Opinion ID: 1678006
Heading Depth: 1
Heading Rank: 5

Heading: should the haberers have been permitted to seek damages for rice's negligent representation of them on the land transaction with melvin lehr?

Text: Merle and Florence Haberer allege that Rice called Merle Haberer and informed him that Bob DeVaan and Melvin Lehr were in his office wanting to buy the Bowdle property. They immediately went to Rice's office and met with Rice, DeVaan and Lehr. They ultimately agreed upon the sale of some property in Bowdle for $30,000. They further allege that Rice insisted that they sign a deed to the property then and there, without a written contract, and without receiving a check for the same. Haberer's further allege that they refused to sign and that Rice prevailed and delivered the deed to Lehr. They further allege that no compensation was ever received for the transaction and that Rice took no further action to collect the same. Rice denies this. The matter was tried in the first trial before the court. Rice argues that the present cause of action is not ripe and that Haberers must show that they have exhausted all other remedies and pursued any and other actions to success or failure. After the first trial Haberers did sue DeVaan and Lehr; DeVaan subsequently took bankruptcy resulting in a partial stay. The trial court recognized that the moneys allegedly due were to be paid to First Bank pursuant to Rice's stipulation with First Bank. The court ruled that the action was not ripe for resolution and denied Haberers the opportunity to try the same. SDCL 15-2-14.2 governs the time for bringing legal malpractice actions. South Dakota follows the occurrence rule. Under the occurrence rule as expressed by our statute, the statute of limitations on a claim of attorney malpractice begins to run at the time of the alleged negligence and not from the time when the negligence is discovered or the consequential damages are exposed. Kurylas, Inc. v. Bradsky, 452 N.W.2d 111 (S.D.1990); Schoenrock v. Tappe, 419 N.W.2d 197 (S.D.1988); Hoffman v. Johnson, 374 N.W.2d 117, 122 (S.D.1985); Annot. 18 A.L.R.3d 978, 986-987 (1968); Meiselman, supra, §§ 5:4, 5:6, 5:7. In Schoenrock v. Tappe, supra , a cause of action for negligently examining a title occurred at the time the attorney provided the client with the erroneous information, in effect when the omission occurred. The statute of limitations would commence to run at the time of the loss to Haberer due to Rice's alleged negligence, at the time that the deed was delivered to Lehr without compensation. At that time Haberer suffered a loss of the value of the property previously owned by him which he transferred at Rice's insistence. The value of the property can be determined in a number of ways. The determination of the value of the property is either the agreed upon sale price or, if the same cannot be determined, the reasonable fair market value of the same at the time and the place of the transfer of the property. All of Haberers' contact with Rice during this period of time constituted a continuing effort to obtain financing and to pay various debts. This was not an isolated transaction but an additional attempt to obtain moneys to pay creditors and is specifically mentioned as a part and parcel of the stipulation which Rice entered into without the consent of his clients. During these transactions, Rice was also acting in a fiduciary capacity. See Rosebud Sioux Tribe v. Strain, 432 N.W.2d 259, 264 (S.D.1988) ([t]he nature of the relationship between attorney and client is highly fiduciary. It requires the highest degree of fidelity and good faith. It is a purely personal relationship, involving the highest personal trust and confidence). Once attorney Rice had been sued, he had the option under our rules of civil procedure to implead third party defendants. SDCL 15-6-14(a). Under the occurrence rule, the harm Haberer suffered occurred on the date when the deed was transferred to Lehr without Haberer receiving payment for his land, i.e., the date of Rice's alleged negligent act or omission. The trial court erred in not allowing Haberer to pursue this claim and offer evidence of related losses.