Court Opinion

ID: 9514281
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:48:26.541023+00
Date Added: 2024-06-11T09:06:15.810542
License: Public Domain

SABERS, Justice
(concurring in part and dissenting in part).
[¶ 27] The trial court erred in granting a directed verdict to Brick’s TY.
[¶ 28] Haberer claims Schaunaman was an ostensible agent of Brick’s TV and that the trial court erred in granting a directed verdict to Brick’s TV.
Upon [a motion for a directed verdict], the trial court must determine whether there is any substantial evidence to sustain the action. The evidence must be accepted which is most favorable to the nonmoving party and the trial court must indulge all legitimate inferences therefrom in his favor. If sufficient evidence exists so that reasonable minds could differ,- a directed verdict is not appropriate. The trial court’s decisions and rulings on such motions are presumed correct and this Court will not seek reasons to reverse.
Bauman v. Auch, 539 N.W.2d 320, 325 (S.D. 1995) (citing Sabag v. Continental South Dakota, 374 N.W.2d 349 (S.D.1985)).
[¶ 29] The trial court stated there was no ostensible agency because Merle did not rely on Brick’s representations. There are really two questions involved. First, whether Schaunaman was an ostensible agent of Brick’s TV and second, whether Merle relied on the relationship to his detriment.3 Since the majority opinion concedes the first, we consider the second question.
[¶ 30] Schaunaman’s business, called Brick’s Video, shared the same office and telephone number as Brick’s TV. Merle was previously billed'for smoke detectors and a television with statements from Brick’s Video, with the same address and telephone number. Merle testified when he wanted to reach Schaunaman, he called Brick’s. Schau-naman testified the telephone was answered “Brick’s TV,” whether Schaunaman or Brick answered. Further, Merle testified Schauna-*612man told Merle' he “was connected with” Brick’s Video.
[¶ 31] Once an ostensible agency is determined, as here, the principal is liable for the acts of his agents only to those who have “in good faith, and without negligence, incurred a liability or parted with value upon the faith thereof.”4 SDCL 59-6-3.
[¶ 32] The trial court stated that Merle presented only limited evidence before the jury and that the only “thing[s] that bothered the court” were two prior statements from Brick’s Video, and that Merle had not even stated he looked at the statements. However, Merle testified more fully that he owned stereo equipment and did not want to pay for a new sound system:
A: So then I thought of Mr. Schaunaman and Schaunaman and I are real good friends. I hope we still are, but we were real good friends. And he came down and I asked him, could you make ... a music system out of this?
Q: Now Mr. Schaunaman, he’d done work for you before?
A: Yes.
Q: And let’s see ... he’s done good work for you in the six months prior to that?
A: Yes.

Q: And did you know where he was operating out of?

A: At the time — at this time?
Q: Yes.

A: Yeah. At this time I did, yes.

Q: All right. And where — and when he would bill you for his work, where— under what name did he bill you? ...
A: Brick’s Video....
Q: ... And when you wanted to call Mr. Schaunaman while you were working on this stereo system, where would you call him? ...
A: At Brick’s Video.
Q: And he would answer the phone?
A: Once he would answer it and the other time I think Mr. Brick would answer. ...
Q: ... But did you call out there at that number?
A: Yes.
Q: And did you think he was connected with Brick’s Video? ...
A: Yes, he told me he was.
(Emphasis added.)
[¶ 33] After the system broke down, Merle “ ... called Jim or I called out to Brick’s. I can’t remember if I talked to Jim or who I talked to and I said it quit.”
[¶34] As indicated, Merle was previously billed with statements from Brick’s Video, with the same address and telephone number as Brick’s TV.5 Merle testified:
Q: [Y|ou were making a point of it, were you, that the address of Brick’s Video on here was something that you were looking at? ...
A: Well, if I did, I did. I don’t know.
Q: But you testified at your deposition, did you not, that you never saw those bills? ...
A: If I did, I was probably confused. I don’t know.
*613Q: So you think that you did see those Mis?
A: I don’t know.
This testimony does not eliminate questions whether Merle relied upon his knowledge that Schaunaman worked at Brick’s. Merle had already testified he knew Schaunaman worked at Brick’s. Although he did not complain to Brick’s when the building burned, he and Schaunaman went to Brick’s 'to disassemble a mixer like the one Merle thought might have caused the fire.6
[¶ 35] Merle testified regarding his reasons for hiring Schaunaman:
Q: [Y]ou hired Jim Schaunaman because you knew him and you like him, isn’t that correct?
A: Jim’s a fine man.
Q: And the work that he had done earlier for you was entirely satisfactory, wasn’t it?
A: Very much so.
[¶ 36] Merle did not indicate he hired Schaunaman only because they were friends. In fact, Merle testified he knew Schaunaman worked at Brick’s Video when he asked him to assemble the stereo at the Showcase. The satisfactory work Schaunaman did earlier was billed on statements from Brick’s Video. While Merle did not make it clear that he hired Schaunaman because Schaunaman worked for Brick’s, a jury question is created if all legitimate inferences are drawn in Ha-berer’s favor as required. Bauman, 539 N.W.2d at 325.
[¶ 37] The question is whether there was sufficient evidence so that reasonable minds could differ. Reasonable minds can differ as to whether Schaunaman was an ostensible agent of Brick’s and whether Haberer reasonably relied on this agency to their detriment under these circumstances. The trial court erred in directing a verdict for Brick’s TV. Therefore, we should reverse and remand for trial on this issue.
[¶ 38] MILLER, C.J., joins this concurrence in part and dissent in part.

. See Restatement (Second) Agency § 265 (1957), which provides:
(1) A master or other principal is subject to liability for torts which result from reliance upon, or belief in, statements or other conduct within an agent's apparent authority.
(2) Unless there has been reliance, the principal is not liable in tort for conduct of a servant or other agent merely because it is within his apparent authority or apparent scope of employment.

. Restatement (Second) Agency § 267 (1957) provides:
One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such.
The comments accompanying § 267 provide, in relevant part: "The mere fact that acts are done by one whom the injured party believes to be the defendant's servant is not sufficient to cause the apparent master to be liable. There must be such reliance upon the manifestation as exposes the plaintiff to the negligent conduct." Id. § 267, cmt a (emphasis added). However, this latter question should not be reached where, as here, a genuine issue of material fact exists as to reliance and reasonable minds can differ.

. On March 28, 1994, 24 days after this lawsuit was filed, Schaunaman filed a "fictitious name” certificate claiming to be the sole owner of Brick's Video. The trial court did not allow this evidence before the jury because Merle did not rely on it prior to the fire. However, it supports, rather than detracts, from the argument that there is a genuine issue of material fact and reasonable minds can differ.

. The majority opinion claims there is “no evi-dentiary dispute.” However, Merle’s testimony raises a question of fact, answerable only by the jury, as to his reliance. Although Merle did not use the words, "I relied on Brick's TV,” he gave the jury evidence on reliance when he indicated he hired Schaunaman knowing Schaunaman worked at Brick's and after Schaunaman indicated he was connected with Brick’s Video.
The majority opinion correctly identifies part of the standard of review: "Upon [a motion for directed verdict], the trial court must determine whether there is substantial evidence to continue the action.” Haberer v. Rice, 511 N.W.2d 279, 284 (S.D.1994).
At this point in the trial, the court, in making this determination, is not free to weigh the evidence or gauge the credibility of the witnesses. Denke v. Mamola, 437 N.W.2d 205, 207 (S.D.1989); Baldwin v. First Nat. Bank of Black Hills, 362 N.W.2d 85 (S.D.1985). The trial court, as well as this court on appeal, must view the evidence in a light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences that can be drawn from the evidence. Denke, 437 N.W.2d at 207; Carlson v. First Nat. Bank, 429 N.W.2d 463, 466 (S.D.1988); Kreagerv. Blomstrom Oil Co., 379 N.W.2d 307 (S.D.1985). If, when so viewed, there is any substantial evidence to sustain the cause of action or defense, it must be submitted to the jury. Denke, supra; Baldwin, supra.
Id. (emphasis added).