R.B.O. v. Priests of the Sacred Heart

#25842-r-GAS

2011 S.D. 86

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

* * * *

R.B.O., J.H.C., N.T.H., L.M.
L.Z., K.T., J.J., and B.S., Plaintiffs and Appellees,

v.

PRIESTS OF THE SACRED HEART, Defendant and Appellant,

and

THE CATHOLIC DIOCESE OF SIOUX FALLS;
(The) CONGREGATION OF THE PRIESTS OF
THE SACRED HEART; INC., BROTHER
RUSS; FATHER WILLIAM PITCAVAGE, S.C.J.;
BROTHER DAVE; BROTHER BILL; AND
DEACON MARION QUAGLIARIELLO,
S.C.J.; FATHER THOMAS LIND, S.C.J.;
BROTHER MATTHEW L. MILES, Defendants.

* * * *

APPEAL FROM THE CIRCUIT COURT OF
THE SECOND JUDICIAL CIRCUIT
MINNEHAHA COUNTY, SOUTH DAKOTA

* * * *

HONORABLE BRADLEY G. ZELL
Judge

* * * *

CONSIDERED ON BRIEFS
ON OCTOBER 3, 2011

OPINION FILED 12/14/11
MICHAEL SHUBECK
Law Offices of Gregory A. Yates
Rapid City, South Dakota

and

REBECCA RHOADES of
Manly & Stewart
Newport Beach, California Attorneys for plaintiffs
and appellees.

ROBERT B. ANDERSON of
May, Adam, Gerdes and Thompson
Pierre, South Dakota Attorneys for defendant
and appellant.
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SEVERSON, Justice

[¶1.] Former students of a parochial school brought an action against the

Priests of the Sacred Heart, Inc. (PSH) and other defendants, asserting claims of

childhood sexual abuse. PSH filed a motion to dismiss the action on the grounds

that the former students failed to timely serve process on PSH in accordance with

South Dakota law. The circuit court denied the motion to dismiss, finding the

former students substantially complied with the applicable service-of-process

statute. The circuit court also found service of process on PSH was valid under

SDCL 15-2-31. We reverse.

BACKGROUND

[¶2.] R.B.O., J.H.C., N.T.H., L.M., L.Z., K.T., J.J. and B.S. (Plaintiffs) are

members of a recognized Native American tribe who attended St. Joseph’s Indian

Mission School (St. Joseph’s) on the Lower Brule Indian Reservation in South

Dakota. PSH is a religious organization with headquarters in Wisconsin.

Plaintiffs allege that individual members of PSH, while acting as employees or

agents of St. Joseph’s, sexually molested and assaulted them. Plaintiffs also allege

that the Congregation of the Priests of the Sacred Heart, Inc. and the Catholic

Diocese of Sioux Falls are liable for the childhood sexual abuse that allegedly

occurred at St. Joseph’s.1

[¶3.] In an initial attempt to commence this action against PSH, Plaintiffs

delivered legal process to the Milwaukee County Sheriff’s Office in late June

1. Plaintiffs also named several individual defendants in their complaint.

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2010. The Office of the Milwaukee County Sheriff served Amanda Milczarski on

July 2, 2010. Milczarski is a receptionist at the Development Office – Sacred Heart

Monastery – Priests of the Sacred Heart, Reign of the Sacred Heart, Inc.

(Development Office). The Development Office is a separate corporate entity from

PSH. The address of the Development Office where Plaintiffs delivered legal

process is not the address of PSH.

[¶4.] The South Dakota Legislature amended the applicable statute of

limitations in civil actions for childhood sexual abuse during the 2010 Legislative

Session. The amended statute, which went into effect July 1, 2010, provides that

“no person who has reached the age of forty years may recover damages from any

person or entity other than the person who perpetrated the actual act of sexual

abuse.” SDCL 26-10-25.

[¶5.] PSH filed a motion to dismiss on August 13, 2010, alleging Plaintiffs’

service of process on Milczarski was insufficient because Milczarski was neither an

employee nor agent of PSH. Shortly thereafter, Plaintiffs hired a private process

server, DDS Legal Support, to effectuate service on David Nagle, the registered

agent of PSH. But the documents Plaintiffs provided to DDS Legal Support did not

list PSH as the party to be served. Instead, the documents instructed DDS Legal

Support to serve the “Congregation of the Priests of the Sacred Heart, Inc., by its

Agent David Nagle.” On August 24, 2010, DDS Legal Support personally served

Nagle. A return of service was filed indicating that Nagle had been served on

behalf of “(The) Congregation of the Priests of the Sacred Heart, Inc.”

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[¶6.] In an order entered December 20, 2010, the circuit court denied PSH’s

motion to dismiss. The circuit court found Plaintiffs substantially complied with

SDCL 15-6-4(d)(1), South Dakota’s statute governing requirements for personal

service on a business entity. In addition, the circuit court found service of process

on PSH was in compliance with SDCL 15-2-31.

STANDARD OF REVIEW

[¶7.] “[W]hen a defendant moves to dismiss for insufficient service of

process, the burden is on the plaintiff to establish a prima facie case that the

service was proper.” Grajczyk v. Tasca, 2006 S.D. 55, ¶ 22, 717 N.W.2d 624, 631

(citing Northrup King Co. v. Compania Productora Semillas Algodoneras Selectas,

S.A., 51 F.3d 1383, 1387 (8th Cir. 1995)). Whether a plaintiff has presented a

prima facie case of sufficient service of process is reviewed by this Court de novo,

with no deference given to the circuit court’s legal conclusions. Id. (citing Northrup

King Co., 51 F.3d at 1387).

DECISION

[¶8.] Whether the circuit court erred when it determined that
service of process on PSH was valid under South Dakota law.

[¶9.] We have recognized that “[p]roper service of process is no mere

technicality: that parties be notified of proceedings against them affecting their

legal interests is a ‘vital corollary’ to due process and the right to be heard.” Spade

v. Branum, 2002 S.D. 43, ¶ 7, 643 N.W.2d 765, 768 (citing Schroeder v. City of New

York, 371 U. S. 208, 212, 83 S. Ct. 279, 282, 9 L. Ed. 2d 255, 259 (1962)). Thus,

service of process serves two important functions: “first, to advise that a legal

proceeding has been commenced, and, second, to warn those affected to appear and

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respond to the claim.” Id. (quoting Wagner v. Truesdell, 1998 S.D. 9, ¶ 8, 574

N.W.2d 627, 629).

[¶10.] The South Dakota Legislature has enacted statutes that specify the

means of ensuring proper service. SDCL 15-6-4(d)(1) governs personal service of

process on a business entity. The statute provides service of process must be

delivered to the following individuals:

the president, partner or other head of the entity, officer,
director, or registered agent thereof. If any of the above cannot
be conveniently found, service may be made by leaving a copy of
the summons and complaint at any office of such business entity
within this state, with the person in charge of such office . . . .

SDCL 15-6-4(d)(1). The statutory list of parties that are authorized to receive

service under SDCL 15-6-4(d)(1) is exhaustive and compliance with the statute is

not discretionary. White Eagle v. City of Fort Pierre, 2000 S.D. 34, ¶¶ 9-11, 606

N.W.2d 926, 929 (citing Matter of Gillespi, 397 N.W.2d 476, 478 (S.D. 1986)).

[¶11.] In this case, we must first determine whether the notice requirements

of SDCL 15-6-4(d)(1) were satisfied when the Office of the Milwaukee County

Sheriff served Milczarski on July 2, 2010. Milczarski is a receptionist at the

Development Office, a corporate entity separate from PSH. Milczarski does not

hold any office with PSH. Nor does she serve as the registered agent of PSH.

Plaintiffs’ attempt to initiate this action against PSH by serving Milczarski was not

effective because Milczarski is not authorized to receive service on behalf of PSH

under SDCL 15-6-4(d)(1).

[¶12.] Nonetheless, Plaintiffs contend that service on PSH was completed

August 24, 2010, the date DDS Legal Support served Nagle, the registered agent of

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PSH. However, the documents Plaintiffs provided to DDS Legal Support did not

list PSH as the party to be served. The return of service indicates that Nagle was

served on behalf of the Congregation of the Priests of the Sacred Heart, Inc. The

fact that Plaintiffs directed DDS Legal Support to deliver the summons to Nagle on

behalf of the wrong defendant is significant because the summons itself was not

specifically directed to PSH. Instead, the summons was directed to all of the

defendants to the action, including the Congregation of the Priests of the Sacred

Heart, Inc.2 Under these facts, Plaintiffs have failed to effectuate service on PSH

in accordance with South Dakota law.3

2. SDCL 15-6-4(a) sets forth the requirements for a valid summons:

The summons shall be legibly subscribed by the plaintiff or his
attorney and shall include the subscriber's address. It shall be
directed to the defendant, and shall require him to answer the
complaint and serve a copy of his answer on the subscriber at
the subscriber’s address within thirty days after the service of
the summons, exclusive of the day of service, and shall notify
him that in case of his failure to answer, judgment by default
may be rendered against him as requested in the complaint.

(Emphasis added.)

3. Plaintiffs submitted a California proof of service form as evidence that
process was served on PSH. PSH argues that this form does not comply
with South Dakota requirements for proof of service because under SDCL
15-6-4(g), if proof of service is made by a person other than a sheriff or
county constable, an affidavit is required. This issue was not raised before
the circuit court. “[I]ssues not addressed or ruled upon by the [circuit] court
will not be addressed by this Court for the first time on appeal.” Watertown
v. Dakota, Minn. & E.R.R. Co., 1996 S.D. 82, ¶ 26, 551 N.W.2d 571, 577
(citations omitted).

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Substantial Compliance

[¶13.] Plaintiffs argue that service of process on Nagle was valid because

Plaintiffs substantially complied with the personal service mandates of SDCL 15-6-

4(d)(1). In support of their argument, Plaintiffs cite Wagner, in which this Court

recognized that “actual notice coupled with substantial compliance is sufficient to

satisfy personal service of process requirements . . . .” 1998 S.D. 9, ¶ 9, 574 N.W.2d

at 629. In Wagner, we defined substantial compliance as follows:

“Substantial compliance” with a statute means actual
compliance in respect to the substance essential to every
reasonable objective of the statute. It means that a court should
determine whether the statute has been followed sufficiently so
as to carry out the intent for which it was adopted. Substantial
compliance with a statute is not shown unless it is made to
appear that the purpose of the statute is shown to have been
served. What constitutes substantial compliance with a statute
is a matter depending on the facts of each particular case.

Id. ¶ 7 (quoting State v. Bunnell, 324 N.W.2d 418, 420 (S.D. 1982)).

[¶14.] In applying this definition to the facts in Wagner, we determined that

the process server substantially complied with SDCL 15-6-4(d)(10), South Dakota’s

personal service statute, when he delivered a summons to the defendant’s

caretaker who was living with the defendant. Id. ¶¶ 4 & 11. Although the

defendant in Wagner was in the dwelling at the time service was delivered to his

caretaker, the defendant could not receive process because he suffered from

Alzheimer’s Disease and was unable to manage his personal or business affairs.

Id. ¶ 3. After considering “the realities” of the case, we held that a strict reading of

SDCL 15-6-4(d)(10) “would be an absurdity” because even if service had been made

on the defendant, the caretaker would have immediately taken the papers away

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from the defendant to give to the defendant’s attorney. Id. ¶ 10. Thus, we

concluded that “[t]here logically is no need in this case for that ‘middle-person’ step

to fulfill the purpose of SDCL 15-6-4(d)(10).” Id.

[¶15.] Here, Plaintiffs argue that because DDS Legal Support delivered a

copy of the summons to the registered agent of PSH, Plaintiffs substantially

complied with the notice requirements of SDCL 15-6-4(d)(1). However, as

previously noted, the documents Plaintiffs provided to DDS Legal Support

indicated that the Congregation of the Priests of the Sacred Heart, Inc. was the

party to be served, not PSH. The summons itself was directed to all of the

defendants to the action, including the Congregation of the Priests of the Sacred

Heart, Inc. Given that the service was directed to a different corporation, PSH

could reasonably be confused about the service, especially given that the

Congregation of the Priests of the Sacred Heart, Inc. is another named defendant

in the action. In light of these facts, there was a logical need for Plaintiffs to direct

service to the correct business entity. Thus, this case is distinguishable from

Wagner.

[¶16.] In White Eagle, we considered whether a plaintiff substantially

complied with SDCL 15-6-4(d)(4) when it attempted to commence an action against

the City of Fort Pierre by serving the city’s financial officer instead of the “mayor or

any alderman or commissioner” as required under the statute. 2000 S.D. 34, ¶ 3,

606 N.W.2d at 927. We held the substantial compliance doctrine was inapposite

because the applicable notice statute “ha[d] not been followed sufficiently to carry

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out the intent for which it was adopted.” Id. ¶ 14. The facts of this case warrant

the same conclusion.

[¶17.] Although we have acknowledged that one purpose of service of process

is to provide notice to a defendant that an action or proceeding has been

commenced against him, we have emphasized notice alone is not sufficient.

Wagner, 1998 S.D. 9, ¶ 9, 574 N.W.2d at 629. “Actual notice will not subject

defendants to personal jurisdiction absent substantial compliance with [the

governing service-of-process statute].” Id. (quoting Thiele v. Stich, 425 N.W.2d 580,

584 (Minn. 1988)). Because Plaintiffs failed to direct service to PSH, they have

failed to substantially comply with South Dakota’s statutory notice requirements.

We thus hold the circuit court erred in denying PSH’s motion to dismiss.4

[¶18.] Reversed.

[¶19.] GILBERTSON, Chief Justice, and ZINTER, Justice, and

THORSTENSON, Circuit Court Judge, concur.

[¶20.] THORSTENSON, Circuit Court Judge, sitting for KONENKAMP,

Justice, disqualified.

[¶21.] WILBUR, Justice, did not participate.

4. Plaintiffs also argue that service of process on PSH was in compliance with
SDCL 15-2-31. Under this statute, the time for service is extended 60 days
when a summons is delivered to the sheriff or other authorized officer with
the intent that it be served on the defendant. However, for SDCL 15-2-31 to
apply, service must be effectuated within the 60-day time extension.
Because Plaintiffs failed to properly serve PSH, we hold that SDCL 15-2-31
is inapplicable.

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