STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

November 7, 1968

L. W. Davis, Director
South Dakota Veterans Department
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 68-39

Court action to collect veterans loans. Payments of expenses of such litigation. Signing of pleadings.

Dear Mr. Davis:

You have requested an official opinion in regard to the following factual situation:

"The Veterans Department, pursuant to provisions of SDC 1960 Supp. 41.04, as amended, has made several loans to veterans. Many such loans, while requiring repayment, are now delinquent. In view of such delinquency, the Commission must either write off such loan as a bad and uncollectible debt, or must take legal action to enforce repayment. The Veterans Commission has concluded that action to collect is preferable."

In connection with such factual situation, and appreciating that the Attorney General's Office should assist in such court proceedings, you have submitted the following questions.

"1. Should the costs of suits (such as filing fees, cost of serving summons, subpoenaing witnesses and the like) be paid from funds of the Veterans Department or of the Attorney General?

"2. If the cost of such litigation is an expense of the Veterans Department, may such be paid from the Veterans Department Revolving Fund, created by Ch. 177, Laws of 1967?

"3. If the Assistant Attorney General, acting as counsel for the Veterans Department in such litigation, incurs expenses, who pays the same-the Veterans Department or the Attorney General?

"4. If the payment of such expenses is the responsibility of the Veterans Department, may funds therefore be taken from such Revolving Fund?

"5. Who should subscribe the complaint to enforce such repayment-the Assistant Attorney General, the Director of the Veterans Department, or a member of the Veterans Commission?

At the outset, may I say it is my opinion that because many of the loans of your department are made upon the agreement of the veteran or his beneficiary, to repay such loan, if repayment is not made, resort may be had to the courts to enforce such repayment. Any other interpretation would render the responsibility to make such loans conditioned on an agreement to repay almost useless.

QUESTIONS 1 and 3

These two questions involve the same principle, and may be answered together.

SDC 1960 Supp. 41.0410 reads as follows:

"The Attorney General is hereby directed to assign to the Veterans Department an Assistant Attorney General who shall, when available, be an honorably discharged war veteran, and who shall serve the Department for such share of his time as may be deemed necessary for the adequate protection of the interest of veterans and of the State."

It is my opinion that this statute requires such Assistant Attorney General to furnish the Veterans Department legal advice without further expenses to such department. He would also have to act as legal counsel in Veteran Department litigation without an additional attorney fee.

However, when it is determined that resort must be had to the courts in order to obtain repayment of a delinquent Veteran Department loan, certainly the required filing fees, witness fees, and necessary travel and living expenses of such attorney while engaged in such litigation, as between the Veterans Department, and the Office of the Attorney General, must be paid by the state entity for whom such litigation is commenced. The Attorney General is merely assisting the Veterans Department, but, as such, has no direct interest in such litigation. However, the Veterans Department has a direct interest therein, for in case recovery of such loan is effectuated, such moneys would be credited to the Veterans Department Revolving Fund for future use in such loan program.

Questions 1 and 3 are answered as follows: It is the duty of the Veterans Department to pay the necessary costs and expenses of litigation necessary to collect delinquent veterans loans.

QUESTIONS 2 and 4

These two questions present the same problem, and may be answered together.

Having found that the Veterans Department is responsible to pay the costs and expenses of litigation to collect delinquent loans, the question is raised, may such costs and expenses be ]laid from the Revolving Fund?

All repayments by Chapter 177, Laws of 1967 are credited to such Revolving Fund, and the proceeds of such fund were by such statute appropriated to be expended "for the purposes provided for in SDC 1960 Supp. 41.04, as amended."

As I have ruled that the Veterans Department may bring action to enforce repayment, it must logically follow that such actions are within the purpose of SDC 1960 Supp. 41.04, as amended.

It is my opinion, in answer to questions 2 and 4, that the Revolving Fund may be used to pay such necessary costs, fees and expenses of litigation necessary to enforce repayment of loans.

QUESTION 5

This question is answered by Rule Eleven (11) of the South Dakota Rules of Civil Procedure. This rule requires every pleading to be signed by at least one of the attorneys of record for a party to litigation. (The rule provides that by such signature, the attorney has made a certificate that to his best knowledge, information, and belief there is good grounds to support the complaint, and such is not interposed for delay.)

There is no question that someone with personal knowledge of the particular loan in question-be he the Director of the Veterans Department or a member of the Veterans Commission, must advise the Assistant Attorney General in order that he may execute a proper complaint.

While there may be no error, if either the Veterans Department Director, or a member of the Commission signs such complaint, the quoted rule also requires the Assistant Attorney General to sign such pleading. It would seem his failure to so sign such pleading may well be grounds for attack on such grounds by the defendant in such litigation.

Respectfully submitted,

Frank L. Farrar
Attorney General