South Dakota Codified Laws 58-37A-8. Liability of officers and members of governing body–Indemnificationand reimbursement–Insurance–Liability of noncompensated member
The officers and members of the supreme governing body or any subordinate body of a society are not personally liable for any benefits provided by a society.
Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and liabilities imposed upon, the person in connection with or arising out of any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, or threat thereof, in which the person may be involved because the person was a director, officer, employee, or insurance producer of the society or of any firm, corporation, or organization which the person served in any capacity at the request of the society. No person may be indemnified or reimbursed in relation to any matter in any action, suit, or proceeding if the person is finally adjudged to be guilty of a breach of a duty as a director, officer, employee, or insurance producer of the society or in relation to any matter in any action, suit, or proceeding, or threat thereof, which is the subject of a compromise settlement; unless in either case the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society and, in a criminal action or proceeding, had no reasonable cause to believe that the person’s conduct was unlawful. The determination whether the conduct of the person met the standard required in order to justify indemnification and reimbursement in relation to any matter described in the preceding sentence may only be made by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to the action, suit, or proceeding or by a court of competent jurisdiction. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, as to the person does not create a conclusive presumption that the person did not meet the standard of conduct required to justify indemnification and reimbursement. The right of indemnification and reimbursement is not exclusive of other rights to which a person may be entitled as a matter of law and shall inure to the benefit of the person’s heirs and personal representatives.
Terms Used In South Dakota Codified Laws 58-37A-8
- Conviction: A judgement of guilt against a criminal defendant.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Person: includes natural persons, partnerships, associations, cooperative corporations, limited liability companies, and corporations. See South Dakota Codified Laws 2-14-2
- Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
- Quorum: The number of legislators that must be present to do business.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
A society may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or insurance producer of the society, or who is or was serving at the request of the society as a director, officer, employee, or insurance producer of any other firm, corporation, or organization against any liability asserted against the person and incurred by the person in any capacity or arising out of the person’s status as such, whether or not the society would have the power to indemnify the person against the liability under this section.
No director, officer, employee, member, or volunteer of a society serving without compensation is liable, and no cause of action may be brought, for damages resulting from the exercise of judgment or discretion in connection with the duties or responsibilities of the person for the society unless the act or omission involved willful or wanton misconduct.
Source: SL 1990, ch 410, § 8; SL 2001, ch 286, § 217.