Hamilton v. Sommers
2014 SD 76
| S.D. | 2014Background
- Hamilton (beekeeper) acquired 10 of 112 disputed registered "bee sites"; Adee (Adee Honey Farms) claimed the 112 sites and sued Hamilton, Block, and Amman for interference, unfair competition, and conspiracy. The defendants initially were jointly represented by Sommers and Neville (Bantz, Gosch & Cremer).
- A settlement in the underlying suit was reached after Amman revealed he had sold his business (which undermined the defense). Hamilton later refused to comply; Judge Flemmer enforced the settlement and found Hamilton had signed a conflict-waiver form.
- Hamilton sued his former attorneys for legal malpractice, breach of fiduciary duty, and negligent infliction of emotional distress (latter later dismissed), alleging conflicted joint representation and failure to investigate insurance coverage.
- Hamilton proffered expert testimony from David Lillehaug (then an attorney), who applied a national standard (Model Rules) and opined defendants breached the standard by not obtaining informed consent, not withdrawing, failing to seek continuance, and failing to investigate insurance. The circuit court struck Lillehaug’s testimony as lacking proper foundation and excluded his national-standard analysis.
- The circuit court granted summary judgment for the attorneys, finding (1) Hamilton lacked admissible expert proof of the applicable local standard of care, (2) collateral estoppel applied to the discrete fact that Hamilton signed a conflict-waiver, and (3) Hamilton failed to meet his burden on proximate cause; Hamilton appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether expert Lillehaug should have been admitted despite using a national standard of care | Lillehaug was qualified; any deficiencies affect weight, not admissibility | Lillehaug applied the wrong (national) standard and lacked local foundation | Court: Exclusion was error — locality not necessarily relevant here; expert testimony should have been admitted on remand to define applicable standard |
| Whether South Dakota should adopt a national (or statewide) standard of care for attorney malpractice | Hamilton: national standard appropriate for conflicts/insurance investigation | Defendants: local/state standard governs; expert must show local knowledge | Court: Rejects mandatory locality rule; directs court on remand to define standard as "competence and diligence normally exercised by lawyers in similar circumstances," considering locality/custom/special skills where relevant (statewide often appropriate) |
| Whether collateral estoppel barred relitigation of conflicted-representation (did Hamilton sign waiver?) | Hamilton: Flemmer’s finding was clearly erroneous; should be relitigated | Defendants: Waiver finding was final and preclusive | Court: Collateral estoppel applies to the limited factual issue that Hamilton signed the waiver; but does not preclude litigation of broader nonconsentable conflict claim |
| Whether summary judgment was proper on proximate cause (i.e., would Hamilton have prevailed absent malpractice) | Hamilton: raised factual disputes that a jury could resolve; settlement unreasonableness and attorney failures are triable | Defendants: No reasonable jury could find Hamilton would have done better at trial; evidence supported conspiracy and loss | Court: Trial court improperly weighed disputed evidence at summary judgment; remand required because genuine issues of material fact exist on proximate cause |
| Whether denial of continuance after striking expert was reversible error | Hamilton: needed continuance to replace struck expert | Defendants: No reversible error; Hamilton did not properly move | Court: Did not reach this issue in light of other holdings on remand |
Key Cases Cited
- Peterson v. Issenhuth, 842 N.W.2d 351 (S.D. 2014) (elements of legal malpractice and proximate cause discussion)
- Lenius v. King, 294 N.W.2d 912 (S.D. 1980) (discussing expert necessity and prior acknowledgment of locality considerations in malpractice)
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999) (trial-court gatekeeping role on expert admissibility and reliability)
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (summary judgment standard: judge may not weigh evidence or make credibility determinations)
- Haberer v. Rice, 511 N.W.2d 279 (S.D. 1994) ("case within a case" approach to attorney-malpractice causation)