author: VANDE WALLE, Chief Justice.

text:
    2006 ND 71
    Geraldine BERNABUCCI, Paul Bernabucci, Mary Bernabucci MacGrath and John R. Bernabucci and Geraldine Bernabucci, as Trustees of the John R. and Geraldine Bernabucci Charitable Remainder Trust, and Corey Nyhus, Plaintiffs and Appellants v. Harvey HUBER and Jan Odin, Defendants and Appellees.
    No. 20050275.
    Supreme Court of North Dakota.
    April 3, 2006.

      Stephen W. Plambeck, Nilles, Ilvedson, Stroup, Plambeck & Seibo, Ltd., Fargo, N.D., for plaintiffs and appellants.
    Todd Ervin Zimmerman, Dorsey & Whitney, Fargo, N.D., for defendants and appellees.
   VANDE WALLE, Chief Justice.

[¶ 1] Geraldine Bernabucci, Paul Ber-nabucci, Mary Bernabucci MacGrath and John R. Bernabucci and Geraldine Berna-bucci, as trustees of the John R. and Geraldine Bernabucci Charitable Remainder Trust (“Bernabucci group”), and Cory Ny-hus appealed from a judgment dismissing their action against Harvey Huber and Jan Odin arising from the 2002 sale of a bank holding company and denying their motion to amend the complaint. We conclude the district court properly granted summary judgment against the Bernabucci group based on a mutual release contained in a stock purchase agreement, and against Nyhus based on the terms of an offer he accepted to purchase his shares of stock. We also conclude the court did not abuse its discretion in denying the motion to amend the complaint because the amendment would be futile. We affirm.

I

[¶ 2] North Star Holding Company (“North Star”) was incorporated in 1986 and is the sole shareholder of the Stuts-man County State Bank (“Bank”) in Jamestown. Northern Plains Investment, Inc. (“Northern”) is a corporation owned by the Bernabucci group. At the time pertinent to this case, the Bernabucci group and Northern owned more than 40 percent of North Star’s shares. John Ber-nabucci served on the board of directors of both North Star and the Bank. Nyhus was on the board of directors of the Bank and was a North Star shareholder. Huber is the president and a director of the Bank and was a North Star shareholder and director. Odin is senior vice president of the Bank and was also a North Star shareholder and director.

[¶ 3] In June 2000, North Star’s board of directors began talking about selling the Bank. At the board’s June 2001 meeting, Bernabucci discussed the possibility of Huber assembling a group to make the purchase. On December 28, 2001, Huber submitted an offer to the board to purchase between 51 percent and 100 percent of North Star’s shares for $425 per share. Huber made the offer “[o]n behalf of myself, and as agent for the owners of the following North Dakota banks (McIntosh County Bank in Ashley, Garrison State Bank and Trust in Garrison, Union State Bank in Hazen, and Security State Bank in Wishek).” The offer acknowledged that “North Star has recently paid a cash dividend of $10 per share, but no additional dividends will be paid prior to closing.” The offer required preparation and execution of a stock purchase agreement and prompt submission of the transaction for regulatory approval. Robert Kauphus-man, North Star’s board president, transmitted this offer to all shareholders in a letter dated December 31, 2001.

[¶4] On January 4, 2002, Bernabucci wrote a letter to North Star’s shareholders informing them that North Star was expecting two additional offers from other qualified buyers and encouraging them to withhold any action on Huber’s proposal until the additional offers could be reviewed. On March 29, 2002, Bernabucci again wrote to North Star shareholders and informed them that when Huber made the December 28, 2001, offer “he failed to disclose to the shareholders that there was a tax refund and other credits of approximately $450,000 that was going to be paid shortly after the first of [the] year. Obviously the earnings on the Bank’s business in 2002 through the date of closing were not considered as part of the purchase price.” A majority of North Star’s shareholders, including Nyhus, however, had accepted Huber’s offer by mid-January 2002 and placed their shares in escrow. No shareholder sought to rescind or revoke their acceptance of the December 28, 2001, offer.

[¶ 5] Over the course of the next several months, Bernabucci attempted to negotiate a higher sales price with the buyers for the Bernabucci group’s North Star shares. In February and March 2002, Bernabucci, through his attorney, proposed a purchase price of $475 per share based on the same terms set forth in Huber’s December 28, 2001, offer which contemplated that no further dividend would be paid before closing. In April 2002, Bernabucci’s attorney proposed a purchase price of $450 per share, again based on the same conditions set forth in the December 2001 offer. The attorney wrote to the buyers and objected to the $425 per share price because of the Bank’s expected accumulation of cash and operating income through the closing date and the possibility that the Bank would receive tax refunds and tax credits, resulting in a “windfall” to the buyers of “approximately $25.68/ share.” The buyers responded on April 26, 2002, and offered to increase the purchase price to $430 per share which, with interest, would total more than $440 per share assuming a September 30, 2002, closing date. On May 2, 2002, the attorney advised the buyers that the Bernabucci group would accept a purchase price of $440 per share with no interest. The buyers accepted the offer.

[¶ 6] The buyers and the Bernabucci group entered into a stock purchase agreement on June 10, 2002. Unlike the December 28, 2001, offer accepted by Nyhus and other shareholders, the stock purchase agreement did not expressly preclude the payment of future dividends before the closing date. The agreement provided that “[t]he business of [Northern], North Star and the Bank shall be carried on in a normal manner 'without commitments of any special or unusual type or any type unrelated to normal and customary business of [Northern], North Star and the Bank.” The agreement further provided “Sellers agree that after the date of this Agreement they will not take any action which would impede Buyers’ ability to obtain regulatory approvals for the transactions contemplated hereunder.” The agreement also included the following “Mutual Release

Except for the obligations specifically set forth in this Agreement, Buyers, North Star and Bank, hereby fully release Sellers, and Sellers hereby fully release Buyers, North Star and Bank (and all of their affiliated entities, directors, shareholders, officers, agents, attorneys, and employees, whether in their individual or official capacity) from any and all claims, demands, actions, liabilities, damages or demands of any kind whatsoever (whether such claims are known or unknown) arising out of or in any way connected with the acquisition of North Star by Buyers. This release is specifically intended to include (but not be limited to) the full release by Sellers of any claims they may have against Mr. Harvey Huber, Mr. Robert Kauphusman and Mr. Maynard Helgaas for any actions they took (or failed to take) in connection with the solicitation of offers and the negotiation of the sale of North Star to Buyers. This release is not intended to include any claim against the above individuals that Sellers may have that is unrelated in any way to the solicitation of offers for, or the negotiation and sale of, North Star, provided, however, that Sellers hereby represent and warrant that, to the best of their knowledge, they are not currently aware of facts or circumstances upon which such a claim could be made.

Nyhus, who had accepted the buyers’ December 28, 2001, offer, was not a party to the stock purchase agreement.

[¶ 7] After execution of the stock purchase agreement, the buyers had agreed to acquire all of the outstanding shares of North Star. The buyers decided to use cash held by the Bank to pay for part of the $16 million purchase price by having the Bank pay North Star a dividend after the closing and having North Star pay the dividend to the buyers as the new owners. The buyers informed the Federal Reserve Board of their plan to use $2 million controlled by North Star and the Bank for this purpose and that no dividend would be issued before the closing date. The Ber-nabucci group and Nyhus claim Huber did not inform the boards of North Star or the Bank of the buyers’ intentions.

[¶ 8] At the Bank’s board meeting on August 13, 2002, Bernabucci made a motion that the Bank declare a $35 per share dividend to North Star, to be paid out by North Star to its shareholders of record on September 10, 2002. Bernabucci indicated the dividend was justified by the amount of Bank earnings from April 1, 2002, through September 30, 2002, the projected closing date, and by the expected tax refund. No one seconded Bernabucci’s motion. Nyhus and Bernabucci eventually moved to declare a dividend of $18 per share. The motion carried, but Huber and Maynard Helgaas, another board member, voted against it. At the North Star board meeting held the same day, Bernabucci moved that North Star pay an $18 per share dividend to all shareholders of record on September 10, 2002. The motion carried, but Huber and Odin voted against it.

[¶ 9] On August 29, 2002, the attorney for the buyers wrote to the Bernabucci group’s attorney and informed him that Bernabucci’s efforts to have North Star pay a dividend before the closing date were “inconsistent with his contractual obligations under the Stock Purchase Agreement,” and that if the dividend were paid, the buyers would bring a legal action against the Bernabucci group. The letter pointed out the stock purchase agreement required that the Bank and North Star’s business be conducted in “a normal manner without commitments of any special or unusual type,” and that “[i]n its entire history, North Star has never paid a dividend to its shareholders except for the $10.00 per share dividend declared and paid in December 2001 for which Buyers gave ... specific written consent.” The letter also pointed out that regulatory applications had been filed with the Federal Reserve Board indicating no dividends would be paid before the closing and the issuance of the dividend would require the buyers to refile their regulatory applications.

[¶ 10] The North Star board of directors held a special board meeting on September 3, 2002, to retain a law firm to act as counsel on North Star’s behalf and to reconsider the dividend issue. Berna-bucci objected to the other board members’ participation, alleging they had conflicts of interest. The board decided to hold a shareholder meeting to resolve the dividend question. The Bank’s board of directors met again on September 10, 2002, and was informed that the buyers had received regulatory approval and would close on September 12, 2002, leaving insufficient time to conduct a shareholder meeting. Nyhus made a motion to authorize a dividend of $13.50 per share payable on September 10, 2002. The motion passed with all directors voting in favor except Huber. North Star also held a board meeting following the Bank’s board meeting. At that meeting, Bernabucci moved to authorize issuance of a cash dividend of $13.50 per share. Kauphusman and Bernabucci voted in favor of the dividend, Huber and Odin voted against the dividend, and Helgaas abstained from voting. The motion failed, no dividend was paid to the shareholders, the purchase was closed, and the buyers paid all shareholders $440 per share, including Nyhus and others who had initially agreed to sell their shares for $425 per share.

[¶ 11] The Bernabucci group and Ny-hus brought this action against Huber and Odin in June 2003. The complaint alleged Huber and Odin were liable for damages because they had a conflict of interest that precluded them from voting to rescind the dividend previously declared by the board of directors and because they breached the fiduciary duties they owed to the shareholders as directors. In November 2004, the Bernabucci group and Odin moved to amend the complaint to join North Star, Kauphusman and Helgaas as defendants and to assert additional claims for breach of contract, actual fraud, constructive fraud, deceit, consumer fraud, misrepresentation, breach of fiduciary duty, unjust enrichment, constructive trust and exemplary damages.

[¶ 12] The district court granted Huber and Odin’s motion for summary judgment and denied the Bernabucci group and Ny-hus’s motion to amend the complaint. The court ruled Nyhus was not entitled to any relief because he had signed the December 28, 2001, offer which stated that no additional dividends would be paid. The court ruled the Bernabucci group’s claims were barred by “the clear language contained in the Mutual Release.” The court denied the motion to amend the complaint because the amendment “would be futile.”

II

[¶ 13] On appeal, the Bernabucci group and Nyhus argue the district court erred in granting summary judgment dismissal of their action and in refusing to grant their motion to amend the complaint.

A

[¶ 14] Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no disputed genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Ernst v. Acuity, 2005 ND 179, ¶7, 704 N.W.2d 869. Whether a district court properly granted summary judgment is a question of law that we review de novo on the entire record. Miller v. Diamond Res., Inc., 2005 ND 150, ¶ 8,703 N.W.2d 316.

[¶ 15] Resolution of the summary judgment issue regarding the Ber-nabucci group’s claims requires an interpretation of the mutual release, which is governed by principles of contract law. The language of a contract governs its interpretation if the language is clear and explicit and does not involve an absurdity. N.D.C.C. § 9-07-02. “The words of a contract are to be understood in their ordinary and popular sense rather than according to their strict legal meaning, unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.” N.D.C.C. § 9-07-09. A contract must be interpreted to give effect to the mutual intentions of the parties as it existed at the' time of contracting. N.D.C.C. § 9-07-03; Binek v. Binek, 2004 ND 5, ¶ 13, 673 N.W.2d 594. When a contract has been reduced to writing, the intention of the parties is to be ascertained from the writing alone if possible. N.D.C.C. § 9-07-04; Kondrad ex rel. McPhail v. Bismarck Park Dist., 2003 ND 4, ¶ 6, 655 N.W.2d 411. Interpretation of a contract is a question of law if the intent of the parties can be ascertained from the agreement alone. Airport Inn Enter., Inc. v. Ramage, 2004 ND 92, ¶ 10, 679 N.W.2d 269. Extrinsic evidence is properly considered if the language of the agreement is ambiguous and the parties’ intentions cannot be determined from the writing alone. Ag Acceptance Corp. v. Glinz, 2004 ND 154, ¶ 12, 684 N.W.2d 632. An unambiguous contract is particularly amenable to summary judgment. Garofalo v. St. Joseph’s Hosp., 2000 ND 149, ¶ 7, 615 N.W.2d 160. On appeal, this Court will independently review a contract to determine whether the district court erred in its interpretation of it. Kondrad, at ¶ 6.

[¶ 16] The mutual release clearly states that “Buyers, North Star and Bank, hereby release Sellers, and Sellers hereby fully release Buyers, North Star and Bank (and all of their affiliated entities, directors, shareholders, officers, agents, attorneys, and employees, whether in their individual or official capacity) from any and all claims, demands, actions, liabilities, damages or demands of any kind whatsoever (whether such claims are known or unknown) arising out of or in any way connected with the acquisition of North Star by Buyers.” The release further provides that it “is specifically intended to include (but not be limited to) the full release by Sellers of any claims they may have against Mr. Harvey Huber, Mr. Robert Kauphusman and Mr. Maynard Helgaas for any actions they took (or failed to take) in connection with the solicitation of offers and the negotiation of the sale of North Star to Buyers,” but “is not intended to include any claim against the above individuals that Sellers may have that is unrelated in any way to the solicitation of offers for, or the negotiation and sale of, North Star.” The mutual release broadly releases North Star and its directors and employees from any claims by the Berna-bucci group related in any way to the solicitation of offers for and the negotiation and sale of North Star.

[¶ 17] The issue is, therefore, whether the Bernabucci group’s claims regarding payment and rescission of the North Star dividend in 2002 are related in any way to the sale of North Star. The undisputed evidence establishes that the payment of a dividend was related to the sale.

[¶ 18] The minutes of North Star’s January 15, 2002, board of director’s meeting reflect that Bernabucci indicated the sales price for the shares needed to be supplemented with “another dividend the first week of June to cover additional earnings prior to closing. Because this dividend was deleted from the Huber offer, [Bernabucci] sees that his approval was not given.” At the board’s meeting on April 9, 2002, Bernabucci again said “he could accept the Huber offer of $425/share if the Holding Company would be allowed to declare an additional dividend in June 2002,” adding “we have a responsibility to all shareholders to not leave that money lying on the table.” At the board’s meeting on August 13, 2002, Bernabucci made motions to declare an $18 dividend, and although “he was not happy with [the] $18 per share dividend, [] he too wants a compromise to all of this.”

[¶ 19] In Bernabucci’s deposition testimony, he also explained the relationship between the issuance of a dividend and the sale of North Star:

Q. Did you ever tell Mr. Huber or Mr. Kauphusman that $425 would be an adequate price?
A. I believe it was in a phone conversation with Mr. Kauphusman subsequent to November 29th, possibly in early December, that we could possibly, and Mr. Kauphusman made light of my word possibly, accept four and a quarter a share if we could declare another significant dividend prior to the closing.
Q. And what would be the purpose of declaring a dividend prior to the closing?
A. To increase the value to the shareholders.
Q. To effectively increase the price being paid to the shareholders?
A. To something near or slightly above 450 a share.
Q. And was that your basis for wanting a further dividend to be paid?
A. Or a higher price. One or the other. To bring the value to the shareholders up to the minimum of 450.
Q. And either approach would accomplish the same goal, either increase the price or you could issue a dividend?
A. Correct.
Q. And the effect of issuing a dividend is to effectively provide the sellers with more value and to provide the buyers with a little less value.
A. Well, yeah. It would actually have been preferential for the sellers to acquire the higher — to obtain the higher price on the sale. Which would be taxed as a capital gain. The dividend, of course, would be taxed as ordinary income. So I would have preferred the $450 a share price.

There was an undisputed connection between the issuance of a dividend and the sale of North Star.

[¶ 20] The Bernabucci group argues summary judgment was erroneously granted because the district court relied upon events which occurred after the June 2002 stock purchase agreement was signed and considered extrinsic evidence in the form of board minutes and Bernabucci’s deposition testimony in reaching its decision. Because the court did so, the Berna-bucci group argues the court determined the mutual release was ambiguous, rendering the determination of the parties’ intent a question of fact inappropriate for summary judgment disposition.

[¶ 21] We reject these arguments. First, the mutual release covered claims arising from the “sale of [] North Star.” Although the stock purchase agreement was signed in June 2002, the actual sale was not completed until the closing in September 2002. Second, the Bernabucci group is correct that, when the terms of a contract are ambiguous, extrinsic evidence of the parties’ intent may be considered and the terms of the contract and the parties’ intent become questions of fact. See, e.g., Moen v. Meidinger, 547 N.W.2d 544, 547 (N.D.1996). However, when reasonable persons can draw but one conclusion, a question of fact becomes a matter of law for the court to decide. See, e.g., Smith ex rel. Smith v. Kulig, 2005 ND 93, ¶ 14, 696 N.W.2d 521. Here, the district court simply relied upon undisputed facts to determine whether the unambiguous provisions of the mutual release were applicable. But even if resort to extrinsic evidence was justified by an ambiguity in the mutual release or a latent ambiguity in the contract, see Gawryluk v. Poynter, 2002 ND 205, ¶ 10, 654 N.W.2d 400 (latent ambiguity is “an ambiguity arising when a writing appears unambiguous on its face, but some collateral matter makes the meaning uncertain”), the result would be the same. If the extrinsic evidence is conclusive and undisputed, the determination of the meaning of a contract is a function for the court to resolve as a matter of law. See, e.g., Continental Cas. Co. v. Northwestern Nat. Ins. Co., 427 F.3d 1038, 1041 (7th Cir.2005); Daimler Chrysler Corp. v. Graves Sheet Metal, 827 N.E.2d 607, 613 (Ind.App.2005); Labor Ready, Inc. v. Abis, 137 Md.App. 116, 767 A.2d 936, 944 (2001); Deutz & Crow Co., Inc. v. Anderson, 354 N.W.2d 482, 486 (Minn.App.1984); Mallad Constr. Corp. v. County Fed. Sav. and Loan Ass’n, 32 N.Y.2d 285, 344 N.Y.S.2d 925, 930, 298 N.E.2d 96 (1973); Brown v. Weis, 871 P.2d 552, 559 (Utah App.1994).

[¶ 22] The Bernabucci group also relies on N.D.C.C. § 9-13-02, which provides:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him, must have materially affected his settlement with the debtor.

The Bernabucci group argues their claims are still viable because “there is no evidence Bernabucci ‘knew1 at the time he signed the Mutual Release that other directors in North Star would first vote to declare and then vote to rescind a dividend after receiving payment of an equivalent dividend from the Bank.” The Bernabucci group’s reliance on the statute is misplaced. Although the stock purchase agreement did not foreclose the possibility of further dividends, neither did it guarantee that further dividends would be declared before the closing. Bernabucci’s plans to continue to seek a dividend after he signed the stock purchase agreement cannot be construed to be a guarantee of a dividend that would have materially affected his decision to enter into the agreement if further dividends were not forthcoming. Bernabucci had no knowledge whether the board would or would not approve distri-button of a dividend before he signed the agreement. Section 9-13-02, N.D.C.C., is therefore inapplicable under the circumstances.

[¶ 23] We conclude the district court properly granted summary judgment dismissal of the Bernabucci group’s claims.

B

[¶ 24] Nyhus argues the district court improperly granted summary judgment dismissing his claims because he did not sign the June 2002 stock purchase agreement containing the mutual release.

[¶ 25] Nyhus accepted the December 28, 2001, offer from the Huber group and tendered his shares for sale. That offer specifically prohibited the payment of further dividends. See N.D.C.C. § 10-19.1-92(l)(c) (the right of a board to authorize distributions may be restricted by agreement). Although Nyhus argues the prohibition on payment of further dividends should not be given effect because no purchase agreement was prepared as called for by the December 28, 2001, offer and because the closing was delayed beyond the contemplated closing date of the end of March 2002, Nyhus accepted payment for his shares of stock when the sale was finally closed on September 12, 2002. A party who accepts performance in a manner different from that required by contract acquiesces in any nonconforming performance. See Dangerfield v. Markel, 252 N.W.2d 184, 191 (N.D.1977); N.D.C.C. § 9-12-01.

[¶ 26] We conclude the district court properly granted summary judgment dismissal of Nyhus’s claims.

C

[¶ 27] The Bernabucci group and Nyhus contend the district court abused its discretion in denying their motion to amend the complaint.

[¶ 28] Once a responsive pleading has been served, a complaint may be amended only by leave of court or by written consent of the adverse party. N.D.R.Civ.P. 15(a); Farmers Alliance Mut. Ins. Co. v. Hulstrand Constr., Inc., 2001 ND 145, ¶ 10, 632 N.W.2d 473. Although leave to amend a pleading “shall be freely given when justice so requires,” N.D.R.Civ.P. 15(a); Greenwood v. American Family Ins. Co., 398 N.W.2d 108, 111 (N.D.1986), leave to amend is not to be granted automatically. See Isaac v. State Farm Mut. Auto. Ins. Co., 547 N.W.2d 548, 551 (N.D.1996). A decision on a motion to amend a pleading under N.D.R.Civ.P. 15(a) is within the sound discretion of the district court and will not be overturned on appeal in the absence of an abuse of discretion. First Interstate Bank v. Rebarchek, 511 N.W.2d 235, 243 (N.D.1994). A trial court abuses its discretion when it acts arbitrarily, unconscionably, or unreasonably, or when its decision is not the product of a rational mental process leading to a reasoned determination. Hulstrand Constr., Inc., at ¶ 10.

[¶ 29] The motion to amend sought to join North Star, Kauphusman and Helgaas as defendants and to add additional claims for breach of contract, fraud, deceit, misrepresentation, breach of fiduciary duty, unjust enrichment, constructive trust and exemplary damages concerning the declaration and subsequent rescission of the dividend. The proposed additional counts essentially restate the original claim for breach of fiduciary duty with different labels, seek the benefit of the rescinded dividend, and do not change the nature of the action. See generally Johnson v. Nodak Mut. Ins. Co., 2005 ND 112, ¶ 12, 699 N.W.2d 45 (in deciding which statute of limitations applies in a given case courts consider the actual nature of the action and not the form of the remedial procedure); Johnson v. Haugland, 303 N.W.2d 533, 538 (N.D.1981) (same). The mutual release signed by the Bernabucci group released North Star and its directors and officers “from any and all claims” related to the sale of North Star. Consequently, the Bernabucci group cannot sue these defendants over their actions concerning the dividend. Although Nyhus did not sign the stock purchase agreement, he accepted the December 28, 2001, offer by the buyers which specifically precluded payment of further dividends before closing. Consequently, Nyhus has no valid claim arising from the failure of North Star to issue a dividend regardless of the theory advanced.

[¶ 30] A district court does not abuse its discretion when it denies a requested amendment which would be futile. See Hulstrand Constr., Inc., 2001 ND 145, ¶ 10, 632 N.W.2d 473; Messiha v. State, 1998 ND 149, ¶ 12, 583 N.W.2d 385; Wishnatsky v. Bergquist, 550 N.W.2d 394, 403 (N.D.1996); Rebarchek, 511 N.W.2d at 243. Under these circumstances, the district court did not abuse its discretion in denying the motion to amend the complaint.

Ill

[¶ 31] The judgment is affirmed.

[¶ 32] BRUCE E. BOHLMAN, S.J., DALE V. SANDSTROM, CAROL RONNING KAPSNER, and MARY MUEHLEN MARING, JJ., concur.

[¶ 33] The Honorable BRUCE E. BOHLMAN, S.J., sitting in place of CROTHERS, J., disqualified.


source: Caselaw Access Project

author: CROTHERS, Justice.

license: Public Domain

text:
    2006 ND 72
    DeAnn R. HOPFAUF; Richard K. Stewart; and Michael L. Wagner, Trustee of Bankruptcy Estate of Richard K. Stewart and DeAnn R. Hopfauf, Plaintiffs and Appellants v. Richard J. HIEB; Richard J. Hieb, DDS, P.C., Defendants Caesar C. Butura; and Face and Jaw Surgeons, P.C., Defendants and Appellees.
    No. 20050203.
    Supreme Court of North Dakota.
    April 6, 2006.

      Arnold V. Fleck, Fleck Law Office, Bismarck, ND, for plaintiffs and appellants.
    Michael T. Andrews (argued) and Harlan P. 'Weir (on brief), Vogel Law Firm, Bismarck, ND, for defendants and appel-lees.
   CROTHERS, Justice.

[¶ 1] DeAnn R. Hopfauf (“Hopfauf’) and Richard K. Stewart, husband and wife, and Michael L. Wagner, trustee of the bankruptcy estate of Richard K. Stewart and DeAnn R. Hopfauf, appeal from the district court’s judgment dismissing the claims against Caesar C. Butura (“Butu-ra”) and Face and Jaw Surgeons, P.C. (“Face and Jaw”). We affirm the district court’s judgment.

I

[¶ 2] On February 4, 2002, Hopfauf retained Dr. Richard J. Hieb, DDS, (“Hieb”) to treat a chipped tooth that was causing discomfort. X-rays were taken during Hieb’s examination of Hopfauf, and Hop-fauf pointed to and described the location of the tooth. Using the standardized dental numbering system, the chipped tooth was number one, the first adult wisdom tooth. Hieb found extensive decay in the tooth, requiring immediate treatment. Hieb suggested either a root canal and crown or extraction as possible courses of action and explained the cost associated with each procedure. Hieb placed a temporary filling in tooth number one to alleviate Hopfauf s discomfort until she decided on a specific procedure.

[¶ 3] Two days later, Hopfauf contacted Hieb’s office for a referral for extraction of the tooth. An employee of Hieb, P.C., made an appointment for Hopfauf at Face and Jaw and completed a referral form. Hieb wrote on the form that Hop-fauf was referred for extraction of tooth number two, thus misidentifying the chipped tooth.

[¶ 4] On March 7, 2002, Butura, an oral surgeon employed at Face and Jaw, briefly reviewed Hopfaufs x-rays, which revealed extensive decay in tooth number two-significantly more decay than in number one. Butura verified that Hopfauf was there for extraction of a decayed tooth and proceeded to sedate Hopfauf and extract tooth number two in accordance with the instructions on the referral form. Hopfauf claims Butura spent less than a minute examining her prior to sedating her for the extraction.

[¶ 5] A few days after the surgery, Hopfauf discovered it was not the chipped tooth, number one, that was removed, but the tooth in front of that tooth, number two. Butura insisted he had extracted the right tooth. Hieb initially claimed the proper tooth was extracted but later admitted incorrectly identifying the chipped tooth as number two.

II

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

Whether summary judgment was properly granted is a question of law which we review de novo on the entire record. On appeal this Court decides if the information available to the trial court precluded the existence of a genuine issue of material fact and entitled the moving party to summary judgment as a matter of law. Summary judgment is appropriate against parties who fail to establish the existence of a factual dispute on an essential element of a claim on which they will bear the burden of proof at trial.

Heart River Partners v. Goetzfried, 2005 ND 149, ¶ 8, 703 N.W.2d 330 (citations and quotations omitted). A ruling court must consider the substantive evidentiary standard of proof when ruling on a motion, considering whether the trier of fact would find the plaintiffs case was proven by the required quality and quantity of the evidence. Id. at ¶ 9.

[¶ 7] Hopfauf argues the district court erred in granting Butura and Face and Jaw’s motion for summary judgment on three bases: Hopfauf was unable to complete discovery before the summary judgment motion was made; the required resolution of factual disputes rendered this action inappropriate for summary judgment; and the court’s determination of duty was based on an improper application of the law to the facts of the case.

A

[¶ 8] Hopfauf argues she was precluded from conducting proper discovery and the district court erred in refusing to grant a continuance to achieve that end. Rule 56(f), N.D.R.Civ.P., states:

Should it appear from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party’s opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just.

A district court’s denial of a request for additional time for discovery under N.D.R.Civ.P. 56(f) is not overturned on appeal absent an abuse of discretion. Continental Cas. Co. v. Kinsey, 513 N.W.2d 66, 69 (N.D.1994).

[¶ 9] Here, Hopfauf was able to, and indeed did, provide a response to the summary judgment motion and an affidavit to support her opposition. Although she listed some issues she sought to further investigate, these facts were not the subject matter of the summary, judgment motion and would, thus, be irrelevant. The district court’s refusal to grant additional time for discovery was not an abuse, of discretion.

B

[¶ 10] Hopfauf contends this action was inappropriate for disposition via summary judgment because it required resolution of factual disputes by a fact-finder. However, critical facts of this case were not disputed, and the district court accepted Hop-fauf s interpretation of the few facts that otherwise might have been in dispute. Hopfauf failed to point to a single issue of material fact in dispute but has, rather, made sweeping allegations that resolution of the facts was required. Summary judgment was appropriate in this case, as we further discuss below.

C

[¶ 11] Hopfauf argues Butura and Face and Jaw were negligent in failing to obtain her informed consent. While claims against Butura arguably should have been analyzed as a “medical battery,” neither remaining party raised that issue for our review. We therefore consider the case as presented, conclude the district court was correct in its result, and affirm.

[¶ 12] “A major element of any negligence action is the existence and extent of a duty owed the defendant by the plaintiff.” Winkjer v. Herr, 277 N.W.2d 579, 587 (N.D.1979). Physicians generally owe a duty of reasonable disclosure of the options available to a patient for treatment and the known, material risks involved. Id. Here, the question of whether Hieb or Butura had the duty to disclose such information was the main issue disputed in the summary judgment proceedings.

[¶ 13] The district court granted summary judgment based on a synthesis of Long v. Jaszczak, 2004 ND 194, 688 N.W.2d 173, and Koapke v. Herfendal, 2003 ND 64, 660 N.W.2d 206. Both Long and Koapke involve informed consent, or more specifically, whether the obligation to obtain informed consent rests with the referring or performing physician in a referral situation.

[¶ 14] Long and Koapke deal with “the duty of a physician to disclose sufficient information to permit a patient to make an informed and intelligent decision on whether to submit to a proposed course of treatment or surgical procedure.” Koapke, 2003 ND 64, ¶ 14, 660 N.W.2d 206. In Long, a patient died following an allergic reaction to an intravenous pyelogram (“IVP”) test. 2004 ND 194, ¶2, 688 N.W.2d 173. Neither the physician that ordered nor the radiologist that supervised the IVP informed the patient of the risks associated with the procedure. Id. at ¶ 3. On appeal, this Court held the referring physician and not the radiologist had the duty to obtain the patient’s informed consent, because the physician formally ordered the procedure for purposes of diagnosing the patient’s condition. Id. at ¶ 15.

[¶ 15] In Koapke, a dentist referred a patient to an oral surgeon for full-mouth extraction in order to be fitted with dentures. 2003 ND 64, ¶ 7, 660 N.W.2d 206. The oral surgeon conducted a full examination of the patient and discussed treatment options before proceeding with the extraction. Id. at ¶ 8. Following the extraction it was determined the patient could not be fitted with dentures, a risk she was not told of by either the referring dentist or the oral surgeon. Id. This Court determined the referring dentist had no duty to obtain the patient’s informed consent because he neither formally ordered nor participated in the extraction. Id. at ¶ 23.

[¶ 16] We agree with the district court’s conclusion that, based on Long and Koapke, the duty of obtaining informed consent rested with Hieb and not Butura. Hieb formally ordered the extraction after discussing treatment options with Hopfauf. He participated in the procedure by placing the temporary filling in the tooth. Bu-tura simply followed the instructions set forth by Hieb. All of these facts viewed in a light most favorable to Hopfauf lead to the conclusion this situation is akin to that in Long rather than in Koapke, and the duty to obtain informed consent rested with Hieb alone.

[¶ 17] Furthermore, a duty to disclose “can arise only if the physician knew or should have known of the risks to be disclosed.” Winkjer, 277 N.W.2d at 588. Hopfauf has failed to direct us to any evidence supporting a position that Butura either knew or should have known that Hieb had directed him to extract the wrong tooth. Even Hopfaufs own expert witness stated that Butura acted within the acceptable standard of care for oral surgeons in determining which tooth to extract. There are no issues of material fact in dispute that support Hopfaufs contention that Butura breached any duty owed to her.

[¶ 18] We affirm the judgment of the district court.

[¶ 19] GERALD W. VANDE WALLE, C.J., WILLIAM F. HODNY, S.J., DEBBIE GORDON KLEVIN, D.J., and JOHN CHARLES IRBY, D.J., concur.

[¶ 20] The Honorable JOHN CHARLES IRBY, D.J., the Honorable DEBBIE ■ GORDON ELEVEN, D.J., and the Honorable WILLIAM F. HODNY, S.J., sitting in place of SANDSTROM, J., KAPSNER, J., and MARING, J., disqualified.

      . Hieb was a party to the district court action but is not a party on this appeal due to settlement.

      . The “law of the case” doctrine and the scope of the parties’ appeal define the parameters of our review. Tom Beuchler Constr. v. Williston, 413 N.W.2d 336, 339 (N.D.1987). We therefore do not consider whether, in North Dakota, there remains a distinction between a battery, which involves a total lack of consent for an act, and a claim involving the absence of informed consent. The differences between the two doctrines have become blurred in numerous jurisdictions, including our own. Some jurisdictions have abandoned the distinction between informed consent and battery, or no-consent, claims altogether. Others have not, stating, “To argue that consent that is inadequately informed is no consent at all ... is to ignore the practical differences underlying the distinction between battery and negligent nondisclosure.” Kohoutek v. Hafner, 383 N.W.2d 295, 299 (Minn.1986). Given the presentation of this appeal, clarification of these concepts under our law is left for another day.


author: KONENKAMP, Justice.

text:
    2006 SD 28
    In the Matter of the GUARDIANSHIP AND CONSERVATORSHIP OF A.L.T. & S.J.T., Minor Children.
    No. 23453.
    Supreme Court of South Dakota.
    Considered on Briefs Feb. 13, 2006.
    Decided March 22, 2006.

      Tamara D. Lee, Yankton, South Dakota, Attorney for grandparents appellants E.S. &C.S.
    Cynthia M. Berreau, Sioux Falls, South Dakota, Attorney for appellee mother.
    Robert L. Spears of Spears Law Office, Watertown, South Dakota, Attorney for appellee father.
   KONENKAMP, Justice.

[¶ 1.] In this case, what began as a divorce, ended as a custody dispute between the parents and the maternal grandparents. Because the parents were unable at first to independently care for their two little girls, the grandparents agreed to care for them. They have done so since birth. Eventually, the grandparents obtained guardianship. Over the next several years, issues concerning visitation and custody of the children were extensively litigated between the grandparents and the parents. In the end, the circuit court terminated the guardianship. The court found that the parents were fit and awarded sole physical custody to the mother, with the father given scheduled visitation. Further, because the court found that the grandparents had deliberately alienated the relationship between the father and the children, the court imposed several restrictions before the grandparents could have visitation with the girls. Now, the grandparents appeal the termination of the guardianship and the court’s decision to restrict their visitation. Although there is evidence in conflict, we cannot say that we have a definite and firm conviction that the circuit court judge was clearly erroneous. Therefore, we affirm.

Background

[¶2.] The mother and father (L.D.T and P.D.T.) were married on May 14,1994, and are the biological parents of A.L.T. and S.J.T., twin girls born on October 22, 1994. After the children were born, the mother, father, and children moved in with the mother’s parents, E.S. and C.S. This arrangement continued for six months, until the mother and father moved into a home that was under construction. When the parents moved out, however, the girls remained with the mother’s parents because the new home was not yet suitable for children.

[¶ 3.] Over the next several years, the mother regularly visited the children at her parents’ home and occasionally provided financial support. The father’s visits were intermittent, and little or no support was provided. At no time, however, did the girls leave the maternal grandparents’ home to live with their parents. On May 25, 1999, the mother sued the father for divorce in Turner County, South Dakota. While the divorce was pending, and because the girls had always remained at the maternal grandparents’ home, the grandparents petitioned for temporary guardianship of the children in Minnehaha County, South Dakota. The court granted the temporary guardianship on December 8, 1999.

[¶ 4.] The father moved to dismiss the temporary guardianship on January 7, 2000. One month later, and before the motion to dismiss was addressed, all parties stipulated to a change of venue on the guardianship matter from Minnehaha County to Lincoln County, and an order was entered to that effect. Then on August 11, 2000, a hearing was held in Lincoln County on the father’s motion to dismiss. The court, per Judge Bogue, ordered that the temporary guardianship be continued pending further hearing on the custody issues in the underlying divorce action in Turner County.

[¶ 5.] At this same hearing, the court ordered that the mother and father shall be entitled to supervised visitation at “such dates and times to be mutually agreed upon by and between the parties and their legal counsel upon reasonable advance notice.” The court also required the mother and father to pay the grandparents child support, in accordance with the South Dakota guidelines. Lastly, the court appointed Deb Langenfeld of Great Plains Psychological Services to counsel the children and make recommendations regarding visitation with the parents.

[¶ 6.] In the divorce action in Turner County, Judge McMurchie took judicial notice of the pending guardianship in Lincoln County and then declared that the temporary physical and legal custody of the children should remain with the grandparents. But the court also stated that the mother and father shall continue to have supervised visitation based on the recommendations of the court appointed expert, Langenfeld. Further, in its December 12, 2000 order, the court joined the grandparents as interested parties in the divorce action.

[¶ 7.] The mother and father exercised their rights to visitation with the children at the Visitation Center in Sioux Falls. These visits were supervised, videotaped, and a record was made documenting each visit. The record detailed the interactions between the parents and the children, as well as the conduct of the grandparents. Langenfeld, as the court-appointed therapist for the children, also kept a record of her treatment of the girls and her recommendations for the future with respect to the parents. A review of her record is essential.

[¶ 8.] On October 24, 2000, Langenfeld wrote a letter to the attorneys involved and summarized the children’s progress. She recommended that the children continue to have supervised visitation with their parents. She also noted that both girls expressed a fear of their father because they claimed he was violent. She noted that reunification is a slow process, recognizing that the grandparents have been the only consistent and stable element in the children’s lives. In describing a visit between the father and the girls on December 10, 2000, Langenfeld reported that the father was relaxing more.

[¶ 9.] In January 2001, Langenfeld indicated that the grandparents may be overacting in front of the children and that the children were picking up on the grandparents’ stress. Langenfeld sent another letter to the attorneys on February 28, 2001. Even though neither parent had been highly involved in the children’s lives in the past, and the grandparents had been left with the responsibility of parenting them, she declared that “[t]he why and wherefores of the past reasons for lack of contact are not as important as is the need now for visitation continuity and furthering the development of a relationship between the girls and each parent.”

[¶ 10.] In her assessment of the mother, Langenfeld stated that she had had only minimal contact with her, but through the girls had learned that the mother had been visiting them on a daily basis. Lan-genfeld could not comment on the quality of the mother-child relationship, as she had nothing from which to do so. However, with respect to the father, she noted that it had been difficult for her to work on reunifying the children with him because of “the ongoing caviling that takes place, as well as the covert and overt messages and coding that takes place from the adults around the children.” Specifically, Langenfeld was concerned “with the quality and the amount of negative messages the [children] are getting about their father through/from the grandparents.” The grandparents, however, relayed to her that they were in fear for the children’s safety and only desired to keep them protected. Langenfeld discussed with them that their issues with the father were only interfering, contaminating, and fueling the loyalty issues with the girls.

[¶ 11.] In summing up, Langenfeld remarked that she needed to continue to monitor the covert and overt contamination by all adults involved. She also stated that it would be helpful if everyone would begin to regard the children’s biological father as “dad” in front of them. This was because the children were calling the grandparents mom and dad, and addressing their biological parents by their respective first names. Because as a whole the visitations were going well and the children were beginning to bond with their father, she also recommended that the therapist-supervised visitations cease and supervised visitation with the father be allowed with his family. If all were to go well, Langenfeld would recommend that the father receive regular visitation as allowed under the South Dakota guidelines.

[¶ 12.] On her recommendations, the father exercised supervised visitation at his brother and sister-in-law’s home on April 14 and 28, 2001, in Minnesota. The girls were six at the time. Two days after the second visit, on April 30, 2001, the grandparents reported that the father sexually abused the children in Minnesota during the overnight visit. According to the grandparents, on a walk after school one afternoon, one of the girls stated that “her potty thing hurts.” When questioned by the grandparents, the child stated that “[the father] hurt my potty thing” and that he “used his finger.” The other child stated that the father had come into the room she was sleeping in and had “stuck his thumb in her potty thing, and it hurt.”

[¶ 13.] The grandparents took the girls to the emergency room, where they were examined by medical personnel. On May 8, 2001, a forensic interview and medical examination were done with both children at Child’s Voice Evaluation Center, by Colleen Brazil and Dr. Rich A. Kaplan, a pediatrician. The interview was videotaped and recorded through written documentation. Dr. Kaplan, in his examination of the children at Child’s Voice, did not find any abnormality, trauma, injury, or other evidence of sexual abuse. Nevertheless, in his assessment and examination of the girls, Dr. Kaplan concluded that sexual abuse was possible. Law enforcement was contacted.

[¶ 14.] The South Dakota authorities conducted a preliminary investigation in South Dakota, but because the incident allegedly occurred in Minnesota, further investigation was conducted by Minnesota authorities. The Minnesota investigator, John Nuernberg, interviewed the father’s sister-in-law, viewed the videotapes from the children’s interviews, met with the South Dakota authorities and reviewed their case file, and spoke with the children’s therapist. However, no agency in South Dakota or Minnesota ever brought criminal charges against the father.

[¶ 15.] After the sexual abuse allegations, visitations between the father and the girls ceased, but the children’s counseling continued. Even though the abuse was not substantiated, the grandparents continued to express fear for the children’s safety. On May 15, 2001, Langenfeld explored with the girls what had reportedly happened. After her session, she remarked that she was unsure of what to make of the children’s statements “since questioning and the children’s reactions by [the grandparents] will have high influence — answers in line with what [the grandparents] reported to me.” Langen-feld indicated that she would be transitioning this case over to a new therapist as she was leaving Great Plains.

[¶ 16.] In June 2001, Patricia Brady took over Langenfeld’s responsibilities with counseling the girls and documenting their treatment. Brady first conducted a preliminary assessment of the children. On June 27, 2001, she established certain treatment goals, which included building a level of trust. She, like Langenfeld, had concerns regarding the grandparents expressing negativity about the father in front of and to the children. Brady determined that the environmental factors were contributing to the children’s trust and loyalty issues. As a result, on July 11, 2001, Brady spoke with the grandparents about this and asked them to bear in mind the confusion the children must feel due to the conflict. She further discussed with the grandparents their responsibility to not speak negatively about the children’s parents in front of them.

[¶ 17.] During the children’s July 24, 2001 session, Brady learned that the grandparents had told the girls that they did not have to see their father anymore. She also learned that their mother continued to see them on a regular basis at the grandparents’ home. Based on this information, Brady planned to work with the girls on clarifying their feelings with what they were being told and identifying certain methods that would assist them in protecting themselves. In October 2001, Brady noted that the girls still did not want to see their father and were fearful that he would take them. Brady continued to work on building trust and assisting the children in identifying and sorting out their feelings about the parental conflict.

[¶ 18.] On September 26, 2001, Dr. Andre Clayborne from Great Plains wrote a letter to all the attorneys as an update on the children’s counseling progress. The letter reported that the children seemed to be adjusting to the sessions with Brady. Also, the letter indicated that no recommendation could be made with respect to resuming visitation with the father because of the alleged sexual abuse. Further, the letter suggested that taking the matter for resolution through the court might be appropriate.

[¶ 19.] Therefore, the father, in his desire to resume visitation with his children, petitioned for dismissal of the guardianship. This came after the mother and father stipulated to a settlement in the divorce action. They left the custody issue to be determined at a later time. Judge McMurchie, in Turner County, held a hearing concerning the guardianship on March 21 and 22, 2002. The court took testimony from the mother, the father, the grandparents, Dr. Kaplan, who had examined the children at Child’s Voice, and then Dr. Clayborne, Jeff Trammell, and Patricia Brady, from Great Plains. The court also admitted into evidence all the records from Langenfeld’s treatment and recommendations. Lastly, the court accepted and considered evidence from the parties relating to the alleged sexual abuse.

[¶ 20.] At the conclusion of the hearing, the court orally ordered that the father have visitation with his children. The visitations were to be supervised and occur on weekends at the Visitation Center in Sioux Falls. The court required that the father submit to a psycho-sexual evaluation by Jeffrey Trammell of Great Plains, who would then prepare a report with his findings and recommendations. The father was examined by Robert Packard, a licensed psychologist. Both Trammell and Packard concluded that there were no presentations that indicated a pattern of psychological difficulties.

[¶ 21.] After the hearing, the father complained that the grandparents were defying the court order by frustrating the scheduled visitations. The grandparents, on the other hand, asserted that it was the girls who refused to see their father. The grandparents insisted that the children refused to get dressed, became defiant, and threatened to run away if forced to go on the scheduled visitations. The grandparents, “sick at the turmoil and distress this is causing the children,” claimed that they did not know what to do next.

[¶ 22.] Because the father was still having difficulty exercising visitation, he moved to further establish his rights. The court held a telephonic hearing on July 10, 2002, in Turner County. Judge McMur-chie entered another order on August 1, 2002, affirming his previous decision to allow the father visitation in accord with the written order entered on June 6, 2002. Further, the court appointed Richard Johnson as the attorney for the children and ordered that he contact Brady to discuss what should be done to get visitation back on track. Brady and Johnson met in August and established a proposed visitation plan.

[¶ 23.] After meeting with the children’s attorney, Brady wrote a letter to Judge McMurchie on September 25, 2002. She noted that the continued purpose of the counseling was to reinstate visitation with the father and children. She stated, however, that the children were resisting such attempts and noted that the girls were telling her that, she was making them see their father and “I don’t want to talk to you.” She also expressed concern about the children’s growing anxiety and agitation regarding counseling. In addition to their fear of their father, Brady commented that the children were now verbalizing a distrust of their mother. According to Brady, though, the children’s “remarks [were] mirroring comments made by the [grandparents] and other family members.” She stated that the negative statements have increased the children’s fears and anxieties. Therefore, she declared that “[a]s of September 25, 2002, all counseling sessions have been stopped until the court can determine a course of action, due to [her] concern of victimization of the children.”

[¶ 24.] In reference to Brady’s September letter, the children’s attorney requested a hearing in October 2002, to determine a further course of action in regard to the custody and visitation of the children. The grandparents moved for a continuance and a change of venue from Turner County to Lincoln County in December 2002. After a telephonic hearing on the matter, Judge Gienapp entered an order on January 23, 2003, granting the change of venue and requiring that the father continue to have visitation on every weekend at the Visitation Center in Sioux Falls until further order of the court.

[¶ 25.] Now in Lincoln County, Judge Tiede held a hearing on February 7, 2003, to determine the future plan for reinstating visitation with the father. On February 27, 2003, the court entered an order requiring that visitation continue as set forth in Judge McMurchie’s oral order and his subsequent August 5, 2002 order as modified by Judge Gienapp’s January 23, 2003 order.

[¶ 26.] On July 15, 2003, the father petitioned the court for unsupervised visitation. Hearings were held on August 11 and 26, 2003. Judge Tiede considered the issue of the alleged sexual abuse through testimonial and documentary evidence. In addition to their own testimony, the grandparents and the father also offered expert testimony: Adrianne Fricker-Elhai for the grandparents and Patricia Brady for the father. Before entering his decision on visitation, Judge Tiede “reviewed all the files including the record from both Turner County and Lincoln County, all the transcripts that [were] part of the [c]ourt file or in the personal files of Judges McMur-chie and Gienapp, the Child’s Voice videotapes of the interviews of [the children], and the videotapes of five visitation sessions by [the father] with the children at the visitation center in the time period from January through March 2003.”

[¶ 27.] Ultimately, on February 18, 2004, Judge Tiede issued an exhaustive thirty-eight page memorandum opinion detailing and assessing the complex legal and personal history of the case. The court found

by the greater convincing force of the evidence that the grandparents have intentionally, deliberately, maliciously and wrongfully prevented [the father] from exercising his lawful rights of visitation with his children. They have improperly and maliciously influenced [the children] by their words and conduct in a deliberate effort to alienate these children from [the father]. They have repeatedly and flagrantly refused to comply with the lawful orders of four separate judges, all of whom have ordered visitation for [the father]. The evidence in support of these findings is overwhelming, beginning with the records of Ms. Langenfeld, the children’s initial therapist extending back to 2000.

On the sexual abuse accusation, the court set forth a detailed analysis of the allegations made by the grandparents and the children, the investigations by the South Dakota and Minnesota authorities, the children’s interview at Child’s Voice, and the results of the father’s polygraph tests. The court evaluated this evidence and concluded that based on the evidence no sexual abuse had occurred.

[1128.] With respect to the polygraph tests, which the grandparents placed significant emphasis on, the court stated:

I completely discount the polygraph for several reasons. First of all, the polygraph evidence is not admissible in South Dakota. It is not admissible because polygraphs are inherently unreliable. Secondly, the police administered the polygraph in the course of an allegation of sexual abuse with no credible evidence to support such allegations. This polygraph was administered clearly in an effort to induce [the father] to confess or admit culpability. The allegation that he failed the polygraph was made in an effort by the police to obtain a confession from [the father]. [The father] continued to profess his innocence. The questions to which the responses of [the father] were deemed deceptive were general and non-specific.

[¶ 29.] In the end, the issues whether the guardianship should continue and whether the children were sexually abused were clearly matters of credibility, and the court found the grandparents to be not credible:

I have been asked to believe that a father desperately fighting to have visitation with his children would on the first opportunity that he was given to have overnight visitation with his children, while in the home of his brother and sister-in-law, and while at least the sister-in-law was present, went into a bedroom where [one child] was sleeping with four other children, took all of his clothes off, took all of the clothes off of [the child], had sexual intercourse with [the child], [the child] screamed and [the father] threatened her and threatened to kill the Grandparents, and then took [the other child] into the bathroom where he touched [that child] in her vaginal area with his thumb outside of her clothes. I am asked to believe this by a Grandmother who has not just a dislike for [the father], but a real hatred of the man. I am being asked to believe this by a Grandmother who prior to the allegation of sexual abuse had done everything within her power to frustrate visitation and the reestablishment of any relationship between these children and [the father]. I am being asked to believe this by a Grandmother who just a month and a half prior to the allegations told a therapist that she is worried something will have to happen before the girls can be safe again. I am being asked to believe this by a Grandmother who is the person who made the initial report of sexual abuse. I am being asked to believe this by a Grandmother who knew that the therapists were reporting that visitations were going well between [the father] and the children and the therapists were recommending that supervision by the therapists end and that transition be made ultimately to unsupervised visitation with [the father]. I am being asked to believe this by a Grandmother who knew that the therapists were reporting that the principal cause of the children’s problems in their behavior in school, and otherwise, was the Grandmother.
Not only is there very little evidence of sexual abuse, there is no credible evidence.

[¶ 30.] Along these same lines, the court addressed the grandparents’ several petitions for protection orders against the father. The latest was September 8, 2003, the fourth protection order they requested. This petition alleged that the father sexually abused the children, but was “in complete contradiction to the earlier allegations which were thoroughly investigated by Minnesota law enforcement officers, Child’s Voice, and the children’s therapists.” Based on this, the court ruled that the grandparents “have wholly failed to sustain their burden of proof to prove domestic abuse by a preponderance of the evidence.” The court rejected the allegation and dismissed the case “as not being supported by any credible evidence.”

[If 31.] The court concluded that no reason existed to deny the father visitation with his children. On March 3, 2004, it entered an order that established the schedule for unsupervised visitation between the father and his children. On March 15, 2004, the father requested a change in custody and termination of the custodial guardianship. At the time of the hearing, however, the children had been admitted to Avera McKennan Hospital in Sioux Falls. The grandparents took the girls there to receive treatment for their anxiety and depression. The children were still in the hospital when the custody hearing was held on March 22 and 25, 2004.

[¶ 32.] The court heard testimony from the mother, the father, the grandmother, and Jeff Hayes, a pastor in the community contacted by the grandparents. At the conclusion of the hearing, Judge Tiede orally ordered that the mother and father be given temporary joint legal custody of the children. The mother received sole physical custody, and the father received unsupervised visitation as previously set forth by the court.

[1133.] Because this was a temporary custody arrangement, the father moved for a modification and a hearing was scheduled for May 25, 2004. At this hearing, the court heard further testimony from the mother, the father, the grandparents, the father’s sister-in-law, and Erin Olson, a home-based therapist who had been referred to the mother from Avera McKen-nan. The court entered a written order on August 18, 2004. In forty-two factual findings and fifteen conclusions of law, the court ruled that the guardianship should be terminated. The court found that from the time temporary custody was transferred to the mother, the children’s anxiety levels had “markedly decreased,” and their performance in school remained constant for one child and improved for the other. Also, the school counselor, who the court found to be credible, “reported that the children seem less fearful than they were in March of 2004.”

[¶ 34.] Nevertheless, the grandparents continued to insist that the father had sexually abused the children and the children needed protection. In this respect, the court noted that it “has consistently ruled it is more probable than not that the sexual abuse supposedly perpetrated by [the father] never happened and such allegations are false.” The court found that since physical custody has been given to the mother, the children’s visitations with the father have gone reasonably well. Also, the court concluded that the children were not acting fearful around him and were enjoying themselves. .

[¶ 35.] The court further found that the mother’s and father’s home environments were stable, that they had the capacity to provide for their children, and that both parents were fit. Therefore, the court ordered that, in the best interests of the children, the mother and father would share joint legal custody of the children and the mother would have sole physical custody. The court denied the grandparents visitation with the children unless the mother consented to the visitation, advance notice of such was given to the father and his attorney, the visitation was recommended by the children’s counselor, and the visitation was specifically authorized by the court.

[¶ 36.] Consequently, the grandparents brought this appeal asserting the following issues: (1) Whether the circuit court erred in terminating the guardianship over the children; (2) Whether the circuit court erred in ruling that the grandparents could not see the children unless certain stringent requirements were met.

Standard of Review

[¶ 37.] Our standard of review is of critical importance in cases where the outcome turns on the credibility of witnesses. Under the rules of appellate review, we are not free to retry the case as if it had never been heard before. A circuit court’s factual findings are reviewed under the clearly erroneous standard. Meldrum v. Novotny, 2002 SD 15, ¶ 18, 640 N.W.2d 460, 463 (quoting Langerman v. Langerman, 336 N.W.2d 669, 670 (S.D.1983)). This means that we must give “considerable deference” to the trial court’s findings. In re J.S.B., Jr., 2005 SD 3, ¶ 12, 691 N.W.2d 611, 615 (citing SDCL 15-6-52(a)). We are bound to “give due regard” to the judge’s unique opportunity to assess whose testimony is more deserving of belief. Meldrum, 2002 SD 15, ¶ 18, 640 N.W.2d at 463 (quoting Langerman, 336 N.W.2d at 670). Findings are clearly erroneous only “when we are left with a definite and firm conviction that a mistake has been made.” J.S.B., Jr., 2005 SD 3, ¶ 12, 691 N.W.2d at 615 (citing In re T.H., 396 N.W.2d 145, 148 (S.D.1986)).

Analysis and Decision

[¶ 38.] The grandparents first claim that the circuit court erred when it terminated their guardianship over the girls. In South Dakota, a court may terminate a guardianship under SDCL 29A-5-506 after it “determines that the minor is no longer in need of the assistance of protection of a guardian....” In this case, the court considered the father’s motion to terminate the guardianship in the context of a divorce proceeding. The court treated this custody matter as a dispute between parents and non-parents and concluded that physical custody should be with the mother.

[¶ 39.] When a non-parent seeks custody, the threshold question is whether the parent is fit to have custody of the child. Matter of Guardianship of Sedelmeier, 491 N.W.2d 86, 87 (S.D.1992). “The parents’ right to custody over then-own children should never be disturbed except upon a clear showing against the parent of ‘gross misconduct or unfitness, or of other extraordinary circumstances affecting the welfare of the child.’ ” Matter of Guardianship of T.L.R., 2002 SD 54, ¶ 13, 645 N.W.2d 246, 250 (quoting Sedelmeier, 491 N.W.2d at 88). In this case, the court awarded sole physical custody of the children to the mother. Therefore, the grandparents had the burden of proving that the mother was unfit, that she committed gross misconduct, or that other extraordinary circumstances affected the welfare of these children such that parental custody should be denied. See Sedelmeier, 491 N.W.2d at 87-88.

[¶ 40.] With respect to fitness of the biological parents, the circuit court held that the mother and father

have stable home environments and have the capacity to provide the children with their basic need and have the ability to give their children love, affection, guidance, education, and have the willingness to maturely encourage and provide meaningful contact with the other parent and prepare the children for meaningful adulthood.

See Fuerstenberg v. Fuerstenberg, 1999 SD 35, ¶ 24, 591 N.W.2d 798, 807. The grandparents do not dispute the mother or father’s capacity to provide the children with their basic needs. Rather, the greater part of the grandparents’ allegations on appeal are against the father. They contend that extraordinary circumstances exist in this case because it is “never in the best interests of a child to be returned to an abusive situation.”

[¶41.] We recognize that the grandparents have articulated considerable fears about the father and his relationship with his twin daughters, their grandchildren. They have cared for and nurtured these children since the time they were born. Their concern for them is expressed throughout the voluminous record and in their brief to this Court, where they insist that the father sexually abused the children in 2001. However, the circuit judge who presided over the case for two years thoroughly examined the record and made a specific factual finding that it was more probable than not that the sexual abuse did not occur.

[¶ 42.] The grandparents ask us to engage in our own assessment of the facts. Yet our standard of review requires us to give deference to the circuit court. Meldrum, 2002 SD 15, ¶ 18, 640 N.W.2d at 463 (quoting Langerman, 336 N.W.2d at 670). In order for the circuit court’s findings to be disturbed, we must have a definite and firm conviction that a mistake has been made. J.S.B., Jr., 2005 SD 3, ¶12, 691 N.W.2d at 615 (citing T.H., 396 N.W.2d at 148). From our review of the record, not only the guardianship termination hearing in May 2004, but the entire settled record submitted for purposes of this appeal, we cannot say that we are left with such a conviction.

[¶ 43.] First, the court awarded the mother, not the father, sole physical custody of the children. This is important because the grandparents make no showing that the mother is unfit. Rather, the record supports the court’s finding of fitness. Before the guardianship was terminated, the children had lived with their mother for approximately two months as part of a temporary custody arrangement. When the court held the final hearing, it was able to compare the children’s current behavior to their past behavior during the time they lived with the grandparents. Based on all the evidence, including expert testimony, the court specifically found that since the transfer of custody to the mother the children have been doing remarkably better. Their anxiety levels had decreased and they were doing well in school.

[¶44.] Second, even though the brunt of the grandparents’ argument is against the father and concerning the alleged abuse, at no time were criminal charges brought against him. He has consistently denied that it happened and has relentlessly fought to maintain a parental relationship with his daughters. In response, the grandparents insist that it is necessary to take into account the fact that the father failed his polygraph examinations. The grandparents place significant emphasis on this, yet we have repeatedly held that the results from a polygraph examination are not admissible in South Dakota civil or criminal proceedings. Sabag v. Continental South Dakota, 374 N.W.2d 349, 352 (S.D.1985) (citing State v. Muetze, 368 N.W.2d 575, 588 (S.D.1985); State v. Watson, 248 N.W.2d 398, 399 (S.D.1976); State v. O’Connor, 86 S.D. 294, 301, 194 N.W.2d 246, 250-51 (1972)). This is because the examinations have “no ‘general scientific acceptance as a reliable and accurate means of ascertaining truth or deception.’ ” See id. at 353 (citation omitted).

[¶ 45.] The circuit court acknowledged the inherent unreliability of polygraph examinations, but it nevertheless reviewed the examination conducted by the Minnesota authorities. The court identified several factors that discredited the results. First, the sole purpose of the examination was to extract a confession from the father. Second, the court found particularly significant that the father’s answer to the question on whether he intended to answer truthfully with respect to the questions regarding the alleged sexual abuse was found to be non-deceptive. Third, the court scrutinized the questions that resulted in deceptive responses from the father, discussing the fact that they were general and non-specific questions. Therefore, and in consideration of the lack of scientific reliability for the polygraph examinations, the circuit court concluded that the results of the father’s polygraph examination were unpersuasive.

[¶ 46.] Based on the court’s review of videotapes from the scheduled visitations and its consideration of the therapists’ observations, the court found compelling the fact that the relationship and interactions between the children and the father were appropriate. The girls were not acting as if they were fearful of him. Indeed, the court, through the same video review, found that the children were enjoying themselves when interacting with their father.

[¶ 47.] Third, these children are now eleven and have consistently been in counseling since the time of the alleged abuse. Their counselors have been reinforcing with them what is appropriate behavior and what is not. While the grandparents’ concerns about the alleged sexual abuse should not be taken lightly, these children have been informed and educated on how to protect themselves. It is also relevant to note that the court gave great weight to the effect of the grandparents’ actions on the children’s well being. Specifically, the court regarded the grandparents’ behavior to be the direct cause of the children’s emotional and behavioral problems. It concluded that continued custody with the grandparents would only be detrimental. Therefore, the court held that “[biased on the totahty of the circumstances, the custodial and guardianship rights of the grandparents should be terminated and such termination would be in the best interests of the children.” We cannot say that the circuit court was clearly erroneous.

[¶ 48.] The grandparents next assert that the court erred when it set forth stringent requirements before they, the grandparents, could see their grandchildren. On the recommendation of the children’s therapist and their attorney, the court ordered that before the grandparents can visit the children: (1) the mother must consent, (2) advance notice must be given to the father and his attorney, (3) Erin Olson, the current counselor, must recommend the visit, and (4) the visit must be specifically authorized by a written order of the court. The effect of these restrictions is to limit substantially the grandparents’ visitation. According to the grandparents, this is extreme considering that they have raised and cared for the girls since birth.

[¶ 49.] South Dakota recognizes the importance of relationships between grandparents and grandchildren. See SDCL 25-4-52. However, grandparent visitation can only occur when it is in the best interests of the grandchild, and when it will not significantly interfere with the parent-child relationship. See id. In this case, the court considered the influence and actions of the grandparents to be detrimental to the welfare of the children. This conclusion is supported in the record. The restrictions were clearly established to protect the emotional and mental well being of the children. Moreover, both the mother and father are not opposed to the children having a relationship with their grandparents. But before this can happen, both parents believe that the grandparents must adjust their own negative behaviors.

[¶ 50.] Both the father and the grandparents seek appellate attorney’s fees and have submitted verified, itemized statements of costs incurred and legal services rendered for purposes of this appeal. In the interests of justice, we award no fees to either side.

[¶ 51.] Affirmed.

[¶ 52.] GILBERTSON, Chief Justice, and SABERS, ZINTER, and MEIERHENRY, Justices, concur.

      .The court ordered the mother and father to pay the grandparents, "as support for the minor children, the sum of $265 each per month, in accordance with the Child Support Guidelines of the State of South Dakota” and "shall split equally (50/50) any medical, dental, orthodontic, counseling, pharmaceutical, or optical expenses not covered by [the grandparents'] insurance.”

      . The statutory authority for joining the grandparents as guardians was SDCL 26-5A-10, which has since been repealed. See SDCL 26-5A-10 (repealed SL 2005, ch. 137, § 43).

      . These records were entered into evidence at a subsequent hearing and are part of the settled record in this appeal.

      . Even though his initial report stated '‘possible” sexual abuse, Dr. Kaplan, in his testimony at a hearing on March 22, 2002, reported that he would now say ‘‘probable” sexual abuse.

      . On June 6, 2002, the court entered a written order that set forth the father's right to visitation with his children. The court acknowledged "that the father has not had the opportunity to visit his children for approximately one year. This Court is of the opinion that this is too long. The goal of the counseling recommendations and visitation plan is to reunify the children with both parents." The court also granted the mother and the father a divorce for irreconcilable differences.

      . The father was administered another polygraph examination by Great Plains. Even though some of the father’s answers were considered deceptive, Trammell could not find any factual basis from which to conclude that the sexual abuse occurred.

      . The first protection order was filed in 2001, and was dismissed for the grandparents’ failure to appear for the hearing. The second and third petitions were from January 2003, and alleged the same instance of sexual abuse from 2001. The petitions were dismissed by Judge Tiede because the grandparents failed to “provide sufficient evidence to support, by a preponderance of the evidence, a finding that domestic abuse between a family or household member had occurred.”

      . The court's findings of fact and conclusions of law from the February 2003 hearing were entered on August 18, 2004.

      . There is reference in the briefs regarding whether the guardianship was temporary and terminated by operation of law. According to the father, if this were the case, then termination by the court was not necessary. Yet, because the matter was not argued below, we will not address it on appeal. See Watertown Coop. Elevator Ass'n v. S.D. Dept. of Rev., 2001 SD 56, ¶ 11 n. 5, 627 N.W.2d 167, 171-72 n. 5.

      . For the father’s motion, the circuit court required that he plead and prove that there had been a substantial or material change in circumstances affecting the welfare and best interests of the children. See Berens v. Berens, 2004 SD 121, ¶ 12, 689 N.W.2d 207, 212; Price v. Price, 2000 SD 64, ¶ 52, 611 N.W.2d 425, 436; SDCL 25-4-45. Accordingly, the court found that "any continued custody of the children by the grandparents would be detrimental to the children’s welfare.”

      . The grandparents had been joined as interested parties in the divorce action, which originated in Turner County. Venue for the divorce action was changed from Turner County to Lincoln County in January 2003 per Judge Gienapp's order.

      . The grandparents also assert that the parents abandoned their children under SDCL 25-7-17. However, they did not argue this in circuit court, and "[w]e refrain from addressing matters brought for the first time on appeal.” See Watertown Coop. Elevator Ass’n, 2001 SD 56, ¶ 11 n. 5, 627 N.W.2d at 171-72 n. 5.