author: VANDE WALLE, Chief Justice.

text:
    2000 ND 225
    Myron JACOBSON, Claimant and Appellant, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellee.
    No. 20000102.
    Supreme Court of North Dakota.
    Dec. 29, 2000.
    Rehearing Denied Feb. 5, 2001.

      Stephen D. Little, Dietz, Little & Haas, Bismarck, ND, for claimant and appellant.
    Brent J. Edison, Special Assistant Attorney General, North Dakota Workers Compensation Bureau, Bismarck, ND, for appellee.
   VANDE WALLE, Chief Justice.

[¶ 1] Myron Jacobson appealed the district court judgment affirming a North Dakota Workers Compensation Bureau order requiring Jacobson to forfeit future benefits because of violation of N.D.C.C. § 65-05-33, but remanding the case to the Bureau for reinstatement of Jacobson’s benefits from July 21, 1997, to November 30, 1998, to remedy violations of Jacobson’s due process rights. We affirm.

I

[¶ 2] Myron Jacobson injured his back on February 4, 1983 when he lifted a 30-gallon barrel while working as an agricultural chemical salesman. He filed a claim for workers compensation benefits and the Bureau accepted his claim. He returned to work full time on March 16, 1983. Jacobson worked for over four years until July 1987 when he asked the Bureau to reopen his claim. After a period of temporary benefits, the Bureau awarded Jacobson permanent total disability benefits beginning January 1991.

[¶ 3] Jacobson began entering fishing tournaments as a professional in 1991. On March 1,1995, and on June 6,1996, Jacobson was interviewed to determine the nature and extent of his physical activities. During a March 1, 1995, interview, Jacobson said he could not lift over ten pounds, avoided all twisting, and left his home only for about an hour each day to visit others. A June 6, 1996, interview was similar except possibly to suggest worsening back pain. That report reiterated Jacobson’s activities were quite limited, consisting of doing a few things around the house, some visiting, and avoiding all lifting, twisting, and bending. In conjunction with that interview, as well as on May 3, 1996, and August 25, 1996, Jacobson responded “no” to the form question “Have you performed ANY other work, whether on a part-time, full-time or voluntary basis?”

[¶ 4] On September 3, 1996, an informant told the Bureau that Jacobson had been receiving money fishing in professional fishing tournaments. The Bureau investigated, finding Jacobson was a professional tournament fisherman traveling throughout the upper Midwest and beyond. Jacobson had won some tournaments resulting in substantial income, with the fees for these tournaments paid by Twin City Marine. Jacobson represented Twin City Marine at trade shows, assisted on the sales floor, and he purchased boats from Twin City Marine at a discounted price. Jacobson became aware of the Bureau’s surveillance. In February 1997, the Bureau sent another form to Jacobson. This time Jacobson responded “yes” to the same question asking him if he had performed any work and attached an explanation that he understood from his claims worker that winning money at a fishing tournament would not jeopardize his workers compensation benefits.

[¶ 5] On June 30, 1997, the Bureau issued Jacobson a notice of intention to discontinue benefits on the basis of providing false statements regarding his workers compensation claim and failing to report earned income to the Bureau. After the Bureau issued a final order on October 31, 1997, Jacobson requested reconsideration. A formal hearing was held before the administrative law judge on December 18 and 21, 1998, after being scheduled for November 30 and rescheduled at Jacobson’s request.

[¶ 6] The administrative law judge recommended a finding that the greater weight of the evidence of record showed Jacobson willfully made false statements relevant to the determination of his claim for workers compensation benefits which could have misled the Bureau in determination of his benefits. The administrative law judge recommended affirming the order denying further benefits but reversing the order for repayment.. The administrative law judge also recommended a conclusion that Jacobson was not denied due process of law by the pre-termination notice or the post-termination delay. The Bureau adopted the order of the administrative law judge and Jacobson appealed to the district court. The district court affirmed the Bureau’s order to deny further benefits but held the notice and delay violated due process requirements. The district court ordered reinstatement of benefits for the period between the initial termination of benefits on July 21, 1997, to November 30, 1998, the original date of the formal hearing. The Bureau did not appeal from that portion of the order reinstating benefits to November 30, 1998.

II

[¶ 7] On appeal, we review the decision of the Workers Compensation Bureau. Siewert v. North Dakota Workers Comp. Bureau, 2000 ND 33, ¶ 18, 606 N.W.2d 501. Under N.D.C.C. §§ 28-32-19 and 28-32-21, we affirm the Bureau’s decision unless its findings of fact are not supported by a preponderance of the evidence, its conclusions of law are not supported by its findings of fact, its decision is not supported by its conclusions of law, its decision is not in accordance with the law or violates the claimant’s constitutional rights; or its rules or procedure deprived the claimant of a fair hearing. Negaard-Cooley v. North Dakota Workers Comp. Bureau, 2000 ND 122, ¶7, 611 N.W.2d 898. We exercise restraint in determining whether the Bureau’s findings of fact are supported by a preponderance of the evidence and do not make independent findings or substitute our judgment for that of the Bureau, but determine only whether a reasoning mind reasonably could have determined the findings were proven by the weight of the evidence from the entire record. Renault v. North Dakota Workers Comp. Bureau, 1999 ND 187, ¶ 16, 601 N.W.2d 580.

m

[¶ 8] Jacobson argues he did not make willful, material false statements in violation of N.D.C.C. § 65-05-33. Section 65-05-33 of N.D.C.C. at the time of Jacobson’s statements provided:

Filing false claim or false statements— Penalty. Any person claiming benefits or payment for services under this title, who willfully files a false claim or makes a false statement, or willfully fails to notify the bureau as to the receipt of income, or an increase in income, from employment, after the issuance of an order awarding benefits, in connection with any claim or application under this title is guilty of a class A misdemeanor, but if the act is committed to obtain, or pursuant to a scheme to obtain, more than five hundred dollars in benefits or services, the offense is a class C felony. Provided further that:
1. For the purposes of this section, “statement” includes any testimony, claim form, notice, proof of injury, proof of return to work status, bill for services, diagnosis, prescription, hospital or doctor records, x-ray, test results, or other evidence of loss, injury, or expense.
2. In addition to any other penalties provided by law, the person claiming benefits or payment for services in violation of this section shall' reimburse the bureau for any benefits paid based upon the false claim or false statement and, if applicable, under section 65-05-29 and shall forfeit any additional benefits relative to that injury. 1995 N.D. Sess. Laws ch. 616, § 6.

[¶ 9] To trigger the statutory consequences of N.D.C.C. § 65-05-33 for a false statement, the Bureau must prove: (1) there is a false claim or false statement; (2) the false claim or false statement is willfully made; and (3) the false claim or false statement is made in connection with any claim or application under this title. Hausauer v. North Dakota Workers Comp. Bureau, 1997 ND 243, ¶ 12, 572 N.W.2d 426. We have defined “willfully” in the context of this statute’s civil penalties as conduct engaged in intentionally, not inadvertently. Dean v. North Dakota Workers Comp. Bureau, 1997 ND 165, ¶ 15, 567 N.W.2d 626 (citing F.O.E. Aerie 2337 v. Workers Comp. Bureau, 464 N.W.2d 197, 201 (N.D.1990)).

[¶ 10] We additionally require the Bureau to prove the false statement is material. Dean, 1997 ND 165, ¶ 15, 567 N.W.2d 626 (citing F.O.E. Aerie 2337, 464 N.W.2d at 201, holding “a false statement must be intentional, not inadvertent, and material, not peripheral.”). If the Bureau seeks reimbursement for benefits paid, the level of materiality required is proof by the Bureau that the false claim or false statement caused the benefits to be paid in error. Hausauer, 1997 ND 243, ¶ 17, 572 N.W.2d 426. However, if the Bureau is seeking only forfeiture of future benefits, as in Jacobson’s case, no such causal connection is required. Id. A false claim or false statement is sufficiently material for forfeiture of future benefits if it is a statement which could have misled the Bureau or medical experts in a determination of the claim. Vernon v. North Dakota Workers Comp. Bureau, 1999 ND 153, ¶ 13, 598 N.W.2d 139.

[¶ 11] Jacobson told an investigator on March 1, 1995, and on June 6, 1996, his activities were limited; saying he mostly stayed at home, ventured out only to visit friends for a short time each day and avoided bending, twisting or lifting anything over ten pounds. These statements were made during the time period Jacobson was a professional tournament fisherman in the Cabela’s and In-Fisherman Professional Walleye Trail circuits. In 1995 Jacobson entered eight tournaments in the states of North Dakota, South Dakota, Minnesota, Wisconsin, Michigan, and Ohio. In 1996 Jacobson reported entering six professional fishing tournaments, including the invitational Professional Walleye Trail Walleye Super Pro in Arkansas. At one tournament, Jacobson reported catching an eleven-pound walleye. The administrative law judge stated in paragraph eight of the findings of fact, concerning the June 1996 interview, “[i]t is passing strange that any conversation about Jacobson’s physical activity would not prompt him to disclose his participation in nine fishing tournaments ovér the past eighteen months, one of which was an invitational championship tournament.”

[¶ 12] In addition to the false statements about his physical abilities, the administrative law judge found Jacobson also made false statements about his work activities, payment of entrance fees, and income. Jacobson claims the Bureau has failed to properly define its own standard for “work” and include it in an administrative rule as required by N.D.C.C. § 28-32-01(11). Jacobson claims the Bureau has maintained injured workers are required to report every physical and mental act to the Bureau under N.D.C.C. § 65-05-33. See Hopfauf v. North Dakota Workers Comp. Bureau, 1998 ND 40, ¶ 10, 575 N.W.2d 436, (stating the administrative law judge applied the definition of work provided in Webster’s New Collegiate Dictionary (1980), “ ‘[w]ork’ is defined as ‘activity in which one exerts strength or faculties to do or perform something’ ”). Therefore, because the Bureau has failed to clearly define work, Jacobson claims it must accept his definition of “work” to mean “gainful employment.” Because he did not make a profit, Jacobson determined he was not working as a professional fisherman.

[¶ 13] Despite his contention that fishing was only a hobby, Jacobson, since 1991, regularly reported income from fishing tournaments, in a Schedule C statement of profit or loss from a business, as a part of his federal income tax returns. In addition to tournament winnings, Jacobson’s tournament entrance fees were paid by Twin City Marine and he purchased a new boat annually at a discounted price. Jacobson not only traveled the professional fishing tournament circuits, he also represented Twin City Marine and Yar Craft at boat shows and assisted on the sales floor. The administrative law judge found in paragraph fifteen of the findings of fact, “[w]hile Jacobson contends that he thinks of ‘work’ as a job and employment, considering work in any commonly understood sense of expending time and effort in the performance of tasks for compensation, he surely worked for Twin City Marine and Yar-Craft.”

[¶ 14] Jacobson also contended he did not report income to the Bureau because his claims worker had told him winnings from a fishing tournament did not affect his workers compensation benefits any more than winnings from a casino or lottery. However, the administrative law judge found the advice given by the claims worker was not based upon a full disclosure of the facts and circumstances of his participation and therefore was not a justified basis for Jacobson failing to report these activities.

[¶ 15] Although we agree the Bureau has not clearly defined “work” in an administrative rule, under our standard of review, it was reasonable for the administrative law judge to find Jacobson’s explanations of his understanding of “work,” “employment,” “gainful employment,” and “income” were not credible. Based on the common understanding of work, Jacobson was making a false statement when he reported no tyork activity while entering as a professional in major fishing tournaments, representing Twin City Marine at boat shows, assisting on the sales floor, accepting entrance fees paid for by Twin City Marine, and buying a new boat each season at a discounted price.

[¶ 16] The administrative law judge recommended finding that the greater weight of the evidence indicated Jacobson’s false statements in connection with his claim were willful and material. A reasoning mind reasonably could have concluded, as the administrative law judge recommended in paragraph eight of the conclusions of law, “[e]learly, Jacobson’s false statements could have, and doubtless did, mislead the Bureau to consider his physical capabilities unchanged and that, therefore, he continued to be permanently totally disabled.” The false statements were material with regard to forfeiture of future benefits as they could have misled the Bureau to consider Jacobson’s physical capabilities unchanged and not pursue further inquiry into the true nature of his physical activities. Upon review of the record, we affirm the findings of willful, material false statements in violation of N.D.C.C. § 65-05-33.

IV

[¶ 17] Jacobson claims he was denied due process by the inadequate information on the notice of intent to discontinue benefits and by the delay of the formal hearing. The administrative law judge held, because the delay resulted from Jacobson’s carefully parsed responses and the delay did not prejudice Jacobson, there was no due process violation. Relying on this Court’s recent decision in Stewart v. North Dakota Workers Comp. Bureau, 1999 ND 174, 599 N.W.2d 280, the trial court held the sixteen-month delay between the termination of benefits and the scheduled formal hearing and the inadequate information on the notice of intent to discontinue benefits violated Jacobson’s due process rights. To remedy the deprivation of due process, the trial court ordered the reinstatement of benefits from the time of the termination of benefits on July 21, 1997, to November 30,1998, the date requested by the Bureau for the formal hearing.

[¶ 18] The Bureau’s notice of intent to discontinue Jacobson’s benefits on July 21, 1997, stated:

The Bureau has acquired information that you have provided false statements regarding your workers compensation claim and have failed to report earned income to the bureau. This action has been taken pursuant to NDCC 65-05-33. A legal order will be forthcoming regarding these issues.

[¶ 19] A continuing right to disability benefits under the Workers Compensation Act is a property right protected by the due process clauses of the state and federal constitutions. Beckler v. North Dakota Workers Comp. Bureau, 418 N.W.2d 770, 772 (N.D.1988). As we reiterated recently in Buchmann v. North Dakota Workers Comp. Bureau, 2000 ND 79, ¶ 12, 609 N.W.2d 437, in Beckler “this Court held due process under the federal and state constitutions requires the Bureau to give a claimant pre-termination notice of its intent to terminate disability benefits, a summary of the evidence supporting termination, and an opportunity to respond” (quoting Vernon, 1999 ND 153, ¶ 18, 598 N.W.2d 139). In Stewart, we stated “[t]he pretermination notice must be sufficiently detailed to frame the precise issues, delineate the Bureau’s theories and rationale for terminating benefits, and summarize the significant evidence supporting the Bureau’s conclusions.” 1999 ND 174, ¶ 19, 599 N.W.2d 280. The notice of intent to discontinue benefits Jacobson received was inadequate and violated Jacobson’s due process rights. See Vernon, 1999 ND 153, ¶ 20, 598 N.W.2d 139.

[¶ 20] Jacobson claims the delay of sixteen months between the July 1997 termination of benefits and the November 1998 hearing date requested by the Bureau also violated his due process rights. The post-deprivation hearing must be provided at a meaningful time, as required by the due process clause. Cleveland Board of Education v. Loudermill, 470 U.S. 532, 547, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985); Barry v. Barchi, 443 U.S. 55, 66, 99 S.Ct. 2642, 61 L.Ed.2d 365 (1979). In Stewart we held, “the post-termination procedure in this case, where the Bureau prematurely terminated benefits and left Stewart without a timely remedy while it conducted a ten-month investigation to support its decision, violated due process.” 1999 ND 174, ¶ 29, 599 N.W.2d 280. In addition to the ten-month investigation in Stewart, another six months passed before Stewart received an evidentiary hearing. Id. at ¶ 34. Similarly, Jacobson’s benefits were terminated in July of 1997 and his first opportunity to present his evidence for the Bureau’s consideration was sixteen months later in November of 1998. The Bureau’s delay of sixteen months did not afford Jacobson a timely remedy, violating his due process rights.

[¶ 21] In fashioning a remedy for the violation of Jacobson’s due process rights, the trial court looked to Stewart. This Court held in Stewart, the appropriate remedy for the due process violation of inadequate pre-termination notice and post-termination delay was to reinstate benefits to the time of the post-termination hearing, the first opportunity Stewart had to present his evidence for the Bureau’s reconsideration. 1999 ND 174, ¶ 35, 599 N.W.2d 280. The trial court therefore ordered the reinstatement of Jacobson’s benefits for the sixteen-month period between termination and the hearing as an appropriate remedy for the due process violations.

[¶ 22] The Bureau does not dispute the trial court’s reinstatement of Jacobson’s disability benefits to the date of the hearing under the rationale of Stewart. 1999 ND 174, ¶ 35, 599 N.W.2d 280. Jacobson, however, presses for the more serious sanction of reversal. Jacobson claims the Bureau’s acts substantially prejudiced his interests and constitute a systemic violation of the law, therefore he claims he is entitled to reinstatement of all future benefits.

[¶ 23] Jacobson cites Madison v. North Dakota Dept. of Transp., 503 N.W.2d 243 (N.D.1993) and Scott v. North Dakota Workers Comp. Bureau, 1998 ND 221, 587 N.W.2d 153, to support his argument the Bureau’s acts constitute a systemic violation of law. In Madison, the Department of Transportation waived the Rules of Evidence in an administrative license-revocation hearing without sufficient explanation, violating not only the clear statutory provision but also contrary to district court instructions. 503 N.W.2d at 246. However, the Court found that other than a fear of testifying, the waiver did not otherwise prejudice Madison. Id. This Court, nevertheless, was concerned about this systemic disregard of law and, having previously warned that even if only potentially prejudicial, if commonplace, conduct may warrant reversal, reversed the revocation of Madison’s license. Id. at 246-47 (relying on a footnote in State v. Steffes, 500 N.W.2d 608, 613-14 n. 5 (N.D.1993)). The Court’s stated purpose for the reversal was not only to resolve the statute’s meaning and effect, but also to ensure the Department acted consistently and predictably in accordance with the law. Id. at 247.

[¶ 24] In Scott, this Court reversed and remanded the Bureau’s denial of Scott’s workers compensation benefits because the Bureau improperly allowed ex parte contacts between its outside counsel and the Bureau officer who issued the case decision. 1998 ND 221, ¶ 1, 587 N.W.2d 153. “When a governmental agency systemically disregards the requirements of law, reversal may be required to prophy-lactically ensure the government acts consistently and predictably in accordance with the law.” Id. at ¶ 20. Ex parte contacts in Lawrence v. North Dakota Workers Comp. Bureau, 2000 ND 60, ¶ 22, 608 N.W.2d 254, also violated the statute, however, in contrast, we were not persuaded the Bureau’s actions established a systemic disregard of the law warranting reinstatement of the administrative law judge’s recommended decision. Instead of reversal, we determined the proper remedy was to remand for a rehearing. Id. at ¶ 23.

[¶ 25] The inadequate pre-termi-nation notice and the delay in the post-termination hearing did affect Jacobson’s interests by depriving him of benefits for the sixteen months prior to having an opportunity to be heard, similar to Stewart. 1999 ND 174, ¶ 23, 599 N.W.2d 280. However, also like Stewart, the effect on Jacobson was merely a premature termination of benefits, a termination justified by Jacobson’s willful and material false statements in violation of N.D.C.C. § 65-05-33. Reinstatement of benefits for the premature deprivation period was the remedy fashioned to address this particular situation in Stewart. Id. at ¶ 35. Also, in Forster v. North Dakota Workers Comp. Bureau, 447 N.W.2d 501 (N.D.1989), we affirmed the trial court’s remedy to reinstate benefits to the date the Bureau issued its post-hearing order. In Vernon, 1999 ND 153, ¶22, 598 N.W.2d 139, we affirmed the remedy fashioned by the trial court to reinstate benefits to the date the Bureau issued its formal order, holding “under the circumstances” the remedy was appropriate. Reinstatement of Jacobson’s benefits for the sixteen-month period between the termination and hearing is appropriate under the circumstances because it remedies the premature deprivation and provides an incentive for the Bureau to act “consistently and predictably in accordance with the law.” Madison, 503 N.W.2d at 247. This does not mean the only remedy for these violations is that prescribed by the trial court. Rather, it means under these facts and in light of our recently developing jurisprudence in this area of the workers compensation procedures, this is an appropriate remedy in this instance.

[¶ 26] We affirm the district court judgment.

[¶ 27] SANDSTROM, NEUMANN, and MARING, JJ„ and RICHARD W. GROSZ, D.J., concur.

The Honorable RICHARD W. GROSZ, D.J., sitting in place of KAPSNER, J., disqualified.

      . The lack of either a statutory or administrative-rule definition of "work” leaves the issue of whether certain activity is "work” to an after-the-fact determination. To the extent this may seem to give inadequate notice of what the Bureau considers "work,” words not defined in a statute are to be understood in their ordinary sense. N.D.C.C. § 1-02-02. This means not only that the Bureau may not agree with the claimant but, without a definition in the statute or a rule, the Bureau takes the risk the courts will not agree with the Bureau's application of the term to particular facts.


source: Caselaw Access Project

license: Public Domain

text:
    2001 ND 1
    In the Matter of the PETITION FOR CHANGE OF DESIGNATION OF RESIDENT DISTRICT COURT JUDGESHIP NO. 1 with Chambers in Dickinson, North Dakota, Southwest Judicial District, to Chambers at Bowman, North Dakota, Southwest Judicial District.
    No. 20000362.
    Supreme Court of North Dakota.
    Jan. 3, 2001.
   ORDER OF DENIAL.

[¶ 1] On December 22, 2000, the Honorable Zane Anderson, Judge of the District Court, Southwest Judicial District, filed a Petition for Change of Designation of Resident District Court Judgeship Chamber under N.D. Sup.Ct. Admin. R. 7.1(2), requesting the Supreme Court to change the designation of District Court Judgeship No. 1, with chambers in Dickinson, North Dakota, to chambers in Bowman, North Dakota. Included with the Petition was a Brief in Support discussing the criteria for redesignation under N.D. Sup.Ct. Admin. Rule 7.1(4).

[¶ 2] In September 1999, this Court had occasion to receive and review testimony on judicial service needs, population and caseload trends, and other criteria identified in N.D. Sup.Ct. Admin. R. 7.2, Section 4, regarding several judgeships, including Judgeship Nos. 1 and 5, in the Southwest Judicial District. See Supreme Court Nos. 990224 and 990249. This review and the associated consultations were conducted to assist this Court in identifying an existing district judgeship to be abolished to satisfy the required reduction in the number of judges by January 1, 2001. Judgeship No. 5, with chambers in Bowman, North Dakota, Southwest Judicial District, was abolished by Order dated December 2, 1999, and effective December 31, 2000. See In the Matter of the Consultation Under N.D.C.C. Section 27-05-02.1 Regarding Judgeship Nos. 6 and 7 in the Northeast Judicial District; Judgeship No. 2 in the Northeast Central Judicial District; Judgeship Nos. 6, 7 and 8 in the Northwest Judicial District; Judgeship Nos. I and 9 in the South Central Judicial District; and Judgeship Nos. 1, 8, and 5 in the Southwest Judicial District, 1999 ND 226, 603 N.W.2d 57.

[¶ 3] A hearing was not conducted concerning this Petition for Change of Designation of Resident District Court Judgeship Chamber for Judgeship No. 1. However, we take judicial notice of the information contained in Supreme Court Nos. 990224 and 990249, including the information resulting from the consultation with judges and lawyers of the Southwest Judicial District.

[¶4] We have reviewed whether the redesignation of the chambers is warranted in light of the information received in the Petition. In view of the 1999 hearing and data received, the Court finds no compelling reason to transfer the chambers from Dickinson to Bowman.

[¶ 5] IT IS THEREFORE ORDERED, that the Petition for Change of Designation of Resident District Court Judgeship No. 1, with chambers in Dickinson, North Dakota, Southwest Judicial District, is DENIED.

[¶ 6] Dated at Bismarck, North Dakota, January 3, 2001.

[¶ 7] VANDE WALLE, C.J., and NEUMANN, SANDSTROM, MARING, and KAPSNER, JJ., concur.


author: GILBERTSON, Justice JOHNSON, Circuit Judge

text:
    2001 SD 9
    Drs. John MAHAN, James MacDougall, Michael Holte, Chester Mayo, Matthew Reynen, and Donald Frisco, Individuals, and Residents of Aberdeen, South Dakota, and Orthopedic Surgery Specialists, Ltd., A South Dakota Medical Partnership, Plaintiffs and Appellees, v. AVERA ST. LUKE’S, A South Dakota Non Profit Community Hospital, Defendant and Appellant.
    Nos. 21118, 21135.
    Supreme Court of South Dakota.
    Argued April 26, 2000.
    Reassigned Oct. 26, 2000.
    Decided Jan. 10, 2001.
    Rehearing Denied Feb. 20, 2001.

      Chester A. Groseclose, Jr. of Richardson, Groseclose, Wyly, Wise & Sauck, Aberdeen, SD, and Richard G. Braman, Thomas S. Darling of Gray, Plant, Mooty, Mooty, & Bennett, Minneapolis, MN, Attorneys for plaintiffs and appellees.
    Edwin E. Evans, Melissa C. Hinton of Davenport, Evans, Hurwitz & Smith, Sioux Falls, SD, Attorneys for defendant and appellant.
   GILBERTSON, Justice

(on reassignment).

[¶ 1.] Orthopedic Surgery Specialists (OSS), a South Dakota corporation, and its individual physicians, commenced this action against Avera St. Lukes (ASL) alleging breach of contract. The trial court granted OSS’ motion for summary judgment and entered a mandatory permanent injunction against ASL. ASL then filed this appeal. We reverse.

FACTS AND PROCEDURE

[¶ 2.] ASL is a private, nonprofit, general acute care hospital located in Aberdeen, South Dakota, organized under the nonprofit corporation laws of South Dakota. ASL is part of Avera Health, a regional health care system sponsored by the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, South Dakota. Since 1901, the Presentation Sisters have been fulfilling their mission statement “to respond to God’s calling for a healing ministry ... by providing quality health services” to the Aberdeen community. ASL has expanded its mission beyond the Aberdeen community to become the only full-service hospital within a 90-mile radius of Aberdeen.

[¶ 3.] As required by SDCL 47-23-13, ASL is governed by a Board of Trustees (Board), which manages its affairs. The Board consists of 15 members from Aberdeen and surrounding communities, including five physicians and four Presentation Sisters. It is the duty of the Board “[t]o implement the purpose and objectives of [ASL] as determined by the Members of [ASL] and in accordance with the Statement of Philosophy of the Presentation Sisters.” By Laws of St. Luke’s Midland Regional Medical Center (Corporate Bylaws), art V, § 14(b). Membership in ASL is limited to “religious Members of the Congregation of the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, South Dakota.” Corporate Bylaws, art I, § 3.

[¶ 4.] In mid-1996, ASL’s neurosurgeon left Aberdeen. After his departure, the Board passed a resolution to recruit two neurosurgeons or two spine-trained orthopedic surgeons to fill the void. During the recruitment process, ASL learned that most neurosurgeon applicants would not be interested in coming to Aberdeen if there was already an orthopedic spine surgeon practicing in the area. This was due to the small size of the community and the probable need for the neurosurgeon to supplement his or her practice by performing back and spine surgeries. Back and spine surgeries are also performed by orthopedic spine surgeons and the applicants were doubtful whether Aberdeen could support the practice of both a neurosurgeon and an orthopedic spine surgeon.

[¶ 5.] ASL was successful in recruiting a neurosurgeon who arrived in December, 1996. Around this time, ASL learned that OSS, a group of Aberdeen orthopedic surgeons, had decided to build a day surgery center that would directly compete with ASL. During the first seven months that OSS’ surgery center was open, ASL suffered a 1000 hour loss of operating room usage.

[¶ 6.] In response to the loss of operating room income, ASL’s Board passed two motions on June 26, 1997. The first motion closed ASL’s medical staff with respect to physicians requesting privileges for three spinal procedures: (1) spinal fusions, (2) closed fractures of the spine and (3) laminectomies. The second motion closed ASL’s medical staff to applicants for orthopedic surgery privileges except for two general orthopedic surgeons being recruited by ASL. The effect of “closing” the staff was to preclude any new physicians from applying for privileges to use hospital facilities for the named procedures. The Board’s decision did not affect those physicians that had already been granted hospital privileges, including the physician-members of OSS. In making its decision, the Board specifically determined that the staff closures were in the best interests of the Aberdeen community and the surrounding area.

[¶ 7.] In the summer of 1998, OSS recruited Dr. Mahan (Mahan), a spine-fellowship trained orthopedic surgeon engaged in the practice of orthopedic surgery. While OSS was recruiting Mahan, one of the OSS physicians advised Mahan that the staff at ASL had been closed to orthopedic surgery privileges. Despite this warning, Mahan began practicing with OSS. On at least two occasions, Mahan officially requested an application for staff privileges with ASL. These requests were denied due to the Board’s decision on July 26,1997.

[¶ 8.] In September of 1998, Mahan and OSS (Plaintiffs) commenced this action against ASL, challenging the Board’s decision to close the staff. Plaintiffs claimed that the action was a breach of the medical/dental staff bylaws (Staff Bylaws) and sought a writ of mandamus and permanent injunction ordering ASL to consider Ma-han’s application for hospital privileges. Both parties submitted cross motions for summary judgment. After a hearing, the circuit court determined that ASL had breached the Staff Bylaws by closing the staff. In making its decision, the circuit court relied exclusively on the Staff Bylaws. The circuit court determined that the Board had delegated a significant amount of its power and authority concerning staff privileges to the medical staff. The circuit court reasoned that because of this delegation, the Board no longer had the power to initiate actions that affected the privileges of the medical staff. The circuit court concluded the Board had breached its contract with the medical staff when it closed the staff to the named procedures without first consulting the staff. Plaintiffs’ request for a permanent injunction was granted, requiring ASL to consider Mahan’s application for privileges. ASL appeals raising the following issues:

1. Whether the individual OSS physicians have standing to challenge the Board’s decision.

2. Whether the Board’s decision breached its contract with the Staff.

ANALYSIS

[¶ 9.] 1. Whether the individual OSS physicians have standing to challenge the Board’s decision.

[¶ 10.] It is well settled in South Dakota that “a hospital’s bylaws constitute a binding contract between the hospital and the hospital staff members.” Read v. McKennan Hospital, 2000 SD 66, ¶ 14, 610 N.W.2d 782, 785 (citing St. John’s Hospital Medical Staff v. St. John Regional Medical Center, Inc., 90 S.D. 674, 679, 245 N.W.2d 472, 474 (1976)). It is also well settled that when such bylaws are approved and accepted by the governing board they become an enforceable contract between the hospital and its physicians. See Northeast Georgia Radiological Assoc. v. Tidwell, 670 F.2d 507, 511 (5th Cir.1982); Janda v. Madera Community Hosp., 16 F.Supp.2d 1181, 1188 (E.D.Cal.1998); Terre Haute Regional Hosp., Inc. v. El-Issa, 470 N.E.2d 1371, 1377 (Ind.Ct.App.1984).

[¶ 11.] Only parties to a contract have rights in the contract. As such, the parties to the contract are the only ones who can seek enforcement of the contract. See Leonard v. Leonard, 529 N.W.2d 208, 211 (S.D.1995). The OSS staff doctors are currently members of the medical staff at ASL; they are a party to the contract between ASL and the medical staff. However, merely being party to a contract is not enough to have standing.

[¶ 12.] “ ‘Generally, for a litigant to have standing to bring an action before the court, the litigant must ‘show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant.’ ” Parsons v. South Dakota Lottery Commission, 504 N.W.2d 593, 595 (S.D.1993) (quoting Gladstone, Realtors v. Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 1608, 60 L.Ed.2d 66, 76 (1979)). In regard to whether the OSS staff doctors suffered an injury, the circuit court found:

It is undisputed that the Board’s decision resulted in an economic benefit for ASL and an economic hardship for these doctors in their private medical practice, OSS. It is also undisputed that the OSS staff doctors, through their medical corporation OSS, spent time and money to recruit Mahan, only to end up with him unable to perform certain procedures because of his inability to obtain staff privileges at ASL. As a result, the OSS staff doctors have had to support Mahan while being unable to build their practice or increase their patient base as expected. Clearly [the OSS] [d]octors ... have standing.

The circuit court properly found that the OSS staff doctors have standing to bring a cause of action for breach of contract.

[¶ 13.] 2. Whether the Board’s decision breached its contract with the Staff.

[¶ 14.] A. The relationship and specific terms of the Bylaws .

[¶ 15.] As noted, in South Dakota, bylaws constitute a contract between a hospital and its medical staff. Read, 2000 SD 66, ¶ 14, 610 N.W.2d at 785. As such, in this case we are called upon to construe the bylaws that are at issue. In so doing we apply the normal principles for construction and interpretation of a contract. St. John’s, 245 N.W.2d at 475. We review the construction of a contract under the de novo standard as a question of law. Read, 2000 SD 66, ¶ 22, 610 N.W.2d at 786.

[¶ 16.] Under South Dakota law, “[t]he affairs of a [non-profit] corporation shall be managed by a board of directors.” SDCL 47-23-13 (emphasis added). More specifically, ARSD 44:04:04:02.01 states that a hospital is required to have “a medical staff organized under bylaws and rules approved by the governing body and responsible to the governing body of the hospital for the quality of all medical care provided patients in the hospital and for the ethical and professional practices of its members.” (emphasis added). These directors “possess a large amount of discretionary power within the limits of their legal authority, and in the exercise of business judgment in the performance of their duties.” 18B AmJur2d Corporations, § 1486. Pursuant to its authority, the Board of ASL has delegated certain powers associated with the appointment and review of medical personnel to its medical staff. These designated powers are manifested in the Staff Bylaws. Plaintiffs now claim that the Staff Bylaws trump the decision-making ability of the Board as to all decisions relating in any way to, or incidentally affecting, medical personnel issues. We do not agree.

[¶ 17.] The circuit court failed to give sufficient weight to the fact that the Staff Bylaws are derived from the Corporate Bylaws. Under Article XIV, section 14(u) of the Corporate Bylaws, any powers supposedly granted under the Staff Bylaws must originate from, and be authorized by, the Board pursuant to the Corporate Bylaws. Their legal relationship is similar to that between statutes and a constitution. They are not separate and equal sovereigns. The former derives its power and authority from the latter. Hence, to determine whether the staff was granted the power that it now claims to possess, any judicial analysis must begin with an examination of the Corporate Bylaws. Article V, section 1 states that “[t]he business and the property of the Corporation shall be managed , and controlled, ... by a Board of Trustees.... ” In addition, the Corporate Bylaws provide that:

[a]ll the corporate powers, except such as herein reserved to the Members of the Corporation, and except such as are otherwise provided for in these By Laws and in the laws of the State of South Dakota shall be vested in and shall be exercised by the Members of the Board of Trustees.

Id., § 13.

[¶ 18.] Therefore, the medical staff has no authority over any corporate decisions unless specifically granted that power in the Corporate Bylaws or under the laws of the State of South Dakota. Plaintiffs have not alluded to any powers that arise under the statutory or common-law of South Dakota. Therefore, we again return to an examination of the Corporate Bylaws. Applicable is article V, section 14, which provides that:

[t]he Members of the Board of Trustees shall have and exercise the authority in the management of the Corporation, as follows, but not in limitation, to wit:
(b) To implement the purpose and objectives of the Corporation as determined by the Members of the Corporation and in accordance with the Statement of Philosophy of the Presentation Sisters.
(i) To periodically examine its goals, its policies and the current programs of the hospital and to be responsible for the development of a mechanism that provides a systematic review of the quantity and quality of the services provided.
(j) To ensure that personnel policies and practices that are adequate to support sound patient care are established and maintained.
(r) ... to analyze and evaluate data which reflects the communities [sic] present and projected health needs and accordingly develop a written plan for the hospital’s growth and development; to provide appropriate physical and financial resources and personnel required to meet the needs of the community and the patients; and to make appropriate recommendations with respect thereto to the Members of the Corporation.
(u) To delegate to the Medical Staff the authority to evaluate the professional competence of staff Members and applicants for staff privileges and to hold the Medical Staff responsible for making recommendations to the Members of the Board of Trustees concerning initial staff appointments, reappointments and the assignment or curtailment of privileges, all subject to the final approval of the Members of the Board of Trustees.
(v) To ensure the development of the Medical Staff ByLaws, Rules and Regulations which must state the policies under which the Medical Staff regulates itself, and to approve the same, (emphasis added).

Under section 14(u), all that is designated to the medical staff is the responsibility to make recommendations to the Board regarding the professional competence of staff members and applicants. Article XVI, section 1(a) directs the Board to organize the staff under medical-dental bylaws, which must be approved by the Board before they become effective. Finally, article XVI, section 2(a) commands the Board to “assign to the medical-dental staff reasonable authonty for ensuring appropriate professional care to the hospital’s patients.” (emphasis added).

[¶ 19.] Clearly, under these explicit powers, the Board has the authority to make business decisions without first consulting the medical staff. Nowhere in the Corporate Bylaws is the staff explicitly authorized to make business decisions on behalf of the corporation. Plaintiffs instead rely on the Staff Bylaws as their source of authority to assume the Board’s power. Yet, even within the Staff Bylaws, there is no explicit provision granting the medical staff control over personnel issues. Instead, the circuit court found that the actions of the Board violated “the spirit of the bylaws taken as a whole.” Such reliance on the “spirit of the [Staff] bylaws” turns the corporate structure of ASL upside down, granting control over day to day hospital administration to a medical staff that is not legally accountable for the hospital’s decisions, has no obligation to further the mission of the Presentation Sisters, and has unknown experience in running a hospital or meeting the medical needs of the community. Such a result is contrary to South Dakota corporate law and thus cannot be allowed to stand.

[¶ 20.] When the Board made its decision to close the medical staff to the three procedures on June 26, 1997, it was acting within the powers granted it in the Corporate Bylaws. See art XIV, § 14(r). When making these decisions, the Board specifically determined that the staff closures were in the Aberdeen community’s best interests, and were necessary to insure 24-hour neurosurgical coverage for the Aberdeen area. By preserving the profitable neurosurgical services at ASL, the Board also insured that other unprofitable services would continue to be offered in the Aberdeen area. When, as here, it is clear from the Corporate Bylaws that the Board has the authority to manage the corporation, that authority “would necessarily include decisions on how to operate individual departments in order to best serve the corporation’s purposes.... The cost of such care and promotion of community health is vitally important to the community and a legitimate concern for the board.” Bartley v. Eastern Maine Medical Center, 617 A.2d 1020, 1022 (Me 1992). ASL cannot continue to offer unprofitable, yet essential services including the maternity ward, emergency room, pediatrics and critical care units, without the offsetting financial benefit of more profitable areas such as neurosurgery. The Board responded to the effect the OSS hospital would have on the economic viability of ASL’s hospital and the health care needs of the entire Aberdeen community. These actions were within the power of the Board. It surely has the power to attempt to insure ASL’s economic survival. As such, the courts should not interfere in the internal politics and decision making of a private, nonprofit hospital corporation when those decisions are made pursuant to its Corporate Bylaws.

[¶ 21.] In this action, the circuit court determined that this was not an administrative decision by the Board. Instead it held this was a decision regarding the “granting or withholding [of] staff privileges,” and that the action fell “within the provisions of the medical staff bylaws.” The circuit court concluded that the Board had “delegated a significant amount of its power and authority concerning professional qualifications and staff privileges to the medical staff.” According to the circuit court, in matters of personnel, the Board has only “secondary approval authority ...; no actions originate with the Board itself.” As support for this view, the circuit court cited to article III, section 2(a) of the Staff Bylaws. That section provides as follows:

Initial appointments and reappointments to the Medical staff shall be made by the Governing Body. The Governing Body shall act on appointments, reappointment, or revocation of appointment only after there has been recommendation from the Medical Staff as provided in these Bylaws.

The circuit court also cited a provision in the Credentialing Manual to support its claim that the Board has essentially only rubber stamp authority. That provision states that “[t]he Board shall either accept or reject the recommendation of the Credentials and Executive Committee.... ” Credentialing Manual, section 1.5-7. Finally, the circuit court found that the procedure for hearings and appellate review was further evidence that the Board was not allowed to originate any actions relating to the medical staff, it was only allowed to hear appeals. Staff Bylaws, art VIII.

[¶ 22.] These provisions have been misconstrued by the circuit court. When the Board delegated power to the medical staff through the Staff Bylaws, it had the authority under the corporate bylaws to delegate only the “authority to evaluate the professional competence of staff Members and applicants for staff privileges.... ” Corporate Bylaws, art V, § 14(u). The purpose of this limited delegation of authority was to obtain input from the staff on areas of its expertise. Decisions relating to the competence, training, qualifications and ethics of a particular physician are matters for which the medical staff is uniquely qualified, while the Board admittedly has limited expertise in those areas. Under the Corporate Bylaws, it is only in those confined areas of expertise that the staff has any authority at all. However, the Corporate Bylaws do delegate other duties to the staff when it holds the staff “responsible for making recommendations to the Members of the Board of Trustees concerning initial staff appointments, reap-pointments and the assignment or curtailment of privileges.” Id. Clearly, the medical staff gives recommendations to the Board on issues relating to appointment and privileges. However, this case is not about appointments or the assignment or curtailment of privileges. It is about an administrative decision to close ASL’s staff for certain procedures, therefore, the medical staff has no part in the decision and the Staff Bylaws do not apply. The circuit court has taken the responsibilities of the staff in certain areas and elevated them into authority and control over those areas. This result was clearly not intended by either the Corporate Bylaws or the Staff Bylaws.

[¶ 23.] The sections of the Staff Bylaws relied upon by the circuit court provide additional evidence of non-application. Article III, section 2 only applies to appointments, reappointments, or revocation of appointments of staff privileges. As previously noted, this case does not involve those procedures. The procedure for hearings and review found in article VIII only applies if a decision by the Board “will adversely affect [the practitioner’s] appointment to or status as a member of the Medical Staff or his exercise of clinical privileges.... ” Staff Bylaws, art VIII, § 1(a). The disputed action by the Board did not affect any physician’s appointment or status as a member of the staff. All physicians that had clinical privileges at ASL on June 26, 1997, retained those privileges. Finally, the provision in the Credentialing Manual only applies to the application process, which is not at issue here because Mahan was never given an application for clinical privileges. We cannot accept that the circuit court’s analysis of the Staff Bylaws can somehow override the specific authority granted to the Board by the Corporate Bylaws of ASL. Nor can we accept that the “spirit of the [Staff] bylaws taken as a whole” can usurp power away from ASL’s Board.

[¶ 24.] Under the Corporate Bylaws, the Board has the authority to analyze and evaluate data reflecting the present and projected health care needs of the Aberdeen community. In light of that data, the Board must develop a “plan for the hospital’s growth and development; to provide appropriate physical and financial resources and personnel required to meet the needs of the community and the patients.” Corporate Bylaws, art V, § 14(r). The Board determined that it was in the best interests of the community to provide 24 hour access to neurosurgical services. To provide this coverage, ASL needed to recruit two neurosurgeons or two orthopedic spine surgeons. To recruit the required personnel, the Board determined that it was necessary to close the staff of ASL as to the three procedures and orthopedic surgery privileges. Under the Corporate Bylaws, this decision was reasonable and this Court has no legal basis to second-guess its decision.

[¶ 25.] Within its broad powers of management, some of the business decisions made by the Board will undoubtedly impinge upon matters that relate to or affect the medical staff of the hospital. This fact is unavoidable. However, merely because a decision of the Board affects the staff does not give the staff authority to overrule a valid business decision made by the Board. Allowing the staff this amount of administrative authority would effectively cripple the governing Board of ASL. ASL would cease to function in its current corporate form if its staff were given such power.

[¶ 26.] In its decision, the circuit court attempted to distinguish between this present situation and the situation wherein a hospital enters into an exclusive contract. We find this attempt to be unpersuasive. An exclusive contract arises when the hospital contracts with an outside physician or group of physicians, whereby the hospital agrees that the physician or group of physicians shall be the only personnel allowed to use certain facilities in the hospital, such as radiology units or emergency room units. Such exclusive contracts are common practice for most hospitals today, and have been almost universally found valid and enforceable, even if not explicitly provided for in corporate bylaws. Lyons v. St. Vincent Health Center, 731 A.2d 206, 212 (Pa.Comwlth. 1999); Holt v. Good Samaritan Hosp. & Health, 69 Ohio App.3d 439, 590 N.E.2d 1318, 1320 (1990). In the past, ASL has closed several areas of its facility to physicians not part of an exclusive contract. Such areas include anesthesiology, radiology, emergency room care, pathology, EKG interpretation, pulmonary function interpretation and cardiac catherization.

[¶ 27.] Plaintiffs do not allege that the prior exclusive contracts entered into by ASL are invalid. Neither is it alleged that the Board does not have the authority to enter into such exclusive contracts. Yet, they claim that the action of the Board they now challenge is somehow invalid. There is no logical reason why ASL could close certain areas of its facility to all but a few physicians (via an exclusive contract), yet not be allowed to close its facilities to any new orthopedic surgeons performing certain, named procedures. In a sense, ASL has entered into an implied exclusive contract with all current orthopedic spine surgeons. The same implicit authority that allows the Board to enter into exclusive contracts allows it to close ASL’s staff as was done here.

[¶ 28.] The circuit court also concluded that ASL must accept an application from any doctor wishing to have privileges at ASL. According to the circuit court, it is then the responsibility of the medical staff to decide whether the applicant is competent to practice and whether the applicant resides in close proximity to the hospital. If the staff is satisfied as to these two elements, then under the circuit court’s analysis, ASL is required to grant the physician privileges at the hospital. According to the circuit court, no other considerations can come into play because, “the [Staff] bylaws do not provide for restrictions of the staff for any other reason.” Such a construction of the Staff Bylaws reaches a result that is contrary to the Corporate Bylaws and common sense. Are we to force ASL to grant privileges to every qualified physician that may stand at its doorstep and announce that he or she will henceforth be using the hospital’s facilities, simply because the staff said they could? Absent a dear grant of such power, the staff of any corporation does not have the kind of control that the circuit court would grant to the medical staff. It is not disputed that there is no such clear mandate in this case, only the “spirit of the bylaws taken as a whole.” The spirit of these bylaws cannot override the entire corporate structure of ASL. The Board was only authorized to delegate to the staff reasonable authority to ensure appropriate professional care. Corporate Bylaws, art XVI, § 2(a). The result reached by the circuit court gives the staff an unreasonable amount of authority that is viola-tive of SDCL 47-23-13 and ARSD 44:04:04:02.01 and is impractical in a corporate business environment. Imagine the confusion and lack of clear lines of management authority that would ensue at the hospital if the Board had only the minimal amount of control over its medical staff that the circuit court would give it.

[¶ 29.] B. Contractual Element of Good Faith.

[¶ 30.] We stated in Garrett v. BankWest, Inc., 459 N.W.2d 833 (S.D.1990), that “[e]very contract contains an implied covenant of good faith and fair dealing which prohibits either contracting party from preventing or injuring the other party’s right to receive the agreed benefits of the contract.” Id. at 841 (citing Restatement (Second) of Contracts, § 205 (1981)). The term “good faith” generally indicates an absence of bad faith on behalf of a party to a contract. Id. at 845. Ex-ampies of bad faith performance include depriving the other party of a negotiated right under the contract, preventing the aggrieved party from receiving the benefits of the bargain, or interfering in the other party’s performance of the contract. Id. at 841, 845.

[¶ 31.] As previously noted, “a hospital’s bylaws constitute a binding contract between the hospital and the hospital staff members .” Read, 2000 SD 66, ¶ 14, 610 N.W.2d at 785. Because the Board accepted and approved the Staff Bylaws, a contract was formed between ASL and its medical staff. This contract, like all in South Dakota, contains the implied covenant of good faith and fair dealing. That implied covenant allows either party to sue for breach of contract “even though the conduct failed to violate any of the express terms of the contract agreed to by the parties.” Garrett, 459 N.W.2d at 841. We assume this is what the circuit court meant by its reference to the “spirit of the bylaws.” But the duty of good faith is not limitless. Id. Implied in tlje definition of bad faith is the idea that the actions were unreasonable, therefore, a breach of the covenant of good faith cannot exist when the parties act in a reasonable manner.

[¶ 32.] The Board’s decision to close the hospital’s facility for certain, named procedures was a reasonable administrative decision. It had determined that the closures were necessary to insure the continued viability of the hospital. The Board must be allowed to make such reasonable, independent decisions if it is to continue to provide comprehensive medical services to the Aberdeen community. It should also be noted that the Board did not abrogate any right for which the staff had previously negotiated. Nor was the medical staff denied the benefit of its bargain. The rights and benefits that the staff is now claiming are not mentioned in the Staff Bylaws, nor are they delegated to the staff in the Corporate Bylaws. It is clear from the record that the Board did not interfere with the staffs performance of the Staff Bylaws. It simply made an economically reasonable decision not to allow any additional physicians to perform the three named procedures and orthopedic surgeries. Therefore, any allegations that ASL breached its implied duty of good faith must fail.

[¶ 33.] Hospitals have legally defined responsibilities and duties. See Tenet Health Ltd. v. Zamora, 13 S.W.3d 464, 471 (Tex.App.2000) (stating that “[a] hospital is not a mere hostery [sic] providing room and board and a place for physicians to practice their craft, but [an institution that] owes independent duties of care to its patients.”). To carry out this duty, the Board must have the power to close its doors to certain physicians. In fact, this power is nearly beyond refute. See Imperial v. Suburban Hosp. Ass’n, Inc., 862 F.Supp. 1390, 1401 (D.Md.1993) (noting that “ ‘a private hospital has the right to exclude any physician from practicing therein, such exclusion rests within the sound discretion of the managing authorities.’ ”); Hutton v. Memorial Hosp., 824 P.2d 61, 63 (Colo.App.1991) (stating that there is nothing that “requires a hospital to grant staff privileges to every physician who satisfies the minimum criteria set forth in its bylaws for obtaining such privileges.”); Sarin v. Samaritan Health Center, 176 Mich.App. 790, 440 N.W.2d 80, 82 (1989) (declaring that “[t]he rule is well established that a private hospital has a right to exclude any physician from prac-tising [sic] therein.”); Lewin v. St. Joseph Hosp., 82 Cal.App.3d 368, 146 Cal.Rptr. 892, 906-07 (1978) (stating that “in every case brought to our attention in which a hospital’s operation of a facility on a ‘closed-staff basis was challenged, the decision of the governing authority of the hospital has been upheld.”).

[¶ 34.] In addition, the negligent act of a doctor can impute liability to a hospital under a theory of respondeat superior unless it can be shown that the doctor was acting as an independent contractor. 40 AmJur2d Hospitals § 28. Further, in Shamburger v. Behrens, 380 N.W.2d 659, 665 (S.D.1986) we held that separate liability for negligence attaches to a hospital when it has breached its own standards, or those available in the same or similar community or hospitals generally, such as allowing a known incompetent doctor to remain on staff. See also Goodman v. United States, 2 F.3d 291, 293 (8thCir.1993) (applying South Dakota law). It would be completely illogical to first impose a duty of reasonable care upon a hospital, and then later strip the hospital of the ability and power to implement the policies and programs required to fulfill that duty.

Conclusion

[¶ 35.] Because the actions of ASL’s Board were permissible under the Corporate Bylaws and done in good faith, there has been no breach of the contract between the Board and the staff. Therefore, the circuit court’s judgment is reversed. The circuit court’s imposition of a permanent injunction is likewise reversed.

[¶ 36.] MILLER, C.J., and AMUNDSON and KONENKAMP, JJ., concur.

[¶ 37.] JOHNSON, C.J., concurs in part and dissents in part.

JOHNSON, Circuit Judge

(concurring in part, and dissenting in part)

[¶ 38.] I concur with the majority on Issue I, but dissent on Issue II.

[¶ 39.] ASL ignored the Medical Staff Bylaws, which allow the active medical staff to vote and be heard concerning amendments to the bylaws. Instead, ASL unilaterally made a business decision to close the medical staff to new orthopedic surgeons, except those which ASL was recruiting.

[II40.] ASL relies almost entirely on article III, § 2(a) of the bylaws, which states: “Initial appointments and reap-pointments to the medical staff shall be made by the Governing Body. The Governing Body shall act on appointments, reap-pointments, or revocation of appointments only after there has been a recommendation from the medical staff as provided by these Bylaws.” This reliance is flawed. This case deals with a unilateral amendment to the bylaws, without the prescribed approval of the medical staff, and not an appointment or reappointment.

[¶ 41.] This Court has held that “medical staff bylaws do constitute a contract which is, by its express terms, subject to amendment when the amendment is agreed to by both the medical staff and medical center.” St. John’s Hosp. M.S. v. St. John Reg. M. C., 90 S.D. 674, 679, 245 N.W.2d 472, 475 (1976). (Holding the board of directors unilateral amendments to the medical staff bylaws null and void without the participation and approval of the medical staff as provided in the bylaws). “The principles which govern the construction of contracts also govern the construction and interpretation of corporate bylaws.” State v. Johnson, 21 Wis.2d 482, 124 N.W.2d 624, 626, 627 (1963). As such, “where the terms of a contract are plain and unambiguous, the duty of the court is to construe it as it stands, giving effect to the plain meaning of the language used.” Id.

[¶ 42.] In the case at hand, the following language in article XVI of ASL’s bylaws clearly delegates to the active medical staff the power to vote and be heard when there are proposed amendments to the bylaws: “The Bylaws, Rules and Regulations Committee shall review these Bylaws at least annually. The review shall be timed so that any proposed bylaw changes are ready for submission to the medical staff on or before the annual meeting.” Article XVI further notes:

[i]n the event that any member of the medical staff has a question or disagrees with the proposed changes in the Bylaws, ... [d]iscussion from the floor regarding the changes in the Bylaws and Rules and Regulations may be conducted by those who desire to participate, following which change, revisions, or alterations shall be balloted upon, (emphasis added).

At no time did the Board of Trustees allow the medical staff to have any input or vote on the proposed changes to the bylaws as required.

[¶ 43.] Article XVII of the bylaws sets forth that “[t]he Bylaws together with the appended Rules and Regulations shall be adopted at any regular or special meeting of the active medical staff.” This means that the amendments to bylaws cannot be adopted unilaterally; the active medical staff must be present.

[¶ 44.] The trial court found:

[i]n reading the bylaws, as a whole, the Court concluded that the bylaws contemplate taking applications from any doctor who wishes to have staff privileges at ASL. The bylaws do not contain any restrictions as to who may apply, they only put professional and logistical qualifications on who can be accepted to the staff. These qualifications center on a physician’s competence to practice medicine and his or her availability to be at the hospital. They bylaws do not provide for restrictions of staff for any other reason. Any other interpretation would lead to a result contrary to the spirit of the bylaws taken as a whole, (emphasis in original).

[¶ 45.] There is no flaw in this conclusion. The staff bylaws did not contain restrictions on who may apply for staff privileges, but did place restrictions on who may be accepted to the staff. This was a benefit to the staff members, as it allowed them to recruit physicians to their clinics with the exception that the new doctors would receive staff privileges (to the only full service hospital within 90 miles of Aberdeen) if they met the professional and geographic requirements of the staff bylaws.

[¶ 46.] ASL unilaterally denied this benefit to staff members by blatantly ignoring the amendment provisions of the staff bylaws. “Every contract contains an implied covenant of good faith and fair dealing which prohibits either contracting party from preventing or injuring the other party’s right to receive the agreed benefits of the contract.” Garrett v. BankWest, 459 N.W.2d 833 (S.D.1990). ASL’s partial closure of the orthopedic staff, for strictly economic reasons, was not reasonable, not in good faith, and was a breach of contract. Either party may sue for breach of contract “even though the conduct failed to violate any of the express terms of the contract agreed to by the parties.” Id. at 841. The trial court was correct in issuing a permanent injunction requiring ASL to provide Dr. Mahan with an application for staff privileges.

[¶ 47.] Accordingly, I would affirm the circuit court on Issue II.

[¶ 48.] JOHNSON, C.J., sitting for SABERS, J., disqualified.

      . References to article and section numbers will refer to those articles and sections in the Corporate Bylaws until stated otherwise.

      . As previously noted, members of the medical staff are not "members” of the corporation. Pursuant to the Corporate Bylaws, membership in the corporation is limited to "religious Members of the Congregation of the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, South Dakota....”

      . The circuit court further concluded that the Board is only allowed to give its "seal of approval” at the final stages of staff actions.

      . Another limitation on the Board’s power to delegate authority is found in the Corporate Bylaws, article XVI, section 2(a), where it states that "[t]he Members of the Board of Trustees shall, in the exercise of their overall authority and responsibility, assign to the medical-dental staff reasonable authority for ensuring appropriate professional care to the hospital’s patients.” (emphasis added). Clearly, the degree of authority given to the staff by the circuit court’s interpretation is not a reasonable amount of authority.

      . Article III, section 2 of the Staff Bylaws states in part:
      a. Initial appointments and reappoint-ments to the Medical staff shall be made by the Governing Body. The Governing Body shall act on appointments, reap-pointments, or revocation of appointments only after there has been [a] rec-
      ommendation from the Medical Staff as provided in these Bylaws.

      c. Appointment to the Medical Staff shall confer on the appointee only such clinical privileges as have been granted by the Governing Body, in accordance with these Bylaws.

      . Again, the circuit court relied upon the “spirit of the bylaws” to reach this conclusion.

      . It should be noted that under the circuit court’s interpretation, the delegation of that much authority would be invalid as a violation of the Corporate Bylaws, because the Board would have granted more than reasonable authority. We cannot conclude that the Board would have intended to violate the Corporate Bylaws when it enacted the Staff Bylaws.

      . Given the fact that appointment to ASL medical staff, under its bylaws, carries with it elements of agency, adoption of the circuit court's rationale arrives at further legal difficulties. In Lucey v. Vilhauer, 64 S.D. 54, 264 N.W. 203, 206 (S.D.1935) (overruled on other grounds), we set forth the duty of an agent to its principal:
      The law is well settled that the relation of an agent to his principal is one of confidence and trust. It is the duty of the agent to act with the utmost good faith for the best interest of his principal in all dealings concerning or affecting the subject matter of the agency, and he must not place himself in such relations that his own interests or the interests of others whom he represents may become antagonistic to those of his principal. It matters not how fair the conduct of the agent may have been nor that the principal was not injured.
      The circuit court’s opinion elevates the interests of the staff, as agent, above the interests of ASL, as principal. This clearly violates general agency principles and cannot be allowed.
      Whether the medical staff are also employees presents a difficult question. Cases from other jurisdictions arrive at different results, from that of employee to something akin to a corporate officer to that of an independent contractor. A review of the ASL Staff Bylaws does not provide a definitive answer. Other cases go beyond the definition used in that type of document and invoke some form of an “economic realities" test. In any event, our recent case of Setliff v. Akins, 2000 SD 124, 616 N.W.2d 878, which dealt with an employment dispute between doctors in a medical clinic, is instructive on agency principles as well. We cited to SDCL 60-2-13 which states, "[a]n employee who has any business to transact on his own account, similar to that entrusted to him by his employer, must always give the latter the preference.” We further concluded that although SDCL 60-2-13 does not flatly prohibit employees from pursuing their own interests, it does require an employee to prioritize. Id., ¶ 20, 616 N.W.2d at 887. An employee must give preference to his employer's business interests over his or her own. Id. (citing Bushman v. Pure Plant Food Intern., Ltd., 330 N.W.2d 762, 763-64 (S.D.1983)).
      How can a doctor who is a part owner of the for-profit OSS be expected to fulfill his or her duties towards his or her co-owners and in the same instance fulfill the duties towards the principal, ASL, who is a not for profit hospital? This does not imply ill-will on the part of the doctor, it simply faces fundamental medical issues such as at which institution does the doctor place his or her patients, OSS or ASL? We have often stated that an agent cannot serve two masters. This rule applies to medical professionals as well.

      . Clearly under articles XVI and XVII of the bylaws the board of directors have given the active medical staff power to alter, amend or repeal the bylaws and adopt new bylaws. See SDCL 47-22-33 which provides: "The power to alter, amend or repeal the bylaws or adopt new bylaws shall be vested in the board of directors unless otherwise provided in the articles of incoiporation or the bylaws.’’ (emphasis added).


author: SABERS, Justice AMUNDSON, Justice

text:
    2001 SD 12
    Ron DAHL, Plaintiff and Appellant, v. COMBINED INSURANCE COMPANY, Defendant and Appellee.
    No. 21291.
    Supreme Court of South Dakota.
    Argued Sept. 21, 2000.
    Decided Jan. 17, 2001.

      Michael A. Hauek, Patrick J. Knecht (on the brief) Sioux Falls, SD, Attorneys for plaintiff and appellant.
    Thomas J. Welk and Tamara A. Wilka of Boyce, Murphy, McDowell & Greenfield, Sioux Falls, SD, Attorneys for defendant and appellee.
   SABERS, Justice

[¶ 1.] Ron Dahl was employed by Combined Insurance Company of America (Combined) as a District Manager. Dahl discovered that certain premiums collected by Combined’s agents were not being submitted to Combined. Dahl reported the missing premiums to the South Dakota Division of Insurance (Division) and he was later terminated. Dahl brought suit for 1.) wrongful discharge invoking the public policy exception to the employment at-will doctrine; and, 2.) misprison of a felony. The circuit court granted summary judgment in favor of Combined. Dahl appeals. We reverse and remand issue 1 for trial.

FACTS

[¶ 2.] In his statement of material facts to the trial court, Dahl stated: Dahl was employed by Combined from 1975 until 1995 as an at-will employee. Dahl began his employment as an insurance agent and eventually achieved the position of District Manager for Combined’s District 10-4. During the end of 1993 Dahl learned that one or more of the agents or managers working under him had collected nearly $6,000 in premiums and had not remitted these premiums to Combined. Combined conducted an internal investigation but was unable to ascertain what person or persons had misappropriated the money. Based on the inability to identify the person or persons responsible, Combined charged Dahl one-third of the missing premiums, withholding $1,799.33 from his compensation.

[¶ 3.] Dahl informed Combined that he planned to report the missing premiums to the Division for additional investigation. On more than one occasion Dahl was told that if he reported the loss to the Division he would be terminated. In spite of these warnings, Dahl reported the missing premiums to the Division in May of 1994. The Division investigated the loss but was unable to identify the source or sources of the missing premiums. On June 17, 1995, Dahl was terminated.

[¶ 4.] Combined moved for summary judgment. Combined asserted that no cause of action existed on the facts alleged by Dahl, and that it was entitled to a judgment as a matter of law. Dahl responded with a motion for partial summary judgment seeking a declaration that the causes of actions asserted in his complaint were valid. The circuit court granted Combined’s motion for summary judgment. Dahl appeals.

STANDARD OF REVIEW

[¶ 5.] Our standard of review for summary judgment is well-established:

In reviewing a grant or a denial of summary judgment under SDCL 15-6-56(c), we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.

Campion v. Parkview Apartments, 1999 SD 10, ¶ 22, 588 N.W.2d 897, 902 (quoting Wildeboer v. SD Junior Chamber of Comm., 1997 SD 33, ¶ 10, 561 N.W.2d 666, 668-69). “The burden of proof is upon the movant to show clearly that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law.” Wildeboer, 1997 SD 33, ¶ 10, 561 N.W.2d at 668-69 (quoting State Dep’t of Revenue v. Thiewes, 448 N.W.2d 1, 2 (S.D.1989)).

[¶ 6.] WHETHER THE PUBLIC POLICY EXCEPTION TO THE EMPLOYMENT AT WILL DOCTRINE PROTECTS FROM RETALIATORY DISCHARGE THOSE WHO REPORT CRIMINAL OR UNLAWFUL ACTIVITY TO A SUPERVISOR OR OUTSIDE AGENCY.

[¶ 7.] The South Dakota legislature has clearly defined the employment at will doctrine. “An employment having no specified term may be terminated at the will of either party....” SDCL 60-4-4. The potentially harsh effects of the at-will doctrine have been tempered in South Dakota by the adoption of the public policy exception. See Johnson v. Kreiser’s Inc., 433 N.W.2d 225 (S.D.1988); Niesent v. Homestake Min. Co., 505 N.W.2d 781 (S.D.1993).

[¶ 8.] Public policy is primarily determined by the constitution, statutes and judicial decisions. Johnson, 433 N.W.2d at 227 (citing State ex rel. Meierhenry v. Spiegel Inc., 277 N.W.2d 298 (S.D.1979); Bartron v. Codington County, 68 S.D. 309, 2 N.W.2d 337 (1942)). “This Court [has] held that a cause of action for wrongful discharge arises on behalf of an employee where an employer’s motivation for termination contravenes a clear mandate of public policy.” Niesent, 505 N.W.2d at 783. In Johnson, we stated that “[a]n employee has a cause of action for wrongful discharge when the employer discharges him in retaliation for his refusal to commit a criminal or unlawful act. It is repugnant to public policy to expect an employee to commit such acts in order to save his job.” Johnson, 433 N.W.2d at 227. Additionally, this court has held that an employee discharged for filing a worker’s compensation claim has a cause of action under the public policy exception. Niesent, 505 N.W.2d at 783. A discharge in either of these situations “contravenes a clear mandate of public policy.” Niesent, 505 N.W.2d at 783.

[¶ 9.] Dahl had knowledge that approximately $6,000 collected in premiums had not been remitted to Combined. Dahl believed employees working under his control had taken the money. Combined investigated but was unable to identify the person or persons responsible. Combined reduced Dahl’s compensation by $1,799.33 as a result of this loss. Dahl reported the loss to the Division for further investigation. He was terminated and he claims that his termination was a result of this disclosure. This disputed claim creates a genuine issue of material fact.

[¶ 10.] Dahl states a cause of action for wrongful discharge under the public policy exception. Dahl claims Combined imper-missibly forced Dahl to choose between reporting the loss or losing his job. Whether Dahl was demoted and quit, as claimed by Combined, or whether said demotion constituted a termination, as claimed by Dahl are genuine issues of material fact for determination by a jury. State v. Thiewes, 448 N.W.2d 1, 3 (S.D.1989).

[¶ 11.] In Johnson and Nies-ent this court held that “a cause of action for wrongful discharge arises on behalf of an employee where an employer’s motivation for termination contravenes a clear mandate of public policy.” Johnson, 433 N.W.2d at 227; Niesent, 505 N.W.2d at 783. “To state a cause of action under this exception, the employee must plead and prove that a substantial public policy may have been violated.” Niesent, 505 N.W.2d at 783 (quoting Johnson, 433 N.W.2d at 227; Thompson v. St. Regis Paper Co., 685 P.2d 1081, 1089 (1984)).

[¶ 12.] Whistleblowing, or the reporting of unlawful or criminal conduct to a supervisor or outside agency, plays an invaluable role in society. As recognized by courts considering this issue, “[p]ublic policy favors the exposure of crime, and the cooperation of citizens possessing knowledge thereof is essential to effective implementation of that policy. Persons acting in good faith who have probable cause to believe crimes have been committed should not be deterred from reporting .... ” Palmateer v. International Harvester Co., 85 Ill.2d 124, 52 Ill.Dec. 13, 421 N.E.2d 876, 880 (1981). As stated by the Arizona Supreme Court:

We believe that whistleblowing activity which serves a public purpose should be protected. So long as employees’ actions are not merely private or proprietary, but instead seek to further the public good, the decision to expose illegal or unsafe practices should be encouraged. We recognize that there is a tension between the obvious societal benefits in having employees with access to information expose activities which may be illegal or which may jeopardize health and safety, and accepted concepts of employee loyalty, nevertheless we conclude that on balance actions which enhance the enforcement of our laws or expose unsafe conditions, or otherwise serve some singularly public purpose, will inure to the benefit of the public.

Wagner v. City of Globe, 150 Ariz. 82, 722 P.2d 250, 257 (1986) (emphasis added). We recognize, as the Arizona Supreme Court did in Wagner, that only whistle-blowing which promotes the public good is protected by the public policy exception. This exception cannot be invoked by employees to primarily protect their proprietary interests, exact revenge on an employer, or for personal gain. If on remand, Combined proves that the reporting was solely for proprietary gain or retaliation against the company, then Dahl would not be entitled to the protection of this exception.

[¶ 13.] Indeed, there is no public policy that can be said to be more basic or necessary than the enforcement of the state’s criminal code or the protection of the life and property of its citizens. See Palmateer, 52 Ill.Dec. 13, 421 N.E.2d at 879. The laws of the State of South Dakota evidence this basic understanding. See e.g:, SDCL 22-11-12 (mandating that any person with knowledge of a felony report the same to the proper authorities or be subject to a class 1 misdemeanor); SDCL 23-13-10 through 23-13-12 (requiring those who treat the victims of gunshot wounds to report such treatment to law enforcement); SDCL 22-11-6 (obstructing a law enforcement officer, jailor or firefighter- acting pursuant to his duties is a Class 1 misdemeanor); SDCL 22-11A-5 (concealing an escaped prisoner is a Class 5 felony); and SDCL 22-3-3 (any person aiding, abetting, or advising in the commission of a crime is guilty as a principal).

[¶ 14.] “The law is feeble indeed if it permits [an employer] to take matters into its own hands by retaliating against its employees who cooperate in enforcing the law.” Palmateer, 52 Ill.Dec. 13, 421 N.E.2d at 880. As acknowledged by the New Mexico Supreme Court, “the employees’ dilemma is one of balancing a public interest against the potential of private loss, with the employee losing either way.” Vigil v. Arzola, 102 N.M. 682, 699 P.2d 613, 618 (N.M.App.1983) rev’d in part and remanded, 101 N.M. 687, 687 P.2d 1038 (1984), overruled in part, Chavez v. Manville, 108 N.M. 643, 777 P.2d 371 (1989). We have recognized that when faced with such a dilemma “many employees ... would choose to retain their jobs.” Niesent, 505 N.W.2d at 784. Such a result is untenable for the employee and the citizens of South Dakota.

[¶ 15.] Dahl’s complaint states a cause of action for wrongful discharge in contravention of public policy and we reverse the circuit court’s -determination. Genuine issues of material fact exist and we remand for factual determinations consistent with this opinion. On remand

[Dahl] has the burden of proving that the dismissal violates a clear mandate of public policy. Once [Dahl] shows this, the burden shifts to [Combined] to prove that the dismissal was for reasons other' than those alleged by [Dahl]. To prevail, [Dahl] must prove by a preponderance of the evidence that the discharge was for an impermissible reason.

Johnson, 433 N.W.2d at 227-28. We are not saying that Dahl has a good case. We are only saying under South Dakota law, he gets a chance to prove it to a jury. Wilson v. Great Northern Ry. Co., 83 S.D. 207, 157 N.W.2d 19, 21 (S.D.1968).

[¶ 16.] In view of our holding on this issue, we affirm the trial court on Dahl’s claim of misprison of a felony, if any, as it would be included within the whistleblower public policy exception.

[¶ 17.] Reversed and remanded for trial.

[¶ 18.] MILLER, Chief Justice, and KONENKAMP and GILBERTSON, Justices, concur.

[¶ 19.] AMUNDSON, Justice, dissents.

AMUNDSON, Justice

(dissenting).

[¶ 20.] It is true that Dahl is entitled to all favorable inferences and we should view his version of the facts as true, for summary judgment purposes. Barnaud v. Belle Fourche Irrigation Dist., 2000 SD 57, ¶ 11, 609 N.W.2d 779, 781 (citing SDCL 15-6-56(c)). This rule of law is tempered by the equally important rule that Dahl must make more than bare assertions in order to survive a motion for summary judgment. Id. Dahl must purport more than the mere factual allegation that he was terminated. Sorrels v. Queen of Peace Hosp., 1999 SD 133, ¶ 18, 601 N.W.2d 606, 610 (Konenkamp, J., concurring). He must point to specific evidence to support his position before this “disputed” fact rises to the level of a genuine issue of material fact. The bare allegation of “termination” is not enough in fight of the overwhelming evidence to the contrary. Id. Even if there is a need for a “whistleblower” exception to the employment at-will doctrine, the underlying facts of this case do not cry out for its adoption here.

[¶ 21.] Dahl was demoted not terminated. He concedes that he received a letter of assignment following a meeting where he claims he was fired. Instead of responding by performing the assignment, Dahl willfully ignored it. The majority misstates the facts when it says “Combined impermissibly forced Dahl to choose between reporting the loss or losing his job.” This is simply not true. By deposition, Dahl was asked:

Q: When you got this letter did you not call somebody up and ask about it?
A: No. My lawyer at that time said just ignore it.

When questioned by deposition, he also admitted that Combined asked him “many times” to perform certain assignments as a sales representative. Dahl defiantly rejected any such assignments. The facts are clear: Dahl received this demotion, and he chose, albeit at his attorney’s direction, not to respond to his new assignment. Dahl cannot take a position more favorable to him than what his testimony would allow. As we have often stated, “a party cannot claim benefit of a version of the facts more favorable to his contentions than he gave in his own sworn testimony.” Chord v. Reynolds, 1999 SD 1, ¶ 19, 587 N.W.2d 729, 738. His claim that he was terminated is without support in the record and does not withstand summary judgment.

[¶ 22.] With Dahl having been demoted, it is doubtful that this Court wishes to extend this already tenuous cause of action to demotions. “A demotion necessarily implies a continuation of service in some different capacity and not a termination.” Adams v. Bd. of Fire and Police Comm’rs of Village of Skokie, 144 Ill.App.3d 905, 98 Ill.Dec. 606, 494 N.E.2d 728, 730 (1986). This is precisely what happened here. Dahl was asked to take on the duties of sales representative rather than district manager. After it became apparent that Dahl was not willing to perform these duties, he, in effect quit his job. There is a strong common law presumption that an employee may be demoted at-will. This is true because, as a logical extension, an employee may be discharged at-will, thus the “at-will presumption would surely apply to lesser quantums of discipline as well.” Scott v. Pacific Gas & Electric Co., 11 Cal.4th 454, 46 Cal.Rptr.2d 427, 904 P.2d 834, 840 (1995).

[¶ 23.] There is no reason to give a legal remedy to those that are demoted, let alone discharged or terminated. Incompetent, disgruntled, or just plain lazy employees now have the ability to threaten suit against their employer because of a “whistleblower” cause of action that is not based on a clear public mandate. Recognizing a retaliation tort for action short of termination could subject employers to torrents of unwarranted and vexatious suits filed by disgruntled employees at every juncture in the employment process.

[¶ 24.] Despite such facts, the majority adopts a “I know it when I see it” approach to determining whether a former employee has a cause of action for wrongful discharge. This is certainly not what the Legislature had envisioned when it codified the employment at-will doctrine. See SDCL 60-4-4. It is also important that before we embrace an exception to our well established employment at-will doctrine, that the conduct of the employer “contravenes a clear mandate of public policy.” Niesent v. Homestake Min. Co., 505 N.W.2d 781, 783 (S.D.1993). Dahl has failed to show that Combined in reassigning him for funds unaccountable on his watch somehow equates to the clear contravention of public policy. Not only should this Court proceed only if there is a clear public mandate to preserve, but it should also be paramount that this Court fashion its scope of intervention narrowly.

[¶ 25.] Furthermore, the majority’s position On public policy is unsound. It depends on the misprision statute as the overriding principal for the adoption of the “whistleblower” exception. The majority states that “there is no public policy that can be said to be more basic or necessary than the enforcement of the state’s criminal code or the protection of the life and property of its citizens.” While I agree with this basic premise, it is not relevant to the case at hand. The misprision statute ostensibly employed by Dahl to protect his actions is a farce. It was not until he received notice from Combined that he was about to lose approximately $1800 did he consider reporting the loss of premiums. Only when his pocketbook was about to be.affected did he cry wolf. It is also undisputed that his report to the Division was in May of 1994, yet Dahl continued to work for Combined until June of 1995. Thus, Dahl was not demoted or, arguendo, terminated, until more than a year after the events he claims cost him his job. In addition, the only case cited by the majority involving the reporting of a crime is the Palmateer case. In fact, in that case, the “whistleblower” reported the crime to the local law enforcement agency. Palmateer, 421 N.E.2d at 876. It is fairly obvious that such a scenario here does not exist. To rely on a “whistleblower” exception based on a clear public mandate to enforce the criminal code, one must “blow the whistle” to an agency who could enforce that code. The Department of Insurance is not a law enforcement agency. The majority, even under the most strained view, cannot make such a claim. Dahl failed to report to the proper authorities as required by statute. Thus, the misprision statute should not apply.

[¶ 26.] The majority constructs a slippery slope by adopting this cause of action based on these facts. By establishing the precedent in this case, this Court, in effect, would be playing puppet master over the internal management of private business. The Court should not place itself in a position to oversee job transfers, alterations in job duties, and quite perhaps even internal discipline decisions. “The potential for expansion of this type of litigation is enormous.” Ludwig v. C & A Wallcoverings, Inc., 960 F.2d 40, 43 (7th Cir.1992). If we travel down this endless path towards judicial oversight of purely private matters, “[t]he courts then would be called upon to become increasingly involved in the resolution of workplace disputes which center on employer conduct that heretofore has not been actionable at common law or by statute.” Zimmerman v. Buchheit of Sparta, Inc., 164 Ill.2d 29, 206 Ill.Dec. 625, 645 N.E.2d 877, 882 (1994). The Court, by adopting this cause of action, under these facts, amounts to judicial micro-management of employer/employee relations.

[¶ 27.] This Court “should not lightly intervene to impair the exercise of managerial discretion or to foment unwarranted litigation” based particularly on the facts in this case, when the violation of a clearly mandated public policy has not been established. Burnham v. Karl and Gelb, P.C., et al., 50 Conn.App. 385, 717 A.2d 811, 815 (1998). The legal quagmire created by the adoption of this new unwarranted exception would place the judiciary inside boardrooms across South Dakota. This Court should exercise judicial restraint by allowing the Legislature to determine the appropriateness of this cause of action. It is not a judicial function to legislate job security.

[¶ 28.] What clearly mandated “public policy” is the foundation in this case? It certainly is not the statutory workers’ compensation exception in Niesent or the narrow exception involving refusal to commit an unlawful act in Johnson. I agree with the trial court that Dahl did not carry his burden of showing a violation of clearly mandated public policy in this case.

[¶ 29.] Therefore, I respectfully dis- , sent.

      . The district managed by Dahl consisted of several counties in eastern South Dakota.

      . In Johnson, an at-will employee was discharged for refusing to participate in the fraudulent scheme of a corporate officer.

      . Whether a termination is found to violate a clear mandate of public policy is a question of law. Niesent, 505 N.W.2d at 783 (quoting Brockmeyer v. Dun and Bradstreet, 113 Wis.2d 561, 335 N.W.2d 834 (1983); Brown v. Physicians Mutual Ins. Co., 679 S.W.2d 836 (1984)). Public policy may be found in constitutional or statutory provisions or schemes and judicial opinion. Johnson, 433 N.W.2d at 227; Niesent, 505 N.W.2d at 783.; Bartron, 2 N.W.2d at 337.

      . This term derives from:
      [T]he act of an English bobby blowing his whistle upon becoming aware of the commission of a crime to alert other law enforcement officers and the public within the zone of danger. Like this corner law enforcement official, the whistleblower sounds the alarm when wrongdoing occurs on his or her ‘beat,’ which is usually within a large organization.

        Winters v. Houston Chronicle Publishing Co., 795 S.W.2d 723, 727 (Doggett, J., concurring).

      . It is also important to note that the record clearly indicates that the Department of Insurance's investigation concluded without clearly identifying the culprit of the missing funds. In fact, the Department concluded that mismanagement of funds and the lack of appropriate record keeping hindered its ability to investigate. Thus, the Department's threat to Combined if Combined decided to fire Dahl was wholly irresponsible and unwarranted. This matter is entirely among Dahl, Combined, and the local state's attorney, and not a matter for the Department of Insurance.