Hills of Rest Memorial Park, Inc. v. Witte

427 N.W.2d 848, 1988 S.D. LEXIS 128, 1988 WL 87218
CourtSouth Dakota Supreme Court
DecidedAugust 24, 1988
Docket15771
StatusPublished
Cited by4 cases

This text of 427 N.W.2d 848 (Hills of Rest Memorial Park, Inc. v. Witte) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hills of Rest Memorial Park, Inc. v. Witte, 427 N.W.2d 848, 1988 S.D. LEXIS 128, 1988 WL 87218 (S.D. 1988).

Opinions

HENDERSON, Justice (on reassignment).

ACTION/PROCEDURAL HISTORY

Plaintiff, Hills of Rest Memorial Park, Inc. (Cemetery), a non-profit corporation, which operates the Hills of Rest Memorial Park cemetery, appeals unfavorable judgments entered by the circuit court for Minnehaha County. The case arose from Cemetery’s allegations, among others, that Defendant David Witte (Witte), now doing business as Chapel Hills Funeral Home, misappropriated and converted its trade secrets and personal property, usurped a corporate opportunity, and violated his fiduciary duty to Cemetery in purchasing railroad property adjacent to Cemetery’s land. Cemetery later amended its complaint to add a claim that Witte caused unauthorized sales commissions to be credited to him in its records. Witte, in turn, filed a counterclaim for unpaid commissions.

The circuit court bifurcated the proceedings, holding two separate trials. Cemetery’s equitable claims regarding the railroad property were tried to the court, resulting in a judgment directing Witte to transfer the railroad property to Cemetery, but ordering Cemetery to reimburse Witte for his expenses, comprising $7,138.19 in acquisition costs and $4,996.64 for maintenance and improvements. After trial on the actions at law, the jury issued verdicts in Witte’s favor, and awarded him $59,-410.28 on his counterclaim for commissions accrued during his employment with Cemetery. The court allowed Witte to recover prejudgment interest and costs.

Cemetery appeals, asserting trial court error in five respects, thereby creating the issues herein.

ISSUES

1) Insufficiency of evidence to support the jury verdict;

2) Use of a jury instruction unsupported by evidence;

3) Erroneous and prejudicial evidentiary rulings;

4) Improper award of funds for maintenance and improvements to the railroad property; and

5) Prejudgment interest.

Cemetery argues that errors on Issues 1, 2, and 3 mandate a new trial on the merits of its causes of action at law. We agree and reverse on that basis. The trial court is affirmed on Issue 4, which applies only to Cemetery’s equitable claims. We do not reach Issue 5, prejudgment interest, in light of our reversal on the first three issues.

FACTS

On May 10, 1978, Cemetery was put into receivership. Witte was appointed receiver, and served in that capacity until termination of receivership on May 1, 1979. Thereafter, by action of Cemetery’s board of directors, Witte was employed as Cemetery’s administrator. In March 1984, the board learned that Cemetery’s financial statement, dated January 31, 1984, indicated that Cemetery owed Witte $100,336 in accrued sales commissions. At the time Witte resigned, January 3, 1985, Cemetery’s records reflected an unpaid balance of $77,304.72. A review of the transactions underlying these commissions, undertaken by a member of the board, Richard Daniels, showed that this figure included commissions of $7,573.57, reportedly earned during the period of receivership, for which no authority existed, $4,224.07 in commissions on cancelled contracts, and $6,160.60 on payments not yet received by Cemetery. (These amounts, when deducted from the amount allegedly outstanding, $77,304.72, yield $59,346.48, a total lower than the jury [850]*850award.) At trial, Witte conceded that additional commissions were based on sales of mausoleum spaces which were sold before the board authorized such commissions. Other alleged anomalies were discovered in Cemetery’s review of its records. Contradictions in the minutes, prepared by Witte, of board meetings where the topic of commissions was discussed created confusion, as when the minutes of one board meeting showed Witte forswearing commissions for “pre-need” sales during an accounting period from February 8,1980 to April 15,1981, yet minutes of a later meeting reflected Witte as earning 15% commission on such sales. At trial, Witte relied primarily on an audit prepared by an accounting firm, employed by Cemetery, which verified the accuracy of Witte’s claim to the full amount of commissions; however, letters from the firm to Cemetery advised that the audit was limited in scope. Admission into evidence of these letters, which were parts of the audit process, was denied by the trial court.

During Witte’s term at Cemetery, two written employment contracts existed. The first, Exhibit No. 1 at trial, specified that he was to receive 15% commission on “pre-need” merchandise sales (“pre-need” denoting sales of cemetery merchandise for future use when the potential consumer is still alive, while “at-need” applies to merchandise purchased for those already deceased). This contract was signed June 22, 1979, and by its terms, was effective from May 1, 1979, until January 31, 1980. It contained provisions for annual review of its terms and renewal, but no such action was ever taken. At trial, evidence of variations in commission percentage, and the merchandise to which commissions applied, was developed by both sides. The second contract, dated August 20, 1984, provided that Witte was due 10% commission on sales of “pre-need” and “at-need” (for which no commission was earned previously) merchandise, and 5% commission on sales of mausoleum crypts. Over Cemetery’s objections, the circuit court instructed the jury, by Instruction No. 14,

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484 N.W.2d 864 (South Dakota Supreme Court, 1992)
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478 N.W.2d 828 (South Dakota Supreme Court, 1991)
Hills of Rest Memorial Park, Inc. v. Witte
427 N.W.2d 848 (South Dakota Supreme Court, 1988)

Cite This Page — Counsel Stack

Bluebook (online)
427 N.W.2d 848, 1988 S.D. LEXIS 128, 1988 WL 87218, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hills-of-rest-memorial-park-inc-v-witte-sd-1988.