Opinion ID: 2137263
Heading Depth: 2
Heading Rank: 2

Heading: SDCL 21-1-4.1 is applicable to claims for punitive damages brought prior to July 1, 1986.

Text: Dahls next issue questions the retroactive application of the statute. They argue that SDCL 21-1-4.1 does not apply here because their claim arose, and this action was commenced, prior to the enactment of the statute. The first question, however, is whether this issue is properly before the court on appeal, since issues will not be reviewed on appeal unless properly preserved before the trial court. Till, 281 N.W.2d at 278. Sittner contends that the question of the statute being retroactively applied was not raised on remand, and that the trial court was never afforded an opportunity to consider the issue. The issue was raised in the trial court in 1987 in Dahls' motion to allow evidence concerning defendants' net worth and Dahls' accompanying brief. Sittner responded to Dahls' contention that SDCL 21-1-4.1 should not apply because it was enacted after commencement of this action by submitting a pretrial brief on legal questions. The trial court did not rule on this motion prior to Dahls' first appeal. On remand, Dahls' motion was listed as pending in Sittner's pretrial conference checklist filed on October 17, 1989. Although the trial court did not expressly deny this motion, it is clear that the issue was raised below, and that by implication the motion was denied. In this case, where Dahls appeal the order entered on the hearing pursuant to SDCL 21-1-4.1, they have properly preserved this issue for appeal. Turning to the merits of the applicability of SDCL 21-1-4.1 to an action commenced prior to the enactment of the statute, Dahls argue that the statute cannot be applied retroactively. The general rule is that newly enacted statutes will not be given a retroactive effect unless such an intention is plainly expressed by the legislature. SDCL 2-14-21; Schmaltz v. Nissen, 431 N.W.2d 657 (S.D.1988); Sheehan v. United Pacific Ins. Co., 439 N.W.2d 117 (S.D.1989). However, statutes which affect only procedural matters, as opposed to substantive rights, are given retroactive effect. Lyons v. Lederle Laboratories, 440 N.W.2d 769, 770 (S.D.1989) (citing Brookings County v. Sayre, 53 S.D. 350, 220 N.W. 918 (1928) and Simpson v. Tobin, 367 N.W.2d 757 (S.D.1985)). Where a new statute deals only with procedure, it applies to all actions, including those which have already accrued or are pending, as well as those which arise after enactment of the statute. 2 N. Singer, Sutherland Statutes and Statutory Construction §§ 41.04, 41.09 (Sands 4th ed.1986). Whether SDCL 21-1-4.1 may be applied retrospectively depends upon the statute being procedural or substantive in nature. First, the statute regulates discovery relating to claims for punitive or exemplary damages by requiring that the claimant first establish a reasonable basis to believe that the party claimed against committed acts which would give rise to punitive damages. This statute also requires that the claimant establish a reasonable basis for the claim before the issue of punitive damages may be submitted to the finder of fact. The purpose of the statute is to prevent the use of claims for punitive damages as a means of harassment, by establishing a threshold to insure that there is a reasonable basis for such claims. Driscoll, Statutory Restrictions on the Discovery and Trial of Punitive and Exemplary Damage Claims in South Dakota, 33 S.D.L.Rev. at 251. The statute does not alter the standard of proof required to recover on a punitive damages claim. Flockhart v. Wyant, 467 N.W.2d 473 (S.D.1991). At trial, a plaintiff must still demonstrate by a preponderance of the evidence that he or she is entitled to punitive damages. Aschoff v. Mobil Oil Corp., 261 N.W.2d 120, 125 (S.D.1977). A clear and convincing standard applies only to determine if there is a reasonable basis to believe that the conduct of the party claimed against was willful, wanton or malicious. Flockhart, supra . Thus, the statute leaves unchanged the substantive nature of the availability of punitive damages. SDCL 21-1-4.1 only affects the procedures involved in obtaining discovery regarding punitive damages and submitting the claim to the finder of fact. It is a procedural statute. Accordingly, it is to be enforced in all cases existing prior to, as well as subsequent to, its enactment. Lyons, 440 N.W.2d at 770; 2 N. Singer, Sutherland Statutes and Statutory Construction § 41.04 (Sands 4th ed.1986). Cases pending at the time SDCL 21-1-4.1 went into effect are affected in relation to future proceedings from the time when the new statute went into effect. Thus, it was proper for the trial court to apply the statute retroactively. Dahls contend that even if the court rejects their retroactivity argument, the statute should not apply because it is unconstitutional. Dahls argue that the statute violates the equal protection guarantees of the federal and state constitutions. They contend the statute arbitrarily classifies parties raising punitive damages claims by dividing them into classes, i.e., those basing their claims on oppression, fraud and intentionally committed acts, as contrasted to those basing their claims on malice, or willful and wanton misconduct in disregard of humanity. See, SDCL 21-3-2. As noted above, the statute applies to all punitive damages claims. The applicability of SDCL 21-1-4.1 does not vary according to the basis for the claim; it applies to any claim whether based on actual or implied malice. Because the statute does not create a classification, there can be no equal protection violation.