Netter v. Netter

#28867, #28888-a-SRJ
2019 S.D. 60

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

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STEPHANIE NETTER, Plaintiff and Appellee,

v.

DONALD NETTER, Defendant and Appellant.

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APPEAL FROM THE CIRCUIT COURT OF
THE SEVENTH JUDICIAL CIRCUIT
PENNINGTON COUNTY, SOUTH DAKOTA

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THE HONORABLE MATTHEW M. BROWN
Judge

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VINCE M. ROCHE
JUSTIN T. CLARKE of
Davenport, Evans, Hurwitz
& Smith, LLP
Sioux Falls, South Dakota Attorneys for appellant South
Dakota Trust Company LLC
as Independent Trustee
of the Ann Holdings Trust and
the Six Cataracts Trust.

MICHAEL F. TOBIN of
Boyce Law Firm, LLP
Sioux Falls, South Dakota Attorneys for appellant South
Dakota Trust Company LLC
as Independent Trustee of
the Scout Resources Trust and
DASSA Trust.

LINDA LEA M. VIKEN of
Viken Law Firm
Rapid City, South Dakota Attorneys for appellee.

****

ARGUED AUGUST 27, 2019
OPINION FILED 11/06/19
#28867, #28888

JENSEN, Justice

[¶1.] Amidst a divorce proceeding in Connecticut between Stephanie Netter

and Donald Netter, Stephanie served an out-of-state subpoena duces tecum on

South Dakota Trust Company LLC (SDTC), seeking information from four South

Dakota trusts administered by SDTC. After Stephanie and SDTC were unable to

reach an agreement concerning the terms of a protective order for the information

sought, Stephanie filed a motion for a protective order and scheduled a hearing with

the circuit court in South Dakota. SDTC submitted written argument requesting

additional protections beyond those Stephanie requested. Just before the hearing,

Stephanie sought to withdraw the subpoena and the motion for protective order.

Based upon Stephanie’s withdrawal of the subpoena, the circuit court dismissed the

proceeding. We affirm.

Facts and Procedural History

[¶2.] Both Donald and Stephanie are residents of the State of Connecticut.

Donald has interests in four discrete trusts located in South Dakota: The Six

Cataracts Trust, formerly known as The Donald Netter Trust; The Ann Holdings

Trust; The DASSA Trust; and The Scout Resources Trust (Trusts). SDTC is a

trustee of the Trusts. The Trusts own interests in several South Dakota limited

liability companies (LLCs). Donald is the manager of the LLCs.

[¶3.] In the Connecticut divorce action, Donald, Stephanie, and their

respective counsel entered into a contractually binding Confidentiality Agreement

governing discovery. Subsequently, Stephanie sought to obtain information directly

from the Trusts concerning Donald’s South Dakota business interests. In November

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2017, Stephanie properly served SDTC with a foreign subpoena pursuant to SDCL

15-6-28.3 for an interstate deposition and production of documents concerning

Donald’s South Dakota business interests.1

[¶4.] Thereafter, SDTC and Stephanie attempted to negotiate a protective

order for the information subpoenaed from the Trusts. Following several months of

unsuccessful negotiations, Stephanie filed a motion for a protective order, proposing

terms she believed were adequate to protect the information. SDTC responded to

the motion by submitting its own proposal for a protective order. The fundamental

dispute involved Stephanie’s disagreement with SDTC’s request that the parties,

their counsel, and any persons receiving the information be required to sign a

confidentiality agreement. The parties scheduled a hearing with the circuit court in

South Dakota to address this dispute.

1. SDCL 15-6-28.3 provides in part:

(A) To request issuance of a subpoena under §§ 15-6-28.1 to 15-
6-28.6, inclusive, a party must submit a foreign subpoena to a
clerk of court in the county in which discovery is sought to be
conducted in this state. A request for the issuance of a subpoena
under §§ 15-6-28.1 to 15-6-28.6, inclusive, does not constitute an
appearance in the courts of this state. It does create the
necessary jurisdiction in the State of South Dakota to:
(i) Enforce the subpoena;
(ii) Quash or modify the subpoena;
(iii) Issue any protective order or resolve any other dispute
relating to the subpoena;
(iv) Impose sanctions on the attorney requesting the issuance of
the subpoena for any action which would constitute a violation
of the South Dakota Rules of Civil Procedure.
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[¶5.] Shortly before the hearing, Stephanie informed the circuit court in

writing that she intended to withdraw her subpoena and motion. She indicated

that the South Dakota subpoena was no longer necessary because Donald had

agreed to provide the requested information through discovery in the Connecticut

divorce. Stephanie also provided a copy of an order from the Connecticut divorce

court, incorporating the Confidentiality Agreement previously signed in

Connecticut. She argued there was no additional need to protect any of the Trusts’

documents because adequate protections were already in place to protect these

documents in the Connecticut divorce proceeding.

[¶6.] Stephanie formally withdrew the subpoena and her motion for

protective order at the start of the hearing before the circuit court, indicating there

was no further need to proceed with either the out-of-state subpoena or the request

for a protective order. SDTC objected and requested the court impose a protective

order requiring any party receiving documents from the Trust to execute a

confidentiality agreement.

[¶7.] The court entered an order allowing Stephanie to withdraw her motion

for protective order and dismissed the action. In its findings of fact and conclusions

of law, the court determined that (1) it lacked jurisdiction over the parties to impose

a protective order; (2) SDTC’s request for a protective order was moot or otherwise

not ripe for consideration; and (3) the court lacked authority to impose a

confidentiality agreement as a part of a protective order under SDCL 15-6-26(c).

[¶8.] SDTC appeals, arguing that the circuit court erred in dismissing the

action for lack of jurisdiction and on mootness grounds. SDTC also argues the court

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erred in determining that it did not have authority under SDCL 15-6-26(c) to

require the parties to sign a confidentiality agreement. Because we determine the

action is moot, it is unnecessary to address the other issues raised by SDTC.

Analysis & Decision

[¶9.] “This Court renders opinions pertaining to actual controversies

affecting people’s rights.” Skjonsberg v. Menard, Inc., 2019 S.D. 6, ¶ 12, 922 N.W.2d

784, 787. The Court will generally not rule on an issue if a decision “will have no

practical legal effect upon an existing controversy.” Id. ¶ 14, 922 N.W.2d at 788. In

other words, the Court will not decide a moot case.2 “A moot case is one in which

there is no real controversy or which seeks to determine an abstract question which

does not rest on existing facts or rights, with the result that any judicial

determination would have no practical or remedial effect.” 1A C.J.S. Actions § 75

(2019). See also, Sullivan v. Sullivan, 2009 S.D. 27, ¶ 11, 764 N.W.2d 895, 899 (a

case is moot when “there has been a change of circumstances or the occurrence of an

event by which the actual controversy ceases and it becomes impossible for the

[court] to grant effectual relief.”)

[¶10.] We have said that “[w]hen a claim becomes moot not during the

pendency of an appeal but prior to the final order from which a party appeals” the

appropriate resolution is to vacate any ruling by the lower court and “remand with

instructions to dismiss.” Skjonsberg, 2019 S.D. 6, ¶ 12, 922 N.W.2d at 788. Here,

2. We have recognized exceptions to the mootness doctrine, such as those
pertaining to public policy concerns and issues “capable of repetition, yet
evading review.” Larson v. Krebs, 2017 S.D. 39, ¶¶ 14-16, 898 N.W.2d 10, 16-
17. The parties have not raised the applicability of any exceptions to the
mootness doctrine in this case.
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the circuit court dismissed the matter as moot before issuing a ruling on the motion

for a protective order. Thus, we must determine whether the circuit court properly

dismissed the proceedings as moot. The circuit court’s legal conclusions, such as a

determination of mootness, are reviewed de novo. In re Woodruff, 1997 S.D. 95, ¶ 9,

567 N.W.2d 226, 228.

[¶11.] The dispute relating to the out-of-state subpoena was the sole

controversy before the circuit court. After Stephanie unconditionally withdrew her

subpoena before any information was produced, there was no longer a dispute

before the circuit court.3 This withdrawal ended any controversy concerning the

foreign subpoena of information held by the Trusts and obviated the need for a

protective order. “No matter how vehemently the parties continue to dispute the

[issue] that precipitated the lawsuit, the case is moot if the dispute is no longer

embedded in any actual controversy about the plaintiffs’ particular legal rights.”

Skjonsberg, 2019 S.D. 6, ¶ 14, 922 N.W.2d at 788.

[¶12.] SDTC argues that despite Stephanie’s withdrawal of the subpoena,

there was still a controversy before the court. SDTC points to the version of the

protective order it proposed to the court and argues that Stephanie’s withdrawal did

not take SDTC’s request for a protective order off the table. SDTC claims a

protective order is still needed to provide appropriate protection to confidential

3. At oral argument, counsel represented that more than 15,000 pages of
documents from the Trusts have been provided in the Connecticut divorce
since the circuit court dismissed this proceeding. These subsequent
developments have no bearing on the dismissal as there are no outstanding
requests for information, or proceedings in South Dakota, that give rise to
any justiciable controversy before our courts.
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documents that may be requested from SDTC.4 Under SDCL 15-6-28.3, the circuit

court was limited to addressing the enforcement of the subpoena and issues and

disputes “relating to the subpoena.” Once the subpoena was withdrawn, there were

no remaining issues left for resolution under the statute. As much as SDTC would

still like to have the South Dakota courts impose a protective order, SDTC seeks

protections for discovery that is no longer sought by Stephanie through the out-of-

state subpoena.

[¶13.] The circuit court properly dismissed the out-of-state subpoena

proceeding as moot. We affirm.

[¶14.] GILBERTSON, Chief Justice, KERN, SALTER, and DEVANEY,

Justices, concur.

4. SDTC’s claim of the need for future relief also implicates the ripeness
doctrine. “Ripeness involves the timing of judicial review and the principle
that ‘[j]udicial machinery should be conserved for problems which are real
and present or imminent[.]’” Boever v. S. Dakota Bd. of Accountancy, 526
N.W.2d 747, 750 (S.D. 1995) (quoting Gottschalk v. Hegg, 89 S.D. 89, 94, 228
N.W.2d 640, 643–44 (S.D. 1975)). See Investigation of Highway Const. Indus.
v. Bartholow, 373 N.W.2d 419, 420 (S.D. 1985) (recognizing that the doctrines
of mootness and ripeness may overlap, but a case is appropriately dismissed
as moot when there is no longer an existing controversy).
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