FLUTH v. SCHOENFELDER CONSTR., 2018 S.D. 65: Owner of a rental property had a prior disgruntled tenant set off a gas explosion in one of his properties.  Owner contracted with Contractor to demolish the home and grade the property.  Owner was told that the waterline accessing the property needed to be shut off at the street-curb.  Owner only shut off the water in the basement and had the water meter removed.  During demolition, Contractor broke the waterline, to which it bent the pipe over and hammered it shut to temporarily lessen the flow of water.  However, the water valve was never shut off at the street-curb.

The following spring, Plaintiff noticed that water was penetrating her basement to which she discovered extensive water damage.  Plaintiff noticed water pooling on Owner’s empty lot and Owner, upon being notified, had the water valve shut off at the curb.  Thereafter, Plaintiff did not experience any further trouble with ground water entering her basement. Plaintiff brought suit against the Owner and Contractor.  Prior to trial, Plaintiff settled with Contractor for $7,500.00, the funds were remitted, and Plaintiff filed a satisfaction of judgment.

Owner moved for summary judgment, which was granted on the basis that a “satisfaction of one judgment precludes action against another joint tortfeasor.”  Plaintiff thereby appealed.

In a case of first impression, the South Dakota Supreme Court held that although Plaintiff filed a satisfaction of judgment, doing so did not automatically discharge Owner.  Where an action for damages proceeds to trial and judgment is entered on the verdict, that judgment represents a final determination, however, this principle does not necessarily apply to a consent judgment.  The issue of full damages has generally not been litigated when a consent judgment is entered, and the parties may or may not agree that the amount being entered by consent represents the plaintiff’s full claim for damages.  As such, the Court found that Plaintiff’s agreement with Contractor did not represent the full extent of Plaintiff’s damages and, therefore, Plaintiff did not discharge Owner from liability if the satisfaction of judgment did not reflect a full satisfaction of Plaintiff’s damages.  The Court also emphasized that such decision does not mean that Plaintiff is entitled to a double recovery, instead, Plaintiff’s partial satisfaction simply reduces the award of a subsequent judgment against other tortfeasors.

Owner also asserted that the trial court erred by denying a motion he brought to bring a cross-claim against Contractor and, furthermore, that if Plaintiff prevailed at trial that Owner was entitled to a pro-rata reduction of $7,500.  The Court found that a release reduces a claim against other joint tortfeasors in the amount of consideration paid.  However, SDCL 15-8-17 does not provide for a pro-rata deduction unless so provided by the release.  Here, even assuming the satisfaction acted as a release, there was nothing in the satisfaction providing for a pro rata reduction.

As to whether Contractor could be brought in by a cross-claim, the Court found that the trial court’s judicial economy arguments no longer applied and, moreover, that if Contractor wished to foreclose Owner’s right to obtain contribution, then Contractor should have sought a release that met the requirements of SDCL 15-8-18.  However, the Court stated that the applicable limitations issue might bar a contribution claim and thereby remanded for that issue to be determined by the trial court.