Court Opinion

ID: 9905918
Source: CourtListenerOpinion
Date Created: 2023-11-30 16:12:44.562065+00
Date Added: 2024-06-11T09:23:58.838346
License: Public Domain

#30252-a-SRJ
2023 S.D. 60

                          IN THE SUPREME COURT
                                  OF THE
                         STATE OF SOUTH DAKOTA

                                 ****

DOUG BARR and DAWN BARR,                  Plaintiffs and Appellants,

      v.

JEFFREY A. COLE, WILLIAM D.
SIMS, and GREGORY T. BREWERS,             Defendants and Appellees.

                                 ****

                  APPEAL FROM THE CIRCUIT COURT OF
                     THE SECOND JUDICIAL CIRCUIT
                  MINNEHAHA COUNTY, SOUTH DAKOTA

                                 ****

                     THE HONORABLE JOHN L. BROWN
                             Retired Judge

                                 ****

LEE SCHOENBECK
JOE ERICKSON of
Schoenbeck & Erickson, P.C.
Watertown, South Dakota                   Attorneys for plaintiffs
                                          and appellants.

JEFFREY G. HURD
EMILY M. SMORAGIEWICZ of
Bangs, McCullen, Butler, Foye
  & Simmons, LLP
Rapid City, South Dakota                  Attorneys for defendants
                                          and appellees Jeffrey A. Cole
                                          and William D. Sims.

                                 ****

                                          ARGUED
                                          OCTOBER 4, 2023
                                          OPINION FILED 11/29/23
                            ****

JASON R. SUTTON of
Boyce Law Firm, LLP
Sioux Falls, South Dakota          Attorneys for defendant and
                                   appellee Gregory T. Brewers.
#30252

JENSEN, Chief Justice

[¶1.]        Doug and Dawn Barr (collectively the Barrs), husband and wife, sued

Jeffrey Cole, William Sims, and Gregory Brewers (collectively the Attorneys) for

legal malpractice, and related claims, arising out of the Attorneys’ representation of

the Barrs in a personal injury action transpiring from a motor vehicle accident

involving Doug and Stuart Hughes. At the time of the accident, Hughes, who was

employed by the State of South Dakota Unified Judicial System (UJS), was

traveling to Sioux Falls after finishing work for the day in Parker. The Barrs’

malpractice action alleged the Attorneys failed to timely notify the State of the

Barrs’ tort claims against it and settled with Hughes for less than the full value of

their claims. The parties filed cross motions for summary judgment. The circuit

court granted the Attorneys’ motions, determining the Barrs could not recover for

legal malpractice as the Barrs did not have a claim against the State because

Hughes was not acting within the scope of his employment at the time of the

accident. The court denied the Barrs’ motion. The Barrs appeal. We affirm.

                                    Background

[¶2.]        Doug and Hughes were involved in a motor vehicle accident on

December 21, 2016, after Hughes ran a stop sign and collided with Doug’s vehicle

near Tea. Doug sustained serious and permanent injuries from the accident.

[¶3.]        Hughes was working for the UJS in December 2016 as a law clerk for

the First Judicial Circuit Court. Hughes lived in Vermillion, but his employment

duty station was in Yankton. His work responsibilities required that he to travel to

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other counties across the First Circuit 1 to assist judges with hearings, when

requested. Hughes was reimbursed for his travel to other counties. On the day of

the accident, Hughes was in Turner County assisting with a trial, and records show

he was reimbursed for his roundtrip travel from his home in Vermillion to Parker.

Hughes was driving his father’s pickup because his own car was being serviced.

After the trial concluded in Parker at the end of the day, Hughes began traveling to

his parents’ home in Sioux Falls, rather than returning to Vermillion, as his parents

had planned a family holiday dinner.

[¶4.]         The accident occurred at approximately 5:30 p.m. Both individuals

were transported to hospitals in Sioux Falls. Brewers, a close friend of the Barrs,

learned of the accident and went to the hospital to see Doug. Shortly thereafter, the

Barrs asked Brewers to provide legal representation to them regarding the car

accident. Brewers agreed to represent the Barrs but informed them he would bring

in another attorney with more experience in personal injury litigation. In January

2017, Cole and Sims began representing the Barrs alongside Brewers.

[¶5.]         The Attorneys filed a lawsuit, on behalf of the Barrs, against Hughes

on September 6, 2017. The Attorneys did not give notice of the Barrs’ claim to the

State within 180 days of the accident pursuant to SDCL 3-21-2, 2 and the lawsuit

1.      The First Circuit encompasses fourteen counties in the southeastern part of
        South Dakota.

2.      SDCL 3-21-2 provides that “[n]o action for the recovery of damages for
        personal injury, property damage, error, or omission or death caused by a
        public entity or its employees may be maintained against the public entity or
        its employees unless written notice of the time, place, and cause of the injury
        is given to the public entity as provided by this chapter within one hundred
                                                              (continued . . .)
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did not allege a claim against the State. Based upon their investigation, the

Attorneys knew Hughes worked for the State, but believed he was not acting within

the scope of his employment because he was traveling towards Sioux Falls and the

crash occurred in Lincoln County—not within the First Circuit. After additional

discovery, the Attorneys discussed the possibility that Hughes may have been

acting within the scope of his employment at the time of the accident because he

had been paid roundtrip mileage for his trip to Parker and the State’s workers’

compensation carrier had paid at least some of his medical bills.

[¶6.]        The Barrs believed their damages arising from the automobile accident

exceeded $1,000,000. They initially demanded $1,000,000 from the carrier

providing liability insurance coverage for Hughes’s negligence. The Barrs

eventually settled their claims against Hughes for $500,000, the limits of his

insurance coverage.

[¶7.]        Following the settlement of their personal injury claims, the Barrs

brought this malpractice action against the Attorneys, alleging negligence, breach of

fiduciary duty, breach of contract, and fraud, and for punitive damages. Underlying

the Barrs’ claims is the alleged failure of the Attorneys to pursue a claim for

damages against the State for Hughes’s negligence and the Attorneys’ failure to

inform the Barrs of this claim before they agreed to settle the claim for the policy

limits indemnifying Hughes. The Barrs allege the claim against the State would

have been covered by the Public Entity Pool for Liability (PEPL) fund and that an

________________________
(. . . continued)
         eighty days after the injury. Nothing in this chapter tolls or extends any
         applicable limitation on the time for commencing an action.”

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additional $500,000 in coverage would have been available to compensate them for

their injuries if the Attorneys had given timely notice of their claims to the State.

[¶8.]        The PEPL fund is a government-run, self-funded pool that “will pay

damages . . . on behalf of [a state] employee that the employee becomes legally

obligated to pay because of an occurrence[.]” Occurrence, within the PEPL fund, is

defined as “an accident, act, error, omission or event, during the Coverage Period,

which results in damages and arises within the scope of the employee’s duties for

the State.” The PEPL’s coverage limit is $1,000,000 per occurrence for any accident

involving a state vehicle. However, when a state employee is driving a personally

owned vehicle, the PEPL fund, if applicable, becomes secondary to the vehicle’s auto

insurance. Neither party disputes that the time to give notice to the State under

SDCL 3-21-2 had elapsed on June 19, 2017.

[¶9.]        The Barrs filed a motion for summary judgment, arguing the Attorneys

were negligent as a matter of law in failing to give notice of the Barrs’ claim to the

State within 180 days of the accident. The Attorneys filed cross motions for

summary judgment, arguing that Hughes was not acting within the scope of his

employment at the time of the accident, and the PEPL fund would not have

provided coverage for any of Doug’s damages, even if timely notice had been given to

the State. Following a hearing, the circuit court entered an order granting the

Attorneys’ motions and denying the Barrs’ motion.

[¶10.]       In explaining its ruling, the court stated, “Well, in reviewing this case,

I think the cogent issue here is what was [Hughes’s] purpose for returning to Sioux

Falls. I think that was a deviation from his course of employment . . . . I think that

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he abandoned his work purpose at that point and that he was on a personal trip to

return to Sioux Falls . . . . But I think it’s clear that he deviated from his

employment and so I’m going to rule in favor of the [Attorneys] on the issue of

whether the PEPL Fund would have provided coverage. I think that obviously

moots out the other issues that we need to determine.” The court entered a final

judgment dismissing all the Barrs’ claims against the Attorneys with prejudice.

[¶11.]       The Barrs appeal and raise two issues, which we restate as the

following:

             1.      Whether a plaintiff, when asserting a legal malpractice
                     claim, must show the underlying claim would have been
                     successful but for the alleged malpractice.

             2.      Whether the circuit court erred when it granted summary
                     judgment in favor of the Attorneys, concluding Hughes
                     had deviated from the scope of his employment.

                                       Analysis

             1.     Proof of causation for legal malpractice.

[¶12.]       “In order to prevail in a legal malpractice claim, ‘a plaintiff must

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.’” Zhi Gang Zhang v. Rasmus, 2019 S.D. 46, ¶ 27, 932 N.W.2d 153,

162 (citation omitted). “[T]he 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.” Id. (citation omitted).

[¶13.]       “Thus, the plaintiff in a legal malpractice case has not only to prove

the four elements basic to negligence cases, but may be asked to prove three
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additional factors: 1) that the underlying claim was valid, 2) that it would have

resulted in a favorable judgment had it not been for the attorney’s error, and 3) the

amount of the judgment and that the judgment was collectible.” Haberer v. Rice,

511 N.W.2d 279, 285 (S.D. 1994). This has come to be known as the case-within-a-

case doctrine. See, e.g., Zhi Gang Zhang, 2019 S.D. 46, ¶ 27, 932 N.W.2d at 162;

Haberer, 511 N.W.2d at 285 (“Accordingly, the client seeking recovery from his

attorney is faced with the difficult task of proving two cases within a single

proceeding.”).

[¶14.]         The Barrs contend that this Court recently pared back the “case-

within-a-case” doctrine, such that they need only prove the underlying claim was

viable, not that the claim would be successful. See Robinson-Podoll v. Harmelink,

Fox and Ravnsborg Law Off., 2020 S.D. 5, 939 N.W.2d 32. While the Barrs

acknowledge the decision in Haberer “appears to require 100% certainty of the

underlying claim[,]” they “believe Robinson-Podoll clarified that language and

provides a more logical standard[.]” The Attorneys respond that the Barrs must

prove the underlying claim would have been successful but for the alleged

malpractice. They argue that the Barrs are asking the Court to adopt the loss of

chance doctrine, which has previously been expressly rejected by the Legislature. 3

3.       “The theory of loss of chance allows an aggrieved party to assert a claim
         against a tortfeasor whose conduct decreased or eliminated the chance of a
         favorable outcome.” Alice Férot, The Theory of Loss of Chance: Between
         Reticence and Acceptance, 8 FIU L. Rev. 591, 591 (2013).

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[¶15.]         Contrary to the Barrs’ assertion, Robinson-Podoll did not modify the

case-within-a-case doctrine. 4 Further, the Barrs’ arguments of lesser required proof

for the underlying claim are inconsistent with our jurisprudence and public policy

adopted by the Legislature. The Court initially adopted the loss of chance doctrine

in a medical malpractice case in Jorgenson v. Vener (Jorgenson I), 2000 S.D. 87,

¶ 17, 616 N.W.2d 366, 371. We again considered the doctrine on Jorgenson’s second

appeal. Jorgenson v. Vener (Jorgenson II), 2002 S.D. 20, 640 N.W.2d 485. After

this Court’s decision in Jorgenson II, the South Dakota Legislature specifically

abrogated the loss of chance doctrine and the holding in Jorgenson I. See SDCL 20-

9-1.1 (“The Legislature finds that in those actions founded upon an alleged want of

ordinary care or skill the conduct of the responsible party must be shown to have

been the proximate cause of the injury complained of. The Legislature also finds

that the application of the so called loss of chance doctrine in such cases improperly

alters or eliminates the requirement of proximate causation. Therefore, the rule in

Jorgenson v. Vener, 2000 S.D. 87, 616 N.W.2d 366 (2000) is hereby abrogated.”).

[¶16.]         As a result, “the plaintiff must essentially prove a ‘case within a case’

by showing ‘that the underlying claim was valid [and] would have resulted in a

favorable judgment had it not been for the attorney’s error[.]’” Zhi Gang Zhang,

2019 S.D. 46, ¶ 27, 932 N.W.2d at 162 (alterations in original). The primary reason

for a legal malpractice suit is to provide a remedy to clients who were harmed by

4.       In particular, the Barrs overlook our discussion in Robinson-Podoll of the
         case-within-a-case requirement for legal malpractice claims. In discussing
         this standard, we reaffirmed the requirement that there must be “adequate
         proof on each claim.” 2020 S.D. 5, ¶ 47, 939 N.W.2d at 48 (quoting Zhi Gang
         Zhang, 2019 S.D. 46, ¶ 32, 932 N.W.2d at 163).

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their attorney’s missteps. Requiring plaintiffs to prove that the underlying claim

would have been successful is logical and proper. If the underlying claim would not

have resulted in a favorable outcome for the clients, then there would have been no

injury to remedy.

[¶17.]       Having determined that the Barrs must prove that their underlying

claim would have been successful “but for” the alleged legal malpractice, we turn to

the issue of whether the circuit court’s grant of summary judgment was proper.

             2.     Grant of summary judgment.

[¶18.]       “We review a court’s decision to grant a motion for summary judgment

de novo.” Zhi Gang Zhang, 2019 S.D. 46, ¶ 25, 932 N.W.2d at 161. “Summary

judgment is appropriate ‘if the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to a

judgment as a matter of law.’” Tammen v. Tronvold, 2021 S.D. 56, ¶ 17, 965

N.W.2d 161, 168 (quoting SDCL 15-6-56(c)). “The evidence must be viewed most

favorably to the nonmoving party and reasonable doubts should be resolved against

the moving party . . . . If there exists any basis which supports the ruling of the

trial court, affirmance of a summary judgment is proper.” Id. (omission in original)

(citation omitted). Further, “[e]ntry of summary judgment is mandated against a

party who fails to make a showing sufficient to establish the existence of an element

essential to that party’s case, and on which that party will bear the burden of proof

at trial.” State v. BP plc, 2020 S.D. 47, ¶ 23, 948 N.W.2d 45, 53.

[¶19.]       The circuit court granted summary judgment on the Barrs’ claims

against the Attorneys after determining that Hughes was not acting within the
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scope of his employment when he was driving from Parker to Sioux Falls for a

family dinner. “An act ‘is within the scope of . . . employment where it is reasonably

necessary or appropriate to accomplish the purpose of [the employee’s] employment,

and intended for that purpose, although in excess of the powers actually conferred”

on him. S.D. Pub. Entity Pool for Liab. v. Winger, 1997 S.D. 77, ¶ 9, 566 N.W.2d

125, 128. “Employees perform within the scope of employment even when they act

with only implied authority[,]” and “[s]uch authority exists if an act is implicitly

directed by an employer, or is of the same general nature of what is empowered, or

is incident to conduct authorized.” Id. (citations omitted). “Considerations of time,

place, and circumstance assist our evaluation.” Id. (citation omitted). Generally,

whether conduct is within the scope of an individual’s employment is a factual

determination and “often involves questions of foreseeability that may require

resolution by the trier of fact.” Tammen, 2021 S.D. 56, ¶ 20, 965 N.W.2d at 169.

[¶20.]       But “[e]mployees do not act within the scope of their jobs when they

substantially deviate from the course of employment.” Winger, 1997 S.D. 77, ¶ 10,

566 N.W.2d at 128. “Substantial deviations occur when employees abandon the

work purpose in furtherance of a personal motive or ‘frolic.’” Id. (emphasis added).

“With slight deviations, coverage resumes only when employees return to the course

of employment.” Id. ¶ 11, 566 N.W.2d at 129. In contrast, when an employee

substantially deviates from the “business purpose, most courts will bar

compensation recovery on the theory that the deviation is so substantial that the

employee must be deemed to have abandoned any business purpose[.]” Id. We have

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recognized the question of “[w]hether a deviation is so substantial to bar reentry

into the course of business is a question of law.” Id.

[¶21.]       The circuit court concluded that Hughes substantially deviated from

his employment for the State after leaving the courthouse in Parker to travel to

Sioux Falls. The court ruled, “I think that [Hughes] abandoned his work purpose at

that point and that he was on a personal trip to return to Sioux Falls.” The Barrs

argue that “[t]he only way this Court can find a substantial deviation is if this

Court makes inferences from the facts that are in a light most favorable to the

Appellee’s version of events.” We disagree.

[¶22.]       Viewing the facts in a light most favorable to the Barrs, the evidence

establishes that Hughes substantially deviated from his employment by traveling to

a family dinner that evening at his parents’ home. Upon leaving the Turner County

Courthouse at the end of the court day, Hughes did not return to Vermillion but

instead began traveling to Sioux Falls. Hughes’s travel to Sioux Falls for a family

dinner was a purpose that was unrelated to his work as a law clerk. Hughes was

not directed by any employee within the UJS to travel to Sioux Falls, and his

attendance at the family dinner did not benefit the UJS. There are no genuine

issues of material fact related to this question and the court properly resolved the

question of whether Hughes had substantially deviated from his work purpose as a

matter of law.

[¶23.]       Nonetheless, the Barrs argue that “[d]riving to and from remote

courthouses is within the scope of the UJS employment duties” undertaken by law

clerks. In support, the Barrs point to the fact that Hughes was reimbursed for his

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roundtrip travel from his home to the courthouse in Parker. However, the

undisputed facts show that Hughes was not traveling back to Vermillion at the time

of the accident. Furthermore, Hughes did not request or receive reimbursement for

his travel from Parker to Sioux Falls.

[¶24.]         The Barrs further contend that Hughes’s travel to Sioux Falls was

within the scope of his employment because his medical bills from the accident were

paid by the State’s workers’ compensation carrier. The Barrs highlight the fact that

workers’ compensation is available for injuries “arising out of and in the course of

the employment.” Terveen v. S.D. Dep’t of Transp., 2015 S.D. 10, ¶ 8, 861 N.W.2d

775, 778. While there may be similarities in analyzing the scope of employment

between workers’ compensation and the PEPL fund benefits, the two

determinations are different and independent of one another. More importantly,

the argument does not implicate disputed facts. At most, the Barrs’ claim suggests

divergent views relating to the legal question of scope of employment. 5

[¶25.]         Further, there is evidence in the record suggesting that there may

have been some initial miscommunication between Hughes and the circuit court

administrator, at the time of the first report of injury, about whether the accident

occurred while he was returning to Vermillion, rather than while traveling to Sioux

Falls. In any event, the record before us on summary judgment leaves no question

that Hughes was traveling to Sioux Falls at the time the accident occurred, not to

5.       The director of the Office of Risk Management, which administers the PEPL
         fund, testified that “there are two separate programs, two separate entities,
         and we [PEPL fund] don’t communicate to the most part about what they’re
         [workers’ compensation] dealing with or what I’m dealing with.”

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Vermillion. “[I]ndependent, self-serving endeavors unrelated to [a] job constitute[ ]

a substantial deviation.” Winger, 1997 S.D. 77, ¶ 14, 566 N.W.2d at 130. When

Hughes left Parker and began his trek to Sioux Falls for a family dinner, an act

independent of his employment with the UJS, he abandoned his purpose as a law

clerk and was acting for his own personal benefit. As such, Hughes substantially

deviated from any work-related purpose and was not acting within the scope of his

employment as a matter of law.

[¶26.]       The Barrs’ claims against the Attorneys for legal malpractice for

failing to provide timely notice to the State were premised on Hughes acting within

the scope of his employment at the time of the accident. Because the accident did

not arise within the scope of Hughes’s duties for the State, the accident was not an

occurrence triggering PEPL fund coverage. Consequently, the Barrs could not have

asserted a claim against the State in their underlying negligence action, and the

Attorneys were not negligent for failing to pursue one. Therefore, the circuit court

properly granted summary judgment in favor of the Attorneys.

[¶27.]       Affirmed.

[¶28.]       KERN, SALTER, DEVANEY, and MYREN, Justices, concur.

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