Murray v. MANSHEIM

#25097-a-MILLER, Retired Justice

2010 SD 18

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

* * * *
CHRISTOPHER JOHN MURRAY,
a/k/a CHRIS MURRAY, Plaintiff and Appellee,

v.

TRAVIS GARY MANSHEIM, a/k/a
TRAVIS MANSHEIM, Defendant and Appellant.

* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE SIXTH JUDICIAL CIRCUIT
TRIPP COUNTY, SOUTH DAKOTA

* * * *
HONORABLE KATHLEEN F. TRANDAHL
Judge
* * * *
SHAWN M. NICHOLS
DOUGLAS DEIBERT of
Cadwell, Sanford, Deibert & Garry, LLP
Sioux Falls, South Dakota
and
DONALD E. COVEY
Winner, South Dakota
and
CLINT L. SARGENT of
Danforth & Meierhenry, LLP
Sioux Falls, South Dakota Attorneys for plaintiff
and appellee.
JACK THEELER
JODY ODEGAARD SMITH of
Morgan, Theeler, Wheeler,
Cogley & Petersen, LLP
Mitchell, South Dakota Attorneys for defendant
and appellant.

* * * *
CONSIDERED ON BRIEFS
ON OCTOBER 5, 2009
OPINION FILED 02/24/10
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MILLER, Retired Justice

[¶1.] In this decision we affirm the circuit court and hold that a compulsory

counterclaim seeking affirmative relief in a personal injury action cannot be served

after the expiration of the statute of limitations. Christopher John Murray and

Gary Travis Mansheim were involved in a two-car accident. Immediately prior to

the expiration of the statute of limitations, Murray commenced an action against

Mansheim for damages he sustained as a result of the accident. Along with his

timely answer, Mansheim served a counterclaim against Murray after the

expiration of the statute of limitations. Murray moved for summary judgment

seeking to dismiss Mansheim’s counterclaim grounded on the failure to bring the

counterclaim within the time imposed by the statute of limitations. The circuit

court granted the motion.

FACTS

[¶2.] The salient facts are not in dispute. On September 13, 2003, Murray

and Mansheim were involved in a motor vehicle accident in which both Murray and

Mansheim sustained injuries. On September 12, 2006, Murray commenced a timely

personal injury action against Mansheim by service of summons pursuant to SDCL

15-2-30. On September 13, 2006, a personal injury action by either party arising

from the September 13, 2003 accident became time-barred. See SDCL 15-2-1, -

14(3). On October 9, 2006, nearly a month after the expiration of the action,

Mansheim served an answer and a counterclaim alleging Murray’s negligence and

seeking damages for injuries sustained as a result of the accident. It is undisputed

that Mansheim’s counterclaim arose out of the same transaction or occurrence as

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the subject matter of Murray’s claim, and therefore, is a compulsory rather than

permissive counterclaim. See SDCL 15-6-13(a).

[¶3.] On July 10, 2008, Murray moved for summary judgment, arguing that

because Mansheim’s counterclaim was initiated after the applicable three-year

statute of limitations, it should be dismissed. At the hearing, the parties disputed

the applicability of the statute of limitations to Mansheim’s compulsory

counterclaim. SDCL 15-2-14(3) provides a three-year limitation on the

commencement of personal injury actions: “Except where, in special cases, a

different limitation is prescribed by statute, the following civil actions . . . can be

commenced only within three years after the cause of action shall have accrued: . . .

(3) An action for personal injury.” Because Mansheim served his compulsory

counterclaim after the running of the statute of limitations, and because the circuit

court interpreted SDCL 15-2-14.1 and SDCL 15-2-14.5 to indicate legislative

disapproval of tolling for affirmative compulsory counterclaims, it granted Murray’s

motion for summary judgment. Mansheim appeals.

STANDARD OF REVIEW

[¶4.] Our standard of review regarding summary judgment is well

established:

[W]e must determine whether the moving party demonstrated
the absence of any genuine issue of material fact and showed
entitlement to judgment on the merits as a matter of law. The
evidence must be viewed most favorably to the nonmoving party
and reasonable doubts should be resolved against the moving
party. The nonmoving party, however, must present specific
facts showing that a genuine, material issue for trial exists. Our
task on appeal is to determine only whether a genuine issue of
material fact exists and whether the law was correctly applied.

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If there exists any basis which supports the ruling of the trial
court, affirmance of a summary judgment is proper.

Jacobson v. Leisinger, 2008 SD 19, ¶24, 746 NW2d 739, 745 (quoting Cooper v.

James, 2001 SD 59, ¶6, 627 NW2d 784, 787).

[¶5.] When summary judgment is granted on a statute of limitations

defense:

The burden of proof is upon the movant to show clearly that
there is no genuine issue of material fact and that he is entitled
to judgment as a matter of law. When faced with “‘a summary
judgment motion where the defendant asserts the statute of
limitations as a bar to the action and presumptively establishes
the defense by showing the case was brought beyond the
statutory period, the burden shifts to the [nonmoving party] to
establish the existence of material facts in avoidance of the
statute of limitations[.]’” It is well settled that “‘[s]ummary
judgment is proper on statute of limitations issues only when
application of the law is in question, and not when there are
remaining issues of material fact.’” Generally, a statute of
limitations question is left for the jury; however, deciding what
constitutes accrual of a cause of action is a question of law and
reviewed de novo.

Id. (quoting James, 2001 SD 59, ¶7, 627 NW2d at 787). There are no issues of

material fact in this case. Both issues presented are questions of law reviewed de

novo. Id.

ISSUES

1. Whether counterclaims are deemed commenced with the initial
action, as part of the initial action, or when stated in the
pleadings and served on the opposing party.

2. Whether a compulsory counterclaim seeking affirmative relief
relates back to the opposing party’s timely initial complaint or if
that initial complaint tolls the statute of limitations for
compulsory counterclaims seeking affirmative relief.

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ANALYSIS AND DECISION

[¶6.] 1. Whether counterclaims are deemed commenced with the
initial action, as part of the initial action, or are
commenced when stated in the pleadings and served on
the opposing party.

[¶7.] We acknowledge an inherent dilemma: our statutes of limitation bar

the untimely commencement of actions, SDCL 15-2-1, and yet, by law, counterclaims

are not technically commenced (no summons required). SDCL 15-6-13(a), -13(b).

Therefore, it would appear that limitation laws should not bar counterclaims.

However, we have an obligation to interpret law in a manner avoiding “absurd

results,” and therefore, decline to hold that counterclaims are not subject to statutes

of limitation. See City of Sioux Falls v. Ewoldt, 1997 SD 106, ¶17, 568 NW2d 764,

768. In deciding how limitation laws apply to the different counterclaims, we must

decide whether both compulsory and permissive counterclaims are “actions” under

SDCL 15-1-1(1), and when each is “commenced” for purposes of SDCL 15-2-1.

Counterclaims are Actions

[¶8.] Under South Dakota law, both permissive and compulsory

counterclaims seeking affirmative relief are “actions” subject to statutes of

limitation. 1 An “action” is defined as “an ordinary proceeding in a court of justice,

1. Were we to parse the language of the statutes and hold that counterclaims
are not “actions” but “claims,” we would reach the absurd result that
counterclaims are not subject to statutes of limitation under South Dakota
law because only the commencement of actions are limited by prescribed
periods. See SDCL 15-2-1 (“Civil actions can only be commenced within the
periods prescribed in this title. . . .” (Emphasis added.)); see also SDCL 15-2-
14.1 (indicating counterclaims seeking affirmative relief are subject to
statutes of limitation).

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by which a party prosecutes another party for the enforcement, determination, or

protection of a right, the redress or prevention of a wrong, or the punishment of a

public offense.” SDCL 15-1-1(1). Based on this definition, both types of claims must

be treated as actions for purposes of limitation laws because nothing prohibits a

party from bringing either type of counterclaim as an independent action while the

initial action still is pending. See 6 Charles Alan Wright, Arthur R. Miller & Mary

Kay Kane, Federal Practice and Procedure § 1418, at 142 (2d ed 1990 & Supp 2009)

(Wright, Miller & Kane) (“[N]either res judicata nor waiver or estoppel . . . prevent a

party who does not want to assert his claim as a compulsory counterclaim in a suit

instituted by his opponent from bringing an independent action on that claim while

the first action still is pending[.]” (Emphasis added.)). Furthermore, a

counterclaim, permissive or compulsory, survives when the original action is

voluntarily dismissed and becomes an independent action. See SDCL 15-6-41(a)(2);

Halm Instrument Co. v. Sigma Eng’g Serv., Inc., 42 FRD 416, 421 (WDPa 1967)

(noting a compulsory counterclaim “remains alive even though the complaint is

dismissed”). Because counterclaims are actions subject to limitation laws, we must

next determine when they are commenced.

Commencement of Counterclaims

[¶9.] We recognize that our limitation laws apply to the commencement of

actions, SDCL 15-2-1, and that the only way to commence an action is by service of

summons. SDCL 15-2-30. We further acknowledge that neither a compulsory nor

permissive counterclaim is initiated by service of summons. See SDCL 15-6-13(a)

(providing that “[a] pleading shall state as a counterclaim . . . .” (Emphasis added.));

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SDCL 15-6-13(b) (providing that “[a] pleading may state as a counterclaim . . . .”

(Emphasis added.)). Therefore, in order for statutes of limitation to apply to

counterclaims, we must deem counterclaims commenced either along with the

initial action or when stated in the pleadings and served on the opposing party. We

have already refused to “relate back” permissive counterclaims indicating that

permissive counterclaims are commenced when asserted in the pleadings and

served on the opposing party. See Jacobson, 2008 SD 19, ¶30 n7, 746 NW2d at 747

n7. Because the statutory procedure for asserting compulsory and permissive

counterclaims is identical, we likewise hold that compulsory counterclaims are

commenced when served on the opposing party. 2

2. Because there is no statutory basis for a disparate commencement time for
compulsory and permissive counterclaims seeking affirmative relief, we
decline to follow the dissent’s reasoning. Were we to follow the dissent’s
rationale, both types of counterclaims must be deemed part of the initial
action for limitation laws purposes. This necessarily follows because both are
“actions” that are asserted without a summons. See SDCL 15-6-13(a), -13(b);
dissent ¶¶32-33. To suggest that only compulsory counterclaims are part of
the initial action, as the dissent does, would make permissive counterclaims
logically illusory, i.e., not able to be commenced and not part of the initial
action. Therefore under the dissent’s rationale, both must be part of the
initial action because neither counterclaim is commenced by summons.
However, as noted above, we have already determined that permissive
counterclaims are not part of the initial action and are commenced for
limitations purposes when served on the opposing party. See Jacobson, 2008
SD 19, ¶30 n7, 746 NW2d at 747 n7. Moreover, by not deeming either
counterclaim as part of the initial action or commenced along with the initial
action, we avoid the result that a summons could preserve the viability of any
counterclaim forever so long as the initial action was commenced within the
statutes of limitation for the asserted counterclaim. Finally, deeming both
counterclaims commenced when served is consistent with our holding in this
opinion that independent actions that have expired do not lose their
independent nature and garner a longer limitations period merely by being
labeled a “counterclaim.”

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[¶10.] With great caution and because it is “imperatively required to make

[our counterclaim, limitation law, and commencement statutes] rational,” see Fin-

Ag, Inc. v. Pipestone Livestock Auction Market, Inc., 2008 SD 48, ¶16, 754 NW2d 29,

38 (citation omitted), we deem all counterclaims “commenced” for purposes of

limitation laws when they are stated in the pleadings and served on the opposing

party. Therefore, because Mansheim served his counterclaim after the limitations

period, his action was time-barred. The only questions that remain are whether the

initial action tolls the statute of limitations for a compulsory counterclaim seeking

affirmative relief or whether that type of counterclaim “relates back” to the

opposing party’s initial complaint.

[¶11.] 2. Whether a compulsory counterclaim seeking affirmative
relief relates back to the opposing party’s timely, initial
complaint or if that initial complaint tolls the statute of
limitations for compulsory counterclaims.

[¶12.] Mansheim argues that under the majority rule, a compulsory

counterclaim is not barred after the expiration of the statute of limitations. He

notes that statutes of limitation provide a speedy and fair adjudication of the rights

of the parties and protect parties from stale claims. He contends these objectives

are upheld by allowing compulsory counterclaims after the expiration of the statute

of limitations because the issues and evidence are the same. Murray responds with

an abundance of authorities that hold compulsory counterclaims seeking

affirmative 3 relief are subject to statutes of limitation because they are regarded as

3. Mansheim’s compulsory counterclaim is not used “purely as a matter of
defense in the nature of . . . recoupment,” see DiNorscia v. Tibbett, 124 A2d
715, 716 (DelSuperCt 1956), but as an affirmative claim for relief. The
(continued . . .)
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independent causes of action. Interestingly, both parties assert South Dakota law

demands their conclusion.

[¶13.] This is a case of first impression in South Dakota. We have refused to

relate back permissive counterclaims to the filing of the opposing party’s complaint.

Jacobson, 2008 SD 19, ¶30 n7, 746 NW2d at 747 n7. 4 However, we have yet to

decide if compulsory counterclaims seeking affirmative relief relate back to the

opposing party’s initial complaint or if that initial complaint tolls the statute of

limitations. In so doing, we first review the pertinent rules of civil procedure to

determine if the “relation-back” rule is applicable.

[¶14.] The concept of “relation back” found in SDCL 15-6-15(c) with regard to

amended pleadings is not applicable to the instant inquiry. That statute applies to

situations where a later “amended pleading” seeks to “relate back” to the date of the

“original pleading” of that party, not the original pleading of a different party.

SDCL 15-6-15(c); cf. Lewis v. Moorhead, 522 NW2d 1, 6 (SD 1994) (noting an

amended complaint asserting a new claim after statute of limitations had expired

may relate back to that party’s original complaint). Because the date of Mansheim’s

________________________
(. . . continued)
counterclaim specifically requests “judgment against plaintiff in an amount
to be determined by a jury.”

4. In Jacobson, we also noted that “compulsory counterclaims benefit from the
relation back doctrine.” 2008 SD 19, ¶30 n7, 746 NW2d at 747 n7 (citations
omitted). However, the question before this Court in Jacobson was whether
Leisinger’s defamation claim had accrued or whether a permissive
counterclaim would relate back. Id. ¶¶19-31, 746 NW2d at 744-47.
Therefore, any reference in Jacobson to compulsory counterclaims “was mere
dicta and not binding as legal precedent in this case.” See Wiersma v. Maple
Leaf Farms, 1996 SD 16, ¶5 n1, 543 NW2d 787, 790 n1.

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original pleading (answer) is after the statute of limitations expired, any relation

back that might be allowed under SDCL 15-6-15(c) for counterclaims is of no benefit

to Mansheim. Therefore, any reference to “relation back” in this case is

independent of SDCL 15-6-15(c). 5

[¶15.] We necessarily turn our focus to other authorities for guidance. This

Court’s research reveals a significant split of authority. Some jurisdictions hold

that counterclaims seeking affirmative relief are barred by the statute of

limitations, while others conclude the timely commencement of the plaintiff’s action

either tolls or waives the statute of limitations for compulsory counterclaims. Still

others hold that compulsory counterclaims relate back to the opposing party’s

timely complaint. Interestingly, courts on both sides claim to follow the “majority

rule.”

[¶16.] Two recognized authorities on civil procedure acknowledge this issue is

unresolved in the courts and that there is a clear split of authority. See 6 Wright,

Miller & Kane § 1419; 3 James WM. Moore et al., Moore’s Federal Practice § 13.93

5. Our statutes also provide no guidance as to the tolling of statutes of
limitation for counterclaims. The only two statutes that mention
counterclaims and statutes of limitation are SDCL 15-2-14.1 and SDCL 15-2-
14.5. These statutes allow a patient to assert a time-barred counterclaim in
the form of a defense to a later timely medical service provider’s claim. This
is not a tolling provision as this statute does not allow the time-barred claim
to be brought as an action. Rather, this codifies the rule that counterclaims
seeking recoupment are “in the nature of a defense arising out of some
feature of the transaction upon which the plaintiff’s action is grounded. Such
a defense is never barred by the statute of limitations so long as the main
action is timely.” See Bull v. United States, 295 US 247, 262, 55 SCt 695,
700-01, 79 LEd2d 1421 (1935). These amendments represent a narrow,
surgical amendment to our medical malpractice limitations law and provide
little guidance for this appeal.

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(3d ed 2009) (hereinafter Moore’s Federal Practice). Of note, these two treatises are

in disagreement as to what constitutes the majority rule. See 3 Moore’s Federal

Practice § 13.93, at 13-88 (“Counterclaims and cross-claims for affirmative relief

are, with some exceptions, subject to the operation of applicable statutes of

limitations.”); 6 Wright, Miller & Kane § 1419, at 152 (“[T]he majority view appears

to be that the institution of plaintiff’s suit tolls or suspends the running of the

statute of limitations governing a compulsory counterclaim.”). Because of the

divided views regarding this issue, our analysis will synthesize the rationale for

both positions, consider the merits of both, and reach a conclusion based on those

merits.

[¶17.] Under one view, “[i]t is fairly well established under [limitations law]

that a counterclaim for affirmative relief . . . is subject to the operation of pertinent

statutes of limitation.” Hurst v. U.S. Dep’t of Educ., 901 F2d 836, 837 (10thCir

1990). The apparent rationale for this rule is that a counterclaim seeking

affirmative relief “is not stripped of its character as an independent action by

acquiring the label counterclaim.” Brown v. Hipshire, 553 SW2d 570, 572 (Tenn

1977). Thus, this view disregards equity and advances strict adherence to the

statute of limitations reasoning that “our recognition of the legislative prerogative

override[s] any justification asserted for extending the life of a counterclaim.”

Crivaro v. Rader, 469 NE2d 1184, 1187 (IndCtApp 1984).

[¶18.] The contrary view holds that “‘the institution of plaintiff’s suit tolls or

suspends the running of the statute of limitations governing a compulsory

counterclaim.’” Burlington Indus. v. Milliken & Co., 690 F2d 380, 389 (4thCir

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1982), cert. denied, 461 US 914, 103 SCt 1893, 77 LEd2d 283 (1983) (quoting 6

Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1419, at

109 (1971)). This view reflects the rationale put forth by Wright, Miller & Kane:

This approach precludes plaintiff, when the claim and
counterclaim are measured by the same period, from delaying
the institution of the action until the statute has almost run on
defendant’s counterclaim so that it would be barred by the time
defendant advanced it. Nor is plaintiff apt to be prejudiced by
the tolling of the statute, since he presumably has notice at the
time he commences his action of any counterclaim arising out of
the same transaction as his suit. Moreover, the necessarily close
relationship between the timely claim and the untimely
counterclaim should insure that the latter is not “stale” in the
sense of evidence and witnesses no longer being available[.]

6 Wright, Miller & Kane § 1419, at 152-53. Therefore, this position embraces equity

focusing on the lack of prejudice to a plaintiff. Armstrong v. Logsdon, 469 SW2d

342, 343 (Ky 1971) (“Simple justice dictates that if the plaintiffs are given an

opportunity to present a claim for relief based upon a particular automobile

collision, the defendant should not be prevented from doing so by a mere

technicality.” (citation omitted)).

[¶19.] Our research indicates that seven federal circuit courts have refused to

toll or waive the statute of limitations, or have noted counterclaims seeking

affirmative relief “may not be allowed.” 6 Only three federal circuit courts allow the

6. See Wells v. Rockefeller, 728 F2d 209, 214-16 (3dCir 1984) (compulsory
counterclaims seeking dissolution and accounting and for fraud were barred
by statute of limitations); In re Smith, 737 F2d 1549, 1552-54 (11thCir 1984)
(disallowing time-barred affirmative claim to be brought as counterclaim
noting that “this change of labels does not effect a change in the essential
character of the action”); Chauffeurs, Teamsters, Warehousemen, and
Helpers, Local Union No. 135 v. Jefferson Trucking Co., 628 F2d 1023, 1027
(7thCir 1980) (“A counterclaim for affirmative relief may not be asserted if
(continued . . .)
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expired compulsory counterclaim to relate back to the initial, timely complaint.7

Furthermore, of the states that do not have a specific statute 8 on point, at least

________________________
(. . . continued)
barred by the statute of limitations.”); see also Luckenbach S.S. Co. v. United
States, 312 F2d 545, 551 (2dCir 1963) (“The defense of reduction or
recoupment which arises out of the same transaction as the note or claim
survives as long as the cause of action upon the note or claim exists, although
an affirmative action upon the subject of it may be barred by the statute of
limitations.”); City of Grand Rapids, Mich. v. McCurdy, 136 F2d 615, 619
(6thCir 1943) (“The defense of recoupment exists as long as the plaintiff's
cause of action exists and may be asserted, though the claim as an
independent cause of action is barred by limitations.”); Penn. R. Co. v. Miller,
124 F2d 160, 161-62 (5thCir 1941) (noting a counterclaim asserting an
“affirmative cause of action [ ] may be barred by limitation”); Williams v.
Neely, 134 F 1, 13 (8thCir 1904) (same); cf. Durant v. Murdock, 3 AppDC 114,
126-28 (DCCir 1894) (“[I]t is not the institution of a suit, but the exhibiting of
a cause of action, that determines the application of the statute of limitations,
whether it be by amendment of the declaration or bill of complaint . . . or by
the interposition of a counterclaim[.]”)

7. See Religious Tech. Center v. Scott, 1996 WL 171443, at *8 (9thCir 1996)
(unpublished) (“[A] compulsory counterclaim relates back to the filing of the
original complaint.”); Employers Ins. of Wausau v. United States, 764 F2d
1572, 1576 (FedCir 1985) (“The institution of a plaintiff’s suit suspends the
running of limitations on a compulsory counterclaim while the suit is
pending.”); Burlington Indus. v. Milliken & Co., 690 F2d 380, 389 (4thCir
1982) (“Rule 13(a) contains no mention of relation back. Nonetheless, the
better view holds that ‘the institution of plaintiff’s suit tolls or suspends the
running of the statute of limitations governing a compulsory counterclaim.’”
(citation omitted)); Canned Foods, Inc. v. United States, 140 FSupp 771, 772
(CtCl 1956) (same). Some states also follow this rule. See MacDonald v.
Riggs, 166 P3d 12, 17-18 (Alaska 2007) (statute of limitations tolled); Jones v.
Mortimer, 28 Cal2d 627, 633,170 P2d 893 (1946) (same); Denton v. Detweiler,
48 Idaho 369, 282 P 82, 84 (1929) (holding that a counterclaim was not
subject to the bar of the statute if it was not barred when the action
commenced); Armstrong v. Logsdon, 469 SW2d 342, 343 (Ky 1971) (same in
tort action); Eagle Sav. & Loan Ass’n v. West, 71 OhioApp 485, 496, 50 NE2d
352, 357 (1942) (same).

8. Many states have remedied the ambiguity in this field by enacting statutes
specifying how limitations laws apply to counterclaims: AlaCode 6-8-84
(When defendant pleads counterclaim and plaintiff replies the statute of
(continued . . .)
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eleven apply the statute of limitations to compulsory counterclaims seeking

affirmative relief. 9

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(. . . continued)
limitations, “the defendant is nevertheless entitled to his counterclaim, where
it was a legal subsisting claim at the time the right of action accrued to the
plaintiff on the claim in the action.”); ColoRevStat 13-80-109 (extending
limitations period for compulsory counterclaims one year after the service of
the complaint of opposing party); ConnGenStat 52-584 (“[A] counterclaim
may be interposed in any such action any time before the pleadings in such
action are finally closed.”); GaCodeAnn 9-3-97 (allowing counterclaims that
have not expired at time of the commencement of initial action until the last
day upon which the answer or other pleading should have been filed);
HawRevStat 657-3 (explaining statutes of limitation applicability to
counterclaims); 735 IllCompStat 5/13-207 (“A defendant may plead a set-off
or counterclaim barred by the statute of limitation . . . the cause of which was
owned by the plaintiff . . . before [it] was so barred.”); KanStatAnn 60-213(d)
(stating that one will not be denied the benefit of a compulsory counterclaim
by reason of statutes of limitation); MichCompLaws 600.5823 (allowing
counterclaim to extent of the amount established by plaintiff’s claim unless
the counterclaim was barred when plaintiff’s claim accrued); NMStat 37-1-15
(allowing setoff or counterclaim to be pleaded as a defense);
NYLimitationsLaw 203(c)-(d) (“A defense or counterclaim is not barred if it
was not barred at the time the claims asserted in the complaint were
interposed.”); OklaStatAnn tit 12, § 2013(C) (specifying when counterclaims
are barred by statutes of limitation and the type of relief allowed);
TennCodeAnn 28-1-114 (stating that counterclaim not barred by statutes of
limitation if it was not barred at the time the claims asserted in the
complaint were interposed); VaCodeAnn 8.01-233 (stating statute of
limitations is tolled by commencement of plaintiff’s action as to a compulsory
counterclaim); WisStat 893.14 (tolling limitations upon plaintiff’s
commencement of the action in which the defense or counterclaim is made).

9. The following states have noted they do not allow counterclaims seeking
affirmative relief if the statute of limitations had run before pleading the
counterclaim. Duhammel v. Star, 133 Ariz 558, 653 P2d 15 (ArizCtApp 1982)
(holding that compulsory counterclaim was barred as an action for
affirmative relief but would be available for recoupment), overruled on other
grounds by Godbehere v. Phoenix Newspapers, Inc., 162 Ariz 335, 783 P2d
781 (1982); Brown v. Missouri Pac. Trans. Co., 75 SW2d 804 (Ark 1934)
(same); Di Norscia v. Tibbett, 124 A2d 715, 715-17 (DelSuperCt 1956) (noting
the statute of limitations is clear and includes no exceptions for
counterclaims); Freiberger v. Am. Triticale, Inc., 815 P2d 437, 439-40 (Idaho
(continued . . .)
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[¶20.] After a thorough review of the authority, and based on South Dakota’s

applicable statutes, we find persuasive the position posited by Moore’s Federal

Practice. This appears to be the majority position. The Wright, Miller & Kane

approach, tolling the statute of limitations, is almost entirely premised on the lack

of prejudice to the plaintiff and the prevention of delaying weak claims until the

statute has almost run. The latter concern is neutralized by counterclaims in the

form of recoupment; claims that arise out of the same transaction or occurrence, but

are defensive in nature and seek no affirmative relief. See Bull v. United States,

295 US 247, 262, 55 SCt 695, 700-701, 79 LEd2d 1421 (1935) (holding that a

counterclaim for recoupment is “never barred by the statute of limitations so long as

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(. . . continued)
1991) (“Where the claim of the defendant is an affirmative independent cause
of action not in the nature of a defensive claim, the defendant must comply
with the applicable statute of limitations.”); Noble v. C.E.D.O., Inc., 374
NW2d 734 (MinnCtApp 1985) (noting that counterclaims for affirmative
relief do not relate back); State ex rel. Egeland v. City Council of Cut Bank,
Mont., 803 P2d 609, 613 (Mont 1990) (counterclaims seeking affirmative
relief must comply with statute of limitations); Nev. State Bank v. Jamison
Family P’ship, 106 Nev 792, 798-99, 801 P2d 1377, 1382 (1990) (holding that
a timely action does not toll the running of statute of limitations for
compulsory counterclaims); Pharmaresearch Corp. v. Mash, 163 NCApp 419,
426, 594 SE2d 148, 153 (NCCtApp 2004) (same); Harmer v. Hulsey, 467 A2d
867 (PaSuperCt 1983) (compulsory counterclaim seeking affirmative relief is
subject to statute of limitations); Brown v. Hipshire, 553 SW2d 570, 571-72
(Tenn 1977) (same; but see Tenn Code Ann 28-1-114 providing that a
counterclaim is not barred by statutes of limitations if it was not barred at
the time the claims asserted in the complaint were interposed); Hawkeye-Sec.
Ins. Co. v. Apodaca, 524 P2d 874, 879-80 (Wyo 1974) (counterclaims seeking
affirmative relief are barred after running of statute of limitations); cf. Biddle
v. Biddle, 163 NJSuper 455, 395 A2d 218 (1978) (commencement of action
does not toll statute of limitations for cross-claims).

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the main action itself is timely”). Therefore, any weak claim brought late in the

limitations period will nevertheless have to overcome the claim for recoupment. 10

[¶21.] Wright, Miller & Kane’s other basis for allowing the expired claim, the

lack of prejudice to the plaintiff, does not support the tolling of the statutes of

limitation. This view apparently considers statutes of limitation as mere

technicalities. Armstrong, 469 SW2d at 343 (stating that a defendant should not be

prevented from asserting a compulsory counterclaim by “a mere technicality”).

However, in South Dakota, statutes of limitation are not mere technicalities. We

have consistently held that “compliance with statutes of limitations is strictly

required and doctrines of substantial compliance or equitable tolling are not invoked

to alleviate a claimant from a loss of his right to proceed with a claim.” Dakota

Truck Underwriters v. S.D. Subsequent Injury Fund, 2004 SD 120, ¶17, 689 NW2d

196, 201 (emphasis added) (citing Peterson v. Hohm, 2000 SD 27, 607 NW2d 8). “It

is clear that statutes of limitation are in place to prevent the prosecution of stale

claims and to punish litigants who sleep on their rights,” Moore v. Michelin Tire Co.,

10. We have acknowledged that “counterclaims were designed, not only to
include recoupment . . . at common law, but to enlarge their scope, so that but
few cases could arise in which all litigation between the parties . . . might not
be settled in the same suit.” McHard v. Williams, 8 SD 381, 66 NW 930, 931
(1896). Recoupment is the “reduction of a plaintiff’s damages because of a
demand by the defendant arising out of the same transaction.” Black’s Law
Dictionary 1280 (7th ed 1999) (emphasis added). Recoupment is “purely
defensive in character and [can] be used only to defeat or diminish plaintiff’s
recovery.” 6 Wright, Miller & Kane § 1401, at 10. “The recoupment doctrine .
. . has survived the codification of compulsory counterclaims and enjoys
continuing vitality today as a means of asserting an otherwise time-barred
counterclaim.” Berger v. City of N. Miami, Fla., 820 FSupp 989, 992 (EDVa
1993) (citing United States v. Dalm, 494 US 596, 605, 110 SCt 1361, 1367,
108 LEd2d 548 (1990)).

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1999 SD 152, ¶25, 603 NW2d 513, 521 (citation omitted), and “[a] cause of action

raised as a counterclaim may be potentially as stale as a cause of action asserted in

an original complaint.” See Harmer v. Hulsey, 467 A2d 867, 869 (PaSuperCt 1983)

(citation omitted). We have also stated that “a defense based on a statute of

limitations is meritorious and should not be regarded with disfavor.” Burke v. Foss,

334 NW2d 861, 864 (SD 1983) (citation omitted). Moreover, statutes of limitation

ensure a “speedy and fair adjudication of the rights of the parties[.]” Moore, 1999

SD 152, ¶25, 603 NW2d at 521. These principles most important to statutes of

limitation are “advanced by refusing to judicially modify the harsh effect imposed by

a statute of limitations.” Dakota Truck Underwriters, 2004 SD 120, ¶18, 689 NW2d

at 201.

[¶22.] Both Mansheim and Murray had three years to commence suit—

Murray timely commenced his action and Mansheim did not. Mansheim has failed

to provide any controlling authority for the propositions that his counterclaim

should relate back to Murray’s complaint or that Murray’s complaint tolled the

statute of limitations. In fact, the only binding authority is found in SDCL 15-1-

1(1), SDCL 15-2-1, and SDCL 15-2-14. A counterclaim is an “action” pursuant to

SDCL 15-1-1(1). And, pursuant to SDCL 15-2-1, “[c]ivil actions can only be

commenced within the periods prescribed in this title[.]” According to that title, an

action for personal injury can be commenced only within three years, unless a

different limitation is prescribed by statute. SDCL 15-2-14. Therefore, Mansheim’s

time to bring his personal injury cause of action expired on September 13, 2006,

three years after the accident. Because Mansheim did not bring his action (via the

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counterclaim) until October 9, 2006, nearly a month after the statute of limitations

expired, his compulsory counterclaim for affirmative relief was time-barred.

[¶23.] South Dakota’s rules of civil procedure provide for relation back only in

regard to amended pleadings relating back to that party’s original pleadings, not the

opposing party’s initial complaint. SDCL 15-6-15(c). Furthermore, we agree with

the majority of courts that do not allow compulsory counterclaims seeking

affirmative relief after the running of the statute of limitations. We find persuasive

that position because independent actions that have expired prior to service of an

answer or counterclaim do not lose their independent nature by being labeled

“counterclaim.” Absent any statute to the contrary, counterclaims seeking

affirmative relief expire like any other action pursuant to SDCL 15-2-1.

[¶24.] We will not read into SDCL 15-2-14(3) (three-year statute of

limitations for personal injury actions) or SDCL 15-6-13 (counterclaims) a different

limitations period for personal injury actions commenced by summons as an initial

action than those commenced by service as a counterclaim. Because no statutory

exception, tolling provision, or equitable tolling doctrine 11 saved Mansheim’s

personal injury action, it is barred by SDCL 15-2-14. Thus, we affirm the circuit

court’s grant of summary judgment.

11. The facts of this case do not represent the situation where the party asserting
the statute of limitations has fraudulently or inequitably invited a party to
delay in commencing the action until the limitations period has expired.
Murray did nothing to lull Mansheim into inaction until his claim was time-
barred. Mansheim simply failed to file a timely action under SDCL 15-2-14.
This was undisputed; therefore, equitable tolling and equitable estoppel are
inapplicable.

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CONCLUSION

[¶25.] We narrow our holding to disallow compulsory counterclaims seeking

affirmative relief when, as here, the limitations period expired after the plaintiff

initiated his action by service of summons but before the defendant served his

counterclaim. Furthermore, any application SDCL 15-6-15(c) may have to

counterclaims is not decided in this case as it provides no relief to Mansheim

because that statute only allows relation back to that party’s original pleading and

Mansheim’s original pleading (answer) was served after the action expired by

statute. We find persuasive the distinction between compulsory counterclaims

seeking recoupment and those seeking affirmative relief. The latter are

independent actions subject to statutes of limitation. The former are in the nature

of a defense and, as noted by the United States Supreme Court, are “never barred

by the statute of limitations so long as the main action itself is timely.” Bull, 295

US at 262, 55 SCt at 700-01. Stated simply, time will not bar Mansheim’s claim of

vindication, but it does preclude his prayer for affirmative relief.

[¶26.] Affirmed.

[¶27.] GILBERTSON, Chief Justice, and KONENKAMP and ZINTER,

Justices, concur.

[¶28.] SEVERSON, Justice, dissents.

[¶29.] MILLER, Retired Justice, sitting for MEIERHENRY, Justice,

disqualified.

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SEVERSON, Justice (dissenting).

[¶30.] I respectfully dissent. An initial summons, not a compulsory

counterclaim, “commences” an action under South Dakota law. Because the

compulsory counterclaim cannot “commence” an action, the compulsory

counterclaim is part of the initial action. A compulsory counterclaim instituted

after the expiration of the statutory period is not barred when the initial action was

“commenced” within the statute of limitations.

[¶31.] We must analyze whether a compulsory counterclaim seeking

affirmative relief is barred by the statute of limitations under South Dakota’s

particular statutory scheme. “Statutory interpretation is a question of law to be

reviewed under the de novo standard of review.” Discover Bank v. Stanley, 2008 SD

111, ¶15, 757 NW2d 756, 761 (citations omitted). “When the language in a statute

is clear, certain, and unambiguous, there is no reason for construction, and [this]

Court’s only function is to declare the meaning of the statute as clearly expressed.”

Id. “The same rule applies to construction of [South Dakota’s] rules of civil

procedure.” Id. This Court looks to the decisions of other courts and other states

for analytical assistance in interpreting a South Dakota rule of civil procedure when

the rule is equivalent to a Federal Rule of Civil Procedure. Moore, 1999 SD 152,

¶24, 603 NW2d at 520. Here, because the South Dakota rule is not equivalent to

the Federal Rule, reference to the Federal Rules is less helpful in determining

whether South Dakota’s unique statutes dictate that compulsory counterclaims are

barred after expiration of the statute of limitations.

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[¶32.] In South Dakota, a compulsory counterclaim seeking affirmative relief

is an “action” pursuant to SDCL 15-1-1(1). An “action” is defined as “an ordinary

proceeding in a court of justice, by which a party prosecutes another party for the

enforcement, determination, or protection of a right, the redress or prevention of a

wrong, or the punishment of a public offense.” SDCL 15-1-1(1). SDCL 15-2-1

further provides:

Civil actions can only be commenced within the periods
prescribed in this title after the cause of action shall have
accrued except where in special cases a different limitation is
prescribed by statute. The objection that the action was not
commenced within the time limited can only be taken by answer
or other responsive pleading.

(Emphasis added.) SDCL 15-2-14 similarly states that a civil action for personal

injury “can be commenced only within three years after the cause of action shall

have accrued.” (Emphasis added.) We must therefore decide if a compulsory

counterclaim seeking affirmative relief “commences” an action or is part of the

initial action. If it does not “commence” an action, it is either not time barred under

SDCL 15-2-14, or it relates back to the commencement of the initial action.

[¶33.] “An action is commenced as to each defendant when the summons is

served on him. . . .” SDCL 15-2-30. See Peterson, 2000 SD 27, ¶15, 607 NW2d at 12

(noting that unlike the Federal Rules, South Dakota requires that a defendant be

served with a copy of the summons to commence an action). No summons need be

served to assert a compulsory counterclaim:

A pleading shall state as a counterclaim any claim which at the
time of serving the pleading the pleader has against any
opposing party, if it arises out of the transaction or occurrence
that is the subject matter of the opposing party’s claim and does

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not require for its adjudication the presence of third parties of
whom the court cannot acquire jurisdiction.

SDCL 15-6-13(a). A plain reading of South Dakota law reveals a compulsory

counterclaim cannot “commence” an action. Only the initial summons “commences”

an action within the meaning of SDCL 15-2-1 and SDCL 15-2-14. A compulsory

counterclaim is therefore part of the initial action. When the initial action is

“commenced” within the statute of limitations, a compulsory counterclaim

instituted after the expiration of the statutory period is not barred.

[¶34.] The majority notes that were we to hold that counterclaims are

commenced at the time of the initial action, both compulsory and permissive

counterclaims would have to relate back. See supra [¶9 n2.] Permissive

counterclaims are more problematic, but in Jacobsen, this Court, in dicta, noted

that only compulsory counterclaims relate back to the original complaint. 2008 SD

19, ¶30 n7, 746 NW2d at 747 n7 (citing 6 Wright, Miller & Kane, § 1425 at 189-90).

This Court also noted that permissive counterclaims do not “benefit from the

relation back doctrine.” Id. As noted by Wright, Miller & Kane, “the applicable

statute of limitations . . . may restrict a party’s freedom to interpose a permissive

counterclaim under Rule 13(b). Since these claims basically constitute independent

actions, a party should not be able to assert a permissive counterclaim on which the

statute of limitations has run.” 6 Wright, Miller & Kane, § 1425 at 189. This same

philosophy is reflected in SDCL 15-6-15(c), which specifies that amended pleadings

relate back to the date of the original pleading if the claim or defense arose out of

the conduct, transaction, or occurrence set forth in the original pleading.

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[¶35.] This case involves the statute of limitations and a compulsory

counterclaim under SDCL 15-6-13(a). The majority opinion focuses on the statute

of limitation and permissive counterclaims under SDCL 15-6-13(b), an issue not

before us. This Court may well believe the view of other jurisdictions, which holds

that compulsory counterclaims seeking affirmative action are barred after the

expiration of the statute of limitations, is the better approach. Yet, that is not the

result South Dakota law demands. The language of the applicable South Dakota

statutes on commencement of an action is “clear, certain, and unambiguous,” and

“this Court’s only function is to declare the meaning of the statute[s] as clearly

expressed.” Discover Bank, 2008 SD 111, ¶15, 757 NW2d at 761. We must not “do

violence to the plain meaning of the statute[s] under construction.” Hagemann ex

rel. Estate of Hagemann v. N.J.S. Eng’g, Inc., 2001 SD 102, ¶8 n7, 632 NW2d 840,

846 n7 (citation omitted). If South Dakota law leads to an undesirable result, it

ought to be changed, but we should not give a strained interpretation to an

unambiguous statute (SDCL ch. 15-2) or Court rule of procedure (SDCL 15-6-13(a)).

[¶36.] The very purposes of statutes of limitation do not require the position

the majority embraces. The majority correctly observes that “statutes of limitation

are in place to prevent the prosecution of stale claims and to punish litigants who

sleep on their rights.” Moore, 1999 SD 152, ¶25, 603 NW2d at 521 (citations

omitted). However, a compulsory counterclaim is one that “arises out of the

transaction or occurrence that is the subject matter of the opposing party’s claim.”

SDCL 15-6-13(a). Because they arise from the same incident, the compulsory

counterclaim is no staler than the initial action. The “necessarily close relationship

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between the timely claim and untimely claim should insure that the latter is not

‘stale’ in the sense of evidence and witnesses no longer being available.” 6 Wright,

Miller & Kane, § 1419 at 152-53. The evidence and witnesses are as accessible for

adjudicating the compulsory counterclaim as they are for the initial action. Id.

“Simple justice dictates that if the plaintiffs are given an opportunity to present a

claim for relief based upon a [transaction or occurrence], the defendant should not

be prevented from doing so[.]” Armstrong, 469 SW2d at 343. The plaintiff should

not reap a benefit, and the defendant the harm, of the plaintiff’s decision to delay

until the statute of limitations has almost run on his claim.

[¶37.] For these reasons, I respectfully dissent.

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