Court Opinion

ID: 9659183
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:34:31.903584+00
Date Added: 2024-06-11T18:12:53.063665
License: Public Domain

HENDERSON, Justice
(specially concurring in part, dissenting in part).
Under the trial court’s judgment, plaintiffs recover no damages either in contract or in tort.
It is rather basic that to recover under either a contract or tort theory, it is vital to establish that damages have been sustained. Under SDCL 21-2-1, General measure of damages for breach of contract — Uncertain damages not recovered, it is provided:
For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom. No damages can be recovered for a breach of contract which are not clearly ascertainable in both their nature and their origin.
Inasmuch as plaintiffs obtained the payments under the installment sale contract with Howard Franz and his subsequent as-signee, albeit late, plaintiffs received the benefit of their bargain. Thus, they have sustained no ascertainable damage.
Under SDCL 21-3-1, General measure of damages for breach of noncontractual obligation — Foreseeability not required, it is further provided:
For the breach of an obligation not arising from contract, the measure of damages, except where otherwise ex-' pressly provided by this code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.
Again, the damage to compensate for the alleged tort of fraud was not proven by plaintiffs as the plaintiffs received the payments due under the contractual instruments. Plaintiffs sued in deceit and fraudulent inducement of the contract. Proposed findings of fact and conclusions of law were submitted to the trial court but rejected. Remembering that the relationship between the broker and his client began in contract, client’s counsel had pleadings also sounding in tort. This is not as unique or unrecognized as a reader might inceptionally believe. See Mid-America Marketing v. Dakota Indus., 281 N.W.2d 419 (S.D.1979) (Dunn and Henderson, Justices, dissenting), rev’d on rehearing, 289 N.W.2d 797 (S.D.1980). See also, Prosser, Law of Torts § 92 (Tort and Contract, Relation Between the Actions) at 613-22 (4th ed. 1971).
I would found an affirmance of the trial court on the lack of damages proven. Plaintiffs must affirmatively show that they are aggrieved in that they have suffered a denial of some claim of right of either their persons or property. Application of Northern States Power Co., 328 N.W.2d 852 (S.D.1983).
I specially concur to further express my view on a substantial question of law that exists in this case. When considering whether a brokerage commission paid to a person, corporation, or association lacking a required license may be recovered by the *836seller due to the nonlicensure of the person, corporation, or association, legislative intent is the touchstone for determining the effect of the violation of the licensing statute. Each case turns upon the meaning of the words in each state’s statute. Obviously, the entire purpose of the licensing statute should be considered. The holdings of the courts rest on varied grounds and take into consideration such factors as mistake of law, payment was voluntary and may not be recovered back, statute does not expressly permit recovery, statute is penal in nature, and equity does not require that the money be justly repaid. With no damages, and counsel for appellant in oral argument expressing that his clients had received full payment under the sale to date, plus the failure of this state’s statute to provide for a recovery of a brokerage commission paid for nonlicensure, it strikes me that recovery for the commission paid is inapplicable to the facts at hand.
I dissent on the affirmance of the assessment of terms in the amount of $287.74 against plaintiffs. The trial court based this award upon “unreasonable acts.” These “unreasonable acts” stem from the refusal of Attorney John H. Shepard of Sturgis, South Dakota, refusing to answer questions posed to him in a deposition on November 18, 1981. Attorney Shepard stated under oath that his clients had not entered a waiver of the attorney-client privilege. Hence, he could not testify to privileged matters. Attorney Shepard had the right to assert this privilege as protected under the provisions of SDCL 19-13-1, SDCL 19-13-2, and SDCL 19-13-3. Our statutory scheme in this state takes precedence over Wright and Miller, Federal Practice and Procedure.
As I understand the record, defendants scheduled the deposition with knowledge that the attorney-client privilege had not been waived. Thus, defendants either knew or should have known that Attorney Shepard was not in a position to testify to privileged matters between him and his clients. Later, another deposition was scheduled of Attorney Shepard and by this time the attorney-client privilege had been waived. Asserting the attorney-client privilege under the law can hardly be described as an unreasonable act.
I note that the trial court leaned on counsel in a motion hearing on or about December 9, 1981, to reassess counsel’s position on the assertion of the attorney-client privilege. The trial court indicated that Attorney Shepard’s testimony played a key role in the case and that extensive damages were being sought by plaintiffs. The trial court expressed the view that asserting this privilege was inappropriate. Thereafter, obviously fearful of the power of the trial court, the plaintiffs waived the attorney-client privilege with Attorney Shepard. This triggered a second deposition of Attorney Shepard on January 11, 1982. I fully appreciate that the trial court has broad discretion in assessing terms. But I deplore that a trial court can heavily lean on an attorney to such extent that he and his clients relent and waive the privilege, then to be further levied terms for exercising a sacred right and relationship in the law. One portion of the oath, SDCL 16-16-18, taken by all attorneys as they are sworn in to become a licensed practicing attorney in the State of South Dakota reads: “I will maintain the confidence and preserve inviolate the secrets of my client . .. . ” SDCL 16-18-18 provides: “It is the duty of an attorney and counselor at law to maintain inviolate the confidence, and at any peril to himself to preserve the secret of his client.” Therefore, I believe that the trial court abused its discretion by ordering terms to cover the costs of taking the second deposition of Attorney John Shepard. Obviously, Attorney Shepard had an intimate knowledge of his clients’ affairs but that does not give the right to an aggressive trial court to insist that such attorney become a witness in the trial procedure, for if this type of rationale makes a waiver justifiable, indeed we shall find attorneys testifying in many cases about their clients’ business which surely shall remove a cornerstone in the foundation of the American legal system.