Black Hills Truck & Trailer, Inc. v. MAC Trailer Manufacturing, Inc.
ORDER denying 65 Motion for Summary Judgment. Signed by U.S. District Judge Karen E. Schreier on 8/28/17. (SLW)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
BLACK HILLS TRUCK & TRAILER, INC.,
Case No. 13-CV-4113 (KES)
ORDER DENYING MOTION FOR
MAC TRAILER MANUFACTURING, INC.,
and SIOUXLAND TRAILER SALES,
Plaintiff, Black Hills Truck & Trailer, Inc., brought this action naming
MAC Trailer Manufacturing, Inc. and Siouxland Trailer Sales, Inc., as
defendants. Black Hills alleges tortious interference with a present and
prospective business advantage against Siouxland. Docket 46. Siouxland
moves for summary judgment on Black Hills’s claim of tortious interference.
The facts, viewed in the light most favorable to Black Hills, the nonmoving party, are as follows:
Gary March owns Siouxland located in Sioux City, Iowa. Siouxland also
has sites in Pacific Junction, Iowa and Harrisburg, South Dakota. Siouxland
sells trailers made by four different manufacturers—MAC, Polar, Vanguard,
and Doonan. Docket 67 at 2. Black Hills is a truck and trailer dealership
located in Rapid City, South Dakota. Docket 66 at 1. Black Hills is a subsidiary
of North American Truck & Trailer, Inc., (NATT), which is owned by the Rush
family in Sioux Falls, South Dakota. Id. Volvo Trucks of Omaha, Inc. (VTO) is a
subsidiary of NATT located in Omaha, Nebraska. Id. NATT has dealer or service
locations in various cities 1 across South Dakota, Nebraska, and Iowa. Id. MAC
is a trailer manufacturer and Mike Conny is the owner, CEO, and President of
Siouxland and MAC entered into a Distributor Selling Agreement (dealer
agreement) on November 22, 2010. Docket 73-1. The dealer agreement
provided Siouxland with an Area of Responsibility (AOR) of the western twothirds of Iowa and did not make any reference to an AOR in South Dakota or
Nebraska. Id. Black Hills and MAC entered into a dealer agreement on
September 26, 2012, that provided Black Hills with an AOR including seven
South Dakota counties, twelve Nebraska counties, and a dealer location in
Rapid City. Docket 67-6. Prior to signing the agreement, Steve Hallas, Vice
President of Sales for MAC Trailer Manufacturing, clarified with Mike Rush,
Vice President of NATT, that he could only have MAC trailers at the Rapid City
location and that Rush could not “put any trailers in the Sioux land [sic] AOR!”
Docket 67-13. On December 26, 2012, March learned that MAC had entered
into an agreement with Bill Rush, President of NATT, for Bill Rush to set up an
Sioux Falls, South Dakota; Rapid City, South Dakota; Watertown, South
Dakota; Omaha, Nebraska; Sioux City, Iowa; Lexington, Nebraska; Tekamah,
Nebraska; West Point, Nebraska; and Commerce City, Colorado.
MAC dealership in his Rapid City, South Dakota store. Docket 66 at 2. That
same day, March sent an email to Steve Hallas, Vice President of Sales for MAC
Trailer Manufacturing, stating, “Gentlemen, my blood pressure can’t get any
higher than it is right now after reading you set up Bill Rush of Black Hills
Trailer. If I see he has taken us out of one deal I will find a new supplier [sic]
Do not take this as a threat it is a promise. I hope you did not set them up with
Tanks.” Docket 67-7. Hallas responded “Gary I thought you and I talked about
this this morning? I told you nothing would be done that Tom L and I would go
over it on Tuesday? So why the emails now?” Id.
On January 9, 2013, March sent another email to Hallas regarding Rush
stating “Interesting visit today from Ken Willcox president of Delta-Waseca Inc.,
Truck body mfg. Seems they have been sued by the Rush family for bogus
product claims, [sic] Company has been around forever, [sic] Inherited the
Omaha store when Rush bought it. Sold to them because of the previos [sic]
owners the next thing the bodies show up at his other dealerships, making
some very un happy [sic] dealers such as their Sioux Falls Dealer Northern
equipment co . . . .” Docket 67-8. March then provided a phone number for
Hallas to call Willcox. Id.
On May 28 or 29 of 2013, an employee of March’s Harrisburg, South
Dakota location informed March that there were MAC trailers on the sales lot of
NATT’s Sioux Falls, South Dakota location. Docket 66 at 3. March then went to
Sioux Falls and observed a stack 2 of MAC trailers and two more trailers on top
of each other. Docket 67-3 at 16. March then called Hallas to complain that
Black Hills was displaying MAC trailers in Sioux Falls for the purpose of selling
them. Id. at 17. Black Hills denies that it stocked MAC trailers in Sioux Falls
with the purpose of selling them. Docket 70 at 6. On May 29, 2013, Hallas and
Conny talked about Black Hills and agreed that the Black Hills dealer
agreement should be cancelled. Docket 67-9; Docket 70 at 9.
On May 30, 2013, March sent Hallas another email stating “let me give
some insight why I have trouble with Rush Companies” and then detailed
several reasons March has trouble with Rush companies. Docket 67-9. The
final reason stated, “Now MAC trailers are showing up in Sioux Falls.” Id.
Hallas then responded that “It was made very clear to Mike Rush that he
couldn’t do what has happened. Mike Conny and I have talked briefly yesterday
and we both feel that Black hills should be canceled for doing what they did.”
Id. And March replied stating, “Do not cancel Rush wait till his year runs out
he will sue you I am sure of that, I don’t want MAC hurt.” Id. And then March
gave Hallas the name of a different potential dealer in Rapid City. Id.
A few days later, Hallas sent Mike Rush an addendum stating that MAC
would like to issue an amended dealer agreement to Black Hills under several
conditions. Docket 67-10. The conditions were: Black Hills would be permitted
to sell only Dump and Flatbed trailers; Black Hills could only stock trailers at
A “stack” of trailers refers to three trailers. Docket 67 at 5.
the Rapid City location; Black Hills would not be permitted to stock trailers in
any other location for any reason; Black Hills would not be permitted to
advertise the MAC product line in any advertisement other than the Rapid City
advertisements; and Black Hills could only sell out of the Rapid City location
and north or south of Rapid City but not east of Rapid City. Id. In reference to
the five restrictions, the addendum also stated that “In the event that any of
this happens your dealer agreement with Mac Trailer will be cancelled. If you
understand and agree with this please sign and return.” The addendum also
included the amended dealer agreement dated June 3, 2013, and signed by
Mike Conny. Id. The amended dealer agreement provided that Black Hills
would forfeit its twelve-county AOR in Nebraska.
On June 24, 2013, Hallas sent Mike Rush a letter stating that “MAC
Trailer will not be able to accept any orders placed by Black Hills Truck and
Trailer until the adjusted dealer agreement and addendum sheet is signed and
received by MAC Trailer.” Docket 67-11. On June 26, 2013, Hallas emailed
LaGiglio directing him not to build any trailers for Black Hills because Hallas
had not received the signed amended dealer agreement and addendum, and he
did not want to sell Black Hills any more product until Black Hills signed the
new agreement. Docket 73-6. On June 27, 2013, Mike Rush sent an email to
Hallas and LaGiglio confirming that Black Hills had received the amended
dealer agreement and additional letters but that Black Hills was not going to
sign the agreement and was “going to stick with the current dealer agreement.”
Docket 67-15. LaGiglio then emailed Hallas stating “How do you want to
handle this clown?” Docket 73-7.
On July 2, 2013, Black Hills’s attorney sent a letter to Hallas. The letter
stated that Hallas’s June 24, 2013 letter constituted an “immediate
termination of the [dealer agreement] without notice and good cause, and is
prohibited by South Dakota law.” Docket 67-14. The letter then stated that
Black Hills would not agree to the new terms demanded by MAC and that the
agreement must be enforced according to its original terms including allowing
Black Hills to “sell tank-type trailers to customers that desire such products, or
other MAC trailer models as requested by customers.” Id. The letter then
explains that if MAC would not agree, Black Hills would file a civil action. Id.
On July 19, 2013, MAC’s attorney sent a letter to Black Hills’s attorney
in response to the July 2, 2013 letter. Docket 73-8. The letter stated that it
served “as notice that MAC will not renew the Dealer Agreement for calendar
year 2014, beginning January 1, 2014, and any year thereafter.” Id. On March
25, 2014, LaGiglio emailed Gary March proposing to grant Siouxland an AOR
including the part of Nebraska that had formerly been under Black Hills’s AOR.
Docket 70 at 11.
“One of the principal purposes of the summary judgment rule is to
isolate and dispose of factually unsupported claims or defenses[.]” Celotex Corp.
v. Catrett, 477 U.S. 317, 323-24 (1986). Summary judgment is proper “if the
movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Celotex
Corp., 477 U.S. at 323 (“[A] party seeking summary judgment always bears the
initial responsibility of . . . demonstrat[ing] the absence of a genuine issue of
material fact.” (internal quotations omitted)). The moving party must inform the
court of the basis for its motion and also identify the portion of the record that
shows there is no genuine issue in dispute. Hartnagel v. Norman, 953 F.2d
394, 395 (8th Cir. 1992) (citation omitted).
Once the moving party meets its initial burden, the nonmoving party
must establish “that a fact . . . is genuinely disputed” either by “citing to
particular parts of materials in the record,” or by “showing that the materials
cited do not establish the absence . . . of a genuine dispute.” Fed. R. Civ. P.
56(c). “The nonmoving party may not ‘rest on mere allegations or denials, but
must demonstrate on the record the existence of specific facts which create a
genuine issue for trial.’ ” Mosley v. City of Northwoods, 415 F.3d 908, 910 (8th
Cir. 2005) (quoting Krenik v. Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir.
1995)). For purposes of summary judgment, the facts and inferences drawn
from those facts are “viewed in the light most favorable to the party opposing
the motion.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655
According to local civil procedure rules, a movant’s “statement of material
facts will be deemed to be admitted unless controverted by the opposing party’s
Black Hills alleges tortious interference with a present and prospective
business advantage against Siouxland. In an action based on diversity of
citizenship, a federal district court must apply the substantive law of the state
in which it sits, including its conflict-of-law rules. Drinkall v. Used Car Rentals,
Inc., 32 F.3d 329, 331 (8th Cir. 1994). So this court will apply South Dakota’s
conflict-of-law rules to determine which state’s tortious interference laws will
“South Dakota applies the provisions of the Restatement (Second) of
Conflicts of Laws in order to resolve questions about which state’s laws govern
in a particular factual situation.” Stockmen’s Livestock Exch. v. Thompson, 520
N.W.2d 255, 257 (S.D. 1994). For tort claims, South Dakota applies the most
significant relationship analysis set forth in the Restatement (Second) of
Conflict of Laws. Burhenn v. Dennis Supply Co., 685 N.W.2d 778, 784 (S.D.
2004). The following contacts between the parties are considered when
evaluating which state has the most significant relationship: (a) the place
where the injury occurred; (b) the place where the conduct causing the injury
occurred; (c) the domicil, residence, nationality, place of incorporation and
place of business of the parties, and; (d) the place where the relationship, if
any, between the parties is centered. Id. (quoting Restatement (Second) Conflict
of Law § 145 (Am. Law Inst. 1971)).
response to the moving party’s statement of material facts.” D.S.D. Civ. L.R.
Also, the principles to be taken into account when applying the most
significant relationship test are:
(a) the needs of the interstate and international systems;
(b) the relevant policies of the forum;
(c) the relevant policies of other interested states and the relative
interests of those states in the determination of the particular
(d) the protection of justified expectations;
(e) the basic policies underlying the particular field of law;
(f) certainty, predictability and uniformity of result; and
(g) ease in the determination and application of the law to be
Restatement (Second) Conflict of Laws § 6 (Am. Law Inst. 1971).
Here, Black Hills alleges that Siouxland injured Black Hills when March
sent multiple emails to MAC detailing reasons why MAC should not do
business with the Rush family and called MAC to complain that Black Hills
was violating its dealer agreement, which ultimately led to MAC terminating its
agreement with Black Hills. Docket 71 at 8-9. While March and Siouxland are
primarily located in Iowa, Black Hills is located in South Dakota. Thus, the
prohibited conduct—March contacting MAC about Black Hills—likely occurred
in Iowa, and the injury occurred in South Dakota. Black Hills is a corporation
organized in South Dakota, Siouxland is a Nebraska corporation, and MAC is
an Ohio corporation. Docket 46 at 1-2. So the third factor does not weigh in
favor of either South Dakota or Iowa. Finally, the relationships between Black
Hills, MAC, and Siouxland centered in South Dakota, Iowa, and Nebraska
because Black Hills was located in South Dakota and was granted an AOR that
included western South Dakota and parts of Nebraska while Siouxland’s AOR
with MAC only included western Iowa. Weighing the various contacts to this
claim, South Dakota and Iowa both have a similar degree of relationship—
South Dakota is where the harm occurred and Iowa is where the conduct took
Applying the principles set out in section 6 of the Restatement, Iowa and
South Dakota both have similar laws governing tortious interference with a
business relationship. See Gen. Elec. Capital Corp. v. Commercial Servs. Grp.,
Inc., 485 F. Supp. 2d 1015, 1025-26 (N.D. Iowa 2007); Tibke v. McDougall, 479
N.W.2d 898, 908 (S.D. 1992). So the policies of the forum, South Dakota, and
the policies of the other interested states, Iowa, are similar as well as the
uniformity of result and ease of determination of law to be applied. See
Restatement (Second) Conflict of Laws § 6. One principle that weighs in favor of
South Dakota is the protection of justified expectations. “In general, the tort of
intentional interference with contractual relations serves as a remedy for
contracting parties against interference from outside intermeddlers.” Gruhlke v.
Sioux Empire Fed. Credit Union, Inc., 756 N.W.2d 399, 404 (S.D. 2008). Here,
Black Hills alleges that Siouxland unjustifiably interfered with Black Hills’s
expectation of business with MAC, and South Dakota has an interest in
protecting the business interests of its residents within its state. Thus,
weighing the contacts of the parties and the choice-of-law principles, South
Dakota has the most significant relationship, and South Dakota law will apply
to the tortious interference claim.
Siouxland’s Motion for Summary Judgment on Claim of Tortious
Interference with a Business Relationship or Expectancy.
In South Dakota, the elements of a tortious interference with business
relationships or expectancy claim are: (1) the existence of a valid business
relationship or expectancy; (2) knowledge by the interferer of the relationship or
expectancy; (3) an intentional and improper act of interference on the part of
the interferer; 4 (4) proof that the interference caused the harm sustained; and
(5) damage to the party whose relationship or expectancy was disrupted. Tibke,
479 N.W.2d at 908. The South Dakota Supreme Court has analogized this
cause of action to “a ‘triangle’ [involving] a plaintiff, an identifiable third party
who wished to deal with the plaintiff, and the defendant who interfered with the
plaintiff and the third party.” Landstrom v. Shaver, 561 N.W.2d 1, 16 (S.D.
1997). This is a “factually driven cause of action” and is “dependent on the
plaintiff’s factual situation.” Hayes v. N. Hills Gen. Hosp., 590 N.W.2d 243, 250
n.6 (S.D. 1999).
A. Siouxland’s Intent.
Siouxland argues that there is no evidence that it intended to have Black
Hills’s dealership agreement cancelled but that “the sole intent of Gary March
was to see to it that the only person who stocked MAC trailers in his AOR was
The South Dakota Supreme Court previously described the third element as
involving “unjustified” interference, which was recently modified to require a
showing of “improper” interference. See Gruhlke, 756 N.W.2d at 408.
Siouxland.” Docket 67 at 10-11. To succeed on a claim for tortious interference
of a business relationship, Black Hills has to prove that Siouxland’s actions
were intentional. Selle v. Tozser, 786 N.W.2d 748, 753 (S.D. 2010). An action is
intentional where the actor “knows that the interference is certain or
substantially certain to occur as a result of his action.” Restatement (Second) of
Torts § 766 cmt. j (Am. Law Inst. 1979). Thus, the question is whether
Siouxland knew that the interference of the Black Hills-MAC relationship was
certain or substantially certain to occur as a result of its actions. Kjerstad v.
Ravellette Publ’ns., Inc., 517 N.W.2d 419, 429 (S.D. 1994). Additionally,
questions surrounding a party’s intent or state of mind are typically questions of
fact for the jury and not suited for summary adjudication. Ahl v. Arnio, 388 N.W.2d
532, 534 (S.D. 1986). Likewise, a person’s description of his state of mind
implicates his credibility, which is also an issue for the jury to consider. Weidner v.
Lineback, 140 N.W.2d 597, 601 (S.D. 1966).
Here, beginning in December of 2012, March sent multiple emails to
MAC detailing reasons why MAC should not do business with Black Hills or the
Rush family. The December 26, 2012 email stated that Siouxland would find
another dealer if Bill Rush took Siouxland out of even one deal. The January 9,
2013 email informed MAC about ongoing litigation between the Rush family
and another manufacturer. And the May 30, 2013 email listed multiple reasons
why March has “trouble with Rush Companies.” Dockets 67-7, 67-8, 67-9. The
listed reasons detailed instances where Rush allegedly engaged in fraudulent or
otherwise underhanded behavior. Dockets 67-8; 67-9. March also called Hallas
on May 28 or 29 to complain about Rush’s Sioux Falls location stocking MAC
trailers. Docket 67-3 at 16. Ultimately, MAC terminated Black Hills’s dealer
agreement, and MAC eventually offered Black Hills’s original Nebraska AOR to
Siouxland. Docket 73-9. There is evidence that March sent emails and called
MAC regarding Black Hills and that March’s actions may have affected the
business relationship between Black Hills and MAC. Also, there is evidence
that Siouxland ultimately benefitted from the breakdown of Black Hills’s and
MAC’s business relationship and that March disliked Bill Rush. Thus, there is
a genuine question of fact for the jury to decide as to Siouxland’s intent behind
its contact with MAC.
B. Siouxland’s Improper Interference.
Siouxland argues that it did not act improperly because the series of
emails March sent to MAC “were nothing more than venting” and that “all he
wanted to accomplish was to keep other dealers from stocking or setting up the
sale of MAC trailers in his area of responsibility.” Docket 67 at 12. The
Restatement (Second) of Torts § 767 lays out the following factors to consider
when determining if an actor’s conduct is improper:
(a) the nature of the actor’s conduct;
(b) the actor’s motive;
(c) the interests of the other with which the actor’s conduct
(d) the interests sought to be advanced by the actor;
(e) the social interests in protecting the freedom of action of the
actor and the contractual interests of the other;
(f) the proximity or remoteness of the actor’s conduct to the
(g) the relations between the parties.
Restatement (Second) of Torts § 767 (Am. Law Inst. 1979).
“What constitutes improper interference will depend on the particular
facts of each case with consideration of the elements above.” Gruhlke, 756
N.W.2d at 408. In St. Onge Livestock Co., Ltd. v. Curtis, 650 N.W.2d 537, 542
(S.D. 2002), the South Dakota Supreme Court indicated that the question of
whether or not a party’s conduct is improper is a question of fact for the fact
finder. St. Onge Livestock Co., Ltd., 650 N.W.2d at 542 (citing Q.E.R. v.
Hickerson, 880 F.2d 1178, 1183-84 (10th Cir. 1989) (stating that balancing the
factors to determine whether conduct was improper is a question for the fact
finder); Hennum v. City of Medina, 402 N.W.2d 327, 336 (N.D. 1987) (stating
that whether interference is justified is a question of fact)).
Here, March sent multiple emails to MAC expressing his dislike for the
Rush family, promising that he would find a new supplier if Rush took
Siouxland out of a deal, and detailing a list of reasons why he has “trouble”
with the Rush companies. Dockets 67-7, 67-8, 67-9. March also called Hallas
to complain about Rush stocking MAC trailers in Sioux Falls. Docket 67 at 5.
And March admits that “[t]he relationship between Gary March and Bill Rush
was not good” and that they had a long history of having “trouble” with each
other. See Docket 67 at 5. March argues that his conduct was not improper
because he was simply ensuring that Black Hills was complying with its dealer
agreement and not stocking MAC trailers outside its AOR. Docket 67 at 12. But
Black Hills contends that Siouxland’s interference was improper because
March was taking out a personal vendetta against Rush. Docket 71 at 9. The
court must view the facts in the light most favorable to Black Hills and draw all
reasonable inferences in its favor. The court finds that March’s multiple emails
to MAC implying that Bill Rush engaged in fraudulent behavior as well as
March’s admission that he does not have a good relationship with Bill Rush
raises a question of fact as to whether his interference with MAC and Black
Hills’s business relationship was improper.
Siouxland argues that there is no evidence to support that March’s
complaints about Black Hills to MAC caused MAC to terminate its dealer
agreement with Black Hills. Docket 67 at 13. To prove a claim for tortious
interference of a business relationship, Black Hills must show that Siouxland’s
actions were a legal cause of Black Hills’s injury. St. Onge Livestock Co., 650
N.W.2d at 542. Legal cause means “an immediate cause which, in the natural
or probable sequence, produces the injury complained of. For legal cause to
exist, the harm suffered must be a natural and probable sequence of the act
complained of.” S.D. Pattern Jury Instruction (Civil) 20-10-20. In South
Dakota, “[i]ssues of . . . proximate cause are ordinarily questions of fact.”
Mitchell v. Ankeny, 396 N.W.2d 312, 313 (S.D. 1986).
March sent several emails to MAC complaining about Rush companies
and Black Hills. Included in the emails were accusations that Bill Rush had
engaged in underhanded behavior in the past, (Docket 67-9), and provided
contact information for MAC to call other manufacturers who, allegedly, had
problems with Rush companies. See Docket 67-8 (providing Hallas with a
phone number to call another manufacturer about its lawsuit with the Rush
family). Also, March called Hallas on May 28 or 29 of 2013 and told Hallas that
Black Hills was violating its AOR by stocking trailers in Sioux Falls. Docket 673 at 17. On May 30, 2013, Hallas stated in an email that Black Hills should be
terminated. Docket 67-9. Thus, viewing the evidence in the light most favorable
to Black Hills, there is evidence that Siouxland’s actions caused MAC to
terminate its agreement with Black Hills, and it is a question of fact for the jury
In conclusion, the court finds that whether Siouxland intentionally and
improperly interfered with Black Hills’s relationship with MAC and whether the
interference caused MAC to terminate its dealer agreement with Black Hills
present questions of fact for the jury. Thus, it is
ORDERED that Siouxland’s Motion for Summary Judgment (Docket 65)
DATED August 28, 2017.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE
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