author: PER CURIAM..

text:
    2005 ND 91
    Eric Scott BOLLIN, Petitioner and Appellee v. NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, Respondent and Appellant.
    No. 20040291.
    Supreme Court of North Dakota.
    May 17, 2005.

      Timothy Q. Purdon, Dickson & Purdon, Bismarck, ND, for petitioner and appellee.
    Douglas B. Anderson, Assistant Attorney General, Office of Attorney General, Bismarck, ND, for respondent and appellant.
   PER CURIAM..

[¶ 1] The North Dakota Department of Transportation (“Department”) appeals from a district court judgment reversing the administrative hearing officer’s suspension of Eric Scott Bollin’s driving privileges for 365 days after he was arrested for driving under the influence of alcohol. We affirm.

I.

[¶2] Burleigh County Deputy Sheriff Kirk Hagel stopped Bollin after observing Bollin’s car cross the center line of the highway. Deputy Hagel smelled alcohol and observed Bollin’s eyes were bloodshot and glassy, and Bollin admitted he had consumed alcohol. Bollin failed the field sobriety tests and registered a blood alcohol concentration of 0.089 percent by weight on the onsite breath screening test. Deputy Hagel arrested Bollin for driving under the influence of alcohol and took him to a hospital for blood testing.

[¶ 3] The nurse administering the test twice attempted to obtain a blhod sample-from Bollin. The first attempt collected an insufficient amount of blood, but the second attempt was successful. Analysis of the second sample indicated a blood alcohol concentration of 0.12 percent by weight. Bollin received a temporary operator’s permit and requested an administrative hearing.

[¶ 4] Bollin objected at the administrative hearing to admission of the test results. When asked to specify his objection, Bollin’s counsel replied that he would specify the objection after cross-examination. The hearing officer admitted the results over the objection.

[¶ 5] Bollin’s counsel questioned Deputy Hagel and the state toxicologist about the use of disinfectant during the collection of Bollin’s blood sample. The nurse who collected the sample indicated on the checklist that she had used the disinfectant that came with the kit, but she also marked that an alternative disinfectant had been used. The line for providing the name of the alternative disinfectant was left blank. The state toxicologist testified that the level of alcohol in the disinfectant could affect the test results, and without knowing what disinfectant was used, she could not testify the results were accurate. Deputy Hagel testified he was present when the sample was obtained, and he did not recall the nurse using an alternative disinfectant. He admitted he was not one hundred percent certain an alternative disinfectant had not been used, and he acknowledged that only the nurse could testify with complete certainty.

[¶ 6] The administrative hearing officer decided it was more likely the nurse inadvertently checked an extra box on the form than used an alternative disinfectant with-

BOLLIN v. NORTH DAKOTA DEPT. OF TRANSP. N. D. 529 Cite as 696 N.W.2d 527 (N.D. 2005) out Deputy Hagel realizing it and suspended Bollin’s license for 365 days. Bollin appealed and the district court reversed the suspension. II. [1] [¶ 7] Although on appeal this Court reviews the record before the administrative agency, Ringsaker v. Director, N.D. Dep’t of Transp., 1999 ND 127, ¶ 5, 596 N.W.2d 328, the district court’s sound reasoning is entitled to respect, Lee v. N.D. Dep’t of Transp., 2004 ND 7, ¶8, 673 N.W.2d 245. This Court will affirm an agency’s decision unless: 1. The order is not in accordance with the law. 2. The order is in violation of the constitutional rights of the appellant. 3. The provisions of this chapter have not been complied with in the proceedings before the agency. 4. The rules or procedure of the agency have not afforded the appellant a fair hearing. 5. The findings of fact made by the agency are not supported by a preponderance of the evidence. 6. The conclusions' of law and order of the agency are not supported by its findings of fact. 7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant. 8. The conclusions of law and order of the agency do not sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge. Id,.; N.D.C.C. § 28-32-46. [2] [¶ 8] This Court has previously articulated its process for reviewing agency decisions: We give great deference to the Department’s findings of fact, and we do not make independent findings or substitute our judgment for that of the Department; rather, we determine only whether a reasoning mind .reasonably could have concluded the Department’s findings were supported by the weight of the evidence from the entire record. Lee, 2004 ND 7, ¶ 9, 673 N.W.2d 245. “In reviewing a suspension, the Court determines only whether a reasoning mind could have concluded the Department’s findings were supported by the weight of the evidence from the entire record.” Id. [3][¶. 9] Bollin argues the administrative hearing officer should not have received the results of the blood test when there is evidence the test was not administered in accordance with the approved method. “The results of the chemical analysis must be received in evidence when it is shown that the sample was properly obtained and the test was fairly administered, and if the test is shown to have been performed according to methods and with devices approved by the state toxicologist, and by an individual possessing a certificate of qualification to administer the test issued by the state toxicologist.” N.D.C.C. § 39-20-07(5). [¶ 10] The method approved by the state toxicologist requires completion of a form entitled Submission for Blood (104), including specification of the type of alternative disinfectant used if such use is indicated. The form for Bollin’s sample indicates use of both the disinfectant included in the kit and an unidentified alternative disinfectant. Deputy Hagel, who assisted the nurse collecting the specimen, testified that he did not recall her using another disinfectant, but the events had occurred over a month before the trial and he did not clearly remember everything.

[¶ 11] This Court has previously said “[w]hen the State fails to establish compliance ■ with the toxicologist’s directions, which go to the scientific accuracy of the test,, the State must prove fair administration through, expert testimony.” Lee, 2004 ND 7, ¶ 16, 673 N.W.2d 245. The state toxicologist stated she could not testify to the accuracy of Bollin’s test results without knowing which alternative disinfectant was used. Deputy Hagel testified he did not clearly remember which disinfectant was used and acknowledged only the nurse who collected the blood sample could testify with complete certainty. The nurse who collected the blood specimen did not testify at trial, and the only evidence of disinfectant use she provided was the marks on Form 104.

[¶ 12] The administrative hearing officer found:

The second sample of Eric Bollin’s blood was tested in accordance with the state toxicologist’s approved method, with the results showing an alcohol concentration of .12 percent.
When the second sample of Mr. Bollin’s blood was drawn, the nurse made a mark in the box for “used an alternative disinfectant,” and also apparently made another mark over it in the same box. Deputy Hagel did not see a second or alternative disinfectant being used, and he watched the entire blood drawing process. The probability appears to be far higher that the nurse .inadvertently checked an extra box on Form 104 than that the nurse used two disinfectants on one blood draw without having the use of a second disinfectant be noticed by Deputy Hagel.

[¶ 13] A reasoning mind examining the form would not have made the same inferences as the hearing officer. The form is unclear as to which disinfectant was used, and the state toxicologist testified she could not say the test results were accurate without that information. Deputy Hagel’s testimony does not resolve the ambiguity present on the face of the form. The hearing officer’s conclusions were not reasonable based on the evidence. We affirm the district court’s reversal of Bol-lin’s suspension.

III.

[¶ 14] The Department argues Bollin failed to preserve his objection to the admission of the test results by not specifying his objection when the hearing officer asked him to. This Court has said, “if the hearing officer had sought more specific objections before ruling on them, [the defendant] would have had to specify or risk waiving his objections.” Tabert v. N.D. Dep’t of Transp., 1997 ND 39, ¶ 7, 560 N.W.2d 883; see also N.D.R.Ev. 103(a)(1) (requiring a statement of the specific ground of objection unless such ground is not apparent from the context).

[¶ 15] The hearing officer asked Bollin if he could be more specific on his objections before she ruled on them. Bollin responded, “I don’t have anything more specific at this time. Maybe after cross-examination, I will. If I do, I’ll specify at that point in time.” The hearing officer stated, “[v]ery well. The objection, since it is not specific, is now overruled.” Bollin solicited testimony from the state toxicologist and Deputy Hagel regarding Form 104, then stated during closing arguments why he felt the test had not been properly administered.

[¶ 16] When Bollin said he was unable to specify the grounds for his objection, but would do so later if possible, the hearing officer stated the objection was overruled “now,” implying she would be willing to reconsider at a later point in the hearing. While the formal objection was never specifically renewed, Bollin’s closing argument stated his reasons for wanting the test results kept out of evidence. In any event, the record indicates both Bollin and the hearing officer were willing to reconsider the objection once Bollin had an opportunity to examine the witnesses and all the testimony had been heard, and, significantly, the hearing officer did subsequently resolve the substance of the objection, the ambiguity in the form, in the findings.

IV.

[¶ 17] Bollin claims the Department should not be able to argue he failed to preserve his objection because the argument was not raised at the district court. Because we find Bollin preserved his objection at the administrative hearing for reasons set forth above, we find it unnecessary to address this issue.

V.

[¶ 18] We affirm.

[¶ 19] GERALD W. VANDE WALLE, C.J., DALE V. SANDSTROM, and MARY MUEHLEN MARING, JJ., concur.

[¶ 20] The Honorable CAROL RONNING KAPSNER disqualified herself subsequent to oral argument and did not participate in this decision.

[¶ 21] The Honorable WILLIAM A. NEUMANN, a member of the Court when this case was heard, resigned effective March 14, 2005, and did not participate in this decision.


source: Caselaw Access Project

author: VANDE WALLE, Chief Justice.

license: Public Domain

text:
    2005 ND 94
    Bruce GLASOW, on behalf of himself and all others similarly situated, Plaintiff and Appellant v. E.I. DUPONT DE NEMOURS AND COMPANY; Pioneer Hi-Bred International; and Monsanto Company, Defendants and Appellees Robert Finken, Appellant.
    No. 20040321.
    Supreme Court of North Dakota.
    May 17, 2005.

      Sarah M. Vogel (appeared), Sarah Vogel Law Firm, P.C., Bismarck, N.D., for plaintiff and appellants.
    Adam J. Levitt '(argued), Wolf Halden-stein Adler Freeman & Herz LLC, Chicago, IL, for plaintiff and appellants.
    Daniel W. Krasner (on brief) and Scott J. Farrell (on brief), Wolf Haldenstein Adler Freeman <& Herz LLP, New York, NY, for plaintiff and appellants.
    David A.P. Brower (on brief), Milberg Weiss Bershad & Schulman LLP, New York, NY, for plaintiff and appellants.
    Stephen A. Weiss (on brief) and James A. O’Brien III (on brief), Seeger Weiss LLP, New York, NY, for plaintiff and appellants.
    Lawrence E. King (appeared) and Patrick J. Ward (on brief), Zuger Kirmis & Smith, Bismarck, N.D., for E.I. DuPont de Nemours and Company and Pioneer Hi-Bred International.
    Anthony J. Franze (argued), Robert N. Weiner (on brief), and Judith Bemstein-Gaeta (on brief), Arnold & Porter LLP, Washington, D.C., for Monsanto Company.
    Stephen W. Plambeck (appeared) and Joel M. Fremstad (on brief), Nilles, Ilved-son, Stroup, Plambeck & Seibo, Ltd., Fargo, N.D., for Monsanto Company.
    Scott E. Gant (argued) and James P. Denvir (on brief), Boies Schiller & Flexner LLP, Washington, DC, for E.I. DuPont de Nemours and Company and Pioneer Hi-Bred International.
   VANDE WALLE, Chief Justice.

[¶ 1] Bruce Glasow and Robert Finken appealed from the district court’s order denying Glasow’s motion to withdraw as party plaintiff, Finken’s motion to intervene, and dismissal without prejudice. We reverse and remand for further proceedings consistent with this opinion.

I

[¶ 2] In March 2004, Glasow filed a class action against E.I. DuPont de Nem-ours, Pioneer Hi-Bred International, and Monsanto Company (“DuPont”), alleging the sale of genetically modified crop seed violated North Dakota antitrust laws. In July 2004, Glasow moved to withdraw as the named party plaintiff and Finken simultaneously moved to intervene within the same motion. The district court denied both motions, finding Glasow’s motion to withdraw as party plaintiff constituted a notice of voluntary dismissal and dismissed the action without prejudice.

II

• [¶ 3] DuPont argues Glasow lacks standing to appeal because the district court’s judgment dismissing his action without prejudice did not affect his interests. An order to dismiss without prejudice is generally not appealable. E.g., Kouba v. FEBCO, Inc., 1998 ND 171, ¶ 4, 583 N.W.2d 810. However, Rule 23, N.D.R.Civ.P., governing class actions, permits appeals from what are otherwise non-appealable orders. Because this is a class action, N.D.R.Civ.P. 23 governs this matter, and we conclude the appeal to be properly before us under Rule 23.

Ill

[¶4] Glasow argues the district court erred in denying the motion to withdraw, the motion to intervene, and ultimately, in dismissing the action. Glasow argues the district court ignored the North Dakota rules of civil procedure requiring written notice of voluntary dismissal, a court hearing, and a decision before a class action can be voluntarily dismissed.

[¶ 5] Glasow’s motion to withdraw as party plaintiff was filed in tandem with Finken’s motion for intervention. The motions were filed within the very same document. The district court treated Glasow’s motion to withdraw as a notice of voluntary dismissal and, on its own motion, dismissed the case without prejudice. In non-class action proceedings, a district court may, on its own motion, order dismissal of an action. N.D.R.Civ.P. 41(a)(2); see also Albrecht v. Metro Area Ambulance, 1998 ND 132, ¶ 12, 580 N.W.2d 583 (noting the court, on its own motion, ordered dismissal of the action without prejudice). However, a district court may not dismiss a class action without following the procedural requirements of Rule 23(l), N.D.R.Civ.P.

[¶ 6] Glasow filed his summons and complaint as a class action. DuPont argues Rule 23 does not apply because Gla-sow did not file a motion to certify the class. Rule 23(l), N.D.R.Civ.P., states:

(1) Unless certification has been refused under subdivision (b), a class action, without the approval of the court after hearing, may not be (A) dismissed voluntarily, (B) dismissed involuntarily without an adjudication on the merits, or (C) compromised.

DuPont argues a strained reading of Rule 23(0- Under federal law, it appears a motion to withdraw as named plaintiff pri- or to a motion for certification moots the plaintiffs claims. Eckert v. Equitable Life Assurance Soc’y of the U.S., 227 F.R.D. 60 (E.D.N.Y.2005). However, the federal rules do not require the court’s approval to withdraw, but only require court approval of settlement, voluntary dismissal, or compromise of certified class actions. Id. (citing Fed.R.Civ.P. 23(e)(1)(A)). The plain language of Rule 23(l), N.D.R.Civ.P., does not require that a motion to certify the class is filed before it becomes applicable. Therefore, Rule 23(Z), N.D.R.Civ.P., governs the dismissal of all class actions.

[¶ 7] Under Rule 23(Z), N.D.R.Civ.P., a class action may only be voluntarily dismissed, involuntarily dismissed without ád-judication on the merits, or compromised after a hearing and court approval. The district court equated Glasow’s motion to withdraw as a notice of voluntary dismissal. Equating the motion to withdraw to a voluntary dismissal, at the very least, compromises the action and requires a hearing. However, the district court did not hold a .hearing on the matter and dismissed the case without prejudice. The district court did not comply with the requirements of Rule 23(i), N.D.R.Civ.P. Furthermore, it is apparent Glasow’s motion to withdraw was to be considered simultaneously with Finken’s motion to intervene as a unified motion, rather than to be considered separately. We reverse the dismissal without prejudice and remand for a determination on the merits of Gla-sow’s motion to withdraw.

IV

[¶ 8] The district court denied Finken’s motion to intervene, finding the dismissal without prejudice ended the action thereby making Finken’s motion moot. Because we conclude the district court erred in dismissing the action without a motion to do so, we remand Finken’s motion to intervene for a determination on the merits in conjunction with GlasoVs motion to withdraw as party plaintiff.

V

[¶ 9] We reverse the dismissal without prejudice and remand for further proceedings consistent with this opinion.

[UlO], CAROL RONNING KAPS-NER, DALE V. SANDSTROM and MARY MUEHLEN MARING, JJ., concur.


author: MARING, Justice.

text:
    2005 ND 95
    Kevin Mark KOENIG, Petitioner and Appellee, v. NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, Respondent and Appellant.
    No. 20040351.
    Supreme Court of North Dakota.
    May 17, 2005.
    Douglas B. Anderson (argued), Assistant Attorney General, Office of Attorney General, Bismarck, N.D., for respondent and appellant.
    Thomas A. Dickson, of Dickson & Pur-don Law Office, Bismarck, N.D., and Chad R. McCabe (argued), of Vinje Law Firm, Bismarck, N.D., for petitioner and appel-lee.
   MARING, Justice.

[¶ 1] The North Dakota Department of Transportation (“Department”) appeals from a district court judgment reversing its administrative suspension of Kevin Koenig’s driving privileges for ninety-one days. We reverse the district court’s judgment and reinstate the Department’s decision.

I

[¶2] At approximately 12:30 a.m. on March 14, 2004, North Dakota Highway. Patrol Officer Eric Pederson observed Koenig operating a vehicle without its headlights on. After initiating a traffic stop of the vehicle, Officer Pederson suspected Koenig was driving under the influence of alcohol and administered several field sobriety tests. After failing the tests, Koenig was placed under arrest and transported to the Stutsman County Corrections Center where he submitted to Intoxi-lyzer testing.

[¶ 3] After providing the first of two breath samples necessary to produce a final test result using the Intoxilyzer machine, Koenig put chewing tobacco in his mouth, making it impossible to obtain an accurate reading on the second required breath sample. Officer Pederson testified he did not think Koenig used the chewing tobacco to intentionally interfere with the test results. Officer Pederson then had Koenig remove the tobacco from his mouth. Officer Pederson began a twenty-minute waiting period, which is necessary under the approved method for this particular model Intoxilyzer, if the test subject has had anything “to eat, drink, or smoke.” Officer Pederson testified, “[w]e didn’t do a second subject test because the test wasn’t validated do [sic] to the fact he put chewing tobacco in. Then which actually turned out to be kind of fortunate because when I got done it wouldn’t print out. Somebody had messed with the printer. So got the printer working again.” Consequently, a record of the results of this first incomplete Intoxilyzer .test was not printed; therefore, documentation relating to the results of this test was not forwarded to the Department.

[¶ 4] After ascertaining the twenty-minute waiting period, a second Intoxilyzer test, composed of the required two breath samples, was administered and successfully printed, This test established Koenig’s blood-alcohol concentration at .16 percent of body weight. Officer Pederson made notations regarding the problems with the first test on both the printout of the second 'test results and on the test record checklist associated with the second test. He then forwarded the documentation to the Department. When asked how he fixed the printer between the administration of the first and second Intoxilyzer tests, Officer Pederson testified he “just pulled a print cartridge out, pulled all of the paper out, put everything back in, and put it in and it was the green light quit flashing and it came on.... It was nothing internal to the Intoxilyzer.” Officer Ped-erson further testified, “I could not get the test record to print out because it timed itself out.” Based on this evidence, the Department suspended Koenig’s driver’s license.

[¶ 5] Koenig appealed the Department’s decision to the district court, arguing that because the officer failed to forward a record of the first Intoxilyzer test results to the Department, the Department did not have jurisdiction under N.D.C.C. § 39-20-03.1(3), which requires the law enforcement officer to forward to the director test records for “all tests” administered. The district court agreed with Koenig and reversed the Department’s suspension of his license.

[¶ 6] The Department appeals the judgment, arguing the district court erred in requiring the officer to forward results of the first incomplete Intoxilyzer test because the results were invalid due to Koe-nig’s use of chewing tobacco and were not printed due to a printer malfunction.

II

[¶ 7] Judicial review of a decision to suspend a driver’s license is governed by the Administrative Agencies Practice Act, N.D.C.C. ch. 28-32. Larsen v. North Dakota Dep’t of Transp., 2005 ND 51, ¶ 4, 693 N.W.2d 39. Under N.D.C.C. § 28-32-46, the district court must affirm an order of an administrative agency unless it finds any of the following are present:

1. The order is not in accordance with the law.
2. The order is in violation of the constitutional rights of the appellant.
3. The provisions of this chapter have not been complied with in the proceedings before the agency.
4. The rules or procedure of the agency have not afforded the appellant a fair hearing.
5. The findings of fact made by the agency are not supported by a preponderance of the evidence.
6. The conclusions of law and order of the agency are not supported by its findings of fact.
7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.
8. The conclusions of law and order of the agency do not sufficiently explain the agency’s rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

[¶ 8] On an appeal from a. district court’s ruling on an administrative appeal, our Court reviews the agency’s order in the same manner. N.D.C.C. § 28-32-49; Larsen, 2005 ND 51, ¶ 4, 693 N.W.2d 39.

' [2,3] [¶ 9] The interpretation of a statute is a question of law, which is fully reviewable on appeal. Johnson v. North Dakota Dep’t of Transp., 2004 ND 148, ¶ 5, 683 N.W.2d 886. When an appeal involves the interpretation of a statute, our Court will affirm the agency’s order unless it finds the order is not in accordance with the law. Id.

Ill

[¶ 10] The sole issue presented on appeal is whether the Department lacked the jurisdiction necessary to suspend Koe-nig’s driver’s license because the arresting officer did not forward “all tests” administered as required under N.D.C.C. § 39-20-03.1(3). Section 39-20-03.1(3), N.D.C.C., provides:

In addition to the operator’s license and report, the law enforcement officer shall forward to the director a certified .copy of the operational checklist and test records of a breath test and a copy of the certified copy of the analytical report for blood, saliva, or urine test for all tests administered at the direction of the officer.

[¶ 11] In Bosch v. Moore, 517 N.W.2d 412, 413 (N.D.1994), our Court stated, in pertinent part:

Section 39-20-03.1(3) requires the officer to forward the test records for “all tests” conducted at the officer’s direction, regardless of whether the officer judges the results to be invalid. We have said that an administrative agency must follow the basic mandatory provisions of the statute. The statute’s command that all tests be forwarded to DOT is basic and mandatory. It precludes the officer’s exercise of choice and requires the transmittal of “all tests.” The legislature has made it the hearing officer’s domain, not the officer’s, to judge the foundational facts for the admissibility of test results and the weight to be given. to each of those results. Therefore, we conclude that the officer’s failure to submit the Intoxilyzer test records deprived DOT of authority to suspend Bosch’s driving privileges.

Bosch, 517 N.W.2d at 413 (citation omitted); see also Larson v. Moore, 1997 ND 227, 571 N.W.2d 151.

[¶ 12] Both Bosch and Larson are distinguishable from this case. In Bosch, the officer conducted both a urine test and an Intoxilyzer breath test. Bosch, 517 N.W.2d at 413. The officer then discarded the Intoxilyzer test because the deviation between the two breath samples was such that the arresting officer felt the results were invalidated. Id. at 412. Only the results of the urine test were forwarded to the Department. Id. We held the statute precludes an officer from using the officer’s discretion to determine which test to forward. Id. at 413. Consequently, the Department lacked jurisdiction because the officer involved substituted his judgment for that of the Department by discarding a test he deemed invalid. Id.

[¶ 13] In Larson, the defendant was given two blood tests. Larson, 1997 ND 227, ¶ 3, 571 N.W.2d 151. During the first blood test, the nurse was only able to draw a small amount of blood. Id. A second sample was then obtained containing a sufficient amount of blood and was forwarded according to standard procedure. Id. The arresting officer discarded the first sample. Id. We reversed the hearing officer’s decision, holding “the officer had no discretion in determining whether an analytical report may be made from a small amount of blood.” Id. at ¶ 10.

[¶ 14] Here, Officer Pederson did not discard any test results or otherwise make a judgment on the validity of any tests administered to Koenig. Every available record of test results was forwarded to the Department. The machine used in this circumstance, the Intoxilyzer 5000 KB-EP, requires the test subject to have had nothing to eat, drink, or smoke within twenty minutes before the collection of a .breath sample. Presumably, this requirement includes using chewing tobacco. Officer Pederson testified that after administering the first breath sample, Koenig “put in a wad of chewing tobacco,” causing Officer Pederson to wait before administering the second breath sample because the tobacco use would invalidate the test result. The approved method for the Intoxilyzer also indicates a foreign substance in the subject’s mouth will invalidate the results. Officer Pederson testified he had Koenig remove the tobacco to initiate the required twenty-minute wait before beginning a new test. He then attempted to print a record of the first test, but experienced a printer malfunction. By the time the printer was working again, the Intoxilyzer had “timed out” and would no longer provide the test results of the first breath sample. After the twenty-minute wait, a second Intoxilyzer test was administered and the officer forwarded to the Department a record of those results, which indicated Koenig’s blood-alcohol concentration was .16.

[¶ 15] In Schwind v. Director, North Dakota Dept. of Transp., 462 N.W.2d 147, 150 (N.D.1990), we addressed the jurisdictional requirements of the Department:

While the jurisdiction of an administrative agency is dependent upon the terms of a statute, these terms must be construed logically so as not to produce an absurd result. Fireman’s Fund Mortgage Corp. v. Smith, 436 N.W.2d 246 (N.D.1989). Where adherence to the letter of the law would result in an absurdity, we have noted that “effect will be given the real intention even though contrary to the letter of the law.” Perry v. Erling, 132 N.W.2d 889, 896 (N.D.1965) (quoting 82 C.J.S. Statutes § 325 (1953)).
The clear legislative intent in enacting chapter 39-20, N.D.C.C., was for the protection of the public, i.e., to prevent individuals from driving while under the influence of intoxicants. Williams v. North Dakota State Highway Comm’r; 417 N.W.2d 359, 360 (N.D.1987); Asbridge v. North Dakota State Highway Comm’r, 291 N.W.2d 739, 750 (N.D.1980). Section 39-20-03.1, N.D.C.C., was enacted, in part, to help ensure that an individual who violated this chapter would not continue to drive. It would be an absurd result if we were to hold that an officer’s failure to strictly comply with this portion of the statute had the opposite effect. While it is clear that section 39-20-03.1, N.D.C.C., requires the officer to forward the operator’s license, the failure to do so does not destroy the Director’s jurisdiction to suspend a violator’s driving privileges. A contrary holding would defeat the Legislature’s intent to protect the public from potential hazards posed by intoxicated drivers.

[¶ 16] On appeal, Koenig does not dispute any of the material facts supporting the Department’s suspension of his license. To conclude the Department lacked jurisdiction because the officer failed to forward test results that were not printed due to a printer malfunction and that had nothing to do with the officer’s exercise of judgment concerning the validity of the results, would produce an absurd result contrary to the intent and public policy behind N.D.C.C. § 39-20-03.1(3).

IV

[¶ 17] We reverse the district court’s judgment and reinstate the Department’s suspension of Koenig’s driver’s license.

[¶ 18] GERALD W. VANDE WALLE, C.J., CAROL RONNING KAPSNER, and DALE V. SANDSTROM, JJ., concur.


author: TIEDE, Circuit Judge.

text:
    2005 SD 52
    INDEPENDENT TRUST COMPANY, LLC, Appellant, v. SOUTH DAKOTA STATE BANKING COMMISSION, Department of Commerce and Regulation, Division of Banking, Appellees, and Security National Bank, Intervenor and Appellee.
    No. 23357.
    Supreme Court of South Dakota.
    Argued Feb. 17, 2005.
    Decided April 27, 2005.

      Charles M. Thompson of May, Adam, Gerdes & Thompson, Pierre, South Dakota, Attorneys for appellant Independent Trust Company.
    Roberto A. Lange of Davenport, Evans, Hurwitz & Smith, Sioux Falls, South Dakota Attorneys for intervenor and appellee Security National Bank.
   TIEDE, Circuit Judge.

[¶ 1.] Independent Trust Company, LLC (ITC) appeals the South Dakota Banking Commission’s (Commission) denial of its application to organize and operate a trust company in Dakota Dunes, South Dakota. We affirm.

FACTS AND PROCEDURE

[¶ 2.] ITC is a limited liability company organized by five partners of an accounting firm, King, Reinsch, Prosser, & Co., LLP (KRP), and Christian Holman (Holman), an attorney employed by KRP Financial Services. ITC filed an application with the South Dakota Division of Banking to form a trust company in Dakota Dunes, South Dakota under SDCL ch 51A-6A. Security National Bank (Security) intervened in opposition to the application.

[¶ 3.] The Director of Banking issued a memorandum to the Commission regarding his examination and investigation pursuant to SDCL 51A-6A-5. A contested hearing was held before the Commission on October 9, 2003. Several witnesses for both ITC and Security testified and were cross-examined. The Commission received post-hearing briefs from both ITC and Security. The Commission denied ITC’s application on January 9, 2004. ITC appealed to the circuit court and the court held a hearing on July 21, 2004. Following the arguments of counsel, the court affirmed the Commission’s decision. ITC appeals.

ISSUE

[¶ 4.] Whether the circuit court erred in affirming the Commission’s denial of ITC’s application to operate a trust company.

STANDARD OF REVIEW

[¶ 5.] In deciding whether to grant an application, the Commission is bound by the Administrative Procedure Act, SDCL ch 1-26. Application of American State Bank, 254 N.W.2d 151, 152 (S.D. 1977) (citation omitted); SDCL 51A-6A-4. The Commission’s findings of fact are reviewed under the clearly erroneous standard. Application of Dorsey & Whitney Trust Co., 2001 SD 35, ¶5, 623 N.W.2d 468, 471 (citing Permann v. Dept. of Labor, 411 N.W.2d 113, 115-17 (S.D.1987)). Questions of law are reviewed de novo. Id. ‘When presented with a mixed question, courts apply the clearly erroneous standard if the ‘analysis is essentially factual, and thus is better decided by the agency or lower court ...,’ and the de novo standard when the ‘resolution requires consideration of underlying principles behind a rule of law....’” Dorsey & Whitney, 2001 SD 35, ¶ 5,. 623 .N.W.2d at 471 (quoting Rios v. Dept, of Soc. Sews., 420 N.W.2d 757, 759 (S.D.1988)). “Where the analysis turns on the fact finder’s ‘experience with the mainsprings of human conduct,’ it is essentially a factual question to which we apply the clearly erroneous standard.” Dorsey & Whitney, 2001 SD 35, ¶ 6, 623 N.W.2d at 471 (quoting Permann, 411 N.W.2d at 119 (other citations omitted)). “Considering the factual nature of the inquiry made by the Commission and the factual nature of the arguments in the briefs, we determine this mixed question is essentially factual in nature.” Dorsey & Whitney, 2001 SD 35, ¶ 6, 623 N.W.2d at 471. “Accordingly, the clearly erroneous standard is appropriate, meaning this Court will not reversé unless ‘we are definitely and firmly convinced a mistake has been made.’ ” Id. (citations omitted).

ANALYSIS AND DECISION

[¶ 6.] ITC had the burden of proving by a preponderance of the evidence that it satisfied the four conditions contained in SDCL 51A-6A-5, which provides:

Upon the filing of an application with the commission, the director shall make a careful examination and investigation concerning the following conditions:
(1) The financial standing, general business experience, and character of the organizers and incorporators;
(2) The character, qualifications, and experience of the officers of the proposed trust company;
(3) The public need for the proposed trust company in the community where the trust company has proposed to locate and whether existing banks or trust companies are meeting the need; and
(4) The prospects for success of the proposed trust company.
If the commission determines any of these conditions unfavorable to the applicants, the application shall be disapproved, but if not, then the application shall be approved.

[¶ 7.] While the Banking Director indicated in his memorandum that the conditions of SDCL 51A-6A-5 were satisfied, the Commission, not the Director, is statutorily charged with the final authority to determine whether the conditions have been met. There was information presented at the hearing that was not known to the Director when he reviewed the application. “Our legislature purposefully gave, the South Dakota Banking Commission a great deal of discretion in deciding factual questions because the commissioners are individuals with specialized knowledge of the banking and trust industries whose judgment and insight in these specialized fields facilitate the admittance and overall regulation of these industries.” Dorsey & Whitney, 2001 SD 35 at ¶ 9, 623 N.W.2d at 472 (citing Valley State Bank v. Farmers State Bank, 87 S.D. 614, 625, 213 N.W.2d 459, 465 (1973) (other citations omitted)). This does not mean that the Commission’s discretion is absolute. Dorsey & Whitney, 2001 SD 35 at ¶ 9, 623 N.W.2d at 472 (citing Wall v. Fenner, 76 S.D. 252, 256, 76 N.W.2d 722, 724 (1956)). “It must base its actions on factual determinations limited to the factors enumerated in the statute.” Id.

[¶ 8.] The Commission found that ITC failed to satisfy any of the four conditions of SDCL 51A-6A-5. In its brief, ITC cites to the evidence that it believes supports findings contrary to those reached by the Commission. However, the question is not whether there is any evidence to support contrary findings, but whether the Commission’s findings are clearly erroneous.

(1) The financial standing, general business experience, and character of the organizers and incorporators

[¶ 9.] The Commission concluded that ITC failed to prove by a preponderance of the evidence that its organizers have adequate financial standing, business experience, and character to operate a trust company. The Commission found in Finding of Fact No. 2 that ITC’s application included “very sketchy financial information and projections of losses in the first two years of operation.” The testimony at the hearing revealed that the organizers did not prepare a written business plan. Holman testified that the original investors “basically did it verbally talking out the idea.” The Commission found in Finding of Fact No. 2:

The application and testimony at the hearing revealed significant problems with ITC’s business plan and financial standing.... ITC’s income projections assume that it could charge fees at or above the top end of the market. ITC did not establish how it can charge more than its competition, and yet attract the volume of trust business that it projected or achieve the fast growth that it projected. The income projections of ITC appear to be unrealistic. On the expense side, ITC underestimated its expenses and overlooked several large expense items, including investment fees to Smith Barney, the omission of employee benefits and employer share of Social Security, outsourcing of a variety of services, tax return preparation, custody and safekeeping, and South Dakota’s minimum tax on trust companies.

[¶ 10.] The Commission further found that “Applicant’s financial information and testimony calls into question the solvency of ITC and the minimum capital into year 3, 4, and 5 of the business plan.” SDCL 51A-6A-19 requires that “[t]he minimum capital of a trust company shall be two hundred thousand dollars.” The testimony was that ITC’s initial capitalization would be $360,000. However, based on the Commission’s findings on the unreliability of ITC’s profit and loss projections, ITC could drop below the $200,000 capital threshold quickly. No financial statements for the organizers were submitted. The. Commission found that ITC had not submitted proof of the organizers’ actual financial standing and that there had only been cursory testimony on the subject of the organizers’ financial standing. Holman testified generally that the organizers were willing to invest additional capital in the event that ITC did not operate profitably within the time projected. When questioned further he did not substantiate to the Commission the availability of additional funds or how much additional capital the organizers were willing to. invest.

[¶ 11.] ITC seeks to- place the blame on the Commission by arguing that the . Commission failed to request additional information regarding the organizers’ financial standing, business experience or character. While the Commission may have the authority to request additional information, it is not obligated to do so. ITC’s arguments suggest that an applicant can submit an inadequate application and expect the Commission to request the information needed to satisfy the conditions of SDCL 51A-6A-5. However, it was ITC that had the burden of proving by a preponderance of the evidence that it satisfied the statutory conditions. Reviewing the record in its entirety, the Commission’s findings as to the financial standing, business experience, and character of the organizers are not clearly erroneous.'

(2) The character, qualifications, and experience of the officers of the proposed trust company

[¶ 12.] ITC’s application identified Holman as the President and Managing Director of ITC, as well as the trust officer. The remaining organizers were identified as the other officers. The Commission found that ITC failed to prove by a preponderance of the evidence that its officers had the requisite character, qualifications, and experience to operate a trust company. The Commission found in Finding of Fact No. 3:

The organizers of ITC lack familiarity with compliance, supervision, or operational requirements of a trust department. The application and financial projections in the application reflect the inexperience of the organizers in operating a trust company. ITC lacks any security program, which is a critical component of a trust business. ITC did not show the requisite qualifications and experience of the officers of the proposed trust company.

[¶ 13.] Holman was the only officer with any experience working for a trust company. Holman worked for approximately 4 1/2 years with Wells Fargo Bank in Iowa. However, Holman testified that he had no management responsibilities while at Wells Fargo. Holman was an attorney licensed in California, but was not licensed in South Dakota where ITC intended to operate a trust company. The Commission’s findings as to this condition are not clearly erroneous.'

(3) The public need for the proposed trust company in the community where the trust company has proposed to locate and whether existing banks or trust companies are meeting the need

[¶ 14.] The Commission found that ITC failed to prove by a preponderance of the evidence the public need for the proposed trust company. The Commission found that there were three active businesses in Dakota Dunes offering trust services and that the trust business was competitive in the southeastern South Dakota area. Unlike in Dorsey & Whitney where the law firm had existing long term relationships in the trust context with its proposed clients and would be serving a specialized market, the Commission found in Finding of Fact No 4 that “ITC does not have a longstanding fiduciary relationship with any grantors or beneficiaries, but rather ITC intends to solicit business generally in South Dakota.”

[¶ 15.] There was conflicting expert testimony regarding the need for a trust company in the Dakota Dunes area. According to the application submitted by ITC, there were twelve institutions with trust powers located in the four South Dakota counties included in the proposed trust company service area. Eleven of those institutions were exercising those trust powers. There were thirty-three institutions with trust powers in the four Iowa counties included in the proposed service area and twenty-four of those institutions were exercising those trust powers. No witnesses testified as to any dissatisfaction with those existing trust businesses. ITC did offer affidavits from investors and other business persons in the area indicating that there was a need for an additional trust company. However, those affiants were not present at the hearing for cross-examination and there was testimony that many of the affiants were under the mistaken belief that there was only one option, for trust services in southeastern South Dakota.

[¶ 16.] Reviewing the record as a whole, the Commission’s findings as to this condition are not clearly erroneous.

(4) The prospects for success of the proposed trust company

[¶ 17.] The Commission found that ITC had not shown its prospects for success by a preponderance of the evidence. “We have previously stated, ‘[t]he overriding purpose of our banking laws is the protection and security of a bank’s depositors and creditors.’ ” Dorsey & Whitney, 2001 SD 35 at ¶ 10, 623 N.W.2d at 472 (quoting Application of American State Bank, 254 N.W.2d at 153) (alteration in original). “Similarly, the legislature intended to protect the participants in the trust industry by ensuring the ‘creation and maintenance of adequate and sound [trust] facilities and services.’ ” Dorsey & Whitney, 2001 SD 35 at ¶ 10, 623 N.W.2d at 472 (citation omitted) (alteration in original). The Commission concluded that “[t]he safety and soundness of the ’trust industry would not be served by approval of the application of ITC.” Based on the above' analysis of the Commission’s findings and a review of the record, the Commission’s findings have not been shown to be clearly erroneous.

CONCLUSION

[¶ 18.] As stated by the trial court, this is a fact-driven case. There was conflicting evidence offered at the hearing before the Commission. It is clear from reviewing the record that,the members of the Commission actively participated in the hearing by, considering the evidence presented and asking questions of the witnesses. While ITC asserts that it was unfairly misfed as to the need to provide the organizer’s financial statements, the Commission found that ITC had not satisfied any of the four statutory conditions. ITC’s reliance on the Banking Director’s Memorandum is misplaced because it is the Commission, not the Director, who has final authority to approve an application. As stated above, the legislature purposely gave the Commission great discretion in deciding factual questions because of the specialized knowledge possessed by the members of the Commission.” Dorsey & Whitney, 2001 SD 35 at ¶ 9, 623 N.W.2d at 472 (citations omitted). The Commission based its decision on the application of its factual findings to the statutory conditions enumerated in SDCL 51A-6A-5. ITC has not shown that those findings are clearly erroneous. This Court will only reverse if it is “ ‘definitely and firmly convinced that a mistake has been made.’ ” Id at ¶ 6, 623 N.W.2d at 471 (citation omitted).

[¶ 19.] Therefore, we affirm.

[¶ 20.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP and MEIERHENRY, Justices, concur.

[¶ 21.] TIEDE, Circuit Judge for ZINTER, Justice, disqualified.

      . SDCL 51A-6A-4 provides:

        No trust company may be incorporated or organized under the laws of this state or transact trust company business in this state until the application for its incorporation or organization and application for authority to do business has been submitted to and approved by the commission. The commission shall approve or disapprove the establishment of any trust company and the location of its principal office. The commission shall prescribe the form for making an application, and any application made to the commission shall contain such information as it requires. The commission may not approve any application until the director first investigates and examines the application and the applicants. All proceedings before the commission on any application shall be held in conformance with chapter 1-26. If upon the dissolution or insolvency of any trust company it is the opinion of the director that by reason of the loss of services in the community, an emergency exists which may result in serious inconvenience or losses to customers or it is in- the public interest of the community, the director may accept and approve an application for incorporation or organization and an application for authority to do business, subject to confirmation and subsequent approval by the commission. Upon approval of an application for authority to do business of a successor trust company, the director shall call a special meeting of the commission, and submit the application to the commission for its confirmation and approval, (emphasis added).

      . In this case, the organizers and the officers were the same individuals. Therefore, the Commission's findings as to the organizers are applicable to a discussion of the officers.


author: MEIERHENRY, Justice.' SABERS, Justice

text:
    2005 SD 53
    Peter FRANKLIN, individually, and Pistol Pete’s, Inc., a South Dakota Corporation, Plaintiffs and Appellants, v. FOREVER VENTURE, INC., a South Dakota Corporation, Defendant and Appellee.
    No. 23302.
    Supreme Court of South Dakota.
    Considered on Briefs on Feb. 15, 2005.
    Decided April 27, 2005.

      Michelle K. Percy of Tellinghuisen, Gordon & Percy, Spearfish, South Dakota Attorneys for plaintiffs and appellants.
    Thomas E. Brady of Brady & Plumier, Spearfish, South Dakota, Attorneys for defendant and appellee.
   MEIERHENRY, Justice.'

[¶ 1.] This appeal involves a non-compete clause in a contract for the sale of a restaurant. Peter Franklin (Franklin), the seller, brought a declaratory action to determine if the non-compete provision was in- violation of the statutory prohibition against restraints of trade. The buyer, Forever Venture, Inc., counterclaimed for an injunction prohibiting Franklin from continuing in his present job. The trial court determined that the non-compete provision was enforceable and issued an injunction against Franklin. Franklin appeals.

PROCEDURAL BACKGROUND AND FACTS

[¶ 2.] Franklin was the sole shareholder in a corporation known as Pistol Pete’s Inc. Pistol Pete’s owned and operated Mad Mary’s, a steakhouse in Spearfish, SD. In June of 2003, Pistol Pete’s sold the steakhouse to Forever Venture Inc. (Forever). The total price for the business was $358,000, of which $50,000 was designated for the goodwill/covenant not to compete. The non-compete covenant provides:

Seller, its stockholders and principals, jointly or severally and Peter Franklin individually will not in any manner, directly or indirectly, be or act as an employee, proprietor, partner, shareholder, officer, manager, agent, advisor, consultant, investor or otherwise, by any means, of any corporation, entity or business enterprise which shall construct, own or operate a restaurant within Meade County, Butte County and Lawrence County, South Dakota and Crook County, Wyoming for so long as Buyer, or its assigns and successors, is engaged in this restaurant business or for-such maximum term as may now or hereafter be permitted by law, whichever is longer.

[¶ 3.] About nine months after the sale, Franklin began working -in food service at Tatanka, an educational interpretive center near Deadwood. Tatanka is part of Kevin Costner Industries in South Dakota. Lisa Bryan, manages the facility. As an interpretative center, Tatanka’s mission is to educate people about the relationship between the buffalo/bison and the Lakota people. The center includes a restaurant. In association with the center’s theme, the restaurant features buffalo meat. It has a limited menu including soups, salads, burgers, brats and ribs. Customers place their orders at a counter and wait while it is prepared. There are no waiters or waitresses. Food items are served on paper plates with plastic utensils. The customers eat on tables inside or picnic tables outside. The facility does not serve liquor. Its hours are limited to daytime, and it is only open during the tourist season.

[¶ 4.] Bryan hired Franklin to work as a prep cook in the restaurant. His employment runs from March until October at a salary of $35,000, which calculates to approximately $20.00 an hour. Besides preparing the food, Franklin assists Bryan in planning and pricing the food items.

[¶ 5.] Forever’s restaurant, “Shoot the Bull,” is considered a “high end restaurant” serving a variety of dinner offers from 5:00 p.m. to 10:00 p.m. The restaurant had also expanded its service to include lunch.

[¶ 6.] The trial court concluded that the non-eompete provision in the contract was valid and that Franklin was in violation. The trial court issued a restraining order against Franklin enjoining him as follows:

... permanently enjoined and restrained from in any manner, directly or indirectly, being or acting as an employee, proprietor, partner, shareholder, officer, manager, agent, advisor, consultant, investor or otherwise, by any means, of Bob’s Family Restaurant in Sturgis, Meade County, South Dakota, the Clubroom restaurant in Spearfish, Lawrence County, South Dakota and the restaurant at Tatanka, Lawrence County, South Dakota, or any other corporation, entity, or business enterprise which shall construct, own or operate a restaurant business, within Meade County, Butte County and Lawrence County, South Dakota, and Crook County Wyoming, for so long as Defendant, or its assigns and successors, shall be engaged in the restaurant business which it purchased from Plaintiffs or for such maximum term as may now or hereafter be permitted by law, whichever is longer;

Franklin appeals, contending that the non-compete clause violates SDCL 53-9-9 because it does not provide a lawful time limit and is broader than the statute allows.

STANDARD OF REVIEW

[¶ 7.] We review de novo both the interpretation of the terms of a contract and the meaning of a statute. Fenske Media Corp. v. Banta Corp., 2004 SD 23, ¶ 8, 676 N.W.2d 390, 393; Blase v. Brewer, 2005 SD 7, ¶7, 692 N.W.2d 785, 786. The trial court’s findings of fact are reviewed under the clearly erroneous standard. Block v. Drake, 2004 SD 72, ¶ 8, 681 N.W.2d 460, 463.

ISSUE

Whether the trial court erred in concluding that the non-compete clause in the Franklin-Forever restaurant sale agreement complied with SDCL

53-9-9 and was valid and enforceable against Franklin.

DECISION

[¶ 8.] South Dakota law prohibits restraint of trade and declares: “Every contract restraining exercise of a lawful profession, trade, or business is void to that extend” SDCL 53-9-8. The legislature, however, carved out three exceptions, one of which allows a non-compete agreement when a person sells the good will of a business. SDCL 53-9-9. The exception and its limits are as follows:

Any person who sells the good will of a business may agree with the buyer to refrain from carrying on a similar business within a specified county, city, or other specified area, as long as the buyer or person deriving title to the good will from the seller carries on a like business within the specified geographical area.

Id. The contract between Franklin and Forever clearly involves the sale of good will, thereby falling within the statutory exception that allows a non-compete agreement. The statutory exception, however, is not without limits. The statutory limits of a non-compete agreement only allow the buyer and seller to agree “to refrain from carrying on a similar business.” The statute further limits the geographical area of the restraint to a “county, city, or other specified area” and sets the time frame for “as long as the buyer or person deriving title to the good will from the seller carries on a like business within the specified geographical area.” These statutory parameters must be present in order for the non-compete covenant to be valid. Additionally, we have stated that when reading an exception to the public policy against restraints of trade, “we must construe it narrowly so as to promote the proscription against general restraints on trade.” American Rim & Brake, Inc. v. Zoellner, 382 N.W.2d 421, 424 (S.D.1986) (discussing the exception found at SDCL 53-9-11) (citing 1st American Systems, Inc. v. Rezatto, 311 N.W.2d .51, 55 (S.D. 1981)).

[¶ 9.] Franklin challenges the covenant as unlawfully broad. He claims it exceeds the statutory restrictions: first, because it tries to encompass more than carrying on a “similar” business; and second, because it provides no time limit. He agrees that the geographical limitations are appropriate.

[¶ 10.] We first address Franklin’s challenge to the .time frame specified in the agreement. Franklin claims the contract clause could apply to Forever’s successors and assigns “to infinity.” Although he makes this challenge, it is not presently an issue. The agreement had only been in existence for nine months at the time of the commencement of this action and the business was'still owned by Forever. Consequently, there is no present controversy making this a justiciable issue’ See Pennington Co. v. State ex rel. Unified Judicial System, 2002 SD 31, ¶ 16, 641 N.W.2d 127, 132. The only justiciable issue concerns whether the non-compete clause limiting Franklin’s current business activity is enforceable. Our analysis, therefore, centers on the covenant’s restrictions to Franklin’s business activities and whether he is carrying on a similar business.

Carrying on a Similar Business

[¶ 11.] Franklin contends that the non-compete contract clause preventing him from various business activities is far broader than the statute allows. The statute allows a seller to agree “to refrain from carrying on a similar business.” SDCL 53-9-9. In construing the meaning of “carrying on a similar business,” we first look at the underlying purpose of the law. In an early case, this Court explained the purpose as follows:

While the law to a certain extent tolerates contracts in restraint of trade or business when made between vendor and purchaser, and will uphold them, they are not treated with special indulgence. They are intended to secure to the purchaser of the good will of a trade or business a guaranty against the competition of the former proprietor. When this object is accomplished, it will not be presumed that more was intended.

Brown v. Edsall, 23 S.D. 610, 617, 122 N.W. 658, 661 (1909) (quoting Greenfield v. Getman, 140 N.Y. 168, 35 N.E. 435, 436 (1893)). Other jurisdictions have explained the purpose of their comparable statutes in a similar manner. California courts have stated that the California law “reflects that when the goodwill of a business is sold, it would be unfair for the seller to engage in competition which diminishes the value of the asset he or she sold.” Hill Medical Corp. v. Wycoff, 86 Cal.App.4th 895, 103 Cal.Rptr.2d 779, 785, (2001) (quotations and citation omitted). The Nebraska Supreme Court determined: “It is lawful for the seller to restrict his own freedom of trade only so far as is necessary to protect the buyer in the enjoyment of the good will for which he pays.” Chambers-Dobson, Inc. v. Squier, 238 Neb. 748, 472 N.W.2d 391, 397 (1991). In construing the Oklahoma statute, the Supreme Court of Oklahoma found: “the purpose of [the] statute is to allow the parties ... to mutually agree, ..., that the transferee will be protected from his transferor who might use his previously acquired experience, contacts and expertise to promote his own interests in the same field of. business in competition with his transferee.” Farren v. Autoviable Sen., Inc., 508 P.2d 646, 648 (Okla.1973). It can generally be concluded that the purpose of a statute that allows a business owner to sell the good will of his business in exchange for an agreement not to compete is to protect the purchaser from the detrimental competition of the seller. If an agreement exceeds that purpose, it cannot be enforced.

[¶ 12.] With this purpose in mind, the legislature, when it enacted the law, specifically allowed a seller of good will to agree to “refrain from carrying on a similar business.” SDCL 53-9-9. What constitutes “a similar business” is not further defined by statute, neither have we had occasion to address its meaning. However, based on the underlying purpose of statute, the offending activity would need to be of a nature that detrimentally competes with the purchaser in order to be considered a similar business. A California court required the business or activity to be substantial, not “infrequent or isolated transactions.” Monogram Industries, Inc. v. Sar Industries, Inc., 64 Cal.App.3d 692, 134 Cal.Rptr. 714, 719 (1976). In addressing the “similar business” language of the California statute, the court stated: “The language of the section insures that the competition is in fact such and not simply insubstantial and infrequent or isolated transactions.” Id. The United States Dis-

trict Court for the District of North Dakota addressed North Dakota’s similar statutory scheme concerning restraints of trade by stating: “Even if a non-competition agreement falls within one of the statutory exceptions, it will only be upheld by North Dakota courts so long as it is not overly broad.” Pruco Securities Corp. v. Montgomery, 264 FSupp2d 862, 869 n2 (D.N.D. 2003). This conclusion is also supported by our own early ruling in Brown, where we addressed the use of the language “carrying on” by stating: “it makes it evident that the lawmakers did not intend to allow persons to bind themselves so that a party, while living up to the spirit of the agreement, could be held as having broken the letter thereof by an occasional act not in harmony with the agreement.” Brown, 23 S.D. at 615, 122 N.W. at 660. This Court then went on to hold that in relation to a liquidated damages provision, “it must certainly be held that, before [plaintiff] could recover, there should be a substantial breach of the agreement[.]” Id.

[¶ 13.] We conclude that a determination of what constitutes “carrying on a similar business” in SDCL 53-9-9 should not include businesses or activities that are isolated, insubstantial, or non-detrimental. Whether the business actually detrimentally competes will depend on the facts of a particular case. See generally Id.

[¶ 14.] In this case, Franklin claims that the non-compete contract clause encompasses more than the statute allows. On its face, this non-compete clause stretches the statutory restriction of “carrying on a similar business” to an expansive and all encompassing definition of restaurant related activities. It prevents Franklin “in any manner, directly or indirectly, ... by any means” from being “an employee, proprietor, partner, shareholder, officer, manager, agent, advisor, consultant, investor or otherwise, of any corporation, entity-or business enterprise which shall construct, own or operate a restaurant.” Read literally, the covenant sweeps into its breadth isolated, insubstantial and non-detrimental.activities. It includes remote business interests that only tangentially involve the restaurant business. Its breadth goes beyond the purpose of preventing the former proprietor from unfairly -competing with the new proprietor. The covenant’s language prevents far more than “carrying on a similar business.” Therefore, to the extent that the agreement may restrain Franklin from activities which could not fairly be characterized as “carrying on a similar business,” it is void as against public policy.

Partial Enforcement

[¶ 15.] The trial court declared that the covenant, as written, was a lawful restraint of trade. We have determined it is not enforceable because it is broader than the statute allows. Yet, despite the covenant being overbroad in its restraint, we need not invalidate the entire provision. We have adopted a rule of partial enforcement, whereby an overly broad non-compete provision is modified and enforced so as to conform to statutory mandates. Simpson v. C & R Supply, Inc., 1999 SD 117, ¶ 16, 598 N.W.2d 914, 920. This rule was derived from the language in SDCL 53-9-8 stating that a contract in restraint of trade is “void to that extent.” See Ward v. Midcom, Inc., 1998 SD 10, ¶ 14, 575 N.W.2d 233, 238 (citing Loescher v. Policky, 84 S.D. 477, 481-82, 173 N.W.2d 50, 53 (1969)). Here, the parties' also included a savings clause in the contract. The savings clause provides:'

It is the intent of this provision to be as expansive as may be permitted by the statutory provisions contained in SDCL 53-9-9,10 and 11 and limited only to the extent as provided herein. In the event any term or provision hereof is deemed beyond the scope or definition of that permitted and provided pursuant to said statutes, then it is the express intent and purposé of the parties hereto that this provision shall remain valid and fully enforceable, to the extent as such may lawfully provide pursuant to said statutory provisions.

Based on the rule of partial enforcement and the contract savings clause, we hold that the covenant is enforceable, but only to the extent of prohibiting Franklin from “carrying on a similar business.”

[¶ 16.] The next step is to look to the facts of the case to determine if Franklin is carrying on a similar business. The trial court erroneously applied the overly broad provision and determined that Franklin had violated the covenant. The question, now, is whether the valid narrower construction would have changed the result. In other words, would Franklin’s activities still be in violation of the modified agreement? Was he carrying on a similar business in competition with Forever?

[¶ 17.] We look to the evidence upon which the trial court relied in making its findings. The trial court found that Franklin violated the covenant not to compete because he was acting as an “employee, manager, agent, advisor, consultant, or otherwise, of restaurant businesses.” The relevant findings of the trial court are as follows:

Plaintiff Peter Franklin became employed at a restaurant business which is located at, and part of, an attraction known as Tatanka near Deadwood, Lawrence County, South Dakota. Tatanka employed Peter Franklin because of his skills and expertise in the restaurant business, including without limitation customer relations, food preparation and food serve management.... The menu used by Defendant at Shoot the Bull and the menu at Tatanka are restaurant menus as the term restaurant is defined and certainly have similar products inclusive of beverages and meals. Any distinctions between the two menus are distinctions without differences, as are any distinctions between the two as to restaurant operations.

Evidence that Franklin’s activities at Ta-tanka were in the nature of carrying on a restaurant business is supported by the testimony. Tatanka’s manager, Bryan, admitted that she hired Franklin because of his reputation as a person “who was good at food preparation” and “customer relations.” She sought him “because [she] knew he had a great customer service and he could prepare food costs and he could also prepare food in an excellent way.” She relied on his education, training, and expertise to assist her in selecting and pricing the items on the menu. His duties as a prep cook were to purchase and prepare all the food. He made certain items prior to opening and prepared the rest while the customer waited. He worked a full schedule — 60 hours a week. His business activity with Tatanka was not isolated, insubstantial or infrequent.

[¶ 18.] The remaining question is whether Tatanka’s restaurant is “a similar business” in relation to Franklin’s former restaurant. Running a food counter for an educational facility may or may not be in competition with a local steakhouse, depending on the surrounding circumstances. Here, the trial court found the restaurants were similar. Evidence in the record supports the finding. There were differences in their menus, level of service and type of plates and utensils used. However, there were also many similarities. Both serve meals. Both targeted tourists as well as local customers. Both were located in relatively close proximity, creating more of a likelihood of competition. If customers ate at Tatanka, they might not have dinner at Forever’s restaurant. We cannot say that the trial court was clearly erroneous in finding that the distinctions between the two restaurants were distinctions without differences. The evidence supports a finding that Franklin was hired to assist in the development and operation of a competing restaurant and that the businesses were similar. This type of detrimental competition falls within the purpose and meaning of the statute and constitutes the type of business competition for which Forever paid Franklin $50,000 to avoid.

[¶ 19.] Based on the evidence and testimony of the parties, we find no clear error with the trial court’s findings. Consequently, we affirm the trial court’s portion of the decision that restrains Franklin from continuing his current duties at Ta-tanka. We reverse the trial court’s determination that the non-compete provision is valid in its entirety. The trial court included in its Judgment and Permanent Injunction a decree that the non-compete provision “comports and complies with SDCL 53-9-9, is reasonable as to scope and geographic area, and is not an unlawful restraint of trade and otherwise unlawful in any respect.” Additionally, the injunction permanently enjoined Franklin from competing by using the precise language of the contract’s non-compete provision, which we have now determined to be unlawfully broad. We, therefore, remand for the trial court to enter judgment and injunctive relief in conformity with this opinion.

[¶ 20.] GILBERTSON, Chief Justice, and KONENKAMP and ZINTER, Justices, concur.

[¶ 21.] SABERS, Justice, concurs in result.

SABERS, Justice

(concurring in result).

[¶ 22.] I concur in result because:

I agree that we should (1) affirm that portion of the trial court’s decision that restrains Franklin from continuing his current duties at Tatanka and (2) reverse that portion of the decision that concludes the non-compete provision is valid in its entirety-

      . Prior to his employment at Tatanka, Franklin cooked and consulted at two other restaurants in the area as favors and without charge to the owners.

      . Pennington Co. v. State cites to Danforth v. City of Yankton, 71 S.D. 406, 412, 25 N.W.2d 50, 53 (1946) for the prerequisites for jurisdiction in a declaratory judgment action. Danforth states:
      (1) There must exist a justiciable controversy; that is to say, a controversy in which-a claim of right is asserted against one who has an interest in contesting it; (2) the controversy must be between persons whose interest are adverse; (3) the party seeking declaratory relief must have a legal interest in the controversy, that is to say, a legally protectible interest; and (4) the issue involved in the controversy must be ripe for judicial determination.

      . We do not address the durational or geographical scope of the agreement.

      . The trial court also restrained Franklin from being involved with Bob's Family Restaurant and the Clubhouse Restaurant. Evidence indicated that he had worked with both restaurants prior to this action. This portion of the restraining order was not addressed on appeal.


author: MEIERHENRY, Justice.

text:
    2005 SD 51
    Tamara K. LUKE, Individually, and as the Trustee of the Elmer Stevenson Trust, Plaintiff and Appellee, v. Clara STEVENSON, Jennifer Sampson Heltzel, and Jason Sampson, Defendants, and Andrea Brown and Gerard Hehn, Defendants and Appellants.
    Nos. 23285, 23286.
    Supreme Court of South Dakota.
    Considered on Briefs March 21, 2005.
    Decided April 27, 2005.

      Thomas E. Alberts, Avon, South Dakota,. Attorney for plaintiff and appellee, Tamara K. Luke.
    Kenneth W. Cotton, Wagner, South Dakota, Attorney for defendant and appellant, Andrea Brown.
    Glenn L. Roth, Olivet, South Dakota, Attorney for defendant and appellant, Gerard Hehn.
    Christopher M. Braley, Parkston, South Dakota, Attorney for appellee, Angela Brown.
   MEIERHENRY, Justice.

[¶ 1.] This is a consolidated appeal from a declaratory judgment action and involves the interpretation of provisions in a trust document. The issues are whether a great-grandchild born after the trust was created should be included as a beneficiary and whether the beneficiary who was to receive a life estate in a portion of the trust is entitled to equalization of distributions previously advanced to other beneficiaries. The trial court included the after-born great-grandchild as a beneficiary and ruled the life estate beneficiary was not entitled to equalization. We reverse in part and affirm in part.

PROCEDURAL BACKGROUND . AND FACTS

[f 2.1 Elmer Stevenson created the “Elmer Stevenson Trust” on August 8, 1990. The original assets of the revocable trust included real estate located in Hutchinson County and Bon Homme County. Elmer died approximately two years after creating the trust. Subsequent to his death, several' questions arose concerning the interpretation and administration of the trust agreement. These questions were presented to the trial court by way of a complaint for declaratory judgment filed by Tamara Luke, the trustee of the trust. A declaratory judgment trial was held on May 21, 2008. The trial court issued its order and this appeal followed.

[¶ 8.] The issues, in this consolidated appeal all arise from disputes over the meaning of certain provisions within the trust agreement relating to the disposition of the trust property and the income derived therefrom. The beneficiaries of the trust consist of the primary beneficiary, Clara Stevenson, and a number of secondary beneficiaries. The first disputed portion of the trust agreement relates to the secondary beneficiaries and reads:

The secondary beneficiaries of the Elmer Stevenson Trust are my son-in-law, Gerard Hehn, my granddaughter, Tamara Kay Brown, and my minor great-grandchildren, namely: Jennifer Sampson, Jason Sampson and Andrea Brown.

At the time of the execution of the trust agreement in 1990, Elmer’s only great-grandchildren were the three named in the above trust provision. However, a fourth great-grandchild, Angela Brown, was born in 1991, after the trust’s creation. The parties dispute whether Angela is included as a beneficiary pursuant to this trust provision. The trial court found that she is a beneficiary. It did so by concluding that the secondary beneficiaries of the trust agreement are the great-grandchildren as a. class; and since Angela is a member of the class, she is a beneficiary.

[¶4.] A second dispute arises from a distribution provision in the trust agreement that provides for equalizing distributions among the secondary beneficiaries. To acquire an understanding of the equalization provision and its implications, the provision must be read in the context of the entire trust document. Initially, the trust directs that after Elmer’s death, the trustee was to pay the income of the trust to Elmer’s spouse, Clara Stevenson, who was the primary beneficiary. During Clara’s life the trustee was also to distribute to Clara and the secondary beneficiaries “as much of the principal of the Trust as the Trustees deem necessary or advisable for their education, health, maintenance and support.” Pursuant to this provision, the trustee made various distributions to the secondary beneficiaries, with some beneficiaries receiving more than others.

[¶ 5.] Upon Clara’s death, the trust property was to be distributed according to further provisions of the trust agreement. This brings us to the provision in question, which reads as follows:

After the death of my spouse [Clara], the Trustee shall, to the greatest extent possible, equalize distributions to the beneficiaries. Any distribution to or for a beneficiary shall be charged against the ultimate share distributable to such beneficiary or those taking through such beneficiary upon termination of the Trust.

[¶ 6.] Gerard Hehn, as a secondary beneficiary, argues that this provision entitles him to receive “an amount equal to the amount that the other secondary beneficiaries were previously advanced or distributed by the trustee during the lifetime of Clara Stevenson.” The trial court ruled that he was not entitled to an equalization distribution, finding that the equalization provision did not relate to Gerard’s interest in the trust. Gerard also filed a Motion for Reconsideration and Motion for New Trial. In support of the motions, Gerard argued that his testimony as to Elmer’s intent in creating the trust and its equalization provisions should be taken and considered. The trial court denied the motions.

ISSUES

1. Whether the trial court erred by including the after-born great-grandchild as a beneficiary of the trust.
2. Whether the trial court erred in finding that Gerard was not entitled to an equalization distribution for amounts previously advanced to other beneficiaries.
3. Whether the trial court erred in denying Gerard’s Motion for Reconsideration and Motion for New Trial.

DECISION

Inclusion of Angela, an After Bom Great-Grandchild, as a Beneficiary

[¶ 7.] Whether Angela is included as a beneficiary hinges on the following language in the trust: “The secondary beneficiaries of the Elmer Stevenson Trust are ... my minor great-grandchildren, namely: Jennifer Sampson, Jason Sampson and Andrea Brown.” The language first uses general class terminology (i.e.great-grandchildren) to describe the secondary beneficiaries. Then after describing the class of beneficiaries, the agreement immediately lists the beneficiaries by name (i.e. Jennifer Sampson, Jason Sampson and Andrea Brown). The named beneficiaries comprise all members of the class of great-grandchildren existing at the time of the document’s execution. However, a fourth great-grandchild, Angela, was born after the execution of the agreement.

[¶ 8.] The court’s task is to ensure that the intentions and wishes of the settlor are honored. See Briggs v. Briggs, 73 S.D. 500, 506, 45 N.W.2d 62, 65 (1950) (“The sole purpose of the process of construction is to discover the intention of the [settlor]”). In order to determine the set-tlor’s intention, we examine the document as written. “If that intention is clearly manifested by the language of the [trust instrument], it is the duty of this court to declare and enforce it. However, if the language is not clear, construction of an ambiguous trust instrument is a question of law to be decided by the court.” In re Estate of Stevenson, 2000 SD 24, ¶ 14, 605 N.W.2d 818, 821 (alteration in original) (quotations and citations omitted). Questions of law are reviewed de novo. Beals v. Wagner, 2004 SD 115, ¶ 5, 688 N.W.2d 415, 417.

[¶ 9.] The trial court found that the language in the trust agreement was clear and that it unambiguously provided for the great-grandchildren as a class, rather than as individuals. Accordingly, the trial court found that Angela is a beneficiary due to her status as a member of the class. An analysis of the trust language, however, does not clearly support the trial court’s conclusion. The agreement initially uses a class designation, but then directly thereafter names the beneficiaries individually. On the one hand, one could logically argue that by specifying the class and then specifically naming all of the living members in the class, Elmer intended to include after-born great-grandchildren in the class. On the other hand, one could legitimately argue that by specifically naming the members, he meant to limit the class to those named. Had he merely identified thfe class without naming the individuals in the class or had he indicated that any great-grandchildren born thereafter were also included or excluded, there would be no doubt concerning his intention. The manner in which it was written, however, does leave a question as to whether he did or did not intend to include the great-grandchildren born after the trust was established.

[¶ 10.] Since a review of the trust language itself leaves doubt as to Elmer’s intent, we may look to rules of construction. See In re Barrett’s Estate, 70 S.D. 475, 480, 18 N.W.2d 787, 790 (1945) (“Before resort may be had to rules of constructional preference, it must appear that a testator has left room for doubt as to his intention.”). One generally recognized rule of construction is that absent an expression of contrary intent, a gift made to persons identified by name and referred to by relationship is a gift to them individually and not as a class. See Vitauts M. Gulbis, Annotation, Wills: Gifts To Persons Individually Named But Also Described In Terms Of Relationship To Testator Or Another As Class Gift, 13 A.L.R.4th 978, § 2(a) (1982 & Supp 2004). Considering the language of the trust agreement in conjunction with this basic rule of construction, the trial court’s finding that Elmer’s intent was to make a gift to the class of great-grandchildren becomes questionable. Cf. McMahan v. Naylor, 855 S.W.2d 193, 194 n2 (TexApp 1993) (applying Texas law and stating that “[a]s a matter of law, if a will describes legatees as a class but also identifies them by name or number, then the devise is not one to a class but to individuals.”). The further finding that this intent is unambiguously shown by the document itself is error.

[¶ 11.] “Language is ambiguous when it is reasonably capable of being understood in more than one sense.” In re Estate of Brownlee, 2002 SD 142, ¶ 17, 654 N.W.2d 206, 210 (citations and quotations omitted); see also Black’s Law DictionaRY 79 (7th ed 1999) (defining ambiguity as “[a]n uncertainty of meaning or intention, as in a contractual term or statutory provision”). As already discussed above, the agreement’s designation of secondary beneficiaries could reasonably be understood to encompass the entire class of great-grandchildren or only the specifically named great-grandchildren. Given the ambiguity in the agreement, we find that it is appropriate to look to the extrinsic evidence of Elmer’s intent in executing the trust agreement. See In re Estate of Klauzer, 2000 SD 7, ¶ 10, 604 N.W.2d 474, 477 (stating that when interpreting a will, “[ejxtrinsic evidence is admissible to clarify any ambiguity”). In this case, the extrinsic evidence is compelling and leaves little doubt of Elmer’s intent. •

[¶ 12.] This trust agreement has been the subject of prior litigation. Concerning one of these earlier disputes, a motion hearing was held where testimony was taken from both Elmer’s late wife Clara and the attorney who drafted the agreement. The transcript of this hearing was entered into evidence in the present case without objection. The attorney’s testimony at the prior hearing was that she had discussed with Elmer the option of including provisions for after-born great-grandchildren in the agreement and that Elmer had rejected the idea; This extrinsic evidence strongly suggests that Elmer’s intent was that after-born children were not to be included as secondary beneficiaries. In addition, Elmer’s late wife Clara testified that Elmer had discussed with her the possibility of adding Angela’s name to the trust agreement after Angela was born. Such a discussion further indicates that Elmer believed that , the document he had executed did not provide for after-born great-grandchildren but only those great-grandchildren specifically named in the document.

[¶ 13.] Considering the ambiguous trust agreement and the extrinsic evidence of Elmer’s intent, we find that the trial court erred when it concluded that Elmer intended to include Angela as a beneficiary. Instead, we conclude that when Elmer created the trust, he intended to include only the named great-grandchildren as beneficiaries. He did not intend to include all members of the class; and although adding Angela was discussed later, he did not do so. The trial court is reversed as to issue one.

The Trial Court’s Application of the UPC

[¶ 14.] On appeal, the parties argue at length over whether the UPC applies to trust agreements drafted before South Dakota’s adoption of the UPC. We need not answer this question because the specific provision the parties attempt to apply is inapposite in this case. Whether or not the UPC might apply in other circumstances is left for another day.

[¶ 15.] When interpreting the trust agreement, the trial court erroneously applied the omitted children provision of the South Dakota Uniform Probate Code (UPC), which is located at SDCL 29A-2-302. Clearly, this statute does not apply to great-grandchildren. The statute refers to “a child born to or adopted by the testator[.]” The UPC’s definition of “child” expressly excludes a “grandchild, or any more remote descendant.” SDCL 29A-1-201(6). Because this issue is not dispositive, we need not reach the issue of whether the UPC applies to trust agreements drafted before its adoption. Equalization Distributions

[¶ 16.] The trust provides for both discretionary distributions and mandatory distributions of specific sums. The mandatory distributions consist of the distribution of all income to Clara during her life, a life estate in half the trust assets to Gerard after Clara’s death and the ultimate distributions to Tamara and the three. great-grandchildren at the termination of the trust. The discretionary distributions allowed by this trust can be categorized into two groups. First, there are the discretionary distributions that could be made before- Clara’s death. These distributions were to come from the principal of the trust assets and could have been made to Clara, Gerard, Tamara, and/or the three great-grandchildren. Second are the discretionary'distributions to be made after Clara’s . death. These could.be made only from the income of trust assets and only to- Tamara and the three great-grandchildren.

[¶ 17.] The current dispute arose as a result of the discretionary distributions of principal that were made before’ Clara’s death. While the trustee made numerous and significant discretionary distributions during this time, only one relatively small distribution was made to Gerard. Gerard now claims that he is entitled to equalization in connection with these disproportionate distributions. He bases this assertion on the final paragraph of Article IV of the trust. The entire Article IV reads as follows:

During Settlor’s life, the Trustees shall dispose of the net income and principal of the Trust in such manner as the Settlor may direct from time' to time. Unless otherwise directed by the Set-tlor, the net income shall be paid to the Settlor at least quarter annually. Additionally, during ány period when, in the opinion of Settlor’s personal physician or pursuant to' a Court determination Settlor is incompetent, incapacitated or disabled due to an illness, age- or other cause, with resulting inability to manage property and affairs effectively, the Trustees shall pay to or apply so much of-the net income and principal of the Trust as in the Trustees sole discretion shall be necessary or advisable for' the health, support, maintenance, and general welfare of the Settlor.
Upon the death of the Settlor, the Trustees shall pay to or apply for the benefit of Settlor’s spouse, Clara, during the term of her life, the entire net income of the Trust in convenient installments, at least quarter annually. However, in the event the Settlor’s spouse should so decide,- she may waive the right to receive said installments. The Trustees shall also pay to or apply for the benefit of Settlor’s spouse and the beneficiaries herein as much of the principal of- the Trust as the Trustees deem necessary or advisable for their education, health, maintenance and support. The Trustees shall, at all times, give primary consideration to the Settlor’s spouse with regard to the distribution of principal under this Section.
The Trustees shall be mindful that the Settlor’s primary concern-and objective is to provide for the welfare of the designated beneficiaries, and the preservation of the principal is. not as important as the accomplishment of said objective. Therefore, in making discretionary dis-: tributions, the. Trustees shall consider any income or other resources of the .beneficiaries outside the Trust and known to the Trustees.
After the death of my spouse, the Trustee shall, to the greatest extent possible, equalize distributions to the beneficiaries. Any distribution to or for a beneficiary shall be charged against the ultimate share distributable to such beneficiary or those taking through such beneficiary upon termination of the Trust.

The trial court found that the equalization provision in the last paragraph relates only to discretionary distributions made after Clara’s death and does not implicate Gerard’s interest in the trust.

[¶ 18.] We interpret the meaning of the equalization provision in context with the other provisions in Article IV. See Hill-Taylor Co. v. Shade, 57 S.D. 357, 362, 232 N.W. 89, 91 (1930) (“intention must be deduced, not from specific provisions or fragmentary parts of the instrument, but from its entire context, from all its provisions taken together”). Generally, Article IV relates to how trust distributions are to be made during the existence of the trust. It proceeds in a sequential fashion. It addresses how distributions are to made (1) while Elmer is alive, (2) after his death but while Clara is alive, (3) after Clara’s death and (4) upon final distribution after Gerard’s death. The following detailed breakdown of Article IV helps illustrate its sequential construction.

[¶ 19.] Under the first two paragraphs of Article IV, while Elmer was alive he was to direct the distributions of net income and principal. The third paragraph directs that after Elmer’s death the trustees were to pay Clara all the net income “in convenient installments.” The trustees were also allowed to invade the principal for the benefit of Clara as well as the other beneficiaries if the trustees determined it “was necessary or advisable for their education, health, maintenance and support.” The fourth paragraph concerns these discretionary distributions and clearly sets forth that Elmer’s first priority was “to provide for the welfare of the designated beneficiaries,” not preservation of principal. The trustee was to make the “discretionary distributions” keeping in mind “any income or other resources of the beneficiaries outside the Trust and known to the Trustees.” This provision clearly indicates that such distributions were not required to be equal and could be dispersed depending on the beneficiary’s need.

[¶ 20.] The final paragraph, which is the one on which Gerard relies, directs that: “[ajfter the death of my spouse, the trustee shall, to the greatest extent possible, equalize distributions to the beneficiaries.” (Emphasis added.) Elmer specifically outlined sequential scenarios based on whether he or Clara or neither was living at the time. Each scenario required a distinct method of handling distributions. Given the sequence of the provisions in Article IV and the language of the provision itself, it is logical to conclude that the final paragraph relates only to discretionary distributions made after the death of the spouse. Discretionary distributions made before Clara’s death are not subject to equalization.

[¶ 21.] This interpretation is also consistent with the equalization provision’s further direction to charge any distribution “against the ultimate share distributable to such beneficiary ... upon termination of the trust.” Pursuant to the terms of the trust agreement, ultimate distribution of the assets of the trust does not occur until after Gerard’s life estate is terminated by his death. After Gerard’s death, these assets are to be distributed to the remaining beneficiaries of the trust. No ultimate distribution can be made 'until after Gerard’s death and neither Gerard or his estate is entitled to any distribution at that time. In other words, upon the termination of the trust Gerard has no “ultimate share” against which a prior distribution could be charged. Only Tamara and the great-grandchildren are entitled to distributions when the trust terminates. Since, unlike Gerard, these secondary beneficiaries are entitled to an ultimate share, the trial court reached the correct conclusion when it determined that the equalization provision (and its interrelated direction to charge distributions against ultimate shares) applies only to Tamara and the great-grandchildren. Such an interpretation is consistent with the entire context of the instrument. See Hill-Taylor Co., 57 5.D. at 362, 232 N.W. at 91.

[¶ 22.] Particularly, this interpretation is bolstered by the language of Article VI of the trust, which further describes what is to happen upon Clara’s death. This paragraph requires the estate to be divided in half after Clara’s death: one half as a life estate to Gerard, one half to the remaining beneficiaries. It provides:

Upon the death of the Settlor and Set-tlor’s spouse, the Trust estate shall be divided so that Gerard Hehn, the Set-tlor’s son-in-law, shall have a life estate in and to one-half (1/2) of the Trust assets. The other one-half (1/2) of the Trust shall be used for the benefit of the remaining beneficiaries as much of the net income as Trustees deem necessary or advisable for their education, health, maintenance and support.

This provision allows the Trustee to make discretionary distributions to the “remaining beneficiaries” (i.e. not Gerard) after Clara’s death. These are the distributions that are subject to Article IV’s direction to equalize if possible and to charge against the ultimate share of each beneficiary without exception.

[¶ 23.] The trial court’s finding that Elmer’s intent was for Tamara and the great-grandchildren to have the distributions they received after Clara’s death equalized is logical and provides internal consistency to the agreement. Therefore, we affirm the trial court as to this issue.

Motion for a New Trial

[¶ 24.] Gerard’s motion for a new trial concerned the trial court’s finding that the equalization provision of the trust agreement did not apply to Gerard’s interest in the trust. In support of this motion, Gerard offered his own affidavit. The affidavit does not assert or contend that Gerard has any extrinsic knowledge or evidence of Elmer’s intent in drafting the equalization provision. The affidavit asserts only that distributions were made from the trust to secondary beneficiaries prior to Clara’s death. The fact that unequal distributions were made prior to Clara’s death provides no further guidance in determining whether Elmer intended such distributions to be equalized. The standard of review for trial court’s denial of the motion for a new trial is abuse of discretion. Border States Paving, Inc. v. State, 1998 SD 21, ¶ 11, 574 N.W.2d 898, 901. The trial court’s denial of these motions was not an abuse of discretion.

[¶ 25.] The trial court is reversed as to Issue 1 and is affirmed as to Issues 2 and

3.

[¶ 26.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP and ZINTER, Justices, concur.

      . This trust agreement was also the subject of a prior opinion of this Court. See In re Estate of Stevenson, 2000 SD 24, 605 N.W.2d 818. In that case we held that the trustee improperly engaged in self-dealing by leasing the trust property to her husband and her husband’s cousin, and that because of this, the leases were void.

      . Tamara Brown, now known as Tamara Luke, is Gerard's daughter. The great-grandchildren are all Tamara’s children.

      . The trust agreement named Gerard Hehn as sole trustee after Elmer’s death. However, Gerard quickly resigned as sole trustee and Tamara Luke was ultimately named as trustee.

      . The appellant very briefly argued res judica-ta in her brief on this issue because the issue had been ruled upon at this earlier hearing. However, because this affirmative defense was raised for the first time on appeal and was not presented or argued to the trial court, it has been waived. Krull v. Jones, 46 FSupp2d 997, 1002 (D.S.D.1999). See also Barnard v. Chicago & N.W. Ry. Co., 39 S.D. 623, 627, 166 N.W. 148, 150 (1918).

      . Gerard received a small distribution prior to Clara's death. Therefore, if Elmer’s intent was that the distributions made prior to Clara's death were to be equalized to the extent possible and charged against the beneficiary's ultimate share, Elmer was directing the trustee to do the impossible. That is, charge the discretionary distribution made to Gerard against his non-existent ultimate share.

      . Gerard contends that when interpreting the trust agreement, the court should consider statutes relating to a trustee’s fiduciary duties.
        See SDCL 55-1A-30, -33 & SDCL 55-3-5. However, these statutes address the powers and duties of the trustee. They do not provide rules of construction.