Alone v. C. Brunsch, Inc., 28688

931 N.W.2d 707

Jennifer Chase ALONE, as the Personal Representative of Elfreda Ann Takes War Bonnett, Deceased, Plaintiff,

v.C. BRUNSCH, INC., a South Dakota Corporation, doing business as Lakota Plains Propane, Inc., Defendant, Third-Party Plaintiff, and Appellant,andWestern Cooperative Company, Inc., a Nebraska corporation, Defendant and Third-Party Plaintiff,

v.Oglala Sioux Lakota Housing Authority, Richard Hill, Derek Janis, Wes Cottier, William White, Ben Plenty Arrows, Renaldo Two Bulls, Brandon Wes, Derek Slim, Robin T. (last name unknown), and John and Jane Doe 1-100, Third-Party Defendants and Appellees.

28688

Supreme Court of South Dakota.

ARGUED ON MARCH 27, 2019

OPINION FILED July 10, 2019

ROBERT J. GALBRAITH, JOHN K. NOONEY of Nooney & Solay, LLP, Rapid City, South Dakota, Attorneys for defendant, third-party plaintiff, and appellant.

EVAN THOMPSON of Browning, Kaleczyc, Berry & Hoven, P.C., Helena, Montana, MARK F. MARSHALL of Bangs, McCullen, Butler, Foye & Simmons, LLP, Rapid City, South Dakota, Attorneys for appellees.

KERN, Justice

[¶1.] Third-party defendants, who are enrolled tribal members and a tribal housing authority, moved to dismiss a complaint filed against them for tortious conduct occurring exclusively on the Pine Ridge Indian Reservation. After a limited evidentiary hearing, the circuit court concluded it lacked jurisdiction and granted the motion pursuant to SDCL 15-6-12(b)(1). Third-party plaintiff appeals. We affirm.

Facts and Procedural History

[¶2.] On October 6, 2016, a duplex in Pine Ridge exploded after propane entered a joint crawl space between Units 157 and 158 through an uncapped gas line. A spark from the water heater pilot flame in Unit 158 most likely caused the catastrophic explosion, which demolished the duplex and killed four people, including Elfreda Ann Takes War Bonnett. Jennifer Chase Alone, her mother and the personal representative of her Estate, filed an action in state court against the building’s propane suppliers, Lakota Propane and Western Cooperative Company, Inc. (Western Co-op), on May 31, 2017. She alleged negligence, strict liability, and breach of warranty.

[¶3.] In the early stages of the litigation, the Oglala Sioux Housing Authority (Housing Authority) was not a party to the lawsuit. At some point, however, Lakota Propane discovered that the Housing Authority had, in 2013, employed individuals to remove debris from Unit 157 after a fire damaged it. As part of the Housing Authority’s cleanup work, they shut off Lakota Propane’s gas services and removed a propane water heater.

[¶4.] Until the spring of 2016, the Unit remained vacant while the Housing Authority replaced several propane appliances in Unit 157 with electrical appliances. When installing the appliances, the employees of the Housing Authority allegedly did not check the gas lines from the previously removed propane appliances to ensure that they were capped. On March 18, 2016, Lakota Propane sold propane to the Housing Authority for the duplex. Gas from the uncapped lines eventually filled the crawl space beneath the units which led to the tragic explosion on October 6, 2016.

[¶5.] Lakota Propane requested and received information from the Housing Authority regarding the nature of the work done on the units and the names of the employees involved with maintaining it. Lakota Propane and Western Co-op then filed a third-party complaint against the Housing Authority and several tribal members in their individual capacities,¹ alleging they caused the explosion by failing to cap one or more propane lines that had previously supplied gas to the propane appliances. Eventually, the court granted Western Co-op’s motion for summary judgment, dismissing it from the case after concluding it owed Takes War Bonnett no duty because it did not supply the propane that caused the explosion.

[¶6.] On September 12, 2017, Lakota Propane served the Housing Authority with its first set of interrogatories and requests for production of documents. In the interrogatories, it asked the Housing Authority to provide general information regarding the renovations but did not include questions aimed at determining subject matter jurisdiction, such as the tribal enrollment status of the individuals or the Housing Authority’s relationship with the Tribe. Lakota Propane did not seek discovery from any of the individually named defendants.

[¶7.] The Housing Authority refused to answer the discovery requests, asserting the defense of sovereign immunity in response to every inquiry. For the same reason, it moved for a protective order when Lakota Propane served it with a notice of deposition. The Housing Authority and Richard Hill, one of the defendants, moved to dismiss the third-party complaint pursuant to SDCL 15-6-12(b)(1) for lack of subject matter jurisdiction. In support of its motion, the Housing Authority attached an affidavit from Doyle Pipe On Head, an employee of the Housing Authority, attesting that all named defendants were either tribal members or a tribal entity and the tort occurred on the Reservation.

[¶8.] On January 4, 2018, the Housing Authority served a notice of hearing on Lakota Propane regarding its motion to dismiss but did not disclose its plan to present evidence at the hearing beyond the pleadings. In the two weeks between the Housing Authority’s notice and the scheduled hearing, Lakota Propane filed an affidavit in accordance with SDCL 15-6-56(f), requesting that the court convert the motion to dismiss into a summary judgment motion. It argued written discovery and a deposition pursuant to SDCL 15-6-30(b)(6) were necessary to resolve factual disputes on the issues of subject matter jurisdiction and sovereign immunity prior to ruling on the Housing Authority’s motion to dismiss.

[¶9.] At the January 18, 2018 hearing, the Housing Authority voiced its intention to call Pipe On Head to the stand and offer exhibits based on his testimony. Lakota Propane responded by objecting to any questions touching on topics that had not yet been subject to discovery. The court overruled the objection but permitted a brief recess to allow Lakota Propane an opportunity to examine the documents not received through discovery. Thereafter, Pipe On Head was called to the stand and testified that he was "100% sure" all individually named defendants were enrolled members of the Tribe. He also testified that the tort occurred exclusively on tribal trust land. To support his statements, the Housing Authority submitted several exhibits establishing that each defendant named in the third-party complaint was either an enrolled member of the Tribe or a tribal entity. After taking the matter under advisement, the circuit court issued a memorandum opinion dismissing Lakota Propane’s third-party complaint against the Housing Authority for lack of subject matter jurisdiction.

[¶10.] Lakota Propane appeals, alleging the circuit court erred in dismissing the third-party complaint.

Analysis and Decision

[¶11.] Motions to dismiss for lack of subject matter jurisdiction fall into one of two categories: (1) facial attacks on allegations of subject matter jurisdiction within the complaint; or (2) disputes regarding the facts upon which subject matter jurisdiction rests. See Hutterville Hutterian Brethren, Inc. v. Waldner , 2010 S.D. 86, ¶ 20, 791 N.W.2d 169, 174–75. "Jurisdictional issues, whether they involve questions of law or fact, are for the court to decide." Godfrey v. Pulitzer Pub. Co. , 161 F.3d 1137, 1140 (8th Cir. 1998).

[¶12.] Both parties agree that in this case, the motion to dismiss constituted a factual attack on subject matter jurisdiction. When presented with a factual attack, the circuit court does not assume the allegations in the complaint are accurate. See Hutterville , 2010 S.D. 86, ¶ 20, 791 N.W.2d at 175. "Because at issue in a factual 12(b)(1) motion is the [circuit] court’s jurisdiction—its very power to hear the case—there is substantial authority that the [circuit] court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Osborn v. United States , 918 F.2d 724, 730 (8th Cir. 1990). To resolve the question, the court may hold hearings, consider live testimony, or review affidavits and documents. See id. ; Wright & A. Miller, Federal Practice & Procedure § 1350 at 243–49 (3d ed. 2004). On appeal, we review challenges to subject matter jurisdiction de novo. See City of Sioux Falls v. Missouri Basin Mun. Power Agency , 2004 S.D. 14, ¶ 9, 675 N.W.2d 739, 742. However, a circuit court’s findings of fact "cannot be disturbed unless they are clearly erroneous." Ainsworth v. Erck , 388 N.W.2d 886, 888 (S.D. 1986).

[¶13.] We are empowered to hear only those cases constitutionally or statutorily authorized. See Red Fox v. Hettich , 494 N.W.2d 638, 643 (S.D. 1993). Our Constitution declares that "Indian lands shall remain under the absolute jurisdiction and control of the Congress of the United States[.]" S.D. Const. art. XXII ; see also Risse v. Meeks , 1998 S.D. 112, ¶ 11, 585 N.W.2d 875, 877.

[¶14.] In the civil adjudicatory context, absent preemption by federal law, state court subject matter jurisdiction turns on "whether the state action [would infringe] on the right of reservation Indians to make their own laws and be ruled by them." See Williams v. Lee , 358 U.S. 217, 220, 79 S. Ct. 269, 271, 3 L. Ed. 2d 251 (1959). We have consistently upheld this principle, which is commonly referred to as the infringement test. See, e.g. , Risse , 1998 S.D. 112, ¶ 27, 585 N.W.2d at 879 (Konenkamp, J., concurring); Sage v. Sicangu Oyate Ho, Inc. , 473 N.W.2d 480, 481–82 (S.D. 1991) ; Harris v. Young , 473 N.W.2d 141, 144, (S.D. 1991) ; Wells v. Wells , 451 N.W.2d 402, 405 (S.D. 1990).

[¶15.] To determine jurisdiction in accordance with the infringement test, we assess the interests of the tribal and federal governments "on the one hand, and those of the State, on the other." See ...