Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Thompson v. Harrie

United States District Court, D. South Dakota, Southern Division

September 19, 2018




         Plaintiffs Teresa Ann Thompson, individually and as special administer of the estate of Winfield Thompson, Sr., deceased, and the Estate of Winfield Thompson filed a complaint in state court alleging unauthorized practice of law, fraud and deceit, civil conspiracy, and barratry/abuse of process against defendants William Harrie, the Nilles Law Firm (collectively “the lawyer defendants”), Nodak Insurance Company, Nodak Mutual Group, Inc., and N.I. Holdings, Inc. (collectively “Nodak”). Docket 1-1. Plaintiffs also seek punitive damages. Id. Nodak removed the case to this court under 28 U.S.C. §§ 1332, 1441, and 1446. Docket 1. Nodak moves to dismiss all counts under Fed.R.Civ.P. 12(b)(1) and 12(b)(6). Docket 7. The lawyer defendants move to dismiss all counts under Fed.R.Civ.P. 12(b)(6). Docket 10. The lawyer defendants also move the court under Federal Rule of Evidence 201 to take judicial notice of the official court files in the underlying lawsuit in South Dakota Circuit Court, Fifth Judicial Circuit. Docket 11. Plaintiffs oppose all defendants' motions to dismiss. Docket 17. Plaintiffs do not appear to object to the lawyer defendants' motion for judicial notice (see Id. at 19-21), so the court takes judicial notice of the state court judgment and entry of order. For the reasons that follow, the court grants the lawyer defendants' motion to dismiss all counts and grants Nodak's motion to dismiss all counts.


         The facts alleged in the complaint, accepted as true, are as follows: Teresa Thompson, a resident of South Dakota, is the daughter of Winfield Thompson, who passed away as a result of injuries sustained in a motor vehicle accident on November 6, 2009. The motor vehicle accident occurred in South Dakota. On or about August 31, 2012, Teresa Thompson brought a wrongful death action in Roberts County, South Dakota, Fifth Judicial Circuit Court (the underlying action), against Nicholas Helgeson, the tortfeasor who caused the motor vehicle accident with Winfield Thompson. At the time of the accident, Helgeson was insured by Nodak Insurance Company. Nodak hired attorney Harrie and the Nilles Law Firm to defend Helgeson in the wrongful death action.

         Harrie was and is an attorney employed by the Nilles Law Firm in Fargo, North Dakota. Harrie was and is licensed to practice law in North Dakota and Minnesota. Despite not being licensed to practice law in South Dakota, Harrie noticed his appearance in the underlying action on October 12, 2012, and no South Dakota licensed-attorney filed a motion for pro hac vice on Harrie's behalf at that time. Harrie filed pleadings on behalf of Helgeson and appeared as counsel for Helgeson at a deposition and in two court hearings.

         On or about January 21, 2016, plaintiffs discovered that Harrie was not licensed to practice law in South Dakota. Harrie sought admission to practice law in South Dakota, but the circuit court denied the motion for pro hac vice. Finding that Harrie unlawfully practiced law in South Dakota in violation of SDCL § 16-18-2, the circuit court granted plaintiffs' renewed motion for default judgment on the merits and quashed all pleadings filed by Harrie. See Docket 18-2. Following a jury trial on damages, the circuit court entered an amended judgment in favor of plaintiffs for $127, 219.60. Docket 18-3.

         Plaintiffs allege that the lawyer defendants' unauthorized practice of law in South Dakota caused plaintiffs undue delay and additional expenses in attorneys fees, costs, and emotional distress damages. And Nodak, plaintiffs allege, knew or should have known that Harrie was improperly practicing law in South Dakota.


         A court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Inferences are construed in favor of the nonmoving party. Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 595 (8th Cir. 2009). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.' ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

         The court assesses plausibility by considering only the materials in the pleadings and exhibits attached to the complaint, drawing on experience and common sense, and reviewing the plaintiff's claim as a whole. Whitney v. Guys, Inc., 700 F.3d 1118, 1128 (8th Cir. 2012). Materials that are part of the public record may also be considered in ruling on a motion to dismiss under Rule 12(b)(6). Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999). A well-pleaded complaint should survive a motion to dismiss “even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.” Twombly, 550 U.S. at 556 (internal quotations omitted).


         I. Count 1: Unauthorized Practice of Law

         Under their unauthorized practice of law claim, plaintiffs argue that they suffered damages as a result of defendants' breach “of their duty to properly represent Helgeson” in the underlying lawsuit. Docket 1-1 ¶ 61. Both Nodak and the lawyer defendants argue that this claim must be dismissed because as a matter of law, defendants did not owe a duty to plaintiffs. Docket 8 at 4, Docket 12 at 5.

         A. The Lawyer Defendants

         South Dakota law provides that “no person shall engage in any manner in the practice of law” in South Dakota unless (1) the person is licensed as an attorney and an active member of the South Dakota Bar in good standing or (2) the person is a non-resident attorney admitted to practice in South Dakota through pro hac vice admission. See SDCL §§ 16-18-1, 16-18-2. The “attorney general or any citizen of the state” may restrain a person engaging in the unauthorized practice of law by permanent injunction. SDCL § 16-18-1. But neither SDCL § 16-18-1 nor SDCL § 16-8-2 provide a private cause of action for damages for the unauthorized practice of law. Thus, the plain language of SDCL §§ 16-18-1 and 16-18-2 show that there is no statutory basis for plaintiffs' unauthorized practice of law claim asserted against the lawyer defendants here.

         Conceding that there is no statutory cause of action in South Dakota for damages for an unauthorized practice of law claim, plaintiffs argue that “there is always a potential ‘common law' basis for a cause of action if the right, remedy, process or intent for the same, can be derived from other statutes, regulations, rules or case law precedent.” Docket 17 at 12. Plaintiffs cite to Persche v. Jones, 387 N.W.2d 32 (S.D. 1987), Cournoyer v. Montana, 512 N.W.2d 479 (S.D. 1994), and Steele v. Bonner, 782 N.W.2d 379 (S.D. 2010) as common law authority to bring a civil action for an unauthorized practice of law claim. Docket 17 at 12-13, 17-18. Plaintiffs also cite to numerous South Dakota statutes and Rules of Professional Conduct. Id. at 14-15. The court finds, however, that these authorities do not support plaintiffs' claim for relief.

         In Persche, the South Dakota Supreme Court concluded that a bank president oversaw and directed the signing and witnessing of a person's will, which constituted an unauthorized practice of law. Persche, 387 N.W.2d at 36-37. Noting that “[o]ne who negligently fails to direct proper attestation of a will becomes liable in tort to an intended beneficiary, ” the Court held that the banker was liable for damages proximately caused by his unauthorized practice of law. Id. And in Cournoyer, the South Dakota Supreme Court held that the chairman of the Yankton Sioux Tribe had standing to bring an action for a temporary restraining order to prevent Montana's unlicensed practice of law on behalf of the tribe in South Dakota. Cournoyer, 512 N.W.2d at 481. See also Steele, 782 N.W.2d at 387 (affirming the trial court's ruling after the trial court permanently enjoined Bonner from continuing to engage in the unauthorized practice of law).

         Plaintiffs claim that they “sustained damages as a direct and proximate cause of [defendants'] breach, of their duty to properly represent Helgeson and as a result of Harrie's unauthorized practice of law.” Docket 1-1 ¶ 61. As noted by the lawyer defendants, this claim is really one for legal negligence or malpractice. See Hamilton v. Sommers, 855 N.W.2d 855, 862 (S.D. 2014) (“[A] successful claim against an attorney for legal malpractice requires proof of four elements: (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 ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.