Court Opinion

ID: 9685751
Source: CourtListenerOpinion
Date Created: 2023-08-24 15:00:55.19921+00
Date Added: 2024-06-11T18:18:09.381967
License: Public Domain

HENDERSON, Justice
(concurring in part; concurring in result in part; and specially concurring in part).
ISSUE I
CONCUR IN RESULT
I concur in the result as to Issue I.
Perhaps it is true that, facially, the elements are here present, as compared to a parallel situation in Farmers Elevator Co. of Elk Point v. Lyle, 90 S.D. 86, 91, 238 N.W.2d 290, 293 (1976), which would trigger the Doctrine of Equitable Estoppel. Therefore, the Doctrine of Equitable Estop-pel is applicable under the U.C.C. to prevent the State Cement Plant from asserting the statute of limitations. We have before us, apparently, a rather strong set of facts to attempt to prove fraudulent concealment. Plaintiffs make a rather strong showing that the State Cement Plant covered up in its overselling of the Plant’s capacity to produce cement and involving itself in secret preferential treatment for certain customers. Though, as I say, we have a set of facts that might, by their sheer force, fit nicely into Western Casualty, 318 N.W.2d 126, and Taylor, 330 N.W.2d 542, both cited in the majority opinion, there are times and factual scenarios which can create the triggering of equitable estoppel without benefit of fraud as an element. See Sander v. Wright, 394 N.W.2d 896 (S.D.1986), for this author’s continuing views and his past writings on this subject.
ISSUE II
SPECIAL CONCURRENCE
I specially concur as to Issue II.
I disagree that the independent tort claims by the plaintiffs should remain untreated in this opinion. I know of no reason why plaintiffs cannot proceed under alternative theories which sound in either contract or in tort. Plaintiffs would, under my rationale, be permitted to pursue their independent tort claims. Plaintiffs’ amended complaint sets forth tort claims for: (1) *350fraud and deceit, (2) negligent misrepresentation, and (3) tortious interference with contract. These all allegedly arise from commercial dealings and transactions between these parties.
The trial court dismissed all of these causes of action “since they arise out of a contract cause of action and are based on contract theory.” There may be independent duties which exist concurrently with, and are separately imposed upon, a contractual relationship.
It is settled law in this state that a breach of duty may arise from a contractual relationship, and while matters complained of may have their origin in contract, the gist of an action may be tor-tious. Smith v. Weber, 70 S.D. 232, 16 N.W.2d 537 [(1944)]. Conduct which merely is a breach of contract is not a tort, but the contract may establish a relationship demanding the exercise of proper care and acts and omissions in performance may give rise to tort liability. Weeg v. Iowa Mutual Ins. Co., 82 S.D. 104, 141 N.W.2d 913 [(1960)].
Kunkel v. United Security Ins. Co. of N.J., 84 S.D. 116, 135, 168 N.W.2d 723, 733 (1969) (emphasis added).
Further, in Smith v. Weber, 70 S.D. 232, 16 N.W.2d 537 (1944), we recognized the tort of bad faith upon a landlord even though there was a contract existent between the parties.
“ ‘It may be granted that an omission to perform a contract obligation is never a tort, unless that omission is also an omission of a legal duty. But such legal duty * * * may spring from extraneous circumstances, not constituting elements of the contract as such, although connected with and dependent upon it, and born of that wider range of legal duty which is due from every man to his fellow, to respect his rights of property and person, and refrain from invading them by force or fraud.' A tort may grow out of or make part of, or be coincident with a contract. The fact that there existed a contract between the plaintiffs and the defendant would not immune the latter from the penalty that is ordinarily visited upon tortfeasors. * * * »
It may be conceded that tort usually signifies a breach of legal duty independent of contract. But such breach of duty may arise out of a relation or state of facts created by contract. Cooley on Torts, 4th Ed., § 60; John Moodie Dry Goods Co. v. Gilruth, 35 S.D. 567, 153 N.W. 383 [(1915)]. While the matters complained of by plaintiff had their origin in a contract, the gist of the action is for alleged wrongful and tor-tious acts of defendant.
Smith v. Weber, 70 S.D. at 236-37, 16 N.W.2d at 539 (citations omitted; emphasis added).
In Weeg v. Iowa Mut. Ins. Co., 82 S.D. 104, 109-10, 141 N.W.2d 913, 916 (1966), we stated:
Conduct that is merely a breach of contract is not a tort. The contract, however, may establish a relationship demanding the exercise of proper care and acts and omissions in performance may give rise to a tort liability. The rule is thus stated in Shearman & Red-field, Law of Negligence (6th Ed.) § 116, as follows: “Negligence which consists merely in the breach of a contract will not afford ground for an action by any one, except a party to the contract, or a person for whose benefit the contract was avowedly made. * * * But where, in omitting to perform a contract, in whole or in part, one also omits to use ordinary care to avoid injury to third persons, who, as he could with a slight degree of care foresee, would be exposed to risk by his negligence, he should be held liable to such persons for injuries which are the proximate result of such omission.” (Citation omitted; emphasis added.)
So, there is ample authority upon which the plaintiffs’ independent tort claims may be asserted. Obviously, some cases lend themselves to the discussion of both contract and tort liability and I submit that the *351case presently before us is such an example.
I also note that the U.C.C. itself specifically provides that “[ujnless displaced by the particular provisions of this title, the principles of law and equity, including the law merchant and the law relative to ... estoppel, fraud, misrepresentation ... or other validating or invalidating cause shall supplement its provisions.” SDCL 57A-1-103. See Farmers Elevator, 90 S.D. at 90-91, 238 N.W.2d at 293. Therefore, tort law of this state is supplemented, not replaced, by SDCL 57A-1-103. Since it appears that plaintiffs possess both contract and tort claims against State Cement, we should allow both types of actions to be presented. Plaintiffs should not be forced to waive a valid tort claim simply because they also possess a valid contract claim. Lastly, the tort claims are subject to non-U.C.C. statute of limitations provisions which would not likely have expired in this instance. SDCL 15-2-3 and SDCL 15-2-13(1), (6). 5 R. Anderson, Anderson On the Uniform Commercial Code,- §§ 2-725, 2-725:63 (3d ed. 1984). Plaintiffs therefore should be permitted to proceed on both theories, contract and tort, against State Cement.
ISSUE III
CONCURRENCE
I concur as to Issue III.
I concur, totally, in the sovereign immunity aspect of this writing of the majority opinion.