Court Opinion

ID: 9663143
Source: CourtListenerOpinion
Date Created: 2023-08-23 23:29:13.940989+00
Date Added: 2024-06-11T18:14:46.044151
License: Public Domain

WUEST, Chief Justice
(concurring specially).
I concur, but have some reservations regarding the majority’s rationale on the prejudgment interest issue. The Bank sued Kehn Ranch and the Kehns upon two theories: (1) Upon the promissory notes (contract theory); and (2) fraud and deceit. The court instructed the jury upon both theories. The jury was further instructed that if the Ranch and Kehns were liable on the promissory notes the damages was the unpaid principal on the notes and the court would determine interest based on answers to questions on the verdict form, or the applicable law. The court further instructed on damages for fraud. However, it did not instruct the jury that they could award interest on the fraud theory under SDCL 21-1-13, which provides:
In an action for the breach of an obligation not arising from contract, and in every case of oppression, fraud, or malice, interest may be given, in the discretion of the jury.
It appears from the verdict form the jury awarded damages to the Bank and against the Ranch and Kehns on the fraud theory, although the damages against them except for Clark Kehn was the sum of the unpaid principal of the notes. As to Clark Kehn, the jury awarded Bank another $100,000 as punitive damages. Under our law, punitive damages cannot be awarded for recovery on a note, but in the discretion of the jury for fraud. SDCL 21-3-2. Since the jury was never instructed they could award interest on the fraud charge, it was error for the court to grant the motion awarding prejudgment interest. If the verdict had been upon the notes (breach of contract theory), which contained a provision for past due interest, I may have distinguished this case from Subsurfco and Hepper, although I concurred in both of them.