author: KONENKAMP, Justice SABERS, Justice GILBERTSON, Chief Justice

text:
    2002 SD 37
    Sherry K. SMITH, as personal representative of Mary K. ROSS and as guardian of Kristian K. Ross, Plaintiff and Appellant, v. LAGOW CONSTRUCTION & DEVELOPING COMPANY and Lloyd Property Management Company, Defendants and Appellees.
    No. 21530.
    Supreme Court of South Dakota.
    Argued Jan. 10, 2001.
    Reassigned Aug. 10, 2001.
    Reassigned Nov. 9, 2001.
    Decided March 13, 2002.

      Robert L. Morris of Day, Morris & Schreiber, Belle Fourche, South Dakota, John W. Burke of Barker, Wilson, Reynolds & Burke, Belle Fourche, South Dakota, Attorneys for plaintiff and appellant.
    Richard J. Helsper, Victoria M. Duehr of Glover, Helsper & Rasmussen, Brook-ings, South Dakota, Attorneys for defendant and appellee.
   KONENKAMP, Justice

(on reassignment).

[¶ 1.] A tenant was murdered when hired killers used a key to enter her apartment. Shortly before her death, she told two apartment employees that one of her keys was missing. According to her mother, the tenant also asked to have her lock changed. Landlord policy prohibited tenants from changing their own locks and required a fee to change them. When the tenant’s estate sued, the circuit court granted summary judgment, ruling that under these facts landlords owe no duty of protection to their tenants. We reverse because there are genuine issues of material fact, and although a landlord owes no general duty to tenants to protect them from crime, such a duty arises when a landlord’s affirmative acts or omissions create a foreseeably high risk to the tenant.

Background

[¶ 2.] Defendants Lagow Construction and Developing Company and Lloyd Property Management Company own and manage, respectively, the Westport Apartment complex in Sioux Falls, South Dakota. Westport is a low-income development. In 1994, Mary K. Ross rented an apartment at Westport for herself and her daughter. She received a copy of the apartment policies, detailing procedures for maintenance and repairs. One policy provision stated, “lock changes or additional locks are not permitted, it being understood that owner or manager may be required to enter in an emergency when no resident is present, such as fire or water coming through the ceiling.” Tenants were required to pay a $45 fee to replace a lost key. This fee covered the cost of changing the lock, if a lock change was necessary. If a tenant could not afford the fee at the time the key was lost, the cost would be deducted from the tenant’s security deposit. A tenant could inform the manager by phone, in writing, or in person, that a key was lost and a lock change was needed.

[¶ 3.] When Ross’s friend, Amy Power, experienced marital difficulties, Ross allowed Amy to live in the apartment. She gave Amy a key. From the limited facts in the record, it appears that in July 1995, Amy lost her key ring, which included the key to Ross’s apartment. Ross informed the maintenance person, Watson Lewing, who in turn told his manager, Jodi Bentz, that one of the keys to her apartment was missing. The parties dispute whether Ross requested a lock change, however.

[¶ 4.] Lewing testified by deposition that he did not remember whether Ross requested a lock change. Bentz testified in her deposition that when Lewing informed her of Ross’s missing key, she asked Lewing whether Ross wanted the lock changed, and he told her that Ross declined because Ross believed the keys would “turn up.” The next day Bentz personally spoke with Ross and asked her whether she wanted the lock changed. Ross declined. Employees, Lewing and Monica Price, neither of whom now work for defendants, and Bentz, who still does, all testified consistently about the key loss and Ross’s decision not to request a lock change.

[¶ 5.] On the other hand, the Ross estate offered the affidavit of Sherry Smith, Ross’s mother. Her affidavit states that (1) she maintained frequent phone contact with Ross; (2) she spoke with Ross three days before the murder and Ross told her that she had requested a lock change; (3) Ross told her she needed money to pay for a lock change; and (4) she detected fear in Ross’s voice, and Ross refused to discuss the Robert and Amy Power situation, telling her mother, “I do not want to talk about him; he’s psycho.”

[¶ 6.] In May 1995, before the key was lost, discord intensified between Amy and her husband, Robert Power. He decided that Ross was partially responsible for the difficulties in his marriage. That led him to contact Michael Smith. Together, they developed a plan for murder. See State v. Smith, 1998 SD 6, 573 N.W.2d 515. They hired two other individuals to commit the crime. Power gave Smith the apartment key, and he in turn gave it to the hired killers. On July 9, 1995, the two men entered Ross’s apartment with the key and stabbed her to death. Robert Power was apprehended, and he pleaded guilty to first-degree murder. He was sentenced to life without parole in the state penitentiary.

[¶ 7.] It is unclear from the record how Robert Power obtained a key to the apartment. He may have made a copy for himself in February 1995, when Ross gave it to him to make a copy for her to give to her babysitter. He may have had access to the key in June 1995, when he and his wife left Ross’s apartment and Amy thought she had lost her keys in the parking lot.

[¶ 8.] The Ross estate brought suit alleging negligent maintenance of the apartment complex. Defendants moved for summary judgment, asserting that they owed no common law duty to Ross because no special relationship existed. .The circuit court granted summary judgment for defendants. The Ross estate appeals on the following issues: (1) “Whether defendant landlords’ exclusive control over the lock on Ross’s apartment door created a special relationship between Ross and defendant landlords.” (2) “Whether defendant landlords owed Ross a duty of due care because it was reasonably foreseeable that she would be harmed.”

Analysis and Decision

[¶ 9.] This case presents two questions, one factual, the other legal. First, did Ross request a lock change? And if so, second, what legal duty did defendants have in response to that request? On question one, bearing in mind that a material fact is one that might affect the outcome of the case, we conclude that a genuine material fact exists here. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202, 211-12 (1986). Defendants’ employees testified that Ross told them of the missing key, but that she declined to have her lock changed. Ross’s mother, on the other hand, avers under oath that Ross said she did request a lock change. On the second question, we must define what legal duty exists under the particular facts of this case.

[¶ 10.] In some jurisdictions, the law has gradually moved toward expanding landlord liability in instances where violent criminal acts by third parties are foreseeable and preventable. W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 63 at 442-43 (5th ed. 1984). Little in South Dakota law, however, suggests that landlords have a general duty to protect tenants from all criminal activity. Crime is everywhere, and proprietors ought not to bear the wholesale responsibility of protection simply because their tenants, like other members of society, become crime victims. Not even government law enforcement carries the burden of civil responsibility to victims if it fails to thwart criminal behavior. Gleason v. Peters, 1997 SD 102, 568 N.W.2d 482.

[¶ 11.] Most courts refuse to impose a broad duty on landlords to protect tenants from criminal acts committed by third parties on the premises. See Rowe v. Lombard, 125 Ill.2d 203, 126 Ill.Dec. 519, 531 N.E.2d 1358, 1364 (1988) (citing cases). As the West Virginia Supreme Court acknowledged, the notion of expanding the duty of landlords to secure people against crime tends to reach the absurd: “One can foresee landowners, proprietors of restaurants, stores, theaters, banks, schools, and, indeed, public buildings being civilly responsible for all crimes on their premises.” Miller v. Whitworth, 193 W.Va. 262, 455 S.E.2d 821, 826-27 (W.Va.1995) (quoting Clarke v. J.R.D. Management Corp., 118 Misc.2d 547, 461 N.Y.S.2d 168, 170 (N.Y.City Civ.Ct.1983)).

[¶ 12.] On the whole, we recognize no general duty to protect one’s fellow human beings from crime, and that rule equally applies to the ordinary relationship of landlord and tenant. If a duty exists for such protection, it must originate from some special relationship imposing an obligation to protect another from crime based on a position of dependence intrinsic to the relationship. A special relationship can occur between common carriers and passengers, innkeepers and guests, business owners and invitees, and employers and employees. See Restatement (Second) of Torts § 314A (1965).

[¶ 13.] In granting summary judgment for defendants, the circuit court applied our special relationship test from Walther v. KPKA Meadowlands Ltd. Partnership, 1998 SD 78, ¶ 41, 581 N.W.2d 527, 535. There, we confirmed that a landlord-tenant arrangement creates no special relationship, and, although landlords have a duty to maintain the safe physical condition of the common areas within their exclusive control, the tenant’s window in that case was not under the exclusive control of the landlord. Id. at ¶ 42, 49. Here, because defendants did not have exclusive control over Ross’s apartment lock, the circuit court held that defendants had no special relationship with Ross. We agree with this reasoning as far as it went. Ross herself gave Robert Powers access to her apartment key five months before he contracted to have her murdered. As defendants did not have exclusive control over her apartment lock, no special relationship existed here.

[¶ 14.] On the other hand, the special relationship test is not the only rule applicable in this case. There are compelling reasons to depart from the restrictive common law conception of landlord liability for leasehold injuries. For many, especially the poor, a rental property may be the only home they will ever occupy. A home is a citadel, and its integrity depends, at least in part, on its locks. A locked door is the first defense to a violent world. Landlords who insist on control over, decisions on changing tenant locks may bear some limited responsibility to their tenants when locks need to be changed or repaired in the face of foreseeable imminent danger. We conclude that although nq special relationship was created in this circumstance, the policy controlling the changing of tenant locks placed defendants in a position of heightened responsibility to their tenants.

[¶ 15.] Mary K. Ross died when her killers used a key to her apartment. If her lock had been changed beforehand, perhaps she would not have died. Only defendants’ employees could have changed her lock. See Cain v. Vontz, 703 F.2d 1279, 1283 (11thCir.1983) (imposing liability for broken or nonexistent apartment door locks). There is no question that Ross told defendants’ representatives that one of her keys was missing. But, as we have said, there remains a question of fact: did she ask to have her lock changed? We are obliged to view the facts in a light most favorable to the nonmoving party. Pickering v. Pickering, 434 N.W.2d 758, 760-61 (S.D.1989). If she asked, as we must assume she did for the purposes of summary judgment, the controlling question then becomes whether defendants may be liable for negligence in failing to act.

[¶ 16.] A duty of protection occurs when a person’s affirmative act or omission exposes another to greater harm. Section 302B of Restatement (Second) of Torts (1965) creates an exception to the general rule that one has no duty to protect another from crime. It provides that such a duty may arise if a person’s affirmative acts or omissions create a foreseeable high risk of harm from criminal assault. Thus, landlords who by their own affirmative acts or omissions create a high risk of harm from crime owe a duty to exercise reasonable care to protect tenants from that increased risk. However, it is not enough for liability purposes that landlords prohibit tenants from changing door locks and demand a fee for changing them. Landlord responsibility also depends on the foreseeability of a criminal act.

[¶ 17.] Foreseeability of high risk of harm is the basis for delineating the boundaries for a duty of protection. B.A. Glesner, Landlords As Cops: Tort, Nuisance & Forfeiture Standards Imposing Liability on Landlords for Crime on the Premises, 42 CaseWResLRev 679 passim (1992). Whether a duty exists is a question of law to be answered by the court. Tipton v. Town of Tabor, 1997 SD 96, ¶ 11, 667 N.W.2d 351, 357. “ ‘A duty, in negligence cases, may be defined as an obligation, to which the law will give recognition and effect, to conform to a particular standard of conduct toward another.’ ” Id. at ¶ 12 (quoting Keeton et al., supra, § 53 at 356).

[¶ 18.] Although foreseeability is a question of fact in some contexts, foreseeability in defining the boundaries of a duty is always a question of law. Poelstra v. Basin Electric Power Cooperative, 545 N.W.2d 823, 825-26 (S.D.1996); Mark, Inc. v. Maguire Ins. Agency, Inc., 518 N.W.2d 227, 229-30 (S.D.1994) (citations omitted). Foreseeability in the “duty” sense is different from foreseeability in fact issues bearing on negligence (breach of duty) and causation.

[¶ 19.] In this summary judgment appeal, we cannot decide the question of duty because the record is incomplete, and we must view what limited facts we have in a light most favorable to the nonmoving party. Most courts fix the limits of foreseeability by examining all the circumstances, including the landlord’s knowledge of prior criminal incidents on the premises. The prior incidents must be sufficiently numerous or of such significance and similarity that the landlord was on notice that there was probable danger to the tenants. Faheen v. City Parking Corp., 734 S.W.2d 270, 273-74 (Mo.Ct.App.1987). But see Gulf Reston, Inc. v. Rogers,, 215 Va. 155, 207 S.E.2d 841 (1974) (thrown object from upper apartment inducing heart attack not foreseeable). If Ross did request a lock change, then the circuit court must decide whether there is sufficient evidence to raise the following factual question: could defendants have reasonably foreseen that their failure to change Ross’s lock probably put her at an unreasonable risk of harm from crime? See Glesner at 703. To borrow Cardozo’s words written in another context, “[t]here must be knowledge of a danger, not merely possible, but probable.” MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050, 1053 (1916). Defendants must have had notice of the probable increased risk of crime and the condition that increased that risk.

[¶ 20.] In a majority of cases where a landlord was held liable for a criminal attack on a tenant, a known physical defect on the premises foreseeably increased the risk of that attack. See, e.g., Aaron v. Havens, 758 S.W.2d 446, 448 (Mo.1988) (inadequately secured fire escape); Braitman v. Overlook Terrace Corp., 68 N.J. 368, 346 A.2d 76, 77 (N.J.1975) (defective deadbolt on apartment door); Duncavage v. Allen, 147 Ill.App.3d 88, 100 Ill.Dec. 455, 497 N.E.2d 433, 437 (1986) (inoperable lighting; ladder left unattended near unlocked window). If landlords insist on the exclusive right to change locks, then they should have some duty to change those locks when they are no longer effective against foreseeable criminal activity.

[¶21.] In sum, we reverse the summary judgment in this case and remand for further proceedings. A fact finder must decide whether Ross requested that her lock be changed. If she did not, then that would end the matter, because she was not obliged to change her lock, and defendants had no affirmative duty to protect her. If she did request a lock change, then the court must decide whether, based on aH the circumstances, there was sufficient evidence to make it reasonably foreseeable that defendants’ faüure to act on her request put her at probable high risk of harm from an imminent criminal act. If it was not reasonably foreseeable, then no duty existed. If the court rules that it was reasonably foreseeable, then the fact finder must decide whether defendants were negligent in failing to act on her request and whether such negligence was the proximate cause of her death.

[¶ 22.] Reversed and remanded with instructions.

[¶ 23.] AMUNDSON, Justice, concurs.

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

[¶ 25.] GILBERTSON, Chief Justice and MILLER, Retired Chief Justice, dissent.

SABERS, Justice

(concurring in result).

[¶ 26.] I concur in the result, but not in the theory of the majority opinion. The theory espoused by the majority opinion violates Plaintiffs right to a jury trial. It allows the court, rather than the jury, to determine whether a failure to change the lock, if the jury determines a change was requested, resulted in foreseeability that someone might enter and harm the decedent. The question of foreseeabüity is a question of fact for the jury. I would rephrase the issue as: whether genuine issues of material fact exist concerning landlord’s duty to Ross, if any, to change the lock. Since genuine issues of material fact exist, we should reverse and remand for a jury trial.

[¶ 27.] The trial court erred in applying the special relationship two-part test articulated in Walther, 1998 SD 78 at ¶ 41, 581 N.W.2d at 535. This test is only applicable when the plaintiff asserts the defendant had a duty to control the'conduct of another with dangerous propensities. E.P. v. Riley, 1999 SD 163, ¶ 31, 604 N.W.2d 7, 15-16. Walther involved a man crawling through a properly working window left open by the victim. 1998 SD 78 at ¶ 6, 581 N.W.2d at 530. The subsequent claim that the landlord had a duty to protect is clearly distinguishable from the case at hand. Accordingly, this case should be analyzed using ordinary negligence principles rather than the special relationship framework.

[¶ 28.] Under ordinary negligence principles, Smith is required to prove that: (1) there was a duty; (2) there was a failure to perform that duty; and (3) an injury resulted from such failure. Leslie v. City of Bonesteel, 303 N.W.2d 117, 119 (S.D.1981). “[W]hether the defendant owed a duty to the plaintiff and whether the defendant’s conduct proximately caused the plaintiffs injury are, in effect, so interrelated that they are generally treated as one [and] the same.” Id. (citing Goff v. Wang, 296 N.W.2d 729, 730 (S.D.1980)). In order to sustain the cause of action, Smith was required to demonstrate that “the harm suffered [was] a foreseeable consequence of the act complained of’ and “[t]he negligent act [was] a substantial factor in bringing about the harm.” Id. (citing Williams v. United States, 450 F.Supp. 1040, 1046 (D.S.D.1978)).

[¶ 29.] Nothing in South Dakota law suggests that landlords have an affirmative duty to protect tenants from criminal activity. In some jurisdictions, however, the law has gradually moved toward enlarging landlord liability in instances where violent criminal acts by third parties are foreseeable and preventable. W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 63 at 442-43 (5th ed. 1984).

[¶ 30.] Many courts pondering whether landlords are under a duty to protect then-tenants against criminal activities by third persons have held that no duty exists simply by reason of the relationship, but that a duty might arise under special circumstances. Landlord’s Obligation to Protect Tenant Against Criminal Activities of Third Persons, 43 ALR3d 331 § 2(a) at 335. Landlords who by their own negligent acts or omissions increase the risk of harm from crime owe a duty to exercise reasonable care to protect tenants from that increased risk. See Restatement (Second) of Torts § 302B (1965) (an exception to the general rule that one person has no duty to protect another from crime exists where that person’s affirmative acts or omissions have created a foreseeable high risk of harm from intentional misconduct). See also Restatement (Second) of Torts § 448 (1965) (criminal act of third person is superseding cause of harm to another unless defendants could have foreseen that their negligent conduct increased risk of crime). Foreseeability of harm then becomes the basis for delineating the boundaries for a duty of protection. B.A. Glesner, Landlords As Cops: Tort, Nuisance & Forfeiture Standards Imposing Liability on Landlords for Crime on the Premises, 42 CaseWResLRev 679, 685 (1992).

[¶ 31.] It has been a well established principle, to date at least, that when a landlord reserves control over a portion of the premises, a failure to carefully maintain that area creates tort liability. Boe v. Healy, 84 S.D. 155, 159-60, 168 N.W.2d 710, 712-13 (1969). Landlords who prohibit their tenants from changing door locks and who demand a fee before changing locks when requested to do so, even in the face of increased danger to tenants, may become liable for negligence as a result of the increased risk to the tenant. If landlords insist on the exclusive right to change locks, then they may have some duty to change them when the locks are no longer effective against foreseeable criminal activity. See Cain, 703 F.2d at 1283 (imposing liability for broken or nonexistent apartment door locks).

[¶ 32.] Under this record, we must view the facts in a light most favorable to the nonmoving party. Wilson v. Great N. Ry. Co., 83 S.D. 207, 212, 157 N.W.2d 19, 21 (1968). The facts viewed in the light most favorable to the nonmovant establish that:

1. The landlord exercised exclusive control over the changing of the lock.
2. The landlord was informed that a key had been missing.
3. The decedent’s only remedy was to request that the landlord change the lock.
4. The decedent told her mother that she had requested a lock change.
5. The decedent requested to borrow money to pay for the lock change.
6. The lock was not changed.

[¶ 33.] Assuming these facts as true, as required in summary judgment, there is a genuine issue of material fact and a jury question whether the request was made to change the lock. It is for a jury to determine if the failure to change the lock, if it finds the change was requested, resulted in foreseeability that someone might enter and harm the decedent. The question of foreseeability is a question of fact for the jury. E.P., 1999 SD 163 at ¶ 33, 604 N.W.2d at 16. This question of foreseeability can and should be determined under SDCL 20-9-1, which provides: “Every person is responsible for .injury to the person, property, or rights of another caused by his willful acts or caused by his want of ordinary care or skill, subject in the latter cases to the defense of contributory negligence.”

[¶ 34.] We should reverse and remand so the jury can determine genuine issues of material fact, proximate cause and foreseeability under proper instructions.

GILBERTSON, Chief Justice

(dissenting).

[¶ 35.] I respectfully dissent.

[¶ 36.] Clearly, the general rule is that there is no duty to protect a person from the criminal acts of a third party. Our two-pronged test, expressed a mere three years ago in Walther, states that a duty to protect a person from the criminal acts of a third party can arise ONLY if: (1) a special relationship exists between the landowner and the injured party; and (2) the intentional criminal acts were foreseeable. Walther, 1998 SD 78 at ¶ 41, 581 N.W.2d at 535. Thus, both must be established or a plaintiffs claim fails. In Walther, we held that no special relationship existed between a landlord and a tenant. Id. at ¶ 42. Herein, neither is established and thus, the conclusion of this Court to hold to the contrary is in error.

[¶ 37.] 1. No special relationship existed.

[¶ 38.] A legal • obligation generally must come from one of three sources. First it can be created by enactment of a specific statute. SDCL 1-1-23. No statute creating a duty of due care between a landlord and tenant exists in this state. Second, the obligation can come from the common law. Id. We held in Walther, no such common law duty exists between a landlord and tenant. Finally an obligation can arise from a contract. It is the contractual lease between landlord and tenant concerning lost key and lock replacement upon which this Court focuses to arrive at its “special circumstances.” Yet “[w]e have long recognized that ‘conduct that is merely a breach of contract is not a tort.’ ” Trouten v. Heritage Mut. Ins. Co., 2001 SD 106, ¶ 32, 632 N.W.2d 856, 865 (quoting Weeg v. Iowa Mut. Ins. Co., 82 S.D. 104, 109-110, 141 N.W.2d 913, 916 (1966) (additional citation omitted)).

[¶ 39.] 2. Forseeability.

[¶ 40.] Moreover, the Court’s analysis of forseeability is in error. The landlord-tenant relationship is not analogous to other relationships where a duty has been imposed. See Walther, 1998 SD 78 at ¶ 44, 581 N.W.2d at 536. In Walther we distinguished the landlord-tenant relationship from the business invitee-landowner relationship. Id. (citations omitted). In distinguishing the two relationships we stated that “the landlord cannot be expected to protect [tenants] from the wiles of felonry any more than the society can always protect them upon the common streets and highways leading to their residence or indeed in their home itself.” Id. (citations omitted). We further noted that:

[a]n apartment building is not a place of public resort where one who profits from the very public it invites must bear what losses that public may create. It is of its nature private and only for those specifically invited. The criminal can be expected anywhere, any time, and has been a risk of life for a long time.

Id. (citations omitted).

[¶ 41.] This Court bases its decision on the issues of exclusive control and foreseeability. But Ross gave Robert Powers, who contracted for her murder, access to her apartment key five months before her death. Not only did Ross share control of the locks with Lagow, she voluntarily extended control to Amy Powers, as well. Ross made no allegation that Lagow had any notice of the problems between Robert and Amy Powers, or even that Amy Powers was a resident in Ross’s apartment. Amy Powers lost the key to Ross’s apartment unbeknownst to Lagow. Lagow certainly did not have exclusive control of the lock. Nor could Lagow foresee any problem when it was not even aware that an additional key had been given to a third person not party to the lease contract. See King v. Ilikai Properties, Inc., 2 Haw.App. 359, 632 P.2d 657 (1981) (holding where tenant does not give explicit notice of particular threat, placing liability on landowner is unjustly imposing a duty of impossible performance); Advance Rental Centers, Inc. v. Brown, 729 S.W.2d 644 (Mo.App.1987) (holding while “special relationship” or “special circumstances” may give rise to landlord-tenant duty, no such relationship or circumstances existed where landlord’s contractor exposed tenant’s premises to theft); Martin v. Usher, 55 Ill.App.3d 409, 13 Ill.Dec. 374, 371 N.E.2d 69 (1977) (holding landlord’s failure to maintain locks, windows, and lights did not give rise to “special relationship” or duty); Knapp v. Wilson, 535 S.W.2d 369 (Tex.Civ.App.1976) (holding key lost by former tenant amounted only to mere possibility of burglary, not foreseeable risk). The facts of this case do not justify placing a special duty upon Lagow to protect its tenants from the criminal acts of third parties.

[¶ 42.] 3. Issue of foreseeability not appropriate for appellate review.

[¶ 43.] Normally the next step would be to determine if Ross showed sufficient facts to create a jury question on foreseeability by applying the totality of the circumstances test. Walther, 1998 SD 78 at ¶ 41, 581 N.W.2d at 535 (citing Small v. McKennan Hosp., 403 N.W.2d 410, 413 (S.D.1987)). In this case, however, the trial court did not address this issue, therefore the issue is not appropriate for appellate review. Thompson v. Summers, 1997 SD 103, ¶ 24, 567 N.W.2d 387, 395 (citations omitted).

Conclusion

[¶ 44.] Today the Court disregards the distinction between tort and contractual duties and the two-pronged test articulated in Walther, which establishes when a duty between a landlord and tenant arises. Instead, the Court erroneously applies other principles of negligence to establish a duty between a landlord and tenant arising under “special circumstances.” Under its flawed reasoning, the legal rationale of this case as compared with Walther is that the landlord apparently has a duty to protect tenants from felonious criminals who enter through a tenant’s door, but not through a tenant’s window.

[¶ 45.] Perhaps there would be no difference in the ultimate amount of landlord liability in this case, whether based on tort or breach of contract if both were properly pled. That is unknown, however, because the contract issue has not been brought before this Court on this appeal and therefore, cannot be considered. What about the next missing-key ease where there is no clause or even a written lease on the subject? Does landlord liability still attach via tort principles as this Court holds today? If so, the “special circumstances exception” has just swallowed up the general rule of landlord tort non-liability with no legal basis to do so.

[¶ 46.] For the above reasons, I respectfully dissent.

[¶ 47.] MILLER, Retired Chief Justice, joins this dissent.

      . Restatement (Second) of Torts § 302B cmt e (1965), provides, in part, that situations in which an actor is required to guard against criminal misconduct of others

        arise where the actor is under a special responsibility toward the one who suffers the harm, which includes the duty to protect him against such intentional misconduct; or where the actor’s own affirmative act has created or exposed the other to a recognizable high degree of risk of harm through such misconduct, which a reasonable man would take into account.
      Restatement (Second) of Torts § 448 (1965) provides:
      The act of a third person in committing an intentional tort or crime is a superseding cause of harm to another resulting therefrom, although the actor's negligent conduct created a situation which afforded an opportunity to the third person to commit such a tort or crime, unless the actor at the time of his negligent conduct realized or should have realized the likelihood that such a situation might be created, and that a third person might avail himself of the opportunity to commit such a tort or crime.

      . The Court concedes this point when it declares, ''[l]ittle in South Dakota statutes and precedents, however, suggests that landlords have a general duty to protect tenants from all criminal activity.... Most courts refuse to impose a broad duty on landlords to protect tenants from criminal acts committed by third parties on the premises.”

      . This is not to say that a special relationship between a landlord and tenant can never exist, only that one does not arise in this case. See, e.g., Flood v. Wis. Real Estate Inv. Trust, 503 F.Supp. 1157 (D.C.Kan.1980) (holding landlord liable where he failed to maintain security as bargained for at beginning of the lease); Doe v. Stegall, 757 So.2d 201 (Miss.2000) (finding genuine issue of material fact where manager gave third party a master key); Rowe, 125 Ill.2d 203, 126 Ill.Dec. 519, 531 N.E.2d 1358 (finding genuine issue of material fact where manager knew master key and grand master key were missing); Razdan v. Parzen, 157 Ga.App. 848, 278 S.E.2d 687 (1981) (holding landlord liable for theft of tenant's property when landlord gave key to bogus repairman). Furthermore, these types of relationships are generally imposed by contract, thus giving rise to a breach of contract action. At most, Ross may be able to show that Lagow violated the provision in the lease that requires it to change a tenant's lock upon request and receipt of the $45 fee. But a breach of contract action does not automatically give rise to a “special relationship” that may then become a basis for a tort claim. Trouten, 2001 SD 106 at ¶ 32, 632 N.W.2d at 864.


source: Caselaw Access Project

author: STEELE, Circuit Judge.

license: Public Domain

text:
    2002 SD 36
    FIRST NATIONAL BANK OF PHILIP, South Dakota, Plaintiff and Appellee, v. Doug TEMPLE, Defendant and Appellant, and Merle Temple, Defendant and Appellee.
    No. 21811.
    Supreme Court of South Dakota.
    Argued Oct. 3, 2001.
    Decided March 13, 2002.

      Ralph Kemnitz, Philip, for plaintiff and appellee.
    Thomas W. Stanton and Michael V. Wheeler of Demersseman, Jensen, Rapid City, for defendant and appellant.
    Kenneth R. Dewell of Viken, Viken, Pe-chota, Leach & Dewell, Rapid City, for defendant and appellee.
   STEELE, Circuit Judge.

[¶ 1.] Doug Temple appeals from a judgment ordering that First National Bank of Philip held a perfected security interest in and to certain livestock as a result of loan instruments executed by Merle Temple. We affirm.

FACTS

[¶ 2.] Beginning in 1990, Merle Temple (Merle) obtained loans from First National Bank in Philip, South Dakota (FNB). To secure the loans, he pledged as collateral cattle bearing one or more brands owned by him. FNB perfected a security interest in all the cattle so branded, their products and proceeds, after first determining that no other security interest appeared of record to suggest any prior lien.

[¶ 3.] In 1992 Doug Temple (Doug), Merle’s father, delivered thirty head of cattle bearing Doug’s brand to Merle. These cattle were to be cared for by Merle. In exchange Merle would be entitled to all calves produced from these thirty head. Merle was also expected to work for Doug from time to time in general ranching activities.

[¶ 4.] In December 1993 Doug purchased twenty heifers which were branded with Merle’s brand at Doug’s direction. In October 1995 Doug purchased an additional twenty-nine heifers, again branding them with Merle’s brand. All cattle were branded at their location of purchase and then delivered to Range Unit # 508, under Merle’s control.

[¶ 5.] In his 1996 financial statement, Merle reported that he owned seventy-six cows and ten replacement heifers. This reflected an increase over the thirty-one cows and six replacement heifers reported in the 1995 financial statement. Merle claimed that the twenty head acquired in 1993 and the twenty-nine head acquired in 1995, all branded with his brand, were his cows. FNB understood that Merle was running thirty cows for his father and that Merle received all of the increase.

[¶ 6.] The relationship between Doug and Merle began to deteriorate. In March 1999 Doug removed part of the original thirty cows bearing his brand from Merle’s care.

[¶ 7.] In early September 1999 Doug made his first and only contact with FNB, and apprised FNB of his claim of an ownership interest in Merle’s cattle. He claimed that the livestock acquired in 1993 and 1995 were to remain his cows. They were only branded with Merle’s brand to distinguish the pasture to which they were assigned, despite the fact that Doug already had thirty head branded with his own brand in the same pasture. Shortly thereafter, Doug obtained an ex parte order from the Ogalala Sioux Tribal Court authorizing seizure of forty-nine to fifty head of cattle. These cattle were seized and sold at Belle Fourche Livestock Auction. The proceeds of the sale were paid into escrow and this action for declaratory judgment was brought in circuit court.

STANDARD OF REVIEW

[¶ 8.] We review the circuit court’s findings of fact under the clearly erroneous standard. City of Deadwood v. Summit, Inc., 2000 SD 29, ¶ 9, 607 N.W.2d 22, 26. “Clear error is shown only when, after a review of all the evidence, ‘we are left with a definite and firm conviction that a mistake has been made.’ ” Id. “The trial court’s findings of fact are presumed correct and we defer to those findings unless the evidence clearly preponderates against them.” Id. Conclusions of law are reviewed under a de novo standard, giving no deference to the circuit court’s conclusions of law. Sherburn v. Patterson Farms, Inc., 1999 SD 47, ¶ 4, 693 N.W.2d 414, 416.

ISSUE ONE

[¶ 9.] Was Doug denied a constitutional or statutory right to a jury trial in this case?

[¶ 10.] Whether a party to a civil action is entitled to a jury trial has been considered by this Court on a number of occasions. The general rule is:

The right to a jury trial is guaranteed both litigants in Article VI, § 6 of the South Dakota Constitution and SDCL 15-6-38(a), (b). This right, however, does not exist in all civil cases. In cases where the pleadings seek equitable relief or where the legal relief is incidental, a jury trial is a matter for the trial court’s discretion. Conversely, when the action is at law, either party has a right to a jury trial.

First Western Bank, Sturgis v. Livestock Yards, 466 N.W.2d 853, 856 (S.D.1991) (quoting Nizielski v. Tvinnereim, 453 N.W.2d 831, 832-33 (S.D.1990)).

Whether an action is legal or equitable must be determined by the real, meritorious controversy between the parties. Mere characterizations will be disregarded, and the courts should look beyond the form in which the action is brought. As a matter of practice, the court looks to the ultimate and entire relief sought, as presented by the pleadings, including the complaint, answer, cross-complaint and prayer for relief.

Arlt v. Langley, 56 S.D. 79, 88, 227 N.W. 469, 473 (1929)(quoting 2 Bancrofts, Code Practice and Remedies, § 1107.)

[¶ 11.] In this case Doug is claiming title and ownership to the cattle. He argues FNB knew or should have known of this interest and, therefore, cannot claim a superior right in the cattle by way of the alleged security interest. This Court will look not only to the complaint, answer, cross-complaint and prayer for relief but also to the real, meritorious controversy between the parties. Id. FNB brought this action in the nature of a declaratory judgment action under SDCL ch. 21-24 in order to resolve its rights .to the proceeds of the sale of the cattle. Accordingly,

A litigant is not necessarily deprived of a jury trial merely because it is a party to a declaratory judgment action. Although the declaratory judgment procedure largely originated in equity, declaratory relief per se is neither legal nor equitable. The fact that a declaratory judgment is sought neither restricts nor enlarges any right to a jury trial that would exist if the issue were to arise in a more traditional kind of action for affirmative relief. To determine whether there is a right to a jury trial in a declaratory judgment action, it is necessary first to determine the nature of the . action in which the issue would have arisen absent the declaratory judgment procedure. In other words, if there would have been a right to a jury trial on the issue had it arisen in an action other than one for declaratory judgment, then there is a right to a jury trial in the declaratory judgement action; conversely, there is no right to a trial by jury if, absent the declaratory judgment procedure, the issue would have arisen in an equitable proceeding.

Northgate Homes, Inc. v. City of Dayton, 126 F.3d 1095, 1098-1099 (8th Cir.1997) (internal citations omitted).

[¶ 12.] In the absence of the declaratory judgment procedure this action would have arisen as an action to foreclose. A complaint seeking foreclosure of a mortgage is unquestionably an equitable action. Alma Group, L.L.C. v. Weiss, 2000 SD 108, 616 N.W.2d 96. We adopt the analysis set forth in Northgate Homes, Inc. The trial court did not err in denying Doug’s demand for a jury trial.

ISSUE TWO

[¶ 13.] Did the trial court err in failing to dismiss this case based upon the doctrine of comity?

[¶ 14.] Doug and Merle are enrolled members of the Ogalala Sioux Indian Tribe and reside on the Pine Ridge Indian Reservation. The tribal court issued an ex parte order involving them. Because of these facts Doug contends that the circuit court should have deferred to the tribal court to adjudicate the dispute between the parties under the doctrine of comity.

[¶ 15.] The United States Supreme Court has recognized comity as:

The extent to which the law of one nation, as put in force within its territory, whether by executive order, by legislative act, or by judicial decree, shall be allowed to operate within the dominion of another nation, depends upon what our greatest jurists have been content to call ‘the comity of nations.’ Although the phrase has been often criticized, no satisfactory substitute has been suggested.
‘Comity,’ in the legal sense, is neither a matter of absolute obligation on the one hand, nor of mere courtesy and good will upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.

Kwongyuen Hangkee Co. v. Starr Fireworks, 2001 SD 113, ¶ 8, 634 N.W.2d 95, 96 (quoting Hilton v. Guyot, 159 U.S. 113, 163-64, 16 S.Ct. 139, 143, 40 L.Ed. 95, 108 (1895)). Pursuant to SDCL 1-1-25:

No order or judgment of a tribal court in the state of South Dakota may be recognized as a matter of comity in the state courts of South Dakota, except under the following terms and conditions:
(1) Before a state court may consider recognizing a tribal court order or judgment the party seeking recognition shall establish by clear and convincing evidence that:
(a) The tribal court had jurisdiction over both the subject matter and the parties;
(b) The order or judgment was not fraudulently obtained;
(c) The order or judgment was obtained by a process that assures the requisites of an impartial administration of justice including but not limited to due notice and hearing;
(d) The order or judgment complies with the laws, ordinances and regulations of the jurisdiction from which it was obtained; and
(e) The order or judgment does not contravene the public policy of the state of South Dakota.
(2) If a court is satisfied that all of the foregoing conditions exist, the court may recognize the tribal court order or judgment in any of the following circumstances:
(a) In any child custody or domestic relations case; or
(b) In any case in which the jurisdiction issuing the order or judgment also grants comity to orders and judgments of the South Dakota courts; or
(c) In other cases if exceptional circumstances warrant it; or
(d) Any order required or authorized to be recognized pursuant to 25 U.S.C., § 1911(d) or 25 U.S.C., § 1919.

[¶ 16.] South Dakota courts will recognize tribal court orders under the principle of comity, Wells v. Wells, 451 N.W.2d 402 (S.D.1990), but the party seeking recognition must first establish that the tribal court order complies with SDCL 1-1-25. Mexican v. Circle Bear, 370 N.W.2d 737 (S.D.1985). SDCL 1-1-25(1)(d) requires a showing by clear and convincing evidence that “[t]he order or judgment complies with the laws, ordinances and regulations of the jurisdiction from which it was obtained[.]”

[¶ 17.] Doug made no such showing in the course of these proceedings. The trial court stated in its findings of fact that no evidence was proffered and, in fact, SDCL 1-1-25(2) was not even addressed. This does not rise to the standard of clear and convincing evidence.

[¶ 18.] Furthermore, SDCL 1-1-25(l)(c) requires due notice and hearing. FNB was never given the opportunity to protect its security interest when the tribal court ordered the livestock seized from Merle. Accordingly, FNB was not afforded the requisite “due notice and hearing” as required by the statute.

[¶ 19.] Finally, FNB is an innocent bystander to the disputes between Merle and Doug. FNB took all of the necessary steps in order to protect its interests in the livestock. The dispute as to who actually owned the cattle is between Merle and Doug, both enrolled members of the Oga-lala Sioux Tribe. FNB is not a party to that dispute. The trial court properly distinguished the ownership claim from the security interest claim at hand.

[¶20.] The trial court correctly determined that the case should not be dismissed based on the doctrine of comity.

ISSUE THREE

[¶ 21.] Did the trial court err when it concluded that FNB held a valid and perfected security interest in the cattle in question?

[¶ 22.] To claim a valid, perfected security interest in collateral, the security interest must attach to the collateral. A security interest attaches when (1) there is an agreement that it attach; (2) value has been given by the secured party; and (3) the debtor has rights in the collateral. SDCL 57A-9-203; First Nat. Bank v. Pleasant Hollow Farm, 532 N.W.2d 60, 62 (S.D.1995). The issue in this case is whether the debtor had sufficient rights in the collateral enabling the security interest to attach.

[¶ 23.] “The phrase ‘rights in collateral’ as used in [SDCL 57A-9-203] has no clear definition.” Continental Grain Co. v. Brandenburg, 1998 SD 118, ¶ 17, 587 N.W.2d 196, 200. The doctrine of derivative rights helps to define and explain this phrase. Essentially, a security interest does not attach to the described asset; it attaches to the debtor’s rights in the asset. William H. Lawrence et al., Understanding Secured Transactions 88-90 (2000). Furthermore,

The common conceptualization of property rights as consisting of a bundle of sticks is helpful in understanding when a debtor has sufficient rights in an asset to grant an enforceable Article 9 security interest. Full ownership of an asset includes, inter alia, the rights to possess and use the asset. All or some of the owner’s rights can be transferred by way of sale, lease, or license. A person with transferable rights can grant an enforceable security interest in those rights. In the full'ownership situations, the security interest attaches to the full panoply of rights, ... debtor with only limited rights in an asset can convey no more than the extent of its own interest. The limitations on the debtor’s rights also constitute limitations on the interest taken by the secured party and on the interest that can be conveyed to a foreclosure-sale buyer.... A secured party’s rights expand as additional parties with rights in the collateral consent to have their rights encumbered.... Even a person who has not actually consented to a security interest may be estopped to deny its effectiveness.... Estoppel can result from either a common-law rule or a statute and is inevitably based on the estopped person’s actions in clothing the debtor with indicia of ownership.

Id. (internal citations omitted). (See also Pleasant View Farms, Inc. v. Ness, 455 N.W.2d 602 (S.D.1990). If the owner of collateral allows another to appear as the owner or to dispose of the collateral, such that a third party is led into dealing with the apparent owner as though he were the actual owner, then the owner will be es-topped from asserting that the apparent owner did not have rights in the collateral).

[¶ 24.] This Court addressed the phrase “rights in the collateral” in Continental Grain, 1998 SD 118 at ¶ 17, 587 N.W.2d at 200:

In an Article 9 transaction, the rule is mere possession of the collateral by the debtor is not enough to grant sufficient rights for the security interest to attach. Yet, as with many rules, there are exceptions. This Court has found formal title is not required for a debtor to have sufficient ‘rights in the collateral’ to allow a security interest to attach. A debtor may have sufficient rights to create a security interest when he does so with an authorization from the actual owner of the collateral. Also, a debtor may have sufficient rights in the collateral if he has something more than ‘naked possession.’ Essentially, the debtor normally can only convey something once it has something and that something may be less than the full bundle of rights that one may hold in such property, (internal citations omitted).

“In Pleasant Hollow, this Court stated that control over the collateral is the factor that determines the debtor’s rights in the collateral, not ownership.” Continental Grain, 1998 SD 118 at ¶ 18, 587 N.W.2d at 200.

[E]ven if a party retains ownership interest in a piece of collateral, a debtor who retains that collateral is still able to mislead potential creditors by exercising his “rights” of possession and control over the collateral. It is the outward appearance of a debtor’s rights of ownership and control in the collateral that determines whether attachment of a security interest is effective and not the right of a party who may have title to the collateral.

Id. (quoting First Nat. Bank v. Pleasant Hollow Farm, 532 N.W.2d at 63.)

[¶ 25.] In the case before us, Merle at all times had every outward appearance of ownership and control of the livestock. The livestock were, at all times, possessed by the debtor and had his healed brand on them. {See also Continental Grain, 1998 SD 118 at ¶ 32, 587 N.W.2d at 204, fn. 9 stating that SDCL 40-19-24 provides a registered brand is prima facie evidence of ownership of livestock). He cared for the cattle at his sole expense using his own land, facilities, equipment and feed. He made all decisions relative to culling, selling and care of the livestock. Furthermore, it is undisputed that he signed all documents necessary to secure the collateral for his loans. Doug gave Merle the outward appearance of ownership and control over the cattle. It was under his direction that the cattle were branded with Merle’s brand. Doug argues that this was done to distinguish the pasture to which they were assigned. However, Doug’s original thirty head, branded with his brand and which are not part of this controversy, were in the same pasture as the other cattle branded with Merle’s brand. These facts compel this Court to conclude that the debtor, Merle, had the necessary rights in the collateral in order for FNB to properly perfect its security interest.

[¶26.] Doug argues that FNB knew or should have known that the cattle were his. Doug contends that FNB cannot take a valid security interest in those cattle through Merle if it can be shown that they knew, or should have known, that the cattle were not Merle’s. He cites no direct authority to support this proposition. Doug argues that creditors, based upon their own wrongful or negligent conduct, can be estopped from asserting or enforcing an alleged security interest in collateral. See 68A Am.Jur.2d, Secured Transactions, § 788, at 646-747 (1993); see also Continental Grain, 1998 SD 118 at ¶ 32, 587 N.W.2d at 203-204 (creditors were estopped from claiming that debtor did not have sufficient rights in collateral based upon the creditors’ “negligent behavior” and “noncompliance with Article 9”).

[¶ 27.] We distinguish the facts in Continental Grain from those before us today. In that case the creditor “did not arrange for protection under Article 9, until this final transaction came to its attention. By that time it was too late.” Id., 1998 SD 118 at ¶ 31, 587 N.W.2d at 203. The negligent behavior is in reference to the creditor continuously taking checks that were returned as non-sufficient funds.

We [find] this practice to be less than reasonable. That [creditor] did not protect itself by using Article 9 or some other means after the first check was returned is negligence. That it did not arrange to protect itself in all other transactions with [debtor] is without justification. Article 9 was enacted to pro vide a protective mechanism for businesses like [creditor’s].

Id. FNB did everything legally necessary to protect its interest. Doug failed to protect his interest under the law and clothed his son with all indices of ownership. FNB cannot be penalized for Doug’s own failures.

[¶ 28.] Under the facts of this case, we conclude that FNB held a valid security interest in the livestock in question and is entitled to the escrowed proceeds of the sale.

[¶ 29.] Accordingly, we affirm the judgment of the trial court.

[¶ 30.] GILBERTSON, Chief Justice, and SABERS, AMUNDSON and KONENKAMP, Justices, concur.

[¶ 31.] STEELE, Circuit Judge, for GORS, Acting Justice.

      . Both Doug and Merle are enrolled members of the Ogalala Sioux Indian Tribe and at times relevant resided within the boundaries of the Pine Ridge Indian Reservation.

      . It should be noted that the United States Supreme Court has abolished the requirement that a legal claim must not be incidental. Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962).

      . Doug argues that we should adopt the rule stated in General Elec. Credit Corp. v. Richman, 338 N.W.2d 814 (N.D.1983). In that case the North Dakota Supreme Court stated that "If a plaintiff in an action to foreclose a mortgage or other lien brings in a third party, a stranger to the mortgage, the third party is entitled to a jury trial.” Id. at 818 (citing First National Bank of Dickinson v. Kling, 65 N.D. 264, 257 N.W. 631 (N.D.1934)). The statement was dictum to the General Electric decision. In Kling the real issue between the parties was found to be one of the title to and ownership of certain horses as well as foreclosure of a chattel mortgage. Kling was not decided under Article 9 of the Uniform Commercial Code, and the defendant's right to a jury trial was. based upon section 7608 of North Dakota Compiled Laws 1913, which dictated "An action for recovery of personal property must be tried by a jury ...” Id. at 634. South Dakota has no similar statute. We find the argument unpersuasive.


author: LAVORATO, Chief Justice.

text:
    Patrick MEADE, Appellant, v. Edward RIES, Appellee.
    No. 00-0369.
    Supreme Court of Iowa.
    Feb. 27, 2002.

      Matthew G. McQuillen and Marty A. Hagge of Remley, Willems, McQuillen & Voss, Anamosa, for appellant.

      Kevin R. Rogers of Swisher & Cohrt, P.L.C., Waterloo, for appellee.
   LAVORATO, Chief Justice.

Patrick Meade appeals from a summary-judgment ruling in favor of the defendant, Edward Ries, dismissing Meade’s negligence suit to recover for injuries he sustained when a tire owned by Ries exploded. At the time, Meade and Ries were coemployees. The injury occurred on the employer’s premises when Ries, who was not on duty at the time, was working on the tire for his personal benefit. The tire exploded when Ries was called away from the tire to help another coemployee with a work-related task. The question we must decide is whether the Iowa Code section 85.20(2) (1997) coemployee immunity applies. The district court concluded the immunity did apply. We disagree and reverse and remand for further proceedings.

I. Background Facts and Proceedings.

The incident underlying this action happened on April 18, 1998, at Swiss Valley Ag Farms, Co. (Swiss Valley) in Hopkin-ton, Iowa. At the time of the incident, Meade and Ries were both employees of Swiss Valley. The company sold agricultural supplies and services. It also maintained a shop and employed a maintenance staff to care for its equipment and facilities.

Ries worked for Swiss Valley as a semi driver, delivering grain, anhydrous ammonia, liquid fertilizer, and other products. Meade was a mechanic and worked in Swiss Valley’s maintenance shop.

On the day in question, Ries was not scheduled to work. That morning, he brought a tire off of his manure spreader to the Swiss Valley maintenance shop to repair it. Ries determined the tire was leaking air between the bead and rim. He deflated the tire completely and cleaned the rim. After cleaning the rim, Ries took the tire to a tire cage in the shop and used an inflator ring to make the tire bead seal to the rim. He did not put the tire inside the tire cage. After using the inflator ring, Ries attached an air hose and chuck to the tire to finish inflating it.

Jason Miles, a Swiss Valley mechanic, was working in the shop on the morning in question. At the time of the incident, Miles was working on the brakes of a semi driven regularly by Ries in the course of his employment at Swiss Valley.

At some point during his repair work, Miles needed someone to push down the brake pedal on the semi. He asked Ries, who was standing nearby, to perform this task. The request came within a minute after Ries had attached the air hose to his tire. Ries obliged, and Miles determined the brakes were working properly. Ries exited the cab of the semi, came around to the front of the semi, and stood by Miles. Miles explained to Ries what the problem had been and what he had done to repair the brakes. During this conversation, Miles saw Meade enter the shop area and go to Miles’s toolbox to retrieve a tool.

A minute or less after Miles saw Meade, and while Miles and Ries were talking, Ries’s tire exploded and struck Meade. Ries and Miles heard Meade screaming that he was hurt, and Ries yelled for someone to call 911. At the time of the incident, Meade was performing regularly scheduled tasks during normal work hours in the area where the incident occurred.

Ries estimated he was in the semi a couple of minutes, and his conversation with Miles lasted about a minute. Miles estimated two minutes had passed between the time he asked Ries to help him and the time of the explosion. He estimated a little less than ninety seconds had passed between the time he told Ries everything was working and the time of the explosion. Sometime after the incident, Ries told Miles the accident had occurred because he had forgotten he was putting air in his tire.

At the time of the incident, Swiss Valley had an unwritten policy that permitted employees to do private work in the shop using company equipment.

Meade filed suit against Ries, alleging he was negligent and seeking damages for the injuries Meade suffered due to that negligence. Ries answered, denying the allegations and asserting an affirmative defense of coemployee immunity pursuant to Iowa Code section 85.20(2).

Ries moved for summary judgment, alleging the court lacked subject matter jurisdiction because as a coemployee of Meade, Ries was entitled to immunity for his negligent acts under section 85.20(2). Meade resisted, asserting that Ries did not come within the class of coemployees protected by section 85.20(2), because his negligence did not arise out of and in the course of employment.

The district court sustained the motion for summary judgment.

II.Issues.

Meade agrees with most of the district court’s summary judgment ruling. His disagreement comes in the application of the court’s legal conclusions to the facts of this case.

Meade contends the district court correctly concluded that section 85.20(2) does not provide absolute immunity for ordinary negligent acts committed by a coem-ployee. In support of his contention, Meade argues the district court correctly determined an employee is entitled to the section 85.20(2) immunity provisions only if his or her negligent acts “arise out of’ and “in the course of’ employment.

Ries disputes this conclusion, arguing in favor of absolute immunity. Ries relies on his absolute immunity argument as a ground to uphold the district court’s ruling.

Meade also contends the district court erred in concluding that Ries’s acts “arose out of’ and “in the course of’ his employment.

III. Scope of Review.

We review a summary judgment ruling for correction of errors at law. Iowa R.App. P. 4; Bailey v. Batchelder, 576 N.W.2d 334, 337 (Iowa 1998). Summary judgment is appropriate where the moving party shows no genuine issue of material fact exists and it is therefore entitled to judgment as a matter of law. Iowa R. Civ. P. 237(c); Bennett v. MC No. 619, Inc., 586 N.W.2d 512, 516 (Iowa 1998). We examine the record before the district court to determine whether any genuine issue of material fact exists and whether the district court correctly applied the law. Schoff v. Combined Ins. Co. of America, 604 N.W.2d 43, 45 (Iowa 1999). A “genuine” issue of material fact exists if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Sievers v. Iowa Mut. Ins. Co., 581 N.W.2d 633, 635 (Iowa 1998). A fact is “material” only if it is outcome determinative. Id.

IV. The Absolute Coemployee Immunity Issue.

The coemployee immunity provision is found in Iowa Code section 85.20, which provides in pertinent part:

The rights and remedies provided in this chapter ... for an employee on account of injury, ... for which benefits under this chapter ... are recoverable, shall be the exclusive and only rights and remedies of such employee ... at common law or otherwise, on account of such injury, .... against:
1. the employee’s employer; or -
2. any other employee of such employer, provided that such injury ... arises out of and in the,course of such employment and is not caused by the other employee’s gross negligence amounting to such lack of care as to amount to wanton neglect for the safety of another.

Iowa Code § 85.20.

. One treatise writer explains the rationale for coemployee immunity this way:

The reason for the employer’s immunity is the quid pro quo by which the employer gives up its normal defenses and assumes automatic liability, while the employee gives up his or her right to common-law verdicts. This reasoning can be extended to the tortfeasor coem-ployee, who also is involved in this compromise of rights. Perhaps, so the argument runs, one of the things the coemployee is entitled to expect in return for what he or she has given up is freedom from common-law suits based on industrial accidents in which that coemployee is at fault.

6 Arthur Larson and Lex K. Larson, Larson’s Workers’ Compensation Law § 111.03[2], at 111-11 (2001) [hereinafter Larson]; see also Seivert v. Resnick, 342 N.W.2d 484, 485 (Iowa 1984) (citing this language).

As he did in the district court, Ries contends here that section 85.20(2) automatically applies and because no gross negligence was involved, the district court lacked subject matter jurisdiction. In support of his contention, Ries suggests a literal interpretation of the statutory language in section 85.20(2). He points out that for immunity to apply, (1) the third party must be an “other employee” of the employer, (2) the injury must not be caused by gross negligence, and (3) the “injury ... arises out of and in the course of’ the injured coemployee’s employment. As to the latter requirement, Ries asserts that the actions of the coemployee seeking immunity need not arise out of and in the course of his or her employment. Applying this interpretation of section 85.20(2) to this case, Ries concludes immunity must apply because (1) Ries is an “other employee” of Swiss Valley, (2) no allegation of gross negligence has been made, and (3) Meade’s injury arose “out of and in the course of’ his employment with Swiss Valley.

Like the district court, we are thus faced with the following question: when does the section 85.20(2) coemployee immunity provision apply? In other words, what is the proper test to determine whether a coem-ployee is immune from suit under section 85.20(2)?

In analyzing this issue, the district court explained that to qualify for workers’ compensation benefits, an employee’s injury must “arise out of and in the course of employment.” See Iowa Code § 85.3(1). The immunity provisions of section 85.20 do not apply unless benefits under the chapter are recoverable. Therefore, the district court reasoned, before immunity can apply, the injury must “arise out of and in the course of employment.”

The district court then examined the language of sections 85.20(1) and (2). It pointed out that while eligibility for benefits is the only prerequisite to employer immunity,. coemployee immunity requires “something more.” In particular, the injury must “arise out of and in the course of employment,” and gross negligence must not be involved. See Iowa Code § 85.20(2).

Next, the district court looked at the “arising out of and in the course of employment” language of section 85.20(2). The court noted that this identical language appears in section 85.3(1) (providing that workers’ compensation is exclusive remedy for employee against employer where injury arises out of and in the course of employment). Given this fact and the fact that both sections appear within close proximity within the same chapter, the court reasoned that the legislature intended that the phrases be given the same meaning.

The court then concluded:

Since the “arising out of’ and “in the course of’ language already fully applied to the injured worker and the employer by reason of section 85.3, it is obvious the legislature had something more in mind when it repeated the same phrase in section 85.20(2). All the language is assumed to have meaning. The only actor to whom the language had not already been applied is the “other employee.” Before a co-employee can benefit from immunity, his or her conduct must arise out of and in the course of employment. (Emphasis added.)

We agree with the district court’s interpretation and conclusion. For immunity to apply, the conduct of the coemploy-ee seeking immunity must “arise out of’ and “in the course of’ employment. Ries’s contrary interpretation leads to an absurd result. See State v. Byers, 456 N.W.2d 917, 919 (Iowa 1990) (the court seeks a “reasonable interpretation that will best effect the legislative purpose and avoid absurd results”). We do not think the legislature intended to provide the “blanket immunity” that Ries suggests. On this point, one court aptly observed:

Suppose one employe[e] is engaged in his employer’s business at some distance from his employer’s premises; if he is injured by a co-employee who is on vacation, could it be seriously contested that a tort action could not be maintained? The legislature intended no such result.

Helmic v. Paine, 369 Mich. 114, 119 N.W.2d 574, 576 (1963).

Our conclusion is consistent with the test Larson suggests:

It must be observed that the immunity attaches to the coemployee only when the coemployee is acting in the course of employment. This is consistent with the justification for the immunity just described, since the coemployee’s employment status does not increase the risk of his causing nonindustrial injuries to his or her fellow-workers.

Larson § 111.03[3], at 111-13 (emphasis added).

Y. “Arising Out of and in the Course of Employment” — The Proper Test.

After determining coemployee immunity required “something more” than status as a coemployee, i.e., a determination that the coemployee’s conduct “arises out of and in the course of employment,” the district court went on to discuss the applicable test. Consistent with its statutory analysis, the court determined that it had to apply the concept of “arising out of and in the course of employment,” as used in traditional Iowa workers’ compensation cases.

For an injury to be compensable, it must occur both in the course of and arise out of employment. Miedema v. Dial Corp., 551 N.W.2d 309, 311 (Iowa 1996). An injury “arises out of’ the employment if a causal connection exists between the employment and the injury. Bailey, 576 N.W.2d at 338. The injury arises “in the course of’ employment when the injury and the employment coincide as to time, place, and circumstances. Id. Both tests must be satisfied for an injury to be deemed compensable. Id.

All of our existing cases interpreting the two phrases are in the context of an injured worker’s qualification for benefits. Until now, no Iowa case has interpreted the phrases in the context of coemployee immunity. Because the phrases have the same meaning in both settings, we agree with the district court that the analysis should focus on whether Ries would have qualified for benefits had he been injured. Other jurisdictions have followed this approach. See, e.g., Blank v. Chawla, 234 Kan. 975, 678 P.2d 162, 168 (1984) (“a co-employee is immune only if he or she would have been entitled to receive workers’ compensation had she or he been injured in the same accident”); Jackson v. Hutchinson, 453 S.W.2d 269, 270 (Ky.1970) (“A test of fellow-employee immunity is whether each of the employees involved would have been entitled to workmen’s compensation benefits for any disabling injury suffered in the accident.”); Helmic, 119 N.W.2d at 577 (“One way in which the case may be tested is whether or not the defendant could obtain compensation benefits if he were a claimant and in the same or similar circumstances.”); Mitchell v. Sanborn, 536 N.W.2d 678, 684 (N.D.1995) (“in determining co-employee immunity, the test is whether the negligent co-employee would have been entitled to receive workers’ compensation benefits if that co-employee had been injured in the same incident”) (citing Larson); Carroll v. Dist. Ct., 579 P.2d 828, 832 (Okla.1978) (“Had [the coemployee] received injury under these circumstances, his injury would have been compensable.”).

Meade agrees this is the applicable test. His quarrel is with the district court’s application of the test to the facts of this case.

Ries, on the other hand, argues that both “arising out of’ and “in the course of’ requirements need not be met for immunity to apply. He cites the following language from Larson in support of his argument that only the “in the course of’ portion of the test need be met:

The commonest question that arises in these cases is: which test of “course of employment” applies? Is it the workers’ compensation test, or the vicarious liability test? The answer may be dictated by the wording of the immunity clause itself.
The more satisfactory test, unless expressly ruled out by statute, is that adopted by Illinois, New Jersey, Kentucky, Indiana, Ohio, Oklahoma, and Florida, which simply use the regular workers’ compensation course of employment standard for this purpose. After all, there are troubles and complications enough administering one course of employment test under the act, without adding a second. By adopting the compensation test, a court has at hand a ready-made body of cases with which to dispose of most borderline situations.

Larson § 111.03[3], at 111-13 to -15 (emphasis added).

In Iowa, however, the “regular workers’ compensation ‘course of employment’ standard” is the “arises out of’ and “in the course of’ employment standard. Bailey, 576 N.W.2d at 338. Other courts have interpreted the Larson language the same way. See, e.g., Sauve v. Winfree, 907 P.2d 7, 11 (Alaska 1995) (after citing Larson, the court states, “this court’s regular workers’ compensation ‘course of employment’ standard is that an injury must have ‘arisen out of and in the course of ... employment’ ”) (citations omitted); Donnelly v. Herron, 88 Ohio St.3d 425, 727 N.E.2d 882, 884-85 (2000) (interpreting the Larson language the same way; “in course of’ and “arising out of’ requirements must be met for immunity to attach).

The district court therefore correctly concluded that the proper test was whether Ries’s actions causing Meade’s injuries arose out of and in the course of Ries’s employment. That brings us to the decisive issue in this case. Did the district court err in applying the test?

Y. Proper Application of the Test.

A. The district court’s application of the test.

In applying-the “arising out of’ and “in the course of’ employment test, the district court focused on several factors. First, the court noted that Ries’s purpose in being on the premises was personal and not related to his employment. These facts, the court concluded, militated against immunity.

Second, the court viewed Ries’s actions in assisting Miles with the brakes of the semi Ries drove as a part of his employment. These activities, the court concluded, “were done for the benefit of the employer and had a direct relationship to Ries’s employment.” These facts, the court concluded, favored immunity.

Last, the court focused on the “business advantage” to Swiss Valley in offering employees the opportunity to use its shop and equipment. The court explained that Ries’s very presence in the shop on the day of the accident arose out of his use of this business benefit. This aspect, the court concluded, also, favored immunity.

After the court observed the issue of immunity was a “close call,” the court concluded:

Given the company’s approval of employee use of the premises and Ries’s activities directly related to the employer’s benefit, the dual nature of his presence must be resolved in favor of finding that [the incident] arose out of and in the course of employment. If Ries himself had been injured in the incident, he would qualify for compensation under the Iowa Workers’ Compensation provisions. The defendant is entitled to the benefit of chapter 85’s immunity provisions.

Meade disagrees with the district court’s application of the “arising out of’ and “in the course of’ employment test to the facts of this case. As a preliminary matter, he argues the focal point of the analysis should be the negligent act of inflating the tire, rather than the moment of injury. He suggests where Iowa case law refers to the “injury,” we should in this case insert “negligent act.”

B. Analysis.

1. “Arising out of.”

As mentioned, an injury “arises out of’ the employment if there is a causal connection between the employment and the injury. Bailey, 576 N.W.2d at 338. Such a connection “is supplied when there is a nexus between the injury and some condition, activity, environment or requirement of the employment.” 82 Am. Jur.2d Workers’ Compensation § 263, at 258-59 (1992). In short, the “arising out of’ requirement refers to the origin of the cause of the incident resulting in the injury. Id. § 265, at 261. To meet the “arising out of’ test, the incident that caused the injury must have “occurfed] while the employee [was] engaged in some activity or duty which [the employee was] authorized to undertake, and which [was] calculated to further, indirectly or directly, the employer’s business.” Id. at 261-62.

Where the incident causing the injury results from “ventures personal to the claimant, [such injuries] are not caused by employment and’ are thus excluded from coverage of workers’ compensa-tion_” Id. § 281, at 281. In other words, “injuries received by an employee while voluntarily engaged in some activity having no essential relation to, or connection with, the employment, and undertaken solely for the pleasure, convenience, or benefit of himself or a third person, are ordinarily not compensable as arising out of ... employment.” Id. at 281-82; accord Linderman v. Cownie Furs, 234 Iowa 708, 714, 13 N.W.2d, 677, 681 (1944).

Meade argues Ries’s actions did not “arise out of’ his employment because no causal connection exists between the employment and the injury. He focuses on the source of the accident — Ries’s negligent acts, ie., failing to use the tire cage and walking away from the inflating tire with the air chuck attached. These actions, Meade concludes, were done for Ries’s own benefit and not done to further his employer’s business..

In contrast, Ries argues he left the inflating tire unattended only because he was attending his work duties. The injury to Meade occurred only after Miles called Ries for assistance with repairing the semi’s brakes. Therefore, Ries concludes, furtherance of his employer’s interests at the time of the injury was a cause of Meade’s injuries.

As mentioned, the test is whether Ries would have been entitled to receive workers’ compensation benefits had he been injured in the same accident. For reasons that follow, we conclude he would have not been entitled to such benefits had he been injured in the same accident. ■

The following are undisputed facts. First, the incident causing the injury was the exploding tire. Second, the origin of this incident is directly traceable to Ries’s inflating the tire. Third, but for his inflating the tire, the explosion and resulting injury would not have occurred. Fourth, Ries inflated the tire while off duty. Fifth, Ries inflated the tire voluntarily and not at the direction of, or compulsion by, his employer. Last, Ries inflated the tire for his own personal benefit and not for any reason connected with his employment or to further his employer’s business.

These undisputed facts lead us to conclude that had Ries been injured in the same accident, his injury would not have arisen out of employment. The district court erred in concluding otherwise.

2. “In the course of.”

An injury arises “in the course of’ the employment when the injury and the employment coincide as to time, place, and circumstances. Bailey, 576 N.W.2d at 338. “An injury occurs in the course of employment when it is within the period of employment at a place where the employee reasonably may be in performing his duties, and while he is fulfilling those duties or engaged in doing something incidental thereto.” Waterhouse Water Conditioning, Inc. v. Waterhouse, 561 N.W.2d 55, 57 (Iowa 1997) (citation omitted). All three conditions — time, place, and circumstances — must be met for a claimant to receive workers’ compensation benefits. 82 Am.Jur.2d Workers’ Compensation § 270, at 267.

As is true with the “arising out of’ requirement, injuries received by an employee while voluntarily engaged in some activity having no essential relationship to, or connection with, the employment and undertaken solely for the benefit of the claimant do not arise in the course of employment. Id. § 281, at 281-82.

Meade points out that the definition of “in the course of’ employment demands that the injury arise within the time and space boundaries of the employment and in the course of an activity whose purpose is related to the employment. He argues that the district court erred when it focused on Ries’s status at the time of the injury. The proper focus, Meade contends, should be on what caused the injury — Ries’s actions in attempting to inflate the tire for his own benefit. Thus, Meade concludes, Ries was not doing anything within the course of employment by attempting to inflate his tire. That activity, Meade asserts, was not related to his employment.

Ries, like the district court, focuses on his actions at the time of Meade’s injury. Ries argues he was acting in furtherance of his employer’s business when he assisted Miles. He argues further that his actions benefited Swiss Valley because Miles would have needed to find another employee to assist him. Therefore, Ries concludes, he was acting in the course of his employment by furthering Swiss Valley’s interest in maintaining its vehicles.

We agree with Meade that the proper focus should be on what caused the injury. We have already determined that the incident causing the injury was the exploding tire and that incident is directly related to Ries’s inflating the tire. This activity was done at a time when Ries was not on duty. Therefore the time requirement necessary for meeting the “in the course of’ employment requirement was lacking.

Additionally, Ries was performing the tire-inflating activity for his own personal benefit rather than to further his employer’s business. Therefore the employment-related element necessary for the “in the-course of’ requirement was also lacking.

We conclude that had Ries been injured in the same accident, his injury would not have arisen in the course of employment. The district court also erred in concluding otherwise as to this requirement.

VI. Disposition.

In sum, the undisputed facts show that had Ries been injured in the same accident, his injury would not have arisen out of and in the course of employment. For this reason, he is not entitled to coem-ployee immunity. Absent such immunity, the district court has subject matter jurisdiction of this action. The district court erred in ruling otherwise. We therefore reverse and remand for further proceedings.

REVERSED AND REMANDED.


author: LARSON, Justice.

text:
    Betty FALADA, Executor of the Estate of James Falada, Deceased, Appellant, v. TRINITY INDUSTRIES, INC., Appellee.
    No. 99-1945.
    Supreme Court of Iowa.
    Feb. 27, 2002.

      Joseph P. Braun and Judith M. O’Dono-hoe of Elwood, O’Donohoe, O’Connor & Stochl, Cresco, for appellant.
    Michael J. Coyle and Norman J. Wang-berg of Fuerste, Carew, Coyle, Juergens & Sudmeier, P.C., Dubuque, for appellee.
   LARSON, Justice.

James Falada was killed when an anhydrous ammonia tank ruptured. The executor of his estate sued Trinity Industries, Inc., manufacturer of the tank, alleging it was “defective in design and manufacture, [and] was unreasonably dangerous to the user or consumer when used in a reasonably foreseeable manner.... ” Trinity moved to dismiss on service-of-notice grounds and also moved for summary judgment, based on its claim the tank was damaged in a prior accident and that its construction was “state of the art” when manufactured. The court denied the motion to dismiss but granted the summary judgment motion on the state-of-the-art defense. We affirm in part, reverse in part, and remand.

I. Facts and Prior Proceedings.

Falada was driving a truck pulling the anhydrous ammonia tank, which was mounted on wheels so that it was “trailer-ized.” The truck and trailer rolled over, rupturing the tank. The rupture allowed ammonia to escape, and Falada died of ammonia inhalation. His wife, the executor of his estate, claims the tank was defectively manufactured.

Trinity moved to dismiss on the ground that the plaintiff did not serve an original notice within the time required by our rule, but the court denied the motion. Trinity later moved for summary judgment on two grounds: (1) the tank had been in a prior accident that weakened its structure, and (2) the tank was manufactured in compliance with the state of the art as it was in 1971, when the tank was manufactured.

The plaintiff resisted the summary judgment motion with affidavits and engineers’ reports. One expert stated the rupture was likely caused by defective welding in the manufacturing process. Another expert said the rupture was not caused by a prior accident, as claimed by Trinity.

II. The Service-of-Notice Issue.

Trinity contends the district court abused its discretion by refusing to dismiss this case for failure to serve a timely original notice. Under Iowa Rule of Civil Procedure 49(f),

[i]f service of the original notice is not made upon the defendant, respondent, or other party to be served within 90 days after filing the petition, the court, upon motion or its own initiative after notice to the party filing the petition, shall dismiss the action without prejudice as to that defendant, respondent, or other party to' be served or direct an alternate time or manner of service. If the party filing the papers shows good cause for the failure of service, the court shall extend the time for service for an appropriate period.

The petition was filed on April 10, 1998. On July 8, the plaintiff served an original notice, but it was served on the wrong party. When notice was served on the correct party, the ninety days had passed, and Trinity moved to dismiss. The plaintiffs attorney resisted with an affidavit explaining that in May 1998 he received information from the Iowa Secretary of State’s office that the registered agent for

Trinity Industries, Inc. was a Lori Lake in Roland, Iowa. He served Lori Lake on behalf of Trinity. This, however, was the wrong Trinity. The district court ruled that the estate had shown good cause for the delay and denied the motion to dismiss, based on the erroneous information regarding the defendant’s address. The court stated:

Service was obtained on the wrong Trinity Industries, Inc., on July 8, 1998. It was at that time that Plaintiff learned that the Trinity Industries, Inc., which was served was not the same Trinity Industries, Inc., contemplated in Plaintiffs Petition. Immediately after learning of this mistake, Plaintiff took steps to obtain service over the correct Trinity Industries, Inc. Service was obtained over the correct Trinity Industries, Inc., on July 21,1998.
The Court finds under the facts herein that Plaintiff has shown adequate justification for the delay in service. Likewise, Plaintiff made a meaningful attempt to locate and serve the Defendant.
We have said:
Our review of a district court ruling on a motion to dismiss for failure to serve in a timely manner an original notice pursuant to rule 49 is for correction of errors at law. In circumstances in which, as here, the district court has made findings of fact, those findings are binding on appeal unless they are not supported by substantial evidence.

Carroll v. Martir, 610 N.W.2d 850, 857 (Iowa 2000) (citation omitted).

Trinity complains that the plaintiff could have been more diligent within the ninety-day window for service. (The plaintiff did not serve process even on the first Trinity until the eighty-ninth day.) If the estate had attempted service earlier in the allotted time, it would not have needed extra time, according to Trinity. The court noted that “a meaningful attempt to locate or serve” is required by our rules, citing Dennis v. Christianson, 482 N.W.2d 448, 451 (Iowa 1992), and found the plaintiff had “shown adequate justification for the delay in service.” It found the plaintiff immediately served the correct party after learning of its error.

We believe substantial evidence supports the finding of adequate justification for the delay of service and therefore affirm on this issue.

III. The Summary Judgment Issue.

The district court held there was a genuine issue of fact on the prior-accident defense but granted summary judgment to Trinity on the ground there was no disputed fact issue regarding its state-of-the-art defense. We review a district court’s ruling on summary judgment for the correction of errors at law. Kelly v. Iowa Mut. Ins. Co., 620 N.W.2d 637, 641 (Iowa 2001).

Summary judgment is appropriate where the moving party shows there are no genuine issues of material fact and it is entitled to judgment as a matter of law. Iowa R. Civ. P. 237(c). In determining whether the moving party has met this burden, we view the record in the light most favorable to the party opposing the motion for summary judgment.

Id. The nonmoving party is entitled to every legitimate inference that can be reasonably deduced from the record. Hansen v. Anderson, Wilmarth & Van der Manten, 630 N.W.2d 818, 822-23 (Iowa 2001).

The state-of-the-art defense is embodied in Iowa Code section 668.12:

In any action brought pursuant to this chapter against an assembler, designer, supplier of specifications, distributor, manufacturer or seller for damages arising from an alleged defect in the design, testing, manufacturing, [etc.], a percentage of fault shall not be assigned to such persons if they plead and prove that the product conformed to the state of the art in existence at the time the product was designed, tested, manufactured, [etc.].

Although the plaintiff presented evidence that the rupture was caused by defective welding of the tank’s seams, the court ruled this failed as a matter of law to establish an issue of material fact because “[w]hen a defect is proved to exist but is consistent with the state of the art, there is no liability,” citing Hillrichs v. Avco Corp., 478 N.W.2d 70, 76 (Iowa 1991), abrogated on other grounds by Reed v. Chrysler Corp., 494 N.W.2d 224, 230 (Iowa 1992).

It is undisputed in the summary-judgment record that, in general, the design of the tanks, i.e., a steel “hemisphere” welded to each end of the cylindrical body, was the accepted method of manufacturing such tanks in 1971. However, there is a distinction between “custom in the industry” and “state of the art.” “Custom refers to what was being done in the industry; state of the art refers to what feasibly could have been done.” Chown v. USM Corp., 297 N.W.2d 218, 221 (Iowa 1980); see also Mercer v. Pittway Corp., 616 N.W.2d 602, 622 (Iowa 2000); Hughes v. Massey-Ferguson, Inc., 522 N.W.2d 294, 295 (Iowa 1994).

One of the plaintiffs experts, Larry D. Hanke, a professional engineer, stated that the welding of the tank sections was defective. He subjected samples of the steel to visual examination, electron microscopy, and chemical analysis. He concluded the steel met required specification and was weldable, but Trinity’s workmanship in welding the sections was defective. His report, made a part of the record in resistance to the defendant’s summary judgment motion, stated:

The tank was manufactured from high-strength, quenched and tempered, steel plate. The plate material composition was consistent with ASTM A517, grade E pressure vessel plate material. This material is weldable, but requires appropriate welding practices to obtain optimum service performance. The failed seam weld exhibited high hardness, low ductility, and low toughness in the heat-affected zone. These conditions are due to less-than-optimum welding practices.
In addition to the undesirable mechanical properties for this weld, the weld configuration served to concentrate stresses at the weld toe of the head plate, i.e. the area of the weldment most susceptible to brittle fracture. The seam weld where the fracture occurred is a transition from the 0.400-in. thick shell to the 0.270-in. thick head. At the fracture, this change in section thickness is made in the weld metal. With this configuration, tension or bending across the weld concentrates stresses at the weld toe on the head side. A preferable practice is to thin the thicker plate to match the thinner plate, which removes the stress concentration from the more vulnerable weld area.
The combined effect of the mechanical properties at the weld and the weld configuration created a susceptibility to rupture at a lower magnitude of deformation than for a weld with optimum welding practices and configuration. That is, a weld with greater ductility and toughness may not have failed due to the damage sustained in this accident. Thus, the weld joint design and welding practices during construction of the tank were significant contributors, and possibly the root cause, of the seam weld failure.

Trinity does not provide contrary evidence as to the cause of the rupture, except its claim of a prior accident.

According to Trinity, the plaintiff has conceded the design of the tank was consistent with the state of the art in 1971, but that is inaccurate. The plaintiff conceded only that the design in general complied with the state of the art; she did not concede that this particular tank had been manufactured in accordance with state of the art. Specifically, she did not concede that the welding of the steel components was state of the art. In fact, she asserts that the welding was improper and was the cause of the rupturé.

Trinity counters that, if the design of a tank is consistent with the state of the art, any workmanship defects in assembling the tank parts is subject to the state-of-the-art defense. We disagree; defective design and defective workmanship are separate concepts. , Here, the issue is whether the plaintiff has presented sufficient evidence to generate' an issue of material fact on Trinity’s state-of-the-art defense with respect to the workmanship in welding the steel parts together. The state-of-the-art defense refers to what “feasibly could have been done.” Chown, 297 N.W.2d at 221. Trinity does not contend that satisfactory welding techniques were not feasible in 1971.

In Dow Chemical Co. v. Royal Indemnity Co., 635 F.2d 379 (5th Cir.1981), an action was brought for losses sustained when a thin-shelled concrete dome collapsed during construction. Styrofoam® blocks were used to support the dome during construction. The issue was whether the cause of the collapse could be considered a design defect or whether the “welding” of the Styrofoam ® was a separate issue, one of workmanship. Id. at 388-89. Dow recognized that workmanship is not a part of design for liability purposes. The fifth circuit approved the district court’s finding that

the collapse of the dome was due to the failure of the subcontractor Dow’s employees to perform the welding in accordance with these specifications ... which would constitute a failure of workmanship, not of design.

Although the Dow case involved an application of insurance principles, it supports our view that the fabrication process is not a part of the design of the item being produced.

In deciding whether a process is state of the art, the issue is not whether a concept (here, the attachment of steel ends to a steel cylinder) in general conforms to the state of the art but whether this particular tank “could reasonably and economically” have been made stronger at that time by proper welding. See Chown, 297 N.W.2d at 222; see also Mercer, 616 N.W.2d at 622; Hughes, 522 N.W.2d at 295. We must assume, for summary judgment purposes, that defective welding was the cause of the rupture. Contrary to Trinity’s argument, the welding cannot be considered state of the art simply because it was integrated in a design that was generally considered to be state of the art (ie., a steel cylinder attached to steel end caps). If negligent welding of the tank parts cannot be the basis of liability, as Trinity argues, simply because the concept of attaching steel parts into a tank was state of the art, this would mean that even tanks joined together with putty would be considered state of the art. This clearly cannot be so.

We conclude summary judgment should not have been granted because the plaintiff generated genuine issues of fact with respect to Trinity’s state-of-the-art and pri- or-accident defenses. We affirm in part, reverse in part, and remand for further proceedings.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.