Court Opinion

ID: 9579914
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:59:53.941351+00
Date Added: 2024-06-11T13:35:53.482255
License: Public Domain

SABERS, Justice
(dissenting).
The issue is:
Whether the trial court erred in granting Seller’s Motion to Dismiss the non-reseission claims.
The trial court erred in granting Seller’s Motion to Dismiss the non-rescission claims. South Dakota authority allows pursuit of alternative remedies so long as a litigant is not awarded double recovery. SDCL 15-6-8(a) provides in part that “[rjelief in the alternative or of several different types may be demanded,” and SDCL 15-6-8(e)(2) provides in part:
A party may set forth two or more statements of a claim or defense alternatively or hypothetically, either in one count or defense or in separate counts or defenses.... A party may also state as many separate claims or defenses as he has regardless of consistency and whether based on legal or equitable grounds or on both. (Emphasis added.)
“Matters of statutory construction are questions of law. Likewise, construction of a written contract is also a question of law.” Stover v. Critchfield, 510 N.W.2d 681, 683 (S.D.1994) (citations omitted). We review questions of law de novo. Id.
SDCL 53-11-2 provides, in part that: “A party to a contract may rescind the same ... [i]f consent of the party rescinding ... was given by mistake or obtained through duress, fraud, or undue influence exercised by or with the connivance of the party as to whom he reseinds[.]” See Holmes v. Couturier, 452 N.W.2d 135 (S.D.1990). As indicated above, Lumber and Duba (Buyers) attempted to rescind the agreement and offered to restore to Seller everything of value received from him.
In Holmes v. Couturier, Holmes purchased a campground from Couturier for $172,000 under an installment purchase agreement. When Holmes experienced problems with the sanitary and electrical systems, he served Couturier with notice of rescission and, nineteen days later, a summons and complaint. The trial court granted the rescission based on fraud. Couturier argued on appeal that Holmes was entitled to monetary damages only, and not rescission of the contract. In explaining Couturier’s misunderstanding of the law of fraud, this court stated that “[i]f a *92buyer has been defrauded, he has an election of remedies available to him. He can either rescind the contract, restore what he received and recover back what he paid, or he may affirm the agreement and sue for monetary damages. Holmes elected to rescind the contract, and having established fraud, he is entitled to the remedy of his choice.” Holmes, 452 N.W.2d at 137-38 (citations omitted) (emphasis added). See Tucek v. Mueller, 511 N.W.2d 832, 838 (S.D.1994) (Amundson, J., dissenting) (“A victim of fraud has an election of remedies available to him. He can either rescind the contract, restore what he received and recover back what he paid, or he may affirm the agreement and sue for monetary damages.”); O’Connor v. King, 479 N.W.2d 162, 165 (S.D. 1991) (“When a buyer has been defrauded, he can either rescind the contract, restore what he received and recover back what he paid, or he may affirm the agreement and sue for monetary damages.”).
Rule 8(a) and (e)(2) of the Federal Rules of Civil Procedure are very similar to SDCL 15-6-8(a) and 15-6-8(e)(2), respectively. In discussing Rule 8, Federal Practice and Procedure examines the abolishment of the “theory of the pleadings doctrine,” a “rule of pleading that a complaint must proceed upon some definite theory, and on that theory the plaintiff must succeed, or not succeed at all. A complaint cannot be made elastic so as to take form with the varying views of counsel.” 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1219 (1990).
The federal rules effectively abolish the restrictive theory of the pleadings doctrine. The text of several rules, although never specifically disavowing the doctrine, makes it very plain that the theory of the pleadings mentality has no place under federal practice. Rule 8(a) eliminates the concept of “cause of action”; Rule 8(e) provides that a party may set forth two or more statements of claim alternatively or hypo-thetieally[.]

Id.

Under Rule 8(e)(2) a party is permitted to set forth inconsistent statements either alternatively or hypothetically within a single count or defense, or in separate claims or defenses. He also may state as many separate claims or defenses as he has, regardless of consistency or whether they are based on legal, equitable, or maritime grounds. The federal rule abrogates the so called “theory of the pleadings” doctrine, which required a plaintiff to seek recovery on a single theory, and only permitted relief to be granted on a particular theory adopted by the pleader.
Federal Practice and Procedure § 1283.
In Walraven v. Martin, Michigan rejected what they referred to as the “election prior to trial doctrine,” noting that such a rejection was consistent with Michigan’s rules of civil procedure. 123 Mich.App. 342, 333 N.W.2d 569, 573 (1983). “Modern rules of civil procedure, the election of remedy doctrine expressed in the current legal periodicals cited earlier, and the Supreme Court’s decision in Gruskin v. Fisher, 405 Mich. 51, 273 N.W.2d 893 (1979), lead us to conclude that plaintiff may simultaneously pursue all of his remedies against the sellers and other defendants herein regardless of legal consistency, so long as plaintiff is not awarded double recovery. ” Id. 333 N.W.2d at 572 (emphasis in original).
With the adoption of SDCL 15-6-8(a) and 15-6-8(e)(2), the South Dakota Supreme Court also rejected the “theory of the pleadings doctrine,” thereby allowing a party to state as many separate claims or defenses as he has regardless of consistency and whether based upon legal or equitable grounds.1 In *93other words, under SDCL 53-11-3, Buyers may pursue rescission and, if denied by the jury because they failed to use “reasonable diligence to comply with §§ 53-11-4 and 53-11-5,”2, may pursue alternative remedies of fraud and deceit and misrepresentation. SDCL 53-11-3. See Federal Practice and Procedure § 1283 (“Courts have permitted plaintiffs to sue on a contract and at the same time alternatively repudiate the agreement and seek recovery on a quantum meruit claim or allege fraud or some other tort theory.”). See generally Jensen v. Weyrens, 474 N.W.2d 261, 265 (S.D.1991) (noting that when a plaintiff seeks specific performance or money damages “in the alternative,” the court’s equitable discretion to award money compensation in addition to specific performance is not limited if necessary to grant full relief).
The defect in the majority’s theory is their reliance on the fact that Buyer sent a letter rescinding the purchase. The majority overlooks the fact that Buyer’s attempt was immediately rejected by Seller. The majority mistakenly holds Buyers irrevocably bound to that which they attempted to do but which was unsuccessful from the start.
Obviously, where a Seller acquiesces in the Buyers’ demand for rescission and retakes possession, damages for rescission only would remain for determination. Here, Fisher, as the Seller, rejected the Buyers’ attempt to rescind and the Buyers had to remain in possession of the premises. Therefore, Buyers must be given an opportunity to assert non-rescission claims and damages. Here, the trial court refused to permit these alternative claims, and it was reversible error.
Although there may be cases where it may be too burdensome on a defendant to defend alternative claims, this is not such a case. The trial court erred in granting Fisher’s Motion to Dismiss the non-rescission claims prior to trial and we should reverse and remand for trial.

. See Federal Practice and Procedure, § 1283 which states:
Common law and code practice condemned inconsistency in pleadings because it was believed that a pleading containing inconsistent allegations indicated falsehood on its face and was a sign of a chicanerous litigant seeking to subvert the judicial process. All too frequently, however, valid claims were sacrificed on the altar of technical consistency.... Under the present federal procedure a party may plead inconsistently, subject only to the limits of making a reasonable inquiry and interposing a pleading only for proper purposes set forth in Rule 11. In contrast to common law and code practice, the rules recognize that inconsistency in pleadings does not necessarily mean dishonesty, and that frequently a party, *93after a reasonable inquiry and for proper purposes, must assert contradictory statements when he legitimately is in doubt about the factual background of his case or the legal bases for his recovery or defense.
Id. at 533.

. SDCL 53-11-4 provides:
The party rescinding a contract must rescind promptly, upon discovering the facts which entitle him to rescind, if he is free from duress, undue influence, or disability, and is aware of his right to rescind.
SDCL 53-11-5 provides:
The party rescinding a contract must restore to the other party everything of value which he has received from him under the contract, or must offer to restore the same, upon condition that such party shall do likewise, unless the latter is unable or positively refuses to do so. Under SDCL 53-11-4, Buyers were required to "rescind promptly” upon discovery of grounds for rescission. Failure to do so would have lost their right to that remedy. Saunders v. Farmers & Merchants Nat. Bank of Milbank, 61 S.D. 261, 265, 248 N.W. 250, 252 (1933); Nielsen v. McCabe, 442 N.W.2d 477 (S.D.1989); Knudsen v. Jensen, 521 N.W.2d 415, 420 (S.D.1994).
At the direction of the Legislature and this court, Buyers should not “sit on their rights" but act diligently and reasonably to preserve their right to rescind a contract. Id. at 421 (Wuest, J. dissenting on the basis that buyers acted promptly after discovery of grounds for rescission and that no prejudice to sellers was shown); SDCL 53-11-4. Buyers’ prompt notification to Seller of the grounds for rescission preserves their right to rescind the contract. Knudsen, at 421 (Wuest and Sabers, J.J. dissenting on the basis that notice was timely and no prejudice was shown). It is inconsistent to require aggrieved buyers to notify a seller promptly to preserve their right of rescission, then limit their rights to pursue other remedies, thereby penalizing them for preserving their rights. This directly conflicts with SDCL 15-6-8(a), 15-6-8(e), and precedent.