Legal Memorandum: Exceptions to the Occurrence Rule

Issue: What are the exceptions to the ‘occurrence rule’ in determining when a cause of action accrues for a legal malpractice claim in South Dakota?

Area of Law: Ethics & Professional Responsibility, Personal Injury & Negligence
Keywords: Occurrence rule; Legal malpractice actions; Continuing representation, fraudulent concealment
Jurisdiction: South Dakota
Cited Cases: 2001 S.D. 59; 627 N.W.2d 784; 419 N.W.2d 197; 378 N.W.2d 680
Cited Statutes: S.D. Codified Laws § 15-2-14.2 (2009)
Date: 03/01/2010

South Dakota law requires that a legal malpractice action be “commenced only within three years after the alleged malpractice, error, mistake, or omission shall have occurred.”  S.D. Codified Laws § 15-2-14.2 (2009).  South Dakota courts apply the occurrence rule, rather than the discovery rule, to legal malpractice actions.  Under the occurrence rule, the statute of limitations on a claim of attorney malpractice begins to run at the time of the alleged negligence.  Green v. Siegel, Barnett & Schutz, 1996 S.D. 146, 557 N.W.2d 396 (S.D. 1996).  The two exceptions to the rule are for continuing representation, and fraudulent concealment of the malpractice.

            Continuing representation will toll the statute of limitations only when there are clear indicia of an “ongoing, continuous, developing, and dependent relationship” between the attorney and the client.  The relationship must be more than sporadic, and must involve a continuity of the services on which the malpractice action is based.  Schoenrock v. Tappe, 1988 SD 19, 419 N.W.2d 197 (S.D. 1988).  The other exception to the limitations period is for fraudulent concealment of the malpractice.  South Dakota courts have held that silence or concealment of a potential cause of action for legal malpractice may constitute fraudulent concealment.  Glad v. Gunderson, Farrar, Aldrich & Demersseman, 1985 S.D. 197, 378 N.W.2d 680, 682 (S.D. 1985).  The relationship between an attorney and client is a relationship of trust and confidence.  Such a relationship imposes a duty on the attorney to disclose facts that […]

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