PIERRE -- The South Dakota Supreme Court recently affirmed a Brule County court's decision to grant summary judgment in the case a Pukwana man filed against family members, an attorney and two family business entities in May 2017.
Between the initial circuit court case and the appellate case, Bret Healy was ordered to pay more than $100,000 in attorney's fees and costs to the parties he filed a lawsuit against. Justice Janine M. Kern authored the Supreme Court opinion, and Justice Mark E. Salter and Chief Justice David E. Gilbertson concurred.
Healy filed a lawsuit against his mother, May Osborne; his two brothers, Bryce and Barry Healy; the family's attorney, Steven Fox; and two business entities known as Healy Ranch Partnership and Healy Ranch Inc. on May 11, 2017. The lawsuit alleged that all the defendants had committed conversion, fraud and conspiracy to commit fraud in connection with Pukwana land that has been in the Healy family for more than 100 years, and it brought a number of related allegations against the defendants individually.
On Sept. 1, 2017, Bryce and Barry Healy and Healy Ranch Inc. moved for summary judgment, arguing that the statute of limitations had expired before the lawsuit was filed. Fox joined that motion, and a few days later, Osborne and the Healy Ranch Partnership moved for summary judgment, also.
A Brule County court granted summary judgment on all claims on Oct. 13, 2017, reasoning that the statute of limitations had expired and that beginning in 1999, Bret Healy was involved in business dealings that would have given him the knowledge that Healy Ranch Inc. was claiming an interest in the real estate on the Healy Ranch property.
Following the circuit court's decision, the defendants moved for attorney fees, and Healy was ordered to pay a total of $83,295.42 between them. The court ruled that Healy's lawsuit had been "frivolous and malicious."
Healy appealed the court's decision with claims the Supreme Court consolidated into three issues: whether the circuit court was wrong in granting summary judgment on all claims, whether the court used the proper procedure when doing so and whether the court erred in awarding attorney fees to the defendants.
According to the Supreme Court opinion, all of Healy's tort and contract claims fall under a six-year statute of limitations, excluding attorney malpractice claims against Fox, which have a statute of limitations of three years. The statute of limitations was the circuit court's reasoning for dismissing Healy's claims as time-barred.
The Supreme Court affirmed that because a warranty deed in question in the case was executed in 1995 and Healy's lawsuit was filed more than 22 years later, the claims fell outside the statute of limitations, and Healy didn't meet the burden of proving that the statute should be tolled. Similar reasoning was used to affirm the circuit court's decision to drop legal malpractice claims against Fox.
The Supreme Court also ruled that the circuit court used the correct procedure in granting summary judgment, based on case law that states that "if there exists any basis which supports the ruling of the (circuit) court, affirmance of a summary judgment is proper."
Under South Dakota law, courts can award attorney fees in lawsuits that are found to be either frivolous or malicious. For a lawsuit to be frivolous, the court must determine that the plaintiff can't use evidence or the law to make a rational argument in support of their claim; a malicious lawsuit is one that is filed for an "improper purpose," such as when the plaintiff's primary motive is hostility toward the defendant.
The circuit court concluded that Healy had brought the lawsuit with the intention of trying to stop the sale of Healy Ranch and that the lawsuit was both frivolous and malicious. The Supreme Court affirmed the circuit court's decision to impose attorney's fees, granted appellate attorney fees to the defendants totaling an additional $18,450 and denied Healy's request for $89,127.19 in fees.
"Even viewed in the light most favorable to Bret, there is no evidence in the record to suggest that Bret had any reasonable basis to believe his claims were valid when he filed the lawsuit or that they could survive the statute of limitations defenses," Kern wrote. "... Bret filed the lawsuit for the purpose of preventing the sale of the property, not because he believed his partnership interest remained enforceable."