author:
GILBERTSON, Chief Justice.
      ZINTER, Justice

text:
    2008 SD 30
    Jason D. ERICKSON, Petitioner and Appellant, v. Douglas WEBER, Warden, South Dakota State Penitentiary, Respondent and Appellee.
    No. 24624.
    Supreme Court of South Dakota.
    Considered on Briefs Feb. 11, 2007.
    Decided April 16, 2008.

      Mark McBride, Beverly Hills, California, and Julia M. Dvorak and Reed Rasmussen of Siegel, Barnett and Schütz Aberdeen, South Dakota, Attorneys for petitioner and appellant.
    Lawrence E. Long, Attorney General, Frank Geaghan, Assistant Attorney General, Pierre, South Dakota, Attorneys for respondent and appellee.

      . By May 5, 2005, Fischbach was no longer the Spink County State’s Attorney.

   GILBERTSON, Chief Justice.

[¶ 1.] On October 28, 2004, Jason Erickson (Erickson) filed a petition for writ of habeas corpus in the South Dakota Fifth Judicial Circuit alleging that the State failed to disclose evidence relevant to his sentencing. Erickson filed a supplemental petition on December 19, 2005. The habe-as court heard the matter on May 26, 2006. Thereafter, the court denied Erickson’s petition, filing its letter opinion on December 22, 2006, with findings of fact and conclusions of law entered on July 27, 2007. We affirm.

FACTS AND PROCEDURE

[¶ 2.] Erickson’s appeal from the habe-as court arises from two aggravated assault convictions and his admission to a part 2 habitual offender information stemming from an armed standoff that started on the night of August 9, 2002. The incident began when law enforcement attempted to initiate a traffic stop after clocking Erickson traveling 95 mph in a 65 mph zone. Erickson, who later told a Department of Criminal Investigation agent that he did not stop because he was intoxicated and did not want a DUI, led law enforcement to his rural Spink County South Dakota home near Tulare.

[¶ 3.] When Erickson arrived at his property, a Spink County Sheriffs Deputy, who was on foot, attempted to stop his vehicle. However, Erickson continued on to his farmhouse, nearly running down the deputy in the process. Once inside, Erickson barricaded himself. Armed with numerous firearms and a large quantity of ammunition, he proceeded to hold officers from a number of northeastern South Dakota law enforcement agencies at bay for several hours. During the standoff, Erickson fired multiple rounds of shotgun and rifle ammunition at law enforcement and their vehicles.

[¶ 4.] Sometime after 4:00 a.m. on the morning of August 10, Detective Steve Pi-nok (Pinok) of the Aberdeen, South Dakota Police Department was contacted to assist in negotiations with Erickson. Unable to communicate with him by phone, Pinok was driven by armored personnel carrier to speak with Erickson through a farmhouse window. Pinok testified during his deposition that he asked Erickson, “what I could do or what I could provide to him to have him lay down his arms and come out peacefully.” Erickson told Pinok that he wanted assurances that he would not go to the penitentiary and that he would receive assistance with chemical dependency and mental health issues.

[¶ 5.] Pinok relayed this information to Spink County State’s Attorney, Victor Fischbach. At around 5:20 a.m., Fisch-bach, together with the Spink County Sheriff, Les Helm, left the scene of the standoff and drove to Redfield, South Dakota where Fischbach typed up a letter addressing Erickson’s demands in exchange for his peaceable surrender to law enforcement. Fischbach and Sheriff Helm returned and gave the Letter to Pinok, who read it to Erickson from the armored personnel carrier. The Letter, on State’s Attorney letterhead, dated August 10, 2002, referred to by the habeas court as the “Fischbach Letter,” stated the following:

In consideration of Jason Erickson laying down his arms and surrendering to law enforcement, the state agrees to help him get the assistance he needs with a chemical dependency and psychological evaluations. In exchange for Jason Erickson agreeing to pay restitution on the aggravated assault upon an officer, the state further agrees to consider not seeking a penitentiary sentence.
The states [sic] position here is that Jason Erickson needs to get help and he realizes that. The states [sic] primary interest here is ensuring that nobody, including Jason Erickson, gets hurt or killed. The state will uphold this offer if Jason Erickson exits his house peacefully and immediately.

Fischbach then added the following handwritten note to the bottom of the Letter:

Additional: I Hereby agree to A $10,000 dollar PR Bond upon condition of his turn In an [sic] booking and agreement to turn himself In for NEMH [Northeastern Mental Health] in Aberdeen, Brown Co. SD on 8-11-02 at 8:00 AM. Should these conditions not be followed the PR Bond will be revoked.
VBF

During his deposition, Pinok testified that after reading the Fischbach Letter, he asked Erickson what he thought about the Letter. Pinok testified that Erickson replied, “It sounds good.”

[¶ 6.] Erickson subsequently surrendered to the chief deputy of the Spink County Sheriffs Department. Erickson was handcuffed. Pinok testified that he handed the Fischbach Letter to the chief deputy and that he “saw the chief deputy fold it up and put it into his pocket and tell Jason [Erickson], ‘Fve got it right here.’ ”

[¶ 7.] On August 13, 2002, Erickson was indicted by a Spink County Grand Jury. He was charged with two counts of attempted first degree murder, four counts of aggravated assault, one count of felony intentional damage to property, possession of a firearm by one with a prior violent crime conviction, eluding law enforcement, reckless driving, obstructing law enforcement and resisting arrest. On September 10, 2002, a part 2 habitual offender information was filed against Erickson.

[¶ 8.] Erickson retained defense counsel, Ron Volesky (Volesky), who arranged a plea agreement whereby Erickson agreed to plead guilty to two counts of aggravated assault and admit to the habitual offender information. In exchange, the State agreed to dismiss the remaining charges and file no further charges in eon-nection with the standoff. Erickson appeared in circuit court on January 14, 2003 and pleaded guilty to the charges as set out in the plea agreement. The circuit court accepted the plea based on the factual basis in the record to support the charges and Erickson’s acknowledgment of his agreement to the terms of the plea agreement. However, sentencing was stayed pending the completion of a presen-tencing investigation that had been requested by Erickson.

[¶ 9.] On March 25, 2003, a stipulation for substitution of counsel was filed whereby attorney Terry Sutton (Sutton) was substituted for Volesky. Sutton filed a request to withdraw Erickson’s pleas. However, sentencing went ahead as scheduled. On August 19, 2003, Erickson was sentenced to 10 to 20 years indeterminate on each of the two aggravated assault counts, to be served consecutively. On June 25, 2004, the South Dakota Board of Pardons and Paroles set the term on each of the two counts at 20 years.

[¶ 10.] Erickson filed a pro se habeas petition on October 28, 2004. On November 15, 2004, attorney Kenneth Tschetter (Tschetter) filed a notice of appearance on behalf of Erickson in the habeas action. On January 25, 2005, a substitution of attorney was filed along -with motion for pro hac vice requesting admission of attorney Mark McBride (McBride) from Hollywood, California to represent Erickson in the habeas action. McBride was admitted to represent Erickson on January 27, 2005.

[¶ 11.] On May 5, 2005, McBride wrote Fischbach a letter in which he indicated that he had reviewed the record, including “station logs” compiled by law enforcement during Erickson’s standoff. McBride went on to state that from the station logs, “it appears that you went to the scene of the incident^ left the scene to type up an agreement [the Fischbach Letter], and returned shortly thereafter with the agreement.” He further stated, “It is my understanding that this agreement contained a plea bargain between you and my client, Mr. Erickson, and that this plea agreement contained statements made by my client.”

[¶ 12.] On September 6, 2005, McBride filed a notice of hearing to compel discovery along with an affidavit in support of said discovery motion. On September 15, 2005, Fischbach sent a letter to McBride explaining that he had just received a correspondence from the Spink County Sheriffs Department indicating that the Fisch-bach Letter had been located in a “Do Not Destroy” evidence file at the Sheriffs office. Fischbach enclosed a copy of the Fischbach Letter with the letter to McBride.

[¶ 13.] Subsequently, attorneys Vole-sky, Sutton and Tschetter each filed affidavits in connection with Erickson’s habeas action. All three attorneys denied having knowledge of the Fischbach Letter until it was shown to them by McBride in mid-October 2005.

[¶ 14.] At the hearing on May 26, 2006, Erickson alleged that the State failed to disclose evidence favorable to him, thereby violating his right to due process. Erickson argued that his guilty plea should be vacated or corrected to take account of the alleged plea agreement in the Fischbach Letter. Fischbach testified that there was only one copy of the Fischbach Letter and that following the standoff, he believed that Erickson had it in his possession.

[¶ 15.] The habeas court found that both Erickson and Fischbach knew of the Fischbach Letter and that neither told Volesky, Sutton or Tschetter about its existence; that there was no evidence that the Fischbach Letter was ever in Erickson’s case file and that Fischbach neither knowingly or intentionally failed or refused to produce the Fischbach Letter for any of Erickson’s attorneys; that Fischbach believed there to be one copy of the Fisch-bach Letter and that he believed it was in Erickson’s possession; that Fischbach responded truthfully to McBride’s May 5, 2005 request for the Fischbach Letter when he told him that he did not have it and that it was not until McBride filed his motion to compel discovery that Fischbach contacted the Spink County Sheriffs Office and learned that the Letter was in the Sheriffs custody.

[¶ 16.] The habeas court denied Erickson’s petition concluding that while the Fischbach Letter had been inadvertently suppressed and that it contained information that Erickson’s attorneys would have wanted to know about prior to sentencing, Erickson was not prejudiced in any way by the State’s failure to produce it sooner. The court concluded that the Fischbach Letter simply did not contain any promise that Erickson would not be incarcerated and that given the context within which the considerations therein were negotiated, it was not a legally enforceable document.

[¶ 17.] Erickson raises two issues on appeal:

1. Whether the State suppressed evidence in violation of Erickson’s due process rights when it allegedly failed to disclose to defense counsel the existence of an alleged plea agreement contained in the Fisch-bach Letter.
2. Whether Erickson was entitled to specific performance of the alleged plea agreement contained in the Fischbach Letter.

STANDARD OF REVIEW

Our review of habeas corpus proceedings is limited because it is a collateral attack on a final judgment. New v. Weber, 1999 SD 125, ¶5, 600 N.W.2d 568, 571 (citing Lien v. Class, 1998 SD 7, ¶ 10, 574 N.W.2d 601, 606) (other citation omitted). It is not a substitute for direct review. Id. (citing Loop v. Class, 1996 SD 107, ¶ 11, 554 N.W.2d 189, 191) (other citation omitted). We are guided by a well-established standard of review:

Habeas corpus can be used only to review (1) whether the court has jurisdiction of the crime and the person of the defendant; (2) whether the sentence was authorized by law; and (3) in certain cases whether an incarcerated defendant has been deprived of basic constitutional rights. Habeas corpus is not a remedy to correct irregular procedures, rather, habeas corpus reaches only jurisdictional error. For purposes of habeas corpus, constitutional violations in a criminal case deprive the trial court of jurisdiction. Further, we may not upset the habeas court’s findings unless they are clearly erroneous.
Bradley v. Weber, 1999 SD 68, ¶ 12, 595 N.W.2d 615, 619 (quoting Flute v. Class, 1997 SD 10, ¶ 8, 559 N.W.2d 554, 556) (other citations omitted). The habeas applicant has the initial burden, by a preponderance of the evidence, to prove entitlement to relief. New, 1999 SD 125, ¶ 5, 600 N.W.2d at 572 (citing Lien, 1998 SD 7, ¶ 11, 574 N.W.2d at 607). We may affirm the ruling of the habeas court if it is “right for any reason.” Id. (citing Satter v. Solem, 458 N.W.2d 762, 768 (S.D.1990)) (other citation omitted).

Krebs v. Weber, 2000 SD 40, ¶ 5, 608 N.W.2d 322, 324 (overruled on other grounds). We review findings of fact under the clearly erroneous standard, while we give no deference to conclusions of law and thereby apply the de novo standard. State v. Runge, 2006 SD 111, ¶ 9, 725 N.W.2d 589, 592 (citations omitted).

ANALYSIS AND DECISION

[¶ 18.] 1. Whether the State suppressed evidence in violation of Erickson’s due process rights when it allegedly failed to disclose to defense counsel the existence of an alleged plea agreement contained in the Fischbach Letter.

[Suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or punishment irrespective of the good faith or bad faith of the prosecution.

Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 1196-97, 10 L.Ed.2d 215 (1963) (emphasis added). Since Brady, the United States Supreme Court has handed down several opinions, expanding the scope of what constitutes prosecutorial suppression of evidence that rises to the level of a due process violation. The Supreme Court’s opinion in Strickler v. Greene, 527 U.S. 263, 119 S.Ct. 1936, 144 L.Ed.2d 286 (1999), sets out the evolution of the Brady doctrine:

[T]he duty to disclose [Brady ] evidence is applicable even though there has been no request by the accused, United States v. Agurs, 427 U.S. 97, 107, 96 S.Ct. 2392, [2399], 49 L.Ed.2d 342 (1976), and that the duty encompasses impeachment evidence as well as exculpatory evidence, United States v. Bagley, 473 U.S. 667, 676, 105 S.Ct. 3375, [3380], 87 L.Ed.2d 481 (1985). Such evidence is material “if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different.” Id. at 682, 105 S.Ct. at 3383, 87 L.Ed.2d 481; see also Kyles v. Whitley, 514 U.S. 419, 433-134, 115 S.Ct. 1555, [1565], 131 L.Ed.2d 490 (1995). Moreover, the rule encompasses evidence “known only to police investigators and not to the prosecutor.” Id. at 438, 115 S.Ct. at 1568, 131 L.Ed.2d 490. In order to comply with Brady, therefore, “the individual prosecutor has a duty to learn of any favorable evidence known to the others acting on the government’s behalf in this case, including the police.” Kyles, 514 U.S. at 437, 115 S.Ct. at 1567, 131 L.Ed.2d 490.

Strickler, 527 U.S. at 280-81, 119 S.Ct. at 1948, 144 L.Ed.2d 286 (emphasis added).

[¶ 19.] Despite the expansion of the Brady doctrine to include cases where the defendant made no request for disclosure, “the defendant must still prove that the government, in fact, suppressed the evidence in question.... ” United States v. LeRoy, 687 F.2d 610, 618 (2d Cir.1982), cert. denied, 459 U.S. 1174, 103 S.Ct. 823, 74 L.Ed.2d 1019 (1983) (citation omitted). Still, Brady requirements presuppose that the evidence in question is unknown to the defendant or would remain unknown to him after exercising a reasonable diligent effort to discover. State v. Wilde, 306 N.W.2d 645, 647 (S.D.1981).

The purpose of the Brady rule is not to provide a defendant with a complete disclosure of all evidence in the government’s file which might conceivably assist him in preparation of his defense, but to assure that he will not be denied access to exculpatory evidence known to the government but unknown to him.

Id. (citing United States v. Ruggiero, 472 F.2d 599, 604 (2d Cir.1973)); United States v. Cravero, 545 F.2d 406, 420 (5th Cir. 1976). “If a defendant knows or should know of the allegedly exculpatory evidence, it cannot be said that the evidence has been suppressed by the prosecution.” Id. (citing United States v. Brown, 628 F.2d 471 (5th Cir.1980)). See also Rodriguez v. Weber, 2000 SD 128, ¶ 15, 617 N.W.2d 132, 139 (quotation omitted); United States v. Payne, 63 F.3d 1200, 1208 cert. denied 516 U.S. 1165, 116 S.Ct. 1056, 134 L.Ed.2d 201 (1996) (recognizing that evidence is not suppressed within the meaning of Brady “if the defendant or his attorney” knew, or should have known, about the evidence) (emphasis added) (citations omitted). The Brady doctrine does not absolve a defendant of his responsibility to discover evidence relevant to his defense or sentencing. Wilde, 306 N.W.2d at 647.

[¶ 20.] The findings and the underlying evidence support the conclusion of the ha-beas court that the Fischbach Letter had information that the defense would have wanted to know about and that it had been “inadvertently suppressed by the State.” The Letter contained Fischbach’s statement that alternative remedies to imprisonment would be considered in exchange for Erickson’s immediate peaceable surrender. At the time of Erickson’s sentencing, the Fischbach Letter was in the possession of the Spink County Sheriffs Department. The Brady doctrine, as enlarged by Agwrs and Kyles, imposed a duty upon the State to learn about the existence of this document in the Sheriffs “Do Not Destroy” evidence file regardless of a request by Erickson. See Agurs, 427 U.S. at 107, 96 S.Ct. at 2399, 49 L.Ed.2d 342; Kyles, 514 U.S. at 437, 115 S.Ct. at 1567, 131 L.Ed.2d 490. However, as the habeas court concluded, this alone was not determinative to its ultimate decision to deny Erickson petition..

[¶ 21.] On May 26, 2006, Fischbach testified before the habeas court that he learned, following Pinok’s first attempt at negotiations, that Erickson had specifically asked for Fischbach to draft an agreement setting out the terms, as dictated by Erickson, under which he would agree to lay down his arms and surrender peaceably. Fischbach left the scene of the standoff with Sheriff Helm and returned a short time later with the Fischbach Letter. Pi-nok testified during his deposition that he read the entire Letter aloud to Erickson, and that Erickson acknowledged his approval. Pinok also testified that after Erickson surrendered and while in his presence he, Pinok, handed the Letter to the chief deputy, who then “folded it up and put it into his coat pocked and [told] Jason [Erickson], ‘I’ve got it right here.’ ”

[¶ 22.] The foregoing testimony of Fischbach and Pinok establishes evidentia-ry support for the finding of the habeas court that Erickson knew about the Fisch-bach Letter prior to his sentencing. However, Erickson failed to submit any evidence that he took any action, at any time between the standoff and sentencing, to request the Letter from the State or to inform any of his attorneys about the existence of the Letter so that they might request it on his behalf. See Wilde, 306 N.W.2d at 647 (claim of suppression is precluded where defendant fails to demonstrate reasonable diligence to discover). Moreover, the fact that McBride, post-sentencing, discovered the existence of the Fischbach Letter through his own review of the station logs indicates that Erickson’s three other attorneys should have been able to discover the existence of the Letter, notwithstanding Erickson’s failure to inform.

[¶ 23.] Finally, Erickson’s argument that the State suppressed Brady evidence, thereby violating his right to due process, fails because he cannot show that the Fischbach Letter was material to his sentence. We find no reasonable probability that the language, “the [S]tate ... agrees to consider not seeking a penitentiary sentence,” would have resulted in a different sentence had the Fischbach Letter been disclosed prior to sentencing.

[¶ 24.] We find that there is evidentia-ry support for the habeas court’s findings of fact and conclusions of law and therefore, no violation of Erickson’s right to due process arising from the State’s inadvertent suppression of the Fischbach Letter.

[¶ 25.] 2. Whether Erickson was entitled to specific performance of the alleged plea agreement contained in the Fischbach Letter.

[¶ 26.] As a matter of equity, Erickson contends that he is entitled to “the benefit of his bargain.” Consequently, Erickson avers that his sentence should either be vacated or corrected to reflect an agreement that he alleges Fischbach entered into with him on behalf of the State.

[¶ 27.] “Generally, plea agreements are contractual in nature and are governed by ordinary contract principles.” State v. Waldner, 2005 SD 11, ¶ 8, 692 N.W.2d 187, 190 (quoting State v. Stevenson, 2002 SD 120, ¶ 9, 652 N.W.2d 735, 738). “Like all contracts, [plea agreements] include[ ] an implied obligation of good faith and fair dealing.” Vanden Hoek v. Weber, 2006 SD 102, ¶ 14, 724 N.W.2d 858, 862 (alterations original) (citations omitted). A party is entitled to rescission when his consent to a contract is “obtained through duress ... or undue influence exercised by or with the connivance of the party as to whom he reseinds[.]” SDCL 53-11-2(1). More specifically, “[promises extorted through violence and coercion are no promises at all; they are void from the beginning and unenforceable as a matter of public policy.” State v. Rollins, 116 R.I. 528, 359 A.2d 315, 318 (R.I.1976) (affirming the decision below sustaining the government’s objection to testimony by a prison official pertaining to a promise of immunity in exchange for the surrender of the defendant, who was engaged in a prison uprising during which a guard had been taken hostage). See also People v. Pasch, 152 Ill.2d 133, 178 Ill.Dec. 38, 604 N.E.2d 294, 303 (1992).

[¶ 28.] In Pasch, the Illinois Supreme Court affirmed the decision below denying the defendant’s motion for specific performance of a promise allegedly made by law enforcement during circumstances comparable to the instant case. The defendant had killed two persons, taken a hostage and was engaged in an armed standoff with law enforcement. Id. at 301. The defendant eventually surrendered and thereafter, alleged that negotiators had promised him that if he surrendered, the death penalty would not be sought. Id. at 302., In affirming the decision below denying the defendant’s motion for an eviden-tiary hearing on the request for specific performance, the court opined:

It is clear that defendant did not enter into a plea bargain with the State when the police promised him that they would not seek the death penalty if he would surrender. Defendant never said during the negotiations that he would plead guilty to the charges, and the prosecutor never accepted a plea in exchange for a lesser sentence than death, nor did defendant ever actually plead guilty to the charges against him. It is only where a defendant enters a guilty plea in reli-anee upon the promises of a prosecutor that he is entitled to a remedy when such promises are breached. Santobello v. New York, 404 U.S. 257, 262, 92 S.Ct. 495, 499, 30 L.Ed.2d 427 (1971).

Id. (emphasis added).

[¶ 29.] Similar to the alleged promise in Pasch, the Fischbach Letter did not constitute a plea agreement. Erickson did not offer to plead guilty; nor were any charges discussed. The Letter merely set out consideration that would be accorded Erickson if he were to surrender.

[¶ 30.] Moreover, had there been an agreement it would have been void from the beginning and unenforceable. See supra ¶ 27 (quoting Rollins, 359 A.2d at 318). Erickson was engaged in a lengthy standoff with several law enforcement agencies that spanned two days. By the accounts of law enforcement testimony, Erickson had fired numerous rounds of rifle and shotgun ammunition at them and their vehicles during the standoff. It was within the context of this highly volatile and dangerous atmosphere that Erickson set out the conditions under which he would surrender. Clearly, law enforcement had been subjected to considerable duress during this violent and coercive situation. Accordingly, as a matter of public policy we agree with the habeas court that under these circumstances there was nothing in the Fischbach Letter that was legally enforceable and the State was in no way obligated thereby.

[¶ 31.] Affirmed.

[¶ 32.] SABERS, KONENKAMP and MEIERHENRY, Justices, concur.

[¶ 33.] ZINTER, Justice, concurs specially.

ZINTER, Justice

(concurring specially).

[¶ 34.] I disagree with the conclusion that the Fishbach Letter was not material. See supra ¶ 23. Both trial counsel representing Erickson would have used it in analyzing the case and negotiating the terms of the plea agreement. Counsel would have certainly presented it to the sentencing judge in arguing for an appropriate sentence. Nevertheless, as the Court points out, habeas corpus relief is not warranted because Erickson had knowledge of the Letter, and therefore it was not suppressed.

      . At the May 26, 2006 hearing, the parties stipulated to the admission of Pinok’s deposition testimony.

      . Erickson had a prior felony conviction stemming from a shooting incident in Red-field, in 1999.

      . The habeas court found that the record was unclear as to whether Erickson abandoned this request or the circuit court denied it.

      . The station logs included an entry on August 10, 2003, at 0520 hours indicating that Fischbach left the scene of the stand to go to his office in Redfield. Another entry at 0543 hours notes Fischbach’s return with "the agreement.”


source: Caselaw Access Project

author: ZINTER, Justice.

license: Public Domain

text:
    2008 SD 31
    Dorothy TIEDE, Plaintiff and Appellant, v. CORTRUST BANK, N.A., Defendant and Appellee.
    No. 24529.
    Supreme Court of South Dakota.
    Considered on Briefs Jan. 7, 2008.
    Decided April 16, 2008.

      Ron J. Volesky of Volesky Law Firm, Huron, South Dakota, Attorney for plaintiff and appellant.
    Michael A. Henderson of Cadwell, Sanford, Deibert & Garry, Sioux Falls, South Dakota, Deanne Watts Hay, Carrie Ann Gohn Barney of Parker & Hay, L.L.P., Topeka, Kansas, Attorneys for defendant and appellee.
   ZINTER, Justice.

[¶ 1.] Dorothy Tiede brought this retaliatory discharge action against CorTrust Bank, alleging that she was discharged for filing Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs) after senior bank officials told her not to file them. The reports were allegedly required under the Bank Secrecy Act (BSA), 31 U.S.C. § 5311 (2001). CorTrust moved for judgment on the pleadings asserting: that Tiede’s state law claim, arising under the public policy exception to the at-will employment doctrine, was preempted by the National Bank Acts (NBA), 12 U.S.C. § 24 (Fifth); and, that her action violated policies underlying the BSA. The circuit court granted CorTrust’s motion on the ground of preemption and dismissed. We reverse and remand.

I.

[¶ 2.] CorTrust is a national bank organized under the law of the United States, with its principal place of business in Mitchell, South Dakota. Tiede had been employed with CorTrust for twenty-six years. At the time of her termination, Tiede was employed as an assistant cashier, assistant vice president, and bank secrecy officer.

[¶ 3.] Tiede’s duties included overseeing compliance with the BSA, which required the filing of SARs and CTRs with the Internal Revenue Service. According to Tiede, she was told on several occasions by senior bank officials to disregard filing SARs and CTRs with respect to certain CorTrust customers. Notwithstanding these admonitions, Tiede continued to file the reports.

[¶ 4.] CorTrust terminated Tiede on February 2, 2005. Tiede then brought this retaliatory discharge suit, alleging that she was terminated in retaliation for filing the SARs and CTRs. She specifically contended that her failure to file the reports would have violated federal banking law and constituted a felony under the BSA. Therefore, she alleged that she was wrongfully discharged under South Dakota’s public policy exception to the at-will employment doctrine.

[¶ 5.] CorTrust moved for a judgment on the pleadings. In connection with its motion, CorTrust filed an affidavit of Cor-Trust’s chief financial officer. Tiede submitted a responsive affidavit. The circuit court granted CorTrust’s motion, concluding that Tiede’s claim was preempted by the NBA.

II.

[¶ 6.] Procedurally, although this matter was initiated as a motion to dismiss, both parties submitted matters outside the pleadings, neither side objected, and the circuit court did not exclude them. Because evidence outside the pleadings was considered without objection, “we review the [circuit] court’s ruling as a motion for summary judgment.” Flandreau Pub. Sch. Dist. No. 50-3 v. G.A. Johnson Const. Inc., 2005 SD 87, ¶ 6, 701 N.W.2d 430, 434 (citing Tibke v. McDougall, 479 N.W.2d 898, 903-04 (S.D.1992) (providing that when the record indicates that matters outside of the pleadings were considered by the court, motions to dismiss are reviewed and disposed of as motions for summary judgment)). “Because we review this matter as a summary judgment, we ‘restrict our review to determining whether the record before us discloses any genuine issues of material fact and, if not, whether the ... court committed any errors of law.’ ” Id. ¶ 7 (citation omitted). Because this case ultimately involves questions of law and statutory interpretation, we review the circuit court’s interpretation de novo. See State v. Burdick, 2006 SD 23, ¶ 6, 712 N.W.2d 5, 7.

III.

[¶ 7.] Tiede alleges that she was discharged in retaliation for her refusal to discontinue filing SARs and CTRs on certain CorTrust customers. She contends that as the bank secrecy officer, she was required to file these reports or risk criminal prosecution under the BSA. CorTrust responds that Tiede’s discharge claim is preempted because it conflicts with federal law granting national banks the power to discharge its officers at-will. CorTrust relies on a provision of the NBA that gives a nationally chartered bank the power:

[T]o elect or appoint directors, and by its board of directors to appoint a president, vice president, cashier, and other officers, define their duties, ... [and] dismiss such officers or any of them at pleasure, and appoint others to fill their places.

12 U.S.C. § 24 (Fifth) (emphasis added). CorTrust contends that this language clearly expresses Congress’s intent that the hiring and firing decision of national bank officers is vested in the bank board of directors, who have the power to dismiss the bank officers “at pleasure.” Therefore, CorTrust maintains that Tiede’s state retaliatory discharge claim conflicts with federal law and is preempted by the Supremacy Clause of the United States Constitution.

[¶ 8.] This Court has previously recognized federal banking preemption in a wrongful termination claim brought by a bank officer. In Weber v. First Fed. Bank, 523 N.W.2d 720 (S.D.1994), the plaintiff was discharged from his position as chief executive officer and president of a federally chartered savings bank. He sued for wrongful termination and the circuit court entered judgment for the bank, holding that analogous federal regulations on bank employment relations (implementing the Home Owners’ Loan Act of 1933) preempted South Dakota state law claims for wrongful termination. This Court affirmed, recognizing the nature of employment relations under federal banking laws:

Federal mutual savings banks are required to “operate under bylaws that contain provisions that comply with all requirements specified by the [Office of Thrift Supervision.]” 12 C.F.R. § 544.5(a). Certain regulations list the powers of the board of directors of an association, including the power to fix the compensation of officers and employees, remove any officer or employee at any time with or without cause, and enter into and terminate employment contracts. 12 C.F.R. §§ 544.5(b)(ll)(ii), 563.39(a)-(b).

Id. at 721. We concluded that this analogous language preempted the plaintiffs wrongful termination claim. Id. at 722.

[¶ 9.] Tiede, however, argues that Weber is distinguishable because Weber involved a claim for wrongful termination, which is an employment claim in contract. Tiede contends that her retaliatory discharge action is not a claim arising out of contractual employment rights, but is a tort claim arising out of public policy. CorTrust responds that South Dakota does not distinguish between retaliatory discharge in tort and wrongful termination in contract. CorTrust relies on Johnson v. Kreiser’s, Inc., 433 N.W.2d 225, 227 (S.D.1988), as support for this proposition.

[¶ 10.] In Johnson, this Court adopted a public policy exception to the employment at-will doctrine. A wrongful termination claim was permitted to the extent that the employee’s discharge violated a mandated public policy, specifically those that involve criminal or unlawful acts. Id. at 227; see also Peterson v. Glory House of Sioux Falls, 443 N.W.2d 653 (S.D.1989) (acknowledging the public policy exception, but declining to expand its parameters). In order to bring a cause of action for wrongful termination under South Dakota’s public policy exception, “the employee has the burden of proving that the dismissal violates the clear mandate of public policy.” Id.

[¶ 11.] In adopting this exception to the at-will employment doctrine, this Court recognized “that an employer becomes subject to tort liability if its discharge of an employee contravenes some well established public policy.” Id. (emphasis added). Inconsistently, however, this Court also stated that a contract action for wrongful discharge was the “more appropriate” remedy:

An employee has a cause of action for wrongful discharge when the employer discharges him in retaliation for his refusal to commit a criminal or unlawful act. It is repugnant to public policy to expect an employee to commit such acts in order to save his job. Consequently, we carve out this exception to the at-will doctrine[.] In doing so, we conclude that a contract action for wrongful discharge is more appropriate than a tort action. A contract action is predicated on the breach of an implied provision that an employer will not discharge an employee for refusing to perform a criminal or unlawful act.

Id. at 227 (emphasis added).

[¶ 12.] This Court later considered another discharge claim in Niesent v. Homestake Mining Co. of Cal., 505 N.W.2d 781 (S.D.1993). In Niesent, an employee was discharged after filing a workers’ compensation claim. He commenced an action against his former employer claiming: (1) that the discharge violated an employment agreement; and (2) that the discharge was wrongful retaliation for filing a workers’ compensation claim under the public policy exception to the employment at-will doctrine. Id. at 782. Summary judgment was entered in favor of the employer on both causes of action. This Court affirmed dismissal of the first claim involving termination under the employment agreement (a contract claim), but reversed and remanded on the wrongful discharge claim involving retaliation for a violation of public policy. In disposing of the causes of action differently, this Court implicitly recognized a distinction between a contractual “wrongful termination” and the public policy tort of retaliatory discharge. This Court did so by affirming dismissal of the wrongful termination claim (involving breach of contract) because the collective bargaining agreement made the probationary employee’s employment at-will, while allowing the wrongful discharge (involving retaliation for filing a workers’ compensation claim) to survive under the public policy exception. Id. Concededly, however, this Court referred to the causes of action interchangeably without expressly stating any distinction.

[¶ 13.] Although the majority in Nies-ent did not specifically recognize any distinction between contractual and tortious claims, Chief Justice Miller did. He specifically noted that South Dakota had adopted the tort theory of retaliatory discharge, stating “[o]ur recognition of the tort of retaliatory discharge should be based directly on the South Dakota Legislature’s stated public policy as set forth in this statute.” Id. at 785 (Miller, C.J., concurring in result) (emphasis added).

[¶ 14.] Later, in Finck v. City of Tea, 443 N.W.2d 632 (S.D.1989), an employee brought claims for wrongful termination, breach of contract, and retaliatory discharge. In resolving a notice of tort claim issue, this Court concluded that notice was required for the retaliatory discharge claim because a claim of “retaliatory discharge soundfs] in tort.” Id. at 635. On the other hand, this Court concluded that the tort claim statute did not require notice of the contract-based claims. Id.

[¶ 15.] Therefore, our most recent decisions have confirmed that our public policy cause of action for retaliatory discharge sounds in tort. Although retaliatory discharge is concededly an exception to the employment at-will doctrine, the latter concept being rooted in contract, retaliatory discharge is a tort arising from a breach of public policy duties independent of the employment contract. Because the retaliatory discharge tort is independent of the contractual employment relationship, Tie-de’s claim falls outside the employment related claim that we found preempted in Weber, 523 N.W.2d at 721-22.

[¶ 16.] CorTrust, however, correctly argues that the NBA may preempt conflicting state law employment claims regardless of any distinction between claims based in tort and contract. Conflict preemption in this area of national banking recognizes that both enumerated and incidental powers of national banks under federal law ordinarily preempt contrary state law. Barnett Bank of Marion County, N.A., v. Nelson, 517 U.S. 25, 32, 116 S.Ct. 1103, 1108, 134 L.Ed.2d 237 (1996). The conflict test is whether compliance -with both laws is a “physical impossibility,” or, whether the state law “stand[s] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Id. at 31, 116 S.Ct. at 1108 (citations omitted). The state law does not, however, stand as an obstacle to the accomplishment of a federal statute’s purpose if that purpose has been “limited.” Id.

[¶ 17.] To determine whether the NBA has been sufficiently limited by the BSA to avoid conflict preemption in this case, we note that notwithstanding the employment relation powers given under the NBA, the subsequently enacted BSA requires banks and their officers to file SARs and CTRs:

When a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of United States coins or currency ... in an amount, denomination, or amount and denomination, or under circumstances the Secretary prescribes by regulation, the institution and any other participant in the transaction the Secretary may prescribe shall file a report on the transaction[.]

31 U.S.C. § 5313(a). The purpose of this Act is “to require certain reports or records where they have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counterintelligence activities, including analysis, to protect against international terrorism.” 31 U.S.C. § 5311(a). “A person willfully violating [the Act] ... shall be fined not more than $250,000, or imprisoned for not more than five years, or both.” 31 U.S.C. 5322(a).

[¶ 18.] Clearly, these provisions apply to national banks and their officers. Because banks can only act through their officers, and because individual officers are subject to criminal prosecution for willful violations, banks are certainly not free to require their officers to fail to comply with the BSA. Therefore, the BSA limits officer employment relations in national banks to the extent necessary to comply with the BSA. The question then is whether a state law claim for retaliatory discharge arising from the public policy requiring compliance with the BSA’s reporting requirements constitutes an obstacle to the accomplishment and execution of the purposes and objectives of the NBA, 12 U.S.C. § 24 (Fifth), as limited by the BSA.

[¶ 19.] The almost identical question was raised in Booth v. Old Nat’l Bank, 900 F.Supp. 836 (N.D.W.Va.1996). In Booth, the president of a bank encouraged the plaintiff to execute a transfer of funds. The plaintiff resisted, advising the bank that the transfer would violate a United States Comptroller of the Currency Regulation. Regardless, the president of the bank ordered the plaintiff to make the transfer. Following an annual compliance audit, a federal bank auditor determined that the transfer was a violation of the regulation. The auditor directed the plaintiff, as the responsible party, to comply with the regulation by redepositing the funds. The plaintiff complied. Eventually, the bank forced plaintiff to resign.

[¶ 20.] Plaintiff sued, alleging two causes of action: retaliatory discharge and breach of contract. The Booth court discussed preemption under the NBA. There was little dispute that the breach of contract action was preempted by the NBA. Booth, however, concluded that the plaintiffs claim for retaliatory discharge was not preempted. Id. at 843. Booth relied on Sargent v. Central Nat’l Bank & Trust Co. of Enid, 809 P.2d 1298 (Okla.1991), in which a bank auditor brought a suit alleging that the bank discharged him for refusing to violate a public policy of the State of Oklahoma. In addressing whether the NBA preempted that suit, the Sargent court held that “preemption does not shield the defendant bank from tort liability for dismissing an employee in violation of a state public policy which is consistent with the federal statute’s purpose.” Id. at 1299. The Oklahoma court noted that while the NBA bestowed upon banks the right to discharge officers at pleasure, “we view this right as not without a limit. When ... the public policies whose violation gives rise to a [retaliatory discharge] claim parallels that of a federal law which is sought to be invoked as a shield from liability, preemption is not available as a defense.” Id. at 1302. In referring to this language from Sargent, Booth concluded:

This Court agrees with the rationale in Sargent that preemption does not shield a defendant bank from tort liability for retaliatory discharge when the state’s public policy is consistent with the federal statute’s purpose. As the Sargent court noted, [the NBA] gave banks the right to discharge officers and directors at pleasure. This right, however, is tempered by restrictions based on state law which are consistent with federal policy.

Booth, 900 F.Supp. at 843. Ultimately, Booth and Sargent observed that the banks’ employment powers under the NBA had been limited by other federal statutes. In light of that limitation, Booth concluded that it could find no conflict between any federal statute and the state law concerning retaliatory discharge. Booth held that while the NBA preempts a breach of contract claim, it does not preempt all claims, including retaliatory discharge. Id. See also Kroske v. U.S. Bank Corp., 432 F.3d 976, 986-87 (9th Cir.2005) (concluding that a state cause of action consistent with federal statutes is not preempted because federally chartered banks are not exempt from liability under the other federal laws); Peatros v. Bank of America NT & SA, 91 Cal.Rptr.2d 659, 674, 22 Cal.4th 147, 173, 990 P.2d 539, 552 (2000) (concluding no conflict preemption existed to the extent that a state law cause of action was consistent with federal employment statutes because the NBA is “impliedly amended” by subsequently enacted federal statutes governing employment relations).

[¶ 21.] Because Tiede’s state claim is consistent with federal banking laws requiring the filing of SAR and CTR reports, and because the state claim is premised on the allegation that the senior bank officials retaliated for her compliance with those federal banking laws, we see no conflict between the retaliatory discharge claim and the purpose of 12 U.S.C. § 24 (Fifth) as limited by the BSA. Therefore, we conclude that the retaliatory discharge claim is not conflict preempted.

[¶ 22.] CorTrust alternatively argues that Tiede’s claim fails because it is not consistent with express policies of the BSA. CorTrust first contends that it is immune from all claims arising under the BSA, 31 U.S.C. § 5318(g)(3). That provision provides immunity for a financial institution’s “disclosure or for failure to provide notice of such disclosure to the person who is the subject of such disclosure or any other person identified in the disclosure.” Id. (emphasis added). Although this language provides immunity for disclosure of the reports, it does not purport to provide immunity for a financial institution that orders a bank officer to not make the disclosure required by the BSA. This is evident from CorTrust’s supporting authorities, which involve suits based on the filing of disclosure reports, as opposed to a bank’s attempts to prohibit its officers from filing the reports.

[¶ 23.] CorTrust also contends there is no private cause of action permitted under the BSA, citing Med. Supply Chain, Inc. v. Neoforma, Inc., 419 F.Supp.2d 1316 (D.Kan.2006), Martinez Colon v. Santander Nat’l Bank, 4 F.Supp.2d 53 (D.Puerto Rico 1998), and Baker v. Wilmington Trust Co., 320 F.Supp.2d 196 (D.Del.2004). Those cases are inapposite because they did not involve a former employee suing an employer for state law retaliatory discharge as a result of the employee’s conduct, which was allegedly required by the BSA. Rather, those cases involved either: (1) employees who were terminated for violating the BSA; or (2) employees and customers who sued because SARs were filed against them. Tiede’s suit does not involve such acts or omissions. Her claim is for the state law tort of retaliatory discharge, and she alleges a breach of the public policy duty to refrain from retaliating against employees for compliance with federal banking laws involving criminal sanctions.

[¶ 24.] CorTrust’s remaining contentions involve obstacles to proof at trial and other matters that should be first addressed by the circuit court. We conclude that the circuit court erred in holding that Tiede’s claim of retaliatory discharge was preempted by the NBA.

[¶ 25.] Reversed and remanded.

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

      . Tiede also argues that Weber does not apply because that claim was against a federal mutual savings bank, not a national bank. That distinction is without merit. Both, situations involve employee relations under federal banking law.

      . Similar to South Dakota, Oklahoma's claim for retaliatory discharge was a "tortious discharge in violation of [the] state's public policy." Sargent, 809 P.2d at 1300.

      . CorTrust also relies on Blote v. First Fed. Sav. and Loan Ass’n of Rapid City, 422 N.W.2d 834 (S.D.1988), in which this Court cited Inglis v. Feinerman, 701 F.2d 97 (9th Cir.1983), which affirmed dismissal of a retaliatory discharge claim alleging that the real reason for the termination was the employee’s insistence that the bank conform its practices to federal law. In dismissing a bank vice president’s wrongful discharge claim, the Blote Court cited Inglis. We did so, however, only for Inglis’ alternative holding "that attempts to create employment rights from independent sources such as personnel manuals are void under the Federal Home Loan Bank Act (12 U.S.C. § 1421, et seq.),’’ which authorizes dismissal of bank officers "at pleasure” of the bank (12 U.S.C. § 1432(a)). Blote, 422 N.W.2d at 838 (emphasis added). We did not consider whether preemption applied to a public policy retaliatory discharge claim that was consistent with other federal banking statutes.

      . See In re Davis, 244 B.R. 776, 791 (Bankr. N.D.Ill.2000) (concluding a credit union had immunity from liability for any disclosures contained in the filed SARs); Nieman v. Firstar Bank, 2005 WL 2346998, *4 (N.D.Iowa 2005); Gregory v. Bank One Corp. Inc., 200 F.Supp.2d 1000, 1002 (S.D.Ind.2002) (involving immunity for statements made in a suspicious activity report).

      .For example, CorTrust argues that even if the action was permitted to proceed, Tiede cannot prove her claim because evidence regarding SARs are confidential and may not be disclosed under 12 CFR § 21.11 (k). Although that regulation prohibits the disclosure of SARs or the information contained in a SAR, the regulation does not prohibit suits or alternative methods of proving that an employee was discharged in retaliation for attempting to comply with the BSA. The regulation only poses an obstacle to Tiede’s method of proof, something that she must overcome in the proceedings in circuit court. Similarly, should CorTrust establish that its defense requires disclosure in violation of the regulation, that matter must be addressed in the first instance by the circuit court.


author: BARNETT, Circuit Judge.

text:
    2008 SD 32
    LaMORE RESTAURANT GROUP, LLC and Kenneth Herslip, Plaintiffs and Appellees, v. Robert AKERS and Cynthia Akers, Defendants and Appellants.
    No. 24650.
    Supreme Court of South Dakota.
    Considered on Briefs on Feb. 11, 2008.
    Decided April 16, 2008.

      John K. Nooney of Nooney Solay & VanNorman, LLP, Rapid City, South Dakota, Attorneys for plaintiffs and appel-lees.
    Courtney R. Clayborne and Michael K. Sabers of Clayborne, Loos, Strommen & Sabers, LLP, Rapid City, South Dakota, Attorneys for defendants and appellants.
   BARNETT, Circuit Judge.

[¶ 1.] Robert and Cynthia Akers (Ak-ers) appeal from a judgment holding that Akers and LaMore Restaurant Group, LLC and Kenneth Herslip (collectively La-More) had entered into a binding contract for the sale of two Rapid City, South Dakota, commercial properties with the price to be set by a first and third appraiser, notwithstanding the absence of a specified date for the appraisals. Akers also appeal from that part of the judgment setting the specific date to be used by the first and third appraisers in establishing the price for the two properties. We affirm.

FACTS AND PROCEDURAL HISTORY

[¶ 2.] Akers are the owners of two commercial restaurant properties in Rapid City, South Dakota. Pursuant to a lease, they rented both properties to LaMore, who operated them as Denny’s Restaurants. The original lease contained an option to purchase at paragraph XXVIII and established an appraisal process for fixing the price if the option was exercised. Several restrictions on the appraisal process were set forth in paragraph XXVIII. If the respective appraisers were less than ten percent apart, the average of those two numbers would be the final price. If the first two appraisals differed in price by more than ten percent, the two appraisers would agree upon a third appraiser, who would then choose either the first or the second appraisal as the fair price. The third appraiser’s choice would be final as to price, subject to a minimum price of $2,500,000.

[¶ 3.] On February 23, 2005, LaMore indicated its intent to exercise the option to purchase the properties. On that date, Akers signed an Addendum to the lease agreement (hereinafter First Addendum), essentially repealing paragraph XXVIII of the original lease and revamping the agreed appraisal process. The First Addendum removed the minimum purchase price of $2,500,000, leaving the price solely to the appraisal process. The parties were to agree upon a Member of the Appraisal Institute (MAI) certified appraiser within fourteen days of the exercise of the option. That appraiser would set the price; if either party disagreed with the first appraisal, they could then get another appraisal from an MAI certified appraiser of their choice. If the two appraisals were within seven percent of each other, the First Addendum required the two appraisers to “convene and determine the value for the subject property, and to the extent that a compromise is not reached between them, the two appraisals shall be averaged” which would then be the final price. If the two appraisals differed by more than seven percent, “the parties shall agree on a third MAI certified appraiser who shall work with the initial MAI certified, appraiser to determine the appraised value.” (Emphasis added).

[¶ 4.] Thus, if the first two appraisers differed by more than seven percent, the second appraisal was discarded and a third appraiser, chosen by both parties, would “work with” the first appraiser to determine the value.

[¶ 5.] The parties agreed to hire Joe Ibach to conduct the first appraisal. Ibach appraised each property at $900,000, for a total of $1,800,000. Upon notification of this appraisal, Akers exercised their right to hire a second MAI appraiser, John Hae-der. Haeder’s appraisal did not use the same appraisal date as Ibach. Instead, Haeder’s appraisal date was some seven months later, on December 1, 2007. This lead to a significant difference in Haeder’s appraisal: $1,045,000 for the Rushmore Road location, and $1,300,000 for the LaCrosse location. Two reasons apparently drove the higher numbers. First, LaMore made substantial improvements to one of the properties subsequent to exercising the purchase option and after the first appraisal was conducted. Second, Akers received a December 1, 2007, outside offer on the properties and gave that information to the second appraiser (Haeder), who used it to help determine the values he set on that same date.

[¶ 6.] Since the first appraisal (Ibach) and the second appraisal (Haeder) were more than seven percent apart, the First Addendum required the parties to agree on a third appraiser. However, they could not agree on the third appraiser and the matter went to court to settle. The trial court, after reviewing the First Addendum, essentially ordered the parties to do what they had agreed to do; they were sent out of court to agree upon a third appraiser. Thereafter, the parties stipulated that Ken Simpson, a name offered by Akers, would be the third appraiser assigned to work with Ibach, the first appraiser.

[¶ 7.] In the interim, negotiations continued between Akers and LaMore and eventually in April 2007 a sale was finalized on the Rushmore Road property. This was evidenced in a document entitled Second Addendum. The Second Addendum set the agreed price at $950,000 for that property which was to be a credit against any final price set by the first and third appraisers under the First Addendum. This Second Addendum did not vitiate the First Addendum; it merely removed one property from the dispute and left the overall appraisal price in the hands of the first and third appraisers as contemplated by the First Addendum.

[¶ 8.] During the process of working with Ibach, Simpson raised the question of the date he should use in setting a value. This brought the matter back to the trial court for clarification. The court took testimony, heard arguments, and eventually ordered that the third appraiser utilize a date of September 1, 2005. This date was a rough compromise between LaMore’s assertion that the third appraiser should use the same date (April 27) used by the first appraiser, and Akers’ contention that a later date should be utilized. Both parties apparently balked at this compromise date and the matter again came back to the trial court.

[¶ 9.] Akers argued that the First Addendum was merely an agreement to agree, and that there had been no meeting of the minds on a material term of the contract, i.e., the date the third appraiser should use in fixing the value. In the alternative, Akers argued that the court should set the date for the third appraisal either as the date Simpson was retained by the parties, which would be much later than the April 27 first appraisal, or some other later date (which would reflect the improvements and the outside offer). However, Simpson testified that according to appraisal protocols, the normal method of conducting a follow-up appraisal is to use the same date as the first appraiser.

[¶ 10.] Following a final hearing, the court entered findings, conclusions and a judgment finding that the First Addendum was enforceable despite the lack of a specific date for the third appraiser to utilize. In so doing, it held that a contract need not specify an exact' price so long as a method for determining the price was agreed to in the contract. Although the court expressed concerns about whether it could pick a date for the appraiser under South Dakota law and that the use of a later date could be inequitable in light of the subsequent improvements made by LaMore, the court set the date for the third appraiser at April 27, 2005, the date used by the first appraiser.

[¶ 11.] Akers raise two issues on appeal:

Whether the First Addendum constituted a valid contract which could be enforced by the parties.
Whether the trial court had the authority to determine a date of valuation when none was supplied.

STANDARD OF REVIEW

[¶ 12.] “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, 25 (citations omitted). “Conclusions of law are reviewed under a de novo standard, giving no deference to the circuit court’s conclusions of law.” Id. (citations omitted). “Existence of a contract is a question of law.” In Estate of Neiswender, 2000 SD 112, ¶ 12, 616 N.W.2d 83, 86.

Contract interpretation is a question of law reviewable de novo. Because we can review the contract as easily as the trial court, there is no presumption in favor of the trial court’s determination. When the meaning of contractual language is plain and unambiguous, construction is not necessary. If a contract is found to be ambiguous the rules of construction apply. Whether the language of a contract is ambiguous is ... a question of law.

Vander Heide v. Boke Ranch, Inc., 2007 SD 69, ¶ 17, 736 N.W.2d 824, 831-32 (citing Ziegler Furniture and Funeral Home, Inc. v. Cicmanec, 2006 SD 6, ¶ 14, 709 N.W.2d 350, 354). “[W]hen contract language is ambiguous, and does not speak to a subject it would normally be expected to, the court may go beyond the four corners of the contract.” Id. ¶40 (citation omitted).

ANALYSIS AND DECISION ISSUE ONE

[¶ 13.] Whether the First Addendum constituted a valid contract which could be enforced by the parties.

[¶ 14.] Akers argue that the contract in question is unenforceable because it fails to set forth, in writing and with sufficient certainty, all material terms. Akers thus contend there was no meeting of the minds to form a valid contract. Akers further argue that even assuming a valid contract existed the trial court erred in its determination as to the appropriate relief to be granted in order to enforce it. We begin with an examination of whether a valid contract was created.

[¶ 15.] The essential elements of a contract are set forth in SDCL 53-1-2, and three of the elements (parties capable of contracting, a lawful object, and sufficient cause or consideration) are not at issue in this appeal. The final element is consent to contract, which is “a question of law and is to be judged on the objective facts of the particular case.” Amdahl v. Lowe, 471 N.W.2d 770, 774 (S.D.1991) (citing Federal Land Bank v. Houck, 68 S.D. 449, 4 N.W.2d 213 (1942); McPherson v. Fargo, 10 S.D. 611, 74 N.W. 1057 (1898)). Akers argue that the First Addendum was insufficient because it did not contain the specific date upon which the third appraiser would base his evaluation.

The statute of frauds requires that contracts for the sale of land must not only be in writing and signed by the party who is to be charged, but the writing must contain all the material terms and conditions of the oral agreement between the parties. To satisfy the statute of frauds, a memorandum for the sale of land must describe the land, the price, and the contracting parties; it need not detail the form or delivery of deed, the time and place of payment, or any other matters. The statute of frauds requires only that the writing evidence the substance of the contract. There is no fatal ambiguity if the contract terms are sufficiently certain to make the acts required of each party clearly ascertainable.

Amdahl, 471 N.W.2d at 774-75 (citations omitted).

[¶ 16.] “If an agreement leaves open essential terms and calls for the parties to agree to agree and negotiate in the future on essential terms, then a contract is not established.” Weitzel v. Sioux Valley Heart Partners, 2006 SD 45, ¶ 23, 714 N.W.2d 884, 892 (citations omitted). Ak-ers assert that the date for the third appraisal is a material term of the contract and since the First Addendum provided no such date the contract fails. In support of this assertion, Akers note that the third appraiser, Simpson, testified that the date of appraisal was material to him. Read in context, however, Simpson was merely stating a non-legal opinion that the outcome of his appraisal would be affected by the date he used to set that price. The reason it would affect the outcome is that between the dates of LaMore’s appraisal and Akers’ appraisal many improvements were made by lessee LaMore and an outside offer was also made on the property.

[¶ 17.] The mere fact that the date of the third appraisal could affect the purchase price does not make it a material element of the contract. Additionally, Ak-ers cite no case authority for the proposition that a contract fails if it leaves the date of appraisal to the discretion of the appraiser, or inferentially, to the rules used by appraisers in conducting follow-up appraisals. Black’s Law Dictionary 998 (8th ed. 2004) defines “material” as: “Of such a nature that knowledge of the item would affect a person’s decision-making process; significant; essential.” However, Black’s Law Dictionary defines “material term” as: “Contractual provisions dealing with significant issues such as subject matter, price, payment terms, quantity, quality, duration, or the work to be done.” Id. at 1510. (emphasis added). Simpson is not legally trained, nor was he called to testify as a legal expert. Simpson merely testified that the date of appraisal was material to his outcome. He did not testify that the date of appraisal was a “material term”.

[¶ 18.] Purchase price, of course, is a material term to a real estate contract. See Amdahl, 471 N.W.2d at 775 (citing Boekelheide v. Snyder, 71 S.D. 470, 26 N.W.2d 74 (1947); Carpenter v. Murphy, 40 S.D. 280, 167 N.W. 175 (1918); Phelan v. Neary, 22 S.D. 265, 117 N.W. 142 (1908)). The price term, therefore, must be sufficiently definite for this Court to give it an exact meaning. See e.g., Weitzel, 2006 SD 45, ¶23, 714 N.W.2d at 892 (citations omitted). “However, absolute certainty is not required; only reasonable certainty is necessary.” Id. We have previously held that not all terms, such as price, need be set out in the contract as long as they are in fact fixed and determinable or reasonably certain. See generally, Nygaard v. Sioux Valley Hosp. & Health Sys., 2007 SD 34, ¶ 15, 731 N.W.2d 184, 191-92. In fact, “words that fix an ascertainable fact or event, by which the term of a contract can be determined, make the contract definite and certain in that particular.” Id. ¶ 13 (citing Kuhfeld v. Kuhfeld, 292 N.W.2d 312, 315 (S.D. 1980)).

[¶ 19.] LaMore asserts that option agreements are sufficiently definite as to price to justify their enforcement if a practicable mode is provided by which the price can be determined by the court without any new expression by the parties themselves. We agree.

[¶20.] “An agreement is not unenforceable for lack of definiteness of price or amount if the parties specify a practicable method by which the amount can be determined by the court without any new expression by the parties themselves.” 1 Corbin on Contracts § 98 (1963). Likewise, option agreements have generally been held or recognized to be sufficiently definite as to price to justify their enforcement if either a specific price is provided for in the agreement or a practicable mode is provided by which the price can be determined by the court without any new expression by the parties themselves. J.R. Harvey, Annotation, Requisite definiteness of price to be paid in event of exercise of option for purchase of property, 2 A.L.R.3d 701, 703 (1965). Thus, an option to purchase at a price to be fixed by third persons acting as appraisers or arbitrators does not fail for lack of definiteness. 77 Ana.Jur.2d Vendor and Purchaser § 38 (2007).

[¶21.] In this case, the method of determining price was the appraisal process, controlled by the terms of the First Addendum entered into by Akers. Other jurisdictions have upheld similar mechanisms for determining purchase price. See Kane v. McDermott, 191 Ill.App.3d 212, 138 Ill.Dec. 541, 547 N.E.2d 708, 713 (1989) (holding option to purchase real estate contained in lease which stated that tenant would purchase “at the appraised bid as established by three disinterested persons” by definition meant that the price was to be the fair market value of the property as set by three disinterested persons); Miller v. McCullough, 236 Ga. 666, 224 S.E.2d 916 (1976) (finding option contract which provided that the selling price of the property would be “the appraised value of the property at the time of purchase based on an MAI Appraisal” to be sufficiently definite); see generally, J.R. Harvey, Annotation, Requisite definiteness of price to be paid in event of exercise of option for purchase of property, 2 A.L.R.3d 701 (1965).

[¶ 22.] In Marder’s Nurseries, Inc. v. Hopping, 171 A.D.2d 63, 66, 573 N.Y.S.2d 990 (N.Y.App.Div.1991), a contract for the sale of real property was held to be sufficiently definite where it called for the purchase price to be the fair market value as set by two appraisers, and if they could not agree, they would appoint a third appraiser, and the price would be set by the decision of any two appraisers. In so holding, the court noted the imperfect nature of the method chosen by the parties.

The method designed by the parties, moreover, is seriously flawed, since there is no guarantee that the first two appraisers would agree, or that, in the event of their disagreement, they would be able to agree as to the identity of the third appraiser. Further, there is no guarantee that the third appraiser, if he or she agreed to the appointment, would concur with either one of the original two. We nonetheless conclude that this provision is not so indefinite as to require cancellation of the contract.

Id. at 71, 573 NY.S.2d 990.

[¶ 23.] The method in the present case is similarly flawed. There is no guarantee that the first appraiser and the third appraiser will agree on the fair market value or on the date which they ought to appraise the property. However, “a contract should not be canceled solely on the ground that the parties, having stipulated that the purchase price was to be determined by a group of appraisers, failed to foresee all possible obstacles or hindrances which might arise during the course of the appraisal procedure.” Id. at 71-72, 573 N.Y.S.2d 990.

[¶ 24.] In the instant case, the trial court found that “[b]y executing the First Addendum, the parties agreed as to a methodology to determine the values of the Denny’s locations as determined by an MAI certified appraiser(s).” Furthermore, the trial court found that “an agreement to leave the calculation to a third party or parties constitutes an acceptable method of evaluation.” The price term is sufficiently definite because both parties specifically agreed to pay or accept whatever price could be agreed upon by the appraisers.

[¶ 25.] Also, the First Addendum clearly altered the method by which price was to be determined. It altered the way in which the appraisers would work together and eliminated the minimum price term of $2.5 million. Furthermore, the express terms of the Addendum provided that “each of the parties desires [sic] to execute this Addendum, so as to modify certain terms and conditions ... in the Lease” and “the parties hereto, intending to be legally bound by the terms hereof agree to amend the Lease Agreement as follows.” “These words are indicative of a completed agreement, and do not establish that there are material details upon which the parties have not yet reached agreement.” Amdahl, 471 N.W.2d at 775 (citing 17A Am. Jur.2d Contracts § 32 (1991). Cf. Wiggins v. Shewmake, 374 N.W.2d 111, 115 (S.D.1985)). We, therefore, hold that the contract is valid.

ISSUE TWO

[¶ 26.] Whether the trial court had the authority to determine a date of valuation when none was supplied.

[¶ 27.] The trial court ordered that the valuation date to be used by the third appraiser, working with the first appraiser, was April 27, 2005 (the date used by the first appraiser). Akers’ maintain that the date of appraisal is a material term of the contract and that by supplying the date of appraisal the trial court erred by way of reforming the contract. In the alternative, they argue that if the trial court properly engaged in reformation it abused its discretion by selecting the date the option was exercised as the date for valuation.

[¶ 28.] However, as previously stated, we believe the date of appraisal is not a material term of this contract, the price term is sufficiently definite, and a valid contract exists. Therefore, the issue is not whether the trial court erred by engaging in reformation but whether the court had authority to consider parol evidence on the question of which date the third appraiser should use.

Introduction of Parol Evidence

[¶ 29.] The parties in this case first encountered trouble when they could not agree on who would serve as the third appraiser. The trial court ordered the parties to live up to the First Addendum and find agreement on naming a third appraiser, which they did by selecting Simpson, an appraiser offered by Akers. The parties then returned to the court because Simpson was unsure of what date to use for valuation. The trial court heard extrinsic evidence in the form of live testimony from Simpson, as well as argument from counsel, and ordered Simpson to use the same date as the first appraiser, April 27, 2005.

[¶ 30.] It is a long standing principle that “[p]arol or extrinsic evidence may not be admitted to vary the terms of a written instrument or to add to or detract from the writing.” Jensen v. Pure Plant Food Int'l. Ltd., 274 N.W.2d 261, 263-64 (S.D.1979) (citation omitted). However, “when the writing is uncertain or ambiguous ... such evidence is admissible to explain the instrument.” Id. (Emphasis added). Furthermore, “[i]n construing a contract where ambiguities exist, established trade customs and usages may ordinarily be considered.” Mash v. Cutler, 488 N.W.2d 642, 647 (S.D.1992) (citing 17A Am.Jur.2d Contracts § 355 (1991)). While this Court has never decided whether par-ol evidence is admissible to explain a method for determining a price term, we have allowed such evidence regarding other essential terms of a contract for the sale of land. In Amdahl, 471 N.W.2d at 775, we stated that “[a] general description of the land which is the subject of the contract is sufficient, and parol evidence may be admitted to provide the more particular description.” Id. (citing Habeck v. Sampson, 88 S.D. 437, 221 N.W.2d 483 (1974); 2 Corbin on Contracts § 499). “This is an established exception to the general rule that testimony is inadmissible for the purpose of proving the terms of a contract for the sale of an interest in land which the statute of frauds requires to be in writing.” Id Finally, Restatement of Contracts (Second) § 362(b) (1981) provides:

Apparent difficulties of enforcement due to uncertainty may disappear in the light of courageous common sense. Expressions that at first appear incomplete may not appear so after resort to usage

However, before extrinsic evidence can be heard the contract must be deemed uncertain or ambiguous. In re J.D.M.C., 2007 SD 97, ¶ 30, 739 N.W.2d 796, 806.

Ambiguity in the First Addendum

[¶ 31.] The trial court did not make a conclusion of law as to whether ambiguity exists in this agreement. However, whether the language of a contract is ambiguous is a question of law for the court, which is reviewable de novo. All Star Constr.v. Koehn, 2007 SD 111, ¶ 33, 741 N.W.2d 736, 744 (citation omitted). “[A] contract is ambiguous only when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business.” Ducheneaux v. Miller, 488 N.W.2d 902, 909 (S.D.1992) (citations omitted). The First Addendum provides:

In the event that the second MAI certified appraiser determines that an appraised value exceeds the initial MAI certified by more than seven percent, the parties shall agree on a third MAI appraiser who shall work with the initial MAI certified appraiser to determine the appraised value.

(Emphasis added).

[¶ 32.] Within the context of the entire agreement, it is clear that both parties intended to commit the calculation of price to third parties and agreed to be bound by the result. It is also clear that the parties agreed that should the first two appraisals differ by more than seven percent, a mutually agreed upon third appraiser would work with the first appraiser to make the ultimate determination as to the purchase price. As to the material terms of the contract there is no ambiguity. However, as to the nonessential terms there exists ambiguity.

[¶ 33.] The phrase “the parties shall agree on a third MAI certified appraiser who shall work with the initial MAI certified appraiser to determine the value,” is imprecise as to what date the third appraiser should use to set value. Therefore, the trial court properly considered custom and usage testimony from Simpson, who has been an appraiser in the Rapid City area for thirty-two years. Simpson testified that per industry guidelines when multiple appraisers appraise a piece of property they use the same date of valuation:

Q. (By Mr. Nooney) Typically, in your experience, Mr. Simpson, and consistent with the guidelines that you operate under, be it the American Institute of Appraisers or some other designation, when multiple appraisers appraise a piece of property, do they typically use different dates?
A. No. Not under this type of circumstance.

Furthermore, Simpson testified that in all of his experiences conducting second appraisals he has never used a different date of valuation than the first appraiser. As the trial court noted, using different dates for the appraisal would be comparing apples to oranges.

[¶ 34.] After LaMore exercised the option, but before Haeder conducted the second appraisal, LaMore paid for almost $200,000 worth of improvements to the properties and Akers received an outside offer on the properties. Both of these factors significantly affected the market value as reflected in Haeder’s appraisal. In fact, it resulted in the two appraisals differing by over $540,000. Indeed, the property to be sold was not the same property on December 1, 2005, as it was when LaMore exercised the option to purchase. The apple became an orange.

[¶ 35.] Also, the plain language of the First Addendum expressly states that the third appraiser was to “work with the initial ... appraiser to determine the appraised value.” (Emphasis added). There is simply no mention of the initial appraiser and the third appraiser even considering the second appraisal. In fact, under the language of the First Addendum, if the second appraisal differed by more than seven percent from the first, the second appraisal was dropped entirely. Thus, Ak-ers’ argument that Simpson should have been instructed to use December 1, 2005, the date of the second appraisal, fails.

[¶ 36.] We find there was a sufficient basis for the trial court to interpret the contract as requiring the first and third appraisers to use April 27, 2005, effectively the date the option was exercised, as their date of valuation. Accordingly, we affirm.

[¶ 37.] BARNETT, Circuit Judge, for SABERS, Justice, disqualified.

[¶ 38.] GILBERTSON, Chief Justice, KONENKAMP, ZINTER and MEIERHENRY, Justices, concur.

      . The trial court indicated that the option exercise date of February 23, 2005, should be utilized but also found under the testimony that no change in value occurred between the option exercise date and the first appraisal date; hence the April 27 date.

      . Since we have determined that the agreement satisfied the statute of frauds we need not consider whether the agreement should be specifically enforced under SDCL 53-8-2(3) and the Restatement of Contracts (Second) § 129 due to LaMore's change in position and reliance upon the agreement.


author: SABERS, Justice.

text:
    2008 SD 33
    STATE of South Dakota ex rel. Loraina WHITE, Plaintiff and Appellee, v. Jeffrey B. BRANDT a/k/a Jeffrey Brian Brandt, Defendant and Appellant.
    No. 24632.
    Supreme Court of South Dakota.
    Argued Feb. 13, 2007.
    Decided April 16, 2008.

      Lawrence E. Long, Attorney General, David L. Braun, Special Assistant Attorney General, Pierre, South Dakota, Attorneys for plaintiff and appellee.
    Michael B. Crew of Crew and Crew, Sioux Falls, South Dakota, Attorneys for defendant and appellant.
   SABERS, Justice.

[¶ 1.] In 1995, the State of South Dakota ex rel Loraina White obtained a default judgment against Jeffrey B. Brandt for child support arrearages. In 2007, Brandt submitted a motion to set aside the default judgment under SDCL 15 — 6—60(b)(4). The circuit court denied the motion. Brandt appeals. We affirm.

FACTS

[¶ 2.] Brandt and White met in Sioux Falls, South Dakota, where they both resided. They began an intimate relationship but never married. They had a child, C.B., in March of 1992. In February 1998, White applied for benefits from the South Dakota Department of Social Services (DSS) and assigned her right to child support payments to the State.

[¶ 3.] On August 30, 1993, Brandt was personally served with a summons and complaint alleging that he was the father of the child and owed $284 in child support per month. The complaint also requested child support arrearages from the time of the child’s birth.

[¶4.] Brandt contacted the Office of Child Support Enforcement (OCSE) and met with the OCSE officer assigned to his case. He said he had been making support payments to White and requested a DNA test. He also spoke with the legal assistant to an attorney with OCSE and again requested DNA testing. Before DNA testing could be conducted, White left the state. Brandt received a letter from OCSE dated September 3, 1993, informing him that his case was being closed since White had left the state. It also informed him that if White returned to South Dakota and received assistance, the State would again seek reimbursement.

[¶ 5.] In July of 1994, Brandt moved to Tempe, Arizona. On December 21, 1994, Brandt was personally served at his residence in Arizona with a second summons and complaint. This complaint alleged that Brandt owed $368 per month in child support, plus arrearages.

[¶ 6.] Brandt did not respond to this complaint and a default judgment was entered on February 21, 1995. The default judgment declared Brandt the biological father of C.B., set his child support at $368 a month, and set the arrearages at $12,572. Instead of mailing the notice of entry of the default judgment to Brandt’s Tempe, Arizona residence, it was mailed to 301 South Willow Street in Sioux Falls, South Dakota, his parent’s residence. Brandt learned of this judgment, however, because he referenced the order of default judgment in his March 13, 1995, letter to the OCSE, in which he again requested DNA testing. OCSE informed Brandt that it required a court order for DNA testing because a judgment had been issued. Furthermore, Brandt was advised to contact an attorney and that collection of his support obligation would continue.

[¶ 7.] At some point Brandt moved to Merida, Mexico. One day, Brandt received a phone call from a Federal Bureau of Investigation (FBI) agent who informed him there was a federal felony warrant for his arrest for failure to pay child support. Brandt moved to Sioux Falls, South Dakota in August or September of 2003. Upon his return, he voluntarily turned himself in to the FBI.

[¶ 8.] On September 12, 2003, Brandt pleaded guilty to violating 18 U.S.C. § 228 for failure to pay lawful child support. He was sentenced in November of 2003 to five years of supervised probation. He was also ordered to pay restitution of $49,123.25 for back child support, in payments of not less than $106 a month.

[¶ 9.] On September 23, 2003, Brandt petitioned for modification of his child support. In his petition, he noted that he was the parent of C.B. After a hearing in front of a child support referee, his support obligation was reduced to $320 a month.

[¶ 10.] Brandt filed a motion for relief from the default judgment on March 26, 2007. At the hearing, he argued that the default judgment was void under SDCL 15 — 6—60(b)(4). He alleged the judgment was void because the State did not give him notice of its application for a default judgment. He argued that he was entitled to notice because he made an appearance in the proceeding by requesting a DNA test from the OCSE officer and the legal assistant to the attorney for OCSE. The circuit court denied his motion. Brandt appeals.

STANDARD OF REVIEW

[¶ 11.] “The decision to grant or deny relief from a default judgment rests with the sound discretion of the trial court and we will not disturb the trial court’s decision absent an abuse of that discretion.” Roso v. Henning, 1997 SD 82, ¶ 5, 566 N.W.2d 136, 139 quoting First Fed. Sav. & Loan Ass’n v. Strub, 427 N.W.2d 836, 838 (S.D.1988). “An abuse of discretion occurs when ‘discretion [is] exercised to an end or purpose not justified by, and clearly against, reason and evidence.’ ” In re L.M.G., 2007 SD 83, ¶ 6, 738 N.W.2d 71, 73-74 quoting Miller v. Jacobsen, 2006 SD 33, ¶ 18, 714 N.W.2d 69, 76. The test for an abuse of discretion is not whether we would reach the same result, but rather, “whether we believe a judicial mind, in view of the law and the circumstances, could reasonably have reached that conclusion.” State v. Crawford, 2007 SD 20, ¶ 13, 729 N.W.2d 346, 349 quoting Huber v. Dep’t of Pub. Safety, 2006 SD 96, ¶ 22, 724 N.W.2d 175, 180.

[¶ 12.] Whether the default judgment is void because the State did not give Brandt notice of its application for a default judgment as provided in SDCL 15 — 6—55(b)(1).

[¶ 13.] Brandt claims he made an “appearance” in this action by requesting DNA testing after service of the first summons and complaint. According to him, that means the State was obligated to give him notice of its application for a default judgment as required by SDCL 15 — 6— 55(b)(1). Since the State did not provide the requisite notice, Brandt argues the default judgment is void.

[¶ 14.] SDCL 15 — 6—55(b)(1) provides in relevant part that “[i]f the party against whom judgment by default is sought has appeared in the action, he (or, if appearing by representative, his representative) shall be served with written notice of the application for judgment at least three days prior to the hearing on such application.” The specific issue in this case is whether Brandt “appeared” in the action.

[¶ 15.] Traditionally, in order to “appear” before a court, a party was required to file documents or actually appear before the court. “Courts now take an expansive view toward the definition of ‘appearance[.]’ ” Roso, 1997 SD 82, ¶ 7, 566 N.W.2d at 139 (additional citations omitted). Instead of actually appearing or filing documents, one must demonstrate to the opposing party a clear intent to defend against the lawsuit. See id. “Not every exchange between parties constitutes an appearance.” Nat’l Sur. Corp. v. Shoemaker, 86 S.D. 302, 311, 195 N.W.2d 134, 139 (1972).

[¶ 16.] In 1993, after receiving the first summons and complaint, Brandt requested DNA testing from the OCSE. He did not go beyond the request and never completed the testing while the action was pending, nor did he re-request the DNA test. However, the term “appearance” is construed liberally. See Roso, 1997 SD 82, ¶7, 566 N.W.2d at 139 (additional citations omitted). In South Dakota, this request put the State on notice that Brandt intended to defend against the lawsuit. Therefore, this DNA request constituted an appearance in the action.

[¶ 17.] On the other hand, when Brandt received the second summons and complaint in December of 1994, he did not request testing or even contact OCSE in any manner. Brandt argues that the proper service of a second summons and complaint did not start a new action. However, SDCL 15-2-30 provides that “[a]n action is commenced ... when the summons is served on him[.]” The second summons was served on Brandt in December of 1994. The summons explained that Brandt had thirty days to answer the complaint and that failure to do so could result in a default judgment as requested in the complaint. No requests or “appearances” were made by Brandt after receipt of the second summons and complaint in December of 1994.

[¶ 18.] Furthermore, the second complaint asked for different relief than the first complaint. The first complaint asked for $284 per month in child support, while the second complaint asked for $368 per month in child support. The default judgment represented arrearages calculated using the $368 per month figure, not the $284 per month, and set the monthly child support obligation at $368. The proper service of the second summons and complaint constituted a second action. In view of the fact that Brandt did not make an appearance in the second action, no notice was necessary before the State applied for a default judgment.

[¶ 19.] Given that the motion for relief is not based on a void judgment, the only other avenue for relief from the judgment would be under SDCL 15 — 6— 60(b)(6), “[a]ny other reason justifying relief from the operation of the judgment.” However, this motion must be made within a reasonable time. Id.; Anderson v. Somers, 455 N.W.2d 219, 221 (S.D.1990). Waiting twelve years after a default judgment does not constitute “within a reasonable time,” and Brandt cannot obtain relief under this portion of the statute.

[¶ 20.] Finally, Brandt cannot demonstrate the circuit court abused its discretion in refusing to grant relief because the doctrines of laches and judicial estoppel prevent him from obtaining relief. For laches to apply, the State has the burden of proving: “1) [Brandt] had full knowledge of the facts upon which the action was based, 2) regardless of [his] knowledge, [he] engaged in unreasonable delay in commencing suit, and 3) allowing [him] to maintain the action would prejudice other parties.” Tovsland v. Reub, 2004 SD 93, ¶ 28, 686 N.W.2d 392, 402 (additional citations omitted). Judicial es-toppel applies when a party “who by their words or conduct take positions inconsistent with their rights, unfairly misleading others into detrimental reliance.” A-G-E Corp. v. State, 2006 SD 66, ¶32, 719 N.W.2d 780, 789 (additional citations omitted). Generally, “the later position must be clearly inconsistent with the earlier one; the earlier position was judicially accepted, creating the risk of inconsistent legal determinations; and the party taking the inconsistent position would derive an unfair advantage or impose an unfair detriment to the opponent if not estopped.” Canyon Lake Park, L.L.C. v. Loftus Dental, P.C., 2005 SD 82, ¶34, 700 N.W.2d 729, 737 (quoting Watertown Concrete Products, Inc. v. Foster, 2001 SD 79, ¶ 12, 630 N.W.2d 108, 112-13 (citing New Hampshire v. Maine, 532 U.S. 742, 750, 121 S.Ct. 1808, 1814-15, 149 L.Ed.2d 968, 977 (2001))) (additional citations omitted).

[¶ 21.] Here, Brandt knew there was a possibility he was not the father as early as 1993 and did not contest the paternity. Then, in 2007, Brandt filed a motion for relief, twelve years after the default judgment, alleging that private DNA testing excluded him as the father. Instead of timely contesting the default, Brandt reaffirmed his paternity in two separate legal proceedings — once when he pleaded guilty in federal court to failure to pay child support and again when he requested modification of his obligation. The position that Brandt was C.B.’s father was judicially accepted in both proceedings. Also, the State would suffer an unfair detriment if Brandt was not estopped. As it argued at oral argument, it may be nearly impossible to find the alleged actual father fifteen years after C.B.’s birth. In addition, the State is precluded from seeking all of the back support even if the alleged actual father is located. Prior to 2005, SDCL 25-8-5 provided that

The mother may recover from the father a reasonable share of the necessary support of a child born out of wedlock. In the absence of a previous demand in writing served personally or by registered or certified letter addressed to the father at his last known residence, not more than six years’ support furnished before bringing an action may be recovered from the father.

Therefore, if the alleged actual father is located, back child support could only be awarded for the previous six years. Brandt cannot obtain relief from the default judgment due to laches and judicial estoppel.

[¶ 22.] A similar result was reached in the North Dakota case, Throndset v. L.L.S., 485 N.W.2d 775 (N.D.1992). In that case, the North Dakota Supreme Court held that the father could not get relief from a paternity judgment where he did not appear at the hearing nor respond to the summary judgment motion. Id. at 780. Nine years later, the father attempted to obtain relief from the judgment. In the interim, the father participated in several court proceedings to enforce his child support, but did not raise the issue. Finding his request untimely, the court held he was estopped from denying paternity and from claiming a defect in the original proceeding. Id.

[¶ 23.] In summary, Brandt’s request for DNA testing constituted an appearance requiring notice of the application for default under SDCL 15 — 6—55(b)(1). However, the proper service of a second summons and complaint started a second action and Brandt failed to make an appearance in that action. Therefore, he cannot obtain relief for lack of notice. Additionally, Brandt did not submit this motion for relief within a reasonable time as required for relief from a default judgment under SDCL 15 — 6—60(b)(6). Finally, Brandt was barred from relitigating paternity by the doctrines of laches and judicial estoppel. Brandt has not demonstrated that the circuit court abused its discretion when it denied his motion for relief from the default judgment.

[¶ 24.] Affirmed.

[¶ 25.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and MEIERHENRY, Justices, concur.

      . In Brandt’s deposition, he testified that, when she left the state, White told him that he was not C.B.’s father.

      . This amount represented past child support arrearages ($12,512) plus the State’s recoverable costs and disbursements ($60).

      . Even if we considered the separate summons and complaints as one continuous action, we need not set aside the judgment for lack of notice. While an appearance requires notice of intent to take a default judgment to be given to the defendant, it does not make the judgment void under South Dakota law. Our case law suggests that the judgment is voidable. See Brockel v. Brockel, 80 S.D. 547, 549, 128 N.W.2d 558, 559 (1964) (noting that the failure to give the required notice was "an irregularity and default judgment entered without such notice was voidable."); Peterson v. McMillan, 70 S.D. 56, 58, 14 N.W.2d 97, 98 (1944) (noting that “[t]he judgment having been issued without such notice was irregular and voidable."); see also Effect of failure to give due notice, 46 Am.Jur.2d Judgments § 288 n. 6 (updated Nov. 2007) (citing Brockel v. Brockel, 80 S.D. 547, 128 N.W.2d 558 (1964)); R.D. Hursh, Effect, under Rule 55(b)(2) of the Federal Rules of Civil Procedure and similar state statutes and rules, of failure, prior to taking default judgment against party who has appeared, to serve 3-day written notice of application for judgment, § 3[a], § 3[b] (1957). Additionally, contrary to a void judgment, which can be attacked collaterally, Missouri ex rel Stormfeltz v. Title Guar. & Sur. Co., 72 F.2d 595, 598 (8th Cir.1934), a voidable judgment cannot be attacked collaterally, but must be challenged upon appeal. Id..; see also Voidable judgments, 47 Am.Jur.2d Judgments § 751 (updated Nov 2007). In this case, the judgment is voidable, not void, and Brandt must demonstrate some reason other than SDCL 15-6-60(b)(4) to receive relief from the judgment in this collateral proceeding.

      . As the circuit court noted, the test and its results were unsubstantiated in that there was no evidence the materials tested came from the alleged individuals. Moreover, there is nothing in the record regarding the test results other than a mention of it in Brandt's affidavit accompanying his motion for relief from the default judgment.