Court Opinion

ID: 9514973
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:52:53.508118+00
Date Added: 2024-06-11T09:06:23.401325
License: Public Domain

GILBERTSON, Chief Justice
(concurring in the result).
[¶ 39.] While Olson-Roti mounts an impressive argument based on equitable public policy, this is not an equitable issue. Rather, the statutory interpretation of our punitive damage statute alone controls the resolution of this issue. In this jurisdiction, punitive damages have not been recoverable at common law, but rather, only where specifically authorized by statute. Vilhauer v. Horsemen’s Sports, Inc., 1999 SD 93, ¶¶ 19-20, 598 N.W.2d 525, 529-30; Thu v. American Family Ins. Co., 292 N.W.2d 109, 110-11 (S.D.1980). SDCL 21-3-2 states:
In any action for the breach of an obligation not arising from contract, where the defendant has been guilty of oppression, fraud, or malice, actual or presumed, or in any case of wrongful injury to animals, being subjects of property, committed intentionally or by willful and wanton misconduct, in disregard of humanity, the jury, in addition to the actual damage, may give damages for the sake of example, and by way of punishing the defendant, (emphasis added).
The content of this statute has remained virtually unchanged since its enactment by the Dakota Territorial Legislature in 1877.3 Schaffer v. Edward D. Jones & Co., 1996 SD 94, ¶ 22, 552 N.W.2d 801, 809, n. 6.
[¶ 40.] At virtually the same time, the Supreme Court of Iowa was asked to decide the very question that is now before us. In Sheik v. Hobson, 64 Iowa 146, 19 N.W. 875 (Iowa 1884), the court held that a claim of slander against a decedent defendant survived his demise and compensatory damages could be awarded against his estate. However, the court noted that claims for punitive damages uniformly died with the decedent.
But [plaintiff] had no personal interest in the question of [defendant’s] punishment. So far as [defendant] was concerned, the punitory powers of the law ceased when he died. To allow exemplary damages now, would be to punish his legal and personal representatives for his wrongful act; but the civil law never inflicts vicarious punishment.
19 N.W. at 875-76. See also Rowen v. Le Mars Mut. Ins. Co. of Iowa, 282 N.W.2d 639, 661 (Iowa 1979); Wolder v. Rahm, 249 N.W.2d 630, 632 (Iowa 1977).
[¶41.] The pertinent language of SDCL 21-3-2 appears to be the same as California in that it is allowed punitive damages “in addition to the actual damages,” and “for the sake of example and by way of punishing the defendant.” Evans v. Gibson, 220 Cal. 476, 489, 31 P.2d 389, *262395 (Cal 1934). At the time of the Evans decision, that court’s research indicated that no case could be located which authorized a claim for punitive damages to survive the defendant’s death and be pursued against the decedent’s estate. 220 Cal. at 490, 31 P.2d at 395.4 See also 25 C.J.S. Damages 125(3).
[¶ 42.] Although somewhat more recent, the Supreme Court of Minnesota arrived at the same result based on its conclusion that the statutory intent of the punitive damage statute was for punishment of the tortfeasor and future deterrence of similar acts by the tortfeasor. The court concluded that neither purpose applied to a decedent. See Thompson v. Petroffs Estate, 319 N.W.2d 400, 408 (Minn.1982). The Court further found as “not persuasive” the plaintiffs claim that the allowance of punitive damages would serve as a deterrent to third parties. Id.
[¶ 43.] Fundamentally, I disagree with the public policy method of analysis for a resolution of this issue. It is not an examination of the majority vs. minority positions and a determination of which is most “persuasive.” In this case, it is solely a question of statutory interpretation and what the Legislature in 1877 intended when it enacted the predecessors to SDCL 21-3-2. The reliance on cases to the contrary which were decided for the most part a 100 years or more after the enactment of SDCL 21-3-2, provide no basis for a “judicial amendment” to the clear meaning of the statute. The weighing of the public policy benefits of one view as against the other is the prerogative of the Legislature, not this Court in the clear absence of a legislative directive for us to do so.
[¶ 44.] The statute in dispute is drawn in the public policy and language of 1877. It may today seem to some to be archaic and incapable of serving the state’s current public policy goals. However, as Justice Hugo Black once observed concerning the related issue of constitutional interpretation:
I realize that many good and able [persons] have eloquently spoken and written, sometimes in rhapsodical strains, about the duty of this Court to keep the Constitution in tune with the times. The idea is that the Constitution must be changed from time to time and that this Court is charged with a duty to make those changes. For myself, I must with all deference reject that philosophy. The Constitution makers knew the need for change and provided for it. Amendments suggested by the people’s elected representatives can be submitted to the people or their selected agents for ratification. That method of change was good for our Fathers, and being somewhat old-fashioned I must add it is good enough for me.
Pitts v. Larson, 2001 SD 151, ¶ 35, 638 N.W.2d 254, 264 (Gilbertson, J., dissenting) (citing Griswold v. Connecticut, 381 U.S. 479, 522, 85 S.Ct. 1678, 1702, 14 L.Ed.2d 510, 537 (1965) (Black, J., dissenting)).
[¶ 45.] Thus, claims for punitive damages under our statute do not survive the tortfeasor’s death and cannot be enforced against the tortfeasor’s estate or heirs.
[¶ 46.] ZINTER, Justice, concurs.
SABERS, Justice (dissenting).
[¶ 47.] I dissent on Issue 3 for all of the following reasons because the estate *263of a tortfeasor should be subjected to liability for punitive damages to the extent of the estate’s ill-gotten gains.
[¶ 48.] South Dakota’s survival statute, SDCL 15-4-1, provides:
All causes of action shall survive and be brought, notwithstanding the death of the person entitled or liable to the same. Any such action may be brought by or against the executor or administrator or successors in interest of the deceased,
(emphasis added).
[¶ 49.] Our holding on Issue 2 purports to allow recovery of punitive damages against the estate of a deceased tortfeasor in the circumstances of this case. However, Company argues that punitive damages are not recoverable against the estate of a deceased tortfeasor because the dual purposes of the punitive damages statute, punishment and deterrence, are not satisfied. Specifically, it argues that since Van Dyke is deceased he cannot be “punished” in accord with South Dakota’s statute allowing for punitive damages.5 This assertion should fail in light of the fact that an obvious desire of human nature is to leave a legacy to one’s heirs. A person is punished, through his estate, when his estate is diminished to the extent of his ill-gotten wealth. Furthermore, the objectives of punishment and deterrence are achieved by imposition of punitive damages against the estate of a wrongdoer. Allowing for the recovery in these circumstances would punish Van Dyke through his estate and deter others from similar wrongdoing in the future.
[¶ 50.] This rule would
send[] a forceful message that a person’s assets may not be insulated by the happenstance of death. Although ordinarily earmarked for the decedent’s heirs, such assets may be required to satisfy both compensatory and punitive damage awards flowing from his or her wrongdoing. We see nothing unjust in this principle.
Haralson v. Fisher Surveying, Inc., 201 Ariz. 1, 31 P.3d 114, 118-19 (2001). Clearly, to permit the wrongdoer’s estate to escape liability on the basis of his death would create a windfall to the heirs and in effect punish the victims.
[¶ 51.] I recognize that a majority of jurisdictions who have considered this issue do not permit an award of punitive damages against a tortfeasor’s estate. I have no quarrel at this time with the majority rule insofar as it deals with a tort-feasor’s actions in a non-economic situation. For example, a DUI tortfeasor whose negligence results in death to himself and others obviously causes adverse consequences to his family or heirs and they seldom profit from his wrong. In fact, the family and heirs are damaged by that tortfeasor’s actions.
[¶ 52.] Company asserts that imposition of punitive damages against the tort-feasor’s estate would result in injury to the innocent heirs. However, here, in an economic situation, Van Dyke, Company, and his estate clearly profited from his wrongful actions and his heirs have no lawful or justifiable claim to his ill-gotten gains. Moreover, a beneficiary’s rights are always subject to the lawful debts of and claims against the estate. In the instant case, the heirs to Van Dyke’s estate would not be damaged or injured but would simply be denied the profits the estate received through the wrongful behavior of the dece*264dent. In other words, the heirs would be denied only those profits the estate would not have had but for Van Dyke’s tortious behavior at the expense of the victims.
[¶ 53.] These facts should lead us to find the reasoning of the minority more persuasive.
There is no logical reason why courts should allow a punitive damage award against a defendant who survives a judgment, but deny it where death occurs earlier. Suppose, for example, two individuals commit equally culpable and outrageous acts. One is comatose and, for all practical purposes, has no reasonable chance of recovery. The other is dead. Is there a way to explain why the unconscious tortfeasor would have his assets exposed to punitive liability, while the deceased’s estate would be immunized from it? Surely the answer does not lie in our inability to punish the wrongdoer.
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Because punitive damages can serve as both an example and a deterrent to others in the community, we hold that there is no per se prohibition against their imposition upon a decedent’s estate. Such an award is peculiarly within the province of the trier of fact.The jury should also be reminded of its right to decline a punitive verdict altogether. Moreover, the parties are free to argue the reasonableness and advisability of such an award. Thus, an estate is placed in the same position as any other defendant against whom a punitive award is sought
Haralson, 31 P.3d at 118-19 (emphasis added). See also Ellis v. Zuck, 546 F.2d 643, 644-45 (5th.Cir.1977) (holding that punitive damages may be assessed against the estate of a deceased tortfeasor); Tillett v. Lippert, 275 Mont. 1, 909 P.2d 1158, 1162 (1996) (holding that punitive damages may be assessed against a tortfeasor’s estate for “sake of example”); Hofer v. Lavender, 679 S.W.2d 470, 474-75 (Tex.1984) (holding that punitive damages may be assessed against a tortfeasor’s estate for purposes of deterrence, inconvenience, public good and other losses); Shirley v. Shirley, 261 Ala. 100, 73 So.2d 77, 85 (1954) (stating that state wrongful death statute is interpreted to permit punitive damage awards on a general deterrence theory).
[¶ 54.] I recognize the importance of avoiding windfalls even when the victims are innocent, as in this case. Therefore, I would hold that those wrongfully injured in an economic situation may recover from the estate of the wrongdoer only to the extent they can prove that the estate profited from the wrong by a preponderance of the evidence.
[¶ 55.] This rule is based on sound public policy. First, it is a fundamental common law principle that no person should be entitled to profit from his or her own wrong. Bosse v. Quam, 537 N.W.2d 8, 14 (S.D.1995) (Sabers, J., dissenting); Dacy v. Gors, 471 N.W.2d 576, 582 (S.D.1991) (Sabers, J., dissenting). Second, no person should receive a windfall at the expense of those wrongfully injured. This is in accord with the general principle that “equity will not tolerate unjust enrichment.” Parker v. Western Dakota Insurors, Inc., 2000 SD 14, ¶ 31, 605 N.W.2d 181, 193 (Gilbertson, C.J., dissenting) (citing People ex rel. Palmer v. Peoria Life Ins. Co., 376 Ill. 517, 34 N.E.2d 829, 834 (1941)). To the extent an estate profits from the wrongful activity of a decedent, there is a direct windfall to the heirs at the expense of those who are injured. Neither fairness nor equity should permit such a result.
[¶ 56.] Accordingly, I would reverse the trial court’s grant of summary judg*265ment and remand this issue for proceedings consistent with this dissent.

. Originally SDCL 21-3-2 constituted two separate statutes. See 1877 Civ.Code § 1946 and § 1974. However, the relevant language which we are now called upon to interpret remained intact through the combination of these two statutes in 1939. See SDC 37.1902.

. The Evans interpretation of statutory language of § 3294 of the California Civil Code, which is the same as SDCL 21-3-2, is particularly persuasive as the source notes of SDCL 21-3-2 and the preface to the 1877 Dakota Territorial Code indicate it was based upon that California statute. 1877 Dak. Terr.Code page V of the preface. See also Trouten v. Heritage Mut. Ins. Co., 2001 SD 106, ¶ 31, 632 N.W.2d 856, 863, n. 3.

. SDCL 21-3-2 provides: “In any action for the breach of an obligation not arising from contract, where the defendant has been guilty of oppression, fraud, or malice, actual or presumed ... the jury, in addition to the actual damage, may give damages for the sake of example, and by way of punishing the defendant.”