author: AMUNDSON, Justice. SABERS, Justice

text:
    2002 SD 101
    STATE of South Dakota, Plaintiff and Appellee, v. Lance KORTH, Defendant and Appellant. State of South Dakota, Plaintiff and Appellee, v. Sheila Steele, Defendant and Appellant.
    Nos. 22058, 22100.
    Supreme Court of South Dakota.
    Argued May 30, 2002.
    Decided Aug. 14, 2002.

      Mark Barnett, Attorney General, Craig M. Eichstadt, Deputy Attorney General, Pierre, for plaintiffs and appellees.
    Arnold D. Laubach, Jr. and Michael Stonefield, Pennington County Public Defender’s Office, Rapid City, for defendant and appellant, Korth.
    Joyce A. Svoboda, Rapid City, for defendant and appellant, Steele.
   AMUNDSON, Justice.

[¶ 1.] Motions to withdraw were filed by court appointed attorneys based on the belief that their clients’ appeals were frivolous. This Court ordered the attorneys to brief the issue of whether an adequate Anders brief is a necessary condition to allow counsel to withdraw.

FACTS

[¶ 2.] The State and Steele’s appointed counsel both argue that the Anders procedure, whereby a motion to withdraw and a brief stating potential appealable issues, is appropriate, and should remain in place. Korth’s appointed counsel, however, proposes that this Court no longer consider Anders-type withdrawal motions.

STANDARD OF REVIEW

[¶ 3.] We are presented with a question of law in the case at hand, which we examine de novo. State v. Sheehy, 2001 SD 130, ¶ 6, 636 N.W.2d 451, 452 (citations omitted).

DECISION

[¶ 4.] In this case, the State and Steele’s counsel request that this Court retain the Anders procedure that is currently in place. Much of the argument supporting current procedure stems from our Rules of Professional Conduct, specifically Rule 3.1 in SDCL chapter 15-18, which states:

A lawyer shall not bring or defend a proceeding or assert or controvert an issue therein, unless there is a basis for doing so that is not frivolous which includes a good faith argument for an extension, modification or reversal of existing law. A lawyer of the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established,

(emphasis added). The State asserts that following the current procedure is the best way to avoid violations of the ethical rules set out for attorneys. Korth’s counsel, however, asserts that the Anders procedure should be eliminated.

[¶ 5.] To address this issue, it is important to understand the historical progeny on which our decision will be based. The initial underlying principles for Anders procedures began with Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963), where the United States Supreme Court declared that under the Fourteenth Amendment, the right to counsel in criminal cases extends in all states. Then, in 1956, the U.S. Supreme Court reviewed the decision of the Illinois Supreme Court, which required an indigent defendant to purchase the trial transcript necessary to obtain appellate review. Griffin v. Illinois, 351 U.S. 12, 14, 76 S.Ct. 585, 588, 100 L.Ed. 891 (1956). Because the indigent individual could not afford the transcript, the court, in essence, denied him his right to appeal. Id. In Griffin, the Supreme Court emphasized equality among all criminal defendants, wealthy or poor, and held that “[destitute defendants must be afforded as adequate appellate review as defendants who have money enough to buy transcripts.” Id., 351 U.S. at 19, 76 S.Ct. at 591, 100 L.Ed. 891.

[¶ 6.] Next, in Douglas v. People of State of California, 372 U.S. 353, 83 S.Ct. 814, 9 L.Ed.2d 811 (1963), this country’s highest court addressed the right to appellate counsel, and stated the following:

There is lacking that equality demanded by the Fourteenth Amendment where the rich man, who appeals as of right, enjoys the benefit of counsel’s examination into the record, research of the law, and marshalling of arguments on his behalf, while the indigent, already burdened by preliminary determination that his case is without merit, is forced to shift for himself. The indigent, where the record is unclear or the errors are hidden, has only the right to a meaningless ritual, while the rich man has a meaningful appeal.

Id. 372 U.S. at 357-58, 83 S.Ct. at 817, 9 L.Ed.2d 811. The Supreme Court held that there is a right to counsel on appeal, not just at the trial level. Again, emphasizing the right to equal protection of the law, the Supreme Court said that without ensuring indigent defendants representation on appeal, there is “discrimination ... between cases where the rich man can require the court to listen to argument of counsel before deciding on the merits, but a poor man cannot.” Id., 372 U.S. at 357, 83 S.Ct. at 817, 9 L.Ed.2d 811.

[¶ 7.] Then, after indigent defendants had been ensured the right to receive necessary transcripts and adequate counsel to represent them on appeal, the issue of how an attorney must proceed if there is nothing non-frivolous in the record to support an appeal arose. In 1967, the decision that truly prompted the dispute at hand was put into law, Anders v. State of California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493. This Court has previously discussed Anders and the protections that should be provided indigent defendants on appeal. See Sweeney v. Leapley, 487 N.W.2d 617, 619 (S.D.1992) (finding the Anders procedure should be followed when counsel feels there is no merit to habeas actions). An-ders states that if counsel appointed to represent an indigent defendant finds a case

wholly frivolous, after a conscientious examination of it, he should so advise the court and request permission to withdraw. That request, must, however, be accompanied by a brief referring to anything in the record that might arguably support the appeal. A copy of counsel’s brief should be furnished the indigent and time allowed him to raise any points that he chooses; the court— not counsel — then proceeds, after a full examination of all the proceedings, to decide whether the case is wholly frivolous. If it so finds it may grant counsel’s request to withdraw and dismiss the appeal insofar as federal requirements are concerned, or proceed to a decision on the merits, if state law so requires. On the other hand, if it finds any of the legal points arguable on the merits (and therefore not frivolous) it must, prior to decision, afford the indigent the assistance of counsel to argue the appeal.
This requirement would not force appointed counsel to brief his case against his client but should merely afford the latter the advocacy which a nonindigent defendant is able to obtain. It would also induce the court to pursue all the more vigorously its own review because of the references not only to the record, but also to the legal authorities as furnished it by counsel.... This procedure will assure penniless defendants the same rights and opportunities on appeal — as nearly as is practical — as are enjoyed by those persons who are in a similar situation but who are able to afford the retention of private counsel.

Id. at 619 (quoting Anders, 386 U.S. at 744-45, 87 S.Ct. at 1400, 18 L.Ed.2d at 498-99). See also Loop v. Solem, 398 N.W.2d 140, 143 (S.D.1986) (discussing the Anders procedure).

[¶ 8.] After Anders was in effect, the U.S. Supreme Court had to assess when court appointed defense has gone far enough to satisfy the Anders requirements. In Penson v. Ohio, 488 U.S. 75, 109 S.Ct. 346, 102 L.Ed.2d 300 (1988), the appellant attorney submitted a “Certificate of Meritless Appeal and Motion” which stated that the attorney carefully reviewed the record, and found no errors. Therefore, the attorney moved to withdraw from the case. Id., 488 U.S. at 77, 109 S.Ct. at 348, 102 L.Ed.2d 300. The court of appeals granted the motion to withdraw. It then examined the record and found error did occur, and reversed the conviction and sentence on that count, but affirmed the remaining counts and found that petitioner was not prejudiced. Id. The Supreme Court held that “the Ohio Court of Appeals did not follow the Anders procedures when it granted appellate counsel’s motion to withdraw, and that it committed an even more serious error when it failed to appoint new counsel after finding that the record supported several arguably meritorious grounds for reversal of petitioner’s conviction and modification of his sentence.” Id., 488 U.S. at 81, 109 S.Ct. at 350, 102 L.Ed.2d 300. The Supreme Court went on to explain that the Court of Appeals should have denied the motion to withdraw and, furthermore, should not have granted the motion before reviewing the record. Id., 488 U.S. at 81-83, 109 S.Ct. at 350-51, 102 L.Ed.2d 300.

[¶ 9.] Shortly after the Penson■ case, the U.S. Supreme Court analyzed whether Wisconsin’s procedure for handling An-ders-type cases was appropriate in light of Anders. In McCoy v. Court of Appeals of Wisconsin, District 1, the Supreme Court analyzed the Wisconsin Supreme Court’s rule requiring that Anders briefs “include ‘a discussion of why the issue lacks merit.’ ” Id., 486 U.S. 429, 431, 108 S.Ct. 1895, 1898, 100 L.Ed.2d 440 (1988). The McCoy Court noted that the Wisconsin Supreme Court did not expect “protracted argument in favor of the conclusions reached!,]” but rather required citations to principal cases, laws and facts in the record to verify that the appeal is meritless. Id., 486 U.S. at 440, 108 S.Ct. at 1903, 100 L.Ed.2d 440. Thus, the Supreme Court held the procedure was unobjectionable, and further acknowledged that the type of candor requested in Wisconsin is already required under attorneys’ ethical rules. Id., 486 U.S. at 441, 108 S.Ct. at 1903, 100 L.Ed.2d 440.

[¶ 10.] More recently, the United States Supreme. Court has stated that courts are free to adopt any procedure to protect defendants’ rights to appellate counsel; they are not bound by the exact steps outlined in Anders. Smith v. Robbins, 528 U.S. 259, 265, 120 S.Ct. 746, 753, 145 L.Ed.2d ‘ 756 (2000). The United States Supreme Court stated: “The procedure we sketched in Anders is a prophylactic one; the states are free to adopt different procedures so long as those procedures adequately safeguard a defendant’s right to appellate counsel.” Id. The Smith court then went on to find that the procedure established in People v. Wende, 25 Cal.3d 436, 158 Cal.Rptr. 839, 600 P.2d 1071, 1074-75 (1979) adequately protects a defendant’s rights to appellate counsel. The Court then stated that the California system described in Wende did not violate the constitution because it provides adequate protections to ensure that an effective appeal would occur. Id., 528 U.S. at 276, 120 S.Ct. 746 at 759, 145 L.Ed.2d 756. After reviewing its holdings in cases like Griffin and Douglas, supra, the Supreme Court stated that the Equal Protection Clause and the Due Process Clause were the underlying basis for ensuring substantial equality to indigent defendants. Id., 528 U.S. at 259, 120 S.Ct. at 759, 145 L.Ed.2d 756. It then explained that An-ders was meant to ensure indigent defendants would be afforded appeals on the merits, and the Wende procedure appropriately did so. Id., 528 U.S. at 278-79, 120 S.Ct. at 760,145 L.Ed.2d 756.

[¶ 11.] It is clear that the great majority of courts employ a procedure similar to that described in Anders. This includes state courts and federal courts. The Eighth Circuit, for example, states:

To be relieved of an appointment, an attorney must file a motion with the clerk specifying the reasons for the request. Motions for leave to withdraw must be served on the client.... Unless the prospective appellant in a criminal case expresses a desire not to appeal in a written notice to the district court, trial counsel must file a timely notice of appeal and prosecute the appeal with diligence until the court grants leave to withdraw. Appointed counsel who believes an appeal is without merit must nonetheless file a brief in conformity with Anders, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967), and Penson, 488 U.S. 75, 109 S.Ct. 346, 102 L.Ed.2d 300 (1988). But see Smith, 528 U.S. 259, 276, 120 S.Ct. 746, 759, 145 L.Ed.2d 756 (2000) (Anders procedure is merely one method of satisfying the requirement of the constitution for indigent criminal appeal).

8th Circuit 2000 Practice Handbook. Other federal courts have given more specific guides to appointed counsel. See, e.g., Suggs v. United States, 391 F.2d 971 (App.D.C.1968) (providing an appendix with information for appointed counsel). In addition, some state courts appear to have set out extremely detailed steps for attorneys to follow. See McCoy, 486 U.S. 429 at 431 n1, 108 S.Ct. at 1897 n1, 100 L.Ed.2d at 440 (presenting the Wisconsin Rules of procedure in Anders-type cases); State v. Clayton, 639 P.2d 168 (Utah 1981) (setting forth an 8-step outline of the procedure set forth in Anders and explaining how each step should be interpreted).

[¶ 12.] Obviously, there is no precise uniformity among the courts that follow Anders. It appears that some courts require so much detail in their Anders briefs that attorneys are deterred from filing them. Martha C. Warner, Anders in the Fifty States: Some Appellants’ Equal Protection is More Equal Than Others’, 23 Fla. St.U.L.Rev. 625, 637 (1996) (describing the intricacies of the Arkansas Supreme Court and Court of Appeals rules). On the other hand, courts, like this Court, have briefly acknowledged that the Anders procedure should be followed, but have failed to set out a detailed guide. See, e.g., Loop, 398 N.W.2d at 143. To further demonstrate the lack of uniformity, it appears some courts use a two-step process, where the court first decides if the appeal is frivolous and rules on the motion to withdraw, then, if the motion is granted, the court reviews the case on its merits. Other courts utilize a one step process where the court looks at the motion to withdraw and reviews the merits in one proceeding. Commonwealth v. Moffett, 383 Mass. 201, 418 N.E.2d 585, 591 n2 (1981).

[¶ 13.] Although the vast majority of courts appear to have accepted the guides set forth in Anders, some courts have decided not to utilize the Anders procedure at all and require the case be submitted on the merits, whether frivolous or not. State v. McKenney, 98 Idaho 551, 568 P.2d 1213, 1214 (1977); State v. Cigic, 138 N.H. 313, 639 A.2d 251 (N.H.1994). See also In re Attorney’s Fees of Mohr, 97 Hawaii 1, 32 P.3d 647 (2001) (requiring court appointed counsel to remain as an advocate and rejecting the use of Anders briefs); Killings-worth v. State, 490 So.2d 849, 851 (Miss. 1986) (overruled by Turner v. State, 818 So.2d 1186 (Miss.2001)) (holding counsel may state to the court that an appeal is without merit, and the client must be informed of that representation and be given the opportunity to respond); Moffett, 418 N.E.2d at 591 (holding “appointed counsel should not be permitted to withdraw solely on the ground that appeal is frivolous or otherwise lacking in merit”); State v. Gates, 466 S.W.2d 681, 684 (Mo.1971) (stating the Anders procedure creates conflicts of interest by requiring defense counsel to argue against his client). Similarly, our neighbor to the north, North Dakota, has held that if court appointed counsel for an indigent defendant believes an appeal is meritless, the court should appoint another attorney to represent the defendant “as soon after the initially appointed attorney makes his opinion as to frivolity known to the court as is practical.” State v. Lewis, 300 N.W.2d 206, 209 (N.D.1980) (citation omitted). It should also be noted that North Dakota, like South Dakota, grants the right to appeal as a matter of law. Id. Consequently, the North Dakota Supreme Court felt that the Anders procedure was inadequate to protect that right. Id.

[¶ 14.] Keeping in mind the above-recited history and the direction that other courts are taking, we are now left with the task of determining which direction this Court should take with regard to Anders-type cases. In doing so, we must set out court appointed counsel’s duty to act as an advocate for his client in the forefront. “Every advocate has essentially the same professional responsibility whether he or she accepted a retainer from a paying client or an appointment from a court.... In preparing and evaluating the case, and in advising the client as to the prospects for success, counsel must consistently serve the client’s interest to the best of his or her ability.” Warner, supra, at 637.

[¶ 15.] In this case, Korth’s appointed counsel pointed out some of the recurring criticisms of the Anders procedure. For example, as the United States Supreme Court noted in Smith:

One of the most consistent criticisms ... is that Anders is in some tension both with counsel’s ethical duty as an officer of the court (which requires him not to present frivolous arguments) and also with his duty to further his client’s interest (which might not permit counsel to characterize his client’s claims as frivolous).

528 U.S. at 281-82, 120 S.Ct. at 762, 145 L.Ed.2d 756. Other courts, too, have acknowledged that attorneys can be on the ethical horns of a dilemma if the client insists on a meritless position. While adhering to the underlying focus on the clients’ best interest and the attorneys’ ethical obligations, we consider one judge’s following critique of the typical Anders procedure:

In trying to determine whether counsel has been faithful to the task ... we either duplicate undocumented time spent by counsel or do what counsel should have done but did not. On the other hand, if we do receive a comprehensive brief, we wonder and surely the appellant will, too[,] why counsel who found so much to discuss did not do so as an advocate instead of, in effect, as a judge ruling against the client. In short, the Anders dictum typically forces either the court to undertake the role of the lawyer, or the’ lawyer to undertake the role of the court. This role reversal does not well serve the administration of justice.

Gale v. United States, 429 A.2d 177, 181 (D.C.App.1981) (Ferrin, A.J., dissenting).

[¶ 16.] The Oregon Supreme Court, after doing a thorough review of Anders and its progeny, held that appointed counsel representing an indigent defendant need not motion to withdraw from a case, even if the requested appeal is entirely frivolous. State v. Balfour, 311 Or. 434, 814 P.2d 1069, 1078 (1991) (Balfour II). Subsequently, Oregon adopted appellate procedural rules providing direction for the representation of indigent defendants.

[¶ 17.] For future -appeals where appointed counsel is presented with an Anders-type case, we find that the Oregon procedure of including a “Section A” (issues the attorney believes are meritorious) and “Section B” (issues the attorney believes are frivolous, but briefed at the client’s request) successfully strikes a balance between protecting a defendant’s Sixth Amendment right to appellate counsel, protecting Fourteenth Amendment due process and equal protection rights and upholding the ethical rules by which attorneys must abide. This procedure reaches the main goal of ensuring the case is decided on the merits. Furthermore, the defendant is afforded:

notice of appeal; a state-paid transcript; appointed counsel charged with conducting a good faith, professional, thorough review of the case as the Ghent’s advocate; appointed counsel raising all issues for review according to counsel’s exercise of professional and ethical judgment in the client’s best interest; an opportunity for the client to raise any issue, with legal advice from counsel, notwithstanding the professional and ethical judgment made - by the counsel that defendant’s arguments are frivolous; and a Court of Appeals decision made on the same basis as in any appeal.

Balfour II, 311 Or. 434, 814 P.2d at 1081. Therefore, we find the appropriate and effective way to process this issue involving an- absolute right to appeal and the right to appointed counsel for the indigent is for the filing of the “Section A” and “Section B” appellate brief. The former should be designated by the attorney as attorney issues, and the latter should be designated as issues that the client requested be submitted.

[¶ 18.] This process avoids the unnecessary step of deciding appointed defense counsel’s motions to withdraw, and offers a procedure where defendants are provided an effective means for presenting their arguments. Furthermore, we are providing a means by which appointed defense counsel can assist their clients with their arguments without violating ethical rule 3.1, which prohibits the presentation of wholly frivolous arguments. By following the above procedure, the potential for role reversal between appointed counsel and judges is avoided, and we ensure that appeals will be considered on the merits.

[¶ 19.] Based on the above decision, the motions to withdraw made by Korth’s and Steele’s defense counsel are denied, and counsel shall now proceed with the appeals in accordance with this decision. The briefs are to be filed within 45 days after this decision has been issued.

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

[¶ 21.] SABERS, Justice, dissents.

SABERS, Justice

(dissenting).

[¶ 22.] I think we are unnecessarily complicating this matter and these cases.

[¶ 23.] If an appeal has merit, file a merit brief.

[¶ 24.] If an appeal has no merit, file an adequate Anders brief and keep your client informed of same.

[¶ 25.] It is not necessary to file a motion to withdraw in either case.

[¶ 26.] In both of these cases, we should simply require counsel to file adequate Anders briefs so that we can decide both cases on the merits.

      . In State v. Korth and State v. Steele, the defendants pleaded guilty to various drug charges. Both Lance Korth (Korth) and Sheila Steele (Steele), the defendants, wanted to appeal the sentences imposed on them by the trial court. Appointed counsel for Korth and Steele made motions to withdraw based on frivolousness of issues and submitted briefs raising the potential issue of cruel and unusual punishment.

      . The impetus of Korth’s argument seems to stem from our opinion in State v. Ekem, 2001 SD 20, 623 N.W.2d 448 (Ekern I) and State v. Ekern, 2001 SD 21, 623 N.W.2d 449 (Ekem II). Based on this Court's comments regarding the pattern of summarily affirming many appeals from the Pennington County public defender's office, Korlh argues it is no longer possible to follow the Anders procedure and heed the caution set forth on filing meritorious briefs in Ekem I, 2001 SD 20, ¶ 3 n2, 623 NW2d at 448 n2. We, however, point out that it does not appear as though Anders-type briefs were at issue in Ekern's cases because counsel did not move to withdraw. Moreover, we point out the scanty work-product that emerged, where counsel failed to adequately cite to portions of the record supporting meritorious claims in its briefs for the Ekem cases. Thus, apparent attempts to chastise the Court for its terse treatment of those cases appears unwarranted.

      . This right to appellate counsel has obviously evolved from the rights granted by our forefathers in the constitution. It may be difficult for a lay person to accept that an indigent defendant in a criminal case should be afforded the same representation as a rich person, but that is what the law of our land provides for.

      . The Wende procedure is, as follows:'
      [C]ounsel, upon concluding that an appeal would be frivolous, files a brief with the appellate court that summarizes the procedural and factual history of a case, with citations of the record. He also attests that he has reviewed the record, explained his evaluation of the case to his client, provided the client with a copy of the brief, and informed the client of his right to file a pro se supplemental brief. He further requests that the court independently examine the record for arguable issues. Unlike under the Anders procedure, counsel following Wende neither explicitly states that his review has led him to conclude that an appeal would be frivolous (although that is considered implicit [citation omitted]) nor requests leave to withdraw. Instead, he is silent on the merits of the case and expresses his availability to brief any issues on which the court might desire briefing.

        Id., 528 U.S. at 265, 120 S.Ct. 746 at 753, 145 L.Ed.2d 756.

      . The Idaho Supreme Court has declined to follow Anders altogether, and has decided that "once counsel is appointed to represent an indigent client during appeal on a criminal case, no withdrawal will thereafter be permitted on the basis that the appeal is frivolous or lacks merit.” McKenney, 568 P.2d at 1214. The Idaho court reasoned that just filing a motion to withdraw based on frivolousness of issues will result in prejudice. Additionally, it concluded that, in essence, there is less conflict and less judicial energy focusing on reviewing motions rather than the merits of the case if counsel is not allowed to motion for withdrawal. Id.

      The "Idaho Rule” was followed by the New Hampshire Supreme Court in Cigic, 138 N.H. 313, 639 A.2d 251. The Cigic court noted that this procedure may occasionally require that appellate counsel be required to argue frivolous issues to the state supreme court. Id. at 254. They, however, created an exception within their rules of professional conduct for such cases. The Idaho procedure adopted, which is similar to the ABA Standards for Criminal Justice, is as follows:
      Counsel first must discuss with the defendant whether to appeal. If, in counsel's estimation, the appeal lacks merit or is frivolous, counsel should so inform the defendant and seek to persuade the defendant to abandon the appeal. If the defendant chooses, notwithstanding counsel’s advice, to proceed with the appeal, counsel must prepare and file the notice of appeal, including all arguable issues. For cases in which a transcript is required, a transcript shall be prepared and provided to the defendant. After appellate counsel is ordered to file a statement of reasons why the appeal should be accepted, counsel must thoroughly examine the record and again determine whether any nonfrivolous arguments exist. If counsel concludes that the appeal is frivolous, counsel should again advise the defendant to withdraw the appeal. If the defendant decides not to withdraw the appeal, counsel must file a statement of reasons or a brief that argues the defendant's case as well as possible. Counsel cannot concede that the appeal is frivolous. If an appeal is truly frivolous, counsel's accurate summary of the facts and law will make that obvious. Thereafter, the appeal will proceed in the normal course.

        Cigic, 639 A.2d at 254.

      . Oregon Rule of Appellate Procedure 5.90 provides:
      (1) If counsel appointed by the court to represent an indigent defendant in a criminal case on direct appeal has thoroughly reviewed the record, has discussed the case with trial counsel and the client, and has determined that the case does not raise any arguably meritorious issues counsel shall file a brief with two sections:
      (a) Section A of the brief shall contain:
      (i)A statement of the case, including a statement of the facts of the case. If the brief contains a Section B with one or more claims of error asserted by the client, the statement of facts shall include facts sufficient to put the claim or claims of error in context.
      (ii) A description of any demurrer or significant motion filed in the case, including, but not limited to, a motion to dismiss, a motion to suppress and a motion in limine, and the trial court’s disposition of the demurrer or motion.
      (iii) A statement that the case is being submitted pursuant to this rule, that counsel has thoroughly reviewed the record and discussed the case with trial counsel and the client, and that counsel has not identified any arguably meritorious issue on appeal. If the brief does not contain a Section B, counsel also shall state that counsel contacted the client, gave the client reasonable opportunity to identify a claim or claims of error, and that the client did not identify any claim of error for inclusion in the brief.
      (iv), Counsel's signature.
      (b) Section B of the brief shall contain any claim of error requested by the client and shall be signed by the client. Section B •shall attempt to state the claim and any argument in support of the claim as nearly as practicable in the manner that the client seeks, in proper appellate brief form.
      (2) A case in which appellant's brief is prepared and filed under this rule shall be submitted without oral argument, unless otherwise ordered by the court.
      (3) On reviewing the record and the briefs filed by the parties, if the court identifies one or more arguably meritorious issues in the case, the court shall notify appellant’s counsel of the issue or issues so identified. Appellant's counsel shall have 28 days from tire date of the court's notice to file a supplemental opening brief addressing those issues. In addition to addressing the issue or issues identified by the court, counsel may address any other arguably meritorious issue counsel has identified. Respondent shall have 28 days after appellant files a supplemental opening brief to file a response or supplemental response brief addressing the issues raised in the supplemental opening brief.
      (4) In a cáse other than a criminal case on direct appeal, court-appointed counsel who determines that there are no meritorious issues on appeal may submit a brief under this rule, in which case the matter will be .submitted without oral argument, unless otherwise ordered by the court.
      (5) In any case in which the appellant is represented by court-appointed counsel on appeal and counsel filed a brief in the Court of Appeals under subsection (1) of this rule, counsel may submit a petition for review that contains a Section A that complies with Rule 9.05(1), (2), and (3)(g), and a Section B that complies with paragraph (l)(b) of this rule.


source: Caselaw Access Project

author: GILBERTSON, Chief Justice.

license: Public Domain

text:
    2002 SD 102
    ST. ONGE LIVESTOCK COMPANY, LTD., Plaintiff and Appellant, v. Randy CURTIS, Dean Strong, and Belle Fourche Livestock Auction, Inc., Defendants and Appellees.
    No. 22159.
    Supreme Court of South Dakota.
    Considered on Briefs May 28, 2002.
    Decided Aug. 14, 2002.

      Michael F. Marlow, Sheila S. Woodward, Steven K. Huff, Johnson, Heidepriem, Miner, Marlow and Janklow, L.L.P., Yank-ton, for plaintiff and appellant.
    Kenneth E. Barker, John W. Burke, Belle Fourche, for defendants and appel-lees.
   GILBERTSON, Chief Justice.

[¶ 1.] Randy Curtis (Curtis) accepted an offer from Dean Strong (Strong) and left St. Onge Livestock Company, Ltd. (St. Onge) to work for Belle Fourche Livestock Exchange, Inc. (Belle Fourche). St. Onge sued Strong and Belle Fourche for tortious interference with a business relationship. The trial court granted summary judgment for Strong and Belle Fourche. We reverse and remand.

FACTS AND PROCEDURE

[¶ 2.] Curtis began working for St. Onge as a field man in 1990. Over a period of nine years, Curtis worked his way up to manager of St. Onge. In 1995, an incentive plan was discussed between Curtis and Gail Sohler (Sohler), the owner of St. Onge. Sohler agreed to a $.025 bonus for each head of cattle or sheep sold at St. Onge in return for Curtis’ signature on an employment agreement containing a non-compete clause. Curtis, however, refused to sign the agreement.

[¶ 3.] In 1996, the incentive plan was again discussed. Curtis intended to use the bonus money to eventually buy out Sohler. This time, Sohler agreed to pay Curtis a $.05 bonus for each head of cattle and sheep sold at St. Onge. In return, Curtis would be required to sign an employment agreement with a non-compete and non-solicit clause. Curtis claimed that he was “surprised” and “disgusted” when Sohler presented him with the agreement, even though it was nearly identical to the one proposed in 1995. After Curtis had his attorney review the agreement, Curtis requested and received several changes to the contract. Some of these changes included alterations in the non-compete provision. Curtis then signed and executed the revised agreement on May 1, 1996. Sohler paid Curtis $21,918.13 over a four-year period under the incentive program.

[¶ 4.] On Monday, July 26, 1999, Strong, the primary shareholder and president of Belle Fourche, asked Curtis to leave St. Onge and come to work for Belle Fourche. Curtis informed Strong that he had executed an employment agreement with St. Onge, which he thought would prevent him from accepting employment from Belle Fourche. Three days later, Strong and Curtis took the employment agreement to Ken Barker (Barker), Belle Fourche’s attorney in this matter, to determine its validity. According to both Curtis and Strong, Barker believed the agreement to be reasonably well drafted. Curtis and Strong, however, decided to go ahead with the employment swap because they believed Sohler would not enforce the contract.

[¶ 5.] On Thursday, August 5, 1999, Curtis informed Sohler that he was leaving and that Friday would be his last day. On Saturday, August 7, 1999, an advertisement appeared in the Belle Fourche city newspaper announcing that Curtis had changed employment and was now managing Belle Fourche. Curtis officially began working for Belle Fourche on Monday, August 9.

[¶ 6.] Curtis admitted in deposition testimony that, when he began working for Belle Fourche, he solicited business from customers who had sold livestock at St. Onge within the last ten years. St. Onge initially identified six customers that had switched to Belle Fourche when Curtis left. After an inspection of Belle Fourche’s records, that list grew to 23 customers who had either substantially decreased or eliminated their business with St. Onge since Curtis’ departure. According. to state livestock reports, sales at St. Onge since Curtis’ defection have decreased by 19,398-head of cattle. Sales at Belle Fourche have since increased in a strikingly similar number: 18,039-head of cattle. Strong acknowledged in deposition testimony that the increase in sales at Belle Fourche was at least partly attributable to Curtis. Curtis also admitted offering jobs to two St. Onge employees just after becoming manager at Belle Fourche.

[¶ 7.] On January 13, 2000, St. Onge sued Curtis, Strong and Belle Fourche for breach of contract, breach of fiduciary duty and breach of the duty of loyalty. St. Onge also sued Strong and Belle Fourche for tortious interference with a contract, asking for punitive damages. Both parties moved for partial summary judgment. The trial court held that Curtis had breached his employment agreement, but it released Strong and Belle Fourche from the breach of contract claim because they were never parties to the contract.

[¶ 8.] The court also held that the non-compete agreement was “overbroad in range of activities, duration and area” and, therefore, violative of SDCL 53-9-11: The court excised the illegal terms and held the agreement enforceable as amended. The court stated:

[Tjhere is little doubt that [Curtis] violated any reasonable interpretation of those factors. It is undisputed that [Curtis] began working at Belle Fourche Livestock just one day after he left [St. Onge’s] employ. Belle Fourche Livestock is in the same business as that of [St. Onge] and located approximately ten miles from [Curtis’] former principal place of employment. The court specifically rejects [Curtis’] argument that the area should be confined to Lawrence County.

Regardless of the duration of the non-compete agreement, the court determined that Curtis had breached the agreement because Curtis began working for Belle Fourche within 24 hours of quitting at St. Onge.

[¶ 9.] Finally, the tortious interference claim, while not included in either party’s motion for summary judgment, was added by stipulation of the parties at the hearing on September 5, 2000. The court held that a valid business relationship existed between Curtis and St. Onge and that Strong and Belle Fourche knew of the relationship. But the court went on to hold: (1) there were no specific facts supporting a finding of intentional and unjustified interference on the part of Defendants; (2) St. Onge had presented no evidence that Defendants’ interference caused the harm sustained; and (3) no evidence of damages had been presented. Therefore, the court granted summary judgment in favor of Strong and Belle Fourche. St. Onge appeals, raising only one issue:

Whether a genuine issue of material fact exists with regard to Strong and Belle Fourche’s intentional and unjustified interference, St. Onge’s resultant harm, and damages.

STANDARD OF REVIEW

[¶ 10.] Our standard for reviewing a trial court’s grant of a motion for summary judgment is well settled:

Summary judgment is authorized “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law.” We will affirm only when there are no genuine issues of material fact and the legal questions have been correctly decided. All reasonable infer-enees drawn from the facts must be viewed in favor of the non-moving party. The burden is on the moving party to clearly show an absence of any genuine issue of material fact and an entitlement to judgment as a matter of law.

Hayes v. N. Hills Gen. Hosp., 1999 SD 28, ¶ 12, 590 N.W.2d 243, 247 (quoting SDCL 15-6-56(c)) (internal citations and additional citations omitted). Therefore, summary judgment requires not only that “there be no material facts at issue, but also that there be no genuine issue on the inferences to be drawn from those facts.” Mueller v. Cedar Shore Resort, Inc., 2002 SD 38, ¶ 10, 643 N.W.2d 56, 61-62 (emphasis added).

ANALYSIS AND DECISION

[¶ 11.] Whether a genuine issue of material fact exists with regard to Strong and Belle Fourche’s intentional and unjustified interference, St. Onge’s resultant harm, and damages.

[¶ 12.] This Court recognized the claim of tortious interference with a business relationship in Tibke v. McDougall, 479 N.W.2d 898 (S.D.1992). There, we defined the tortious interference claim to include the following essential elements:

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

Id. at 908. But to withstand a summary judgment motion, a claimant need only demonstrate “an intentional interference with the business relationship which results in damage to the plaintiff.” Id. (citations omitted).

[¶ 13.] In the case at bar, the trial court ruled that St. Onge had failed to demonstrate a genuine issue of material fact existed with respect to elements 3, 4 and 5. The court found that a valid business relationship existed and that Strong and Belle Fourche knew of that relationship. Yet, the court denied the claim on the basis that St. Onge had presented no specific evidence that would create a genuine issue of material fact as to whether there was an intentional and unjustified interference, whether that interference caused harm, and whether the harm resulted in damages. We disagree.

[¶ 14.] a. Intentional and Unjustified Interference

[¶ 15.] There is no dispute that Strong and Belle Fourche knew of, and intentionally interfered with, the employment agreement between Curtis and St. Onge. Strong knew Curtis was employed by St. Onge when he offered Curtis the job. Strong also knew, as Curtis immediately informed him, that Curtis had executed an employment agreement with St. Onge that would prevent him from accepting employment from Belle Fourche. Even after having an attorney review the agreement, the two chose to disregard the contract and go ahead with Curtis’ employment at Belle Fourche because they believed St. Onge would not enforce the non-compete clause. Strong and Belle Fourche knew the result that was substantially certain to occur because of Curtis’ switch to Belle Fourche. Thus, the analysis of element three focuses only upon whether that intentional interference was unjustified.

[¶ 16.] When analyzing a claim of tor-tious interference in the case of Landstrom v. Shaver, we recognized that “[t]his cause of action is the recognition that valid business relationships and expectancies are entitled to protection from unjustified interference.” 1997 SD 25, ¶ 81, 561 N.W.2d 1, 18 (emphasis added). We did not, however, define what constitutes unjustified interference. Both parties in this case refer to the Restatement (Second)-of Torts § 767, which outlines the factors to consider in determining whether the interference was unjustified. Those factors include:

(a) the nature of the actor’s conduct; (b) the actor’s motive; (c) the interests of the other with which the actor’s conduct interferes; (d) the interests sought to be advanced by the actor; (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other; (f) the proximity or remoteness of the actor’s conduct to the interference; and (g) the relations between the parties.

Restatement (Second) of Torts § 767 (1979). An application of these factors to the events of this case indicates, contrary to the trial court’s ruling, that genuine issues of material fact do exist.

[¶ 17.] Strong actively recruited Curtis when he knew Curtis was currently managing St. Onge, an employer for whom Curtis had worked nearly nine years. Neither Strong nor Belle Fourche were daunted by the existence of a valid and enforceable employment agreement containing a non-compete clause. While Strong could have hired someone else, he was attracted to his competitor’s manager. He chose a man who had proven himself a successful livestock sales manager, with significant customer contacts. Less than 24 hours after Curtis’ resignation, in which he gave only one day’s notice, Belle Fourche was running an ad in the city newspaper informing potential customers of Curtis’ switch. Then Curtis attempted to lure away two other St. Onge employees while soliciting previous St. Onge customers. Curtis even testified that he informed Strong of this solicitation. When asked to confirm if Curtis had ever informed him of a customer’s switch from St. Onge to Belle Fourche, Strong replied, “I suppose when they finally come. Guys that he’d run on to.” But Strong could not remember any names. These actions are enough to raise a question of fact, an issue that should be resolved by a jury. See Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust, 201 Ariz. 474, 38 P.3d 12, 32 (2002) (analyzing wrongful conduct in light of factors, but giving most weight to nature of actor’s conduct and actor’s motive); Q.E.R. v. Hickerson, 880 F.2d 1178, 1183-84 (10thCir.1989) (stating that - balancing of factors to determine whether conduct was justified is task for fact finder); Hennum v. City of Medina, 402 N.W.2d 327, 336 (N.D.1987) (stating “whether or not interference with contractual relations is justified is basically a question of fact.”).

[¶ 18.] b. Resultant Harm

[7] [¶ 19.] St. Onge has also alleged specific facts with which to infer that it sustained harm as a direct result of this interference. There is no dispute that, but for Strong’s inducement, Curtis would not have left St. Onge. Indeed, there was evidence submitted to indicate Curtis was considering buying out Sohler’s interest in St. Onge. Since Curtis’ departure, livestock sales at St. Onge have fallen by approximately the same number as sales at Belle Fourche have risen. Strong and Belle Fourche claim that St. Onge has failed to prove that this change in sales resulted from Curtis’ defection to Belle Fourche. But the procedural posture of this case requires that all reasonable inferences must be drawn in favor of the non-moving party. Strong acknowledged that Belle Fourche’s increase in business was due, at least in part, to Curtis. Therefore, it is reasonable to infer that Curtis’ change in employment was, at least in part, responsible for St. Onge’s decrease in business.

[¶ 20.] In addition, St. Onge identified a minimum of 23 customers that either eliminated or substantially diminished their business with St. Onge, in favor of Belle Fourche, after Curtis’ departure. In fact, this was likely the purpose behind the August 7 advertisement and Curtis’ admitted solicitation of St. Onge customers. Yet, the trial court incorrectly determined that because St. Onge did not produce affidavits from each of these customers, the evidence was insufficient to create a genuine issue of material fact. See Hayes, 1999 SD 28 at ¶ 31, 590 N.W.2d at 250.

[¶ 21.] We have previously held that such evidence may be further developed at trial, so long as the plaintiff has demonstrated that the defendant has intentionally and unjustifiably interfered with a legitimate business expectancy. See Setliff v. Akins, 2000 SD 124, ¶¶ 36-41, 616 N.W.2d 878, 889-890 (holding plaintiffs claim that the departure of one of his doctors jeopardized level of patient care and tarnished clinic’s good will, was enough to withstand summary judgment); Ibid, (holding specific fisting of lost patients not necessary to withstand summary judgment). This evi-dentiary hurdle is even lower in a case where, unlike Setliff and Hayes, the plaintiff is only alleging that the lost customers were the resultant harm. See Corcoran v. Land O’Lakes, Inc., 39 FSupp2d 1139 (N.D.Iowa 1999) (comparing evidentiary standards of tortious interference with a contract and tortious interference with a prospective business relation).

[¶22.] St. Onge has not alleged, as it could have, that Defendants Curtis, Strong and Belle Fourche also tortiously interfered with the business expectancies between St. Onge and its customers. “ ‘One is liable for commission of this tort [if he] interferes with business relations of another, both existing and prospective, by inducing a third person not to enter into or continue a business relation with another or by preventing a third person from continuing a business relation with another.’ ” Hayes, 1999 SD 28 at ¶ 22, 590 N.W.2d at 248 (emphasis added) (quoting N. Plumbing & Heating, Inc. v. Henderson Bros., Inc., 83 Mich.App. 84, 268 N.W.2d 296, 299 (1978)). Instead, St. Onge is alleging only that Strong and Belle Fourche’s tortious interference with the business contract between St. Onge and Curtis resulted in the loss of customers and the associated revenue. We conclude the evidence is sufficient to raise a genuine issue of material fact as to the resultant harm to St. Onge.

[¶ 23.] c. Damages

[¶ 24,] Because St. Onge has raised genuine issues of material fact as to unjustified interference and resultant harm, St. Onge is entitled to take the issue of damages to trial. See Jorgenson v. Vener, 2002 SD 20, ¶ 13, 640 N,W.2d 485, 487-88 (citing South Dakota Constitution Article VI § 6). Nevertheless, the trial court pointed out in its memorandum opinion that, even if St. Onge had demonstrated that harm had resulted from the interference, it had submitted no evidence of monetary damages, thus making summary judgment proper. However, Strong and Belle Fourehe instigated the breach of- a valid employment agreement containing a non-compete clause. At a minimum, the expenses St. Onge incurs in enforcing such an agreement are recoverable as money damages. See Kallok v. Medtronic, Inc., 573 N.W.2d 356, 363-64 (Minn.1998). In addition, St. Onge has identified at least 23 customers that it likely lost as a result of Curtis’ transfer to Belle Fourehe. If St. Onge can prove that Curtis’ departure occasioned the loss of even one customer, then St. Onge is entitled to damages in the amount of that lost revenue. Thus, when damages can be reasonably inferred from the facts and circumstances, as is the case here, the amount of such damages is a question of fact reserved for a jury.

Conclusion

[¶ 25.] As we stated in Tibke: [Sjummary judgment is not a substitute for trial; a belief that the non-moving party will not prevail at trial is not an appropriate basis for granting the motion on issues not shown to be a sham, frivolous or unsubstantiated; summary judgment is an extreme remedy and should be awarded only when the truth is clear[;] and reasonable doubts touching upon the existence of a genuine issue of material fact should be resolved against the movant.

479 N.W.2d at 904 (citations omitted). Given this standard with which summary judgment is governed, we conclude that St. Onge has submitted sufficient evidence to establish genuine issues of material fact on the questions of whether there was unjustified interference, resultant harm, and damages. Therefore, we reverse the lower court’s decision and remand for a trial on the merits.

[¶ 26.] SABERS, AMUNDSON, KONENKAMP, and ZINTER, Justices, concur.

      . There are several allegations from both parties that discovery in this case was not entirely forthcoming. We find it difficult to comprehend that Curtis could admit soliciting people he knew to be previous St. Onge customers and then forget their names.

      . While instructive, we caution that these factors are neither exhaustive nor determinative.

      . We also note that a customer's switch from St. Onge to Belle Fourche is not the only way for St. Onge to sustain harm. For example, if a customer’s only reason for continuing business at St. Onge was his familiarity with Curtis, upon Curtis’ departure, that customer may choose to take his business to the Sturgis Livestock Exchange. Simply because that customer does not follow Curtis to Belle Fourche, does not mean Curtis’ departure has not still occasioned the loss of that customer.


author: MILLER, Acting Justice.

text:
    2002 SD 103
    HURON CENTER, INC., d/b/a Crossroads Hotel and Convention Center, Plaintiff and Appellant, v. HENRY CARLSON CO., Durrant Group, Inc., and Durrant Construction Management, Inc., Defendant and Appellee, and Durrant Group, Inc., and Durrant Construction Management, Inc., Defendant and Appellee, v. Zurbrigen Industries, Inc. (formerly Concrete Products Company), Third Party Defendant and Appellee.
    No. 22219.
    Supreme Court of South Dakota.
    Considered on Briefs on May 28, 2002.
    Decided Aug. 14, 2002.

      Rodney Freeman, Jr., Jeff Burns of Churchill, Manolis, Freeman, Kludt & Shelton, Huron, for plaintiff and appellant.
    William G. Beck of Woods, Fuller, Shultz and Smith, Sioux Falls, for defendant and appellee Henry Carlson.
    Gary J. Pashby of Boyce, Murphy, McDowell and Greenfield, Sioux Falls, for defendant and appellee Durrant Group.
    Michael L. Luce of Davenport, Evans, Hurwitz and Smith, Sioux Falls, for third party defendant and appellee Zubrigen.
   MILLER, Acting Justice.

[¶ 1.] Huron Center, Inc., d/b/a Crossroads Hotel and Convention Center (Huron Center) sued Henry Carlson Co. and Durrant Group, Inc., for breach of contract as a result of a claimed defective design and the substandard construction of a hotel in Huron, South Dakota. Although the exact date is disputed, deterioration of the exterior panels began in the early 1990’s. Huron Center, however, did not commence this action until April 1997. After four years of discovery, the defendants moved for summary judgment on the grounds that the six-year statute of limitations period had expired. The trial court granted the motion. We reverse and remand.

FACTS AND PROCEDURE

[¶ 2.] In 1985, Huron Center contracted with Durrant, an architectural firm, and Carlson, a general contractor, to build a hotel in Huron. Huron Center specified that the hotel would be built using pre-cast building panels manufactured by Concrete Products Company, n/k/a Zurbrigen Industries, Inc. Construction of the hotel was completed on May 1,1987.

[¶ 3.] Prior to July 1990 (the exact date is unknown) Huron Center began having problems with Zurbrigen’s pre-cast concrete panels. The panels gradually began to crack and discolor in various areas. Huron Center paid contractor Travis Dry-vit to fix the problems by scraping away the crumbling concrete and replacing it with a styrofoam base, which was then covered with a finishing coat. In July 1990, when Steve Oetken replaced Richard Johnson as Huron Center’s general manager, he noticed the exterior wall problems. In the spring of 1991, Oetken contacted Dryvit to come make repairs. Dryvit fixed the exterior wall deterioration that had developed since his last repair job. While Dryvit has annually repaired the exterior panels since 1990, it was not until 1992 that he also began to inspect the interior walls.

[¶ 4.] In 1995, Huron Center began experiencing problems with the interior walls. Sheet rock on the walls of several rooms was deteriorating to the point that it would not hold the wall coverings. The walls were also retaining a significant amount of moisture. In the fall of 1995 or spring of 1996, Oetken wrote a letter to Carlson and Durrant explaining the problems, requesting advice as to why they were occurring, and asking who was responsible. Carlson sent an engineer to review the problems and Durrant sent Randy Hoscheid to perform some tests on the exterior panels. Hoscheid’s testing revealed that the exterior panel design and construction were defective.

[¶ 5.] In April 1997, Huron Center sued Carlson and Durrant for breach of contract. Durrant brought a third party complaint against Dakota Engineering and Testing Co. and Zurbrigen. The trial court granted summary judgment in favor of Carlson, Durrant and Zurbrigen (collectively Defendants). Huron Center moved to vacate the grant of summary judgment, which motion was denied. Huron Center appeals, raising the following issue:

1. Whether the time of accrual of Huron Center’s cause of action raises a genuine issue of material fact.

In this appeal, Defendants raise the following issue:

2. Whether Huron Center properly preserved the substantive issue for appeal.

For obvious reasons, we will address these issues in reverse order.

STANDARD OF REVIEW

[¶ 6.] This case involves the review of a trial court’s grant of summary judgment. Given the standard set forth in SDCL 15-6 — 56(c):

[W]e must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied.

Wissink v. Van De Stroet, 1999 SD 92, ¶ 9, 598 N.W.2d 213, 215 (citations omitted).

ANALYSIS AND DECISION

[¶ 7.] 1. Whether Huron Center properly preserved the substantive issue for appeal.

[¶ 8.] Defendants claim this Court does not have jurisdiction because Huron Center has not properly preserved the substantive issue, i.e. when accrual of the cause of action occurred, for appeal. They allege the only dispute before the trial court was whether the ten-year statute of limitations or the six-year statute of limitations applied. We disagree.

[¶ 9.] In its letter brief opposing summary judgment, written to the trial court on September 21, 2001, Huron Center’s counsel wrote:

I would alternatively advise that the determination as to when a cause of action accrues is a question of fact for a jury. Strassburg v. Citizens State Bank, 1998 SD 72, 581 N.W.2d 510. The Defendants cite Steve Oetken’s testimony as to when the injury occurred. In reviewing the cited deposition testimony in Defendant’s brief, Mr. Oetken mentions three different years in which he may have [first] contacted Travis Dryvit. Mr. Oetken’s statements certainly are not conclusive as to when this cause of action accrued, the extent of any damage that may have occurred at that time, nor whether it is damage that was even included in this cause of action. The time this cause of action accrued is certainly in dispute and if necessary, should be determined by the trier of fact.

This letter clearly indicates the substantive issue was put squarely before the trial court prior to its summary judgment ruling. As a result, it has been properly preserved for appeal and this Court has jurisdiction to decide the matter.

[¶ 10.] 2. Whether the time of accrual of Huron Center’s cause of action raises a genuine issue of material fact.

[¶ 11.] Both parties agree this action is governed by SDCL 15-2-13, which provides, in salient part:

Except where, in special cases, a different limitation is prescribed by statute, the following civil actions other than for the recovery of real property can be commenced only within six years after the cause of action shall have accrued:
(1) An action upon a contract, obligation, or liability, express or implied, excepting those mentioned in §§ 15-2-6 to 15-2-8, inclusive, and subdivisions 15-2-15(3) and (4); * * *

However, a claim that a cause of action is time-barred is an affirmative defense. Wolff v. Sec. of S.D. Game, Fish and Parks Dep’t, 1996 SD 23, ¶ 14, 544 N.W.2d 531, 533-34 (holding filing outside the statutory period must be “established as a matter of uncontroverted fact.”)- Therefore, the burden is on Defendants to show that Huron Center’s cause of action accrued more than six years before the April 1997 filing date. Id. While the question of what constitutes accrual is one of law, the question of when accrual occurred is one of fact generally reserved for trial. See Wissink, 1999 SD 92 at ¶ 11, 598 N.W.2d at 215-16.

[¶ 12.] A cause of action accrues when “the plaintiff either has actual notice of a cause of action or is charged with notice.” Strassburg v. Citizens State Bank, 1998 SD 72, ¶ 10, 581 N.W.2d 510, 514(citing SDCL 17-1-2, SDCL 17-1-3). Huron Center was not put on actual notice of Defendants’ alleged breach until 1996 when Hoscheid’s testing revealed the existence of architectural defects. Therefore, we must determine whether there is a genuine issue of material fact as to when Huron Center was put on constructive notice.

[¶ 13.] Construction of the hotel was completed on May 1, 1987. Dryvit was hired in 1990 to fix one or more deteriorating exterior panels. The extent of his repairs is unknown. Oetken became general manager of Huron Center in 1990, but did not contact Dryvit until sometime in 1991, when he first learned Dryvit had made previous repairs. Problems with the interior walls did not occur until 1995, again, the extent of which is unknown. As early as the fall of 1995, but possibly as late as 1996, Oetken attempted to contact Carlson and Durrant to determine why the deterioration problems had continued to occur. Carlson sent an engineer to look at the panels and Durrant sent Hoscheid to perform some tests.

[¶ 14.] Defendants argue that Huron Center’s cause of action accrued before Oetken became manager in July 1992. They do not, however, indicate whether this was evidenced by the deterioration of the first panel or by its repair. They claim only that accrual occurred before the arrival of Oetken and therefore, the action is time-barred. Huron Center argues the repair of an exterior panel, without more, does not conclusively establish that it knew or should have known of Defendants’ alleged breach. Huron Center maintains that, at the earliest, it was not aware of anything unusual until 1995, as evidenced by Oetken’s attempts to contact Defendants for answers. Thus, the only undisputed date is that upon which the hotel was completed. The time of the first occurrence of damage, the extent of that damage, the time of Huron Center’s first awareness of the deterioration, and the time Huron Center suspected something out of the ordinary, are all in dispute. Given our standard of review, as well as this Court’s decision in Wissink, we conclude a genuine issue of material fact exists in the accurate determination of an accrual period.

[¶ 15.] Defendants claim, this Court’s decision in Wissink is inapposite. They assert that Wissink was a complicated case involving several different transactions and several parties, so it was understandable that there would be some argument over the accrual date. They contend this case, on the other hand, is a simple construction case where accrual clearly occurred prior to July 1992, regardless of whether we look to the date of actual deterioration or Huron Center’s awareness of such. We are neither persuaded by this rationale, nor by Defendants’ oversimplified characterization of the facts in this case.

[¶ 16.] If events were as simple as Defendants portray them to be, a statement from Dryvit noting the date of his first repair would have solidified an accrual date. Yet, Defendants cannot identify one point at which Huron Center should have known of Defendants’ alleged breach. The trial court noted only that “[t]he problems with the exterior accrued before Oetken became general manager,” and that “Plaintiff was aware of the accrual of the alleged defects.” There is, however, no evidence of the initial severity of the problems, whether it was possible that they could have been dismissed as simple maintenance, or at what point the problems became such that Huron Center should have known they were beyond routine repairs. Furthermore, Defendants rely solely upon the equivocal testimony of Oetken to establish an accrual date for a time in which he was not even employed there.

[¶ 17.] Defendants further rely on this Court’s decision in Strassburg to support the proposition that summary judgment in this case was proper. See 1998 SD 72, 581 N.W.2d 510. Strassburg involved a conversion action against a bank in connection with its setoff against a customer’s account. There, this Court held summary judgment would have been proper if not for the genuine issues of material fact regarding the bank’s misrepresentation or fraud, and remanded only for a determination of that issue. Id. at ¶ 19. We noted, however, that the plaintiff in that case “neither question[ed] the time when the setoff occurred nor dispute[d] the date he received notice of it.” Id. at ¶ 11. Thus, there was no genuine issue of material fact regarding the accrual date and the defendant had presumptively shown the cause of action was time-barred. As a result, the burden shifted to the plaintiff to demonstrate genuine issues of material fact as to why the statute of limitations .defense should not apply, namely, facts relating to the bank’s fraudulent misrepresentations.

[¶ 18.] Unlike Strassburg, Defendants have not demonstrated that Huron Center’s cause of action was brought beyond the six-year statutory period because they have not conclusively established when the cause of action accrued. A party is charged with constructive notice when it has “an awareness either that [it] has suffered an injury or that another [party] has committed a legal wrong.... ” Wissink, 1999 SD 92, ¶ 15, 598 N.W.2d at 216 (quoting Haberer v. First Bank, 429 N.W.2d 62, 68 (S.D.1988)) (additional citation omitted). Here, the parties dispute when Huron Center should have known that Defendants committed a breach. In fact, there is no agreement regarding any date except the hotel’s completion date. “Clearly, this disputed time of notice is sufficient to establish that genuine issues of material fact still exist regarding the date of accrual. As such, the question of the applicability of the statute of limitations should have been presented to a jury.” Wissink, 1999 SD 92, ¶ 15, 598 N.W.2d at 216. See also Salem Sch. Dist. 18-3 v. Puetz Constr., Inc., 353 N.W.2d 51, 53 (S.D.1984) (holding dispute over faulty construction and completion date raised questions of fact as to when cause of action accrued, thereby precluding summary judgment).

[¶ 19.] Huron Center has presented sufficient evidence that its version of the facts is “beyond mere speculation, conjecture, or fantasy.” Cooper v. James, 2001 SD 59, ¶ 13, 627 N.W.2d 784, 788 (holding disputed time frame of when termination of representation occurred precluded summary judgment). Conversely, Defendants have not carried their burden of demonstrating that Huron Center’s action is time-barred because the question of an accrual date remains disputed. “Summary judgment is proper on statute of limitations issues only when application of the law is in question, and not when there are remaining issues of material fact.” Greene v. Morgan, Theeler, Cogley & Petersen, 1998 SD 16, ¶ 6, 575 N.W.2d 457, 459 (citation omitted). Accordingly, we reverse and remand for a determination of when Huron Center should have known of Defendants’ alleged breach.

[¶ 20.] GILBERTSON, Chief Justice, and AMUNDSON, KONENKAMP, and ZINTER, Justices, concur.

[¶ 21.] MILLER, Acting Justice, sitting for SABERS, Justice, disqualified.

      . Both parties rely solely on Oetken’s deposition testimony for this information. Oetken, however, was not exactly certain when he had contacted Dryvit, nor when Dryvit had last been to the hotel. When asked if he was aware of the exterior problems when he took over as manager, Oetken responded:
      A. I know that Travis — from my conversations with Travis Dryvit, he fixed some light spots or deteriorations on the exterior previous to my coming to the hotel. Did not hear that from Richard Johnson, heard it from Travis when I got there.
      Q. Do you know the approximate date when he made those initial fixes?
      A. He told me he was there the year before when I contacted him.
      Q. Which would have been?
      A. 1989, 1990. I would guess it would have been 1991 that he was there because I would not have contacted him in '90, I would have contacted him in '91 after because — to get brought up to date.
      Q. Now these were the problems with the exterior that began in approximately 1990 or before?
      A. That's correct.

      . Only when Defendants have presumptively established their defense by showing the action was brought beyond the statutory period, six years after the accrual date, does the burden shift to Huron Center to demonstrate material facts in avoidance of the defense. See Wissink, 1999 SD 92, ¶ 9, 598 N.W.2d at 215.

      . SDCL 17-1-2 provides, "Actual notice consists in express information of a fact.” Conversely, SDCL 17-1-3 provides, "Constructive notice is notice imputed by the law to a person not having actual notice.”


author: LARSON, Justice.

text:
    PHIL WATSON, P.C., Appellant, v. Gregory W. PETERSON, Todd A. Elverson, Jon A. Vasey, Thomas J. Jackowski, and Elverson, Vasey & Peterson, L.L.P., Appellees.
    No. 00-1271.
    Supreme Court of Iowa.
    Sept. 5, 2002.
    Carlton G. Salmons of Gaudineer, Confi-to & George, L.L.P., West Des Moines, for appellant.
    Mark J. Wiedenfeld of Wiedenfeld & McLaughlin, L.L.P., Clive, for appellees.
   LARSON, Justice.

Gregory Peterson left the law firm with which he had been associated and joined a new firm. He continued to represent several clients with whom he had been working in his old firm. The firm, Phil Watson, P.C. (Watson), sued Peterson, his new partnership, Elverson, Vasey, and Peterson, L.L.P. (EVP), and the partners individually, on several theories, and the defendants counterclaimed. The district court entered its judgment, and both parties appealed. We modify and .affirm on both appeals.

I. Facts and Prior Proceedings.

Peterson was an associate in the Watson firm for twelve years before he resigned on May 1, 1996, to become a partner in EVP. Peterson’s employment with Watson was at will, based on an oral agreement that provided Watson would pay Peterson an annual salary, a bonus of a set percentage of his contingency-fee receipts, medical insurance, and other benefits. There was, however, no agreement concerning termination of the employment relationship or how fees would be allocated in the event of termination.

Peterson’s practice with Watson was largely a contingent-fee practice in plaintiffs’, workers’ compensation, and social security cases. Peterson also represented Watson’s credit-card-company clients in bankruptcy and collection matters. The clients Peterson represented had signed attorney-client contracts with Peterson and, while Watson did not sign the contracts, the contracts indicated Peterson was associated with the Watson firm. Peterson believed the clients he represented were his, not Watson’s, despite his association agreement with Watson providing that the gross fees from contingency-fee cases were Watson’s property.

About two months before Peterson resigned, he began contacting some of the clients he had represented, and in some cases obtained on a preprinted form the clients’ authority for Peterson to take their cases to EVP. This form stated:

Election
Dear Mr. Peterson: I would like you to continue to represent me. Please take my file(s) with you and continue with the present representation.
Client
Date

In at least one case, Peterson obtained authorization by telephone.

In the weeks prior to his departure, Peterson obtained several of these consents and quietly removed files for those cases from Watson’s premises. He took thirty cases, twenty of which later produced fees. Ten were contingent-fee cases. The EVP partners left it to Peterson to decide how much to set aside for a quantum meruit reimbursement to Watson for each case that produced a fee after Peterson left Watson. Peterson segregated for repayment to Watson $130 for each hour he had worked at Watson on a case producing a fee. All of the cases brought from Watson were resolved between 1996 and 1998. From time to time during that period, Peterson calculated his time spent on the case while at the Watson firm and tendered various checks to Watson at the rate of $130 per hour. Watson refused to endorse the checks without knowing the particulars of the fee recovery and an accounting. He also objected to the accord and satisfaction provisions on the endorsement portion of the checks. Peterson and EVP acknowledged that Watson was entitled to a quantum meruit payment, and they retained $40,766 earmarked for Watson on that basis.

The parties apparently agreed at trial on the number, nature, and specifics of the cases Peterson brought from the Watson firm. Peterson stated he had spent a total of 286.2 hours on all cases, regardless of recovery, while at the Watson firm. He spent 426.8 hours on the cases after he began with EVP. The cases produced a total gross income of $280,805.

Watson filed a petition for an accounting and declaratory relief and later amended it to add claims of breach of fiduciary duty, tortious interference with contracts, and conversion. Peterson answered and filed a counterclaim for failure to pay wages and to make contributions to a profit-sharing plan.

The case was tried to the court, which ruled that, of the $280,805 gross fees in dispute, $114,956 was to be paid to Watson. This was based on a lost-profits theory in which Watson recovered all of the fees minus Peterson’s salary, bonus, benefits, and other overhead costs that Watson was able to avoid. The court found Peterson liable for breach of fiduciary duty and interference with a contract, but not for conversion. The court also found that EVP and all of the individual partners were jointly and severally liable for the entire amount on a theory of constructive trust. The court, however, rejected Watson’s request for punitive damages and attorney fees. The court awarded Peterson $519.23 for unpaid wages.

On the parties’ motions to reconsider, the court confirmed most of its findings against Peterson but reversed its finding of a constructive trust. The court continued to hold EVP and its individual partners jointly and severally liable for damages on a theory of aiding and abetting and partnership liability, although those claims had not been pled by Watson. The court made some adjustments- to the judgment concerning interest and Peterson’s counterclaim and entered a judgment of $114,436.77 against all defendants jointly and severally. All parties appealed. Our review is de novo.

II. Whose Clients Are They?

When a law firm and an associate have no agreement for posttermination division of fees in cases originally, handled by the firm, how shall the fees be determined: should they become the sole property of the firm, the departing lawyer, or both? Further, if the fees are to be divided, on what basis should that be done? The district court ruled that the fees collected by Peterson on cases he obtained while associated with the Watson firm remained the property of Watson, subject to payment of salary and benefits to Peterson as if Peterson had continued to work for Watson. For the reasons that follow, we disagree with this analysis.

Watson also contends the procedure used by Peterson in contacting clients and obtaining their consent to remove files before the termination of Peterson’s employment was improper. The proper procedure to follow, according to Watson, is set out in a 1982 opinion by the Iowa State Bar Association Committee on Professional Ethics and Conduct. This opinion was addressed to an associate who had left a law firm and was inquiring about how to handle cases in which he wanted to continue representation. The opinion stated:

The Committee is of the opinion that it is the obligation of the firm to advise clients for whom you were doing work that you have left the firm and that the client can elect to have another lawyer in the firm handle the matter or select other counsel, including you, to complete the work.
The firm should furnish you with an appropriate copy or copies of the notification letter so you will know that the clients have been advised of your departure and their options. If the firm fails to notify the clients within a reasonable time (one week to ten days) the Committee is of the opinion that it would be appropriate for you to advise the clients of the above information. If it is necessary for you to so write, you should furnish an appropriate copy or copies of your letter to the firm.

ISBA Comm, on Profl Ethics <& Conduct, Formal Op. 82-23 (1982) [hereinafter Formal Op. 82-23].

We have no cases directly on point. The principal case relied on by Watson and the district court, West v. Jayne, 484 N.W.2d 186 (Iowa 1992), is distinguishable. West does not stand for the proposition, as Watson urges, that Peterson is entitled to “only that which [he] would have earned under the employment contract.” In West Jayne was an associate. The lawyers divided contingency fees one-third to the originating attorney, one-third to the attorney doing the work, and one-third to West for office overhead. West, 484 N.W.2d at 188, 190. In West the issue was whether one attorney, West, who had been suspended, was entitled to his share of the fees in view of the fact that, generally, suspended lawyers may not collect fees for legal work during the period of suspension. We held that, despite the suspension of West’s license, his work that justified his referral portion was completed once he referred the case to Jayne, and the other portion West received was for office overhead. Id. at 190. This is not an issue in the present case.

Although no Iowa cases are directly on point, the facts of this case are not uncommon. In fact, it has been observed that “[l]aw firms are under siege.” See Robert W. Hillman, Law Firms and Their Partners: The Law and Ethics of Grabbing and Leaving, 67 Tex. L.Rev. 1, 1 (1988) [hereinafter Hillman], Because of lateral movement by attorneys between firms, there is “the ever-present threat of [a lawyer] leaving and taking what many regard as the firm’s assets — its clients.” Id. at 4. This phenomenon is referred to as “grabbing and leaving.”

“The idea that a partner ‘leaves’ while others ‘stay’ tips the analysis toward a view that the partner ‘taking’ clients is, in effect, looting the firm.” Id. at 5. Solicitation of clients by lawyers has been the subject of several Supreme Court cases. See, e.g., Shapero v. Kentucky Bar Ass’n, 486 U.S. 466, 108 S.Ct. 1916, 100 L.Ed.2d 475 (1988) (states may not categorically prohibit attorneys from soliciting clients with truthful letters); Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447, 98 S.Ct. 1925, 56 L.Ed.2d 444 (1978) (states may discipline attorneys for in-person solicitation of clients).

Grabbing, [as opposed to solicitation], typically involves clients for whom the lawyer has previously worked. Although grabbing may present some of the abuses of solicitation, it also may effectuate a client’s educated and considered choice of a lawyer. Broad regulation of grabbing through ethical standards targeted at solicitation reflects the assumption that a firm “owns” clients and has a prior claim on their “files.” A logical extension of this view is that grabbing by “departing” lawyers should be regulated but that grabbing by firms attempting to “retain” clients does not present the same dangers. In a particular case, the actual relationships between a firm, its lawyers, and its clients may or may not justify the presumption favoring the firm in a battle for clients. When applied generally to all cases, however, treatment of grabbing as solicitation is little more than an uncritical extension of the vocabulary’s biases [which labels the departing lawyer as the “grabber.”]

Hillman, 67 Tex. L.Rev. at 12 (footnote omitted). However, one judge, obviously disdaining the practice of grabbing and leaving, has stated:

It is noble and daring to embark on a career of law by cutting the umbilical cord that ties one to an employment contract. But taking the heart and soul of the benefactor is immoral, illegal and repulsive. If they want their own firm, let them get their own clients.

Adler, Barish, Daniels, Levin & Creskoff v. Epstein, 252 Pa.Super. 553, 382 A.2d 1226, 1233 (1977) (Spaeth, J., concurring), rev’d, 482 Pa. 416, 393 A.2d 1175 (1978) (reinstating decree of the court of common pleas).

While the grabbing of clients and their files raises professional issues, the primary concern, of course, is the best interest of the clients. Thus,

a policy that effectively restricts in-person communications [between a departing lawyer and clients] is questionable on several grounds. First, disfavoring in-person grabbing communications may deprive the client of the very information he needs to make an intelligent choice of counsel. Second, grabbing is most likely to succeed when the client knows the lawyer well and is satisfied with the quality of her work; in such cases, restricting in-person contacts as improper solicitation does little more than restrain competition among lawyers. Finally, restrictions on grabbing assume a vulnerability and naiveté on the part of clients that may not exist. The sophistication of clients, especially that of larger institutions, may easily match that of their lawyers, in which case the abuses targeted by the antisoli-citation provisions simply do not exist.

Hillman, 67 Tex. L.Rev. at 14-15 (footnotes omitted). While ethics rules regarding solicitation might be invoked in these cases, this raises questions. As Professor Hillman observes:

A strict application of the Model Code’s antisolicitation rules to grabbing gives an advantage to law firms in their battles with grabbing lawyers. Judicial decisions sanctioning grabbing as solicitation under the Model Code assume that firms have a prior “right” to their clients and that regulation of firms’ attempts to “retain” clients by fending off grabbing is unnecessary. The application of this double standard also conflicts with other tenets of legal ethics, most particularly the principle of client choice and the ban on restrictive covenants, that provide an edge to grabbing partners. The permissible scope of state regulation of grabbing activities remains an open question, but the increasing acceptance of the more liberal Model Rules may render the issue moot and thereby further sharpen the competition of lawyers for “their” clients.

Id. at 15 (footnote omitted).

Peterson acknowledges that Watson is entitled to share the fees he has collected on the cases he brought from Watson. The only question is how much he should pay, and that turns on what theory of recovery we adopt. Is it a lost-profit theory for breach of contract as the district court ruled, or is it a quantum meruit theory as suggested by Peterson? Another issue arising from the manner in which Peterson handled his exit from the firm is whether we should order him to pay punitive damages.

III. The Theories of Recovery.

Watson contends it is entitled to recover the fees it would have realized if the clients had not left the firm, less Peterson’s salary and expenses the firm would have incurred in earning the fees — a lost-profits theory. The problem with this argument is that, by the time the cases were concluded and the fees were earned, there was no longer an attorney-client relationship between Watson and the clients. The termination of that relationship, of course, was due in large part to Peterson’s active encouragement and participation, an issue we will discuss later. Nevertheless, the attorney-client relationship between Watson and these clients terminated when the clients made their election to follow Peterson.

The right of a client to terminate the relationship with a lawyer is necessarily implied in the attorney-client relationship, and the right is “absolute.” Fracasse v. Brent, 6 Cal.3d 784, 100 Cal.Rptr. 385, 494 P.2d 9, 10 (1972). The courts’ solicitude toward a client’s right to decide who will represent him explains the courts’ aversion to restrictive covenants between attorneys. See Meehan v. Shaughnessy, 404 Mass. 419, 535 N.E.2d 1255, 1262 (1989) (“The strong public interest in allowing clients to retain counsel of their choice outweighs any professional benefits derived from a restrictive covenant. Thus, the [firm] could not restrict a departing [attorney’s] right to remove any clients who freely choose to retain him or her as their legal counsel.”). See also Anderson v. Aspelmeier, Fisch, Power, Warner & Engberg, 461 N.W.2d 598, 601-02 (Iowa 1990) (discussing rationale for rule prohibiting restrictive covenants between lawyers); see generally, Robert W. Hillman, Professional Partnerships, Competition, and the Evolution of Firm Culture: The Case of Law Firms, 26 J. Corp. L. 1061 (2001).

Attorneys, of course, have the right to be compensated for the value of their services rendered before the termination. When a contingency-fee case is concluded after the termination of the attorney-client relationship, the attorney is entitled to be paid the value of his services under a quantum-meruit theory, but not on the basis of the contract amount. See Fracasse, 100 Cal.Rptr. 385, 494 P.2d at 10. The court in Fracasse said:

For the reasons hereinafter stated, we have concluded that this rule [allowing full contingent-fee recovery following termination of attorney-client relationship] is inconsistent with the strong policy, expressed both judicially and legislatively, in favor of the client’s absolute right to discharge his attorney at any time, and that the attorney should be limited to a quantum meruit recovery for the reasonable value of his services, upon the occurrence of any contingency contemplated by this contract.

Id. (overruling prior California case allowing recovery of full contingent fee); accord Ecclestone, Moffett & Humphrey, P.C. v. Ogne, Jinks, Alberts & Stuart, P.C., 177 Mich.App. 74, 441 N.W.2d 7, 8-9 (1989) (former firm was awarded appropriate portion of attorney fee, earned from case associate took with him when he left the firm, on the basis of quantum meruit); Baker v. Zikas, 176 Neb. 290, 125 N.W.2d 715, 717-18 (1964).

Although a firm normally will prefer to carry a contingent-fee case to completion and receive the contractually based compensation rather than a quantum meruit recovery, the increasing acceptance of compensation based on the value of services rendered prior to discharge accommodates the interests of both the firm and its former client. This accommodation may well be appropriate in the grabbing context.

Hillman, 67 Tex. L.Rev. at 27 (footnotes omitted).

Watson’s lost-profits claim could not prevail, even if it did not involve the unique rules applicable to. lawyers. If Peterson were an employee at will in a manufacturing business and was the only employee capable of making a certain product, his employer could not sue him for lost profits that would have been realized for the products that could have been produced if Peterson had remained employed. In the present case, it is really not the fact that Peterson left the firm that gives rise to a compensable claim because, as an employee at will, he could do so at any time for any reason. Rather, it is the manner in which Peterson left — an issue we address later — that presents the problem.

Watson claims quantum meruit will not satisfy its contract claim for lost profits, which it calculates was $235,964. We conclude quantum meruit is the appropriate measure of recovery for the reasons discussed. Moreover, Watson has not shown that Peterson’s failure to comply with ethics opinion 82-23 resulted in its loss of any contingent fees. If Peterson and the Watson firm had followed the recommended procedures of that opinion, the clients would still have been given the option to retain Peterson individually (or as a partner in EVP) and discharge Watson. Watson has not shown that the unilateral notification used by Peterson had any effect on the realignment of clients between the lawyers except, perhaps, to accelerate the process. Acceleration of the process is not shown by Watson to have had any effect on its claim to the contingent fees.

IV. Compensatory Damages.

We believe the proper way to calculate the division of the contingency fees is to award Watson a percentage of each fee based on the percentage of time Peterson spent on each case at Watson compared to the time spent on the case at EVP. The percentage of time Peterson spent on a case at Watson ranged from two to 43.4%. Multiplying the percentage of time spent on each case times the amount collected in each contingency-fee case, Watson’s share would be $34,240. The noncontingency fees, which were based on an hourly fee, totaled $21,186. Based on the time spent on these cases at Watson, Watson’s share would be $16,726. The total share of fees owed to Watson is therefore $50,966. This amount should have been paid by the clients to Watson, and because Peterson is now in possession of those funds, we decree them to be held by Peterson personally in trust for Watson, and we order a judgment to be entered against that fund accordingly.

V. Additional Damage Claims.

Watson requested an award of punitive damages, but the district court refused to grant them. We affirm on that issue because, while we strongly disapprove of Peterson’s methods of terminating the relationship, particularly his clandestine removal of client files, Watson did not establish by “clear, convincing, and satisfactory” evidence that Peterson’s actions toward Watson were motivated by malice. See Condon Auto Sales & Serv. v. Crick, 604 N.W.2d 587, 594 (Iowa 1999).

We also reject Watson’s claim for additional compensatory damages based on a theory of breach of fiduciary duty. Even if such a breach were established, Watson has failed to show Peterson’s method of terminating the relationship had any effect on the ultimate alignment of clients, except to accelerate it. Watson has not established that this accelerated process resulted in any separate damages based on a breach of fiduciary duty.

On our de novo review, we find the evidence insufficient to establish liability against Peterson’s new firm members on any of the theories asserted. The judgment of the district court is modified to impose judgment against the funds held in constructive trust by Peterson. As so modified, the judgment of the district court is affirmed on the appeal and cross-appeal.

JUDGMENT MODIFIED AND AFFIRMED; CASE REMANDED FOR ENTRY OF NEW JUDGMENT.

      . We do not approve the procedure outlined in this formal ethics opinion because it implies the firm, which is given the right to first contact clients to advise them of the impending departure of a member, somehow "owns” the clients. For the reasons discussed later, clients do not "belong” to the firm or its individual members; clients are free to choose their own attorney, and a departing lawyer has an equal right to notify clients of an impending change so clients may make an informed choice of lawyers.

      . This law review article deals primarily with partnerships, but as the article notes, some of the problems and remedies are the same for lawyer-associates and their relationships. See Hillman, 67 Tex. L.Rev. at 29.