Background
Fischer Farms Partnership — a South Dakota general partnership operated by Jeff Fischer and his father Lynn — made a series of informal loans to Excel Underground, Inc. between 2014 and early 2018, totaling over $1 million. Excel, a construction company solely owned by Reed Olson (Jeff’s brother-in-law), needed the funds to survive prolonged litigation with the Brant Lake Sanitary District over a sewer-system project. Most of the loans lacked promissory notes, but Fischer Farms’ balance sheets, emails from Reed’s wife Missy Fischer-Olson (a Fischer family member who worked with the partnership), and Reed’s own sworn testimony in the Brant Lake case all acknowledged the debt.
Excel eventually won the Brant Lake litigation and collected a judgment of roughly $1.57 million in July 2021. Fischer Farms then sued to recover the unpaid loans. At trial, Excel conceded it had received some funds but called the claimed balances “fictional,” arguing Fischer Farms had inflated the figures after the partnership fell into its own financial difficulties. The jury awarded Fischer Farms $849,550. Excel appealed, challenging the circuit court’s refusal to instruct the jury on the statute of frauds and on a “reasonable certainty” damages standard; Fischer Farms cross-appealed the denial of prejudgment interest.
Critically, during the Brant Lake trial, Reed had testified under oath that Excel borrowed more than $1.1 million from family members — specifically from his father-in-law Lynn Fischer — to keep the company afloat. Excel’s counsel made the same representation in closing argument, using the borrowing figure to anchor the lost-profits damages claim on which the jury awarded $800,000.
The Court’s Holding
The South Dakota Supreme Court affirmed on all issues. On the statute of frauds, the court held that whether writings satisfy SDCL 53-8-2(4)’s requirement of a signed memorandum is a question of law for the court, not a fact question for the jury. The circuit court therefore committed no error by withholding a statute-of-frauds instruction. Reviewing the emails Missy sent to a potential lender and to Fischer Farms’ banker — each acknowledging the debt and promising repayment upon receipt of the Brant Lake judgment — the court concluded those writings were sufficient as a matter of law to satisfy the statute’s evidentiary purpose.
Independently, the court invoked judicial estoppel on its own motion to bar Reed and Excel from using the statute of frauds as a defense at all. Reed’s sworn Brant Lake testimony and Excel’s closing argument had placed the $1+ million borrowing at the center of a successful damages claim. Allowing Excel to now call those same loans “fictional” would permit the classic mischief judicial estoppel is designed to prevent: proving one proposition in one proceeding and the opposite in another. All three elements were satisfied — the positions were clearly inconsistent, the earlier one was judicially accepted (reflected in the $800,000 lost-profits award), and Excel would obtain an unfair advantage while imposing an unfair detriment on Fischer Farms if not estopped.
On the damages instruction, the court found that the circuit court’s instruction tracked SDCL 21-2-1 almost verbatim, and the “clearly ascertainable in both their nature and origin” language already captured the substance of the “reasonable certainty” standard Excel sought. Any arguable error was harmless because the jury’s $849,550 award fell well within the range of indebtedness Excel itself had acknowledged under oath. The court also affirmed the denial of prejudgment interest, noting that the date-of-loss — necessary to calculate prejudgment interest — is a factual issue Fischer Farms failed to submit to the jury through an instruction or special interrogatory.
Key Takeaways
- In South Dakota, whether a writing satisfies the statute of frauds is a question of law for the court; the jury resolves only the underlying factual disputes about contract formation and amount owed.
- Judicial estoppel may be raised by an appellate court on its own motion and can preclude a party from using the statute of frauds as a defense when that party previously benefited — in a prior judicial proceeding — from testimony acknowledging the very obligation it now seeks to deny.
- A damages instruction that tracks the “clearly ascertainable” language of SDCL 21-2-1 need not also include a separate “reasonable certainty” paragraph; the two standards address the same prohibition on speculative damages.
- A party seeking prejudgment interest must request a jury instruction or special interrogatory on the date of loss; failure to do so forfeits the award even if liability and damages are established.
Why It Matters
The decision clarifies an important procedural division of labor in South Dakota contract cases: courts — not juries — decide whether available writings clear the statute-of-frauds bar, while juries determine whether a contract was actually formed and how much is owed. This limits the ability of defendants to manufacture jury confusion around written-evidence requirements when courts have already assessed the sufficiency of the writings.
The judicial-estoppel holding carries broader significance for business litigation involving family or closely held entities. Parties who use admissions of debt or financial obligation to win damages in one lawsuit cannot repudiate those same obligations in a subsequent collection action. The court’s willingness to raise judicial estoppel sua sponte at the appellate level, even after the issue had been dropped below, signals that South Dakota courts will actively police inconsistent positions to protect the integrity of the judicial process.