Case:
Hamilton v. Sommers, 76 S.D. (S.D. 2014)
Background:
This case was an appeal from summary judgment in favor of the defendant-appellee dismissing the Plaintiff-appellant’s claims of legal negligence or malpractice and breach of fiduciary duty brought against his former attorneys.
This malpractice case stemmed from a dispute involving the ownership of bee sites in South Dakota. Appellant, along with two other businessmen, had acquired 112 beekeeping sites and were sued by a man. He claimed to have had registered 10 of those sites prior to Appellant and the other two businessmen purchasing them. The Appellant, along with the two businessmen, met with Appellees while seeking representation in the beekeeping suit.
After a settlement was arranged with the plaintiff in the beekeeping suit, Appellant sued Appellees. Saying that the settlement was unenforceable because there was duress and fraud committed by Appellees. He sued Appellees for legal malpractice and breach of fiduciary duty based on an alleged conflict of interest relating to Appellee’s representation of one of the other co-defendants in the bee site case.
During discovery, Appellant retained a Minneapolis-based lawyer as an expert witness. The expert testified that due to the non-consentable conflict of interests between the co-defendants due to one of them independently selling his portion of the beehive sites; the Appellees should not have proceeded with the case and that the Appellees breached the standard of care by failing to withdraw after the news of the sale came to light. The expert’s opinions were based on the Model Rules of Professional Conduct Rule 1.7, and in his interpretation. As well as its similarity with South Dakota’s Rules of Professional Conduct Rule 1.7. He also testified that the Appellee’s committed legal malpractice in failing to properly investigate whether Appellant had applicable insurance coverage. He based this allegation on his own career experience in Minnesota. Including information from attorneys licensed to practice in South Dakota.
The Appellees moved to strike the expert’s opinions by asserting that it was not reliable. He applied the wrong standard of care to both the conflict of interest and insurance investigation claims.
Outcome:
In his expert report, Appellant’s expert stated that the applicable standard of care was consistent with Rule 1.7. He noted that South Dakota’s Rule of Professional Conduct 1.7 is identical to the American Bar Association’s Model Rule 1.7. Noting that the national standard of care applied to legal ethics. His belief that the laws were interchangeable was based on his own readings and discussions with South Dakota attorneys. Just as his belief of the standard of care for investigating insurance was.
The Court decided the expert was highly qualified as an attorney to testify to the standard of care for attorneys. Even though he was not licensed in South Dakota. Therefore, his testimony should not have been stricken just because it failed to meet a locality standard, especially since 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 South Dakota state-law equivalent of the Federal Rule of Evidence Rule 702, SDCL 19-15-2, of assisting the trier of fact to understand a fact at issue in the case.
The opinion contains a lengthy dissent criticizing the decision of the majority to allow this expert’s testimony in relation to the lack of application to local rules: “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 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.”
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