Legal Ethics

Ex-Client Sues Law Firm, Says Sex Trial Statements Cost Him $21.5M

Once a high-flying real estate mogul in South Dakota, Doug Hamilton says he lost his entire net worth of over $21.5 million as a result of adverse testimony and arguments by a former employee and her counsel at his sexual harassment trial.

Now he is trying to regain at least some of that money by suing the Rapid City law firm that represented him, Bangs McCullen Butler Foye & Simmons, and litigation partner Jeffrey Hurd, the Rapid City Journal reports.

In a malpractice suit filed last month in federal district court in Sioux Falls, Hamilton contends that errors by his counsel resulted in the case going to trial and a $4.1 million verdict for the plaintiff in early 2006 (which subsequently was overturned). Although the case later settled for a “much lower” figure than the original verdict, testimony by the plaintiff and what the newspaper describes as “character assassination” by her counsel made it impossible for his real estate business to obtain credit even before the the global economic turmoil of recent years, according to the suit.

However, in an answer filed this week, Bangs McCullen contends that the firm was not at fault. Hamilton’s harassment of female employees caused the adverse publicity and adverse verdict of which he complains, the answer says, arguing that he understood the risk involved in the underlying sexual harassment case.

The firm is also asserting a statute-of-limitations defense, arguing that Hamilton filed suit too late.

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