Court Opinion

ID: 9568493
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:04:17.244879+00
Date Added: 2024-06-11T10:43:19.662184
License: Public Domain

HENDERSON, Justice
(concurring in part and dissenting in part). '
I concur on Issues I and II, but dissent as to Issue III.
On the punitive damage issue, the majority opinion vaults technicality (form) over substance. It is implicit, within the finding by this jury of undue influence, that fraud might well have been perpetrated upon the aggrieved. Further, the language contained in Hannahs v. Noah, 83 S.D. 296, 303, 158 N.W.2d 678, 682 (1968), provides precedent in this Court, for the submission of punitive damages to the jury. It states: “ ‘[Ejxemplary damages are recoverable in all actions for damages based upon tortious acts which involve circumstances or ingredients, of malice, fraud, or insult, or a wanton and reckless disregard of the rights of the plaintiff.’ ” Id. (quoting 22 Am. Jur.2d Damages § 243, at 334 (1965) (emphasis added)).1
Within the following holdings of this Court, plus one federal decision, I would take comfort that a jury question existed in this ease on exemplary damages. Smith v. Montana-Dakota Utils., 575 F.Supp. 265 (D.S.D.1983); Gross v. Kouf 349 N.W.2d 652 (S.D.1984); K & E Land & Cattle, Inc. v. Mayer, 330 N.W.2d 529 (S.D.1983); Black v. Gardner, 320 N.W.2d 153 (S.D.1982); Hulstein v. Meilman Food Indus., 293 N.W.2d 889 (S.D.1980); Till v. Bennett, 281 N.W.2d 276 (S.D.1979).
Chief Judge Bogue, in Smith, 575 F.Supp. at 266-67, wrote:
In Hannahs v. Noah, the South Dakota Supreme Court held that the evidence was sufficient for the jury to find malice and that the trial court did not err in submitting the punitive damage question to the jury. 83 S.D. 296, 158 N.W.2d 678, 682 (1968). In that case, the defendant unjustifiedly filed and served notice of an agister’s lien on the plaintiff on the morning of plaintiff’s farm auction sale. Because of this notice, the auction sale was delayed. Plaintiff successfully brought suit for wrongful interference with his farm auction sale.
The supreme court in Hannahs had occasion to examine the exact language found in SDCL 21-3-2. Significantly, the court analyzed this language in the context of defining malice. The court observed:
The rule supported by statute in this state is stated in 22 Am.Jur. 22, Damages, § 243, p. 334:
“As a general rule, exemplary damages are recoverable in all actions for damages based upon tortious acts which involve circumstances or ingredients, of malice, fraud, or insult, or a wanton and reckless disregard of the rights of the plaintiff.” And in the same text, § 250, p. 341:
“Malice as used in reference to exemplary damages is not simply the doing of an unlawful or injurious act, it implies that the act complained of was conceived in the spirit of mischief or of *891criminal indifference to civil obligations. While it has been said that the term imports a wish to vex, annoy, or injure another (Bogue v. Gunderson, [30 S.D. 1, 137 N.W. 595 (1912)]) it does not necessarily mean mere spite, ill will, or hatred.”
As recently as 1979, the South Dakota Supreme Court in Till v. Bennett, 281 N.W.2d 276 (S.D.1979), approved an award of punitive damages in an action for injury to cropland as a result of a trespass by the defendants’ cattle. Construing SDCL 21-3-2, the court cited Hannahs and quoted the above-language in defining the legal standard for an award of punitive damages in South Dakota. The court specifically held that “evidence indicating a ‘wanton and reckless disregard’ of plaintiff’s rights is sufficient to warrant the jury instruction for exemplary damages and to support the verdict.” Till, 281 N.W.2d at 279. (Footnotes omitted.)
SDCL 53-4-7 deals specifically with “undue influence.” It provides:
Undue influence consists:
(1) In the use, by one in whom a confidence is reposed by another, or who holds a real or apparent authority over him, of such confidence or authority for the purpose of obtaining an unfair advantage over him; or
(2) In taking an unfair advantage of another’s weakness of mind; or
(3) In taking a grossly oppressive and unfair advantage of another’s necessities or distress.
This statute was quoted in Black v. Gardner, 320 N.W.2d 153, 156 n. 1 (S.D.1982).
According to D. Dobbs, Handbook on the Law of Remedies § 3.9, at 204-05, 208 (1973), punitive damages may be awarded if the plaintiff has established, on the part of the defendant “a sufficiently aggravated piece of misconduct ... plus a culpable state of mind_” Id. at 208. Dobbs notes that
courts have developed a large vocabulary to describe the kind of mental state required — the defendant must be “malicious”, “reckless”, “oppressive”, “evil”, “wicked”, or guilty of “wanton misconduct,” or “morally culpable” conduct_ [Ajlmost any term that describes misconduct coupled with a bad state of mind will describe the case for a punitive award.
Id. at 205.
Can “undue influence” involve, be, coexist with, touch upon, or partake of “fraud”?
“Undue influence” is a species of “fraud.” In re Chinsky’s Will, 150 Misc. 274, 268 N.Y.S. 719 (1934); Taylor v. Klahm, 8 Mich.App. 516, 517-18, 154 N.W.2d 529, 530 (1967).
“Undue influence” is a species of constructive fraud. Eldridge v. May, 129 Me. 112, 114-16, 150 A. 378, 379 (1930).
“Undue influence” is commonly “fraud” in the larger sense, and also partakes of the nature of “duress.” McDonald v. MacNeil, 300 Mass. 350, 352-53, 15 N.E.2d 460, 461 (1938).
“Undue influence” is a species of constructive fraud which the courts will not undertake to define by any fixed principles, lest the very definition itself furnish a finger-board pointing out the path by which it may be evaded. Stewart v. Marvin, 139 Cal.App.2d 769, 774-75, 294 P.2d 114, 118 (1956).
“Undue influence” in determining fraud is a fraudulent influence over the mind and will of another to the extent that the professed action is not freely done but is in truth that act of one who procures the result. In re Estate of Loftin, 285 N.C. 717, 721-22, 208 S.E.2d 670, 674 (1974).
Defendant, while acting in a confidential relationship, took from the safety deposit box of the elderly plaintiff, $10,000 in City of Watertown Industrial Development Revenue Bonds. She then put them in her own safety deposit box. Later, she said they were “gifts”; the jury said otherwise.2 *892“Circumstances of fraud”? Yes. “Ingredients of fraud”? Yes. “Wanton or reckless disregard of the rights of plaintiff”? Yes. “The purpose of awarding punitive damages is to punish the wrongdoer.” Hulstein, 293 N.W.2d at 892. This jury found the defendant to be a wrongdoer. A reading of SDCL 21-3-2, set forth, in ex-tenso, in the majority opinion, reflects, inter alia, “oppression, fraud, or malice, actual or presumed_” (Emphasis added.) Said statute further provides for giving additional damages “for the sake of example, and by way of punishing the defendant.” Under these circumstances, the trial court should have submitted the issue of punitive damages to the jury.

. A pleader is required, under SDCL 15 — 6—9(b) to plead the "circumstances constituting fraud or mistake ... with particularity.” (Emphasis added.)

. Attorney John DeVany represented the elderly plaintiff. Defendant’s testimony at trial claimed that the attorney had knowledge of his client giving permission to remove the bonds *892from the safety deposit box and having them transferred unto defendant. Attorney DeVany vehemently contradicted this testimony.