author: PER CURIAM.

text:
    2002 ND 21
    Wolfgang MAU and Ena Mau, Plaintiffs and Appellants, v. NORTH DAKOTA INSURANCE RESERVE FUND, a corporation, Defendant, and National Union Fire Insurance Company of Pittsburgh, Pennsylvania, a corporation, Defendant and Appellee.
    No. 990217.
    Supreme Court of North Dakota.
    Feb. 20, 2002.
    Rehearing Denied March 12, 2002.

      Duane A. Lillehaug (argued) and Leland F. Hagen of Lee Hagen Law Office, Ltd., Fargo, for plaintiffs and appellants.
    William P. Harrie of Nilles, Hansen & Davies, Ltd., Fargo, for defendant and ap-pellee.
   PER CURIAM.

[¶ 1] Wolfgang Mau and Ena Mau appealed from a district court summary judgment dismissing their action against National Union Fire Insurance Company of Pittsburgh, Pennsylvania, for underin-sured motorist benefits. We certified the following question to the Wisconsin Supreme Court:

Is Endorsement # 1 defining an “Insured” as “Only while occupying the Alamo rental vehicle, any rentee/lessee who purchases the International Extended Protection (IEP) Option, but only while the Alamo vehicle is being driven by the rentee/lessee” valid under Wisconsin law to preclude underinsured motorist coverage to one who rents a car from Alamo, purchases the IEP Option, and is injured while sitting in a different car?

Mau v. National Union Fire Ins. Co., 2000 ND 97, ¶ 15, 610 N.W.2d 761.

[¶ 2] The Wisconsin Supreme Court answered our certified question by holding Wolfgang Mau is a named insured and the occupancy requirement is invalid under Wisconsin law. Mau v. National Union Fire Ins. Co., 248 Wis.2d 1031, 637 N.W.2d 45, 2001 WI 134, ¶¶ 40, 41.

[¶ 3] The judgment appealed from is reversed, and the matter is remanded for further proceedings consistent with Mau v. National Union Fire Ins. Co., 248 Wis.2d 1031, 637 N.W.2d 45, 2001 WI 134.

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


source: Caselaw Access Project

author: ERICKSON, Circuit Judge. GORS, Acting Justice

license: Public Domain

text:
    2002 SD 7
    DAKOTA, MINNESOTA & EASTERN RAILROAD CORPORATION, Plaintiff and Appellant, v. HERITAGE MUTUAL INSURANCE COMPANY, d/b/a Heritage Insurance, Defendant and Appellee.
    No. 21903.
    Supreme Court of South Dakota.
    Argued Oct. 1, 2001.
    Decided Jan. 16, 2002.
    Brian J. Donahoe and Michael D. Bor-nitz of Cutler, Donahoe & Mickelson, Sioux Falls, for plaintiff and appellant.
    Gary Thimsen and Jennifer Wollman of Woods, Fuller,. Shultz & Smith, Sioux Falls, for defendant and appellee.
   ERICKSON, Circuit Judge.

[¶ 1.] The Dakota, Minnesota and Eastern Railroad Company (DM&E) appeals from the judgment granting the cross-motion for summary judgment filed by Heritage Mutual Insurance Company (Heritage Insurance). We affirm.

FACTS

[¶ 2.] DM&E operates an interstate common carrier railroad within the State of South Dakota. Heritage Insurance is an insurance company doing business in South Dakota. At all times pertinent to this action, Heritage Insurance had a policy covering DM&E for damages because of bodily injury or property damage, and a corresponding duty to defend DM&E from claims. Julian Olson (Olson) was an employee of the DM&E. While acting in the course of his employment he was severely injured in a motor vehicle accident.

[¶ 3.] DM&E has two insurance policies in force with the intent to cover this type of situation. The first, with Heritage Insurance, is a business automobile insurance policy, with policy limits of $1,000,000. The second, with CNA Insurance, is a railroad liability insurance policy, with a retained limit of $1,000,000. In obtaining these policies, DM&E tried to coordinate them to provide a total coverage package.

[¶ 4.] The railroad liability insurance policy contained the following endorsement:

In consideration of the premium charged, it is understood and agreed that Section I, Exclusion I, does not apply to any Bodily Injury or Property Damage which arises out of or results from the ownership, maintenance, operation, use, loading or unloading of any Auto but only to the extent that such coverage is available to the Insured in the underlying insurance as scheduled below.
With respect to coverage provided by this endorsement, the Company’s liability for Each Incident shall apply in excess of a retained limit of $1,000,000 each incident. If the retained limit is not satisfied in full by the underlying insurance, the Retained Limit as specified on the Declarations, shall apply for the remainder up to the $1,000,000 each incident.

[¶ 5.] The Heritage Insurance policy is then noted as being the underlying insurance carrier.

[¶ 6.] In other words, the railroad liability insurance policy is an excess coverage policy and DM&E is responsible for the first $1,000,000 of liability. To that end they purchased the Heritage policy in an attempt to cover that first $1,000,000 of potential liability.

[¶ 7.] As a railroad worker, Olson was not subject to workers’ compensation insurance and filed suit against DM&E under the Federal Employer’s Liability Act (FELA) 45 U.S.C. § 51 et seq. DM&E requested that Heritage defend the case, but it refused. Heritage also refused to contribute towards an eventual settlement. That refusal was based upon the following policy exclusions:

B. Exclusions
This insurance does not apply to any of the following
3. Workers’ Compensation
Any obligation for which the insured or insured’s insurer may be held liable under any worker’s compensation law, disability benefits law or unemployment compensation law or any similar law.
4. Employee Indemnification and Employer’s Liability
Bodily injury to:
a. An employee of the insured arising out of and in the course of employment by the insured; or
This exclusion applies:
1. Whether the insured may be liable as an employer or in any other capacity;
And
2. to any obligation to share damages with or repay someone else who must pay damages because of the injury.
But this exclusion does not apply to bodily injury to domestic employees not entitled to worker’s compensation benefits or to liability assumed by the insured under an insured contract.

[¶ 8.] The trial court ruled that Clause B-3 (workers’ compensation or similar law) did not apply to the FELA; therefore, the workers’ compensation exclusion did not exclude coverage. The Court also held that under Clause B-4 (Employee Indemnification and Employer’s Liability Exclusion) the DM&E was not provided coverage and coverage was excluded. The court further ruled that the “South Dakota legislature enacted a statutory exception which permits an automobile insurance policy to exclude liability coverage to employees while operating within the scope of their employment,” so Clause B-4 did not violate public policy of this state.

ANALYSIS

[¶ 9.] The parties agree that no genuine issues of material fact exist and that the issues presented are solely questions of law as to the interpretation of an insurance policy’s exclusionary provisions.

Summary Judgment

[¶ 10.] As has often been said:

“Summary judgment shall be granted ‘if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.’ We will affirm only when there are no genuine issues of material fact and the legal questions have been correctly decided. All reasonable inferences drawn from the facts must be viewed in favor of the nonmoving party. The burden is on the moving party to clearly show an absence of any genuine issue of material fact and entitlement to judgment as a matter of law. On the other hand, ‘[t]he party opposing a motion for summary judgment must be diligent in resisting the motion, and mere general allegations and denials which do not set forth specific facts will not prevent issuance of a judgment.’ ”

Truck Ins. Exch. v. CNA, 2001 SD 46, ¶ 23, 624 N.W.2d 705, 710.

Standard of Review

[¶ 11.] In Farm and City Ins. v. Estate of Davis, 2001 SD 71, ¶ 6, 629 N.W.2d 586, 587 this Court reaffirmed that it would:

interpret provisions in an insurance policy which are “fairly susceptible” to different interpretations by choosing that interpretation most favorable to the insured. (citations omitted). We will not, however, “seek out a strained or unusual meaning for the benefit of the insured.” (citations omitted). We read and understand insurance contracts “according to the natural and obvious import of the language, without resorting to subtle and forced construction or the purpose of either limiting or extending their operation.” (citations omitted). When it is necessary to review an insurance policy in light of a certain statute, we treat that statute “as if it were actually written into the policy.”

[¶ 12.] Additionally, we review the construction of a contract under the de novo standard as a question of law. Mahan v. Avera St. Lukes, 2001 SD 9, ¶ 15, 621 N.W.2d 150, 153.

ISSUE ONE

[¶ 13.] Whether the phrase “any similar law” in a business automobile insurance policy’s exclusionary provision which excludes coverage for “any workers’ compensation law, disability benefits law or unemployment compensation law or any similar law” is sufficiently unambiguous to exclude an insured’s employee from coverage under an action brought pursuant to the FELA.

[¶ 14.] This issue was brought before the trial court by Heritage Insurance. The court specifically found that policy exclusions are to be strictly construed. In doing so, it concluded that the phrase “any similar law” found in exclusion B-3 did not encompass the FELA. Thus, DM&E won on this issue. DM&E filed a notice of appeal on April 10, 2001. Heritage Insurance did not file a notice of review on any issue in this case. Therefore, Heritage Insurance is precluded from asking this Court to reverse on this issue because of its failure to file a notice of review. Himrich v. Carpenter, 1997 SD 116, ¶ 3, 569 N.W.2d 568, 570.

[¶ 15.] DM&E raised the issue in its original brief. Heritage has merely responded. Since it is not properly before the Court, we need not decide this issue at this time.

ISSUE TWO

[¶ 16.] Whether the phrase “domestic employees” in an exception to an exclusionary clause of a business automobile insurance policy means “of one’s own country,” or “household servant.”

[¶ 17.] DM&E argues that Clause B-4 is ambiguous because the clause is fairly susceptible to two constructions. Clause B-4 excludes coverage for bodily injury to a DM&E employee arising out of and in the course of employment. However, this exclusion does not apply to “domestic employees not entitled to workers’ compensation benefits!.]” DM&E argues that the phrase “domestic employees” is susceptible to two constructions. DM&E admits the first definition is well known and means “a worker employed in and around the household.” DM&E’s second definition, which it argues is controlling, is “of one’s own country.”

[¶ 18.] Heritage Insurance argues that the phrase is not ambiguous and is subject to its plain and ordinary meaning. Heritage argues that DM&E’s construction is strained, illogical and unreasonable.

[¶ 19.] The trial court ruled that a “domestic employee” is one engaged in household work. It further ruled that it would be a strained interpretation to find that it meant being “of this country.”

[¶ 20.] In Jackson v. Lee’s Travelers Lodge, Inc., 1997 SD 63, ¶ 18-19, 563 N.W.2d 858, 862 this Court interpreted the term “domestic employee” in light of our workers’ compensation statutes. Citing an Arizona Court of Appeals case, Griebel v. Industrial Com’n of Arizona, 133 Ariz. 270, 650 P.2d 1252, 1255 (Ariz.Ct.App. 1982), this Court found its rationale to be sound and applied its “profit test” to determine whether an injured worker was excluded from coverage as a domestic servant. That “profit test” was defined as follows:

We believe the rule to be that if the master is regularly using his servant’s labor in a commercial enterprise, that is, attempting to profit in an entrepreneurial capability from the labor of the servant, then the master is an “employer” within the [workers’ compensation statute’s] definition ... notwithstanding the place where the servant works or the nature of his duties. On the other hand, if the master is the sole consumer of the servant’s labor, and that labor is directed to the construction, maintenance or repair of the master’s private properties or care of the master’s family, and that labor is not within the usual trade, business, profession or occupation of the matter, then the servant is a “domestic servant” under the [statute]. Ibid, ¶ 19.

[¶21.] Therefore, we reject DM&E’s argument holding that the term “domestic servant” means a person whose “labor is directed to the construction, maintenance or repair of the master’s private properties or care of the master’s family.” Id.

ISSUE THREE

[¶ 22.] Whether SDCL 32-35-73 authorizes an exclusionary provision in a business automobile insurance policy which excludes liability coverage to employees while operating within the scope of their employment in situations where an employee is not covered under the workers’ compensation law.

[¶ 23.] DM&E argues that Clause 4-B is void because it is contrary to public policy reflected in South Dakota’s Financial Responsibility Law. It argues that this public policy is so strong that there are only two exceptions provided in South Dakota law. The first is when liability is actually covered under any workers’ compensation law. The second is when liability should be covered by workers’ compensation law but may not actually have been covered.

[¶ 24.] Heritage argues that SDCL 32-35 contains certain exclusions when insurance is not required. SDCL 32-35-73 contains an employee exclusion section, which allows coverage to be excluded for “any liability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic of the insured.... ” This language is nearly identical to the policy exclusion.

[¶ 25.] The trial court ruled that since public policy is found in our statutes, the provision of SDCL 32-35-73 is the statutory exception that permits an automobile insurance company to exclude coverage to employees while operating a business vehicle within the scope of their employment.

[¶ 26.] SDCL 32-35-73 [workers’ compensation coverage unnecessary] provides:

A motor vehicle liability policy as defined in § 32-35-68 need not insure any liability under any workers’ compensation law nor any liability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the operating, maintenance, or repair of any such vehicle nor any liability for damage to property owned by, rented to, in charge of, or transported by the insured, (emphasis provided).

[IT 27.] “SDCL 1-1-23 states that the sovereign power of this state, otherwise known as its public policy, is expressed in part by ‘statutes enacted by the legislature[.]’ ” Breck v. Janklow, 2001 SD 28, ¶ 30, 623 N.W.2d 449, 459.

[¶ 28.] Generally, issuers of automobile liability insurance must provide coverage to permissive drivers of vehicles. SDCL 32-35-70. Certain exclusions may apply. At one time, “household exclusions” were declared invalid as a violation of public policy. Cimarron Ins. Co. v. Croyle, 479 N.W.2d 881, 884 (S.D.1992). Immediately thereafter, the legislature amended SDCL 32-35-70 to provide an exclusion, which was later determined to be new public policy. DeSmet Ins. Co. of South Dakota v. Gibson, 1996 SD 102, ¶7, 552 N.W.2d 98.

[¶ 29.] DM&E analogizes this situation to Cimarron, supra. However, unlike the circumstances in Cimarron, there is a statute in place, which if interpreted as proposed by Heritage, defines public policy.

[¶ 30.] Important to our decision is the language in Tapio v. Grinnell Mut. Reinsurance Co., 2000 SD 147, ¶ 10, 619 N.W.2d 522, 525 where this Court stated:

When it enacted SDCL 58-11-9.3, the legislature explicitly provided that exclusions, such as the one used here, are permissible. This legislative mandate will be given priority over other, more general provisions. In certain situations, the owner of a vehicle may not be able to secure affordable coverage unless an unacceptable driver is excluded. In those situation, it is “in the best interests of the parties and the public to require the insurer to continue liability coverage on the express condition that the named insured agree that the insurer will not be liable for any claims based on conduct of the unacceptable driver.” (citations omitted). When it enacted SDCL 58-11-9.3 the legislature created this limited exception in furtherance of those policy concerns. We are bound by its determination, (emphasis provided).

[¶ 31.] While not dealing with SDCL 32-35-73, Tapio deals with an analogous situation. This is a motor vehicle liability policy excluding liability coverage for any liability on account of bodily injury to or death of an employee of the insured while engaged in the employment. Olson was certainly an employee of the insured and was engaged in the insured’s employment at the time of the accident.

[¶ 32.] Thus, the employee exclusion does not violate South Dakota public policy. SDCL 32-35-73 permits an automobile insurance company to exclude coverage to employees while operating a business vehicle within the scope of their employment.

ISSUE FOUR

[¶ 33.] Whether the trial court erred in granting Heritage Insurance’s cross motion for summary judgment because there exists a genuine issue of material fact as to whether DM&E had a reasonable expectation of coverage.

[¶ 34.] DM&E argues that there is a genuine issue of material fact based upon the application of the doctrine of reasonable expectations. DM&E presented an affidavit from the assistant treasurer and comptroller supporting its argument that at the time it purchased its policy from Heritage, DM&E clearly thought the policy would cover FELA incidents. DM&E argues that it reasonably relied upon the absence of clear language in the policy excluding FELA coverage at the time of purchase.

[¶35.] Heritage did not file an answering affidavit. It claims that the issue is being raised for the first time in this forum. Heritage argues that DM&E entered into a stipulation of undisputed material facts before the trial court and cannot change its argument now. DM&E also contends this issue was raised before the trial court both in its trial court brief and in oral argument.

[¶ 36.] Both parties are essentially correct. The issue of reasonable expectations was raised in the context of the argument concerning public policy and the provisions of SDCL 32-25-73. However, it does not appear that DM&E raised it in the context of there being a genuine issue of material fact.

[¶ 37.] To make this argument DM&E relies upon Trammell v. Prairie States Ins. Co., 473 N.W.2d 460, 463 (S.D.1991); Dairyland Ins. Co. v. Wyant, 474 N.W.2d 514, 516 (S.D.1991); and Hawkeye-Security Ins. Co. v. Clifford, 366 N.W.2d 489, 490 (S.D.1985). Unfortunately, while discussed in each of those cases, “the doctrine of reasonable expectations has never been adopted by South Dakota; in fact, this Court has repeatedly declined to adopt the doctrine,” particularly in those cases. SDCP v. Wausau Underwriters Ins. Co., 2000 SD 116, fn.5, 616 N.W.2d 397.

[¶ 38.] DM&E argues that because the terms of the policy are ambiguous, it should be applied to determine the clear meaning of the policy. In Alverson v. Northwestern Nat’l Cas. Co., 1997 SD 9, ¶ 13, 559 N.W.2d 234 this Court, citing American Family Mut. Ins. Co. v. Elliot, 523 N.W.2d 100,103 (S.D.1994), said:

This Court expresses no opinion whether the doctrine of reasonable expectations would govern construction of an insurance contract if the terms of that contract were ambiguous, or may otherwise lead a policyholder to reasonable, but incorrectly, conclude that coverage existed. As in Wyant that issue is not before us today because we have held that there is nothing ambiguous about this policy. The clear and plain meaning of the terms of the policy read as a whole exclude coverage.

[¶ 39.] We have determined that there is nothing ambiguous about the policy exclusion in this case, and therefore, the issue is not before us. The doctrine of reasonable expectations simply does not apply to this policy language in these circumstances.

CONCLUSION

[¶40.] Based on the foregoing, we affirm the judgment of the circuit court.

[¶ 41.] GILBERTSON, Chief Justice, and AMUNDSON, Justice, and ROEHR, Circuit Judge, concur.

[IT 42.] ERICKSON, Circuit Judge, for KONENKAMP, Justice, disqualified.

[¶ 43.] ROEHR, Circuit Judge, for SABERS, Justice, disqualified.

GORS, Acting Justice

(concurring in part and dissenting in part).

[¶ 44.] I concur in Issues One, Two and Four and I dissent on Issue Three where we validate the Heritage business automobile insurance policy exclusion of Lability coverage for DM&E employees while operating in the scope of their employment. In my experience, when the agent sells insurance, everything is covered. However, when there is a claim, nothing is covered. The legislature requires, as a matter of public policy, that the people of South Dakota buy automobile liability insurance. SDCL 32-35-113. The legislature should also require, as a matter of public policy, that the liability insurance provides coverage.

      . This case is submitted on limited stipulated facts. As a result it is unknown whether Heritage was aware DM&E’s intent at the time the business automobile insurance policy was negotiated.

      . SDCL 58-11-9.3:
      An insurance policy covering a private passenger automobile or other motor vehicle registered or principally garaged in this state may by written agreement with the named insured exclude a named individual from coverage. The policy may also contain a restrictive endorsement reducing the limits of liability or collision coverage when the vehicle is operated by a named person or class of persons. However, if the policy does provide liability coverage to a person or persons named in a restrictive endorsement, the liability coverage may not be less than the minimum prescribed by chapter 32-35.


text:
    2002 SD 12
    Jean THOMAS f/k/a Jean Hauge, Plaintiff and Appellee, v. Owen HAUGE, Defendant and Appellant.
    No. 21917.
    Supreme Court of South Dakota.
    Jan. 23, 2002.
    Thomas M. Tobin of Tonner, Tobin & King, Aberdeen, South Dakota, Attorneys for plaintiff and appellee.
    Forrest C. Allred of Hyde & Allred Law Office, Aberdeen, South Dakota, Attorneys for defendant and appellant.
   PER CURIAM.

[¶ 1.] Owen Hauge appeals from an order that determined that, notwithstanding a prior stipulation and order irrevocably waiving child support, Owen has a duty to pay child support to Jean Hauge for the support of their minor daughter, Rachel. We affirm.

FACTS

[¶ 2.] When Owen and Jean divorced in 1997, the judgment and decree of divorce incorporated their stipulated property, alimony, support, child custody and visitation, and child support agreement. They agreed to joint legal custody of their three children with Jean receiving primary physical custody. Owen agreed to pay $540 per month in direct child support and $69 for his share of the children’s health insurance.

[¶ 3.] In 1998 the judgment and decree of divorce was modified in accordance with the parties’ stipulation. Owen received custody of Robert while Jean retained custody of Emily and Rachel. Owen’s child support obligation was set at $304 “which is net of [Jean’s] obligation to Owen for child support of Robert.”

[¶ 4.] By June 1999 both parties’ legal obligation to provide child support for Robert ceased. The parties then stipulated that Owen would have the primary physical care of Rachel. Jean retained physical care of Emily. The stipulation and the court’s order modifying the judgment and decree of divorce in accordance with the stipulation provided:

All claims of either party for child support against the other party, whether past, present or future, are permanently and irrevocably waived, and all such claims, assertions, orders, or judgments, are hereby satisfied in full.

[¶ 5.] In December 1999 Jean filed a motion to grant her custody of Rachel and to set child support for Emily and Rachel. In her supporting affidavit she alleged that placement of Rachel with Owen “has been a disaster for the child.” Owen, an over the road truck driver, was gone a majority of the time leaving Rachel with her stepmother. They did not get along and Rachel ran away five times. She was now living in a foster home subject to a CHIN’s petition filed in Newcastle, Wyoming. The circuit court ultimately ordered that Jean would have physical custody of Rachel. It also ordered Owen to pay $310 per month as child support for Rachel.

ISSUE

[¶ 6.] Can a father be permanently relieved of the duty to support his minor child by agreement with the mother and court approval?

DISCUSSION

[¶ 7.] “Parents are obligated to provide support for their children.” Kost v. Kost, 515 N.W.2d 209, 214 (S.D.1994). The parents’ obligation to provide support for their children is a matter of public policy, as well as a statutory duty. Vander Woude v. Vander Woude, 501 N.W.2d 361 (S.D.1993); SDCL 25-5-18.1; SDCL 25-7-6.1. “The children’s best interest requires that they be supported.” Stach v. Stach, 369 N.W.2d 132, 136 (S.D.1985).

[¶ 8.] A support agreement injurious to the best interest of the child violates public policy and is invalid for any purpose. Estes v. Albers, 504 N.W.2d 607 (S.D.1993).

The parents cannot make a valid irrevocable contract which will relieve them of the duty to support and educate their minor children; the rights of children to support and maintenance cannot be bargained away. Accordingly, parental agreements which have the effect of making a child a public charge cannot be countenanced, and a support agreement which is injurious to the best interest of a child is invalid for any purpose. In particular, the father may not by contract avoid his duty to support and educate his minor children, and a wife cannot contract away the right of children to be supported by their father. An agreement between the father and mother which attempts to relieve the father of his obligation is, as between the father and children, ineffective as a violation of public policy; and where the father and mother are equally and jointly charged by statute for the maintenance of their children, an agreement by the mother to perform her statutory duty does not discharge the father’s statutory obligation.

67A CJS Parent and Child § 60 (1978). A trial court errs when it incorporates a stipulated permanent waiver of support in its judgment, order, or decree because the provision is contrary to public policy and unenforceable. Aumock v. Aumock, 410 N.W.2d 420 (Minn.App.1987).

[¶ 9.] We also note that SDCL 25-4-45 provides, in part, “[i]n an action for divorce, the court may, before or after judgment, give such direction for the custody, care, and education of the children of the marriage as may seem necessary or proper, and may at any time vacate or modify the same.”

“Circuit courts have continuing jurisdiction to modify child support obligations and are statutorily infused with broad powers to implement modifications ‘from time to time.’ SDCL 25-4-41, and ‘as may seem necessary or proper.’ SDCL 25 — 4-45.” Dryden, 409 N.W.2d at 651 (citations omitted). A child support agreement may be modified even though it was originally based on a stipulation between the parties. Jameson II, 306 N.W.2d at 242; State ex rel. Larsgaard v. Larsgaard, 298 N.W.2d 381, 383 (S.D.1980). “The parties’ agreement cannot deprive the courts of their power to modify support obligations.” McGee v. McGee, 415 N.W.2d 812, 813 (S.D.1987).

Jacobson v. Jacobson, 2000 SD 60, ¶ 12, 611 N.W.2d 210, 213-214.

[¶ 10.] Jacobson, 2000 SD at ¶ 16, 611 N.W.2d at 215-216, also makes it clear that a trial court has the authority to modify a child support stipulation that it earlier had approved:

A court can not impose certain arrangements on the parties as a condition of granting a divorce. However, once the parties have stipulated to a provision and incorporated it into their divorce agreement, the court has authority to approve or reject the agreement. If it approves, it also has the authority to later modify a provision as part of the overall modification of the decree. This holding finds support in Connolly v. Connolly, 270 N.W.2d 44, 47 (S.D.1978), where, regarding the modifiability of alimony orders, we stated:
We conclude that when read together [our alimony statutes] contemplate that a husband’s duty of support may be the subject of a valid agreement entered into between the parties to a marriage subsequent to the marriage and in contemplation of separation or divorce, but that in the event of a divorce the trial court has the ultimate authority to approve or reject the agreement and, if it approves the agreement, to later modify the provisions for support.
Accord Shoop v. Shoop, 58 S.D. 593, 600, 237 N.W. 904, 907 (S.D.1931) (surmising that court would be deprived of statutorily prescribed jurisdiction in holding that because the court incorporated provision from parties’ stipulated agreement into divorce decree, the decree is not subject to modification).

[¶ 11.] Consequently, the trial court approved stipulation of the parties which permanently and irrevocably waived child support was contrary to the public policy of this state, invalid, and void. The trial court clearly had the authority to modify its order regarding support. There was no error in its decision to order Owen to pay $310 per month for the support of Rachel.

[¶ 12.] The order is affirmed.

[¶ 13.] GILBERTSON, Chief Justice, and SABERS, AMUNDSON, and KONENKAMP, Justices, and GORS, Acting Justice, participating.

       Owen contends SDCL 25-7A-l 7 relieves him of child support because his stipulation with Jean waiving all child support was court approved. We disagree. SDCL 25-7A-l 7 provides:
      An agreement between parents or other responsible persons relieving a party of any duty of support or responsibility or purporting to settle past, present or future support obligations as settlement or prepayment may not act to reduce or terminate any rights of the department of social services or any support obligee to recover from parents or other responsible persons for support provided, unless the department or any support obligee has consented to the agreement in writing and the agreement has been approved by a court of competent jurisdiction.
      SDCL 25-7A-l 7 clearly is designed to restrict a party's ability to contract away a duty of support. Sharp v. Sharp, 422 N.W.2d 443, 447 (S.D.1988). The crux of that statute is that agreements purporting to relieve a parent of a duty of support "may not act to reduce or terminate any rights” of DSS or any support obligee to recover from the parents "for support provided,” i.e. arrearages, unless court approved. See Vander Woude v. Vander Woude, 501 N.W.2d 361 (S.D.1993). Owen and Jean's stipulation had nothing to do with arrearages. SDCL 25-7A-17 simply does not apply. See, Sharp v. Sharp, 422 N.W.2d at 447. We observe, however, that "[pjublic policy is found in the letter or purpose of a constitutional or statutory provision or scheme, or in a judicial decision.” Jasper v. Smith, 540 N.W.2d 399, 403 (S.D.1995). Any suggestion that SDCL 25-7A-17 allows the permanent and irrevocable waiver of child support flies in the face of the public policy of this state found in the statutory child support scheme and the decisions of this Court.


author: AMUNDSON, Justice.

text:
    2002 SD 11
    Marlo D. HOFMAN, Petitioner and Appellant, v. Douglas WEBER, Warden, South Dakota State Penitentiary, Respondent and Appellee.
    No. 21928.
    Supreme Court of South Dakota.
    Considered on Briefs Nov. 13, 2001.
    Decided Jan. 23, 2002.

      Michael B. Thompson, Sioux Falls, South Dakota, for petitioner and appellant.
    Mark Barnett, Attorney General, Sherri Sundem Wald, Pierre, South Dakota, for respondent and appellee.
   AMUNDSON, Justice.

[¶ 1.] Mario Hofinan (Hofman) petitioned for writ of habeas corpus. The habeas court denied his petition. We reverse and remand.

FACTS

[¶ 2.] Hofman was convicted of first degree murder at a jury trial and received a life sentence. Hofinan appealed his conviction directly to this Court, which affirmed. State v. Hofman, 1997 SD 51, 562 N.W.2d 898. Hofman then filed a petition for writ of habeas corpus.

[¶ 3.] On June 19, 1995, Ronald “Doc” Hofinan (Doc) was beaten and stabbed to death inside the bar he owned in Brandt, South Dakota. Hofman, Doc’s brother, became a suspect in the death. Law enforcement asked Hofman to go to Sioux Falls to take a polygraph test, which he did, and the test indicated Hofman had not been truthful in his answers. Immediately following the polygraph test, Department of Criminal Investigation Agent Bryan Gort-maker elicited a videotaped admission by Hofman. Following the questioning, Hof-man, who had a history of mental illness, asked to be admitted to McKennan Hospital in Sioux Falls. He was taken to McKennan, where again, at the urging of Gortmaker, Hofman confessed to his cousin, Brian Ruhd, that he had caused his brother’s death.

[¶ 4.] After McKennan Hospital refused to admit Hofman, Gortmaker took Hofman to Brookings while in the process of transferring him to Deuel County, where the murder had occurred. The Deuel County Deputy Sheriff, Dave Solem, met up with Hofman and Gortmaker in Brookings, at which time Hofinan was advised of his constitutional rights. Hofman waived his rights and again, at the prompting of Gortmaker, confessed to Deputy Solem that he had murdered his brother.

[¶ 5.] Hofman was taken from Brook-ings to Watertown for detention. Upon his arrival in Watertown, Marie Suman, the jailer on duty, inquired into Hofman’s reasons for being jailed. Hofman again admitted to killing his brother. In addition to his statement to Suman, Hofman also allegedly admitted to Todd Bren, another inmate at the Watertown jail, that he had killed his brother. The record also reflects that Hofman denied his guilt to a second inmate in the jail, Ron Tvedt.

[¶ 6.] After a hearing, the habeas court concluded Hofman’s admissions to Ruhd, Solem and Suman were involuntary, but found no prejudice resulted from their admission into evidence. The habeas court denied relief. Hofman appeals the habeas court’s decision on the following issues:

1) Whether Hofman was prejudiced by his trial counsel’s failure to timely move for the suppression of admissions given shortly after an involuntary confession was made, thereby resulting in ineffective assistance of counsel.
2) Whether Hofman’s trial counsel was ineffective by failing to call a witness who could have testified that Hofman denied killing his brother.

STANDARD OF REVIEW

[¶ 7.] The review of habeas decisions is “a collateral attack on a final judgment,” and thus more restricted than ordinary appeals. See Krebs v. Weber, 2000 SD 40, ¶ 5, 608 N.W.2d 322, 324 (citations omitted) overruled on other grounds by Jackson v. Weber, 2001 SD 136, 637 N.W.2d 19. The recognized standard of review is to determine: “(1) whether the court has jurisdiction of the crime and the person of the defendant; (2) whether the sentence was authorized by law; and (3) in certain cases whether ah incarcerated defendant has been deprived of basic constitutional rights.” Id. We will not reverse the habeas court’s findings unless they are clearly erroneous. Id. Therefore, if the habeas court was “right for any reason,” we may affirm its ruling. Id.

[¶ 8.] In order for Hofman to succeed on his claim of ineffective assistance of counsel, he must pass what is known as the Strickland test. See Davi v. Class, 2000 SD 30, ¶¶ 15-17, 609 N.W.2d 107, 111-12 (recognizing the test for ineffective assistance of counsel as outlined in Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984)). Under the Strickland test, Hofman must first demonstrate that his trial counsel was not “functioning as counsel guaranteed by the Constitution^]” Id. at ¶ 16. He must also prove prejudicial error so great that he was deprived of a fair trial. Id. Under the prejudice prong of the Strickland test, a reasonable probability of a different outcome in which confidence in the jury’s verdict was seriously undermined must be proven. Weddell v. Weber, 2000 SD 3, ¶ 25, 604 N.W.2d 274, 281 (citing Loop v. Class, 1996 SD 107, ¶ 14, 554 N.W.2d 189, 192). We have stated:

[W]hether a defendant has received ineffective assistance of counsel is essentially a mixed question of law and fact. In the absence of a clearly erroneous determination by the circuit court, we must defer to its findings on such primary facts regarding what defense counsel did or did not do in preparation for trial and in his presentation of the defense at trial. This [C]ourt, however, may substitute its own judgment for that of the circuit court as to whether defense counsel’s actions or inaction constituted ineffective assistance of counsel.

Weddell, 2000 SD 3 at ¶ 27, 604 N.W.2d at 281-82 (citations omitted). Furthermore, there is a presumption that counsel is competent, and if the presumption is not overcome, the Strickland test has not been satisfied. Ramos v. Weber, 2000 SD 111, ¶ 12, 616 N.W.2d 88, 92.

DECISION

[¶ 9.] 1) Whether Hofman was prejudiced by his trial counsel’s failure to timely move for the suppression of admissions given shortly after an involuntary confession was made, thereby resulting in ineffective assistance of counsel.

[¶ 10.] Prior to trial, the court suppressed the videotaped confession to Gortmaker given after the polygraph test, holding it was involuntary. On the day of trial, after the jury had been selected, Hofman’s counsel moved to suppress Hofman’s statements to Ruhd and Solem. The trial court denied the motion as untimely. That ruling of the court was affirmed on direct appeal. Hofman, 1997 SD 51 at ¶ 10, 562 N.W.2d at 901 (citing SDCL 23A-8-3; State v. Maves, 358 N.W.2d 805, 810 (SD 1984)).

[¶ 11.] A decision of this Court prior to Hofman’s trial held that subsequent statements made in close time-proximity to inadmissible statements may be suppressed. See State v. Helmer, 1996 SD 31, ¶ 32, 545 N.W.2d 471, 476.

When preceding confessions or statements are inadmissible, subsequent statements are not automatically inadmissible, but they are suspect. State of South Dakota v. Long, 465 F.2d 65, 70 (8thCir.1972). “If from the facts, it is found that the two statements are so closely related as to taint the second, and there are no intervening events sufficient to purge the taint, the second must also be inadmissible.” Id. The connection between the improper interrogation and the final incriminating statement must be so attenuated as to dissipate the taint. Stumes v. Solem, 671 F.2d 1150, 1158 (8thCir.1982) (citing Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963)). The reason for suppressing statements which follow an earlier involuntary statement parallels the reason for the suppression of the original statement. People v. Badgett, 10 Cal.4th 330, 41 Cal.Rptr.2d 635, 895 P.2d 877, 886 (1995) (citing Clewis v. Texas, 386 U.S. 707, 87 S.Ct. 1338, 18 L.Ed.2d 423 (1967)). The second statement should be suppressed as it is involuntary in itself unless the taint of the first has been attenuated by the passage of time or other reasons. Id.

Id. at ¶ 32.

[¶ 12.] To determine if subsequent statements are sufficiently attenuated so as to remove the taint from the prior improper statement, we have said that an array of factors may be analyzed. Id. at ¶ 33. They include: “a removal in time and place from the original setting, an adequate advisement of the accused’s constitutional rights, and the opportunity to exercise those rights.” Id. (citing Satter v. Solem, 458 N.W.2d 762, 768 (S.D.1990); Westover v. United States, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966)).

[¶ 13.] The habeas court acknowledged that the statement by Hofman to his cousin, Ruhd, was involuntary. Although the statements were issued in different places, (one at the Sioux Falls Sheriffs Department where the polygraph test was administered and one at McKennan Hospital) there was little time between the involuntary confession just after the polygraph test and the statement made to Ruhd. Additionally, the confession to Ruhd was made after Gortmaker requested Hof-man tell his cousin about his confession, not of Hofman’s own volition. Furthermore, Hofman was not advised of his constitutional rights at anytime between these two confessions.

[¶ 14.] Next, the habeas court also acknowledged that the statement Hof-man made to Solem was involuntary because it, again, was made at the direction of Gortmaker. Even though Hofman was advised of his constitutional rights prior to this confession, it was made in close time-proximity and, again, at the urging of DCI Agent Gortmaker.

[¶ 15.] Finally, the habeas court determined Hofman’s confession to Suman was involuntary. Because of Hofman’s mental condition, educational level, susceptibility to suggestion, the lack of re-advisement of Hofman’s constitutional rights and the limited amount of time that had passed, the statements were tainted by the previous involuntary videotaped statements to Gortmaker.

[¶ 16.] Importantly, the State does not contest the trial court’s holding that the subsequent statements were involuntary. In fact, it stated in brief, “[T]he habeas court concluded that statements Petitioner made to Ruhd, Gortmaker and Solem, as well as to Suman on June 24 were so closely related to the suppressed videotaped statement initially given to Gortmaker, that each of the statements was involuntary and therefore should have been suppressed. The State does not challenge this holding on appeal.” Thus, our sole focus must be whether, by entering these statements into evidence, any prejudice occurred. As previously stated, prejudice requires error to such a degree that confidence in the prior decision is eroded, and the defendant was deprived of a fair trial. See Weddell, 2000 SD 3 at ¶25, 604 N.W.2d at 281.

[¶ 17.] These tainted statements constitute a great bulk of the incriminatory evidence presented. In fact, the record reflects that the State repeatedly used these statements, demonstrating how vital they were. During closing arguments the State reinforced to the jury there was not just “one” admission made by Hofman. The State then proceeded to recap each of the statements that the habeas court later found were involuntary and inadmissible. The remainder of the evidence is mostly circumstantial, including a knife without matching blood samples, possible motives and the fact that Hofman was the one who discovered his brother’s body. Without these statements to various witnesses, the admissible evidence is not what could be described as so overwhelming that a denial of habeas relief would be appropriate.

[¶ 18.] For the foregoing reasons we agree with the habeas court’s determination that trial counsel acted ineffectively by failing to move to suppress these confessions in a timely manner. We disagree, however, with the habeas court’s decision that prejudice did not result from this error. We find the second prong for ineffective assistance of counsel has been met because Hofman was prejudiced by counsel’s actions, thereby resulting in an unfair trial. See Freeman v. Leapley, 519 N.W.2d 615, 616 (S.D.1994) (stating the prejudice analysis for ineffective assistance of counsel requires inquiry into potentially different outcome and fairness of the trial). Defense counsel was well aware of the confessions long before trial, thus there was no valid reason for failing to suppress them in a timely manner. Cf. Weddell, 2000 SD 3 at ¶ 32, 604 N.W.2d at 282-83 (stating strategic decisions will not be second-guessed on habeas appeal). We have previously acknowledged that “this [Cjourt will not compare counsel’s performance to that of some idealized ‘super-lawyer’ and will respect the integrity of counsel’s decision in choosing a particular strategy, [but] these considerations must be balanced with the need to insure that counsel’s performance was within the realm of competence required of members of the profession.” Sprik v. Class, 1997 SD 134, ¶ 24, 572 N.W.2d 824, 829 (citations omitted). The error in this case resulted in prejudice to Hofman under the Strickland standard. Therefore, we reverse and remand for a new trial.

[¶ 19.] Based on our decision regarding issue one, we find it unnecessary to address issue two.

[¶ 20.] GILBERTSON, Chief Justice, SABERS, and KONENKAMP, Justices, and GORS, Acting Supreme Court Justice, concur.

      . Trial counsel stated, at the habeas hearing:
      [T]he Helmer decision came out fairly close to trial ... as I recall, [it was the first time] South Dakota addressed the issue of the attenuation of voluntary statements. But regardless, my view was that once the confession made to Gortmaker was suppressed, ... I made a tactical decision to try and frankly sand bag the subsequent ones ... In other words, I did not want to give the State an opportunity to establish further voluntariness.
      We have never recognized "sandbagging” the opposition as a strategic decision earning the presumption given trial strategies. Furthermore, the Helmer decision came down at least a month prior to Hofman's trial, so counsel could have reviewed it well in advance of trial or made a motion regarding its holding. It is obvious from reviewing the Helmer decision that its basis is not a new or novel theory advanced in support of suppressing subsequent statements.

      . The habeas court found that the statement was not tainted because of the fact that it was so separated in time.


author: KONENKAMP, Justice.

text:
    2002 SD 10
    Wallace ADRIAN, Plaintiff and Appellee, v. Rich McKINNIE and Lynn McKinnie, Defendants and Appellants.
    No. 21963.
    Supreme Court of South Dakota.
    Considered on Briefs Nov. 13, 2001.
    Decided Jan. 23, 2002.

      Michael A. Wilson of Quinn, Day & Barker, Rapid City, Attorneys for plaintiff and appellee.
    Michael W. Strain of Morman Law Office, Sturgis, Attorneys for defendants and appellants.
   KONENKAMP, Justice.

[¶ 1.] This is an appeal from a judgment on the status and effect of a “Lease Agreement & Option to Purchase” relating to a 600-acre tract of land in Custer County, South Dakota. The trial court, treating this document purely as a lease-purchase agreement, found that the lessees breached the agreement and failed to cure their breach and that the terms of the agreement entitled the lessor to terminate the lease. We reverse because the lease was a device to secure an advancement of purchase money, and, therefore, it constituted an equitable mortgage.

Background

[¶ 2.] In 1994, Rich and Lynn McKin-nie purchased approximately 600 acres of land in Custer County from Dorothy Welsh on a contract for deed. Shortly thereafter,' the McKinnies purchased an adjoining tract of 53 acres from Josephine Relf. Upon obtaining a loan of $110,000 from Butch McKinnie (no relation to Rich and Lynn), the McKinnies obtained title to the 600 acres when they paid Welsh in full. To get the loan from Butch McKinnie, the McKinnies conveyed title to him and entered into a contract for deed to secure the debt. After taking possession of the 600-acre tract, the McKinnies made various improvements, installing a well and pipeline system at a cost of approximately $20,000.

[¶ 3.] Not long after obtaining the loan from Butch McKinnie, the McKinnies, suffering strained financial circumstances, began seeking alternative financing at a lower rate of interest. In the later months of 1997, the McKinnies consulted with Wallace Adrian, the owner of a 2,280-acre tract adjoining the 600 acres. The McKin-nies were on friendly terms with him, as Adrian had previously leased the 2,280-acre parcel to the McKinnies and was pleased with their stewardship. The McKinnies’ financial difficulties increased, and Butch McKinnie threatened to foreclose and develop the property. At that time, Adrian had no interest in owning the 600 acres, but neither he nor the McKin-nies wanted to see the tract developed. Accordingly, Adrian agreed to provide the McKinnies financial assistance in purchasing the land.

[¶ 4.] At an initial meeting between the parties and their attorneys in October 1997, they considered a promissory note secured by a mortgage against the property. Adrian, however, was concerned that creditors might take action to collect on the McKinnies’ substantial debts. He rejected a mortgage and insisted on being completely secured, so that if the McKin-nies failed to make their payments, the land would automatically be his. As additional security, Adrian required that the McKinnies deed him an additional 15 acres of their own land, which would be deeded back to them upon their having made total payments of $10,000. The result was a “Lease Agreement & Option to Purchase” drafted by the McKinnies’ attorney. It is the import of this agreement that is in question here.

[¶ 5.] The record shows that Butch McKinnie received $122,000 for the 600-acre tract. Upon receipt of that sum, Butch McKinnie deeded the tract to the McKinnies. They in turn deeded it to Adrian as part of the “Lease Agreement & Option to Purchase.” As an obviously critical part of the agreement between the McKinnies and Adrian, Adrian paid into an escrow account a sum of $122,000, which was then transferred to Butch McKinnie. This three-way transaction left Butch McKinnie with $122,000, Adrian with own"■ership of the 600 acres, and the McKinnies with an option to purchase the tract upon their paying Adrian a total of $140,662.68 over ten years (with payments to be made twice per year), provided that they pay, in addition, one dollar at the end of the ten-year period. The agreement also afforded the McKinnies the option to buy the land at any time before the ten-year period ran, upon their paying Adrian the $140,662.68. On the other hand, the McKinnies would have no further claim to title if they failed to make payments in accordance with the agreed schedule.

[¶ 6.] Up until the summer of 1999, relations between the parties were amicable, and the McKinnies made their scheduled payments. But in that summer, the McKinnies missed a payment, and Adrian gave notice of default. The McKinnies eventually made a late payment before Adrian could terminate the lease in accordance with the agreement. Relations continued to worsen until the spring of 2000, when each party sued the other. The McKinnies sought specific performance of their offer to pay off the sum remaining. Adrian sought to terminate the agreement on the ground of material breach. These actions were consolidated into the case before us.

[¶ 7.] Another notable circumstance arose during that summer: both parties were contacted by a Rapid City resident, Carolyn Robbins, who indicated that she and other investors were interested in purchasing the 600-acre parcel from whoever was the real owner. The clear implication of this overture was that Robbins and her investors were willing to pay substantially more for that property than the sum for which it had last been sold.

[¶ 8.] In its decision, the trial court ruled that the McKinnies had materially breached the lease and option to purchase and had failed to cure their breach. The court also found that the McKinnies had unclean hands because during the lease they harvested excess lumber from the property in violation of the lease agreement. On appeal, the McKinnies raise the following issues: (1) The Lease Agreement & Option to Purchase was in actuality a mortgage, rendering questions of default irrelevant. (2) There was no breach of the agreement in harvesting timber. (3) There was no material breach in failing to close within the specified time in the agreement. Because we deem the first issue dispositive in this appeal, we need not reach the other two issues.

Equitable Mortgage

[¶ 9.] Although the circuit court addressed the equitable mortgage issue by questions to counsel during trial, in neither its findings of fact nor its conclusions of law did the court explain why it rejected the McKinnies’ suggested remedy. The court simply refused the McKinnies’ proposed findings on the point. Because the recharacterization of a document is an equitable remedy, a court has discretion to grant or deny it. Englehart v. Larson, 1997 SD 84, ¶ 12, 566 N.W.2d 152, 155. Our standard of review, therefore, is abuse of discretion.

[¶ 10.] To say that a decision is discretionary is not to mean that it is unguided. This is especially true in equity cases, where discretion is more carefully scrutinized. “Equity discretion should not be confused with routine managerial discretion.” 1 Childress and Davis, Federal Standards of Review § 4.16 n.l (3d ed.1999) (citation omitted). Discretionary choices in equity are bounded by the course of precedent and the substantive rules governing permissible remedies. A court will have no discretion, for example, to rely on improper factors or to make choices tainted by errors of law. See State v. Ashbrook, 1998 SD 115, ¶ 6, 586 N.W.2d 503, 506 (citation omitted). If facts plainly exist to warrant equitable relief and no facts exist to disentitle a party to such relief, then a court is not free simply to ignore the remedy in the name of discretion. Consistency and fairness require courts to decide similar cases similarly. It follows that when a court gives reasons for its exercise of discretion, we will of course review those reasons with some deference. However, when a court gives no justification for its exercise of discretion, then, of necessity, our review broadens. We will examine the entire record to see whether reasons and facts exist to support or refute the court’s discretionary choice. Here, on careful review of the evidence, we find little reason to deny equitable relief to the McKinnies.

[¶ 11.] A document executed with the formality of a contract will ordinarily be taken to express its true intent on its face. Commercial & Sav. Bank v. Cassem, 33 S.D. 294, 145 N.W. 551, 552 (1914). One claiming such a document to be in fact a mortgage, although it appears to be something else, will have the burden of proving that it is a mortgage by clear and convincing evidence. Id. (citations omitted). Deciding whether a document, absolute in form, constitutes a mortgage depends on the intent of the parties. This controlling intention must be gleaned from the written memorials and all the surrounding circumstances. Fuller v. Middaugh, 76 S.D. 288, 77 N.W.2d 841, 842 (1956).

One of the essential elements of mortgage is a debt to be secured.... One of the strongest proofs that a transaction of this character is intended by way of sale, rather than by way of mortgage, is that a pre-existing debt was regarded and treated by the parties as extinguished or discharged by the conveyance.

Am. Nat. Bank v. Groft, 56 S.D. 460, 229 N.W. 376, 379 (1930) (citing 41 CJ 287; Jones on Mortgages (8th ed.) §§ 314, 316, 318).

[¶ 12.] Here, if either of the parties had considered the conveyance to have been absolute, then both' — and, in particular, Adrian — should also have considered the McKinnies’ debt to Adrian satisfied. However, the record is clear that, because he was not interested in owning the 600 acres at the time of the agreement, Adrian agreed that the McKinnies could pay him the sum of $140,662.68 in return for his paying off the McKinnies’ note to Butch McKinnie for $122,000. The record is undisputed that, at the time the agreement was memorialized, Adrian and the McKin-nies were on friendly terms; Adrian wished to help the McKinnies out of their financial difficulties, and he did so by offering them a relatively low repayment rate on his $122,000 outlay.

[¶ 13.] There is ample reason to conclude that both parties intended their lease with purchase option to be a security device to protect Adrian’s loan. Their situation is quite analogous to that detailed in Pittwood v. Spokane Sav. & Loan Soc., 141 Wash. 229, 251 P. 283 (1926).

A foreclosure would entail a very considerable additional expense for attorney’s fees and costs and would interfere more or less with a sale of the property. The appellants had no immediate hope of paying the indebtedness. Under these conditions they did that which many another man has done under identical circumstances, to wit, gave the absolute title to the mortgagee in satisfaction of the indebtedness, with the right to repurchase within a year for the amount of that indebtedness plus interest, taxes, and other sums paid.

Id. at 285. Adrian knew that the McKin-nies were in difficult financial straits, but Adrian, like the mortgagee in Pittwood, wished to avoid potential competition with other creditors, as well as the considerable additional expense that foreclosure on a mortgage would entail in the event of default by the McKinnies. Likewise, the McKinnies had no other option to escape the onerous terms of their previous agreement with Butch McKinnie than to borrow the money from Adrian, which he made available to them on more favorable terms.

[¶ 14.] The record reveals that both Adrian and the McKinnies had an interest in seeing that the land not be developed, but it also shows, as noted earlier, that at and before the time of the agreement, Adrian was not interested in buying or owning the property. Perhaps Adrian’s interest in owning the property changed after he became aware, in the summer of 1999, that a third party might be willing to pay substantially more for the property than the sum he had given the McKinnies in exchange for the deeds. Perhaps not coincidentally, the McKinnies found soon thereafter that they could secure financing to pay off Adrian in full.

[¶ 15.] In addition, the lease and option agreement required the McKinnies to deed to Adrian a 15-acre tract of their own land in addition to the 600-acre tract they transferred to Adrian and leased back. Adrian was to return — and did return— the deed to the additional 15 acres upon the McKinnies’ payment of the first $10,000 of certain “rental payments” under the agreement. Adrian required the additional acreage as an apparent additional “security” for his outlay. If Adrian had seen himself purely in the position of being the owner of the 600 acres, additional “security” would seem unnecessary. In Wilson v. McWilliams, 16 S.D. 96, 91 N.W. 453 (1902), the situations of the parties were similar to those of the McKinnies and Adrian. In Wilson, we quoted with favor the Montana Supreme Court’s language in Gassert v. Bogk:

[w]here there is a deed, and contract to re-convey, and oral evidence has been introduced tending to show that the transaction was one of security, and leaving upon the mind a well-founded doubt as to the nature of the transaction, then courts of equity incline to construe the transaction as a mortgage.

Id. at 456 (quoting 19 P. 281, 285 (Mont. Terr. 1888)). As in Wilson, so here: one party agreed to re-convey the property after payment in full.

[¶ 16.] Adrian points out that the McKinnies’ complaint seeking specific performance refers to Adrian as the owner in fee simple of the 600 acres. Adrian admits that allegation in his answer. The McKinnies’ complaint also alleges that they leased this property from Adrian by contract dated October 10, 1997. Adrian contends that these allegations conclusively determine the case. See Tunender v. Minnaert, 563 N.W.2d 849, 856-57 (S.D.1997) (citing Standard Cas. Co. v. Boyd, 75 S.D. 617, 71 N.W.2d 450 (1955)); Goff v. Goff, 72 S.D. 534, 37 N.W.2d 251 (1949); Englund v. Berg, 69 S.D. 211, 8 N.W.2d 861 (1943). Under our modern rules of pleading, however, we will not read allegations hyperteehnically, especially where the issues were fairly litigated in trial. House of Seagram, Inc. v. Assam Drug Co., 83 S.D. 320, 159 N.W.2d 210, 213-14 (1968) (“free and open competition” though admitted in the pleadings should not be accepted as establishing its existence). Here, the meaning of the word “lease” in the McKinnies’ complaint is precisely what is at issue. To take that word in its technical, legal sense and use it as an admission against interest assumes that the answer to the root question at issue had already been decided in the pleadings even though the parties later went to trial on that issue. Nothing in these pleadings commands such an outcome. But as we have seen, many of the facts and circumstances brought out in trial simply make no sense if this agreement is understood to have been a genuine lease-purchase.

[¶ 17.] Lastly, Adrian contends that the trial court’s finding that the McKinnies acted with unclean hands disen-titles them to equitable relief. When claimants seek equitable relief in an instance where they would ordinarily be permitted such relief, they will nonetheless be denied the relief if they acted improperly or unethically in relation to the relief they seek. Dobbs, Law of Remedies, § 2.4 (1973). Unrelated misconduct will not bar relief: “What is material is not that the plaintiffs hands are dirty, but that he dirties them in acquiring the right he now asserts.” Republic Molding Corp. v. B.W. Photo Utilities, 319 F.2d 347, 349 (9th Cir.1963). No matter how wrong the McKinnies may have been in taking excess timber off the land, those acts have nothing to do with how the agreement here was formed. The trial court’s unclean-hands finding will not bar equitable relief.

[¶ 18.] In accordance with our observation in Wilson, the fact that Adrian during negotiations insisted on calling — and both parties in their written agreement and pleadings did call — the contract a “lease” does not impair a court’s power in equity to recharacterize the instrument to express its true intent:

As lenders of money are less under the pressure of circumstances, which control perfect and free exercise of the judgment, than [are] borrowers, the effort is frequently made by persons of this description to avail themselves of the advantage of this superiority in order to obtain inequitable advantages. For this reason, the leaning of courts had been against them, and doubtful cases have generally been decided to be mortgages.

Wilson, 91 N.W. at 456 (citing Conway’s Ex’rs v. Alexander, 11 U.S. 218 (7 Cranch 218), 3 L.Ed. 321 (1812)).

[¶ 19.] The trial court abused its discretion in not declaring the “Lease Agreement & Option to Purchase” to be an equitable mortgage. Therefore, we remand this case to the circuit court for further proceedings consistent with this opinion.

[¶ 20.] Reversed and remanded.

[¶ 21.] GILBERTSON, Chief Justice, SABERS and AMUNDSON, Justices, and GORS, Acting Supreme Court Justice, concur.

      . As in all appeals touching a trial court's findings of fact, we apply the clearly erroneous standard of review to those findings. In re Regennitter, 1999 SD 26, ¶ 11, 589 N.W.2d 920, 923 (citations omitted). Questions of law are reviewed de novo. Id. Credibility findings are best left to the trial court; therefore, we give those findings considerable deference. Id.

      . “Parties seeking to take undue advantage of mortgagors situated as the plaintiff was in this case almost invariably seek to cover up the transaction by inducing the party to whom the loan was really made to take a lease of the property; hence, the mere fact of leasing should have little weight with a court of equity, which seeks to discover the real transaction.” Wilson, 91 N.W. at 457.


author: STREIT, Justice.

text:
    STATE of Iowa, Appellee, v. Mary Kathlyn BURGESS, Appellant.
    No. 99-1159.
    Supreme Court of Iowa.
    Dec. 19, 2001.
    Rehearing Denied Feb. 25, 2002.

      Don W. Schroeder, West Liberty, for appellant.

      Thomas J. Miller, Attorney General, Martha E. Boesen, Assistant Attorney General, Denver D. Dillard, County Attorney, and Jerry Vander Sanden, Assistant County Attorney, for appellee.
   STREIT, Justice.

Mary Kathlyn Burgess kept money paid by her customers for decorating services she never rendered. Burgess entered an Alford plea to a charge of theft by misappropriation. The Iowa Court of Appeals dismissed the charge without prejudice to allow the State to re-indict Burgess. See Burgess v. State, 585 N.W.2d 846, 848 (Iowa Ct.App.1998). The State then filed a trial information charging Burgess with theft by deception. Again, Burgess entered an Alford plea to the charge. She now appeals from her conviction and sentence for third-degree theft by deception. Iowa Code §§ 714.1(3), 714.2(2) (1993). She contends the charge of theft by deception violated the applicable statute of limitations and her right to a speedy trial. She also argues the charge violated her right to be free from double jeopardy. We find Burgess waived her statute of limitations and speedy trial claims by entering an Alford plea to the charge. Because we find the charge of theft by deception does not implicate principles of double jeopardy, we affirm.

I. Facts

Mary Kathlyn Burgess, an interior decorator, took money and furnishings from clients wanting decorating services. However, she failed to render her services. On July 30, 1993, the State charged Burgess with one count of second-degree theft by misappropriation. Id. § 714.1(2) (1993). After a series of continuances and a change in counsel, Burgess entered an Alford plea on August 30, 1994. The district court sentenced her to a term not to exceed five years, suspended the term, and placed her on probation for five years. Burgess appealed her conviction arguing her trial counsel was ineffective for failing to challenge the factual basis of her plea.

On August 17, 1995, the Iowa Court of Appeals affirmed her conviction, but found there was no factual basis for the plea and preserved her claim for postconviction proceedings. In 1996, Burgess filed an application for postconviction relief. After a hearing on the matter, the postconviction court denied Burgess’ request for relief. Burgess appealed and in 1998 the appellate court found Burgess’ trial counsel was ineffective because he failed to completely inform Burgess of the possibility of a complete defense to the charge against her. The court remanded the case for dismissal of the charge without prejudice so the State could re-indict Burgess under a code section supportable by the available evidence.

In accordance with the appellate court ruling, the State filed a trial information and charged Burgess with second-degree theft by deception. Burgess filed a motion to dismiss the charge asserting the charge was filed beyond the statute of limitations, and violated her rights to a speedy indictment and to be free from double jeopardy. Following a hearing, the district court denied Burgess’ motion to dismiss. Finally, in June 1999, Burgess entered an Alford plea to third-degree theft by deception. Id. §§ 714.1(3), 714.2(2). Burgess waived her right to be present at the time her plea was entered and the court fined her $500. Burgess appeals.

On appeal Burgess contends the charge of third-degree theft by deception should have been dismissed as it was barred by the statute of limitations. She also contends the State’s delay in filing the theft by deception charge deprived her of the constitutional right to a speedy indictment. She finally argues the subsequent prosecution of theft by deception after dismissing her conviction of theft by misappropriation is a violation of double jeopardy.

II. Scope of Review

Burgess claims the charge of theft by deception should have been dismissed as it was barred by the statute of limitations. As to this issue, our standard of review is for correction of errors at law. Iowa R.App. P. 4; State v. Hippler, 545 N.W.2d 568, 569 (Iowa 1996). As to Burgess’ constitutional claims, the appropriate standard of review is de novo. State v. Washburne, 574 N.W.2d 261, 263 (Iowa 1997); State v. Alspach, 554 N.W.2d 882, 883 (Iowa 1996).

III. Statute of Limitations and Speedy Indictment

Burgess argues the charge of theft by deception was barred by the statute of limitations and it violated her right to a speedy indictment. She also argues the charge of theft by deception violated her right to be free from double jeopardy. We first address the statute of limitations and speedy indictment issues as Burgess waived these challenges by the entry of her Alford plea.

An Alford plea is a variation of a guilty plea. In effect, the pleas are the same as the defendant is agreeing to the imposition of a criminal sentence for the crime charged. A guilty plea freely and voluntarily entered waives all defenses and objections, including constitutional guarantees. State v. Yodprasit, 564 N.W.2d 383, 385 (Iowa 1997). However, in certain circumstances, a defendant does not waive the right to challenge the plea itself, the right to challenge the indictment or information if it charges no offense, and the right to be free from double jeopardy. See id.; see also State v. White, 545 N.W.2d 552, 554 (Iowa 1996). The rights to challenge a charge based on statute of limitations or speedy indictment grounds are not exceptions to the general rule of waiver. Consequently, we do not address either the statute of limitations or speedy indictment claims because Burgess waived them by entering an Alford plea. The central issue in this case is whether the charge of theft by deception violates Burgess’ right to be free from double jeopardy. We now turn to this issue.

IV.Double Jeopardy

Burgess asserts she was placed twice in jeopardy after the Iowa Court of Appeals remanded the case for dismissal of the charge of theft by misappropriation without prejudice to allow the state to “re-indict Burgess under a code section supported by the evidence.” Burgess captioned her double jeopardy argument in terms of a violation of the United States Constitution. However, at the end of the double jeopardy analysis, she asserted double jeopardy claims based on both the Federal and Iowa constitutions. U.S. Const, amend. V; Iowa Const, art. I, § 12. Burgess merely cited the applicable provision of the Iowa Constitution without engaging in a separate analysis based on this provision. She did not argue the protections afforded to her by the Federal and State constitutions were in any way distinguishable with respect to her double jeopardy claim and therefore we restrict our analysis to the federal constitution.

The Double Jeopardy Clause of the Fifth Amendment to the United States Constitution, applicable to the states under the Fourteenth Amendment, protects defendants from prosecution for the same offense after conviction or acquittal, and against multiple punishments for the same offense. Brown v. Ohio, 432 U.S. 161, 165, 97 S.Ct. 2221, 2225, 53 L.Ed.2d 187, 194 (1977). The Double Jeopardy Clause is based on principles of finality and the prevention of prosecutorial overreaching. State v. Taylor, 596 N.W.2d 55, 56 (Iowa 1999). The purpose of this clause is to protect against: (1) a second prosecution for the same offense after acquittal; (2) a second prosecution for the same offense after conviction; and (3) multiple punishments for the same offense. North Carolina v. Pearce, 395 U.S. 711, 717, 89 S.Ct. 2072, 2076, 23 L.Ed.2d 656, 664-65 (1969), overruled on other grounds in Alabama v. Smith, 490 U.S. 794, 803, 109 S.Ct. 2201, 2207, 104 L.Ed.2d 865, 875 (1989). Burgess’ argument focuses on the prevention of a second prosecution for the same offense after acquittal. Her argument is partly based on the belief the charges of theft by deception and theft by misappropriation are a single offense. We disagree.

The double jeopardy protection against prosecution for the same offense after conviction or acquittal serves the purpose of restraint on the courts and prosecutors. Brown, 432 U.S. at 165, 97 S.Ct. at 2225, 53 L.Ed.2d at 194. In cases implicating the protection against prosecution for the same offense after conviction, the question is whether the offenses prosecuted constitute the “same offense.” Iowa Code § 816.1 (1999) (“conviction or acquittal by a judgment upon a verdict shall bar another prosecution for the same offense”). The test for determining whether two offenses are the same within the meaning of the Double Jeopardy Clause is whether each provision requires proof of an additional fact which the other does not. State v. Ruesga, 619 N.W.2d 377, 382 (Iowa 2000); see United States v. Dixon, 509 U.S. 688, 696, 113 S.Ct. 2849, 2856, 125 L.Ed.2d 556, 568 (1993); Blockburger v. United States, 284 U.S. 299, 304, 52 S.Ct. 180, 182, 76 L.Ed. 306, 309 (1932). In other words, we compare the two offenses to determine whether one is a lesser-included offense of the other. State v. Schmitz, 610 N.W.2d 514, 516 (Iowa 2000); State v. Jeffries, 430 N.W.2d 728, 734 (Iowa 1988) (citing Ex parte Nielsen, 131 U.S. 176, 188, 9 S.Ct. 672, 676, 33 L.Ed. 118, 122 (1889)). If an offense is a lesser-included one of the offense charged, a conviction or acquittal of the charged offense bars a subsequent prosecution of the lesser offense. Jeffries, 430 N.W.2d at 734 (citing Nielsen, 131 U.S. at 188, 9 S.Ct. at 676, 33 L.Ed. at 122). Similarly, a conviction or acquittal of the lesser-included offense bars a subsequent prosecution of the greater offense. Id. If, after an examination of the statutory elements of two offenses, we determine one offense is not a lesser-included offense of the other, then the principles of double jeopardy are not implicated. See, e.g., Dixon, 509 U.S. at 701-02, 113 S.Ct. at 2859-60, 125 L.Ed.2d at 571-72 (where defendant convicted of violation of civil protection order, subsequent conviction for assault with intent to kill and threatening to injure or kidnap did not violate principles of double jeopardy); Wrublewski v. McInerney, 166 F.2d 243, 244-45 (9th Cir.1948) (offense of assault with intent to commit murder is not such an ingredient of manslaughter that acquittal of assault would authorize a plea of double jeopardy to subsequent manslaughter charge even though identical factual situation was involved in both cases); State v. Burton, 231 N.W.2d 577, 578 (Iowa 1975) (dismissed charge of burglary with aggravation did not bar subsequent prosecution of robbery with aggravation because the two crimes are not the “same offense” for purposes of “former jeopardy”); State v. Cowman, 239 Iowa 56, 60, 29 N.W.2d 238, 240 (1947) (where original charge of breaking and entering was dismissed, subsequent prosecution for larceny from a building in the nighttime was not precluded by double jeopardy); State v. Dickson, 200 Iowa 17, 20, 202 N.W. 225, 226 (1925) (dismissal before trial of information charging assault and battery did not bar prosecution for assault with intent to do great bodily injury though both charges arose from same transaction); State v. Ingalls, 98 Iowa 728, 730, 68 N.W. 445, 446 (1896) (acquittal of larceny is not a bar to prosecution for breaking and entering based upon the same facts); State v. Liakos, 142 N.H. 726, 731-32, 709 A.2d 187, 190 (1998) (dismissal by court of homicide charge, causing death of another while operating motor vehicle under the influence of valium, did not preclude retrial on charge of negligent homicide, causing death of another by crossing double yellow line, after declaration of mistrial); Commonwealth v. Rosario, 438 Pa.Super. 241, 252-58, 652 A.2d 354, 360-62 (1994) (trial court’s sua sponte withdrawal of appellant’s guilty plea to hindering apprehension or prosecution did not bar subsequent prosecution for murder and conspiracy); Shute v. State, 858 S.W.2d 606, 608 (Tex. Ct.App.1993) (reversal for insufficient evidence of defendant’s conviction for attempted capital murder of peace officer did not bar subsequent prosecution for attempted murder); Martin v. Commonwealth, 242 Va. 1, 7-8, 406 S.E.2d 15, 18 (1991) (defendant’s prosecution and conviction for obstructing justice did not bar subsequent prosecution for attempted murder and use of firearm in commission of attempted murder); Harvey v. State, 835 P.2d 1074, 1078 (Wyo.1992) (prior convictions for kidnapping and first-degree sexual assault did not, under double jeopardy clause, bar prosecution for conspiracy)-

Burgess claims when the court of appeals dismissed the charge of theft by misappropriation without prejudice, it acquitted Burgess on the charge based on insufficient evidence. The State later filed a trial information charging Burgess with theft by deception. Given these facts, Burgess argues the State is barred from re-indicting her. See Burks v. United States, 437 U.S. 1, 11, 98 S.Ct. 2141, 2147, 57 L.Ed.2d 1, 9 (1978) (“[t]he Double Jeopardy Clause forbids a second trial for the purpose of affording the prosecution another opportunity to supply evidence which it failed to muster in the first proceeding”). Burgess argues the two charges are the “same offense” for purposes of double jeopardy. She contends theft by misappropriation is a lesser-included offense of theft by deception. We find one particular Iowa statute instructive on this issue. Iowa Code section 816.2 provides:

When a defendant has been convicted or acquitted upon an indictment for an offense consisting of different degrees, the conviction or acquittal shall be a bar to another indictment for the same offense charged in the former or for any lower degree of that offense, or for an offense necessarily included therein.

Iowa Code § 816.2. Assuming without deciding the action of the Iowa Court of Appeals in dismissing the charge of theft by misappropriation constituted an acquittal on the charge, we turn to whether the two crimes are the “same offense” for purposes of the Double Jeopardy Clause. The critical issue is whether theft by deception is a lesser-included offense of theft by misappropriation. To determine this issue, we must examine the elements of each offense. A person commits theft by misappropriation if he or she:

(1) Misappropriates property which the person has in trust, or property of another which the person has in the person’s possession or control, whether such possession or control is lawful or unlawful,
(2) by using or disposing of it in a manner which is inconsistent with or a denial of the trust or of the owner’s rights in such property,
(3) or conceals found property,
(4) or appropriates such property to the person’s own use,
(5) when the owner of such property is known to the person.

Iowa Code § 714.1(2).

A person commits theft by deception when he or she:

(1) Obtains the labor or services of another,
(2) or a transfer of possession, control, or ownership of the property of another,
(3) by deception.

Iowa Code § 714.1(3).

Comparing the two offenses side by side, it is plain theft by deception contains elements not essential to proof of theft by misappropriation. Contrary to Burgess’ contention, it is possible to commit theft by deception without also committing theft by misappropriation. If it is possible to commit one crime without committing the other, each offense is separate and not a lesser-included offense of the other. Taylor, 596 N.W.2d at 57.

While there may be some similarity of proof between the two charges, neither is a lesser-included offense of the other because each contains some distinct elements not included in the other charge. Under Iowa Code section 714.1(2), the State must prove the owner retained some interest in the property misappropriated by the defendant. To the contrary, theft by deception requires proof that not only possession, but ownership of the property transferred to the defendant through a component of dishonest or false conduct by the defendant. See State v. Galbreath, 525 N.W.2d 424, 426-27 (Iowa 1994) (statutory theft classifications clearly distinguish between theft based on misappropriation of funds in which the owner retains an interest and theft by deception that results in the transfer of possession and ownership). The charge of theft by deception, therefore, requires proof of facts different than those facts required to prove theft by misappropriation. A single act may be an offense against two statutes. However, if each statute includes elements which the other does not, an acquittal or conviction under either statute does not exempt the defendant from prosecution under the other. See Iowa Code § 816.2. We do not have before us a case where the state retried the defendant for the same offense. Consequently, because the charges of theft by misappropriation and theft by deception are not the “same offense,” the Double Jeopardy Clause is not implicated.

V. Conclusion

In conclusion, the appellate court dismissed the original charge without prejudice permitting the State to re-indict Burgess under a code section appropriate under the available evidence. Despite the fact the initial charge was dismissed for lack of sufficient evidence, the State is not barred from re-indicting Burgess. Even if the dismissal of theft by misappropriation constituted an acquittal of the charge, it was proper for the State to re-indict Burgess to charge theft by deception as the two charges are not the “same offense” for purposes of double jeopardy. Since we find double jeopardy is not implicated in this case, we affirm.

AFFIRMED.

All justices concur except CARTER, J., who takes no part.

      . An Alford plea is different from a guilty plea in that when a defendant enters an Alford plea, he or she does not admit participation in the acts constituting the crime. See State v. Hansen, 221 N.W.2d 274, 276 (Iowa 1974). Though the defendant does not admit guilt, he or she may voluntarily, knowingly, and understandingly consent to the imposition of a sentence. Id. There is no material difference between the pleas, however, when a defendant intelligently concludes his interests require entiy of a guilty plea and the State has overwhelming evidence of the defendant’s guilt. See North Carolina v. Alford, 400 U.S. 25, 37, 91 S.Ct. 160, 167, 27 L.Ed.2d 162, 171 (1970).