Smith Masonry v. Wipi Group Inc.

2025 S.D. 26
South Dakota Supreme Court·Decided June 11, 2025·No. 30557·Published

Opinion

#30557-r-PJD 2025 S.D. 26

IN THE SUPREME COURT

OF THE

STATE OF SOUTH DAKOTA

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TOM SMITH DBA TOM SMITH MASONRY, Plaintiff and Appellant,

v.

WIPI GROUP, USA, INC., Defendant and Appellee, and LINCOLN COUNTY, SOUTH DAKOTA, Defendant.

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APPEAL FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT LINCOLN COUNTY, SOUTH DAKOTA

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THE HONORABLE DOUGLAS E. HOFFMAN Judge

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JEFFREY L. BRATKIEWICZ of Bangs, McCullen, Butler, Foye & Simmons, LLP Sioux Falls, South Dakota

SARAH E. BARON HOUY of Bangs, McCullen, Butler, Foye & Simmons, LLP Rapid City, South Dakota Attorneys for plaintiff and appellant.

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CONSIDERED ON BRIEFS

AUGUST 27, 2024

OPINION FILED 06/11/25

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RONALD A. PARSONS, JR of Johnson, Janklow & Abdallah, LLP Sioux Falls, South Dakota

PAMELA R. REITER HANNAH HONRATH of Reiter Law Firm Sioux Falls, South Dakota Attorneys for defendant and appellee WIPI Group USA, Inc.

DEVANEY, Justice [¶1.] This is the second appeal between Tom Smith Masonry (Smith Masonry) and WIPI Group USA, Inc. (WIPI) related to Smith Masonry’s work under a contract for a fence project on WIPI’s property. Smith Masonry brought suit against WIPI to foreclose on a mechanic’s lien, seeking the remaining amount due under the contract. WIPI disputed Smith Masonry’s right to recover and asserted multiple counterclaims. The circuit court denied both parties relief, and Smith Masonry appealed. We reversed and remanded for the court to enter a judgment of foreclosure in favor of Smith Masonry for the full amount of the lien and to reconsider Smith Masonry’s request for an award of attorney fees. Smith Masonry v. WIPI Group, USA, Inc. (WIPI I), 2023 S.D. 48, 996 N.W.2d 368. On remand, the court entered a judgment in favor of Smith Masonry on the lien but declined to award Smith Masonry attorney fees. Smith Masonry appeals. We reverse and remand.

Factual and Procedural Background Circuit court proceedings on the mechanic’s lien [¶2.] A more detailed factual and procedural background for this case can be found in WIPI I, 2023 S.D. 48, 996 N.W.2d 368. Relevant to this appeal, Smith Masonry and WIPI executed a contract and addendum in February 2014 for Smith Masonry to construct a fence along WIPI’s property. The end design of the fence included over 50 masonry columns connected by metal fence panels. Smith Masonry subcontracted with an excavation company to dig the holes and pour the

concrete footings for the columns and with American Fence Company to install the fence panels and a gate. [¶3.] After Smith Masonry installed the columns and American Fence nearly completed its work installing the fence panels, Smith Masonry requested final payment from WIPI. American Fence also requested payment for the work it had completed. WIPI did not remit payment to Smith Masonry at that time because a dispute arose over who was responsible for installing a gate operator for the fence. American Fence also did not receive payment, and as a result, American Fence stopped work on the project in September 2014. At the time, American Fence had installed all fence panels; however, some of the brackets needed adjusting to bring the fence panels into alignment, the gate operator had not been installed, and American Fence did not finish securing the gate. [¶4.] For the next couple months, Smith Masonry and WIPI discussed final payment to Smith Masonry and payment to American Fence, though no payments were remitted. Eventually, American Fence filed a mechanic’s lien against WIPI’s property, and WIPI paid American Fence $38,000 to satisfy the lien. WIPI persisted in its refusal to remit final payment to Smith Masonry, and in December 2014, Smith Masonry filed a mechanic’s lien against WIPI’s property. Thereafter, WIPI and Smith Masonry discussed concerns WIPI had about the fence project, and while these discussions were occurring, American Fence attempted to address, at no additional cost to WIPI, alignment issues that had occurred with the fence panels. WIPI did not allow American Fence to do the work and WIPI refused to remit final payment to Smith Masonry.

[¶5.] In January 2017, Smith Masonry instituted an action to foreclose on its mechanic’s lien against WIPI’s property, seeking $41,672.20 for what it believed to be the unpaid balance due under the parties’ contract. Smith Masonry also requested an award of attorney fees, costs, and expenses pursuant to SDCL 44-9-42. In its answer, WIPI “specifically denie[d] that [Smith Masonry] properly completed the work called for in the contract and put[] [Smith Masonry] to [its] proof as to the same.” WIPI also asserted counterclaims for breach of contract, breach of express warranty, and breach of implied warranty of reasonable workmanship. WIPI sought damages, initially in the amount of $300,000, for Smith Masonry’s faulty workmanship and requested an award of attorney fees as allowed by law. [¶6.] A six-day bench trial was held with multiple witnesses testifying for both parties concerning whether Smith Masonry constructed the columns according to masonry standards and what caused the alignment issues in the fence. Smith Masonry acknowledged that one column was leaning, multiple fence panels were out of alignment, and there were connection issues between the panels and columns. However, Smith Masonry presented testimony to support its view that the leaning column was caused by water drainage issues. It also presented testimony to prove that the connection and alignment issues with the fence could have been remedied had WIPI allowed American Fence to conduct repairs when it attempted to do so in 2014 and that the repair cost would have been $1,555.96. [¶7.] WIPI presented testimony from witnesses to support its contrary view that Smith Masonry failed to construct the columns to masonry standards and that Smith Masonry’s faulty workmanship caused the issues with the fence. However,

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