In Hamilton v. Sommers, the Supreme Court of South Dakota held that in a legal malpractice suit the considerations of locality may or may not be relevant. The court stated that a statewide focus is the most logical approach in determining the requisite standard of care for an attorney, but also ruled that a national standard may sometimes apply. The court explained that application of the statewide or national standard would hold attorneys to an acceptable level of performance; whereas standards based on a smaller focus--such as the locality rule--may excuse an unacceptable level of legal service. Rather than using a geographic standard, the court held that the appropriate standard of care requires a lawyer to practice at the level normally exercised by lawyers in similar circumstances. The majority explained that circuit courts should identify the similar circumstances, which include considerations of "locality, custom, and special skills." The court further pointed out that the application of "locality ... is fact specific and will not be an issue in every case. " In doing so, however, the court failed to provide guidance on determining what standard applies and when locality would be pertinent. This holding ignored the importance of the locality rule and degraded the requirements of expert testimony. The court should have clearly articulated the practical application of the new standard. Without this direction, the result will generate confusion as to whether a South Dakota attorney's conduct comports with the requisite standard of care. In order for attorneys to know what factors will be applied in a legal malpractice suit, the locality rule must be reevaluated to provide an accurate understanding of when it is appropriate to apply the locality rule, as well as provide consistency in legal malpractice actions in South Dakota.
Although many people believe they can determine whether or not a lawyer is at fault for an unfavorable result in a case, the reality is that such determinations are not easily discernible. (1) This is because every malpractice case carries with it a different set of facts and circumstances under which an attorney has worked. (2) When a lawyer is retained by a client, the client is typically not involved in specific details that are the basis of the lawyer's litigation strategy. (3) Lawyers see themselves as problem solvers, providing ways to protect their clients who may not comprehend the legal strategy that attorneys often employ. (4)
A lack of trust and understanding of an attorney's decisions may result in further litigation against the attorney if the case does not turn in the client's favor. (5) Even if the attorney's conduct does not clearly establish that he is at fault for the client's losses, the client may still seek to place blame on the attorney for the outcome. (6) Today's litigation-happy society encourages blaming attorneys when the adversary system does not provide a favorable result. (7) Although the fear of being sued by a client is a "white-elephant" in the room during any underlying case, the sight of the attorney's own name as a defendant brings the public's love-hate perception of the legal profession into focus. (8)
Many legal malpractice cases are not clear-cut, and questions of fact must be answered by a jury that may have empathy for the client due to the public's view of attorneys. When representing a client under any circumstances, every case brings with it a "legal minefield" full of different avenues and choices that requires an attorney to make decisions. (10) This minefield not only consists of decisions based on the attorney's knowledge of the law and the circumstances, but it also includes a labyrinth of "unrealistic and largely unstated client expectations" that the attorney must dive into face-first. (11)
In South Dakota and many other rural areas, practicing law poses different and unique circumstances that are not present in urban practice. (12) Relationships are important in rural communities, and trust can be easily gained or lost. (13) This is because client-attorney relationships are more personal, and involvement in the community creates a trust that cannot normally be gained in an urban area. (14) What an attorney chooses to do in a certain situation in a big city law firm may not be the same choice that a rural attorney makes in South Dakota. (15) Attorneys are often sparse, and many residents travel more than 100 miles to find one. (16) All attorneys are required to meet a certain standard of care when assisting clients with legal matters. (17) Legal malpractice litigation demands proof that an attorney has failed to meet this standard. (18) The standard, therefore, must be made clear to all attorneys in the profession. (19) In Hamilton v. Sommers, however, a majority of the Supreme Court of South Dakota held that in some cases, attorneys would be held to a statewide standard, while in others, a national standard would apply. (20) The court also determined that an out-of-state expert--with no knowledge of local circumstances surrounding the underlying case-- could testify to the standard of care expected of rural South Dakota attorneys. (21) By disregarding the locality rule, the court disregarded the importance of the rural attorney-client relationship in South Dakota. (22)
This casenote argues that the evolution of the locality rule has alleviated the concerns of lowering the standard of care by adding the similar circumstances element. (23) It will first discuss the facts and procedure of Hamilton (24) Second, it will examine the history and application of the locality rule, as well as its importance in the admissibility of expert testimony. (25) Third, this casenote will discuss the use of the American Bar Association Rules of Professional Conduct as a foundation for an attorney's standard of care rather than knowledge of the local circumstances. (26) Lastly, this casenote will argue that the ruling in Hamilton must be reexamined to provide a more functional rule. (27)
FACTS AND PROCEDURE
The Underlying Case
In the northeast corner of South Dakota, in Marshall, Roberts, and Day counties, James Paysen owned 112 bee sites. (28) Paysen sold the sites to John Kelley around 1995. (29) Kelley did not register his bee sites with the South Dakota Department of Agriculture (the Department) as required by state law; he later sold his sites to Richard Adee in 20 06. (30) Adee received permission from landowners to put his hives on their land, but he, like Kelley, failed to register with the Department. (31)
During 2006, Richard Hamilton heard that Kelley's business was going into bankruptcy. (32) Hamilton acquired an abandonment map from Mike Block, a fellow associate of Hamilton's who was also in the bee business. (33) The abandonment map displayed that the sites were still registered to Paysen. (34) Thus, under the current registration, Adee's permissive use was invalid under South Dakota law. (35) Hamilton subsequently obtained revocation forms for landowners to revoke permission. (36) The landowners signed the revocation forms for the hives despite the fact that Adee had permission to use the land. (37) Hamilton acquired ten bee sites, while Block and Monte Amman, another beekeeper, acquired 102 bee sites. (38) Hamilton and Block promptly raced to Pierre and registered the sites with the Department. (39)
Adee petitioned the Department, claiming the bee sites belonged to him and the registration should be put in his name. (40) A hearing held on May 15, 2007, found that Hamilton had correctly registered his ten bee sites. (41) Adee sued Hamilton, Block, and Amman on August 25, 2007, claiming interference with his business, conspiracy to deprive him of his business, and unfair competition. (42) Seeking representation, Hamilton, Amman, and Block went to the offices of Richard Sommers and Melissa E. Neville on September 27, 2007 in Aberdeen, South Dakota. (43) Sommers and Neville asked the three co-defendants if they had insurance that would provide a defense in the suit (44) Block and Amman replied that they had insurance, but Hamilton replied in the negative, not realizing that he did, in fact, have coverage under his business insurance. (45) When the insurance companies refused to defend Block and Amman, the three codefendants wanted to retain Sommers and Neville. (46) Sommers and Neville advised the co-defendants about the possibility of a conflict of interest due to the joint representation. (47) Having been informed of the potential conflict, Hamilton, Block, and Amman orally agreed at the meeting that the attorneys would represent them. (48) Sommers and Neville sent letters to the three co- defendants on October 3, 2007, to confirm the joint representation, including a conflict of interest waiver for each to sign 49 Block and Amman signed the conflict of interest waivers. (50) Hamilton, however, claimed that he never received the waiver. (51)
Sommers's and Neville's main defense of the lawsuit was that "Adee had no legally protected interest in the bee sites because the permissive use was revocable at any time and bee sites could not be sold." (52) On July 7, 2009, Adee offered to settle with Amman if he put his sites in Adee's name and agreed to testify against the other two co-defendants. (53) Unbeknownst to Hamilton and Block, Amman had already sold his bee business, including his bee sites, creating a legally protected interest. (54) This sale-created interest destroyed the main defense of the lawsuit. (55)
Sommers and Neville did not learn of the secret sales agreement until they communicated Adee's offer to settle. (56) Sommers and Neville determined they had a duty to disclose the information to Adee's attorney. (57) During a pretrial hearing, the attorneys motioned to exclude the sale and sought a continuance in order to obtain testimony of witnesses to explain the sale. (58) The trial court denied both the motion to...