#26720-aff in pt, rev in pt & rem-LSW

2014 S.D. 76

                           IN THE SUPREME COURT
                                   OF THE
                          STATE OF SOUTH DAKOTA

                                        ****
ROGER HAMILTON,                                Plaintiff and Appellant,

      v.

RICHARD A. SOMMERS, MELISSA E.
NEVILLE and BANTZ, GOSCH &
CREMER, PROF., LLC,                            Defendants and Appellees.

                                        ****

                   APPEAL FROM THE CIRCUIT COURT OF
                      THE FIFTH JUDICIAL CIRCUIT
                    ROBERTS COUNTY, SOUTH DAKOTA

                                        ****

                    THE HONORABLE GENE PAUL KEAN
                             Retired Judge

                                        ****

DAN RASMUS
Minneapolis, Minnesota

      and

TIMOTHY L. JAMES
Yankton, South Dakota                          Attorneys for plaintiff
                                               and appellant.

THOMAS J. WELK
JASON R. SUTTON
MEGHAN K. WOSTER of
Boyce, Greenfield, Pashby & Welk, LLP
Sioux Falls, South Dakota                      Attorneys for defendants
                                               and appellees.

                                        ****
                                               ARGUED ON MARCH 24, 2014
                                               OPINION FILED 10/29/14
#26720

WILBUR, Justice

[¶1.]        Roger Hamilton appeals summary judgment dismissing his claims of

legal negligence or malpractice and breach of fiduciary duty brought against his

former attorneys. We affirm in part, reverse in part, and remand.

                                    Background

[¶2.]        This case began as a dispute related to 112 bee sites located in

Marshall, Roberts, and Day counties in northeast South Dakota. In order to place

bee hives onto private property, the hive owner must secure written permission

from the landowner and file the permission slip with the South Dakota Department

of Agriculture (Department). Here, the 112 sites were previously registered to

James Paysen. Paysen sold the 112 sites in the mid-1990s to John Kelley; but

significantly, Kelley did not register them. 1 In 2006, Kelley sold the 112 sites to

Adee Honey Farms, which was owned by Richard Adee.

[¶3.]        Around the same time as Adee’s purchase, plaintiff/appellant Roger

Hamilton, a local beekeeper, learned that Kelley was “going under.” Hamilton

obtained an “abandonment map” from another local beekeeper (Mike Block) to

determine what sites may be available. Block also prepared and gave Hamilton a

revocation form used to revoke a landowner’s permission. Using the map,

revocation forms, and new permission forms, Hamilton acquired 10 bee sites

formerly registered to Paysen on which Adee had unregistered hives. Block, along




______________________________________
1.    “Sold” is a relative term because landowners may revoke permission to place
      bee hives on their property at any time for any reason.

                                          -1-
#26720

with another regional beekeeper (Monte Amman), acquired the other 102 sites.

Hamilton and Block drove together to Pierre to register their permission forms with

the Department.

[¶4.]        Claiming the 112 sites as his own, Adee petitioned for an

administrative hearing seeking to have the sites registered in his name. The

hearing occurred on May 15, 2007. Hamilton, Block, and Amman prevailed; thus,

the Office of Hearing Examiners found Hamilton had properly registered his 10 bee

sites.

[¶5.]        Following the administrative hearing, Adee sued Hamilton, Block, and

Amman on August 25, 2007, jointly and severally, for interference with business

relations and/or expectancy, unfair competition, and civil conspiracy (Underlying

Lawsuit). Seeking representation, Hamilton, Block, and Amman met with

attorneys Richard Sommers and Melissa Neville of Bantz, Gosch & Cremer, L.L.C.

(collectively “Appellees”) on September 27, 2007, in Aberdeen, South Dakota.

[¶6.]        At the meeting, Appellees discussed the potential conflict of interest

that could occur when representing all three defendants. Appellees asked whether

Hamilton, Block, or Amman had insurance coverage that would compel the

insurance carriers to respond to Adee’s suit. Block and Amman replied

affirmatively. Appellees wrote a demand letter to Block and Amman’s carrier

requesting that the insurance company defend the lawsuit, which the carrier




                                         -2-
#26720

declined. Hamilton allegedly said he did not have insurance; 2 Appellees did not

inquire any further. In hindsight, Hamilton did, in fact, have insurance in that

regard. At the meeting’s conclusion, Hamilton, Block, and Amman orally agreed to

Appellees’ representation.

[¶7.]        On October 3, 2007, Appellees sent a letter to Hamilton, Block, and

Amman confirming the joint representation and enclosing a conflict of interest

waiver. Block and Amman signed and returned the waiver; Hamilton claims he

never received, signed, or returned the waiver.

[¶8.]        On July 7, 2009, Adee offered to settle solely with Amman if Amman

transferred his bee sites to Adee and testified against Hamilton and Block in the

Underlying Lawsuit. Appellees informed Hamilton, Block, and Amman of the

settlement offer. Amman stated that he could not settle because, unbeknownst to

Hamilton, Block, and Appellees, he had sold his business “including bee hive

locations” on January 5, 2009, to Whetstone Valley Honey, Inc. (Whetstone).

Amman’s sale undercut the defense’s theory that Adee had no legally protected

interest in the bee sites because the permissive use was revocable at any time and,

thus, the bee sites could not be sold. Additionally, the sale valued each bee site at

approximately $5,000, allowing Adee to precisely state his alleged damages.

Surprised by the sale, Appellees explained to the defendants that it was a major

problem for their defense.



______________________________________
2.    Neville testified that at the meeting, Hamilton said he did not have
      insurance. Hamilton does not dispute that fact, saying in his deposition that
      he had a different insurance company and did not realize he had coverage.

                                          -3-
#26720

[¶9.]        The next week on July 13, 2009, Judge John Flemmer held a pre-trial

conference in the Underlying Lawsuit. There, Judge Flemmer denied Appellees’

motions to exclude evidence of Amman’s sale and for a continuance to add witnesses

who could explain the sale. During the conference, Appellees recognized there may

be a conflict of interest between defendants if evidence of the sale was presented

stating: “there may be an irretrievable conflict now between Mr. Amman and the

other two Defendants.” 3

[¶10.]       After the pre-trial conference, Appellees raised the possibility of

settling. Adee’s demand was a settlement with all defendants or none. Hamilton

expressed reservations about settling, but, eventually, Hamilton, Block, and

Amman signed a settlement agreement on July 17, 2009. Under the settlement

terms, Hamilton, Block, Amman, and Whetstone agreed to transfer their interests

in the bee sites to Adee and to send landowners letters requesting they register

their sites with Adee. Additionally, Hamilton, Block, and Amman agreed to pay

Adee $7,500 for honey delivery to the bee sites’ landowners for the 2009 season.

[¶11.]       After the settlement, Hamilton hired a new attorney (John Wiles) and

advised Appellees that he did not intend to comply with the agreement. Block also

hired new counsel (Lee Schoenbeck) and refused to comply with the agreement.

Adee moved to enforce the agreement, and during a hearing, Judge Flemmer



______________________________________
3.    Appellant’s brief skews Sommers’s testimony to say that he “acknowledged
      on the record that a conflict of interest existed.” But, review of the hearing
      transcript shows that Sommers stated a conflict of interest may occur if the
      evidence of the sale is admitted because defendants then may need to testify
      against each other.

                                          -4-
#26720

rejected Hamilton and Block’s argument that the settlement was unenforceable

because of duress or fraud. As part of the court’s findings of fact, Judge Flemmer

specifically found that Hamilton had signed the conflict waiver form that Appellees

claim they mailed to him. Hamilton did not appeal Judge Flemmer’s decision.

[¶12.]       On September 29, 2010, Hamilton sued Appellees asserting three

causes of action: legal malpractice, breach of fiduciary duty, and negligent infliction

of emotional distress, all based on an alleged conflict of interest relating to

Appellees’ representation of co-defendants Hamilton, Block, and Amman in the

Underlying Lawsuit. On May 31, 2012, Hamilton amended his complaint adding an

allegation of legal malpractice for Appellees’ alleged failure to properly investigate

whether Hamilton had applicable insurance coverage.

[¶13.]       During discovery, Hamilton retained David Lillehaug, then a partner

at a Minneapolis law firm, as an expert witness. 4 As to the conflict of interest

claim, Lillehaug opined that the seriousness of the conflict between Hamilton,

Block, and Amman made the conflict of interest non-consentable, and, even if it

were consentable, Appellees breached the standard of care by failing to obtain

informed consent from Hamilton. Also, Lillehaug opined that Appellees breached

the standard of care by failing to withdraw or move for continuance when Adee

offered to settle with only one defendant (Amman) when Amman’s sale came to

light. Lillehaug based his conflict of interest opinion on his practice under the


______________________________________
4.    During the pendency of this litigation, David Lillehaug was appointed to the
      Minnesota Supreme Court. At the time attorney Lillehaug gave his opinions,
      he was not a member of the Minnesota Supreme Court and will be referred to
      as “Lillehaug.”

                                           -5-
#26720

Model Rules of Professional Conduct Rule 1.7, and in his interpretation, its

similarity with South Dakota’s Rules of Professional Conduct Rule 1.7. Lillehaug

testified, in his opinion, that “the standard of care with respect to conflict of interest

. . . is essentially a national standard of care and that there is nothing unique about

South Dakota in that regard.” As to the insurance investigation claim, Lillehaug

opined that Hamilton’s statements that he had no insurance “warrant[ed] further

inquiry and investigation.” Lillehaug based his insurance investigation opinion on

his career experience, which occurred almost entirely in Minnesota, and on

information from other attorneys, including two attorneys licensed to practice in

South Dakota (one based in Washington, D.C.).

[¶14.]       Appellees moved to strike Lillehaug’s opinions asserting he applied the

wrong standard of care to both the conflicted representation and insurance

investigation claims. Appellees also moved for summary judgment asserting

Hamilton’s failure to meet his initial burden of presenting evidence to support his

claims. Hamilton agreed to dismiss his negligent infliction of emotional distress

claim.

[¶15.]       On April 15, 2013, the circuit court, Judge Gene Paul Kean presiding,

granted Appellee’s motion to strike, stating, Lillehaug “lacked adequate foundation

to testify about the applicable standard of conduct” and his expert testimony would

be “irrelevant, unhelpful to the jury, and confusing to the jury because his opinions

[were] based upon a national standard of conduct[.]” The circuit court also granted

Appellees’ motion for summary judgment. On the conflicted representation claim,

the court found Hamilton failed to provide sufficient evidence of proximate cause


                                           -6-
#26720

and damages arising from the settlement. On both the conflicted representation

and insurance investigation claim, the court found Hamilton failed to provide

sufficient evidence of a breach of the standard of care because Hamilton failed to

provide admissible expert testimony. The circuit court found that even if the expert

testimony was admissible, Hamilton failed to provide admissible expert testimony

that Appellees violated the standard of care applicable to attorneys in the same or

similar locality as Roberts County, which the court determined to be a South

Dakota statewide standard of conduct.

[¶16.]       Hamilton timely appeals, raising the following issues: (1) whether the

circuit court erred in striking Lillehaug’s expert opinion; (2) whether South Dakota

should adopt a national standard of care for legal malpractice claims; (3) whether

the circuit court erred in finding that collateral estoppel precluded litigation on the

conflicted representation claim; (4) whether the circuit court improperly weighed

the evidence as to the proximate cause of Hamilton’s damages; and (5) whether the

circuit court committed reversible error by denying a continuance after striking

Lillehaug’s testimony.

                                Standard of Review

[¶17.]       “Summary judgment is an extreme remedy, . . . not intended as a

substitute for a trial.” Discover Bank v. Stanley, 2008 S.D. 111, ¶ 19, 757 N.W.2d

756, 762 (quoting Cont’l Grain Co. v. Heritage Bank, 1996 S.D. 61, ¶ 17, 548 N.W.2d

507, 511). Our review of summary judgment is well settled:

             We 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

                                          -7-
#26720

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

De Smet Farm Mut. Ins. Co. of S.D. v. Busskohl, 2013 S.D. 52, ¶ 11, 834 N.W.2d

826, 831 (quoting Brandt v. Cnty. of Pennington, 2013 S.D. 22, ¶ 7, 827 N.W.2d 871,

874). We review the circuit court’s findings of fact “under the clearly erroneous

standard.” Peterson v. Issenhuth, 2014 S.D. 1, ¶ 15, 842 N.W.2d 351, 355 (quoting

Eagle Ridge Estates Homeowners Ass’n, Inc. v. Anderson, 2013 S.D. 21, ¶ 12, 827

N.W.2d 859, 864). We review the circuit court’s conclusions of law de novo. Id.

[¶18.]       Further, we review “a circuit court’s decision to admit or deny an

expert’s testimony under the abuse of discretion standard.” Burley v. Kytec

Innovative Sports Equip., Inc., 2007 S.D. 82, ¶ 12, 737 N.W.2d 397, 402. An abuse

of discretion “is a fundamental error of judgment, a choice outside the range of

permissible choices, a decision, which, on full consideration, is arbitrary or

unreasonable.” Thurman v. CUNA Mut. Ins. Soc’y, 2013 S.D. 63, ¶ 11, 836 N.W.2d

611, 616.

                                       Analysis

[¶19.]       Whether the circuit court erred in striking Lillehaug’s expert
             opinion, which was based upon a national standard of care.

[¶20.]       Hamilton contends that his expert’s (Lillehaug’s) testimony was

reliable and any deficiency should go towards the weight, not admissibility, of his

testimony. Appellees contend that Lillehaug based his testimony on an incorrect

standard of care (national) and, thus, the circuit court appropriately excluded

                                          -8-
#26720

Lillehaug’s testimony. These arguments touch on the first two issues raised by

Hamilton; therefore, we will address those issues together.

[¶21.]       A negligence action in general requires four elements to be proven. As

stated in Bernie v. Catholic Diocese of Sioux Falls, “[i]n order to prevail in a suit

based on negligence, a plaintiff must prove duty, breach of that duty, proximate and

factual causation, and actual injury.” 2012 S.D. 63, ¶ 15, 821 N.W.2d 232, 240

(quoting Highmark Fed. Credit Union v. Hunter, 2012 S.D. 37, ¶ 9, 814 N.W.2d 413,

415). Moreover, a successful claim against an attorney for legal malpractice

requires proof of four elements: “(1) the existence of an attorney-client relationship

giving rise to a duty, (2) the attorney, either by an act or failure to act, breached

that duty, (3) the attorney’s breach of duty proximately caused injury to the client,

and (4) the client sustained actual damage.” Peterson, 2014 S.D. 1, ¶ 17, 842

N.W.2d at 355.

[¶22.]       “[T]he existence of a duty is a question of law to be determined by the

court” and not the jury. Janis v. Nash Finch Co., 2010 S.D. 27, ¶ 8, 780 N.W.2d

497, 500 (quoting Small v. McKennan Hosp., 403 N.W.2d 410, 413 (S.D. 1987)).

“The court determines, as a matter of law, the existence and scope or range of that

duty.” 57A Am. Jur. 2d Negligence § 78 (2014). Depending on the facts of the case,

locality may or may not be one of the considerations of the court in determining

duty as a matter of law. “In terms of legal malpractice, as in tort law generally, the

standard of care is the behavioral component of duty.” Michael P. Ambrosio &

Denis F. McLaughlin, The Use of Expert Witnesses in Establishing Liability in Legal

Malpractice Cases, 61 Temp. L. Rev. 1351, 1357-58 (1988). “Once the court


                                           -9-
#26720

determines that the law imposes a duty[,] . . . it must then determine what conduct

the law requires to fulfill that legal duty.” Id.

               [T]he required standard of conduct is the exercise of professional
               care and skill. Although this general legal standard of care is
               established by law, the question of whether the legal standard of
               care has been fulfilled in a particular case is decided by the
               malpractice trier of fact. On this issue, the role of the expert
               witness is critical. Except in certain cases, it is an expert
               witness who must establish the particular standard of care, i.e.,
               the particular level of professional conduct required to meet the
               legal standard of care, and whether an attorney’s conduct
               conforms to this standard of care. This is because the degree of
               skill and care ordinarily exercised by lawyers in particular cases
               is generally beyond the common knowledge of laypersons.

Id. (footnotes omitted).

[¶23.]         Consideration of the following criteria is required in determining the

reasonableness of a lawyer’s conduct: “(1) the requisite skill and knowledge; (2) the

degree of skill and knowledge to be possessed and exercised; (3) the effect of local

considerations and custom; and (4) any special abilities possessed by the lawyer.” 2

Ronald E. Mallen & Jeffrey M. Smith, with Allison D. Rhodes, Legal Malpractice §

20:2 (2014 ed.). “A translation of these considerations into a standard of care means

that an attorney should exercise the skill and knowledge ordinarily possessed by

attorneys under similar circumstances.” 5 Id. “Considerations of locality, custom

and special skills are treated as the ‘similar circumstances.’” Id.

______________________________________
5.    The duty of an attorney providing professional services has been
      articulated in various ways:

         California: “The general rule with respect to the liability of an attorney for
         failure to properly perform his duties to his client is that the attorney, by
         accepting employment to give legal advice or to render other legal services,
         impliedly agrees to use such skill, prudence, and diligence as lawyers of
         ordinary skill and capacity commonly possess and exercise in the
                                                                 (continued . . .)
                                            -10-
#26720

______________________________________
(. . . continued)
         performance of the tasks which they undertake.” Kirsch v. Duryea, 578 P.2d
         935, 938 (Cal. 1978) (quoting Lucas v. Hamm, 364 P.2d 685, 689 (Cal. 1961)).

      Colorado: “An attorney owes his client a duty ‘to employ that degree of
      knowledge, skill, and judgment ordinarily possessed by members of the legal
      profession in carrying out the services for his client.’” Hopp & Flesch, LLC v.
      Backstreet, 123 P.3d 1176, 1183 (Colo. 2005).

      Iowa: An attorney breaches the duty of care owed to the client when the
      attorney fails to use “such skill, prudence and diligence as lawyers of
      ordinary skill and capacity commonly possess and exercise in the
      performance of the task which [is undertaken].” Martinson Mfg. Co. v. Seery,
      351 N.W.2d 772, 775 (Iowa 1984).

      Minnesota: “Attorneys have a duty ‘to exercise that degree of care and skill
      that is reasonable under the circumstances, considering the nature of the
      undertaking.’” Jerry’s Enters. Inc., v. Larkin, Hoffman, Daly & Lindgren,
      Ltd., 711 N.W.2d 811, 817 (Minn. 2006) (quoting Prawer v. Essling, 282
      N.W.2d 493, 495 (Minn. 1979)).

      Nebraska: “In a legal malpractice action, the required standard of conduct is
      that the attorney exercise such skill, diligence, and knowledge as that
      commonly possessed by attorneys acting in similar circumstances.” Young v.
      Govier & Milone, 835 N.W.2d 684, 694 (Neb. 2013).

      Two states adjacent to South Dakota apply a statewide standard:

      North Dakota: An attorney providing professional services has a duty to
      perform those services with “that degree of skill, care, diligence, and
      knowledge commonly possessed and exercised by a reasonable, careful, and
      prudent lawyer in the practice of law in the State.” Wastvedt v. Vaaler, 430
      N.W.2d 561, 565 (N.D. 1988).

      Wyoming: “To succeed on a legal malpractice claim, a plaintiff must establish
      each of the following: (1) the existence of a duty; (2) the accepted standard of
      legal care; (3) that the attorney departed from the accepted standard of care;
      and, (4) that the attorney’s conduct was the legal cause of the injuries
      suffered. Ordinarily, the question of whether the fourth element, causation,
      has been shown will not arise unless the plaintiff has established each of the
      other three elements. To establish a departure from the standard of care, the
      plaintiff must show that the attorney failed to exercise the degree of care,
      skill, diligence and knowledge commonly possessed and exercised by a
      reasonable, careful and prudent lawyer in the practice of law in this
      jurisdiction.” Gayhart v. Goody, 98 P.3d 164, 169 (Wyo. 2004) (citations
      omitted).
                                                               (continued . . .)
                                          -11-
#26720

[¶24.]          Analyzing the facts in this case, in regard to the conflicted

representation claim, we note that Lillehaug wrote in his expert report that “the

applicable standard of care is consistent with, and well stated by, Rule 1.7.” He

noted how South Dakota’s Rules of Professional Conduct Rule 1.7 is identical to the

American Bar Association’s Model Rules of Professional Conduct Rule 1.7. Then,

during his deposition, Lillehaug testified that a national standard of care applied to

legal ethics:

                Lillehaug: Okay. My opinion is that the standard of care with
                respect to conflict of interest, the issue relevant to us today, is
                essentially a national standard of care and that there is nothing
                unique about South Dakota in that regard. I believe I am
                familiar with the South Dakota standard of care with respect to
                conflict of interest, not just by reading the rule, but by
                discussions with South Dakota attorneys over the years, but I
                can’t identify any particular attorneys or discussions.
                Attorney: So let me understand this . . . I asked: Are you
                familiar with the standard of care for legal ethics in South
                Dakota? And what you’re saying to me is that you believe, as is
                relevant to this case, that it’s a national standard of care and it’s
                not a local standard of care; is that correct?
                Lillehaug: Correct.

[¶25.]          In regard to the insurance investigation claim, Lillehaug identified the

standard of care as: “to take competent and diligent steps to identify and confirm

liability coverage and tender the case to the carrier for defense and indemnity.”

Lillehaug testified his opinion was based on his experience and what he has learned



______________________________________
(. . . continued)
         Restatement (Third) of The Law Governing Lawyers provides that “a lawyer
         who owes a duty of care must exercise the competence and diligence normally
         exercised by lawyers in similar circumstances.” Restatement (Third) of The
         Law Governing Lawyers § 52 (2000).

                                             -12-
#26720

from other more senior and experienced lawyers throughout the course of his career

with respect to cases that involve insurance. He claimed that “other lawyers”

included two members of the South Dakota Bar. Appellees’ attorney asked:

             Attorney: Are you familiar with the standard practice
             regarding investigating insurance coverage in South Dakota by
             South Dakota lawyers?
             Lillehaug: I’m not aware that there is anything different with
             respect to South Dakota as far as investigating insurance
             coverage than in any other state.
             Attorney: Have you done any investigation to determine
             whether there is any standard of care different in South Dakota
             than what you have had?
             Lillehaug: No.

[¶26.]       Lenius v. King is cited in the dissent as adopting the locality rule for

defining the standard of care for attorneys in South Dakota. However, the issue

that was appealed and decided in Lenius was the need for an expert on the standard

of care. 294 N.W.2d 912, 913 (S.D. 1980). Although the circuit court in Lenius gave

a jury instruction that included locality, that part of the instruction was not

appealed and was thus not analyzed by the Court, other than to state, “[W]e are not

persuaded that the instruction incorrectly states the law applicable in this case.”

Id. at 914. The Court went on to note that the circuit court applied the same

standard of care required of a lawyer that is required for the medical profession. Id.

We have since adopted a national standard of care for specialists in medicine. See

Mousseau v. Schwartz, 2008 S.D. 86, ¶ 17, 756 N.W.2d 345, 352 (citing Shamburger

v. Behrens, 418 N.W.2d 299, 306 (S.D. 1988), overruled on other grounds by Russo v.

Takata Corp., 2009 S.D. 83, 774 N.W.2d 441).




                                         -13-
#26720

[¶27.]         In describing a lawyer’s duty, this Court in Lenius merely stated, in

general:

               In a malpractice action the jury decides, from evidence
               presented at trial by other lawyers called as expert witnesses,
               whether a lawyer possessed and used the knowledge, skill, and
               care which the law demands of him. The opinions and testimony
               of such experts are indispensable in determining questions
               which are unfamiliar to ordinary witnesses and, within that
               field, the opinions of lay witnesses are not admissible.

294 N.W.2d at 914 (emphasis added).

[¶28.]         In applying a standard of care, locality can also be considered as a

factor or special circumstance when determining whether an attorney has met the

standard, in an appropriate case, such as where local rules, practices or customs are

relevant to claimed breach of duty. 6 However, in many cases locality is not relevant

to the application of the standard of care. 7 Therefore, the application of the locality

rule is fact specific and will not be an issue in every case. See Dwain E. Fagerlund,

Legal Malpractice: The Locality Rule and Other Limitations of the Standard of Care:

Should Rural and Metropolitan Lawyers Be Held to the Same Standard of Care?, 64

N.D. L. Rev. 661, 686-87 (1988). For the two issues in this case—first, conflict of


______________________________________
6.    “Consideration of the locality, such as local rules, practices or customs, can
      determine the propriety of the attorney’s conduct. If expert testimony is
      required locality considerations may limit the geographical area from which
      expert witnesses can be selected.” Mallen et al., supra ¶ 23, § 20:5.

7.       “The ability of the practitioner and the minimum knowledge required should
         not vary with geography. The rural practitioner should not be less careful,
         less able or less skillful than the urban attorney. The fact that a lower
         degree of care or less able practice may be prevalent in a particular local
         community should not dictate the standard of care.” Moore v. Lubnau, 855
         P.2d 1245, 1249 (Wyo. 1993) (quoting 1 Ronald E. Mallen & Jeffrey M. Smith,
         Legal Malpractice, § 15.5 (3d ed. 1989)).

                                           -14-
#26720

interest in representing multiple clients and, second, investigation of insurance

coverage—there was no showing that locality was a relevant factor.

[¶29.]       In cases where locality may be relevant to the expectations a client has

of his lawyer, we agree with the circuit court that a statewide focus would usually

be appropriate. “[A]n attorney’s required level of skill and ability is not defined by

the individual locality in which he practices. The state is the more logical and

generally accepted territorial limitation on the standard of care.” Moore v. Lubnau,

855 P.2d 1245, 1249 (Wyo. 1993). However, there may be cases where it is not

appropriate to apply a statewide standard, and we should not limit ourselves to only

using a statewide approach.

             [T]here is the possibility that limiting the standard of care to the
             state may foster an unacceptably low level of performance in
             certain areas of the law. It is plausible that in some areas of
             law, all the lawyers in a given state may lack the necessary
             skill, knowledge, and experience to handle a case properly. If
             such were the case, testimony by a lawyer practicing in that
             state as to the standard of care in a similar situation would
             serve to perpetuate an unacceptably low level of legal service.

Fagerlund, supra ¶ 28, at 686-87.

[¶30.]       Although it is now unlikely that David Lillehaug is in a position to

testify in this case due to his current position on the Minnesota Supreme Court, he

was, at the time his testimony was offered, highly qualified as an attorney to testify

to the standard of care for attorneys. His expert testimony, when read in its

entirety, addressed the issues of the requisite obligations of an attorney. 8 His



______________________________________
8.    Lillehaug referenced the Model Rules of Professional Conduct. Although the
      Model Rules do not establish the standard of care for lawyers, a violation of a
                                                           (continued . . .)
                                        -15-
#26720

testimony should not have been stricken because it failed to meet a locality

standard, even when expanded by the circuit court to the statewide standard.

Striking his testimony is illustrative of a glaring problem in applying the locality

rule to all attorney malpractice actions, as there was no showing that locality

unique to the jurisdiction had any impact on the standard of care in this case. His

testimony met the requirements of SDCL 19-15-2, by assisting the trier of fact to

understand a fact in issue. The striking of his testimony illustrates the trap in

applying such a standard when locality is not relevant to attorneys’ actions.

[¶31.]         In determining the standard of care to be applied in this case, the

circuit court on remand should evaluate the case under the standard that a lawyer,

who owes a duty of care, must exercise the competence and diligence normally

exercised by a lawyer in similar circumstances. If applicable, the court must

consider locality, custom, and special skills in determining “similar circumstances.”

Mallen et al., supra ¶ 23, § 20:2. The court should specifically identify the “similar

circumstances,” if any, to be used by the jury in their determination whether the

duty, as defined by the court, was breached. 9 See id. The trier of fact must apply


______________________________________
(. . . continued)
         Model Rule can be evidence of a breach of a civil standard of conduct. See
         generally Mallen et al., supra ¶ 23, § 20:7.

9.       As explained in Mallen et al., supra ¶ 23, § 20:2:

               For example, when the only circumstance is that of a specialty,
               such as patent law, the standard could simply be described as
               “the skill and knowledge ordinarily possessed by lawyers
               engaged in the practice of patent law.” In other words, the court
               in instructing the jury should, whenever possible, incorporate
               and specifically identify the similar circumstances that affect
                                                              (continued . . .)
                                            -16-
#26720

that standard of care and address breach of duty, proximate and factual causation,

and actual injury.

[¶32.]        Whether the circuit court erred in finding collateral estoppel
              precluded litigation on the conflicted representation issue.

[¶33.]        Hamilton argues that Judge Flemmer’s finding, during the Underlying

Lawsuit, that Hamilton signed a conflict of interest waiver at the outset of

Appellees’ representation was clearly erroneous, and that the circuit court was

incorrect when it determined collateral estoppel precluded relitigation of that issue.

Appellees argue that this issue is moot, or in the alternative, that the circuit court

was correct when it determined collateral estoppel precluded relitigation of that

issue.

[¶34.]        The collateral estoppel doctrine “bar[s] relitigation of an essential fact

or issue involved in the earlier suit” if a four-part test is satisfied: “(1) Was the issue

decided in the prior adjudication identical with the one presented in the action in

question? (2) Was there a final judgment on the merits? (3) Was the party against

whom the plea is asserted a party or in privity with a party to the prior

adjudication? (4) Did the party against whom the plea is asserted have a full and

fair opportunity to litigate the issue in the prior adjudication?” Estes v. Millea, 464

N.W.2d 616, 618 (S.D. 1990). We review a circuit court’s application of collateral




______________________________________
(. . . continued)
               the standard of care. When the “circumstances” are complicated
               or lengthy, for clarity it may be desirable to identify each
               operative circumstance in a separate instruction.

                                           -17-
#26720

estoppel de novo. Am. Family Ins. Grp. v. Robnik, 2010 S.D. 69, ¶ 14, 787 N.W.2d

768, 774.

[¶35.]       In the Underlying Lawsuit after a formal hearing, Judge Flemmer

found that Hamilton signed a conflict waiver at the outset of Appellees’

representation. That finding was not objected to nor appealed. Applying the four-

part collateral estoppel test, the circuit court found: “(1) the issue was decided by

Judge Flemmer in a former adjudication; (2) Judge Flemmer entered a final

judgment on the merits; (3) Hamilton previously litigated the issue and lost on the

merits against Adee; (4) Hamilton had a full and fair opportunity to litigate the

issue of conflicted representation in the prior adjudication.” Ultimately, based on

collateral estoppel, the court determined “the finding that a conflict of [interest]

waiver was signed appears settled.”

[¶36.]       We agree that collateral estoppel applies to the limited issue of

whether Hamilton had signed a conflict of interest waiver. See Estes, 464 N.W.2d at

618 (barring “relitigation of an essential fact or issue involved in the earlier suit”).

Collateral estoppel does not apply to the broader question of whether Appellees

engaged in a nonconsentable, conflicted representation of Hamilton.

[¶37.]       Whether the circuit court improperly weighed evidence in
             granting summary judgment regarding proximate cause.

[¶38.]       In addition to basing summary judgment regarding conflicted

representation on Hamilton’s failure to present expert testimony as to the

appropriate standard of care, the circuit court relied on Hamilton’s purported

failure to bear his burden of production regarding proximate cause.



                                           -18-
#26720

[¶39.]       Proximate cause is an essential element of a legal malpractice claim.

Peterson, 2014 S.D. 1, ¶ 17, 842 N.W.2d at 355-56 (citing Chem-Age Indus., Inc. v.

Glover, 2002 S.D. 122, ¶ 24, 652 N.W.2d 756, 767). Likewise, proximate cause is an

essential element of a breach of fiduciary duty claim. Chem-Age Indus., Inc., 2002

S.D. 122, ¶ 38, 652 N.W.2d at 772. Proximate cause is defined as “a cause that

produces a result in a natural and probable sequence and without which the result

would not have occurred. Such cause need not be the only cause of a result. It may

act in combination with other causes to produce a result.” Peterson, 2014 S.D. 1, ¶

17, 842 N.W.2d at 355-56 (quoting Estate of Gaspar v. Vogt, Brown & Merry, 2003

S.D. 126, ¶ 6, 670 N.W.2d 918, 921). This Court has further defined proximate

cause as “[a]n immediate cause and which, in natural or probable sequence,

produced the injury complained of. . . . Furthermore, for proximate cause to exist,

the harm suffered must be found to be a foreseeable consequence of the act

complained of.” Weiss v. Van Norman, 1997 S.D. 40, ¶ 13, 562 N.W.2d 113, 116-17

(quoting Musch v. H-D Coop., Inc., 487 N.W.2d 623, 624 (S.D. 1992)). “Causation is

generally a question of fact for the jury except when there can be no difference of

opinion in the interpretation of the facts.” Id. Further, this Court has worded the

attorney malpractice causal requirement in the negative:

             [I]t is often said that the plaintiff can recover against the
             defendant-attorney only when it can be shown that the injury
             would not have occurred “but for” the negligence of the lawyer.
             Thus, the plaintiff must establish that the total or partial loss
             would not have occurred had it not been for some act or omission
             on the part of the attorney.




                                         -19-
#26720

Id. ¶ 12 (quoting Haberer v. Rice, 511 N.W.2d 279, 284 (S.D. 1994)). The plaintiff

can satisfy the causation element by recreating the underlying action—known as a

“case within a case.” Haberer, 511 N.W.2d at 285.

[¶40.]        Specifically, Hamilton argues he provided sufficient proximate cause

evidence based on whether he would have been successful in the Underlying

Lawsuit. He argues the following facts for support:

              (1) Adee received a much better result through settlement than
              he would have at trial because he did not request any bee sites
              in the underlying matter; (2) Hamilton won at the
              administrative hearing based on the landowners having the
              right to decide who placed hives on their land; (3) Hamilton’s
              damages are based on the loss of bee yards and [Appellees]
              cannot claim this is speculative because it is the same theory
              they used to argue Adee would obtain a large jury verdict; (4)
              Sommers told Hamilton he had done nothing wrong and that
              Adee could provide no fact on which a jury could find against
              him; (5) Block and Amman testified in their depositions that
              Hamilton did nothing wrong; (6) there was no interest in
              settlement until after the motion hearing; and (7) there was no
              evidence that Hamilton misrepresented facts or that he aided in
              misrepresentations made by Amman and Block.

Appellees argue that no reasonable jury could have found that Hamilton would

have received a better result in the Underlying Lawsuit but for Appellees’ alleged

negligence.

[¶41.]        Here, the circuit court found that Hamilton would not have prevailed

in the Underlying Lawsuit, citing evidence to support a civil conspiracy claim

against Hamilton, including joint participation in preparing the revocation and

permission form, printing the listing sites, dividing respective territories by

geographic region, establishing a territorial boundary line in obtaining sites “sold”

to Adee, and traveling to Pierre to register the sites. The court stated there was


                                          -20-
#26720

evidence that Hamilton went to sites where he knew Adee had been, including

where he actually saw Adee’s hives, and received permission from the owner to

place bee hives at that site.

[¶42.]       Hamilton argues that the circuit court improperly weighed that

evidence. Upon review, we agree. The evidence mentioned by the court raises

genuine questions of material fact. The circuit court conceded: “Thus, Hamilton

raises a question of fact as to whether he participated with Block and Amman in the

alleged conspiracy.” The circuit court then went on to weigh evidence and resolve

disputed evidence to conclude that Hamilton participated in the alleged conspiracy

and, therefore, would not have prevailed in the Underlying Lawsuit. The judge’s

function at the summary judgment stage, however, is not to weigh the evidence and

determine the matters’ truth. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

249, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986). But, it appears that is what the

court did here. Weighing the evidence to derive its conclusion that Hamilton would

not have prevailed in the Underlying Lawsuit was reversible error.

[¶43.]       Alternatively, Hamilton argues he provided sufficient proximate cause

evidence to show that the Underlying Lawsuit’s settlement was unreasonable.

Appellees argue that the settlement was reasonable.

[¶44.]       When reviewing a settlement’s reasonableness, we are aware of a

lawyer’s hindsight vulnerability. Settlement negotiations often require flexible and

educated positions, by both parties, in arriving at an agreeable solution. That

flexibility requires a flexible standard of care. A California appellate court aptly

stated that “[t]he standard should be whether the settlement is within the realm of


                                          -21-
#26720

reasonable conclusions, not whether the client could have received more or paid

less.” Filbin v. Fitzgerald, 149 Cal. Rptr. 3d 422, 433 (Cal. Ct. App. 2012) (internal

quotation marks omitted). The court justified: “No lawyer has the ability to obtain

for each client the best possible compromise but only a reasonable one.” Id.

(internal quotation marks omitted).

[¶45.]       The circuit court determined that Hamilton provided insufficient

evidence that Appellees’ settlement was unreasonable, what would have been a

reasonable settlement, and that Adee would have agreed to the settlement. See

Stern Oil Co. v. Brown, 2012 S.D. 56, ¶ 8, 817 N.W.2d 395, 398 (“[T]he party

challenging summary judgment must substantiate his allegations with sufficient

probative evidence that would permit a finding in his favor on more than mere

speculation, conjecture, or fantasy.” (quoting Tolle v. Lev, 2011 S.D. 65, ¶ 11, 804

N.W.2d 440, 444)). In his brief, Hamilton does not seem to dispute those findings.

Instead, Hamilton argues he never should have been put in the position to settle. It

is premature, however, to address this matter, as a remand may or may not

substantiate Hamilton’s claim.

[¶46.]       Hamilton also argues Appellees’ failure to investigate insurance

coverage was the proximate cause of Hamilton’s damage. Appellees argue that

Hamilton provided insufficient evidence to support his claim.

[¶47.]       On review, we note that the circuit court did not address this exact

issue in its memorandum decision or order. In its order, the court based its decision

to grant summary judgment on the insurance investigation claim on Hamilton’s

failure to provide sufficient expert testimony, not on a failure to provide sufficient


                                          -22-
#26720

evidence to support a finding of proximate cause. As no finding or conclusion was

based on this argument, we do not address it.

[¶48.]       Whether the circuit court committed reversible error by
             denying a continuance after striking Lillehaug’s testimony.

[¶49.]       Because of our ruling on the preceding issues, we need not reach this

issue.

                                      Conclusion

[¶50.]       The circuit court did not err by finding collateral estoppel precluded

litigation of the limited issue of whether Hamilton signed a conflict of interest

waiver. However, the circuit court abused its discretion by striking Hamilton’s

expert’s opinion, leaving Hamilton without the necessary expert opinion to establish

the applicable standard of care. In addition, the circuit court inappropriately

weighed evidence during summary judgment in its proximate cause determination

on the conflicted representation issue. As a result, summary judgment was

improper. We affirm in part, reverse in part, and remand consistent with this

opinion.

[¶51.]       KONENKAMP, ZINTER and SEVERSON, Justices, concur.

[¶52.]       GILBERTSON, Chief Justice, dissents.



GILBERTSON, Chief Justice (dissenting).

[¶53.]       Lenius v. King, 294 N.W.2d 912 (S.D. 1980), and other cases establish

that South Dakota follows the locality rule in determining whether an attorney’s

conduct breaches the standard of care, which results in legal malpractice. I

conclude that especially in this case, retention of the locality rule is the correct

                                           -23-
#26720

approach, rather than adopting a state or national standard. Because I am not

convinced that the circuit court abused its discretion in striking Lillehaug’s

testimony, and because I conclude that Hamilton failed to properly make a motion

for continuance, the circuit court’s decision to grant summary judgment in favor of

Sommers should be affirmed.

[¶54.]       1.     Justification for adherence to the locality rule.

[¶55.]       The Court limits the support Lenius provides for the application of the

locality rule in South Dakota. The Court states that “[a]lthough the trial court in

Lenius gave a jury instruction that included locality, that part of the instruction

was not appealed and was thus not analyzed by the Court[.]” Instead, the Court

concludes that the issue decided in Lenius was merely whether an expert was

required to testify as to an attorney’s standard of care. However, despite

distinguishing our (passive) endorsement of the locality rule in Lenius, the Court

recognizes that we there stated, “The trial court applied the same standard of care

required of a lawyer that is settled for the medical profession.” Lenius, 294 N.W.2d

at 914. At the time, the standard that applied to the medical profession was the

locality rule. 10 See id. (citing Hansen v. Isaak, 70 S.D. 529, 531, 19 N.W.2d 521, 522


______________________________________
10.   As the Court points out, we subsequently adopted a “national standard of
      care for specialists in medicine.” Shamburger v. Behrens, 418 N.W.2d 299,
      306 (S.D. 1988), overruled on other grounds by Russo v. Takata Corp., 2009
      S.D. 83, 774 N.W.2d 441. In the year following Shamburger, however, we
      confirmed that the standard for non-medical professionals retained
      consideration of locality. Matter of Yemmanur, 447 N.W.2d 525, 529 (S.D.
      1989). The reason for this is simple: the knowledge and procedure required
      to perform an appendectomy, for example, is largely the same regardless of
      whether the doctor performing the operation is located in South Dakota,
      North Dakota, Minnesota, or Indian Country. In comparison, an attorney
                                                          (continued . . .)
                                         -24-
#26720

(1945) (“The law requires that a physician shall have the degree of learning and

skill ordinarily possessed by physicians of good standing practicing in the same

community . . . .”). We have also said that “[i]n professional negligence actions one

must generally consider the locality of practice in determining the standard of care

for professionals.” Matter of Yemmanur, 447 N.W.2d 525, 529 (S.D. 1989). In

People ex rel. M.H., we actually expanded the concept of a locality rule to require

that an “expert witness” in an Indian Child Welfare Act case be an expert on the

child’s tribe and not just on Native American culture in general. 2005 S.D. 4, ¶ 12,

691 N.W.2d 622, 626.

[¶56.]       Although other policy considerations may have necessitated the

creation of the locality rule, our continued adherence to it is prescribed by the same

evidentiary concerns underlying the fundamental qualifications for the

admissibility of any expert testimony: the testimony must be reliable and relevant.

See Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152, 119 S. Ct. 1167, 1176,

143 L. Ed. 2d 238 (1999); Burley v. Kytec Innovative Sports Equip., Inc., 2007 S.D.

82, ¶ 25, 737 N.W.2d 397, 406 (quoting Daubert v. Merrell Dow Pharm., Inc., 509

U.S. 579, 597, 113 S. Ct. 2786, 2799, 125 L. Ed. 2d 469 (1993)). These two

evidentiary concerns are embodied in SDCL 19-15-2 (Rule 702), which governs the

admissibility of expert testimony. It reads, in pertinent part:

             If . . . specialized knowledge will assist the trier of fact to
             understand the evidence or to determine a fact in issue, a
             witness qualified as an expert by knowledge, skill, experience,

______________________________________
(. . . continued)
         representing an apiarist in Roberts County might be expected to understand
         and apply the law and procedure of upwards of five distinct bodies of law.

                                         -25-
#26720

             training, or education, may testify thereto in the form of an
             opinion or otherwise, if: (1) The testimony is based upon
             sufficient facts or data, (2) The testimony is the product of
             reliable principles and methods, and (3) The witness has applied
             the principles and methods reliably to the facts of the case.

Id. As a rule of exclusion that restricts who may qualify as an expert witness, see 2

Ronald E. Mallen & Jeffrey M. Smith, with Allison D. Rhodes, Legal Malpractice §

20:5 (2014 ed.) (“If expert testimony is required locality considerations may limit

the geographical area from which expert witnesses can be selected.”), the locality

rule is now, in essence, a manifestation of Rule 702.

[¶57.]       As a manifestation of Rule 702, the locality rule is relevant whenever a

party proffers an expert witness, contrary to the Court’s conclusion that “in many

cases locality is not relevant to the application of the standard of care.” While I

agree that a witness’s geographic location may not always be relevant, 11 a potential

witness’s knowledge of the legal peculiarities of a particular geographic area

certainly is relevant in every case. The absence of such peculiarities does not

change the relevance of the locality rule in any way. The rule should not be read to

apply only when local conditions create a legal landscape that differs from a state or

national standard. Rather, when the local standard is coextensive with the



______________________________________
11.   The circuit court quite correctly pointed out that “the locality concept is not
      concerned with where the expert lives, but is concerned with the locality he or
      she is opining about[]” and that “[t]he expert testifying as to the standard of
      care does not have to be from South Dakota provided that the person has the
      ability to opine what the South Dakota standard is.” Modern
      communications and the general availability of information offers the
      opportunity for practically any attorney to become an expert regarding a
      particular locale, even if that attorney does not practice in that geographic
      area.

                                          -26-
#26720

applicable state or national standard, the result under the locality rule is, not

surprisingly, the same as the result under the state or national standard.

Furthermore, if circumstances are such that the local standard is obviously

coextensive with that of the state or nation, as the case may be, the circuit court has

discretion to “avoid unnecessary ‘reliability’ proceedings in ordinary cases where the

reliability of an expert’s methods is properly taken for granted, and to require

appropriate proceedings in the less usual or more complex cases where cause for

questioning the expert’s reliability arises.” See Kumho, 526 U.S. at 152, 119 S. Ct.

at 1176. In other words, even though the locality rule is always relevant, the circuit

court maintains its usual control and discretion over the admissibility of expert

testimony.

[¶58.]       As a product of the expert qualification requirements embodied in Rule

702 and Daubert, the locality rule is not only relevant, it is a necessary

consideration whenever a party proffers an expert witness. See State v. Guthrie,

2001 S.D. 61, ¶ 32, 627 N.W.2d 401, 415 (“Before admitting expert testimony, the

court must address [reliability and relevance].”). “The objective of [this gatekeeping

requirement] . . . is to make certain that an expert, whether basing testimony upon

professional studies or personal experience, employs in the courtroom the same

level of intellectual rigor that characterizes the practice of an expert in the relevant

field.” Kumho, 526 U.S. at 152, 119 S. Ct. at 1176. If a proffered expert lacks

knowledge of the unique conditions of a particular geographic area, he or she cannot

be qualified as an expert under SDCL 19-15-2 (Rule 702). Thus, application of the

locality rule in the qualification process prevents a party from qualifying an expert


                                          -27-
#26720

under a homogenized state or national standard and then having that expert testify

on purely local matters that lie outside the witness’s “knowledge, skill, experience,

training, or education[.]” See SDCL 19-15-2 (Rule 702). After all, “[t]he value of the

opinion of an expert witness is no better than the facts upon which it is based. It

cannot rise above its foundation and proves nothing if its factual basis is not true.

It may prove little if only partially true.” Bridge v. Karl’s, Inc., 538 N.W.2d 521, 525

(S.D. 1995). See also People ex rel. M.H., 2005 S.D. 4, ¶ 15, 691 N.W.2d at 627.

[¶59.]       The Court’s proposal reverses the expert qualification process. The

Court suggests that the circuit court must “consider locality, custom, and special

skills in determining ‘similar circumstances.’ The court should specifically identify

the ‘similar circumstances,’ if any, to be used by the jury . . . . The trier of fact must

apply that standard of care and address breach of duty, proximate and factual

causation, and actual injury.” While local conditions function as a filter for

qualifying an expert in a Daubert hearing under the locality rule, those same

conditions would merely serve to define the jury instructions under the Court’s

decision today. There are several problems with this approach.

[¶60.]       First, such an approach tasks the jury with the burden of applying

negligence principles without the benefit of expert guidance. In Lenius we

approvingly quoted the Georgia Court of Appeals’ summary of the expert rule as it

applies to the legal profession.

             [E]xcept in clear and palpable cases . . . , expert testimony is
             necessary to establish the parameters of acceptable professional
             conduct, a significant deviation from which would constitute
             malpractice. The reason for this requirement is simply that a
             jury cannot rationally apply negligence principles to professional
             conduct absent evidence of what the competent lawyer would

                                           -28-
#26720

             have done under similar circumstances, and the jury may not be
             permitted to speculate about what the “professional custom”
             may be. Expert evidence as to the “professional custom” is
             required in malpractice actions against other professionals.

294 N.W.2d at 914 (quoting Hughes v. Malone, 247 S.E.2d 107, 111 (Ga. Ct. App.

1978)). The situation described by the Georgia Court of Appeals is exactly the

situation in which this Court will place the juries of this State. By removing the

consideration of local legal conditions from the expert qualification process, the

Court’s approach necessarily opens the door for a witness to be qualified as an

“expert”—perhaps lacking even a minimum quantum of knowledge about local

conditions—and to subsequently testify and offer opinion as to whether an

attorney’s actions conform to a state or national standard of care. If the circuit

court dutifully applies this Court’s instructions and includes some of those local

conditions in instructing the jury as to the standard of care, then in the best case

scenario, the jury will functionally be placed in the situation of applying negligence

principles to professional conduct without the benefit of expert guidance. In the

worst case, the jury might actually be led astray by ignorant testimony draped in

the cloak of authority. Either outcome is contrary to Daubert and to the axiom that

“[t]he fundamental test for admission of expert testimony . . . is whether it will

assist the jury in resolving the factual issues before it.” See State v. Corey, 2001

S.D. 53, ¶ 15, 624 N.W.2d 841, 845 (emphasis added). See also Daubert, 509 U.S. at

591-92, 113 S. Ct. at 2796 (“Rule 702’s ‘helpfulness’ standard requires a valid . . .

connection to the pertinent inquiry as a precondition to admissibility.”).

[¶61.]       Second, the Court’s proposed treatment of local conditions—to require

a showing from the party seeking the benefit of those circumstances and possible

                                          -29-
#26720

inclusion in the jury instructions—does not provide a functional rule upon which a

practicing attorney can rely. To further complicate matters, the Court suggests that

“there may be cases where it is not appropriate to apply a statewide standard, and

we should not limit ourselves to only using a statewide approach.” Apparently, this

means we will sometimes apply a national standard instead of a state standard.

Under the locality rule, an attorney is always put on notice that he or she will be

charged with performing in a manner consistent with a duty of care that

incorporates the legal landscape in which he or she practices. Under the Court’s

approach, on the other hand, an attorney must wait to find out whether he or she

must comply with a local, state, or national standard until the jury instruction

stage—well after any violative conduct has occurred.

[¶62.]       Third, the Court’s proposed abandonment of the locality rule could

significantly alter the standard under which we review a circuit court’s treatment of

local legal circumstances. “Trial courts retain broad discretion in ruling on the

admissibility of expert opinion. Decisions to admit or deny opinion evidence will not

be reversed absent a clear showing of abuse of discretion.” Guthrie, 2001 S.D. 61, ¶

30, 627 N.W.2d at 414-15 (citations omitted). On the other hand, “no court has

discretion to give incorrect, misleading, conflicting, or confusing instructions[.]”

Vetter v. Cam Wal Elec. Coop., Inc., 711 N.W.2d 612, 615 (S.D. 2006).

Consequently, while we “generally review a trial court’s decision to grant or deny a

particular instruction under the abuse of discretion standard[,] . . . when the

question is whether a jury was properly instructed overall, that issue becomes a

question of law reviewable de novo.” Vetter, 711 N.W.2d at 615. Thus, relegating


                                          -30-
#26720

the consideration of local conditions to the jury instruction stage not only increases

the likelihood that a witness will be allowed to offer expert testimony on a subject in

which he or she lacks expertise—in violation of Rule 702 and Daubert—it will also

tend to limit a circuit court’s power over what has traditionally been a matter of

judicial discretion by eroding the deference with which we review those decisions.

[¶63.]       In exchange for the concerns outlined above, the Court’s suggested

approach offers no potential gain over continued adherence to the locality rule.

There is no difficulty in applying the locality rule to cases that do not involve local

legal idiosyncrasies—in such a case the local standard is the state standard.

Further, when considered as a manifestation of a court’s duty to ensure the

reliability and relevance of expert testimony, the locality rule will not frequently

deviate from this state standard. Thus, as the Court noted, a “statewide focus

would usually be appropriate.” This is true, however, not because we decline to

apply the locality rule in some situations; rather, it is a natural state resulting from

local standards that tend to be coextensive with the prevailing standard across the

State. 12 When viewing the locality rule as a component of the expert qualification


______________________________________
12.   The circuit court anticipated that we would expand the locality rule to
      encompass the entire state. It based its prediction, in part, on the conclusion
      that “[p]assing the South Dakota Bar Examination indicates that the
      standard of care should be statewide and not localized to smaller
      communities.” However, we have previously said that “[t]he standards used
      for determining negligence and competence are separate and distinct.”
      Yemmanur, 447 N.W.2d at 529. While requiring an individual to pass a state
      bar examination as a prerequisite to practicing in this state may be indicative
      of a state competency standard, it has no bearing on a tort negligence
      standard of care. Cf. id. (“[W]e believe it is clear that this minimum degree of
      skill and knowledge required to practice medicine in this state represents the
      state-wide standard of competence . . . .”).

                                          -31-
#26720

process, the circuit court maintains its usual control and discretion over the

admissibility of expert testimony. If a particular locale does not have any unique

legal conditions, then the result of applying the locality rule is the same as if it had

not been applied at all. In short, we need not completely abandon the locality rule

to achieve the Court’s desired goals.

[¶64.]        The Court’s decision today to remove the consideration of locality from

the expert witness qualification process is unnecessary and limits a circuit court’s

ability to ensure that expert witnesses do, in fact, possess heightened expertise on

whatever issue they are called upon to explain. Simply declaring that we apply a

state or national standard does not actually remove the local legal peculiarities that

attorneys in this state must handle on a daily basis. For the above reasons I would

retain the locality rule.

[¶65.]        2.     Application of the locality rule to this case.

[¶66.]        This is a case about bees. Specifically, it is a case about the State of

South Dakota’s regulation of the bee industry. According to the record, beekeepers

generally pay landowners for the right to place bee hives on their land in South

Dakota. The landowner usually gets compensation for this grant either in the form

of cash or honey. The permission by the landowner must be registered with the

South Dakota Department of Agriculture. See generally SDCL 38-18.

[¶67.]        As this case is venued in Roberts County, the legal issues to which an

attorney must apply reasonable knowledge, skill, and care are tied not only to the

South Dakota statutes concerning bees, but also to the legal landscape of that

particular locale. The rights and responsibilities of an apiarist maintaining hives in

an area, as well as the value of any given bee site, are directly influenced by the
                                         -32-
#26720

scope of the State’s jurisdiction to regulate bee operations in that specific area. An

attorney advising his client in a factual situation such as this would have to have

knowledge of the State’s regulatory authority in Roberts County and adjoining

areas.

[¶68.]       Roberts County has legally established boundaries. See SDCL 7-1-55.

On the northern boundary is the State of North Dakota. On the eastern boundary

is the State of Minnesota. However, between Roberts County and Minnesota are

two interstate lakes—Lake Traverse and Lake Big Stone—which are subject to at

least some Federal control. See North Dakota v. Minnesota, 263 U.S. 365, 376, 44 S.

Ct. 138, 140, 68 L. Ed. 342 (1923). Moreover, 15% of the land located within

Roberts County is within the status of “Indian Country,” see 18 U.S.C. § 1151, in the

form of trust allotments. DeCoteau v. Dist. Cnty. Ct., 420 U.S. 425, 428, 95 S. Ct.

1082, 1085 43 L. Ed. 2d 300 (1975); see also United States v. Rickert, 188 U.S. 432,

23 S. Ct. 478, 47 L. Ed. 532 (1903) (addressing authority of Roberts County to

impose various taxes on lands “held by any Indian or Indian tribe”). Other areas of

Roberts County contain “dependent Indian communities” that, under 18 U.S.C. §

1151, are also subject to tribal and Federal control. DeCoteau, 420 U.S. at 428, 95

S. Ct. at 1085; see also United States v. South Dakota, 665 F.2d 837 (8th Cir. 1981).

In addition, the Sisseton-Wahpeton Sioux Tribe has its own constitution, codes, and

court system. DeCoteau, 420 U.S. at 464-67, 95 S. Ct. at 1102-04 (Douglas, J.,

dissenting); Frank Pommersheim, South Dakota Tribal Court Handbook 35-39

(1988).




                                         -33-
#26720

[¶69.]       As the bee goes about its daily business, it is oblivious to whether it

has crossed a state line, is flying over interstate waters, or is now enjoying the

vegetation of Indian Country. However, an attorney advising clients like those

involved in this litigation would have to have a working knowledge of the legal

rights granted to a bee keeper by SDCL 38-18, and must understand the reach of

those rights in this geographical area. We held in Staab v. Cameron, 351 N.W.2d

463, 466 (S.D. 1984), that an attorney is only liable for malpractice for losses

actually sustained as a proximate result of the conduct of the attorney. Although

the expert witness for the Plaintiff, here, is a highly qualified attorney in the

Minneapolis area, he admits he has no such knowledge of the legal status of various

tracts in Roberts County. He said he did consult attorneys in Yankton and Rapid

City, both hundreds of miles away from the Roberts County locale. There is no

showing in the record that these attorneys, who are undoubtedly highly competent,

possess the professional knowledge that it would take to navigate this legal

minefield. This, it seems to me, is the weakness in adopting a state standard rather

than retaining our locality rule.

[¶70.]       Hamilton argues that the application of the locality rule will prevent

plaintiffs from finding attorneys willing to testify as experts for a plaintiff. If

accurate, it would be expected that an appeal addressing application of the locality

rule in this state would have occurred in the last 34 years since Lenius was decided.

In addition to Lenius, there have been several legal malpractice cases in which the

plaintiff found an expert. See, e.g., Behrens v. Wedmore, 2005 S.D. 79, 698 N.W.2d




                                           -34-
#26720

555; Estate of Gaspar v. Vogt, Brown & Merry, 2003 S.D. 126, 670 N.W.2d 918;

Dakota Cheese v. Ford, 1999 S.D. 147, 603 N.W.2d 73.

[¶71.]       Retention of the locality rule is not a method to allow attorneys in

rural settings to “get away” with more, or otherwise have a more lax standard of

care. Given a legal and factual background such as in this case, the locality rule

may instead serve to heighten the standard compared to a state standard of care.

             Unlike the medical field, however, [an attorney’s] knowledge of
             local practices, rules, or customs may be determinative of, and
             essential to, the exercise of adequate skill and knowledge. An
             attorney must know local statutes, ordinances or rules.
             Frequently, trial attorneys place great weight on the cultural,
             economic or social characteristics of the community in which the
             matter is to be tried.

Mallen et al., supra ¶ 56, § 20:5. An attorney’s knowledge of the local jury, judges,

and cultural issues all affect whether the attorney exercised the reasonable

standard of care. Id. The entirety of the legal and factual landscape of the locality

dictates what actions are professionally reasonable. In Roberts County and other

locations across South Dakota, an attorney may need to exhibit different knowledge

or take additional or greater precautions, given what a reasonable attorney should

know about the unique jurisdictional, legal, geographical, cultural, and practical

considerations of that area.

[¶72.]       The circuit court determined that “[c]ertainly Lillehaug could acquaint

himself with the South Dakota standard of care; it just did not occur in this

situation.” Because nothing in the record indicates that the circuit court abused its

discretion in determining that Lillehaug was not qualified to testify as to the




                                         -35-
#26720

appropriate standard of care in South Dakota—let alone Roberts County—I see no

reason to reverse its decision on this issue.

[¶73.]         3.    Hamilton’s failure to properly move for continuance.

[¶74.]         Because of its decision on the locality rule, the Court does not address

whether the circuit court should have granted Hamilton a continuance. Hamilton

claims that he “promptly raised the issue of a continuance at summary judgment

and in a post-hearing motion for hearing on setting trial date and notice of newly

discovered evidence.” Thus, he concludes that “the circuit court committed

reversible error by failing to give Hamilton the opportunity to obtain a replacement

expert witness.” However, while Hamilton may have mentioned the issue of

continuance, the record does not reflect—and he does not seem to claim—that he

ever actually moved the circuit court for continuance. Unfortunately for Hamilton,

the South Dakota Legislature has outlined specific requirements for requesting

continuance.

               All applications for continuance must be made, by motion . . . .
               All such motions shall be in writing and accompanied by
               affidavits in support of the motion, which affidavits shall set
               forth with particularity the grounds and cause for such motion
               as well as the efforts of the party or the party’s attorney to avoid
               such delay.

SDCL 15-11-6 (emphasis added). Even if we were to conclude that the one sentence

contained in Hamilton’s Motion for Hearing On Setting Trial Date dedicated to

requesting permission to obtain a second expert served as a de facto motion for

continuance—I am convinced it does not—Hamilton clearly failed to submit the

required affidavits in support of that motion.



                                           -36-
#26720

[¶75.]         Perhaps a continuance would have been appropriate in this case,

considering that at the time the circuit court struck Lillehaug’s testimony, no trial

date had yet been determined. 13 See Tosh v. Schwab, 2007 S.D. 132, ¶ 26, 743

N.W.2d 422, 430 (“[T]here would have been no delay or prejudice . . . because the

trial date had not yet been scheduled.”). On the other hand, the locality rule has

remained undisturbed for decades, including all times relevant to this litigation,

regardless of the Court’s decision today. Perhaps failing to secure an expert on the

legal landscape of Roberts County was simply bad planning on Hamilton’s part—a

factor that would militate against granting a continuance. Id. ¶ 25, 743 N.W.2d at

430 (quoting State v. Moeller, 2000 S.D. 122, ¶ 8, 616 N.W.2d 424, 431). We have

nothing to review, however, because Hamilton’s counsel did not properly move for

continuance and, consequently, the circuit court made no decision regarding the

same. It is ironic that Hamilton’s counsel—in an action against other attorneys

based, in part, on their failure to make a motion for continuance—themselves failed

to properly file a motion for continuance.

[¶76.]         Expert testimony was necessary in this case. See Lenius, 294 N.W.2d

at 914 (quoting Hughes, 247 S.E.2d at 111). 14 The circuit court determined that

Lillehaug had not familiarized himself with Roberts County prior to testifying and,



______________________________________
13.   The circuit court originally set a trial date of April 16, 2013. However, the
      court cancelled that date after learning of Lillehaug’s possible appointment to
      the Minnesota Supreme Court. At the time the circuit court struck
      Lillehaug’s testimony, it had not set a new trial date.

14.      In its memorandum opinion, the circuit court noted the parties also agreed
         that expert testimony was necessary to establish the standard of care.

                                          -37-
#26720

consequently, struck his testimony. I am not convinced that the court abused its

discretion in reaching this conclusion. Without an expert to testify as to the

standard of care, summary judgment was appropriate and Hamilton’s remaining

issues are moot. 15 Therefore, I dissent.




______________________________________
15.   Hamilton was required to prove “(1) the existence of an attorney-client
      relationship giving rise to a duty; (2) the attorney, either by an act or failure
      to act, breached that duty; (3) the attorney’s breach of duty proximately
      caused injury to the client; and (4) the client sustained actual damage.”
      Peterson v. Issenhuth, 2014 S.D. 1, ¶ 17, 842 N.W.2d 351, 355 (emphasis
      added) (quoting Chem-Age Indus., Inc. v. Glover, 2002 S.D. 122, ¶ 24, 652
      N.W.2d 756, 767) (internal quotation marks omitted). Because proof of all
      four elements is required to establish a malpractice claim, a necessary failing
      of any one element—such as the failure to produce an expert to articulate the
      applicable standard of care—alone renders the claim legally insufficient.
      Therefore, I would not reach the issue of proximate cause.

                                            -38-
