author: PETERSON, Judge.

text:
    HAVERHILL TOWNSHIP, et al., Appellants, v. COUNTY OF OLMSTED, City of Rochester, Respondents.
    No. A03-880.
    Court of Appeals of Minnesota.
    Feb. 17, 2004.

      Peter B. Tiede, Murnane, Conlin, White Brandt, P.A., St. Paul, MN, for appellants.
    John M. Baker, Greene Espel, P.L.L.P., Minneapolis, MN, for respondent County of Olmsted.
    George C. Hoff, Hoff, Barry Kuderer, P.A., Eden Prairie, MN, for respondent City of Rochester.
    Considered and decided by HARTEN, Presiding Judge; PETERSON, Judge; and HUDSON, Judge.
   OPINION

PETERSON, Judge.

This appeal is from a summary judgment granted to respondent county and intervenor city in a declaratory judgment action brought by appellant townships.

FACTS

Appellants are townships within the boundaries of respondent Olmsted County. Before October 23, 2000, all but two of the townships had entered into cooperative agreements with Olmsted County that permitted the county to enforce its official controls within the townships. On October 23, 2000, each of those townships adopted a resolution terminating its cooperative agreement pursuant to the terms of the agreement. On, or after, October 23, 2000, each of the appellant townships adopted a resolution taking over the adoption and enforcement of official controls within the township’s boundaries, including areas for which Olmsted County had adopted official controls.

In April 2001, the townships filed a complaint alleging that Olmsted County has persisted in asserting its right to exercise official controls within the jurisdictions of the townships. The complaint sought a declaration of the parties’ rights with respect to the adoption and enforcement of official controls and a judgment that each township has the legal capacity to adopt and enforce official controls and the county has no remaining authority to independently enforce its own official controls within the townships.

The City of Rochester was permitted to intervene in the action, and it asserted counterclaims against the townships. The townships asserted a cross-claim against the city, which was later dismissed pursuant to a stipulation. Each of the parties moved for summary judgment. The district court granted the motions by the city and the county and dismissed the townships’ complaint. The court denied the townships’ motion for summary judgment on their declaratory judgment claim but granted their motion for summary judgment on the city’s counterclaims.

This appeal by the townships followed. The city did not seek review of the summary judgment granted the townships on the city’s counterclaims.

ISSUE

Is a township that adopts a resolution pursuant to Minn.Stat. § 394.32, subd. 3, to take over planning functions with respect to areas within the township for which a county has adopted official controls limited by Minn.Stat. § 394.33, subd. 1, to enacting official controls that are consistent with or more restrictive than the official controls adopted by the county?

ANALYSIS

“On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the lower courts erred in their application of the law.” State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). Statutory construction is a question of law, which this court reviews de novo. Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 393 (Minn.1998).

“In Minnesota, ... a municipality has no inherent power to enact zoning regulations. A municipality receives power to zone only by legislative grant of authority by the state.” Costley v. Caromin House, Inc., 313 N.W.2d 21, 27 (Minn.1981). “[A] municipality cannot exceed the limitations imposed by the enabling legislation.” Id. Minn.Stat. §§ 394.21 to 394.37 (2000) grant counties authority to enact and enforce planning and zoning regulations. Minn.Stat. §§ 462.351 to 462.365 (2000) grant municipalities authority to enact and enforce planning and zoning regulations. Minn.Stat. §§ 366.10 to 366.181 (2000) grant towns authority to enact and enforce planning and zoning regulations.

The statutory provisions that grant counties planning and zoning authority recognize that land within a town is also within a county and provide for situations where a town and a county both act to adopt official controls that regulate the same land. In these situations, the following statutory provision applies:

The governing body of any town including any town with the powers of a statutory city pursuant to law may continue to exercise the authority to plan and zone as provided by law, but after the adoption of official controls for a county or portion thereof by the board of county commissioners no town shall enact or enforce official controls inconsistent with or less restrictive than the standards prescribed in the official controls adopted by the board. Nothing in this section shall limit any town’s power to adopt official controls, including shoreland regulations which are more restrictive than provided in the controls adopted by the county.

Minn.Stat. § 394.33, subd. 1 (2000) (emphasis added).

The townships acknowledge that the emphasized language in this statute limits a town’s authority to adopt official controls that are different from official controls adopted by the board of county commissioners. But they argue that this limitation on their authority was removed when they adopted their resolutions taking over the adoption and enforcement of official controls within their boundaries. The townships base their argument on two other provisions of the statutes that grant counties planning and zoning authority. The first of these provisions states: “The board of supervisors of any town which has adopted or desires to adopt zoning regulations and restrictions pursuant to law shall have the authority granted the governing body of any municipality as provided in section 394.32.” Minn.Stat. § 394.33, subd. 2 (2000). The townships contend that this statute grants towns the authority to exercise the powers of a municipality. The townships then turn to Minn.Stat. § 394.32 (2000) to determine what powers it grants municipalities.

The authority granted the governing body of any municipality by section 394.32 includes the authority to contract with the county board for planning and zoning services. Minn.Stat. § 394.32, subd. 1. The contract may provide for joint county-municipal planning activities, or it may designate the county board as the planning agency for the municipality. Minn.Stat. § 394.32, subd. 2. A municipality may also request a county to provide comprehensive planning and enforcement services. The statute provides:

The governing body of any municipality may request a county board to submit to such governing body a comprehensive plan for the municipality setting forth such provisions as the board deems applicable to the municipality and for its best interests, or to include the area within the municipality in a countywide comprehensive plan, or to prepare official controls to apply to the area within the municipality. Notwithstanding the adoption of the comprehensive plan and recommendations for the municipality the plan and recommendations shall not be binding until official controls are adopted by the municipality in accordance with the plan or until the county adopts official controls for the areas within the incorporated limits of the municipality when requested by the governing body of the municipality. After the county adopts official controls for areas within the municipality, the county shall enforce the controls unless the county and municipality provided otherwise by agreement. A municipality may at any time, by resolution of its governing body, take over planning Junctions, including adoption and enforcement of official controls, ivith respect to areas within its corporate limits for which a county has adopted official controls.

Minn.Stat. § 394.82, subd. 3 (emphasis added).

Citing the emphasized language, the townships contend that one of the powers granted municipalities by Minn.Stat. § 394.32, subd. 3, is the power to pass a resolution to take over planning functions with respect to areas within its corporate limits for which a county has adopted official controls. Therefore, the townships conclude, because they have authority to exercise the powers of a municipality, they have authority to pass a resolution to take over planning functions, and, when they passed their resolutions, they took over all authority for planning and zoning and became “vested with the statutory authority to enact and enforce official controls within their jurisdictional borders without encroachment from County controls.” In other words, when they passed their resolutions under Minn.Stat. § 394.32, subd. 3, they were no longer limited by Minn.Stat. § 394.33, subd. 1, to enacting official controls that are consistent with or more restrictive than the official controls adopted by the county. That limitation, the townships argue, applies only to townships that have not adopted a resolution taldng over planning functions pursuant to MinmStat. § 394.32, subd. 3.

Minnesota courts have not determined whether a township that adopts a resolution pursuant to Minn.Stat. § 394.32, subd. 3, to take over planning functions with respect to areas within the township for which the county has adopted official controls remains limited by Minn.Stat. § 394.33, subd. 1, to enacting official controls that are consistent with or more restrictive than the official controls adopted by the county. But the supreme court provided significant guidance about the meaning of Minn.Stat. §§ 394.32 and 394.33 in Scinocca v. St. Louis County Bd. of Comm’rs, 281 N.W.2d 659 (Minn.1979).

In Scinocca, the St. Louis County Zoning Ordinance governed lands in the Town of Canosia before the Town Board of Canosia adopted a more-restrictive ordinance. Id. at 660. A dwelling was moved onto land in the town in violation of the town’s ordinance. Id. A citation was issued, and the county court referred the matter to the St. Louis County Attorney for handling. Id. The county attorney refused to pursue the matter on the grounds that he did not have the authority or responsibility to prosecute town-zoning-ordinance violations. Id. A township resident requested the county board to authorize the county attorney to enforce the town ordinance, and when the board refused to do so, the resident sued for a writ of mandamus. Id.

The district court found that the town zoning ordinances were enacted pursuant to Minn.Stat. § 394.33 (1976) and held that the county board had the duty, to enforce the town ordinances pursuant to Minn.Stat. § 394.37, subd. 1 (1976). Id. The supreme court disagreed and held that the county board had no duty to enforce the town’s zoning ordinances. Id. at 661-62. In reaching this conclusion, the supreme court examined the language in Minn.Stat. § 394.37, subd. 1, which states, “The [county] board shall provide for the enforcement of sections 394.21 to 394.37 and of ordinances and regulations made thereunder, and may impose enforcement duties on any officer, department, agency, or employee of the county.” Minn.Stat. § 394.37, subd. l. The supreme court then made the following statement, which is significant to our analysis of the issue before us:

The ordinances and regulations referred to in [Minn.Stat. § 394.37, subd. 1] are only those adopted by the county board of commissioners.... [Minn.Stat. §§ ]394.21 to 394.37 regulate county zoning, while town zoning is regulated by [Minn.Stat. §§ ]366.10 to 366.18.
[Minn.Stat. § J394.33 is not an enabling statute which grants towns authority to enact zoning ordinances. It merely permits them to continue to zone as provided by law under [Minn.Stat. § ]366.12. [Minn.Stat. § J394.33, in conjunction with [Minn.Stat. § J394.32 does allow a town to contract with the county for planning and zoning services. If a town does so contract, the county board would then be required by [Minn.Stat.] § 394.32, subd. 3, to enforce the town’s zoning ordinances.

Id. at 661-62 (citation omitted).

As this statement explains, Minn. Stat. § 394.33 does not grant towns authority to enact zoning ordinances. Instead, it is among the statutory provisions that regulate county zoning, and within this context, it permits towns to continue to exercise the zoning authority granted by Minn.Stat. § 366.12 and, in conjunction with Minn.Stat. § 394.32, to contract with the county for planning and zoning services.

Like Minn.Stat. § 394.33, Minn.Stat. § 394.32 is among the statutory provisions that regulate county zoning. Within this context, Minn.Stat. § 394.32 grants municipalities authority to contract with a county board for planning and zoning services, and if a county adopts official controls for areas within a municipality, Minn.Stat. § 394.32 grants the governing body of the municipality authority to, at any time, take over the planning functions for areas within the municipality for which the county has adopted controls. But, just as Minn. Stat. § 394.33 is not an enabling statute that grants towns authority to enact zoning ordinances, Minn.Stat. § 394.32 is not an enabling statute that grants municipalities authority to enact zoning ordinances. Minn.Stat. § 394.32 only permits municipalities to (1) contract with a county board for planning and zoning services, (2) request a county board to provide comprehensive planning and enforcement services, and (3) take over planning functions for areas within the municipality for which the county has adopted official controls.

In claiming that Minn.Stat. § 394.33, subd. 2, grants towns the authority to exercise the powers of a municipality, the townships ignore the last phrase of the statute, which significantly limits the authority that the statute grants towns. With the last phrase, the statute says only that a township “shall have the authority granted the governing body of any municipality as provided in section 39⅛.32.” Minn.Stat. § 394.33, subd. 2 (emphasis added). As we have just explained, Minn. Stat. § 394.32 grants municipalities authority to do just three things; it does not grant municipalities general authority to enact and enforce planning and zoning regulations. Consequently, MinmStat. § 394.33, subd. 2, only grants towns authority to do these three things. Therefore, a town has authority to take over planning functions for areas within the town for which the county has adopted official controls, but a town that exercises this authority must perform the planning functions using the planning and zoning authority that is otherwise granted to towns by statute. Adopting a resolution to take over planning functions does not remove the limitation in Minn.Stat. § 394.33, subd. 1, that prohibits townships from enacting or enforcing official controls that are inconsistent with or less restrictive than the official controls adopted by the county.

DECISION

When the townships adopted resolutions pursuant to Minn.Stat. § 394.32, subd. 3, to take over planning functions with respect to areas within the townships for which the county had adopted official controls, the townships did not acquire the authority of a municipality to enact and enforce planning and zoning regulations. The townships took over the planning functions, but in performing these functions, they can only exercise the authority that has been granted to townships by statute. Therefore, the townships’ authority to perform the planning functions remains limited by MinmStat. § 394.33, subd. 1, to enacting official controls that are consistent with or more restrictive than the official controls adopted by the county.

Affirmed.

      . " ‘Official control' means legislatively defined and enacted policies, standards, precise detailed maps, and other criteria, all of which control the physical development of a municipality or a county or any part thereof or any detail thereof, and are the means of translating into ordinances all or any part of the general objectives of the comprehensive plan. Such official controls may include but are not limited to ordinances establishing zoning, subdivision controls, site plan rules, sanitary codes, building codes, housing codes, and official maps." Minn.Stat. § 394.22, subd. 6 (2000).

      . As used in Minn.Stat §§ 394.21 to 394.37, "municipality” means a city however organized. Minn.Stat. § 394.22, subd. 4 (2000).

      . Minn.Stat. § 394.33 was amended one time after 1976. 1995 Minn. Laws ch. 254, art. 3, § 4. The amendment does not affect our analysis.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    2004 ND 32
    In the Matter of the JUDICIAL VACANCY IN DISTRICT JUDGESHIP NO. 4, WITH CHAMBERS IN MINOT, NORTH DAKOTA, NORTHWEST JUDICIAL DISTRICT.
    No. 20040017.
    Supreme Court of North Dakota.
    Feb. 18, 2004.
   PER CURIAM.

[¶ 1] On January 7, 2004, the Honorable Gary A. Holum, Judge of the District Court, with chambers in Minot, Northwest Judicial District, notified the Supreme Court of his intention not to seek reelection when his term ends December 31, 2004. Under Section 27-05-02.1(4) a vacancy is created.

[¶ 2] Under Section 27-05-02.1, N.D.C.C., this Court is required to review vacancies that occur and determine, within 90 days of receiving notice of a vacancy, whether the office is necessary for effective judicial administration. This Court may, consistent with that determination, order the vacancy filled or order the vacant office transferred to a judicial district in which an additional judge is necessary, to be filled in that district.

[¶ 3] Under N.D. Sup.Ct. Admin. R. 7.2, notice of a written consultation with the attorneys and judges of the Northwest Judicial District was posted January 10, 2004, on the website of the Supreme Court. Notice was also electronically provided to all presiding judges of the state. Written comments on the vacancy were permitted through February 17, 2004. For purposes of the consultation provided for under Section 27-05-02.1, N.D.C.C., this procedure is sufficient for determining the disposition of the vacancy.

[¶ 4] A Report containing population and caseload trends, and other criteria identified in N.D. Sup.Ct. Admin. R. 7.2, Section 4, was filed February 17, 2004, by the Northwest Judicial District.

[¶ 5] Under the criteria of Section 4 of N.D. Sup.Ct. Admin. R. 7.2, the Court has considered all submissions received by the Court and its own administrative records on state-wide weighted caseload data.

[¶ 6] This Court determines that the office is necessary for effective judicial administration in its present location.

[¶ 7] IT IS HEREBY ORDERED, that Judgeship No. 4 at Minot in the Northwest Judicial District be filled, that an election for this office be held, and that this office appear on the 2004 primary and general election ballots in North Dakota.

[¶ 8] GERALD W. VANDE WALLE, C.J., CAROL RONNING KAPSNER, MARY MUEHLEN MARING, DALE V. SANDSTROM, and WILLIAM A. NEUMANN, JJ., concur.


text:
    2004 SD 7
    In the Matter of I.H., Abused or Neglected Child.
    No. 22896.
    Supreme Court of South Dakota.
    Considered on Briefs Jan. 8, 2004.
    Decided Jan. 21, 2004.
    Lawrence E. Long, Attorney General, David W. Siebrasse, Assistant Attorney General, Pierre, South Dakota, Attorneys for appellee, State of South Dakota.
    Beverly J. Katz, Huron, South Dakota, Attorney for appellant, Mother.
   PER CURIAM.

[¶ 1.] L.W. (mother) appeals the termination of her parental rights over her nine-year-old daughter, I.H. We affirm.

FACTS

[¶ 2.] Mother is a thirty-three-year-old resident of Huron. She has mental impairments and has been diagnosed with a borderline personality disorder and borderline intellectual functioning that causes great volatility in her mood states. Mother has a history of alcohol and substance abuse, has received extensive mental health treatment and has been involved with various services since her adolescence. She is twice divorced and has had four children of which I.H. is the youngest. Mother’s oldest child was put up for adoption in 1988 and custody of her other two children was given to their father because of her incarceration at one point in time.

[¶ 3.] I.H. was born in 1994. Over the following seven years, the Department of Social Services (DSS) received twenty-four referrals concerning mother’s care of I.H. Out of these referrals, there were three voluntary removals of the child and two involuntary removals. Mother was twice adjudicated for abuse and neglect and at least one of the adjudications involved mother’s physical abuse of the child.

[¶ 4.] DSS began providing mother with direct services in 1996. The services involved a social worker going into the home to improve mother’s functioning and interaction with I.H. These services were provided on a continual basis from 1996 through 2000. In addition, mother was provided services by various community based agencies including community counseling through the Bradfield Leary Center in Huron and instruction in independent living through the Huron Center for Independence. Independent living instruction included assistance with mother’s work search skills and development of her parenting and living skills such as grocery shopping and menu planning. These community based services continued up through the time of disposition and ranged from ten to twenty hours per week with various people in different agencies. There were also weekly staff meetings among the agencies involved to coordinate the services being provided to mother.

[¶ 5.] Although DSS ceased providing direct services to mother in 2000, the community based services continued. There was testimony that any additional services DSS could have provided to mother would have been repetitious and that sufficient services were being provided to constitute “overkill.” Another service provider involved with mother’s case testified that mother received the most services that she had ever heard of and that it still was “not enough.”

[¶ 6.] After informing a DSS worker about a touching incident involving mother’s ex-husband, I.H. was finally removed from mother’s care and taken into emergency custody by DSS on October 17, 2002. I.H. told the worker that the ex-husband had come to mother’s house while drunk, spent the night sleeping in bed with mother and I.H. and, during that time, touched her inappropriately in her private area. Specifically, I.H. alleged the ex-husband hurt her with his thumb in her groin area and touched her bottom with his hand. Mother later confirmed these facts, admitting that she knew her ex-husband had touched I.H., that she was in the room when it happened, that she knew the ex-husband touched the child’s groin and that her response was to tell him to “knock if off or he would have to leave.” When the ex-husband ignored her and touched I.H. with his hand on her “butt,” mother repeated that he should knock it off or leave. Although the ex-husband continued ignoring mother’s warnings, she failed to contact the police for assistance.

[¶ 7.] A temporary custody hearing was held on October 21, and the trial court signed an order granting DSS temporary custody of I.H. The order recited that, despite reasonable efforts to reunite the family, it was in I.H.’s best interest to be held in temporary custody and that it would be contrary to her welfare to remain in mother’s home. A petition alleging abuse and neglect of I.H. was filed on October 28. During a hearing on November 7, mother admitted the allegations of the petition and the child was adjudicated to be abused and neglected. During the same hearing, mother’s counsel acknowledged that it was her understanding that the State intended to ask for a termination of parental rights. Counsel further indicated that it was her position that mother was “in services right now.” After the hearing, custody of I.H. was continued with DSS and the department was ordered to make reasonable efforts to make possible the return of the child. In its adjudicatory conclusions, the trial court wrote that “[rjeasonable efforts were made to return the child but, despite such efforts, return of the child at [the] time would not be in [her] best interest.”

[¶ 8.] On November 20, mother’s counsel had a phone conversation with the DSS case-worker supervising I.H.’s case about increasing the frequency of mother’s visitations. During that conversation, the case-worker informed counsel that it was not DSS’s intention to make efforts to reunite the family and that the department intended to seek the termination of mother’s parental rights. During a hearing on the visitation issue on December 3, mother’s counsel again acknowledged her understanding that the State was asking for a termination of parental rights. When counsel observed that it was her belief that this did not constitute reasonable efforts toward reunification, the trial court, responded that it would make that determination at the dispositional hearing. The court further indicated that, if it determined that reasonable efforts were not made, it would deny termination.

[¶ 9.] Actual disposition of the child was delayed because of problems I.H. was exhibiting in foster care. She:'was removed from her foster home on December 13 and placed at McKennan Hospital in Sioux Falls for stabilization of disruptive and defiant behavior that included suicidal comments, banging her head against the wall and the stabbing of a foster sister with a pencil. She was later diagnosed as a special needs child suffering a variety of emotional and psychological problems.

[¶ 10.] The dispositional hearing began on March 7, 2003 and continued on March 24. After the hearing, the trial court entered dispositional findings of fact, conclusions of law and an order terminating mother’s parental rights. With regard to the services provided to mother, the trial court entered the following pertinent findings:

7. No reasonable efforts have been made to reunite and rehabilitate the family because the alleged father has had no contact with the minor child and the mother has exposed the child to or demonstrated an inability to protect the child from substantial harm or the risk of substantial harm, the child has been removed from the mother’s custody on two separate occasions, and the Department of Social Services offered or provided family services on each of the two separate occasions the child was removed.
8. The conditions which led to the removal of the child still exist, in that the mother has demonstrated a consistent pattern of inability to protect the child from harm. In this last situation, there was sexual contact by the step-father and mother did nothing to prevent contact. The mother has received extensive services, more than 10 hours weekly, from the Department of Social Services and other local agencies. The alleged father has never had contact with the minor child.
9. There is little likelihood that these conditions will be remedied to allow the child to be returned to the custody of the child’s mother.
10. Services to the family would be unavailing and contrary to the best interests of this child. Extensive services have been provided to this family and circumstances continue to arise where the child must be removed from the home.

The trial court also entered the following conclusion of law on the issue of the services provided to mother:

3. Reasonable efforts are not required because the mother has demonstrated an inability to protect the child from substantial harm pursuant to SDCL 26-8A-21.K8).

[¶ 11.] Mother’s counsel duly filed objections to the foregoing findings and conclusions and also proposed her own findings and conclusions on the services issue. From the order terminating her parental rights, mother appeals.

ISSUE

[¶ 12.] Did the trial court comply with the requirements of the Adoption and Safe Families Act in terminating Mother’s parental rights?

[¶ 13.] The Adoption and Safe Families Act (ASFA), 42 USCA § 671 et seq., was recently reviewed by this Court in People ex rel. D.B., 2003 SD 113, 670 N.W.2d 67. As explained in D.B., the federal act:

establishes a child protection system that subordinates parental rights to the paramount concern for the health and safety of the child when making a decision on whether it is in the child’s best interests to preserve the family unit. ASFA is the congressional response to concerns that the preexisting law acted as a barrier to the adoption of abused and neglected children. Under ASFA, the child protection system is not required to expend its limited resources attempting to reunify children with abusive parents if certain circumstances exist. Thus, the act allows states to move toward termination of parental rights more efficiently under certain circumstances.

D.B., 2003 SD 113 at ¶ 10, 670 N.W.2d at 70 (citations omitted)(emphasis added). Mother argues that ASFA procedural requirements were not met in her case and, therefore, the trial court erred in terminating her parental rights in the absence of direct efforts by DSS to return I.H. to her home and custody.

[¶ 14.] ASFA procedural requirements in South Dakota are primarily reflected in SDCL 26-8A-21; SDCL 26-8A-21.1 and SDCL 26-8A-21.2. SDCL 26-8A-21 requires reasonable efforts by DSS to reunify a child who has been removed from the home with the child’s parent, guardian or custodian. See Matter of C.W., 1997 SD 57, ¶ 17, 562 N.W.2d 903, 906 (SDCL 26-8A-21 requires that DSS make reasonable efforts to return a child to his parents); People in Interest of S.A.H., 537 N.W.2d 1, 5 (S.D.1995)(SDCL 26-8A-21 requires that DSS exercise reasonable efforts to return children to their parents). However, as explained in D.B., supra, ASFA provides an exception to the reasonable efforts requirement in cases where the court determines that a parent has subjected a child to “aggravated circumstances” as defined by state law. See 42 USCA § 671(a)(15)(D)(i). South Dakota’s list of “aggravated circumstances” is contained in SDCL 26-8A-21.1. See D.B., supra. Subdivision (8) of the statute provides in pertinent part:

Nothing in § 26-8A-21 requires reunification of a child with a parent who:
* * ⅜
(8) Has exposed the child to or demonstrated an inability to protect the child from substantial harm or the risk of substantial harm, the child has been removed from the parent’s custody on two separate occasions, and the Department of Social Services offered or provided family services on each of the two separate occasions the child was removed[.]

[¶ 15.] Here, the trial court specifically found after the dispositional hearing that:

No reasonable efforts have been made to reunite and rehabilitate the family because the alleged father has had no contact with the minor child and the mother has exposed the child to or demonstrated an inability to protect the child from substantial harm or the risk of substantial harm, the child has been removed from the mother’s custody on two separate occasions, and the Department of Social Services offered or provided family services on each of the two separate occasions the child was removed.

This finding was obviously entered to excuse DSS’s compliance with the reasonable efforts requirement pursuant to SDCL 26-8A-21.1(8) and the finding is supported by the record as set forth under the facts. Nevertheless, mother contends the finding is inadequate from a procedural standpoint because it was not entered after a separately noticed hearing on the issue of reasonable efforts and as a predicate to another hearing on a permanency plan for I.H. pursuant to SDCL 26-8A-21.2:

If the court has determined that reasonable efforts to return an adjudicated abused or neglected child to the home of the parent, guardian, or custodian are not appropriate, a permanency hearing shall be held within thirty days after the determination. At the permanency hearing, the court shall determine whether and, if applicable, when:
(1) The child should be placed for adoption, and the state should file a petition for termination of parental rights;
(2) The child should be referred for legal guardianship;
(3) The child should be placed permanently with a fit and willing relative; or
(4) A compelling reason is' documented with the court that none of the permanent plans listed in this section would be in the best interest of the child, and the child should be placed in another planned permanent living arrangement.

[¶ 16.] Indeed, the preferable course to follow in this case would have been for the State or DSS to seek a separate hearing shortly after I.H.’s removal and early in the termination process on the issue of the necessity of reasonable efforts. Following that hearing and entry of a finding of an aggravated circumstance under SDCL 26-8A-21.1, a permanency hearing could have been held within thirty days pursuant to SDCL 26-8A-21.2. At that hearing, DSS could have presented its plan for the final disposition of I.H. and the final dispositional hearing could have followed a short time later. Such procedures would have comported with the ASFA goal of moving toward termination of parental rights more efficiently in cases where aggravating circumstances are present. See D.B., 2003 SD 113 at ¶ 10, 670 N.W.2d at 70. See also, New Jersey Div. v. A.R.G., 361 N.J.Super. 46, 824 A.2d 213, 234 (N.J.Super.Ct.App.Div.2003)(ASFA gives courts the discretion to identify the most egregious cases at the early stages of child protection proceedings without providing fruitless reunification services).

[¶ 17.] A good example of the foregoing process is provided in A.R.G., supra, a case relied upon by this Court in D.B., supra. In A.R.G., New Jersey’s family services agency effected an emergency removal of three children from their father’s care. The removal took place on May 28, 2002. The next day, the agency filed a child abuse and neglect complaint against the father. On the application of the agency, the trial court also issued an order directing the father to show cause at a hearing on June 26, why custody of the children should not be continued with the agency. Two days before the show cause hearing, counsel for the agency issued a letter to all counsel advising that it would submit evidence and' seek a finding at the hearing that no reasonable efforts to reunify the family were required. At the hearing, the agency moved for a finding that it was not required to exert reasonable efforts to reunify the family based upon the presence of certain aggravating circumstances in the case. After considering the testimony, evidence, and arguments of counsel, the trial court ruled that the agency had clearly established the presence of aggravating circumstances. The court also scheduled a permanency planning hearing for July 17 (a time within thirty days of its determination of aggravating circumstances). At the permanency hearing, the agency presented its plan to terminate the father’s parental rights and to place the children for adoption by their maternal grandparents. The trial court approved the plan and issued an order directing the agency to file a guardianship complaint for termination of the father’s parental rights within thirty days. Proceedings to terminate parental rights (i.e., proceedings similar to a dispositional hearing) followed.

[¶ 18.] The two month span from removal of the children to approval of the permanency plan in A.R.G. contrasts with the five months between removal and disposition in the present case. Obviously the A.R.G. procedures were more consistent with the ASFA goal of efficient movement to termination in cases involving aggravating circumstances. D.B., supra. This does not, however, equate with a finding of reversible error here.

[¶ 19.] In a process more similar to what occurred in this case, the New York Court of Appeals, in In Re Marino S., 100 N.Y.2d 361, 763 N.Y.S.2d 796, 795 N.E.2d 21 (2003), approved a trial court order excusing a family service agency’s failure to exercise reasonable efforts toward reunification of the family. In Marino, one of the three children at issue was raped by her father and the children were placed in foster care. Child abuse proceedings against the parents were instituted and, after a finding of abuse, proceedings to terminate parental rights were commenced. During the pendency of the abuse and termination proceedings, ASFA took effect in New York. Shortly thereafter, a motion was brought for a finding of aggravated circumstances dispensing with the requirement that the family services agency exercise reasonable efforts toward reunification. A hearing was held and the parents were given a full opportunity to present evidence in support of their contention that diligent efforts to reunite them with their children should be required. After the hearing, the trial court found that the children were severely abused, that reasonable efforts at reunification were not required and terminated the mother and father’s parental rights. The parents appealed. With regard to the argument that the trial court could not excuse the family service agency’s failure to exercise reasonable efforts retrospectively, the New York Court held:

Such a construction of the statute would be at odds with the remedial nature of ASFA. Even before the enactment of ASFA, a court could, in the context of a finding of severe abuse, excuse an agency from showing that it had exercised diligent efforts when such efforts would be detrimental to the best interest of the child. Indeed, in this case [trial] court, in addition to finding ... that diligent efforts were not required, also made a finding — pursuant to the pre-ASFA portion of Social Services Law § 384-b(8)(a) — that such efforts would have been detrimental to the best interests of the children. As the Appellate Division noted, “[i]t would be an absurd result to require reasonable efforts until a judicial determination is made when the [statute] itself recognizes that there are situations where reasonable efforts may actually be harmful to the child”.

Marino, 763 N.Y.S.2d 796, 795 N.E.2d at 28 (some citations omitted).

[¶ 20.] The history of South Dakota law on this topic is similar to that in New York. It has been a long-standing rule in this state that services are not mandated in every case and that, in compelling circumstances, parental rights may be terminated without delay where it is in the best interests of the child. See e.g., Matter of S.T.B., 499 N.W.2d 903, 905 (S.D.1993). See also People in Interest of T.G., 1998 SD 54, ¶ 21, 578 N.W.2d 921, 924 (although fundamental nature of parental rights mandates reasonable effort to aid them in maintaining their offspring, best interests of the child must always prevail and the exhaustion of every form of assistance is not required). It would be ironic if ASFA, intended to make the termination process more efficient in cases involving compelling or aggravated circumstances, was actually permitted to be used as a tool for extending the process and compelling the provision of services that would clearly be fruitless and contrary to the best interests of the child.

[¶ 21.] The record of services provided to mother over a period of years in this case is overwhelming. Even after DSS ceased its provision of direct services to mother, community based resources offered her extensive assistance aimed at stabilizing her life and giving her the chance to retain custody of I.H. The extended termination process that was followed in this case also inured to mother’s benefit, affording her the opportunity to obtain further assistance from these community based resources and the opportunity to improve her parenting skills to a degree establishing her capacity to care for the special needs of her child. Instead, by the time of the dispositional hearing, mother was actually refusing the community based services, had fallen into and. out of unhealthy relationships with three other men, was again abusing alcohol and was about to lose her home and move to Sioux Falls. Even at the dispositional hearing, mother failed to offer proof of any additional services that could have been provided that would have raised any likelihood of change in the outcome of this matter. Based upon this record, the trial court did not commit procedural error in its retrospective determination of the existence of aggravating circumstances sufficient to excuse DSS from the obligation to make reasonable efforts to reunify mother and I.H.

[¶ 22.] Affirmed.

[¶ 23.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, ZINTER and MEIERHENRY, Justices, participating.

      . I.H.'s biological father has not been involved in her life since birth. The father voluntarily terminated his parental rights as part of the proceedings in this case and the termination of his rights is not at issue in this appeal.

      . DSS continued to provide visitation services to mother during those periods when she did not have actual physical custody of I.H.

      . Services included visitation, individual counseling for mother and I.H., medication management for the two of them, individual education plans for I.H., protective payee services, housing assistance, TANIF, food stamps, childcare assistance, home-based services through the Bradfield Leaty Center and Center for Independence, parenting instruction, educational assistance to obtain a GED, employment assistance, instruction on independent living skills, instruction on eliminating risks to I.H. posed by third parties, sobriety counseling, weekly team meetings, and psychological testing and treatment.


author: TIEDE, Circuit Judge.

text:
    2004 SD 8
    Bruce H. LIEN, on behalf of himself individually, and Bruce H. Lien, on behalf of other shareholders of Pete Lien & Sons, Inc., a South Dakota corporation acting on a shareholder derivative basis, Plaintiff and Appellee (# 22621, 22622, Notice of Review # 22636), Plaintiff and Appellant (#22640), v. Charles H. LIEN, Peter C. Lien, Sandra J. Lien, and Pete Lien & Sons, Inc., a South Dakota corporation, Defendants and Appellants (# 22621), Defendants and Appellees (# 22640), and Edwin L. Hubbeling, Jerrold L. Brown, and Peter S. Birrenkott, individually and in their capacity as directors of Pete Lien & Sons, Inc., a South Dakota corporation, Defendants and Appellees (# 22640), and Barbara Jeanne Lien, Julie Anne Rathbun, Larece Lien-Shattuck, Melanie Lien Palm, Elizabeth Lucille Lien, Suzanne Lien Gabrielson, Christian B. Lien and Stephanie Anne Lien, Defendants in Intervention and Appellants (# 22622), Defendants in Intervention and Appellees (# 22640).
    Nos. 22621, 22622, 22636, 22640.
    Supreme Court of South Dakota.
    Argued Aug. 27, 2003.
    Decided Jan. 21, 2004.

      Thomas W. Stanton of DeMersseman, Jensen, Christianson, Stanton, & Huffman, Rapid City, South Dakota, Attorneys for plaintiff and appellee Bruce H. Lien (# 22621, 22622, Notice of Review # 22636) and plaintiff and appellant Bruce H. Lien (# 22640).
    Jeffrey G. Hurd of Bangs, McCullen, Butler, Foye & Simmons, Rapid City, South Dakota, Attorneys for defendants and appellants Charles H. Lien, Peter C. Lien, Sandra J. Lien and Pete Lien & Sons, Inc. (#22621) and defendants and appellees Charles H. Lien, Peter C. Lien, Sandra J. Lien and Pete Lien & Sons, Inc. (# 22640).

      Larry M. Von Wald of Beardsley, Jensen & Von Wald, Rapid City, South Dakota, Attorneys for defendants and appellees Edwin L. Hubbeling, Jerrold L. Brown and Peter S. Birrenkott (# 22640).
    Barton R. Banks of Banks, Johnson, Colbath, Sumner & Kappelman, Rapid City, South Dakota, Attorneys for defendants in intervention and appellants Barbara Jeanne Lien, Julie Anne Rathbun, Larece Lien-Shattuck, Melanie Lien Palm, Elizabeth Lucille Lien, Suzanne Lien Ga-brielson, Christian B. Lien and Stephanie Anne Lien (#22622) and defendants in intervention and appellees Barbara Jeanne Lien, Julie Anne Rathbun, Larece Lien-Shattuck, Melanie Lien Palm, Elizabeth Lucille Lien, Suzanne Lien Gabrielson, Christian B. Lien and Stephanie Anne Lien (# 22640).
   TIEDE, Circuit Judge.

INTRODUCTION

[¶ 1.] In this consolidated appeal we address: 1) the trial court’s grant of partial summary judgment concerning shareholder deadlock; 2) the equitable remedy fashioned by the trial court as a result of the shareholder deadlock; 3) the trial court’s dismissal of various causes of action with prejudice; and 4) the trial court’s grant of a protective order and decision quashing a subpoena duces tecum. We reverse the trial court’s decision on issue one, do not address issue two and affirm the trial court’s decision on issues three and four.

FACTS

[¶ 2.] Pete Lien & Sons, Inc. (PLS) was originally founded in 1944 as a partnership with Bruce Lien (Bruce), Charles Lien (Charles) and their father, Pete Lien, Sr., as the co-equal partners. The business operates in the quarrying and lime industries in the Rapid City area as well as several other states. PLS was incorporated in 1952 as a South Dakota corporation with the three partners as equal shareholders. Since its inception, PLS’s corporate governing documents have restricted the right of a shareholder to freely sell or transfer shares except to another shareholder. Over the years Pete Lien, Sr. gifted and sold stock to Bruce and Charles. When he died in 1969, Bruce and Charles inherited the remainder of his stock and each became fifty percent shareholders of the corporation. PLS authorized and issued both voting and non-voting stock.

[¶ 3.] PLS grew and prospered into a company with approximately 450 employees and an annual payroll of approximately $17 million. Both Bruce and Charles were actively involved in PLS. Bruce testified that he was responsible for most of the company’s financing as well as seeking new opportunities for the company’s expansion. Bruce resigned from PLS’s executive committee in 1982, but continued to serve on the board of directors as the chairman. Charles served as president of PLS between 1982 and 1996. He was also chief operating officer from 1985 until 1996. At the time of trial, Bruce was 75 years old and Charles was 73 years old. While both diminished their day-to-day role in PLS in recent years, they continued to serve on the board of directors.

[¶ 4.] Bruce is married and has no children. Charles is married and has nine children (collectively referred to as the Nine Liens). Four of Charles’ children are presently employed by PLS-defendants Pete Lien and Sandra Lien and defendants in intervention Suzanne Lien Ga-brielson and Christian B. Lien (Four Liens). Pete Lien is the president of PLS and on the board of directors. Sandra Lien is currently vice president of corporate development for all PLS divisions. Suzanne Lien Gabrielson is chief financial officer. Also, two of the Four Liens have spouses that are employed in management positions with PLS. Several other children and grandchildren of Charles are either involved with contract work for PLS or work at PLS.

[¶ 5.] Bruce holds 50 percent of the voting and non-voting shares. Charles holds 50 percent of the voting shares, but has either sold or gifted some of his nonvoting shares to his wife and each of his nine children. Over the years, Bruce executed various documents that demonstrated a willingness to either gift his shares in PLS or sell them at a favorable price to the Nine Liens during his lifetime or upon his death. However, all parties testified that it was understood that Bruce was under no obligation to do so..

[¶ 6.] The current board of directors for PLS consists of seven members. Four Lien family members-Bruee, defendants Charles, Pete Lien, and Sandra Lien, and three non-family, long-time employees-defendants Edwin Hubbeling, Jerrold Brown and Peter Birrenkott. Directors- have not been elected since 1998.

[¶ 7.] . Bruce and Charles have often disagreed as. to the future direction of PLS. Bruce has pushed for the company to be sold privately or converted to a publicly owned corporation. Charles has resisted both alternatives although, on occasion, he has agreed to consider a .proposal.- Bruce and Charles are equally compensated -from PLS. All dividends are distributed pro rata in accordance with the. respective share holdings. As the holder of more shares in the corporation than any other single individual, Bruce receives more income and dividends than any other shareholder. However, as it relates to the distribution of dividends there has been considerable disagreement concerning whether to authorize dividends and, if so, in what amount.

[¶ 8.] Charles’ vision is to preserve P-LS for future generations of the Lien family by controlling present returns and thereby allowing for the growth of PLS. Generally, Charles advocates for the distribution of dividends only to meet the payment of a shareholder’s individual income tax liability arising from the status of PLS as a subchapter S corporation. Whereas, Bruce wants to increase present returns and desires to maximize current payments of dividends. In support of this position, Bruce pursued a course of action involving subordinated notes. In this regard, Bruce requested that PLS declare dividends equal to 100 percent of net earnings for a year on the condition that the shareholders loan back those amounts to PLS. The shareholders would then receive notes subordinate to PLS’s -debt to its bank creditors. PLS would then pay interest to the shareholders on this subordinated debt in addition to payment of the principal on the loans. At Bruce’s urging, PLS issued subordinated notes from 1992 to 1997.

[¶ 9.] In December 1998 a board meeting was held and the issue of payment of dividends was addressed. Charles made a motion, supported by his son Pete, to only pay dividends for the purposes of paying shareholders’ tax liability until the corporation reduced its debt level to $8.5 million. This was contrary to Bruce’s desire to issue subordinated notes. Despite Bruce’s strong opposition to this motion, the other six directors agreed that it was not advisable- to issue subordinated notes and determined that dividends would be paid for purposes of shareholder tax liability only. After this meeting, Bruce stated that he would vote against the existing board at the next shareholders’ meeting and elect directors that would vote as he desired. He further threatened that if he won control of the board of directors he would fire certain senior members of PLS’s management. There was testimony that he contacted directors and told them they would be on his list unless they changed their vote on the issue of dividends, apologized to him for voting against his position as to dividends and resigned from the board.

[¶ 10.] In response to Bruce’s threats, the board passed a resolution at the March 29, 1999, board meeting providing for a director qualification. The director qualification provided that no person could serve as a director unless he or she had previously served on the board or had been an officer of the corporation for at least five years. Bruce has not attended shareholders’ meetings or directors’ meetings since the passage of the director qualification resolution. Since Bruce and Charles each hold 50 percent of the voting shares in the corporation, Bruce’s refusal to attend shareholders’ meetings has resulted in the lack of a quorum for purposes of electing new directors.

[¶ 11.] In April 2000 Bruce brought this action against PLS and the other members of the board of directors alleging minority shareholder oppression, breach of fiduciary duty, and tortious interference with prospective business relations or expectancy. He later amended his complaint to seek dissolution of PLS under SDCL 47-7-34(3) on the grounds of shareholder deadlock. In December 2000 the remaining non-voting/non-director shareholders in PLS (defendants in intervention) filed a motion to intervene as defendants. Their motion was granted by the trial court.

[¶ 12.] On November 28, 2001, the trial court granted partial summary judgment to Bruce finding that there was shareholder deadlock in failing to elect directors for the requisite period of time as provided in SDCL 47-7-34(3) and ordered that a hearing be held to determine the most appropriate equitable remedy. A petition for intermediate appeal from the summary judgment was denied by this Court.

[¶ 13.] Following trial, the court entered findings of fact, conclusions of law and an amended judgment determining that the most equitable manner to break the existing deadlock was a blind auction between Bruce and all other shareholders for the sale of the corporation. The trial court included the Lien defendants, except PLS, and the defendants in intervention as comprising one faction competing with Bruce. The trial court set out the procedure to be followed and ordered that the corporation be liquidated in the event that neither faction is able to complete the purchase as directed. By separate findings of fact, conclusions of law and judgment, the trial court dismissed Bruce’s claims of oppression, breach of fiduciary duty, and tor-tious interference with business relations or expectancy with prejudice.

[¶ 14.] This is a consolidation of three appeals filed as to this case. Defendants in intervention have filed an appeal of the trial court’s amended judgment, along with the named defendants. Bruce also filed an appeal of the trial court’s dismissal of his tort claims against the Lien defendants and non-Lien defendants.

STANDARD OF REVIEW

A trial court’s findings of fact will not be set aside unless they are clearly erroneous. SDCL 15-6-52(a). We will declare a finding of fact clearly erroneous only if we are definitely and firmly convinced that a mistake has been made. First Nat’l Bank in Brookings v. Kuechenmeister, 2002 SD 9, ¶ 12, 639 N.W.2d 184, 187 (citing Lewis v. Moorhead, 522 N.W.2d 1, 3 (S.D.1994)). We review the trial court’s conclusions of law de novo. Carstensen Contracting, Inc. v. Mid-Dakota Rural Water System, Inc., 2002 SD 136, ¶ 8, n. 2, 653 N.W.2d 875, 877 n. 2.... Our standard of review for cases in equity is abuse of discretion. Kuechenmeister, 2002 SD 9 at ¶ 12, 639 N.W.2d at 187 (citing Mattson v. Rachetto, 1999 SD 51, ¶ 9, 591 N.W.2d 814, 817). An abuse of discretion occurs only if no judicial mind, in view of the law and the circumstances of the particular case, could reasonably have reached such a conclusion. Mattson, 1999 SD 51, ¶ 9, 591 N.W.2d at 817 (citations omitted).

Hofeldt v. Mehling, 2003 SD 25, ¶ 9, 658 N.W.2d 783, 786-87.

ISSUES AND ARGUMENTS

ISSUE ONE

[¶ 15.] Whether the trial court erred in finding deadlock under SDCL 47-7-34(3).

[¶ 16.] The trial court granted partial summary judgment by its order dated November 28, 2001, finding that there were no genuine issues of material fact and that as a matter of law there existed a deadlock under SDCL 47-7-34(3). The trial court ordered á hearing to determine the most appropriate equitable remedy to address the deadlock after which it determined the remedy to be a blind auction between the parties.

[¶ 17.] Our standard of review for summary judgment is well settled.

Summary judgment is authorized ‘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.’ SDCL 15-6-56(c). We will affirm only when there are no genuine issues of material fact and the legal questions have been correctly decided. Bego v. Gordon, 407 N.W.2d 801, 804 (S.D.1987). All reasonable inferences drawn from the facts must be viewed in favor of the non-moving party. Morgan v. Baldwin, 450 N.W.2d 783, 785 (S.D.1990). The burden is on the moving party to clearly show an absence of any genuine issue of material fact and an entitlement to judgment as a matter of law. Wilson v. Great N. Ry. Co., 83 S.D. 207, 212, 157 N.W.2d 19, 21 (1968).

Mattson, 1999 SD 51, ¶ 8, 591 N.W.2d at 816-17 (quoting Shuck v. Perkins County, 1998 SD 32, ¶ 6, 577 N.W.2d 584, 586).

[¶ 18.] The trial court found that there was no genuine material dispute of fact that Bruce and Chuck each own 50 percent of the voting shares of PLS and that the shareholders have failed for at least two consecutive annual meetings to elect successor directors for those whose terms have expired. Those findings of fact are not clearly erroneous. “Once the facts have been determined, however, the application of a legal standard to those facts is a question of law reviewed de novo.” State v. Hirning, 1999 SD 53, ¶ 8, 592 N.W.2d 600, 603 (citing Spenner v. City of Sioux Falls, 1998 SD 56, ¶ 13, 580 N.W.2d 606, 610).

[¶ 19.] SDCL 47-7-34(3) provides:

The circuit court shall have full power to liquidate the assets and business of a corporation in an action by a shareholder when it is established:
(3) That the shareholders are deadlocked in voting power, and have failed, for a period which included at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired or would have expired upon the election of their successors; ....

[¶ 20.] Reviewing the trial court’s legal conclusions de novo, we do not agree that the facts as found by the trial court constitute deadlock under SDCL 47-7-34(3). There was no showing that the shareholders were deadlocked in voting power simply because Bruce refused to attend shareholders’ meetings and participate in a vote as to election of directors. Bruce cannot artificially create a deadlock by refusing to attend and participate at shareholders’ meetings and then seek an equitable remedy under SDCL 47-7-34(3). See Nelkin v. HJR Realty Corp., 25 N.Y.2d 543, 307 N.Y.S.2d 454, 255 N.E.2d 713, 717 (1969) (citation omitted) (applying language similar to SDCL 47-7-34(3) and finding that “[i]n the absence of a showing of equal division and disagreement among the directors, a petition is insufficient which alleges only that the stockholders are equally divided and cannot elect directors, without showing that an unsuccessful attempt to elect directors has been made.”); In re Application of Parveen, 259 A.D.2d 389, 687 N.Y.S.2d 90, 92-93 (1999) (citation omitted) (holding that the statute “requires a showing of deadlock, but there can be no deadlock where, as here, the contending factions have not even attempted to elect directors.”).

[¶ 21.] The trial court concluded that there was voting deadlock because Bruce and Charles each hold 50 percent of the voting shares and they disagree as to their vision for the corporation. However, although there were several shareholders’ meetings noticed to Bruce, there was never a tie in the vote for director candidates because Bruce refused to attend any of the meetings. If Bruce had attended a shareholders’ meeting and a tie vote as to director candidates had resulted, SDCL 47-5-6(3) provided a statutory remedy for breaking a tie vote. SDCL 47-5-6(3) provides:

To render effective the cumulative voting rights provided by article XVII, section 5, of the Constitution of this state, and except as hereinafter provided, where several directors are to be elected for terms of the same duration:
(3) If there exists a tie vote between candidates, with resulting failure of choice as to any place as director, such choice shall be determined by drawing of lots under such procedure that all rights of the candidates involved in such tie are adequately safeguarded.

If Bruce had attended a meeting, directors would have been elected because there would have been a drawing of lots to break any possible tie in the votes. However, the statutory remedy of SDCL 47-5-6(3) for breaking a tie vote was not invoked because of Bruce’s refusal to attend shareholders’ meetings.

[¶ 22.] The trial court excused Bruce’s refusal to attend shareholders’ meetings by citing to the director qualification. Director qualifications are specifically authorized by SDCL 47-5-1. The trial court found that the directors adopted the director qualification after determining it to be in the company’s best interests and that it was not oppressive or a breach of fiduciary duty. While the trial court points out that there were no prior formal director qualifications, a review of the record shows that in the more than fifty year history of the corporation only two directors have ever served that did not meet the director qualification passed by the board. Those two prior outside directors served some years ago and were specifically required by a bank as a condition of financing. The director qualification merely formalized what had been the policy followed by Chuck and Bruce for many years as to selection of directors. The record shows that PLS has thrived and prospered under this policy.

[¶ 23.] We cannot agree with the trial court’s conclusion that the director qualification justified Bruce’s refusal to attend shareholders’ meetings. A shareholder may not boycott a shareholders’ meeting and claim deadlock just because he does not believe that his position or arguments will carry the day. Even if the director qualification narrows the pool of eligible candidates from which Bruce may select directors, any director chosen has a fiduciary duty which obligates him or her to avoid acting as a rubber stamp for either side. Directors are held to a high degree of diligence and due care in the exercise of their fiduciary duties to shareholders. Case v. Murdock, 488 N.W.2d 885, 889-90 (S.D.1992) (citing Mobridge Community Industries v. Toure, 273 N.W.2d 128, 133 (S.D.1978)). “Directors of a corporation occupy a fiduciary position in respect to the corporation and its shareholders, and are required to exercise the utmost good faith in all transactions touching a director’s duty.” Case, 488 N.W.2d at 890 (citing Schurr v. Weaver, 74 S.D. 378, 384, 53 N.W.2d 290, 293 (1952)). See also Landstrom v. Shaver, 1997 SD 25, ¶ 84, 561 N.W.2d 1, 18. A director must exercise independent judgment and act in ■the corporation’s best interest, not as a puppet for a particular shareholder.

[¶ 24.] While Bruce alleges that the director candidates eligible under the director qualification are nothing more than figureheads'who will follow the wishes of Chuck, Bruce’s own testimony is that he wished to elect directors that would be duty bound to act as he told them to act. We cannot and will not assume that any director elected hereafter, including any elected through the tie breaker statute, will not follow the law and exercise their own best judgment as to what action is in the best interests of PLS and all of its shareholders. Certainly, any director who would fail to do so acts at his or her own peril and at risk of liability to the shareholders for breach of fiduciary duty.

[¶ 25.] Therefore, we reverse the trial court and find as a matter of law that there is no deadlock under SDCL 47-7-34(3) on these facts.

ISSUE TWO

[¶ 26.] Whether the trial court abused its discretion in fashioning an equitable remedy.

[¶ 27.] Because we have held that there is no deadlock under SDCL 47-7-34(3) entitling Bruce to equitable relief, we do not reach this issue.

ISSUE THREE

[¶ 28.] Whether the trial court erred in dismissing Bruce’s causes of action for oppression, breach of fiduciary duty, tortious interference with business relations or expectancy and a claim for punitive damages with prejudice.

[¶ 29.] The trial court entered a judgment dated October 1, 2002, dismissing Bruce’s claims of oppression, breach of fiduciary duty, tortious interference with business relations or expectancy and a claim for punitive damages with prejudice. We affirm the trial court’s dismissal of these claims.

[¶ 30.] “Whether conduct is oppressive is a legal conclusion.” Landstrom, 1997 SD 25, ¶ 37, 561 N.W.2d at 7 (citing Robblee v. Robblee, 68 Wash.App. 69, 841 P.2d 1289, 1293 (1992); Davis v. Sheerin, 754 S.W.2d 375, 380-81 (Tex.App.1988)). Also, “[t]he existence of a fiduciary duty and the scope of that duty are questions of law for the trial court.” Landstrom, 1997 SD 25, ¶ 84, 561 N.W.2d at 18 (citing Garrett v. BankWest, Inc., 459 N.W.2d 833, 839 (S.D.1990)). The trial court found that the defendants’ actions were not oppressive or a breach of fiduciary duty. The trial court also found that the directors’ actions were done in the best interests of the corporation. Bruce receives more income and dividends from PLS than any other single individual. While the record reveals he is disappointed and upset that the other directors have determined it is not in the best interests of the corporation to withdraw as much income from PLS as possible to satisfy Bruce’s demands, this does not constitute a cause of action for oppression. Based on the trial court’s findings of fact and the evidence presented, Bruce has failed to establish oppression as a matter of law.

[¶ 31.] Bruce further claimed that the director qualification amounted to tortious interference with his business relations or expectancy. He claimed that the director qualification interfered with his ability to sell his shares as well as reduced the value of his shares in the corporation. The essential elements of tortious interference with business relations or expectancy include:

(1) the existence of a valid business relationship or expectancy;
(2) knowledge by the interferer of the relationship or expectancy;
(3) an intentional and unjustified act of interference on the part of the interferer;
(4) proof that the interference caused the harm sustained; and
(5) damage to the party whose relationship or expectancy was disrupted.

Mueller v. Cedar Shore Resort, Inc., 2002 SD 38, ¶ 35, 643 N.W.2d 56, 68 (citing Tibke v. McDougall, 479 N.W.2d 898, 908 (S.D.1992) (citations omitted)). “In Tibke, we held that to establish a ‘valid business relationship or expectancy,’ there had to be a showing of a ‘contract or business relationship’ between the plaintiff and an identifiable third party.” Landstrom, 1997 SD 25, ¶ 75, 561 N.W.2d at 16 (citing Tibke, 479 N.W.2d at 908-09). In order for Bruce to prevail on this claim, “there must be a ‘triangle’-a plaintiff, an identifiable third party who wished to deal with the plaintiff, and the defendant who interfered with the plaintiff. and the third party.” Landstrom, 1997 SD 25, ¶ 75, 561 N.W.2d at 16. Based on Bruce’s own testimony, there is no identifiable third party. Bruce testified as follows:

Q. Well, let me ask you this. Is it your testimony that you’ve never tried to sell your Pete Lien & Sons stock?
A. That’s correct, I have never been real serious about it. I have delved into it to see what my options are to find out what it’s worth but I’ve never really been serious about going through with it.
Q. Is that true even today?
A. That true? Yes.

Bruce cannot now claim a better version of the facts than he testified to himself. Winterton v. Elverson, 389 N.W.2d 633, 637 (S.D.1986) (citation omitted). Therefore, Bruce cannot establish the first element of his claim of tortious interference and the trial court did not err in dismissing the claim.

ISSUE FOUR

[¶ 32.] Whether the trial court erred in granting a protective order and quashing the subpoena duces tecum served on Attorney Larry M. Von Wald.

[¶ 33.] Bruce asserts error in the trial court’s grant of a protective order and decision to quash the subpoena duces te-cum served on Attorney Larry M. Von Wald. Von Wald drafted the director qualification and was hired by the corporation to represent PLS after Bruce stated his intention to sue PLS. In this appeal, he represents the non-Lien defendants. “ ‘We review the trial court’s rulings on discovery matters under an abuse of discretion standard.’ ” Eccleston v. State Farm Mut. Auto. Ins. Co., 1998 SD 116, ¶ 33, 587 N.W.2d 580, 584-85 (quoting Maynard v. Heeren, 1997 SD 60, ¶ 5, 563 N.W.2d 830, 833 (citations omitted)). “ ‘[T]he extent of discovery permitted by either side rests in the discretion of the court.’ ” Eccleston, 1998 SD 116, ¶ 33, 587 N.W.2d at 585 (quoting State v. Erickson, 525 N.W.2d 703, 711 (S.D.1994) (alterations in original) (citations omitted)). Bruce has not shown that the trial court abused its discretion and we affirm.

[¶ 34.] GILBERTSON, Chief Justice, and MEIERHENRY, Justice, and TIEDE, Circuit Judge, MILLER, Retired Justice, and LOVRIEN, Circuit Judge, concur.

[¶ 35.] TIEDE, Circuit Judge, for SABERS, Justice, disqualified.

[¶ 36.] MILLER, Retired Justice, for KONENKAMP, Justice, disqualified.

[¶ 37.] LOVRIEN, Circuit Judge, for ZINTER, Justice, disqualified.

      . For purposes of identifying the various appellants and appellees in this consolidated appeal, Bruce Lien will be referred to as Bruce or plaintiff. The Lien directors and PLS will collectively be referred to as Lien defendants. The three director defendants that are not members of the Lien family will be referred to as non-Lien defendants. Nonvoting, non-director shareholders in PLS will be referred to as defendants in intervention. Other parties will be referred to as previously set forth.

      . While the findings of fact and conclusions of law indicate that the dismissal is conditional on the implementation of the trial court's parallel judgment as to the issue of shareholder deadlock, the judgment does not state that the dismissal is conditional and does not specifically incorporate the findings of fact and conclusions of law.

      . However, we do question the appropriateness of the remedy based on our review of the record and the findings made by the trial court. While the trial court purports to have considered the factors listed in Henry George & Sons, Inc. v. Cooper-George, Inc., 95 Wash.2d 944, 632 P.2d 512, 517 (1981) among other factors, the facts as found by the trial court and applied to those factors do not appear to support the remedy ordered. While a trial court has broad discretion in fashioning an equitable remedy, it should be noted that "[t]o say that a decision is discretionary is not to mean that it is unguided.” Adrian v. McKinnie, 2002 SD 10, ¶ 10, 639 N.W.2d 529, 533. "This is especially true in equity cases, where discretion is more carefully scrutinized.” Id.

      . Bruce claims that the trial court erred in dismissing these claims because they were not before the court at the time of trial and that he did not submit all of his evidence. Alternatively, he claims that he is entitled to judgment on these claims as a matter of law based on the evidence presented at trial. These claims were in Bruce's pleadings. The trial court heard six days of testimony from the parties. The record in this case is extensive. Both parties were given wide latitude by the trial court as to the presentation of evidence relevant to these claims. While Bruce asserts on appeal that there is a "wealth of additional evidence he would have offered,” he fails to specify what that additional evidence might have been.


author: ZINTER, Justice.

text:
    2004 SD 21
    STATE of South Dakota, Plaintiff and Appellee, v. Joshua SCHROEDER, Defendant and Appellant.
    No. 22895.
    Supreme Court of South Dakota.
    Considered on Briefs Jan. 12, 2004.
    Decided Feb. 18, 2004.

      Lawrence E. Long, Attorney General, Patricia Archer, Assistant Attorney General, Pierre, South Dakota, Attorneys for plaintiff and appellee.
    Donald E. Covey, Winner, South Dakota, Attorney for defendant and appellant.
   ZINTER, Justice.

[¶ 1.] Joshua Schroeder was found guilty of possession of a controlled substance. His conviction was based solely upon the presence of methamphetamine in his urine. He contends that his conviction should be reversed because there was no other physical evidence that he possessed methamphetamine. We affirm.

Facts and Procedural History

[¶ 2.] A highway patrol officer stopped a vehicle in which Schroeder was a passenger. After receiving consent, the officer searched the vehicle and found a digital scale under the front passenger seat. Both the driver and Schroeder denied owning the scale. White residue on the scale field-tested positive for amphetamines. Later in jail, the driver and Schroeder submitted to urinalysis. Schroeder’s test revealed 28.0 micrograms/ml of methamphetamine in his urine. Schroeder was ultimately charged with possession of a controlled substance, ingestion of a controlled substance, and possession of drug paraphernalia.

[¶ 3.] Schroeder did not dispute the results of the urinalysis. In fact, he stipulated to the facts. Schroeder also stipulated to the following procedural resolution of the possession of a controlled substance charge:

(1) Each Defendant is charged with one count of Possession of Controlled Substance (Methamphetamine), in violation of SDCL 22-42-5. The State agrees that this charge is based solely upon the facts as set forth in the ... “Joint Stipulation of Facts” and is not based upon any other substance or instrumentality. Stated otherwise, this charge is based upon the presence of methamphetamine in each Defendant’s urine.
(2) The ... “Joint Stipulation of Facts” shall be submitted to the Court in a Trial to the Court, and no other facts shall be submitted for the Court’s consideration. The parties shall be free to argue to the Court, at hearing, the effect that the stipulated facts have in determining the guilt or innocence of each Defendant. The Defendants shall maintain their individual pleas of Not Guilty in such hearing, and the Court shall render its verdict based upon the stipulated evidence after the parties shall have argued the case.

[¶ 4.] Based on these stipulations, the court found Schroeder guilty of possession of a controlled substance. Schroeder raises the following issue on appeal:

Whether a positive urinalysis, revealing the presence of a controlled substance in Defendant’s urine, is sufficient to support a possession conviction.

[¶ 5.] The answer to this question requires statutory construction. “Construction of a statute is a question of law and is, therefore, fully reviewable without deference to the interpretation made by the trial court.” Delzer v. Penn, 534 N.W.2d 58, 61 (S.D.1995) (citing In re Estate of Steed, 521 N.W.2d 675, 680 (S.D.1994); State v. French, 509 N.W.2d 693, 695 (S.D.1993); Sander v. Geib, Elston, Frost Pro. Ass’n, 506 N.W.2d 107, 121 (S.D.1993)).

[¶ 6.] Schroeder’s conviction was based solely upon the presence of methamphetamine in his urine. On appeal, Schroeder asserts that instead of prosecuting him for ingestion, a misdemeanor, the State prosecuted him for possession “to seek conviction of [a] felony offense.” Schroeder also argues that “[t]he ultimate fact of one offense [ingestion] cannot be used to prove the categorically different ultimate facts of another offense [possession].” Schroeder finally argues that he could not “possess,” “control,” or “exercise dominion over” the methamphetamine that was in his body. He therefore concludes that his positive urinalysis, with no other corroborating physical evidence, was insufficient to prove possession. We disagree.

[¶ 7.] Although we have previously mentioned this issue, we have not decided it. See State v. Hanson, 1999 SD 9, 588 N.W.2d 885; State v. Blakey, 2001 SD 129, 635 N.W.2d 748. Furthermore, since those decisions, we have not had occasion to consider how a 2001 amendment of the definition of a “controlled substance” affects the question. Because the 2001 amendment appears to have been prompted by one of those cases, we begin by discussing them.

[¶ 8.] This Court first addressed the use/possession issue in Hanson, supra. Hanson was a passenger in a vehicle in which officers found a marijuana seed and leaf, along with a pipe containing burned marijuana residue. Like Schroeder, Hanson argued that her positive urinalysis was insufficient to establish possession. She contended that a positive urine test could not, by itself, constitute possession of marijuana. Id. ¶ 42. However, we declined to “decide the issue of what if any further additional proof beyond the test result [was] required to establish possession ... as [Hanson] was not charged with possession of marijuana in her body but possession of the marijuana found in the car.” Id. ¶ 48. Nevertheless, we noted the closely related “ingestion precludes possession” argument by mentioning the historic dichotomy between the use and possession of a controlled substance:

Defendant’s argument is based upon the historic dichotomy between “possession” and “use” in the criminal law. Defendant argues that when there is a specific statute concerning ingestion, i.e. “use,” a defendant cannot be convicted of a separate offense of “possession.” This issue has not been addressed in South Dakota. In this instance there is no need for this Court to do so, because while there is circumstantial evidence of ingestion, there is also the evidence of the actual presence of marijuana in the form of a leaf, residue and a pipe.

Id. n. 5 (internal citations omitted).

[¶ 9.] There is still no need to decide this related issue of -whether an ingestion statute precludes a conviction for possession when the only evidence is a positive urinalysis. We need not reach that question in this case because Schroeder concedes that “[t]he sole issue before this Court is the sufficiency of the evidence^]” In fact, Schroeder acknowledges that although “it may appear that [he] argues the dichotomy of ‘use’ versus ‘possession,’ ” his argument is “really much more simple.” He only questions whether the presence of methamphetamine in his urine, with no corroborating physical evidence, is sufficient to prove possession.

[¶ 10.] Schroeder’s sufficiency of the evidence question has also been mentioned by this Court. In Blakey, the defendant was charged with possession of a controlled substance after a urinalysis indicated the presence of methamphetamine. He also argued the sufficiency of the evidence question. Blakey, 2001 SD 129, 635 N.W.2d 748. The Blakey trial court concluded that the mere presence of a controlled substance in urine did not establish a prima facie case of unauthorized possession. Id. ¶ 2. Although we reversed on a different issue, we did acknowledge the sufficiency of the evidence question in a footnote:

We reserve for a time when it is properly presented the issue of whether this state will follow the majority rule in State v. Griffin, 220 Wis.2d 371, 584 N.W.2d 127, 131 (Wis.Ct.App.1998) that a urinalysis result alone is not sufficient evidence to sustain a conviction for possession of a controlled substance.

Id. ¶ 8 n*.

[¶ 11.] The sufficiency of the evidence issue is now properly before us. However, since Hanson and Blakey, the definition of a “controlled substance” was amended. Under the prior definition in SDCL 22-42-1(1)(1998), a controlled drug was merely “a drug or substance, or an immediate precursor of a drug or substance, listed in Schedules I though IV[.]” In apparent response to Hanson, the Legislature amended that definition in 2001 to provide that: “[t]he term includes an altered state of a drug or substance listed in Schedules I through IV absorbed into the human body [.] ” SDCL 22-42-1(1)0001) (emphasis added).

[¶ 12.] We presume that the Legislature changed the wording of the statute for a reason. See Peterson v. Burns, 2001 SD 126, ¶ 30, 635 N.W.2d 556, 567-68. “When an amendment is passed, it is [often] presumed the legislature intended to change existing law.” South Dakota Subsequent Injury Fund v. Federated Mut. Ins., Inc., 2000 SD 11, ¶ 18, 605 N.W.2d 166, 170 (citations omitted). However, amendments can also clarify existing law. Olson v. Pulaski Common Sch. Dist. of Faulk County, 77 S.D. 416, 419, 92 N.W.2d 678, 680 (1958); In re Farmers State Bank of Viborg, 466 N.W.2d 158, 160 (S.D.1991). To determine the legislative purpose of an amendment, “we consider the time and circumstances surrounding the enactment of the amendment.” Id. at 160-61.

[¶ 13.] In this case, we agree with the State that “[i]t is reasonable to infer that' the Legislature was responding to the questions raised in Hanson and elsewhere (including the court decisions in other jurisdictions) regarding the issue of possession of a drug in the body.” This inference is clearly justified by the title of the bill adopting the change, which was entitled: “An Act to include in certain drug offenses the altered state of a controlled drug or substance or marijuana once absorbed into the human body.” 2001 SD Laws ch 116. We also observe that this amendment was adopted shortly after our decision in Hanson.

[¶ 14.] Giving plain meaning to this amended definition of “controlled drug or substance,” Schroeder’s argument regarding á legal distinction between “use” and “possession” is unpersuasive. Under the new statutory framework, SDCL 22-42-5 prohibits any person from “knowingly possessing] a controlled drug or substance [.] ” (Emphasis added.) Reading this possession statute together with the amended definition of a controlled drug, possession may now occur if a person knowingly possesses “an altered state of a drug or substance absorbed into the human body.” SDCL 22-42-1(1), 22-42-5. We therefore agree with the trial court that “[t]his recent amendment to SDCL 22-42-1(1) clearly expresses the intent of the South Dakota Legislature to reject the historic dichotomy between ‘possession’ and ‘use’ in the criminal law.” It also “permit[s] a defendant to be convicted of ‘unauthorized possession’ of a controlled drug or substance when the only ... evidence is from the ingested or absorbed unauthorized [substance in] the defendant’s body.”

[¶ 15.] We affirm.

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

      . They stipulated that:
      (1) At the time charged in the Information, the Defendants were traveling together in an automobile in Tripp County.
      (2) The parties stipulate and agree that the Highway Patrol Officers had probable cause to stop their car.
      (3) The parties stipulate and agree that during the stop of the car, the Highway Patrol Officers developed probable cause to collect a urine specimen from each Defendant, which specimen was given voluntarily by each Defendant a short time after the initial stop.
      (4) The urine samples were sent to the State Health Lab in Pierre, by proper means of transmittal. The parties stipulate and agree that chain of custody is not contested.
      (5) The urine samples were tested at the State Health Lab in Pierre, and as to each Defendant it was determined that methamphetamine was present, to wit: As to [the driver], there were 22.3 micrograms/ml of methamphetamine present in his urine. As to Defendant Schroeder, there were 28.0 micrograms/ml of methamphetamine present in his urine. The parties stipulate and agree that the lab results as stated herein may be accepted as conclusive.
      (6) The parties stipulate and agree there is no evidence that either Defendant ingested methamphetamine within Tripp County or, for that matter, within the State of South Dakota.

      . We cannot determine the accuracy of this assertion from the record. The record does not reflect any disposition of the charges of possession of drug paraphernalia and ingestion. The State's brief states that: “The misdemeanor charges of ingestion and possession of drug paraphernalia were apparently not presented to Judge Wilbur. Notwithstanding Count 2 of the Information [charging ingestion], the court ruled that Defendant is 'not charged with violation of SDCL 22-42-15 [ingestion].’ " Schroeder's brief does not address the issue at all. We find no dismissal of these two remaining charges in the record.

      . Although Schroeder points to other jurisdictions’ analysis of this issue, we address the issue under our Legislature's 2001 statutory framework.

      . Blakey was decided in 2001. The events underlying that decision took place in the fall of 2000. Therefore, this Court considered the 1998 version of SDCL 22-42-1(1).

      . Schedules I through IV are lists of controlled drugs and substances found in SDCL ch 34-20B.