Opinion ID: 2124129
Heading Depth: 1
Heading Rank: 3

Heading: did the circuit court err in granting summary judgment for the district?

Text: In reviewing a grant or a denial of summary judgment under SDCL 15-6-56(c), we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper. Pickering v. Pickering, 434 N.W.2d 758, 760 (S.D.1989) (citations omitted). There is generally no dispute between the parties over the pertinent facts. The issue in this case focuses solely on the legality of the execution, levy and sale of Aunes' judgment against the District in order to satisfy Tabor's judgment against Aunes. In that regard, Aunes again contend that the District's filing of the supersedeas bond in connection with its appeal of Aunes' judgment should have stayed the execution sale of that judgment. We disagree. At the outset, it is clear that South Dakota law does permit the execution, levy and sale of a judgment as an asset in order to satisfy an earlier judgment. SDCL 15-18-17 in the chapter on execution of judgments describes the property subject to levy on execution: All property and interests therein and rights appurtenant thereto, tangible or intangible, including shares or interests in any corporations, credits, choses in action, and whether capable of manual delivery or not, belonging to the party against whom the execution was issued, and not exempt by law may be taken on execution and sold or otherwise applied to the satisfaction of the judgment as provided by law. Moreover, SDCL 15-18-21 specifically outlines the procedure for levying on a judgment: A levy under a writ, warrant, or execution upon a judgment, must be made by serving a notice of levy upon the clerk of the court in which it is docketed, describing the judgment by the title of its action, date, amount, book, and page of docketing, and by mailing copies of such notice of attachment by registered or certified mail to the judgment debtor, and the present owner of the judgment as shown by the docket, and to their attorneys of record, if any, at their last known post-office addresses. Based upon the above provisions, it is clear that Tabor was acting within its rights in levying on Aunes' judgment against the District as a means of satisfying its own judgment against Aunes. Insofar as whether the District's filing of the supersedeas bond in connection with its appeal of Aunes' judgment stayed Tabor's ability to levy on that judgment, SDCL 15-26A-32 defines the matters stayed with the filing of such a bond: When an approved supersedeas bond is filed it shall stay all further proceedings in circuit court upon the judgment or order accordingly, except that the circuit court may proceed upon any other matter included in the action, not affected by the judgment or order appealed from. (emphasis added). This court further defined the scope of application of a supersedeas bond in Wentzel v. Huebner, 78 S.D. 471, 473-74, 104 N.W.2d 476, 477 (1960): The effect of such undertaking is to suspend further proceedings pending determination of the appeal. Janssen v. Tusha, 67 S.D. 597, 297 N.W. 119 [(1941)]. By this means the status quo of the matter is preserved. It is the intent of our statute that the privilege of suspending the execution of such judgment is that of the party entitled to appeal. State ex rel. Sholseth v. Knight, 52 S.D. 572, 219 N.W. 258 [(1928)]. The liability with which it is concerned is that of the appellant. (emphasis added). The above provisions make clear that the only execution of judgment stayed by the filing of a supersedeas bond is the execution of the judgment under appeal. It is the liability of the judgment debtor on that judgment with which the supersedeas bond is concerned because it is that judgment debtor who holds the privilege of suspending the execution of the judgment appealed. Applying these principles in the instant case means that Aunes were clearly precluded from executing on their judgment against the District because the District, the judgment debtor on that judgment, appealed the judgment and filed a supersedeas bond in connection with the appeal. This is of no assistance to Aunes, however, because it was not the execution of Aunes' judgment against the District that led to the sale of that judgment. The judgment was sold because Tabor executed on its earlier judgment against Aunes. There is no indication in the record that Aunes, the judgment debtors on that judgment, appealed the judgment or obtained a supersedeas bond in connection with any such appeal. Thus, there was nothing to stay Tabor's ability to execute on its own judgment against Aunes by levying on Aunes' judgment against the District. Aunes' judgment was merely an asset held by Aunes that was used to satisfy Tabor's judgment, an action clearly countenanced by the previously referenced statutes on executions. Aunes do cite various authorities for the proposition that a judgment debtor is precluded from purchasing a judgment against itself while the matter is on appeal. However, none of the authorities cited by Aunes support that proposition. Aune v. Breneman, 74 S.D. 324, 52 N.W.2d 483 (1952) was an appeal in a foreclosure action. The issue was whether the appeal and undertaking for a stay of execution extended the redemption period allowed by the judgment of foreclosure. There is nothing in the decision concerning the ability of a judgment debtor to purchase a judgment against itself during the pendency of an appeal of the judgment. The same is true with regard to Edge v. Harsha, 334 N.W.2d 741 (Iowa 1983). The issue in Edge was whether a judgment lien against real property could be discharged where the judgment debtor furnished a supersedeas bond pending an appeal of the judgment. In Rhoades v. State Real Estate Commission, 153 Neb. 625, 45 N.W.2d 628 (1951), the issue was whether the time of commencement of a period of suspension of a real estate broker's license was postponed by the filing of an appeal bond in connection with an appeal of the order of suspension. Finally, in State By Johnson v. Sports & Health Club, 368 N.W.2d 747 (Minn.Ct.App. 1985), the issue was whether the state Supreme Court's denial of a motion for a stay of an administrative law judge's order was equivalent to an order directing compliance with the administrative order. We can construe none of the above authorities as foreclosing a judgment debtor's ability to purchase a judgment against itself while the judgment is on appeal. In fact, South Dakota law on the execution of judgments places no limitation on who may purchase a judgment at an execution sale. SDCL 15-19-7 merely provides in pertinent part that, [p]ersonal property must be sold on execution at public auction to the highest bidder.  (emphasis added). In this instance, it is undisputed that the District was the highest bidder at the public auction of Aunes' judgment against the District. Thus, South Dakota law not only allowed but compelled the sale of the judgment to the District. The dissent submits that, in order to execute on a judgment, it must be a final and unreversed judgment after an appeal or after the time for an appeal has expired. In Pendergast v. Muns, 59 S.D. 135, 238 N.W. 344 (1931), this Court held that the appeal by a judgment debtor from a judgment for the payment of money did not stay the execution of the judgment where no supersedeas bond was filed. Even more significantly, this Court also held that, [i]t is also clear that, upon the reversal of a judgment, the law raises an obligation on the part of the party who received benefits from its enforcement to restore those benefits to the adverse party. Pendergast, 59 S.D. at 142, 238 N.W. at 347 [1] . This authority makes clear that one who executes on a judgment during the pendency of an appeal of the judgment does so at his own risk. If he obtains benefits from the execution and the judgment is subsequently reversed, those benefits must then be restored to the adverse party. It follows that the purchaser of a judgment during the pendency of the appeal of the judgment purchases at his own risk. If the judgment is affirmed, the purchaser is entitled to the value of the judgment. However, if the judgment is reversed, the purchaser obtains nothing. Whatever the result of the appeal, Pendergast makes clear that the pendency of an appeal of a judgment, in and of itself, is no bar to an execution on the judgment. The dissent also questions our reliance on Wentzel, supra . In Wentzel, supra, the plaintiff sued the defendant for personal injuries suffered in a car accident. The judgment was for the plaintiff and the defendant appealed. In connection with the appeal, the defendant executed a supersedeas bond. During the pendency of the appeal, the plaintiff proceeded by garnishment against the defendant's liability insurer. The trial court dismissed the garnishment proceedings as premature and the plaintiff appealed. This Court initially held that the supersedeas bond executed by the defendant did not satisfy statutory requirements and, therefore, the bond did not prevent the plaintiff from attempting to enforce his judgment. Thus, Wentzel's discussion of supersedeas bonds is instructive in this case. As to the issue of the finality of the judgment in Wentzel and whether the garnishment proceedings against the insurer were premature because of the pendency of the appeal of the judgment, this Court held that the liability of the insurer was dependent on the language of the policy. The language of the policy provided that no action would lie against the insurer until the amount of the insured's obligation to pay was finally determined by a judgment. Referencing the language of SDC 1960 Supp. 33.0104 (now SDCL 15-1-3) that an action is deemed pending from its commencement until a final determination on appeal [2] , this Court held that the insured's obligation to pay was not finally determined by the plaintiff's tort judgment and affirmed the dismissal of the garnishment proceedings. Here, this Court is not being asked to construe the language of an insurance policy. SDCL 15-18-21 clearly and unambiguously discusses the procedure for execution upon a judgment. To hold that Aune's judgment against the District was not really a judgment because of the pendency of the appeal would raise an anomalous result. It is Aunes' judgment against the district that was appealed. If there was no judgment, there was no right of appeal and the purported appeal should have been dismissed instead of having been affirmed in Aune's favor. See, Griffin v. Dwyer, 88 S.D. 357, 220 N.W.2d 1 (1974). Thus, the only conclusion that can be drawn is that there was a judgment as required for an appeal by SDCL 15-26A-3(1), as defined by SDCL 15-6-54(a) and as contemplated by SDCL ch. 15-18 on executions. Perhaps sound policy should require that a judgment be final and unreversed to be subject to execution. That, however, is a matter for rule or statute, not a matter for this Court's determination in this appeal. Based upon the above analysis, there was no unlawful act committed by the District in purchasing Aunes' judgment. Thus, Aunes' causes of action for unjust enrichment and intentional infliction of emotional distress, premised on that asserted unlawful act, were untenable. The trial court appropriately granted summary judgment for the District. Affirmed. HENDERSON and SABERS, JJ., concur. MILLER, C.J., and AMUNDSON, J., dissent.