United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 08-1540
                                    ___________

Harding County, South Dakota, et al.,    *
                                         *
       Plaintiffs - Appellants,          *
                                         * Appeal from the United States
       v.                                * District Court for the
                                         * District of South Dakota.
Ron Frithiof, et al.,                    *
                                         *
       Defendants - Appellees.           *
                                    ___________

                              Submitted: February 12, 2009
                                 Filed: August 6, 2009
                                  ___________

Before LOKEN, Chief Judge, MELLOY and BENTON, Circuit Judges.
                              ___________

LOKEN, Chief Judge.

       Harding County, South Dakota, is home to many valuable fossils. In June
1998, fossil hunter Mark Eatman found fossilized remains of a juvenile tyrannosaurus
rex dinosaur on land in Harding County that was either owned by rancher Gary
Gilbert or owned by the County and leased to Gilbert for grazing. Eatman sold his
interest in the fossil for $50,000 to a Texas group led by Ron Frithiof, who named the
fossil “Tinker.” Frithiof and Gilbert then entered into a series of prospecting leases.
From June 1998 until November 2000, Frithiof and his partners excavated from the
site approximately twenty-eight field jackets (soil and fossils removed together and
wrapped in plaster casing), and Frithiof began negotiations to sell Tinker to the
Indianapolis Children’s Museum. His asking price was $8.5 million.
       Becoming aware that Tinker may have been found on County-owned land,
Frithiof and his group approached Harding County for a lease. On November 9, 2000,
Frithiof and the County entered into a five-year lease granting Frithiof legal title to
fossils “located and/or collected” on County property in exchange for “ten percent
(10%) of the actual selling price of any fossils collected from [County property] and
which are sold by [Frithiof] for a sum exceeding [one thousand dollars].” At issue on
this appeal was an additional clause entitled “OTHER,” which provided that the lease
terms would apply to fossils “that Lessee has located, discovered, or removed . . . on
the Leased Property, or any other property owned by Harding County, prior to the date
of this lease.”

       When the County later learned that Frithiof found Tinker two years before the
lease was signed, it rescinded the lease and commenced this action against Frithiof and
three of his partners (we will refer to defendants, collectively, as “Frithiof”). A class
of Harding County taxpayers joined as plaintiffs. The district court initially granted
summary judgment for the County, concluding that the lease was void because the
County failed to hold a public hearing before authorizing the lease, as SDCL § 7-18-
32 requires if a lease is “for an amount exceeding five hundred dollars annual value.”
Frithiof appealed. We vacated the judgment and remanded because the County “failed
to present evidence of the fair market value of the lease at the time it was entered, and
thus the district court erred in granting the County’s motion for partial summary
judgment.” County of Harding, S.D. v. Frithiof, 

, 551 (8th Cir. 2007)
(“Frithiof I”). On remand, the district court1 granted summary judgment to Frithiof.
The County appeals, raising numerous issues. Reviewing the grant of summary
judgment de novo, we affirm. Heppler v. Thomson Newspapers, Inc., 

,
1213 (8th Cir. 1997) (standard of review).




      1
       The HONORABLE RICHARD H. BATTEY, United States District Judge for
the District of South Dakota.

                                          -2-
       Although the County’s complaint asserted eight separate claims sounding in
contract and tort, and all are argued on appeal, the appeal turns on the answers to three
questions: (1) Did Frithiof have a legal duty to disclose his prior discovery of Tinker
before the lease was signed? (2) May the County void the lease if it committed a
mistake of law that resulted in non-compliance with § 7-18-32? (3) Did Frithiof
commit actionable trespass or conversion in removing fossils from County land before
the lease was signed? After describing the lease negotiations, we will address the
County’s arguments on appeal in the context of these questions.

                        I. THE LEASE NEGOTIATIONS

       Frithiof’s attorney, Jimmy Nassour, first contacted Harding County Auditor
Kathy Glines in July 2000. The County had signed two fossil excavation leases with
other prospectors in 1996. Auditor Glines testified the County knew in advance that
both prospective lessees had already found fossils on County land. In July 2000,
Nassour proposed a written lease modeled on one of the 1996 leases, containing
identical purpose, rent, and title provisions. Nassour added two new provisions,
proposing to back-date the lease to 1998 and including an “OTHER” clause providing
that “Lessee shall be responsible for negotiating a lease with any other lessee which
may have rights to lease the property.” In tandem, these additions would have
resolved the prior discovery issue while making Frithiof responsible for dealing with
any prior lessee during the back-dated period (in other words, Gilbert, with whom
Frithiof had already negotiated).

       Glines and the County’s attorney, Robert Haivala, reviewed Nassour’s proposed
lease. They rejected the proposed back-dating as not authorized by law and noted
errors in the land description. Nassour drafted a revised lease, making the requested
changes. He also replaced the prior “OTHER” clause with the above-quoted provision
applying the lease’s terms to prior discoveries. Nassour mailed the revised lease to
Glines, with a cover letter noting the changes to the land’s legal description but not

                                          -3-
the revised “OTHER” clause.2 Glines presented the revised lease to the County’s
Board of Commissioners while Haivala was out of town. The Board approved it on
November 9 without notice or public hearing pursuant to § 7-18-32.

       Neither party disputes that Tinker was found on County land. Frithiof testified
that he sought a lease with the County after Gilbert told him in the summer of 2000
there was County land as well as Gilbert-owned land in the area where Tinker was
found. Frithiof claimed he did not know Tinker was on County land until the area was
professionally surveyed in March 2001. The County’s view is more sinister, based
on testimony by a Frithiof marketing consultant that Frithiof was “just tickled how
clever they were to slip [the prior discovery clause] in that way because [the County]
still weren’t going to know that it was Tinker they were talking about.” For summary
judgment purposes, we of course credit that testimony. The County rescinded the
lease in May 2003 and commenced this lawsuit.

              II. FRITHIOF’S ALLEGED DUTY TO DISCLOSE

       The County’s Complaint alleged that Frithiof failed to disclose that he had
entered County property to search for fossils and had found, excavated, removed, and
attempted to sell Tinker, “despite having a duty to disclose such information” during
the lease negotiations. Based on this failure to disclose, the County asserted tort and
contract claims for damages and rescission of the lease based on actual and
constructive fraud, mistake of fact and law, breach of fiduciary duty, and breach of the


      2
        At her deposition, Auditor Glines changed her initial recollection that the
County proposed the “prior discovery” clause to ensure that it received proceeds from
anything discovered prior to the lease. Viewing the facts in the light most favorable
to the County, we assume that attorney Nassour inserted the provision. This is logical,
as well, because the prior discovery provision gave Frithiof the same protection he
would have received from the rejected back-dating proposal, and the replaced
“OTHER” provision was inappropriate unless the lease was back-dated.

                                          -4-
covenant of good faith and fair dealing. Though the district court separately discussed
each claim, central to its decision was the conclusion that, under South Dakota law,
“failure to provide a full disclosure of facts known to one party during contract
negotiations” is neither fraudulent nor a breach of a fiduciary or other duty. On
appeal, the County’s lead argument is that Frithiof had a duty to disclose information
“material to the contract.” The existence of a duty is a question of law that is
“appropriate” for summary judgment decision. Garrett v. Bankwest, Inc., 

, 839 (S.D. 1990).

       Breach of Fiduciary or Other Duty. Like the district court, we begin with the
question whether Frithiof breached a fiduciary duty to disclose during the lease
negotiations that he had previously discovered, removed, and attempted to sell Tinker
fossils. Under South Dakota law -

      fiduciary duties are not inherent in normal arm’s-length business
      relationships, and arise only when one undertakes to act primarily for
      another’s benefit. The law will imply such duties only where one party
      to a relationship is unable to fully protect its interests and the unprotected
      party has placed its trust and confidence in the other.

Taggart v. Ford Motor Credit Co., 

, 500 (S.D. 1990). “Fiduciary
relationships juxtapose trust and dependence on one side with dominance and
influence on the other.” High Plains Genetics Research, Inc. v. J.K. Mill-Iron Ranch,

, 842 (S.D. 1995).

      The County argues that a fiduciary duty arose because it placed “trust and
confidence” in Frithiof. But this alone does not create a fiduciary relationship:

      One party cannot transform a business relationship into one which is
      fiduciary in nature merely by placing trust and confidence in the other
      party. There must be additional circumstances, or a relationship that


                                           -5-
      induces the trusting party to relax the care and vigilance which he would
      ordinarily exercise for his own protection.

High 

(citation omitted). No “additional circumstances”
emerge from the parties’ arm’s-length dealings in this case, such as the conflict of
interest that motivated a bank to lure investors into a certain-to-fail investment in
Buxcel v. First Fidelity Bank, 

, 598-99 (S.D. 1999). The County as
owner had control of the land, was experienced in fossil leases, and had its auditor and
attorney review the proposed lease and insist on changes.

       In High Plains, the Supreme Court of South Dakota reversed an award of
damages for breach of fiduciary duty, noting that, although one party had “superior
knowledge and technical skills” and provided a “specialized service,” the other party
was not “lacking in mental acuity, business intelligence or knowledge of the basic
principles 

; accord Cleveland v. BDL Enter., Inc., 

, 218 (S.D. 2003). Based on these controlling authorities, we agree with
the district court there was no fiduciary relationship or breach of fiduciary duty.3

      The County further argues that, even if Frithiof had no fiduciary duty to
disclose, he breached an obligation to disclose “facts basic to the transaction,” a duty
recognized in Maybee v. Jacobs Motor Co., 

(S.D. 1994), and
§ 551(2)(e) of the Restatement (Second) of Torts (1977). The district court did not
discuss this contention.

       Restatement § 551(2)(e) requires disclosure of facts basic to the transaction
only if the other party, “because of the relationship between them, the customs of the


      3
        In its Reply Brief, the County argued for the first time that, because Frithiof
had possession of the fossil while negotiating, he owed the County fiduciary duties
as trustee of an implied trust under SDCL §§ 55-1-8, 55-2-1. We do not consider
issues not raised in the district court or in a party’s principal brief.

                                          -6-
trade or other objective circumstances, would reasonably expect a disclosure of those
facts.” In Maybee, the Court applied this standard and concluded, not surprisingly,
that a professional car dealer had a duty to disclose that the 1984 van being sold
contained a rebuilt 1966 engine. On the other hand, in Schwaiger v. Mitchell
Radiology Assoc., P.C., 

, 380-81 (S.D. 2002), the Court concluded
that the duty outlined in § 551 did not compel an employer to disclose in arm’s-length
negotiations with a prospective employee the existence of a voting agreement that
affected control of the corporation. In concluding there was no duty to disclose, the
Court quoted approvingly Restatement § 551, cmt. 

n.9:

      superior information and better business acumen are legitimate
      advantages, which lead to no liability. The defendant may reasonably
      expect the plaintiff to make his own investigation, draw his own
      conclusions and protect himself; and if the plaintiff is indolent,
      inexperienced or ignorant, or his judgment is bad, or he does not have
      access to adequate information, the defendant is under no obligation to
      make good his deficiencies.

       We conclude that Schwaiger is controlling. The County as lessor had prior
dealings with lessees who had made prior discoveries (in one case, of a valuable
tyrannosaurus rex fossil). Frithiof made no affirmative misrepresentation. In their
arm’s-length dealings, he could reasonably expect the County to make its own
investigation and protect its interests by inquiring into prior discoveries were that truly
“basic to the transaction.”4 In these circumstances, we assume that Restatement
§ 551(2)(e) reflects South Dakota law but conclude that it imposed no duty to disclose

      4
        Indeed, information suggesting a prior discovery was readily available.
Interviews with Frithiof discussing Tinker appeared in newspaper articles across the
country in late 1999 and early 2000, specifically mentioning the location of the find
(“north of Belle Fourche, S.D.”) and the time of discovery (“the summer of 1998”).
See, e.g., 1st Nearly Intact Skeleton of a Juvenile T. Rex Found, L.A. Times, Dec. 1,
1999, at 17, available at 1999 WLNR 6623900; T-Rex Skeleton Studied, St. Paul
Pioneer Press, Dec. 1, 1999, at 4A, available at 1999 WLNR 2393580.

                                           -7-
Tinker’s prior discovery during the lease negotiations. The absence of a duty to
disclose “is true, in general, when it is the buyer of land . . . who has the better
information and fails to disclose it.” Restatement § 551, cmt. k.

      Finally, the County argues that Frithiof’s failure to disclose breached the
implied covenant of good faith and fair dealing. The district court concluded that this
duty “applies once a contract is executed” but does not “require a party’s full
disclosure of one’s knowledge, plans, and intent during the negotiation of a contract.”
On appeal, the County cites no contrary authority. We agree with the district court.
Under South Dakota law, this implied covenant “is not a repository of limitless duties
and obligations.” Farm Credit Servs. of Am. v. Dougan, 

, 28 (S.D.
2005). It targets actions by one party that “limit[] or completely prevent[] the
aggrieved party from receiving the expected benefits of the bargain.” Nygaard v.
Sioux Valley Hosp. & Health Sys., 

, 194 (S.D. 2007).

       Constructive Fraud. Constructive fraud under South Dakota law includes “any
breach of duty which, without any actually fraudulent intent, gains an advantage to the
person in fault . . . by misleading another to his prejudice.” SDCL § 53-4-6.
Constructive fraud will support an action to avoid a contract, but not a tort action for
damages. Schmidt v. Wildcat Cave, Inc., 

, 117 (S.D. 1977). As the
statute expressly requires a breach of duty, the district court dismissed this claim
based on its conclusion that Frithiof had no duty to disclose his prior discovery during
the lease negotiations. We agree. See Sejnoha v. City of Yankton, 

,
740 (S.D. 2001).

       Actual Fraud. Actual (intentional) fraud is the basis for a tort action of deceit
as well as an action to avoid a fraudulently induced contract. See SDCL §§ 20-10-1,
53-4-1(2). Fraud is almost identically defined for both purposes in SDCL §§ 20-10-2
and 53-4-5. As the County concedes Frithiof made no affirmative misrepresentation,
this case implicates only the third subsection: “The suppression of a fact by one who

                                          -8-
is bound to disclose it, or who gives information . . . likely to mislead for want of
communication of that fact.” SDCL § 20-10-2(3); see also SDCL § 53-4-5(3). The
County argues that summary judgment was improper because actual fraud is a
question of fact, and it presented evidence that Frithiof intended to deceive the County
by “withholding . . . facts material to the lease and the lease terms.” However, § 20-
10-2(3) applies to “suppression of a fact by one who is bound to disclose it.” No fraud
action for intentional concealment will lie absent a duty to disclose. See 

.

       The County argues that attorney Nassour’s cover letter enclosing the revised
lease brings this fraud claim within the statute because it misleadingly failed to
mention the revised “OTHER” clause. We disagree. This passive non-disclosure was
not tantamount to active suppression or misrepresentation. Indeed, Nassour put the
County’s agents on notice of prior fossil activity by first proposing a back-dated lease
and then, when that proposal was rejected, proposing a substitute “OTHER”clause
expressly applying the lease to prior discoveries. As the district court observed:

      It was not the obligation of defendants to orally provide notice of a
      clause that was set apart from the remainder of the lease. Harding
      County, as a party to the contract, had a duty to review the contract and
      familiarize itself with the obligations of the contract. . . . To permit a
      party to admit that he signed a contract but did not read it or know its
      stipulations would absolutely destroy the value of all contracts.

      This is not a case like Life Benefit, Inc. v. Elfring, 

, 136 (S.D.
1942), where the insured fraudulently induced the insurance contract when she
disclosed minor surgery but intentionally “suppressed and concealed the truth as she
knew it, viz., that she had had a serious disorder of the breast and had had that breast
removed.” Here, even if Frithiof hoped that the prior discovery issue would slip by
the County’s notice, he had no duty to disclose and therefore committed no fraud,



                                          -9-
actual or constructive. See Weitzel v. Sioux Valley Heart Partners, 

,
896-97 (S.D. 2006); 

.

       For the same reasons, the district court properly granted summary judgment
dismissing the claim for rescission of the lease agreement based on the County’s
unilateral mistake of fact. See SDCL §§ 53-4-9, 53-11-2. Rescission for mistake of
fact requires that the mistake “not result from the want of such care and diligence as
would be exercised by a person of reasonable prudence under the same
circumstances.” LPN Trust v. Farrar Outdoor Adver., Inc., 

, 800
(S.D. 1996). It is undisputed that Harding County made no effort to inquire into prior
discoveries despite the lease’s unambiguous “OTHER” clause. The County did not
ask Frithiof about any such discoveries, inspect its land, or attempt any investigation
before entering into the lease. Such complete inaction cannot satisfy the requirement
for care and diligence. If the County’s agents mistakenly assumed that any prior
discoveries were of nominal value, that assumption was contrary to the lease’s plain
language, which contemplated discovery of fossils worth more than $1000, and cannot
provide grounds for rescission. See 

First Colony Life Ins. Co. v. Berube,

, 829 (8th Cir. 1997) (no rescission for mistake caused by neglecting to
understand “the contents of the contract before he signed it”) (applying South Dakota
law).

         III. THE COUNTY’S MISTAKE OF LAW (SDCL § 7-18-32)

       The County did not hold public hearings under § 7-18-32 before entering into
either of the 1996 leases. In his motion for summary judgment, Frithiof argued “that
the County cannot have it both ways: two identical lease agreements providing for the
same contingent compensation, one being worth in excess of $500, while the other one
is not.” The County responded that whether the lease had a value of at least $500 per
year was a disputed fact issue that must be tried. The district court avoided that issue.
Adopting the suggestion in Judge Colloton’s concurring opinion in Frithiof I, 483

                                          -10-
F.3d at 552-53, the court concluded that any failure to comply with § 7-18-32 was an
exercise of the County’s leasing authority in an “irregular manner,” and the County
is estopped by its own actions to rescind the lease on this ground.

       On appeal, the County argues the court committed two errors of law: first, if
the value of the lease exceeded $500 per year, then the County consented to the lease
under a mistake of law and may now rescind, see SDCL § 53-4-10; and second, the
necessary elements of estoppel are absent because the County took no affirmative
action on which Frithiof relied to his detriment. We reject both contentions.

        1. Section 53-4-10 authorizes rescission of a contract if there was (1)
“misapprehension of the law by all parties . . . making substantially the same mistake
as to the law,” or (2) “misapprehension of the law by one party of which the others are
aware at the time of contracting.” The mistake must be material to the contract.
Home Bldg. & Loan Ass’n v. Perpetual Sav. & Loan Ass’n, 

, 459
(S.D. 1983). Here, the County presented no evidence that Frithiof made a mistake of
law regarding compliance with § 7-18-32. Indeed, there is no evidence he even knew
of that statute, which simply imposed a condition precedent on the County’s authority
to enter into the lease. Thus, any mistake as to § 7-18-32 compliance was the
County’s unilateral mistake of law (and likely was no mistake of law at all given
Auditor Glines’s testimony that the County was aware of the statute and concluded
that the Frithiof lease, like the 1996 fossil leases, was worth less than $500 per year).
Thus, § 53-4-10 provides no basis to rescind the lease.

       The County argues that non-compliance with § 7-18-32 made the lease “an
impermissible enlargement of the County Commission’s power and authority.” But
that purported illegality is not a ground for rescinding the lease under SDCL § 53-11-
2, and the County provides no other rescission authority. Section 7-18-32 is silent as
to the consequences of failed or improper application. The County has not identified,



                                          -11-
nor have we found, any case or statute providing that a failure to comply with § 7-18-
32 automatically voids the offending lease.

       2. Turning to the estoppel issue, the County does not challenge the district
court’s conclusion, consistent with Judge Colloton’s opinion in Frithiof I, that failure
to hold a public hearing under § 7-18-32 amounted to an “irregular exercise” of the
County’s power to lease. When “a county has power to act, it may be estopped by the
acts of its agents although the method of exercising the power was irregular.”
Mellette County v. Arnold, 

, 643 (S.D. 1956). The County argues that
it took no affirmative act that could create an estoppel. This contention is without
merit. Entering into the lease agreement, without more, was such an affirmative act.
See Even v. City of Parker, 

, 674-76 (S.D. 1999) (issuing a building
permit); Mellette 

(“A consent judgment being in the nature
of a contract constitutes in the absence of fraud or mistake a waiver of errors and
irregularities.”) (emphasis added); Mo. River Tel. Co. v. City of Mitchell, 

, 70 (S.D. 1908) (enacting ordinance).

       The County further argues that Frithiof failed to meet his burden to prove
detrimental reliance. This argument, too, is without merit. It is undisputed that, in
reliance on the signed lease, Frithiof continued excavation and negotiations to sell
Tinker to the Indianapolis Children’s Museum, brought museum representatives to the
site and assured them the lease gave him marketable title to the fossil, and later
contracted with Colorado Dinosaur Company and Prehistoric Journeys for
preparation, mounting, and marketing of the fossil. This is more than adequate
reliance to trigger an estoppel. See 

(estoppel applied
when builder purchased materials in reliance on invalid permit).

       Viewing this issue in perspective, the County seeks to use its own alleged
mistake in construing § 7-18-32 to reap the entire profit from Frithiof’s efforts, based
on failure to comply with a statutory procedure that likely would have delayed, but not

                                         -12-
prevented, signing of the lease. Though estoppel should be used sparingly against
public entities, we conclude the County’s position on this issue is manifestly unjust.
We affirm the district court’s decision that the County is estopped to rescind the lease
based on § 7-18-32 non-compliance.

                         IV. PRE-LEASE TORT ISSUES

       1. Trespass. The County argues that the district court erred in dismissing its
claim for damages resulting from Frithiof’s unconsented entry onto County property
prior to signing of the November 2000 lease. The district court ruled that the County
ratified any trespass because the “OTHER” clause expressly “contemplates
defendants’ previous presence on county land.” The County argues there can be no
ratification absent knowledge of the material facts and intent to ratify. See Drew v.
Stanton, 

, 83 (S.D. 1999).

       As we see it, ratification is not the critical issue. Consent to enter land is a
defense to trespass under South Dakota law. Benson v. State, 

, 159
(S.D. 2006). Auditor Glines testified that County-owned lands are “open to the
public” and that anyone “can go walk through . . . state land without it being a trespass
issue.” The County raised no trespass issue with two previous prospectors who
requested and were granted leases after already entering County land and discovering
fossils. Consequently, we conclude that Frithiof’s entry on Harding County property
prior to the lease signing was privileged by consent. Moreover, Frithiof was on the
land with Gilbert’s permission, and the County cloaked Gilbert as lessee with at least
apparent authority to grant Frithiof permission to enter contiguous lands that Gilbert
both owned and leased. Finally, we agree with the district court that the lease waived
any claims for prior trespass.

      2. Conversion. The County’s complaint alleged that Frithiof committed the tort
of conversion when he excavated and removed Tinker from County property without

                                          -13-
the County’s consent. The County sought compensatory and punitive damages for
this serious interference with its ownership and possessory rights, later limiting this
claim to fossils excavated and removed from the site prior to signing of the lease in
November 2000. The district court granted summary judgment dismissing this claim
on alternative grounds: (i) the fossils were real property (an “‘ingredient’ of the
soil”) and therefore not subject to conversion, see Denke v. Mamola, 

,
207 (S.D. 1989); and (ii) if the fossils were subject to an action for conversion, the
lease’s “OTHER” clause provided permission for Frithiof’s action “and thus, obviates
any claim for conversion.”

       On appeal, Frithiof concedes that any fossils removed from the ground prior to
the lease became personal property subject to an action for conversion. See Black
Hills Inst. of Geological Research v. S.D. Sch. of Mines & Tech., 

, 741-42
(8th Cir. 1993). Thus, the district court’s first ground does not support summary
judgment dismissing the entire conversion claim. Turning to the second ground, the
County argues, relying again on 

, that it did not ratify
Frithiof’s conversion because “one cannot ratify an action of which they were not
aware had already taken place.” Frithiof counters that the County’s consent to the
prior removal of fossils is reflected in the prior discovery clause.

       In November 2000, Harding County knew it was leasing land for the purpose
of fossil prospecting and excavation, knew from prior discoveries in the area that
fossils of more than nominal value might be found, knew County lands were open to
the public and prior lessees had made discoveries before approaching the County for
leases, and should have known from the plain language of the lease proposed by
Frithiof that he may well have made prior discoveries. With this knowledge, the
County entered into a lease expressly granting Frithiof title to prior fossil discoveries
in exchange for ten percent of their sale price. It is a nice question, not adequately
briefed by the parties, whether the County, as a matter of law, thereby waived an
existing cause of action for conversion of which it may not have known but could

                                          -14-
easily have uncovered with even modest inquiry. See generally PLM Inv. Mgmt., Inc.
v. Dakota S. Ry. Co., 

, 1336 (8th Cir. 1991), quoting Norwest Bank
S.D. v. Venners, 

, 775 (S.D. 1989) (“To support the defense of
waiver, there must be a showing of a clear, unequivocal and decisive act or acts
showing an intention to relinquish the existing right.”).

       We conclude we need not resolve this question because a cause of action for
conversion will not lie after signing of the lease. “[C]onversion is an intentional
exercise of dominion or control over a chattel, which so seriously interferes with the
right of another to control it that the actor may justly be required to pay the other the
full value of the chattel.” Rensch v. Riddle’s Diamonds of Rapid City, Inc., 

, 271 (S.D. 1986) (emphasis added). “A simple act of intermeddling with
another’s property . . . which is done in ignorance of the owner’s claim thereto, and
without any intention to deprive him of it, will not constitute a conversion.” Richstein
v. Roesch, 

, 560 (S.D. 1946) (quotation omitted). Where the
defendant’s initial possession is rightful, conversion occurs only when he refuses the
owner’s demand that the chattel be returned. Rapid Sewing Ctr., Inc. v. Sanders, 

, 236 (S.D. 1961). Here, when Frithiof learned that Tinker was
discovered on County land, he approached the County for a lease. The County made
no inquiry as to prior discoveries and no demand for their return. Instead, the County
agreed to transfer title to any prior discoveries for ten percent of their sale price. In
these circumstances, the County no longer had a cause of action for the full value of
the chattel as a matter of law. As the district court properly concluded, the “ OTHER”
clause in the lease “obviate[d] any claim for conversion.”

       3. Civil Conspiracy. South Dakota law recognizes damage claims for civil
conspiracy. However, the claim is “not an independent cause of action, [and] is
sustainable only after an underlying tort claim has been established.” Kirlin v.
Halverson, 

, 455 (S.D. 2008) (internal quotation omitted). Because
Frithiof committed no underlying tort, the County’s conspiracy claim fails.

                                          -15-
      Finally, the County argues that various pretrial evidentiary rulings were an
abuse of the district court’s discretion. As we have affirmed the grant of summary
judgment, these issues are moot.

       We grant Appellants’ Motion To Supplement Record and affirm the judgment
of the district court.

MELLOY, Circuit Judge, dissenting.

       I believe the County has presented facts that, at a minimum, create a jury
question on the conversion claim. One of the bases for the district court’s decision on
the conversion issue was a theory of ratification or waiver by the insertion of the
“OTHER” clause in the lease. The parties’ briefs were directed to the merits of the
issue of whether the victim of a tort can unknowingly ratify that tort after the fact.
Rather than address a defense “not adequately briefed by the parties,” ante at 14–15,
however, the majority raises a new question and resolves the claim on a logic not
briefed at all.

       The majority is correct that a conversion is “‘an intentional exercise of
dominion or control over a chattel, which so seriously interferes with the right of
another to control it that the actor may justly be required to pay the other the full value
of the chattel.’” Ante at 15 (quoting Rensch v. Riddle’s Diamonds of Rapid City, Inc.,

, 271 (S.D. 1986)). In expounding this definition, however, the
majority concludes the County lost the right to seek full value by signing the lease and
agreeing to a ten-percent royalty. In reaching this result, the majority first cites case
law distinguishing between conversion and “[a] simple act of intermeddling with
another’s property, which does not imply any assertion of title of dominion over the
property, and which is done in ignorance of the owner’s claim thereto, and without
any intention to deprive him of it.” Richstein v. Roesch, 

, 560 (S.D.
1946). Where, as here, the defendant has taken physical possession of the chattel and

                                           -16-
attempted to sell it, however, the degree of interference could hardly be more
complete. See, e.g., Restatement (Second) of Torts § 222A, illus. 2 (stating that
mistakenly taking the property of another and not returning it until realization of the
mistake three months later is a conversion). Compare 

(finding the filing of a lien insufficient to constitute conversion), with, e.g., Denke v.
Mamola, 

, 208 (S.D. 1989) (finding conversion where good-faith
purchaser was unaware of plaintiff’s interest in property). Second, the majority finds
it relevant that “[w]here the defendant’s initial possession is rightful, conversion
occurs only when he refuses the owner’s demand that the chattel be returned.” Ante
at 15 (citing Rapid Sewing Ctr., Inc. v. Sanders, 

, 236 (S.D. 1961)
(treating apartment lessor’s initial possession of sewing machines left in apartment by
former lessee as rightful where plaintiff had employed lessee and supplied him with
the sewing machines in the course of his job as salesman)). As an isolated statement
of law it is not incorrect, but it is not germane to this case because Frithiof’s
possession was not “rightful” under any interpretation of the record. See Rapid
Sewing 

(citing Coleman v. Francis, 

, 719 (Conn.
1925)); 

–20 (discussing “wrongful” and “rightful”
possession); see also 

(“[Conversion] does not require
wrongful intent and is not excused by care, good faith, or lack of knowledge.”).

       Ultimately, the majority’s opinion comes full circle to conclude that the County
has waived its conversion claim by agreeing to transfer title to prior discoveries for
ten percent of their sale price, stating that the County, by entering the lease, “no longer
had a cause of action for the full value of the chattel.” Ante at 15. Conversion does
not require that the plaintiff have “a cause of action for” the full value of the chattel.
Rather, the interference must be sufficient “that the actor may justly be required to
pay” the full value. 

(quotation omitted). The cases cited
do not concern how interference once justifying full-value damages can later serve to
justify only partial-value damages or how a later reduction in actual damages



                                           -17-
completely undoes an existing conversion claim. Reframing the issue in terms of “full
value” does not answer the question before us.

       Frithiof does not seriously contend that the chattel was not converted; he argues
instead that through the lease the County consented to, ratified, and affirmed the
earlier conversion. Rather than address Frithiof’s waiver defense directly, however,
the majority emphasizes “full value” and summarily concludes that the County can
inadvertently waive its existing cause of action because ex post the County will have
waived its cause of action. To the contrary, waiver must be done “with full
knowledge of the material facts.” PLM Inv. Mgmt., Inc. v. Dakota S. Ry. Co., 

, 1336 (8th Cir. 1991) (quoting Norwest Bank S.D. v. Venners, 

, 775 (S.D. 1989). Viewing the record in the light most favorable to the non-
moving party, the County did not have “full knowledge of the material facts” that
Frithiof had already discovered fossils worth millions of dollars and had already
converted them for his own use.

       My second area of disagreement with the majority opinion is its refusal to
consider the County’s reliance on South Dakota Codified Laws sections 55-1-8 and
55-2-1, presumably on the basis that they were cited for the first time in the County’s
reply brief. It is somewhat ironic that the difficult issue of conversion is decided on
a basis that was neither relied upon by the district court nor raised by the parties in
their briefs, yet a statutory section that was cited, albeit in the reply brief, is ignored.
Moreover, the County’s argument was raised in the district court and the appellant’s
opening brief, admittedly without citation to the relevant South Dakota statute. In its
brief to the district court in opposition to summary judgment, the County framed this
argument in terms of the “additional circumstances” that can create a fiduciary duty
under South Dakota law. See Sporleder v. Van Lier, 

, 13 (S.D. 1997).
The County argued: “‘Additional circumstances’ are present in this unique case as the
Defendants had already . . . removed the very object which the lease allowed them to
search for.” As a part of its opening fiduciary-duty argument on appeal, the County

                                           -18-
stated that “[b]ecause Frithiof already had possession of the fossil while negotiating
with the County, Defendants had a duty [of] complete candor.” Frithiof
acknowledged the argument, but countered merely: “The case authority cited by [the]
County does not support that conclusion.” While the County failed to clearly
delineate its various fiduciary-duty arguments in its opening brief, this particular
argument is clarified and supported in the County’s reply brief. Simply put, “Because
of his control and knowledge of Harding County’s ownership of the fossil, Frithiof
was acting as Harding County’s trustee, albeit unbeknown to the County.” See S.D.
Codified Laws § 55-1-8 (“One who gains a thing by fraud, accident, mistake, undue
influence, the violation of a trust or other wrongful act, is, unless he has some other
and better right thereto, an implied trustee of the thing gained for the benefit of the
person who would otherwise have had it.”); 

(“In all matters connected
with his trust a trustee is bound to act in the highest good faith toward his beneficiary
and may not obtain any advantage therein over the latter by the slightest
misrepresentation, concealment, threat, or adverse pressure of any kind.”).

        I acknowledge that the appellant’s opening brief can be fairly read to raise only
a theory of common law implied trust while the reply brief shifts the focus to a theory
of statutory fiduciary duty. However, I am troubled that we would reject a potentially
dispositive theory simply because the relevant statutes were not cited until the reply
brief, particularly when another issue is resolved on a basis that was not argued in any
brief.

      I respectfully dissent.
                        ______________________________




                                          -19-