Barr v. Cole , 2023 S.D. 60 ( 2023 )

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2023 S.D. 60IN 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.
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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
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(. . . 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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