

obtained and carefully considered before a conclusion is 

reached. 

 
#24978 

-9- 

 

Oakman v. City of Eveleth, 203 NW 514, 517 (Minn 1925). 1 See also Hous. & 

Redevelopment Auth. of Minneapolis v. City of Minneapolis, 198 NW2d 531, 

536-37 (Minn 1972) (stating a proposed city charter amendment that would have 

allowed citizens to refer actions such as the settlement of lawsuits could create a 

“chaotic situation” in city government); Peterman v. Village of Pataskala, 702 NE2d 

965, 967 (OhioAppCt 1997) (recognizing a settlement prevented a municipal 

referendum as it was not a “legislative action”). The dissent’s self-generated 

contention to allow referral of litigation settlements could create “chaotic situations” 

extending far beyond the facts of this case. 

[¶14.] Consequently, we hold that the Council’s decision concerning the 2008 

stipulation for settlement was an “administrative” decision on the facts presented 

and therefore not subject to the referendum process. 

[¶15.] Affirmed. 

[¶16.] ZINTER, and MEIERHENRY, Justices, concur. 

[¶17.] GILBERTSON, Chief Justice, dissents. 

[¶18.] SABERS, Retired Justice, disqualified. 

GILBERTSON, Chief Justice (dissenting). 

[¶19.] I dissent. 

1. It would be an untenable position if a municipality, after having the 

opportunity to weigh the merits of a lawsuit and confer with counsel, decided 

to settle litigation and that decision was determined referable. However, if 

the City were to ignore the benefits of settlement and proceed to a final court 

disposition, that judgment could not be referred. See Green Oak Twp. v. 

MHC, 661 NW2d 243, 246 n5 (MichAppCt 2003) (recognizing a referendum 

on a court judgment would violate separation of powers).
#24978 

-10- 

 

[¶20.] The circuit court’s letter to the parties, dated July 11, 2008, states that 

“[t]he prime issue presented is: Whether the City’s February 19, 2008, decision to 

settle the golf course lawsuit is a legislative act or an administrative act?” 

(Emphasis added.) The circuit court concluded that the 2008 Settlement 

Agreement was an administrative act. As a consequence of this conclusion, the 

circuit court held that the 2008 Settlement Agreement was not subject to 

referendum, and refused to enter a writ of mandamus. As a part of their argument 

that a writ of mandamus should have been granted, the Okersons appeal the 

legislative/administrative conclusion that ultimately led to the circuit court’s 

denial.2

[¶21.] “The circuit court has discretion in granting or denying a writ of 

mandamus,” and “[c]onsequently, the standard of review on appeal is abuse of 

discretion.” Black Hills Cent. R. Co., 2003 SD 152, ¶9, 674 NW2d at 34. However, 

“[b]y definition, a decision based on an error of law is an abuse of discretion.” Credit 

Collection Servs., Inc. v. Pesicka, 2006 SD 81, ¶5, 721 NW2d 474, 476 (quoting State 

v. Vento, 1999 SD 158, ¶5, 604 NW2d 468, 469). In these cases, the predicate 

question of “whether the [ ] decision [ ] was legislative or administrative is a 

question of law which we review de novo.” Kirschenman v. Hutchinson County Bd. 

of Com’rs, 2003 SD 4, ¶2, 656 NW2d 330, 332 (citing Voeltz v. Morrell & Co., 1997 

2. I agree with the conference opinion that the Okersons did not raise the 

argument that the 2002 Agreement was void at the circuit court level, and 

that this argument should not be considered on appeal. However, the 

Okersons’ claim that the 2008 Settlement Agreement was a legislative rather 

than administrative act is presented more broadly than simply the invalidity 

of the 2002 Agreement. Therefore, the legislative/administrative 

determination is an issue properly before this Court. 
#24978 

-11- 

SD 69, ¶9, 564 NW2d 315, 316) (overruled on other grounds by Bechen v. Moody 

County Bd. of Com’rs, 2005 SD 93, 703 NW2d 662). 

[¶22.] The circuit court determined that the 2008 Settlement Agreement was 

an administrative act, because “[t]he Terms of the Settlement Agreement . . . when 

compared with the City’s 2002 decision to purchase/construct the golf course . . . are 

consistent in all material respects.” Applying Wang, 469 NW2d 577, the circuit 

court concluded that “the legislative line was drawn six years ago (2002) – not five 

months ago.” Therefore, the circuit court concluded that the 2008 Settlement 

Agreement, as an administrative act, was not subject to referendum. SDCL 9-20-

19. 

[¶23.] “The construction of a written contract is a question of law for the 

Court to consider.” Gul v. Ctr. for Family Med., 2009 SD 12, ¶8, 762 NW2d 629, 632 

(citing Dirks v. Sioux Valley Empire Elec. Ass’n, 450 NW2d 426, 427-28 (SD 1990)). 

Contrary to the circuit court’s conclusion, the two “contracts” made by the City of 

Hot Springs are materially different in how they pay for the golf course addition. 

[¶24.] The 2002 Agreement provides, in relevant part: 

I. . . . The purchase price will be paid by the City paying to the 

[Simuneks] 50% of the added gross income from golfing fees, 

membership fees and other miscellaneous fees over the 

existing income adjusted annually for inflation from those 

same items at the time the City takes over the golf course. 

The [Simuneks] will charge the City no interest. 

(Emphasis added.) 

[¶25.] The 2008 Stipulation Agreement provides, in relevant part: 

4. [The City of Hot Springs] agrees to make a lump sum 

settlement on [ ] Simuneks claim . . . by making a one-time 

payment of $625,000.00. . . . The parties further agree that 
#24978 

-12- 

 

the lump sum payment of $625,000.00 is contingent upon the 

[City] obtaining financing from a commercial, private or 

governmental lender. This Agreement is contingent upon 

payment on or before June 1, 2008, of the $625,000.00 by 

[City] to [Simuneks]. . . . In the event payment hereunder is 

made after June 1, 2008, [Simuneks] shall be entitled to 

receive the annual payment of one-half of the increase in the 

golf course fees over and above the 2004 revenue received 

 from golf course fees by the [City].3

(Emphasis added.) 

[¶26.] Whereas the 2002 Agreement provides for interest free payments made 

out of the added gross income of the golf course, the 2008 Settlement Agreement 

permits the City to obtain funding for the lump sum payment from another, 

undefined source. Potentially, this undefined source will charge interest and 

require a defined payment amount. Most importantly, payments made to the 

undetermined lender apparently come from the City’s general fund, rather than out 

of the added gross income of the golf course. This is a completely different revenue 

source. 

[¶27.] Under the 2002 Agreement, the users of the golf course paid for the 

addition through the fees they paid at the golf course. With a “no interest, no 

deadline” obligation to pay, the addition plan presented to the citizens in 2002, 

colloquially, “paid for itself.” Under the 2008 Settlement Agreement, every citizen 

of Hot Springs is required to pay for the addition through the City’s general taxes. 

3. While it is unclear from the record, if the lump sum payment was made after 

June 1, 2008, the 2008 Settlement Agreement requires annual payments 

from the increase in golf course fees similar to what was required under the 

2002 Agreement. If this occurred, the lump sum payment appears to be 

made in addition to what was already being paid under the 2002 Agreement. 

Furthermore, under the 2008 Settlement Agreement, these annual payments 

appear to be made in perpetuity and not limited by a “grand total” as under 

the 2002 Agreement. 
#24978 

-13- 

The 2008 Settlement Agreement effectively shifts the burden of paying for the golf 

course from those who benefit from its use to the general population. 

[¶28.] By authorizing the 2008 Settlement Agreement and the financing plan 

therein, the City has levied a tax upon its general population in order to pay for the 

golf course addition. The City, essentially, argues that this taxation evades the 

referendum process because the project itself had been approved in 2002 and this 

realignment of the revenue source is an administrative act necessary to carry out 

the 2002 Agreement. Through this method, the City appears to have found a 

loophole in funding major projects by getting initial public support through 

advertising the project as “no cost to non-users,” then later refinancing the project 

through a settlement agreement that places the cost of the project on all of its 

citizens. 

[¶29.] The 2008 Settlement Agreement appropriates funding for the golf 

course in a wholly different manner from what was presented to, or anticipated by, 

the public under the 2002 Agreement. “In applying the ‘legislative’ versus 

‘administrative’ distinction this Court will apply a liberal rule of construction 

permitting rather than preventing, citizens from exercising their powers of 

referendum.” Wang, 469 NW2d at 580 (citing 5 McQuillin, Municipal Corporations 

§1655 and cases cited therein). “The [distinction] is rooted in realism.” Id. at 579. 

The 2008 Settlement Agreement, because it appropriates money from the City’s 

general fund or otherwise shifts the revenue source for this project, is a legislative 

act. In the words of SDCL 9-20-19, the 2008 Settlement Agreement hardly “puts 
#24978 

-14- 

into execution a plan already adopted” by the City. Therefore, it is subject to 

referendum. SDCL 9-20-19. 

[¶30.] In construing SDCL 9-20-19, we so held in the factually similar case of 

Wang, supra. Therein the City adopted a master plan for an airport, which we held 

did not preclude the referral of the City’s subsequent decision to commence 

condemnation proceedings to build it. While condemnation was mentioned in the 

original master plan “if required,” the second decision to invoke it was determined 

by this Court to be a legislative, rather than an administrative, decision. 

[¶31.] Initiative and referendum “was to act as an ostensible safety valve and 

remedy for whatever ills might evolve in representative government.” Baker v. 

Jackson, 372 NW2d 142, 144 (SD 1985) (holding abrogated on other grounds by 

1986 S.L. Ch. 73, § 1, codified at SDCL 7-18A-15.1, 9-20-18, and 9-20-19.). Here, 

when the good citizens of Hot Springs read of the “pay as you go” plan adopted in 

2002 by their City Council little did they realize that was synonymous with a plan 

of digging into their pockets to the total of $625,000, be they taxpaying golfers, nongolfers or invalids. This dispute has festered in the City government and the courts 

since 2002. It is time to end this dispute by the safety valve of a public vote rather 

than let it continue to fester into the future. 

[¶32.] The circuit court erred in the legislative/administrative determination 

as a matter of law. Because the circuit court erred as a matter of law, it abused its 

discretion when it applied this error to deny the writ of mandamus. See supra ¶20. 

I would remand to the circuit court for findings consistent with this opinion.