Johns v. Black Hills Power, Inc.

#23896-a-CALDWELL, Circuit Judge
2006 SD 85

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

* * * *

TIMOTHY R. JOHNS and
LEANN L. JOHNS, Plaintiffs and Appellants,

v.

BLACK HILLS POWER, INC.,
a South Dakota Corporation, Defendant and Appellee.

* * * *

APPEAL FROM THE CIRCUIT COURT
OF THE FOURTH JUDICIAL CIRCUIT
LAWRENCE COUNTY, SOUTH DAKOTA

* * * *

HONORABLE EUGENE L. MARTIN
Circuit Judge Retired

* * * *

DAVE L. CLAGGETT Attorney for plaintiffs
Spearfish, South Dakota and appellants.

GARY D. JENSEN of
Beardsley, Jensen & VonWald Attorneys for defendant
Rapid City, South Dakota and appellee.

* * * *

CONSIDERED ON BRIEFS
ON MAY 24, 2006

OPINION FILED 9/20/06
#23896

CALDWELL, Circuit Judge

[¶1.] Timothy and LeAnn Johns (Johns) appeal the circuit court's grant of

summary judgment in favor of Black Hills Power, Inc. (BHP) on their claim of

trespass or, in the alternative, inverse condemnation. We affirm.

FACTS AND PROCEDURE

[¶2.] On July 24, 1990, Johns purchased a residence located at 110 South

Main Street, Lead, South Dakota. The property was purchased from Barbara E.

Huebler (Huebler). BHP placed an anchor pole and guy wires on the northeast

corner of Huebler's property in 1989. The anchor pole and guy wires provided

support for pole No. 7 located on the opposite side of the street. The anchor pole

and guy wires were on the property at the time of Johns' purchase. Johns became

customers of BHP the day after the property was transferred to them. Johns'

residence did not directly receive electrical service from pole No. 7. Its electrical

service was provided by pole No. 50.

[¶3.] In the spring of 2004, BHP placed a wooden stake in Johns' yard for

the proposed placement of additional guy wires. Johns objected to the placement

and checked the public records to determine the extent of BHP's rights. A check of

the records disclosed no license, easement or other writing granting BHP a right to

occupy the property. Johns notified BHP by letter to either immediately remove the

pole and guy wires or negotiate an easement if it wished to continue to use the

property. BHP ultimately removed the anchor pole and guy wires in November

2004.

[¶4.] This action was originally commenced by Johns as a small claims

action. BHP petitioned to transfer the case to circuit court. Johns alleged that BHP
#23896

has committed trespass, or, in the alternative, inverse condemnation. 1 BHP

acknowledged that no easement or license had been filed with the register of deeds.

BHP maintained that its tariff required the granting of rights of way as a condition

of service. BHP asserted that even if a taking had occurred, Johns did not have

standing to maintain an action. Further, it argued that Johns had constructive

notice of the alleged taking when they purchased the property and, therefore, were

estopped or waived any such claim. BHP moved for summary judgment which was

granted by the circuit court. Johns appeal.

STANDARD OF REVIEW

Under our familiar standard of review in summary
judgment cases, we decide only whether genuine issues of
material fact exist and whether the law was correctly
applied. If any legal basis exists to support the circuit
court's ruling, we will affirm. Kobbeman v. Oleson, 1998
SD 20, ¶4, 574 NW2d 633, 635 (citing SDCL 15-6-56(c)
(1966)); see De Smet Ins. Co. of South Dakota v. Gibson,
1996 SD 102, ¶5, 552 NW2d 98, 99. "With the material
facts undisputed, our review is limited to determining
whether the [circuit] court correctly applied the law."
Kobbeman, 1998 SD 20, ¶4, 574 NW2d at 635.

Schulte v. Progressive Northern Ins. Co, 2005 SD 75, ¶5, 699 NW2d 437, 438.

ANALYSIS AND DECISION

ISSUE

[¶5.] Whether the circuit court erred in granting summary judgment
in favor of BHP.

1. Johns initially sought damages in the amount of $8,000 in the small claims
proceeding. After removal to circuit court, Johns claimed in their answers to
BHP's interrogatories damages in the amount of $5 per day compounded
daily for eighteen years at ten percent per annum, totaling $103,191.98.
-2-
#23896

Tariff

[¶6.] SDCL 49-34A-10 provides:

Pursuant to rules promulgated under chapter 1-26 by the
Public Utilities Commission, every public utility shall file
with the commission, within such time and in such form
as the commission may designate, tariffs and schedules
showing the terms and conditions of service and all rates
established by the public utility and collected or enforced,
or to be collected or enforced, within the jurisdiction of the
commission. The public utility shall keep copies of such
tariffs and schedules open to public inspection under such
rules as the commission may promulgate. Schedules and
tariffs approved by the commission have the force and
effect of law.

Before the circuit court, BHP asserted that Section 310 of the Rules and

Regulations Covering Electric Service (tariff) filed by BHP with the Public Utilities

Commission (PUC) granted a right-of-way without compensation. Section 310

provides:

Customer shall, without compensation, make or procure
satisfactory conveyance to Company of right-of-way for
Company's lines necessary and incidental to the
furnishing of service to customer and for continuing or
extending said lines over and across the property owned
or controlled by customer. The Company shall not be
liable for damages involving the power line when such
damages result from actions of parties other than the
Company.

[¶7.] Johns argued that Section 310 is unconstitutional in as much as it

provides for a taking without compensation. BHP argued that the tariff is a

contract with its customers and is accepted by the customer when accepting electric

service. BHP maintained that the anchor pole and guy wires were part of the

distribution system which supplied electricity to Johns. BHP claimed that there

was no constitutional issue when a correct understanding of the tariff was applied.

-3-
#23896

[¶8.] The circuit court did not grant summary judgment on this basis and

withheld a decision on the constitutionality issue because Johns had not given

proper notice to the attorney general pursuant to SDCL 15-6-24(c). Johns still have

not provided the required notice and this Court declines to consider the

constitutionality issue before the circuit court has an opportunity to fully consider

it. Boever v. South Dakota Bd. of Accountancy, 526 NW2d 747, 751 (SD 1995).

Standing

[¶9.] The anchor pole and guy wires were placed on the property prior to

Johns' purchase. Johns' complaint alleged trespass or, in the alternative, inverse

condemnation. The circuit court concluded that the placing and maintaining of the

pole on Johns' property was not a temporary or continuing trespass. "If the

invasion is deemed to be 'permanent,' there is but one cause of action, and the

statute of limitation commences to run from the time the invasion began, or when it

became known to the aggrieved party." City of Sioux Falls v. Miller, 492 NW2d 116,

118 (SD 1992) (citations omitted).

[¶10.] The following factors are considered in determining whether a

nuisance or trespass is permanent:

(1) [I]s the source of the invasion physically
permanent, i.e., is it likely, in the nature of things
to remain indefinitely?

(2) [I]s the source of the invasion the kind of thing an
equity court would refuse to abate by injunction
because of its value to the community or because of
the relations between the parties?

(3) [W]hich party seeks the permanent or prospective
measure of damages?

-4-
#23896

Miller, 492 NW2d at 119 (quoting Dan D. Dobbs, Handbook on the Law of Remedies

§ 5.4, at 338 (1973)).

"First, a nuisance or trespass is usually not regarded as a
permanent one unless it is physically permanent or likely
to continue indefinitely." Dobbs, supra. Under the second
part of the test, Dobbs mentions that there are two large
classes of cases, in which courts will not order removal of
the trespassing structure or cessation of the operation of a
nuisance-causing activity. In one class the defendant has
the power of eminent domain. In such cases, courts will
not force the defendant to cease operation since the
defendant could, after a formal condemnation, continue
its operation. "In a case like this, then, the source of the
nuisance or trespass is physically permanent, and also
legally permanent, in the sense that courts will not
require its removal." Id. at 340.

Miller, 492 NW2d at 119.

[¶11.] Despite the fact that BHP ultimately decided to replace the anchor

pole and guy wires after a substantial financial subsidy from the City of Lead, the

placement of the anchor pole and guy wires on Johns property was permanent or

likely to continue indefinitely. Further, it is doubtful that a court would require

BHP to remove them because BHP could have formally condemned the property to

place the pole on the property. See SDCL 49-33-10. "'The clearest case of a

permanent nuisance or trespass is the one where the offending structure or

condition is maintained as a necessary part of the operation of a public utility.'"

Miller, 492 NW2d at 119 (citation omitted).

[¶12.] This Court holds that the circuit court was correct as a matter of law in

concluding that this was a permanent trespass. "[I]f a [trespass] is deemed

permanent, there is only one unceasing invasion of the plaintiff's interests and only

one cause of action. . . . The statute of limitations of the one cause of action must,

-5-
#23896

then, begin running from the time the invasion began, or from the time it became

manifest." Id. (quoting Dobbs, supra at 343). Johns' action is really one for inverse

condemnation or a taking because of the permanent nature of the trespass. See

Miller, 492 NW2d at 120. "[I]t is a general rule of the law of eminent domain that

any award goes to the owner at the time of the taking, and that the right to

compensation is not passed to a subsequent purchaser." Palazzolo v. Rhode Island,

533 US 606, 628, 121 SCt 2448, 2463, 150 LEd2d 592 (2001). The anchor pole and

guy wires at issue were placed on the property in 1989 prior to Johns' purchase on

July 24, 1990. When Johns purchased the property, any diminution in value caused

by the placement of the pole and wires presumably was reflected in the purchase

price. Johns concede in their brief that if the trespass or taking is permanent, the

cause of action would belong to the former owner. This Court affirms the circuit

court's conclusion that any cause of action for inverse condemnation belongs to the

prior owner and Johns lack standing to maintain an action for the taking.2

2. Johns reliance on SDCL 15-6-17(a) as a bar to the granting of summary
judgment is misplaced. The concepts of "real party in interest" and "standing
to sue" are related, but distinct. See 6A Charles A. Wright and Arthur R.
Miller, Federal Practice and Procedure §1542 (2004). "A party must be both
the real party in interest and have standing." Id.

In the realm of public law, when governmental action is
attacked on the ground that it violates private rights or
some constitutional principle, the question whether the
challenger is a proper party plaintiff to assert the claim
rarely is analyzed in terms of real party in interest or
capacity principles. Instead, the courts have tended to
rely on the judge made doctrine of standing to sue. To the
extent that standing in this context is understood to mean
that the litigant actually must be injured by the
governmental action that he is assailing, then it closely
resembles the notion of real party in interest under Rule
17(a), inasmuch as both terms are used to designate a
-6-
#23896

Constructive Notice and Waiver

[¶13.] The circuit court also concluded that even if Johns had standing,

summary judgment was proper based on constructive notice and waiver. Because

this Court concludes that Johns lack standing, it is not necessary to address this

issue.

[¶14.] We affirm the grant of summary judgment because Johns do not have

standing.

[¶15.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER and

MEIERHENRY, Justices, concur.

[¶16.] CALDWELL, Circuit Judge, for SABERS, Justice, disqualified.

plaintiff who possesses a sufficient interest in the action
to entitle him to be heard on the merits. Thus, for
example, the well-settled rule that a party ordinarily does
not have standing to raise the constitutional rights of
another person who is not joined in the suit may be
thought of as merely a particular application of the real
party in interest principle.

However, several other elements of the standing doctrine
are clearly unrelated to the rather simple proposition set
out in Rule 17(a), and plaintiff must both be the real
party in interest and have standing.
Id.
-7-