author: MEIERHENRY, Justice.

text:
    2004 SD 78
    PRUNTY CONSTRUCTION, INC., a South Dakota Corporation with its principal place of business in Brookings, South Dakota, Plaintiff and Appellant, v. CITY OF CANISTOTA, McCook County, South Dakota, Defendant and Appellee.
    Nos. 23077, 23078.
    Supreme Court of South Dakota.
    Argued April 29, 2004.
    Decided June 9, 2004.

      Ronald G. Schmidt of Schmidt, Schroyer & Moreno, Rapid City, SD, for plaintiff and appellant.
    Timothy W. Bjorkman of Bjorkman & Fink Bridgewater, SD, for defendant and appellee.
   MEIERHENRY, Justice.

[¶ 1.] The City of Canistota contracted with Prunty Construction, Inc. for a water and sewer project. The City claims that the contract was paid in full. Prunty claims it is owed an additional sum of $59,428 for work performed under the contract. The trial court granted summary judgment in favor of the City. Prunty and the City appeal.

FACTS AND PROCEDURE

[¶ 2.] The City hired Sayre Associates, Inc. (Sayre) to design and prepare construction and bidding documents for the construction of two projects: (1) a water main and (2) a sanitary sewer and surfacing improvement. Sayre assigned Monty Miller (Engineer), a professional engineer, to represent the City on this project. Prunty submitted its bid and was awarded the contract. The City paid Prunty partial payments in the amount of $925,587.77 which was the amount Prunty submitted on the original bid form. After the project was completed, the City refused to pay a final change order in the amount of $54,930 plus an additional $4,498 for items inadvertently omitted from the final change order. Prunty filed suit against the City alleging breach of contract. Both Prunty and the City moved for summary judgment. The trial court granted summary judgment to the City. Prunty moved for reconsideration. The City requested sanctions against Prunty pursuant to SDCL 15 — 6—56(g) in its Resistance to Plaintiffs Motion for Reconsideration. The trial court denied Prunty’s motion. It also denied the City’s request to impose sanctions against Prunty. Both Prunty and the City appeal. The Association of General Contractors of South Dakota (AGC) appears as amicus curiae.

ISSUES

[¶ 3.] Prunty raises the following issue on appeal:

Whether the trial court erred in granting summary judgment to the City.

[¶ 4.] The City raises the following issue on appeal:

Whether the trial court abused its discretion by not imposing sanctions against Prunty.

STANDARD OF REVIEW

[¶ 5.] Summary judgment grant or denial requires this Court to determine whether genuine issues of material fact exist and whether legal issues were correctly decided. First Dakota Nat. Bank v. Performance Eng’g and Mfg., Inc., 2004 SD 26, ¶ 4, 676 N.W.2d 395, 398. We view the evidence most favorably to the non-moving party, resolving reasonable doubt against the moving party. Id. The grant or denial of sanctions is reviewed for abuse of discretion.

ANALYSIS

[¶ 6.] The parties disagree as to the terms of the contract. The City claims that the contract is a “lump sum” contract. Prunty claims that the contract is a “unit bid” contract. They also disagree about the final change order and whether the contract requires prior approval of the changes. Both parties argue that the terms of the contract are not ambiguous. In analyzing this case, we will first set forth the trial court’s ruling and the positions of Prunty and the City.

Trial Court

[¶ 7.] The trial court, while discussing differences between unit bid contracts and lump sum contracts, did not expressly decide this question. Rather, the trial court determined that “the contract between Prunty and Canistota required notice of unanticipated conditions and a halt to the work until the change order was approved.” Because the trial court concluded that Prunty did not comply with these requirements, it held that the City was “not bound to pay for these additional expenses.”

City’s Claim — ■Lump Sum Contract

[¶ 8.] The City argues that the contract is a lump sum contract, and that Prunty was required to submit change orders for additional units and have prior authorization in order to be paid for any additional work beyond the contract amount. “Under a lump-sum agreement, the contractor agrees to complete the work for a set price, regardless of the actual costs incurred in completing the construction.” United States v. Johnson, 937 F.2d 392, n. 2 (8thCir.l991). The City relies on the contract provision that specified a total sum of $925,587.77. The provision states:

The CONTRACTOR agrees to perform all of the WORK described in the CONTRACT DOCUMENTS and comply with the terms therein for the sum of $925,587.77 or as shown in the BID schedule.

The City claims that Prunty is only entitled to the lump sum amount specified, in the contract. The only way Prunty would be entitled to amounts in excess of the contract amount is if Prunty had submitted and the City had approved a change order prior to the work being done. The City further argues that municipalities cannot be held liable for sums greater than the approved original bid because subsequent increases were not approved at a duly-authorized meeting as required by SDCL 9-1-5, 5-18-11 & 5-18-19.

Pnmty’s Claim — Unit Bid Contract

[¶ 9.] Prunty argues that its contract with the City is a unit bid contract and as such, requires the City to pay for the actual units supplied.

A unit-bid contract is one wherein the contractor submits a price per unit for each of the various categories involved. This type of contract is used where the final quantities of work cannot be determined with accuracy until final completion.

Johnson, Drake & Piper, Inc. v. United States, 483 F.2d 682, 684 (8thCir.l973). Prunty admits that change orders had to be submitted but asserts that a “final change order” is contemplated by the contract. Prunty also argues that not all changes required halting the work until a change order was approved. Prunty argues that only certain changes required prior approval. Specifically, changes that required prior approval were of two types: (1) changes due to subsurface or latent physical conditions at .the site differing materially from those indicated in the contract, and (2) changes due to unknown physical conditions at the site, of an unusual nature , and differing materially from those ordinarily encountered and generally recognized as inherent in this type of work. Prunty claims that the final change order did not include changes requiring prior approval. Whether the site conditions differed materially or were of an unusual nature would be questions of fact for which summary judgment would be inappropriate. Sundt Corp. v. South Dakota Dept. of Transp., 1997 SD 91, ¶¶ 22-24, 566 N.W.2d 476, 481-82.

DECISION

[¶ 10.] Contract interpretation is a question of law reviewed de novo. Fenske Media Corp. v. Banta Corp., 2004 SD 23, ¶ 8, 676 N.W.2d 390, 393. To ascertain the intent of the parties, we rely on the contract’s language. Id. (citation omitted). Further, to the extent possible, “we must give meaning to all the provisions of a contract.” Id. (citation omitted).

[¶ 11.] As part of the contract, the parties signed an agreement which specified that “the CONTRACTOR agree[d] to perform all of the WORK described in the CONTRACT DOCUMENTS and comply with the terms therein ...” The contract by definition included the following: (1) the advertisement for bids, (2) information for the bidders, (3) the Bid consisting of 10 pages listing 146 items, (4) a Bid Bond, (5) Agreement, (6) a 28-page Rural Utilities Service (RUS) Bulletin describing 32 General Conditions, (7) Supplemental General Conditions, (8) Payment Bond, (9) Performance Bond, (10) Notice to Proceed, (11) Change Order (12) 66 pages of Drawings by Sayre Associates, Inc., (13) Specifications prepared or issued by Sayre Associates, Inc., and (14) Addenda Nos. 1 & 2. 0Compare to what is included in SDDOT construction contract documents noted in Sundt, 1Q97 SD 91, nn. 5 & 6, 566 N.W.2d at 479.) A large portion of the contract consists of RUS form documents. Since RUS partially funded the projects, it imposed certain requirements on the City including the use of its forms.

“Unit Bid” Contract

[¶ 12.] To determine if the contract is a “unit bid” contract or a “lump sum” contract, we look to the contract language itself. The clearest indication that the contract is a “unit bid” contract is from the advertisement for the bid and the bid itself. The City’s Advertisement for Bids used unit prices for the major items necessary for the projects to be bid. The Advertisement states:

Approximate quantities of major include the following: construction items

Water Main 4,230 L. Ft.

Concrete Meter Vault 1 Each

Sanitary Sewer Pipe 5,050 L. Ft

48" Diameter Manhole 18 Each

Ordinary Roadway Shaping 21,045 Sq. Yd.

Aggregate Base Course 11,264 Ton

PCC Pavement Replacement (8") 1,398 Sq. Yd.

Asphalt Concrete Composite 4,436 Ton

(emphasis added). The Bid Form divides the major items listed in the Advertisement into two projects, Schedules A and B. Each Schedule lists the items for that project, totaling 146 bid items for the two projects. For each of the items there is an “estimated quantity” column, “unit” column (measurement), a “unit price” column, and a “total price” column. For example, the following items appear on the form as follows:

Est. Unit Total

Item Description Quant. Unit Price Price

38. Asphalt Concrete

Composite 3411.0 TON _ _

66. Temporary Silt

Fence 60 L.FT. _ _

Sayre, on behalf of the City, filled in the “Estimated Quantity” and “Unit” columns with the anticipated number of units needed to complete the project. Bidders were required to fill in the “Unit Price” and “Total Price” columns. The “Total Price” was derived by multiplying Sayre’s estimated “Unit” quantity by the bidder’s “Unit Price” amount. Each Schedule was then subtotaled and added together to derive the “Total Gross Sum Bid for Project.” Item 85 allowed the bidder to bid one of three alternatives: a Concrete meter vault, a factory built steel package or a precast concrete package. For that item, two alternatives allowed a bid “For the Lump Sum of $_” No other item made reference to a lump sum bid. In fact, the form required the contractor to total all 146 items and insert that total on a line entitled “TOTAL GROSS SUM BID FOR PROJECT.” Right after the total gross sum bid, the form again refers to the nature of the contract as a “unit bid;” it states:

In the event of a discrepancy between unit bid prices and extensions, the unit bid price shall govern. The bid will be evaluated and a contract award made on the proposal deemed to be in the best interest of the Owner.

[¶ 13.] Notwithstanding that the Advertisement and Bid Form required the contractors to bid based on unit prices, the City claims that the contract is one for a “lump sum.” The City relies on the language of the Agreement signed by the parties to support its interpretation of the contract. A closer look at the provision on which the City relies actually shows a contrary intent. The language and form of the agreement are dictated by RUS Bulletin 1780-13. As with many of the RUS forms made part of the contract, it is written broadly enough to allow for either “lump sum” or “unit bid” contracts. The provision in the form is as follows: “4. The CONTRACTOR agrees to perform all of the work described in the CONTRACT DOCUMENTS and comply with the terms therein for the sum of $_or as shown in the BID schedule.” A logical reading of the paragraph would lead one to conclude that the contract price is either shown in the bid schedule or if the job was bid as a lump sum, that lump sum amount would be entered in the blank. When the actual agreement was prepared for signatures, someone had typed beneath the blank “Bid Alternate No. 2.” Bid alternate No. 2 was item 85 — the only item indicated on the Bid Form that could be bid in a lump sum. When the form was completed, however, the total contract price for all 146 items rather than just item 85 was typed above the line. The City claims that this paragraph limits Prunty to $925, 587.77 as a lump sum price. Although the manner of completing the form may be a bit confusing, the provision “or as shown in the BID schedule” clearly points to the document from which the sum is derived. Under the City’s interpretation, the phrase- “or as shown in the BID schedule” would have no meaning. If, as the City suggests, that the clause is meaningless to the agreement, it should not have included it. Nevertheless, the advertisement for bid and the bid schedule are not confusing. Both invite the contractor to bid a price by unit based on the City’s estimated number of units.

[¶ 14.] Additionally, the bid form contemplates variations in quantities and work. The bid form concludes with an understanding and agreement that the City can unilaterally vary the quantities of material and work and delete contract items. The contract term-provides:

It is understood and agreed that the quantities of material to be furnished and work to be done may be varied on construction as may be deemed advisable by the City of Canistota. It is further understood and agreed that the City of Canistota may, at their option, delete items from the contract.

The language of this provision read in conjunction with the other provisions of the contract makes it clear that the unit quantities initially estimated were subject to adjustment. The City hired Sayre to plan and supervise the project. Sayre engineers attempted to determine from less than precise city drawings the location and condition of the underground systems and the work and materials needed. As evidenced by the bid schedule, the quantities were estimated. Prunty’s “bid” was based on the engineer’s estimated quantities subject to adjustments during the project.

[¶ 15.] As stated supra, “to ascertain the intent of the parties, we rely on the contract’s language” and must attempt to “give meaning to all the provisions of [the] contract.” Fenske, 2004 SD 23 at ¶ 8, 676 N.W.2d at 393. In giving meaning to all the provisions of the documents making up this contract, we conclude that the parties’ agreement is a unit bid contract, not a lump sum contract: (1) the contract documents allow for changes in unit quantity (but not unit price); (2) the units necessary to complete the project were estimated by Sayre, as opposed to Prunty; (3) the bid form included 146 items for unit bidding, however, only item 85 could have been bid in the alternative “for the lump sum of $_In other words, item 85 could have been bid in units as all other items or it could have been bid as a lump sum. Therefore, the bid form itself indicates that it was a unit bid contract. We, therefore, conclude based upon the language of the document that the contract is a unit bid contract.

Change Orders

[¶ 16.] The City argues that even if the contract is a “unit bid” contract, Prunty should not be paid for the final change order because Prunty did not get the City’s prior approval. The City relies specifically on a provision in a document entitled “Special Conditions,” which addresses change orders as follows: “Change orders, if necessary, will be authorized by the Engineer, and approved by the Owner [City], prior to change order work being performed.” This provision is, however, one of several provisions in the contract that control change orders. How the parties intended to handle changes is determined from “the entire contract and all its provisions must be given meaning if that can be accomplished consistently and reasonably.” Carstensen Contracting, Inc. v. Mid-Dakota Rural Water Sys., Inc., 2002 SD 136, ¶ 8, 653 N.W.2d 875, 877. We have previously applied general principles of contract interpretation as follows:

In interpreting a contract, we seek to ascertain and give effect to the intention of the parties; at the same time, to find the intention of the parties, we rely on the contract language they actually used. Malcolm v. Malcolm, 365 N.W.2d 863, 865 (S.D.1985). In a case where, as here, several documents comprise the contract, all are to be read together to learn the parties intent. Dail v. Vodicka, 89 S.D. 600, 237 N.W.2d 7 (1975). It is a fundamental rule of contract interpretation that the entire contract and all its provisions must be given meaning if that can be accomplished consistently and reasonably. Id. at 603, 237 N.W.2d at 9. However, when provisions conflict and full weight cannot be given- to each, “the more specific clauses are deemed to reflect the parties intentions — a specific provision, controls a general one.” State v. Greger, 1997 SD 14, 21, 559 N.W.2d 854, 864. Ordinarily, the plain meaning of the contract language will be followed unless there is some ambiguity or different intent manifested. American State Bank v. Adkins, 458 N.W.2d 807, 809 (S.D.1990).

Id.

[¶ 17.] We must also look at all the provisions in the contract addressing change orders in addition to the section relied upon by the City. The contract defines a change order as an order to the contractor authorizing adjustments in the contract price:

CHANGE ORDER — -A written order to the CONTRACTOR authorizing an addition, deletion, or revision in the WORK within the general scope of the CONTRACT DOCUMENTS, or authorizing an adjustment in the CONTRACT PRICE or CONTRACT TIME.

In the portion of the contract entitled “General Conditions,” Section 13 “Changes in the Work” allows the City to order changes for which “an equitable adjustment shall be authorized,” and allows the Engineer to make changes “in the details of the work” with a Field Order. Additionally, Section 14 of the “General Conditions” requires a Change Order if the contract price changes. Section 14 “Changes in Contract Price” states:

14.1The CONTRACT PRICE may be changed only by a CHANGE ORDER. The value of any WORK covered by a CHANGE ORDER or of any claim or increase or decrease in the CONTRACT PRICE shall be determined by one or more of the following methods in the order of precedence listed below:
a. Unit prices previously approved.
b. An agreed lump sum.

The contract specifically requires work stoppage and prior approval in certain circumstances. Section 17 of the General Conditions provides when “subsurface or latent physical conditions ... differf ] materially” from the contract specifications, the contractor must not proceed until a Change Order is approved. Additionally, if “unknown physical conditions ... of an unusual nature differ[] materially from those ordinarily encountered and generally recognized as inherent,” to the project (water and sewer project), the work must stop until approved. The contract states:

The CONTRACTOR shall promptly, and before such conditions are disturbed, except in the event of an emergency, notify the OWNER by WRITTEN NOTICE of:
17.1.1 Subsurface or latent physical conditions at the site differing materially from those indicated in the CONTRACT DOCUMENTS; or
17.1.2 ■ Unknown physical conditions at the site, of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in WORK of the character provided for in the CONTRACT DOCUMENTS.

(emphasis added).

[¶ 18.] Section 27 of the General Conditions details the engineer’s authority as the City’s representative in overseeing the project and interpreting the contract. Subsection 27.1 states:

The ENGINEER shall act as the OWNER’S [City’s] representative during the construction period .... and shall interpret the intent of the CONTRACT DOCUMENTS in a fair and unbiased manner.

Subsection 27.4 states “[t]he ENGINEER shall promptly make decisions relative to interpretation of the CONTRACT DOCUMENTS.” See Subsurfco, Inc. v. B-Y Water Dist, 337 N.W.2d 448, 458 (S.D.1983) (discussing the authority of an engineer in contract cases). This language provides the engineer with the authority to interpret the intent of the contract “in a fair and unbiased manner.”

[¶ 19.] Another portion of the contract entitled “Supplemental General Conditions” amends the General Conditions and supersedes any conflicting provisions of the contract. The Supplemental General Conditions expressly “change, amend, or supplement the General Conditions and shall supersede any conflicting provisions of this Contract.” (emphasis added). It contains a change order section which clearly gives the City the right to increase or decrease the unit price quantity. Section 2.3 provides:

When the CONTRACT sum is, in whole or in part, based on unit prices, the OWNER reserves the right to increase or decrease a unit price quantity as may be deemed reasonable or necessary in order to. complete the work contemplated by this CONTRACT.

[¶ 20.] Section 2.1 provides for a written change order for all changes agreed to by the City, the Contractor and RUS. The provision states:

All changes affecting the project’s construction cost or modifications of the terms or conditions of the contract must be authorized by means of a written contract change order which is mutually agreed to by the OWNER and CONTRACTOR and is approved by RUS. The contract change order will include extra work, work for which quantities have been altered from those shown in the bidding schedule, as well as decreases or increases in the quantities of installed units which are different than those shown in the bidding schedule because of final measurements.

Supplemental General Conditions § 2.1 (emphasis added).

[¶ 21.] This superseding contract provision does not specifically state the need for work to stop until the work is approved. It also does not specifically state that change orders always need to be completed prior to the work being done. Particularly noteworthy is the language at the end of the section. The language contemplates a final change order based on “final measurements” of units that have already been “installed.” It provides: “[t]he contract change order will include ... decreases or increases in the quantities of installed units which are different than those shown in the bidding schedule because of final measurements.” Id. The conflicting change order provision upon which the City relies appears in a document entitled “Special Conditions.” As to change orders, it says, “Change orders, if necessary, will be authorized by the Engineer, and approved by the Owner, prior to change order work being performed.” This provision conflicts with the provision in the Supplemental General Conditions which allows adjustment due to final measurements of installed units. The provision in the Supplemental General Conditions controls.

[¶ 22.] The change order in controversy is based on final measurements of installed units. It was submitted on an RUS form made part of the contract and prepared by ’ the Owner’s (City’s) engineer. The form of the order states that it is from the City directed to Prunty Construction Company as follows: “You are hereby requested to comply with the following changes from the contract plans and specifications.” Next, the form provides a place for a description of the increases or decreases in the number of installed units different from the number of estimated units shown on the Bid Schedule. The final change order is designated Order No. 02-Final and includes the following adjustments to the contract:

Drainage Pipe Adjustments $ 2,439.32 increase

Surfacing Adjustments $43,201.23 increase

Traffic Control Adjustments $ 245.70 increase

Erosion Control Adjustments $ 1,328.50 decrease

Water Main Adjustments $14,629.25 increase

Sanitary Sewer Changes $ 4,256.96 decrease

Total Adjustments $54,930.04 increases

The form indicates the contract total of $1,002,601.15 including the changes. The Order is signed by the engineer. Attached to the form are five pages of detailed adjustments and narrative explanation for each category listed. Signature lines appear on the form as follows;

Requested____

(Owner)

Recommended___

COwner’s Architect/Engineer)

Accepted_

(Contractor)

Approved by Agency___

(Name and Title)

[¶ 23.] Sayre engineer Miller considered this a final change order designed to reconcile the final quantities which could not have been known until the project was completed. Miller testified that his interpretation of the contract provisions gave him the authority to approve certain changes on a day to day basis. He explained as follows:

There’s also language at the end of the proposal that deals with various quantity variations, too, that I think give the engineer as the owner’s representative latitude in adding or deleting certain items of the project during the course of the work. And as we do that in the course of the work, we can’t be dealing with a change order every time there’s a deviation in the quantity.

During the project, Miller had submitted a change order to the City when a substandard slope in an existing sewer line was discovered and had to be remedied. .The change order requested approval for work in the amount of $22,083.84. It was submitted and approved as part of Partial Payment Estimate 6. The first change order fell under the contract provisión that specifically requires prior approval of a change order when unforeseen subsurface problems are discovered. Miller testified that when the first change order was presented to the City, the City was told that the project may go over budget and that one way to stay within the budget was to eliminate the asphalt pavement on Warehouse Avenue. Miller said the City, “was pretty adamant that Warehouse Avenue would have to be paved. There was some discussion about it, but it was decided that Warehouse Avenue would be paved.” A large portion of the increase in the project was attributable to Warehouse Avenue paving. Miller determined that prior approval was unnecessary for the final order because it merely adjusted the actual units used in the project; and as the owner’s representative, he had approved the changes on a day to day basis. Miller testified that the Contractor, the City and RUS expected a final adjustment would be made after the project was completed since this was a unit bid contract.

[¶ 24.] The trial court determined that the contract required the City’s prior approval of unanticipated conditions and granted summary judgment to the City. In its memorandum decision, the trial court stated:

As a matter of law, the contract between Prunty and Canistota required notice of unanticipated conditions and a halt to the work until the change order was approved. The record before the Court indicates Prunty failed to comply with the requirements of the contract and thus' Canistota is not bound to pay for these additional expenses.

Since interpretation of a contract is a matter of law, we review de novo “without any presumption in favor of the trial court’s determination.” James River Equipment Co. v. Beadle Co. Equip., Inc., 2002 SD 61, ¶ 10, 646 N.W.2d 265 (citing Thunderstik Lodge, Inc. v. Reuer, 1998 SD 110, ¶ 12, 585 N.W.2d 819, 822) (additional citations omitted); Mahan v. Avera St. Luke’s, 2001 SD 9, ¶ 15, 621 N.W.2d 150, 154.

[IT 25.] The only provision in the contract that specifically addresses the circumstances requiring prior approval and work stoppage is in the General Conditions 17.1.1 & .2. The specific provision requires the contractor to stop work when unanticipated conditions “differ[ ] materially” from the contract or “from those ordinarily encountered and generally recognized inherent” in this type of work. The conditions prompting the first change order fell within this provision. Whether any of the changes in the final change order fall within this provision is a question of fact. Some of the changes are reductions, some are increases. There is conflicting evidence of whether these changes were materially different from the contract or materially different from those ordinary and inherent conditions of sewer and water renovations. Whether the final change order falls under the contract provision requiring the work to stop until the City approves the order would be a question of fact.

[¶ 26.] Also inherent ■ in every contract is a covenant of good faith and fair dealing. Mahan, 2001 SD 9 at ¶ 30, 621 N.W.2d at 159. If the City did “adamantly require” the Contractor to pave Warehouse Avenue as Miller testified, it would be unreasonable for the City to disallow payment for the work. The trial court placed the entire burden of bringing forth a Change Order on the Contractor. The Contract, however, specifically gives the Owner the right to unilaterally make changes in the number of units. If the Owner makes changes without implementing a written Change Order, it should not be allowed to deny payment for those changes for lack of a Change Order. Since there are genuine issues of material fact, summary judgment is not appropriate. We reverse the trial court’s grant of summary judgment in favor of the City.

Final Order Part of Original Contract

[¶ 27.] The City claims that even if the contract is a unit-price contract, that the City cannot be bound under South Dakota law governing municipalities. The City claims that the Final Order did not comply with SDCL 9-1-5 which requires the City to vote “at a duly assembled meeting.” Id. The City further argues that the Final Order as a separate contract is void because it was not in writing and signed by the proper officials. SDCL 5-18-11, -19. The City’s argument is without merit. The Change Order Prunty submitted was not a new contract. Bak v. Jones County, 87 S.D. 468, 470, 210 N.W.2d 65, 66 (1973) (holding that work performed for the county did not have to be compensated because one commissioner could not bind the county). It was a procedure for payment outlined in the original contract.

City’s Claim — Sanctions

[¶ 28.] The City filed a motion for sanctions against Prunty pursuant to SDCL 15-6-56(g) which provides:

Should it appear to the satisfaction of the court at any time that any of the affidavits presented pursuant to 15-6-56 are presented in bad faith or solely for the purpose of delay, the court shall forthwith order the party employing them to pay to the other party the amount of the reasonable expenses which the filing of the affidavits caused him to incur, including reasonable attorneys fees, and any offending party or attorney may be adjudged guilty of contempt.

Id. (emphasis added). The trial court denied the motion. This Court has not previously addressed this provision. However, SDCL 15-6-ll(a) (Rule 11) is similar to SDCL 15-6-56(g). Both statutes allow for imposition of sanctions for actions performed in bad faith or to cause delay. Rule 11 provides in part:

Every pleading, motion and other paper of a party ... [signed by an attorney] constitutes a certificate by him that he has read the pleading, motion and exhibits or attachments thereto, or other paper; that to the best of his knowledge, information and belief formed after reasonable inquiry it is well grounded in fact and is ivarranted by existing law or a good faith argument for the extension, modification or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass, embarrass another party or person, or to cause unnecessary delay or needless increase in the cost of litigation.

SDCL 15-6-ll(a) (emphasis added). If a violation of this rule occurs, the following provision provides for the imposition of sanctions:

If a pleading, motion, exhibits or attachments thereto, or other paper is signed or filed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed or filed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion or other paper, including a reasonable attorneys fee.

SDCL 15 — 6—11(b). Rule 11 appeals are reviewed under an abuse of discretion standard. Anderson v. Prod. Credit Assn., 482 N.W.2d 642, 645 (S.D.1992). “Abuse of discretion is discretion not justified by, and clearly against, reason and evidence.” Gronau v. Wuebker, 2003 SD 116, ¶ 5, 670 N.W.2d 380, 382 (citation omitted). Similarly, we review sanctions under SDCL 15-6-56(g) under the abuse of discretion standard.

[¶ 29.] The trial court did not enter findings to support its denial of sanctions. The record, however, supports the trial court’s denial of sanctions. The Complaint and Amended Complaint are both stated in broad terms allowing for different approaches to the claims. The City argues, however, that Prunty’s affidavits assert contrary positions. Specifically, Prunty initially claimed that the adjustments were due to subsurface site conditions. Prunty’s second affidavit, issued after the trial court granted the City summary judgment, states that the adjustments did not come “within the provisions of paragraph 17 of the General Conditions related to subsurface site conditions ... there were no site conditions existing within the intent or meaning of paragraph 17.” Under the contract, not all site conditions come within the mandate of paragraph 17. Only such conditions that differed materially from those indicated in the contract or those ordinarily encountered and generally recognized in work of this character have to follow the work stoppage-prior approval procedure. Prunty claims that what it encountered at the sites was unknown pri- or to the work but nevertheless were conditions that were anticipated. The trial court did not abuse its discretion by denying the City’s request for sanctions.

[¶ 30.] We reverse and remand in part, and affirm in part.

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

      . The billing process was that Prunty submitted receipts to the Engineer who would com-píete the required forms and submit them to the City for payment.

      . The Association of General Contractors of South Dakota (AGC) moved to file an Amicus Curiae Brief; the motion was granted.

      . The Rural Utility Service (RUS) of the Farmers Home Administration (FmHA) was a .major funding source.

      . The entire section 13 provides as follows:
      § 13.1 The OWNER may at any time, as the need arises, order changes within the scope of the WORK without invalidating the Agreement. If such changes increase or decrease the amount due under the CONTRACT DOCUMENTS, or in the time required for performance of the WORK, an equitable adjustment shall be authorized by CHANGE ORDER.
      § 13.2 The ENGINEER, also, may at any time, by issuing a FIELD ORDER, make changes in the details of the WORK. The CONTRACTOR shall proceed with the performance of any changes in the WORK so ordered by the ENGINEER unless the CONTRACTOR believes that such FIELD ORDER entitles the CONTRACTOR to a change in CONTRACT PRICE or TIME, or both, in which event the CONTRACTOR shall give the ENGINEER WRITTEN NOTICE thereof within seven (7) days after the receipt of the ordered change. Thereafter the CONTRACTOR shall document the basis for the change in CONTRACT PRICE or TIME within thirty (30) days. The CONTRACTOR shall not execute such changes pending the receipt of an executed CHANGE ORDER or further instruction from the OWNER.

      . Prunty is also claiming an additional amount owed for aggregate in the amount of $4,498.52, which is not included in the final Change Order.


source: Caselaw Access Project

author: ZINTER, Justice.

license: Public Domain

text:
    2004 SD 79
    BROOKSIDE TOWNHOUSE ASSOCIATION, an unincorporated association, Plaintiff and Appellee, v. Oliver CLARIN and Inez Clarin, Defendants and Appellants.
    No. 22969.
    Supreme Court of South Dakota.
    Argued April 29, 2003.
    Decided June 16, 2004.

      Thomas E. Brady of Brady Plumier, P.C., Spearfish, South Dakota, Attorneys for plaintiff and appellee.
    David L. Claggett, Spearfish, South Dakota, Attorney for defendant and appellant.
   ZINTER, Justice.

[¶ 1.] Brookside Townhouse Association sought a mandatory injunction against Oliver and Inez Clarín after they installed non-approved windows and siding on their townhome. Clarins counterclaimed for damages. The trial court bifurcated the equitable relief sought in the complaint from the legal relief sought in the counterclaim. After conducting a court trial on the equitable issues, the court granted the injunction and determined that its ruling mooted the legal issues. Clarins appeal, and we affirm.

Facts and Procedural History

[¶ 2.] Brookside Townhouse Association is an unincorporated residential development association. The Association is comprised of the owners of the residential structures located on the north and south sides of Washington Street in Spearfish, South Dakota. There are forty-two household units in these structures. Twenty units are in five ranch-style four-plexes on the north side of the street. These four-plexes have vertical, brown fir siding with pewter gutters and windows. Eighteen units are in six structures on the south side of the street. Two of those structures are ranch-style three-plexes, and three are ranch-style four-plexes. Those five structures all have vertical, brown fir siding with white gutters and windows. The remaining structure on the south side of Washington Street is a two-story four-plex with horizontal, lighter colored steel siding.

[¶ 3.] In 1998, Oliver and Inez Clarín purchased a unit in a four-plex on the north side of the street. The purchase was subject to the Association’s Declaration of Covenants, Conditions and Restrictions, which required unit owners to submit written plans and specifications to the Association’s Board for approval prior to making exterior changes or alterations. In 2000, a committee of owners revised the Association’s By-Laws and Declaration of Covenants. Inez Clarín served on that committee. The relevant section of the amended covenant also required prior written approval of the Board before making external changes. It further required that the Board determine whether exterior changes were in “harmony or external design and location in relation to surrounding structures and topography.” There is no dispute that Clarins were subject to this covenant.

[¶ 4.] During the summer of 2000, two events caused Clarins to decide to replace their windows and siding. First, a hailstorm caused damage to their windows, as well as the windows in several units in the development. Second, Clarins claimed that their unit was drafty, which exacerbated Oliver’s health condition. Clarins claimed that as result of these problems, they ordered replacement windows. They also decided to replace their siding with light-colored, horizontal steel siding. However, they failed to submit their plans and specifications to the Board as required by the covenant.

[¶ 5.] Inez first contacted the President of the Board in September 2001 to request permission to make the changes. Clarins followed this contact with a letter to the Board on November 3, 2001. Although Cla-rins’ four-plex had vertical, brown fir siding and pewter windows, Clarins’ letter requested the installation of white windows and horizontal light-colored steel siding. The photographs in evidence reflect that Clarins’ proposed windows did not conform to the color and appearance of the street-side windows in any of the four-plexes on their side of the street. Their steel siding was substantially different from all but one structure on both sides of the street. Nevertheless, Clarins believed that their changes in color and building materials were more “practical,” and that others should change their exteriors to conform to Clarins’ proposal. They wrote:

It was my understanding after the June 2001 meeting that the windows on the north side that had hail damage in Aug. 2000 were to be replaced. It is now Nov. 3, 2001, and as far as we know, there has been no window work done. These are very cheap windows and we have had them repaired once, but the vinyl edge is loose again. We have a very loud whistle in the house when we have a strong wind, so we plan to replace all of ours. We also want good windows, so have ordered Pella windows on Oct. 4, 2001. They cannot be returned, so please let us have them installed when they come this following week before the weather gets too cold. If there is an objection to the white color, perhaps the windows on the south side of the street should have theirs painted brown as this street had brown first. I believe that when further work is required on these town houses, that the east end of this street will be planning on white too, as there is no fading and they will look nice much longer. We think it is practical. Also there are some windows on the north side of this street with white already and these have been in for some time.
Also. Please allow us to install steel siding after the windows are in. The window representative told us the siding on our house is in such poor condition that moisture coming in could cause damage to the new windows. We want to use the same siding that would be used in the unit east of us or the same as the one that already has steel siding across the street. We would like to get this work completed before the weather gets too bad this fall. We would appreciate permission to having our windows installed right away and the siding on before the weather gets too cold. We do want to keep our home in good repair. Since our unit was the second unit built on this street, and the siding was of very poor quality, we feel there should be no objection to getting the repair work done as soon as possible.

[¶ 6.] At a meeting on November 5, 2001, the Board considered the Clarins’ white window proposal as well as a similar proposal from another resident. The Board denied both requests. The Board also discussed Clarins’ proposal to install the steel siding. Because the Board was in the process of developing a long-term siding plan for the entire Association, Cla-rins’ request for steel siding was also denied.

[¶ 7.] In a November 6, 2001 letter, the Board formally informed Clarins of its decision. The letter also informed Clarins of the Board’s ongoing planning for replacement siding throughout the development. The letter finally informed Clarins that the insurance proceeds for the hail-damaged windows had arrived, and that the Board was seeking a contractor to replace the damaged windows.

[¶ 8.] On January 17, 2002, the Board informed Clarins and other residents that it had selected a contractor. The contractor suggested that those who had already ordered white windows could be brought into compliance by painting them the pewter color found on the other homes. Cla-rins, however, declined to follow that suggestion. Instead, they installed white windows in February 2002, and refused to paint them a conforming color.

[¶ 9.] On May 21, 2002, the Board met with Clarins to discuss the covenant violation and the non-compliant windows. After the meeting, Gary Reimnitz, President of the Board, sent the following letter to Clarins:

Dear Inez and Oliver:
At the monthly board meeting on May 21, 2002 you were asked by the board of your intention to conform to Brookside Townhouse Covenants regarding the window color of the recently installed windows on your unit. The windows were installed without the proper procedure of gaining permission from the Board and of an appropriate color selection.
With the encouragement of association members in attendance at the meeting!,] the Board has set a deadline of June 1 for your written response to the board. Your written response should clearly indicate whether you intend to conform to the covenances [sic] and will have the window painted (with proper maintenance done around the framing) or whether the Association attorney should proceed with legal further steps. Again those steps are outlined in the covenants.
Please remember that the window issue on your unit has generated high legal costs to ALL your neighbors and homeowners on the street as you heard reported at the meeting. It is the monthly dues from all Washington Street homeowners that are paying the legal fees for this situation. Such costs diminish funds, which provide improvements for all homeowners.
As you heard at the meeting, homeowners are concerned about the market value of their homes because of this window appearance and lack of covenant conformity. Association members and the Board are anxious to have this issue settled so life can go on for the good of all in the Association. The window issue is currently holding up other projects, too, that need to be resolved and proceeded with in the interest of all homeowners.
The Board and Association membership looks forward to your response on or by June 1. Thank you for your prompt attention to this matter.

[¶ 10.] Clarins did not respond to this letter. Furthermore, they proceeded to order the horizontal, light-colored steel siding. That siding was delivered to Cla-rins’ home on July 30, 2002. That same day, the Board became aware of the delivery of the steel siding, and it advised Clarins in writing to not proceed with the installation. The letter also advised that if Clarins did install the steel siding, they did so at the risk of being compelled to remove it. Nevertheless, Clarins began installation the next day, July 31, 2002.

[¶ 11.] The association commenced this action for equitable relief that same day. Clarins answered, asserted affirmative defenses and a counterclaim for damages, and requested a jury trial on their legal theories. The trial court bifurcated the claims and first considered the equitable issues. After a court trial on the equitable issues, the trial court granted the mandatory injunction. It further ruled that the “resolution and disposition of the equitable issues in [the] case moot[ed] issues of law, if any, and obviate[d] the need for jury trial of Clarins’ Counterclaim.”

[¶ 12.] Clarins appeal, raising numerous issues, which we have restated as follows:

1. Whether the trial court erred in denying Clarins’ right to a jury trial on their legal claims.'
2. Whether the trial court erred in granting a mandatory injunction requiring Clarins to bring their town-home into conformity with the other homes.
3. Whether the trial court erred in including witness fees and costs for a former Association presidént who testified at trial.

Analysis and Decision

[¶ 13.] 1. Whether the trial court erred in denying Clarins’ right to a jury trial on their legal claims.

[¶ 14.] Clarins argue that they were deprived of their right to a jury trial on their counterclaim for breach of fiduciary duty, conversion, breach of covenants, and fraud and deceit. Association agrees that the legal claims “carry a right to jury trial.” However, Association points out that Clarins’ legal claims were premised on theories that were decided adversely to them in the equitable proceeding. Therefore, Association contends that there was no merit to any of the remaining legal claims as a matter of law. We agree.

[¶ 15.] We have previously held that “[i]n cases where the pleadings seek equitable relief or the legal relief is incidental, a jury trial is a matter for the trial court’s discretion.” Skoglund v. Staab, 312 N.W.2d 29, 30 (S.D.1981) (citations omitted). “Conversely, when the action is at law, either party has a right to a jury trial.” First Western Bank, Sturgis v. Livestock Yards Co., 466 N.W.2d 853, 856 (S.D.1991) (quoting Nizielski v. Tvinnereim, 453 N.W.2d 831, 832-33 (S.D.1990)). In cases involving both claims for relief, a trial court may bifurcate “the equitable issues for a trial to the court, and the legal claims for a trial by jury[.]” Durkee v. Van Well, 2002 SD 150, ¶ 11, 654 N.W.2d 807, 812.

[¶ 16.] Following bifurcation and a trial of the equitable issues, a court may also, under certain circumstances, dismiss the legal claims. In Bachand, v. Walker, 455 N.W.2d 851 (S.D.1990), Bachand argued that he was entitled to a jury trial on a fraud and conversion claim after the court had tried an equitable accounting claim. Id. We held that “the trial court was correct in concluding all claims of Bachand had been fully resolved by the [equitable] accounting, and [the court did not err] in refusing to allow a jury trial on the various alleged fraud claims.” Id. at 854. Clarins, however, argue that Bac-hand is distinguishable because Clarins “are not asking for [an] accounting.” However, that argument is misplaced because the form of equitable relief is not relevant. The relevant fact is that both Association’s claim for an injunction and the Bachand claim for an accounting were claims for equitable relief. Therefore, Bachand stands for the proposition that if the disposition of the equitable claim resolves the legal claims as a matter of law, a dismissal of the legal claims does not violate the right to a jury trial.

[¶ 17.] Here, the equitable issue resolved the legal claims as a matter of law. Clarins’ counterclaims were all premised on allegations of wrongful conduct by the Association in enforcing the covenant and handling the insurance proceeds designated for replacement windows. However, the equitable proceeding determined that Clarins’ installation of the windows and siding violated the Association’s covenants and that Clarins’ defenses were without merit. Moreover, the insurance proceeds were not wrongfully converted. They were merely being held by the Association for Clarins until the hail-damaged windows were properly replaced. Because the equitable ruling necessarily rejected Clarins’ legal claims as a matter of law, there was no legal defense or counterclaim remaining for trial by jury.

[¶ 18.] 2. Whether the trial court erred in granting a mandatory injunction requiring Clarins to bring their townhome into conformity with the other homes.

[¶ 19.] The trial court issued a mandatory injunction requiring Clarins to remove and correct the non-compliant windows and siding, and to replace them with windows and siding of the same material and color as the units adjoining Clarins’ home. Our standard of review in equitable actions is abuse of discretion. Englehart v. Larson, 1997 SD 84, ¶ 12, 566 N.W.2d 152, 155. Generally, four factors are applied in exercising that discretion. Prairie Hills Water and Dev. Co. v. Gross, 2002 SD 133, ¶ 37, 653 N.W.2d 745, 753. Those factors are:

1) Did the party to be enjoined cause the damage?
2) Would irreparable harm result without the injunction because of [a] lack of an adequate and complete remedy at law?
3) Is the party to be enjoined acting in bad faith or is its injury-causing behavior an “innocent mistake”?
4) In balancing the equities, is the “hardship to be suffered by the [enjoined party] ... disproportionate to the ... benefit to be gained by the injured party”?

Id. at 753-54 (brackets in original) (citations omitted).

Causation

[¶ 20.] Clarins challenge the trial court’s finding that they caused damage to another person by installing windows and siding in violation of the covenants. However, we agree with Association that factually, “[t]he very essence of a townhouse development such as Brookside includes uniformity of appearance in order to preserve the overall appearance and value of all the units.” Moreover, as a result of the covenant violation, Clarins’ home now has light-colored, horizontal steel siding and white windows, while the other three units in their four-plex, and the rest of the structures on that side of the street, have vertical brown fir siding and pewter windows. Consequently, Clarins’ unilateral decision to install a non-conforming exteri- or has caused a lack of uniformity of appearance in the development. Furthermore, that non-uniformity of appearance is damaging to all homeowners in the Association.

[¶ 21.] Clarins also attempt to distinguish- our prior decisions in this area on facts that are not material to their holdings. As just one example, in Vaughn v. Eggleston, 334 N.W.2d 870 (S.D.1983), we affirmed a mandatory injunction requiring the removal of a mobile home that had been placed in a subdivision in violation of applicable covenants. Clarins, however, point out that Vaughn involved substandard housing. They argue that because of their home is not substandard, the case is inapplicable. We disagree with Clarins’ analysis of Vaughn, as well as our other relevant cases because they did not turn on such minor factual details. Rather, our cases enforcing covenants have been based upon'the legal notion that property uses that conflict with the property’s restrictive covenants may be enjoined. We therefore agree with the trial court that under the facts and the law, Clarins’ breach of the covenant caused actionable damage.

Irreparable Harm

[¶ 22.] The trial court found that Brookside lacked an adequate and complete remedy at law for the injury it suffered. On appeal, Clarins argue that the Board failed to establish that it suffered irreparable harm. Clarins insist that their violations, if any, were “de minimis.” .

[¶ 23.] However, we have previously held that “[g]iven the purpose of ... covenants to maintain the desired tone of the land, to prevent nuisances, and to secure the attractivéness of the land, even a ‘minor’ violation- of the covenants could be irreparable.” Harksen v. Peska, 1998 SD 70, ¶ 26, 581 N.W.2d 170, 175. Moreover, we have reviewed the evidence, and Cla-tins’ new exterior can hardly be described as a “de minimis violation.” Garins’ light-colored, horizontal steel siding and white windows stand in stark contrast to the brown fir, vertical siding and dark windows on virtually all of the other structures in the development. Therefore, we affirm the trial court’s finding that Association “lacks an adequate and complete remedy at law for .the injury it has suffered by reason of Clarins’ violation of the Covenants[.]”

Willful, Knowing and Bad Faith violation or “Innocent Mistake”

[¶ 24.] Garins challenge the trial court’s finding and conclusion that they acted willfully, knowingly, and in bad faith. The court entered this finding and conclusion after two days of testimony from Association Board members, other homeowners in the Association, and Inez Garin.

[¶25.] In challenging this finding and related conclusion, Garins argue that Inez “believed that what she was doing was proper and necessary for the protection of her husband.” They assert that the condition of their previous windows and siding was so poor that their home was drafty, which exacerbated Oliver’s medical condition. Garins further assert that the Association President gave Inez permission to use the non-conforming windows and siding; and that they relied on that alleged “permission.” They finally assert that they relied upon the advice of their attorneys in reaching “their opinion” that “replacing the windows and siding would not be in violation of the covenants and bylaws!;.]”

[¶ 26.] We first observe that, notwithstanding these assertions, Garins do not challenge other findings that clearly support the trial court’s determination that Garins acted willfully, knowingly, and in bad faith. For example, Garins do not challenge the court’s findings that they installed non-compliant windows and siding after the Association notified them in writing that their requests were not approved. Garins were also told in January 2002 that the windows they had ordered could be brought into compliance by painting. Despite the fact that two other residents in the same situation agreed to paint their windows, Garins refused this offer. Garins finally ignored the May 2002 Board offer to propose their own plan of compliance. We believe that under these facts, the trial court’s findings are supported.

[¶ 27.] With respect to their argument of “permission,” the trial court found that the Association President did not give Inez permission to use non-compliant windows and siding. Although the President did, on one occasion, say in substance, “Do what you want,” the trial court found that this statement was not really permission, but a statement made “out of frustration” and only after Inez’s “continued” demands. With respect to Garins’ argument that Inez was only doing what was necessary for Oliver’s health, that medical condition did not require white windows or steel siding. Certainly, pewter windows and brown fir siding would have been as medically effective as white windows and steel siding. Finally, it must be remembered that the trial court had the opportunity to assess the credibility of the witnesses on each of Garins’ assertions, and Garins fail to point to any evidence contradicting the court’s credibility findings. We therefore conclude that the trial court’s ultimate finding of a willful, knowing, and bad faith violation was not clearly erroneous.

Balancing the Equities

[¶ 28.] We have held that “[t]he last factor to guide a court in issuing an injunction is the balancing of the equities, or what is known as the ‘relative hardship test.’ ” Hentz v. City of Spearfish, Dept. of Pub. Works, Office of Planning & Zoning, 2002 SD 74, ¶ 10, 648 N.W.2d 338, 341 (citations omitted). Clarins argue that “undue hardship to the Clarins clearly outweighs any claimed need for an injunction.”

[¶ 29.] The trial court first concluded that “[bjecause the Clarins’ violation of the Covenants and disregard of the Board’s denial of their request [] was willful, knowing and in bad faith, this [cjourt need not apply the relative hardship test to determine whether to issue a mandatory injunction.” This ruling most likely originated from our recognition that “[a] critical factor in balancing equities is that the party being enjoined knew that he was violating the covenant.” Id. (citation omitted). However, we need not address the propriety of this ruling because the trial court also applied the relative hardship test. The trial court found and concluded:

If the relative hardship test is applicable to this case, this [cjourt finds and concludes that the hardship to be suffered by Clarins from application of the Covenants and issuance of a mandatory injunction is not disproportionate to the benefit to be gained by Brookside by enforcing the Covenants with a mandatory injunction.

[¶ 30.] In reviewing the trial court’s application of this test, we first note that the foregoing finding was not specifically challenged by Clarins on appeal. Second, we agree that the hardship to be suffered by Clarins is not disproportionate to the benefit to be gained by the Association. This was a willful, knowing, and bad faith violation, and the injunction simply returns the parties to the status quo. It also ensures that the uniformity of the development will be maintained. We finally observe that Clarins’ unilateral decision defeats the very purpose of the covenant, and although complying with the injunction will not be easy for Clarins, their burden is a result of a hardship that they could have easily prevented. We therefore find no abuse of discretion in applying the four injunction factors.

Affirmative Defenses

[¶ 31.] Clarins further argue that the trial court erred in rejecting their affirmative defenses of laches, waiver, estoppel, unclean hands, good faith reliance, justification by necessity, misrepresentation, ostensible agency, and a Fair Housing Act defense under SDCL 20-13-20. However, Clarins failed to cite any authority for any defense except laches. Accordingly, their arguments on all of the other defenses are waived. See supra n3. ’

[¶ 32.] The only affirmative defense left for our review is laches.

To support a determination that laches bars [Association’s] action it must be found that, (1) [Association] had full knowledge of the facts upon which the action is based, (2) regardless of this knowledge, [Association] engaged in an unreasonable delay before commencing the suit, and (3) that allowing [Association] to maintain the action would prejudice [Clarins].

City of Sioux Falls v. Miller, 492 N.W.2d 116, 120 (S.D.1992) (citing Conway v. Conway, 487 N.W.2d 21, 24 (S.D.1992); Golden v. Oahe Enterprises, Inc., 90 S.D. 263, 279, 240 N.W.2d 102, 110 (1976). Accord Cheskey v. Cheskey, 298 N.W.2d 180, 183 (S.D.1980)).

[¶ 33.] With respect to the windows, Clarins argue that although the Association knew that Clarins ordered, received, and installed the windows, it waited until after installation to -begin its action. Cla-rins therefore claim “unreasonable delay” under factors one and two. They also argue that allowing Association to maintain this action for removal of windows would cause prejudice under factor three because: (1) the costs of installation, (2) the windows cannot be removed without damage, (3) Association is not attempting to enforce the color code on the back side of the house, and (4) painting the window trim would void the warranty on the windows. With respect to the siding, Clarins argue that Association was notified by Cla-rins that they intended to install the siding, but Association did not commence this action until the siding was in the process of being installed. Clarins again assert that they would be prejudiced by an order requiring removal of the siding because of its cost and the cost to replace it.

[¶ 34.] The record reflects that Association commenced this action on July 31, 2002. Prior to that time, Clarins had been engaged in an ongoing debate and negotiations over the windows and siding. During the negotiation process, Clarins received a letter from the Board reiterating the Board’s decision and informing them that legal action could be commenced to compel removal of the windows. After further negotiation between counsel, the Board gave Clarins a May 2002 opportunity to paint or propose their own plan of correction for the windows, but Clarins ignored this opportunity. Finally, on July 30, the same day that the Board learned that steel siding had been delivered to the site, both Clarins and their attorney were notified in writing that installation of that siding would result in Board action. The next morning, Clarins proceeded with installation, and Association’s action was commenced the same day.

[¶ 35.] These facts do not demonstrate unreasonable delay in commencing suit. Much of the time that elapsed between Clarins’ installation of the non-conforming windows and the commencement of this action was taken up by negotiations to resolve the matter. Furthermore, there was a pre-installation warning and no delay after the Board learned of the impending installation of the steel siding. The trial court’s rejection of Clarins’ laches claim was supported by the evidence.

[¶ 36.] Clarins finally argue that the covenants are ambiguous because they do not expressly require pewter window trim or brown fir siding. According to Clarins, “Realistically, whether a house has white trim around the windows or pewter trim to go with the white doors and white garage doors is a ridiculous and petty demand, not worthy of commencing suit against any person.” We disagree. Clarins’ argument misses the point because although the covenant does not specify the exact exterior specifications, the covenants clearly require that exterior alterations (1) must be approved in writing by the Board, and, (2) may not adversely affect the harmony of appearance within the development. Clarins’ unilateral action violated both requirements.

[¶ 37.] We affirm the trial court’s issuance of an injunction.

[¶ 38.] 3. Whether the trial court erred in including witness fees and costs for a former Association president who testified at trial.

[¶ 39.] Gary Reimnitz was the President of the Association at the time this action was commenced. However, he later sold his townhouse and relocated to Mitchell. Reimnitz was required to return for trial. Association, as the prevailing party, was awarded his witness fees and some cost of subsistence.

[¶ 40.] Clarins’ only argument is that Reimnitz was essentially “a witness in his own case.” Therefore, they challenge the award citing Commercial Trust and Savings Bank v. Christensen, 535 N.W.2d 853 (S.D.1995). However, in Christensen, the award of witness fees and expenses was reversed because that witness merely observed the trial, and was not called to testify. Christensen is inapplicable to a witness who actually testified.

[¶ 41.] It is true, however, that a successful party is not entitled to witness fees for their own attendance. See Kallis v. Beers, 375 N.W.2d 642 (S.D.1985). Nevertheless, Reimnitz was not the successful “party” because he was no longer an officer or member of the Association. Therefore, an award of witness fees was within the discretion of the trial court.

[¶ 42.] Affirmed.

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

      . The covenant provided:
      No building, fence, wall or other structure shall be commenced, erected or maintained upon the property nor shall any exterior addition to or change or alteration therein be made until the plans and specifications showing the nature, kind, shape, color, height, materials and locations of the same shall have been submitted in person and in writing to the Board. Such plans and specifications shall be judged by the Board as to harmony or external design and location in relation to surrounding structures and topography. The Board of Directors shall respond with a written reply within ten (10) days. (In the event that the Board fails to approve or disapprove such design and location within ten (10) days after said plans and specifications have been submitted to it, approval will not be required and this provision shall be deemed to have been fully complied with.)

      . The only white windows were on the back of said homes. Those windows did not face the street.

      . Clarins also argue that "a jury trial should be granted within the discretion of the trial court.” However, "[a]s a threshold ... [Cla-rins] must cite relevant authority before this Court will consider granting relief.” State v. Corey, 2001 SD 53, ¶ 19, 624 N.W.2d 841, 845 (citing State v. Pellegrino, 1998 SD 39, ¶ 22, 577 N.W.2d 590, 599). Clarins fail to cite any authority supporting a right to a discretionary jury under the facts of this case. Therefore, that argument is waived.

      . Clarins assert that "[n]o genuine issue of material fact exists [,] ” and argue that they are entitled to "immediate payment” of the insurance proceeds. However, Clarins have failed to cite any authority for their assertions. Therefore, the issue is waived. See supra n3.

      . Clarins only asserted equitable defenses to injunctive relief. See infra ¶ 31.

      . Clarins’ reply brief raises new issues and new facts supporting a claimed right to jury trial on their conversion and breach of covenant claims. These new submissions violate SDCL 15-26A-62. That statute provides that a reply brief "must be confined to new matter raised in the brief of the appellee[.]” See, e.g., State v. Beck, 2000 SD 141, ¶ 25, 619 N.W.2d 247, 254 (Gilbertson, J., dissenting). Because the new issues and facts were not raised in appellee's brief, we decline to address them.

      . See also Prairie Hills Water & Dev. Co., 2002 SD 133, 653 N.W.2d 745; Harksen, 1998 SD 70, 581 N.W.2d 170; Spring Brook Acres Water Users Ass'n, Inc. v. George, 505 N.W.2d 778 (S.D.1993); Hammerquist v. Warburton, 458 N.W.2d 773 (S.D.1990).

      . Clarins also argue that they should be excused from paying Association dues and assessments because the Association paid the costs of this litigation from dues and assessments collected from all members. Therefore, Clarins characterize the assessment of Association dues as an indirect award of attorney's fees. Clarins rely upon In re Estate of O’Keefe, 1998 SD 92, 583 N.W.2d 138, for the proposition that, absent clear statutory authority, attorney's fees are not assessed against unsuccessful litigants. However, this rule has no application here because Clarins' complaint is over their Association dues, not any trial court award of attorney’s fees. The trial court noted this distinction in declining to rule on Clarins' association dues issue. The trial court explicitly stated:
      COURT: I'm not deciding issues as to whether or not she has to pay attorney's fees [through dues or assessments]. That isn't part of this suit. You're billing her for it, but that's never — you've never sued on the debt, have you?
      ASSOCIATION: The covenants do not provide that a party has to pay the association fees in litigation yet. It’s going to next time. She is paying — or has been expected to pay her proportionate share, 1/42 of the association fees, because she’s a member of the association.
      COURT: If she doesn’t, then I suppose you can come back to court. I don't think it's an issue before me now.
      We agree that this issue was not ripe for decision.


author: LOVRIEN, Circuit Judge.

text:
    2004 SD 81
    BUTLER MACHINERY CO., a Foreign Corporation, Plaintiff and Appellee v. MORRIS CONSTRUCTION CO., a South Dakota Corporation, Defendant and Appellant.
    No. 22735.
    Supreme Court of South Dakota.
    Considered on Briefs Jan. 12, 2004.
    Decided June 23, 2004.

      Robert Gusinsky and Brian Iverson of Lynn, Jackson, Shultz, & Lebrun, Rapid City, South Dakota, Attorneys for plaintiff and appellee.
    James P. Hurley of Bangs, McCullen, Butler, Foye & Simmons, Rapid City, South Dakota, Attorneys for defendant and appellant.
   LOVRIEN, Circuit Judge.

[¶ 1.] Morris Construction Company (Morris) appeals the grant of summary judgment entered in favor of Butler Machinery Company (Butler) in the amount of $122,284.50 plus costs and interest. We affirm the trial court’s grant of summary judgment for breach of contract but reverse and remand to the trial court for further proceedings concerning the resulting amount owed by Morris under the terms of the contract.

FACTS

[¶ 2.] Morris and Butler had an extensive history of business dealings relating to repair work for construction equipment, purchase of parts, equipment rental, and equipment purchase. On January 11, 1999, the parties’ previous agreements relating to these matters were consolidated into a single contract and security agreement. According to the terms of that agreement the total amount owed by Morris to Butler was $217,445. The contract provided that Morris would pay Butler a single payment of $5,497.29 in February 1999 and then follow with forty-seven monthly installments of $5,547 to conclude in January 2003.

[¶ 3.] In the agreement, Morris also granted Butler a purchase money security interest in six pieces of construction equipment: a Caterpillar 140G motor grader, a Caterpillar D5C crawler dozer, a Caterpillar 966F loader, two Load King semi equipment trailers and a Caterpillar 416 backhoe. Butler filed a UCC-L financing statement with the South Dakota Secretary of State to perfect this security interest. However, in October 2000 Morris stopped making the payments as required by the contract. There were no scheduled monthly payments made to Butler after the September 2000 installment. In May 2001, Butler repossessed the crawler doz-er. In June and July 2001, Butler also repossessed the motor grader and two semi trailers. Thereafter, repossession of the loader occurred in August 2002.

[¶ 4.] Concerning this equipment, Morris alleged in the proceedings below that Butler reported to it that at least some of this repossessed machinery had been sold. Yet, Butler did not provide any documentation to Morris concerning these sales. Additionally, no accounting was provided by Butler that indicated what amounts were due and owing under the contract nor was any amount given to Morris concerning the redemption of the collateral. Butler filed suit against Morris on October 31, 2001, to recover the remaining amounts owed on the contract. After delays for what appears to have been fruitless discovery requests, the circuit court eventually entered summary judgment in favor of Butler in the amount of $122,284.50 plus costs and interest. Morris appeals the grant of summary judgment raising the following issues:

Whether the trial court erred in granting summary judgment to Butler for Morris’ alleged breach of contract. ■
Whether the trial court erred in granting summary judgment to Butler when the amount Morris owed Butler under the terms of the contract was disputed.

STANDARD OF REVIEW

[¶ 5.] This Court’s standard of review for the grant or denial of summary judgment by the trial court is clear.

Summary judgment shall be granted “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 inferences drawn from the facts must be viewed in favor of the nonmoving 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. On the other hand, “[t]he party opposing a motion for summary judgment must be diligent in resisting the motion, and mere general allegations and denials which do not set forth specific facts will not prevent issuance of a judgment.”

Chilson v. Kimball School Dist. No. 7-2, 2003 SD 53, ¶ 7, 663 N.W.2d 667, 669 (quoting Greene v. Morgan, Theeler, Cogley & Petersen, 1998 SD 16, ¶ 6, 575 N.W.2d 457, 459).

CHOICE OF LAW

[¶ 6.] “We have generally recognized that parties may agree to be bound by the law of a particular state.” Dunes Hospitality, L.L.C. v. Country Kitchen Intern., Inc., 2001 SD 36, ¶ 10, 623 N.W.2d 484, 488 (citing State ex rel Meierhenry v. Spiegel, Inc., 277 N.W.2d 298, 299 (S.D.1979)). While parties may so choose, their agreement is “subject to limitation and invalidation by overriding public policy” concerns. Id. This Court will not give effect to laws of other jurisdictions if they are contrary to the public policy of South Dakota. Id.

[¶ 7.] In this case, Butler and Morris agreed to be bound by North Dakota’s version of the Uniform Commercial Code. This choice of law agreement is not contrary to the public policy of the State of South Dakota. The North Dakota law applicable to this case is substantially similar to the law of South Dakota and, in fact, this Court has applied North Dakota’s UCC on occasion. See e.g. Husky Spray Service, Inc. v. Patzer, 471 N.W.2d 146 (S.D.1991). Therefore, this commercial, contract dispute is properly governed by the North Dakota UCC.

ISSUE ONE

[¶8.] Whether the trial court erred in granting summary judgment to Butler for Morris’ alleged breach of contract.

[¶ 9.] On appeal, Morris claims that it was entitled to various credits that should have been applied to the remaining balance due on the contract. Morris maintains these credits resulted from various business dealings between the parties pri- or to the execution of the contract on January 11, 1999. As a result, Morris argues the trial court erred in granting summary judgment for breach of contract because of the disputed amount of these credits and whether they had been properly applied to the contract amount.

[¶ 10.] We conclude that the trial court did not err in granting summary judgment on the issue of breach of contract. The very terms of the contract signed by both parties contradicts Morris’ assertion. The language of that agreement provides: “You agree that this and any other written agreement pertaining to this sale contain all of the terms and provisions of your agreement with us and that we have not made any oral warranties or promises regarding the secured property.” The contract language operated to limit the parties’ agreement to what was contained within the four corners of the document unless supplemented by additional written agreements. The terms of that agreement are clear and unambiguous.

[¶ 11.] In addition, the parol evidence rule prevents a party .to an unambiguous contract to challenge its terms by asserting alleged oral variations to what is written in the document. This rule, as codified in SDCL 53-8-5, provides: “The execution of a contract in writing, whether the law requires it to be written or not, supersedes all the oral negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument.” See also NDCC § 9-06-07.

[¶ 12.] We have recognized that the parol evidence rule is one of substantive law, not of evidence. Hofeldt v. Mehling, 2003 SD 25, ¶ 11, 658 N.W.2d 783, 787 (citing Auto-Owners Ins. Co. v. Hansen Housing, Inc., 2000 SD 13, ¶ 14, 604 N.W.2d 504, 510). Furthermore,

By its express statutory language, the rule does not apply to conduct and statements taking place after a contract has been executed. Thus, evidence of negotiations occurring after a written agreement will not be excluded by the parol evidence rule.-

Id. (citing E. Allan Farnsworth, Farnsworth on Contracts § 7.3, § 7.6, at 228 (2d ed 1998)). Therefore, only subsequent agreements can alter or waive the rights and remedies expressed in a contract. Id. (citing Moe v. John Deere Co., 516 N.W.2d 332, 335 (S.D.1994)).

[¶ 13.] Here, no additional written agreements were presented by Morris to supplement, modify, or rescind any terms of the contract. Moreover, Morris has neither alleged nor argued that the contract is ambiguous. As a result, the assertions by Morris that there were oral agreements by the parties regarding adjustments of Morris’ debt based *on credits or offsets from dealings that occurred pri- or to the signing of the contract were properly disregarded by the trial court.

[¶ 14.] As the trial court recognized, this agreement was clear and unambiguous. Morris was to make monthly payments of $5,547 and its failure to make such monthly payments constituted a default under the terms of that agreement. There was no genuine dispute of material fact that Morris was in default after September 2000 when it made no further monthly payments. Summary judgment was therefore proper concerning Morris’ breach of contract.

ISSUE TWO

[¶ 15.] Whether the trial court erred in granting summary judgment to Butler when the amount Morris owed Butler under the terms of the contract was disputed.

[¶ 16.] We conclude that the trial court’s grant of summary judgment was not proper on the issue of the amount owed under the contract. We do so because the amounts owed under the contract depend, at least in part, on the amount of the payments made pursuant to the contract and those proceeds generated by the sale or lease of equipment repossessed under the terms of the contract. Morris disputed the amount Butler claimed was owed under the contract and had diligently sought an accounting concerning what Butler did with the repossessed collateral. However, it appears from the record that a full accounting of the repossessed collateral has never been provided.

[¶ 17.] Viewing the evidence in the light most favorable to the non-moving party, as we are required to do, the settled record established that Butler repossessed various items , of equipment owned by Morris; that this equipment was valuable; that Butler generated proceeds from the sale or. lease of this equipment; and, that Butler failed to affirmatively show that the proceeds were properly applied to the balance due under the contract. These facts alone established a genuine issue of material fact and was fatal to Butler’s claim that it was entitled to summary judgment on the issue of damages.

[¶ 18.] It is well-settled that summary judgment was never intended to be used as a substitute for a court trial or for a trial by jury where any genuine issue of material fact exists. Wilson v. Great Northern Ry. Co., 83 S.D. 207, 212, 157 N.W.2d 19, 21 (1968). Furthermore, “When considering a motion for summary judgment, the formal issues presented by the pleadings are not controlling and a party may not rest upon the mere allegations contained therein.” Aetna Life Ins. Co. v. McElvain, 363 N.W.2d 186, 188 (S.D.1985) (citing Hughes-Johnson Co. v. Dakota Midland Hospital, 86 S.D. 361, 195 N.W.2d 519 (1972)). Yet, in the case at bar Butler did just that — it rested on the allegation that Morris owed $122,284.50. “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.” Ward v. Lange, 1996 SD 113, ¶ 10, 553 N.W.2d 246, 249 (citations omitted).

[¶ 19.] Had Butler provided a full accounting of what it had done with the repossessed collateral and how those proceeds were applied to the balance due under the contract it may have been able to establish that it was entitled to summary judgment. Without this accounting, however, there remains a genuine issue of material fact as to which pieces of repossessed equipment, if any, Butler sold, leased or still has in its possession and whether the proceeds from any sale or lease of repossessed equipment were properly applied to the amounts owed under the contract. These are matters to be resolved at trial. Viewing the evidence in the light most favorable to the non-moving party, we conclude that a genuine issue of material fact existed as to the amount Morris owed under the contract. Accordingly, we reverse the grant of summary judgment on this issue and remand for further proceedings consistent with this opinion.

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

[¶ 21.] LOVRIEN, Circuit Judge for SABERS, Justice, disqualified.

      . The language of NDCC § 9-06-07 is identical to that of SDCL 53-8-5.

      . SDCL 57A-9-608 provides that after paying expenses, proceeds of the disposition of collateral are to be used for the satisfaction of the obligation secured. NDCC § 41-09-105 enumerates identical rules for application of proceeds.

      . For example, Morris noted its claim that the fair market value of the repossessed equipment was $304,000 (against Butler’s claim of $122,284.50), and requested that "summary judgment be denied' until discovery óf the material facts determines the true balance owed.”

      .The debtor is entitled to an accounting when collateral is repossessed and then disposed of by the creditor. SDCL 57A-9-611 provides in pertinent part that the secured party shall send an authenticated notification .of disposition to the debtor. Cf. NDCC 41-09-108. SDCL 57A-9-613 includes the statement that the debtor is entitled to an accounting for the unpaid indebtedness in its list of contents for a sufficient notification of disposition. Cf. NDCC 41-09-110. These rules cannot be waived or varied except in an authenticated agreement entered into after default SDCL 57A-9-602; SDCL 57A-9-624. Cf. NDCC 41-09-99; NDCC 41-09-119.

      . We note that Morris has a statutory right to notice of the disposition of collateral. See SDCL 57A-9-611 and NDCC § 41-09-108. Morris also has a statutory right to redeem the collateral by fulfilling the obligation it secured in addition to paying reasonable expenses. SDCL 57A-9-623 Cf. NDCC 41-09-118. A debtor’s statutory right of redemption may be waived, but only by agreement after the default. SDCL 57A-9-624. Cf. NDCC § 41-09-119. Because Butler apparently did not give Morris proper notice as required by these statutes, it is unknown whether Morris would have redeemed the repossessed equipment for more than the amount Butler received by its sale, thus reducing the amount due under the contract.

      . In addition, the commercial reasonableness of any sale(s) of collateral may present an additional issue of material fact at trial. Generally, when a creditor sues for a deficiency, he bears the burden of proving that disposition of the collateral was conducted in compliance with the Uniform Commercial Code. First Bank of South Dakota v. Haberer Dairy & Farm Equipment, Inc., 412 N.W.2d 866, 870 (S.D.1987) (citations omitted). While First Bank was interpreting the pre-2001 UCC, we believe that the revised version has not changed this burden. Butler must show that any sale of collateral was accomplished within the mandates of the UCC.