Wells v. Redwine ( 2001 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
MAY 24 2002
FOR THE TENTH CIRCUIT
PATRICK FISHER
Clerk
THOMAS L. WELLS and NANALEE
F. WELLS, husband and wife,
Plaintiffs-Counterclaim
Defendants-Appellants,
v. Nos. 00-6398 & 01-6155
(D.C. No. CIV-99-370-C)
PHILLIP W. REDWINE, individually (W.D. Okla.)
a/k/a Phillip W. Redwine Law Offices
d/b/a Redwine and Associates; and
D. BENHAM KIRK, JR.,
Defendants-
Counterclaimants-
Appellees,
OKLAHOMA ATTORNEYS
MUTUAL INSURANCE COMPANY,
Defendant-Appellee,
RIGGS, ABNEY, NEAL, TURPEN,
ORBISON, & LEWIS, INC.,
Defendant.
ORDER AND JUDGMENT *
*
The case is unanimously ordered submitted without oral argument
according to the parties’ request for a decision on the briefs and pursuant to
Fed. R. App. P. 34(f) and 10th Cir. R. 34.1(G). This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
(continued...)
Before LUCERO , BARRETT , and ANDERSON , Circuit Judges.
This case presents two appeals. In appeal No. 00-6398, plaintiffs Thomas
L. Wells and Nanalee F. Wells (“the Wells”) appeal the district court’s entry of
summary judgment against them on their claims of fraud and deceit, civil
conspiracy, and interference with their attorney-client relationship. In appeal No.
01-6155, the Wells appeal the jury verdict granting attorney fees to the Wells’
former attorneys. These appeals have been consolidated. We have jurisdiction
under 28 U.S.C. § 1291, and we affirm.
I
In 1994, Luke Castle and Abbi Parrish Castle (“the Castles”) sued the
Wells in an Oklahoma state court for fraudulently inducing them to enter into an
oral contract. The case resulted in a judgment in the Castles’ favor for $330,000
in actual damages and $500,000 in punitive damages. Defendant Phillip W.
Redwine was engaged to represent the Wells in the Castle litigation and he
supervised the attorneys from his firm who conducted the trial. Shortly after the
unexpected verdict was entered against the Wells, they met with Redwine. When
*
(...continued)
and collateral estoppel. The Court generally disfavors the citation of orders and
judgments; nevertheless, an order and judgment may be cited under the terms and
conditions of 10th Cir. R. 36.3.
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questioned in his deposition, Mr. Wells alleges that the following conversation
transpired between himself and Redwine:
Q (to Mr. Wells): Well, what did you tell [Redwine]? What did he
say to you right after the trial, in his office?
A: He called Nanny and I into his office and had us sit down. And
he told us – he said, “I want you to look me straight in the eye.” And
he proceeded to tell us that – he says, “I personally guarantee you
that you won’t lose a thing. And besides that, I have a good
insurance policy.”
Q: Is that all he said?
A: And then he said – after we got up and he shook our hands, he
said, “Don’t worry about a thing. I’ll take care of everything,” and
sent us back to Minnesota.
Q: This meeting would have taken place when, do you say?
A. This would have taken place on, I believe the 14th.
Q: Of October 1996?
A: Yes.
(2 Appellants’ App. at 667.)
These Redwine remarks are interpreted by the Wells as a promise to pay the
Castle judgment, either personally or by a claim to his professional malpractice
insurer—defendant Oklahoma Attorneys Mutual Insurance Company (“OAMIC”).
Redwine has characterized this conversation as his attempt “to reassure them that
[he and his firm] were going to do everything possible to protect them.” (2
Appellants’ App. at 678.)
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Redwine appealed the Castle judgment to the Oklahoma Supreme Court;
however, the Wells were not able to post a bond to stay the Castles’ collection
efforts pending appeal. Because the Castles were persistent in their efforts to
collect their judgment and ultimately instituted collection procedures, the Wells
filed for Chapter 11 bankruptcy. They hired defendant D. Benham Kirk, Jr. to
represent them in the bankruptcy proceedings. 1
The Oklahoma Supreme Court
entered a stay of the Castle appeal based on the bankruptcy court’s automatic stay.
Redwine and Kirk viewed the stay as beneficial to the Wells because it permitted
them to pursue their homestead exemption claims to protect their property from
the Castles’ collection efforts upon the eventual lifting of the bankruptcy stay. In
addition, while the stay of the appeal was in effect, Redwine and Kirk intended to
litigate, within the bankruptcy proceedings, their assertion that the punitive-
damages judgment was dischargeable in bankruptcy. Before that happened,
however, the United States Supreme Court issued an opinion that Redwine and
Kirk thought resolved the punitive-damages challenge adversely to the Wells.
At a subsequent bankruptcy court settlement conference, the Wells agreed
to pay the Castles $500,000 as full settlement of their judgment. As part of the
settlement, the Castles agreed to assign their interests in the state appeal to a
1
Kirk subsequently joined the law firm of Riggs, Abney, Neal, Turpen,
Orbison & Lewis, Inc., which was named as a defendant in this lawsuit, but was
dismissed by stipulation prior to this appeal.
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corporation owned by Mr. Wells. Having previously filed a state-court
malpractice suit against Redwine for his firm’s representation of them in the
Castle litigation, the Wells assert that the assignment of their interests in the state
appeal was adverse to them because its sole purpose was to protect Redwine from
their pending malpractice claim. However, Redwine and Kirk maintain that this
assignment was necessary to prevent the dismissal of the malpractice suit.
Without the state-court appeal, OAMIC would defend the malpractice suit by
arguing that Redwine was deprived of an opportunity to win the appeal.
Ultimately the Castle appeal was dismissed.
Instead of proceeding with the malpractice action, the Wells brought this
federal lawsuit alleging that Redwine is liable to them for breach of contract,
fraud and deceit, civil conspiracy, and intentional infliction of emotional distress,
but not for professional malpractice or negligence. This federal action also
included claims against Kirk and OAMIC, which are explained below. Redwine
and Kirk each filed a counterclaim for attorney’s fees for professional services
rendered in the Castle and bankruptcy litigation.
Summary judgment was entered in favor of all defendants on the Wells’
claims by the district court. A jury decided the counterclaims for attorney fees,
and a verdict was returned in Redwine’s favor for $96,867.26, and another in
Kirk’s favor for $8,811.26. After judgments were entered on the verdicts,
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Redwine requested and was granted as a prevailing party, $13,970 for attorney
fees incurred in litigating his counterclaim.
II
On their claims against Redwine, Kirk, and OAMIC for fraud and deceit,
civil conspiracy, and interference with their attorney-client relationship, the Wells
appeal the district court’s grant of summary judgment. All other claims
are deemed abandoned because they were not briefed. See Abercrombie v. City
of Catoosa , 896 F.2d 1228, 1231 (10th Cir. 1990) (issue listed, but not argued
in brief, is waived). Moreover, this Court will not search the record for evidence
to support allegations contained in the appellate briefs. Gross v. Burggraf
Constr. Co. , 53 F.3d 1531, 1546 (10th Cir. 1995).
We review de novo the district court’s grant of summary judgment, viewing
the record in the light most favorable to the party opposing summary judgment.
McKnight v. Kimberly Clark Corp., 149 F.3d 1125, 1128 (10th Cir. 1998).
Summary judgment is appropriate if there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); Fed. R. Civ. P. 56(c). Summary judgment will
be granted to defendant if plaintiff “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.” Celotex Corp., 477 U.S. at 322.
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“Although we are required to view the evidence in the light most favorable to the
nonmoving party, we must not refrain from examining the evidence altogether.”
Heartsprings, Inc. v. Heartspring, Inc. , 143 F.3d 550, 557 (10th Cir. 1998).
There is no dispute that Oklahoma state law controls. In this case, based on
diversity, we must reach the same conclusion the state’s highest court would
reach. Blanke v. Alexander, 152 F.3d 1224, 1228 (10th Cir. 1998). In applying
Oklahoma law, we afford no deference to the district court’s legal rulings.
Salve Regina College v. Russell, 499 U.S. 225, 238-39 (1991).
A
Fraud-and-deceit claims were brought against both Redwine 2
and Kirk by
the Wells. To maintain a claim of fraud, a plaintiff must produce evidence of five
elements: (1) a material representation that was false, (2) the statement was made
by a defendant who knew it was false, (3) the defendant intended the plaintiff to
rely on the representation, (4) the plaintiff acted upon the representation, and (5)
the plaintiff suffered a detriment as a result. Silk v. Phillips Petroleum Co., 760
2
The Wells assert that the district court did not resolve their claim against
Redwine for fraud and deceit because it premised the dismissal of the fraud claim
on the Wells’ statement that they did not pursue a claim of negligence or legal
malpractice against Redwine. Because the record supports summary judgment in
favor of Redwine on the claim for fraud and deceit we affirm the district court’s
decision, albeit for different reasons. See Mallinson-Montague v. Pocrnick , 224
F.3d 1224, 1233 (10th Cir. 2000) (“[T]his court can affirm the district court for
any reason that finds support in the record.”).
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P.2d 174, 176-77 (Okla. 1988). Mere allegations will not withstand summary
judgment. Id. at 177. Facts must be demonstrated “from which an irresistible
deduction of fraud reasonably arises.” Id. (quotation omitted).
A cause of action for deceit requires evidence of a willful deceit, intent that
the other party alter his position, and injury to the other party. Okla. Stat. tit. 76,
§ 2. “Deceit” is defined as any of the following:
1. The suggestion, as a fact, of that which is not true by one who
does not believe it to be true.
2. The assertion, as a fact, of that which is not true, by one who has no
reasonable ground for believing it to be true.
3. The suppression of a fact by one who is bound to disclose it, or who
gives information of other facts which are likely to mislead for want of
communication of that fact; or
4. A promise, made without any intention of performing.
Id. § 3.
Three allegations form the basis of the Wells’ fraud-and-deceit claims
against Redwine. First, Redwine lied when he told the Wells that he would be
responsible for paying the Castle judgment. Second, Redwine permitted the
appeal from the Castle judgment to be stayed for about one year during the time
the bankruptcy case was pending, and to be continued after the Castle settlement,
even though the appeal was moot, thereby denying the Wells of any benefit from
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the appeal. 3
In addition, Redwine was deceitful in not telling the Wells the reason
the appeal was stayed for a year or the reason for continuing the appeal after the
settlement. Third, Redwine told the Wells that he would request his malpractice
insurer, OAMIC, to consider paying a claim made by the Wells, thereby inducing
them to settle with the Castles on the assumption that OAMIC would pay the
settlement amount. Also, Redwine failed to disclose the fact that OAMIC had not
committed to contributing to any settlement with the Castles.
As indicated above, to prevail on a claim for fraud and/or deceit, a plaintiff
must suffer damages as a result. In this effort to establish damages, the Wells
claim they (1) had to pay $500,000 to settle the Castle judgment, (2) incurred a
$100,000 attorney-fee obligation in the Castle litigation, and (3) continued the
Castle appeal even after settling with the Castles. Mr. Wells admitted, however,
that he sustained no damages as a result of the continuation of the appeal. The
attorney fees incurred in the Castle litigation predated any alleged
misrepresentations made by Redwine, so the Wells could not have relied on
misrepresentations in incurring those fees.
3
The Wells also claim that by failing to have the stay of appeal lifted,
Redwine improperly ensured that the Castle judgment was not affirmed on appeal.
According to them, this resulted in the Castles accepting a $500,000 settlement,
which was less than their $830,000 judgment. They allege that Redwine’s motive
was to keep the exposure on the Castle matter within his insurance policy’s limit
of $1,000,000. However, this argument is meritless because the judgment of
$830,000 was within the $1,000,000 policy limit.
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Despite their claim to the contrary, the Wells admit, and the record shows,
that Redwine contacted OAMIC to request it to consider a legal malpractice claim
against him by the Wells. (1 Appellants’ App. at 294-96.) As for the Wells’
claim that Redwine failed to tell them that OAMIC had not agreed to pay any of
the Castle settlement, the record does not contain evidence that Redwine led the
Wells to think that OAMIC had agreed to pay anything.
Ultimately, this claim rests on the Wells’ allegation that Redwine’s
statements—that they would not lose a thing and he would take care of
everything—meant that he intended to pay the Castle judgment or have his
malpractice insurer pay it. We conclude that Redwine’s statements cannot
provide the necessary clear and convincing evidence from which an irreducible
deduction of fraud reasonably arises. The statements are only a scintilla of
evidence, which cannot defeat summary judgment. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 252 (1986). Moreover, Oklahoma law precludes the Wells
from seeking payment of the Castle judgment by Redwine. “It would be contrary
to public policy to allow [the Wells] to benefit from their own confirmed fraud
and recover a monetary judgment from [Redwine] to indemnify them for their
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fraud.” Heyman v. Gable, Gotwals, Mock, Schwabe, Kihle, Gaberino , 994 P.2d
92, 94 (Okla. Ct. App. 1999).
Similar to the fraud-and-deceit claims against Redwine, the Wells’ fraud-
and-deceit claims against Kirk are based on four allegations. First, Kirk
permitted the Castle appeal to be stayed during the bankruptcy case and then
pursued it even after the settlement. Second, Kirk was deceitful in not telling the
Wells the reason the appeal was stayed for a year or the reason for continuing the
appeal after the settlement. Third, Kirk discussed how to accomplish proceeding
with the Castle appeal after the Castles agreed to the settlement with the attorneys
for OAMIC. Fourth, Kirk failed to disclose the fact that OAMIC had not
committed to contributing to any settlement with the Castles, instead he
encouraged the Wells to settle by letting them think that OAMIC would pay any
settlement reached.
Kirk’s fraud and deceit allegedly caused the Wells $500,000 in
damages—the amount of the Castle settlement—because by continuing the Castle
appeal, Kirk was able to defeat their malpractice claim against Redwine. (1
Appellants’ App. at 33 (first amended complaint).) Yet they have not produced
any evidence either (1) that Kirk made any material misrepresentations, false
statements, or promises he did not intend to keep, or (2) that they relied on any
misrepresentation to their detriment. To the contrary, the materials submitted on
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appeal demonstrate that Kirk pursued the Castle appeal for the very purpose of
preserving the Wells’ malpractice claim against Redwine. Accordingly, we hold
that summary judgment in Kirk’s favor on this claim was correct.
B
Alleging that Kirk’s efforts to pursue the Castle appeal after settlement
were the result of OAMIC’s demands that the appeal continue, the Wells claim
that OAMIC unlawfully interfered with their attorney-client relationship. We
assume they refer to their professional relationship with Kirk, since their
appellate brief describes the factual basis for this claim as letters written after
they discharged Redwine and sued him in state court for legal malpractice.
A claim for tortious interference with an attorney-client contractual
relationship is based on three elements: (1) there existed a “business or
contractual right that was interfered with by [OAMIC]; (2) such interference was
malicious and wrongful, and neither justified, privileged, nor excusable; and (3)
damages were proximately caused by such interference.” Thompson v. Box , 889
P.2d 1282, 1284 (Okla. Ct. App. 1994). This claim was not argued in the
appellate brief, but was mentioned only in passing. We have considered it,
however, and we conclude that the Wells have not made a prima facie case.
There is no evidence that OAMIC interfered with their attorney-client relationship
with Kirk, let alone evidence that OAMIC, through its attorneys, engaged in
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malicious or wrongful activity. As discussed relative to the Wells’ other
complaints that continuing the Castle appeal was wrongful, they have alleged no
damages as a result. Therefore, we affirm the district court’s grant of summary
judgment in OAMIC’s favor.
C
Arguing that the district court erred in granting summary judgment against
them on their claims of civil conspiracy, the Wells allege two conspiracies. First
they allege Redwine and Kirk denied the Wells the opportunity to benefit from the
reversal of the Castle judgment by permitting the stay to remain in effect for
about one year; second they claim Redwine, Kirk, and OAMIC perpetuated the
Castle appeal even after the appeal became moot due to the settlement with the
Castles.
A civil conspiracy consists of a combination of two or more
persons to do an unlawful act, or to do a lawful act by unlawful
means. Unlike its criminal counterpart, civil conspiracy itself does
not create liability. To be liable the conspirators must pursue an
independently unlawful purpose or use an independently unlawful
means. There can be no civil conspiracy where the act complained of
and the means employed are lawful.
Brock v. Thompson , 948 P.2d 279, 294 (Okla. 1997) (footnotes omitted).
Because there is no claim that staying or pursuing the Castle appeal after
settlement was illegal, and in not identifying an unlawful purpose pursued by the
alleged co-conspirators or an unlawful means employed by them, the Wells have
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not alleged a civil conspiracy. We do not delve into the reasons for the course of
action taken by Redwine, Kirk, and OAMIC to determine if it was appropriate, or
even reasonable, because the Wells have made it quite clear that their claims in
this case do not include legal malpractice. Accordingly, summary judgment was
proper.
III
Challenging the judgments in favor of Redwine and Kirk on their
counterclaims for professional services rendered and the additional attorney fees
awarded to Redwine as a prevailing party, 4
the Wells argue that the district court
committed reversible error by refusing to permit them to defend against
Redwine’s counterclaim by showing his fraud and deceit. They also claim
Redwine and Kirk waived collection of their respective fees or, by failing to send
bills and/or talk about the bills with the Wells, they are estopped from collecting
the fees. Therefore, the Wells argue they were entitled to a judgment as a matter
of law, pursuant to Fed. R. Civ. P. 50(a). They maintain that reversal of the
counterclaim judgments will also require reversal of Redwine’s additional award
based on his status as a prevailing party.
4
Kirk did not request similar fees. Redwine’s and Kirk’s counterclaims
were tried before a jury. Jury verdicts were returned in favor of Redwine and
Kirk as stated above. The additional attorney-fee award to Redwine was entered
by the district court, pursuant to Okla. Stat. tit. 12, § 936.
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We review the district court’s rulings on the admission of evidence for an
abuse of discretion. Black v. M&W Gear Co. , 269 F.3d 1220, 1227 (10th Cir.
2001). We review an order disposing of a motion for judgment as a matter of law
by reviewing all of the evidence in the record and drawing all reasonable
inferences in favor of the nonmoving party. Stewart v. Adolph Coors Co. ,
217 F.3d 1285, 1288 (10th Cir. 2000), cert. denied , 531 U.S. 1077 (2001).
We are unable to review these claims because the Wells have not provided
a record of the jury trial proceedings. Appendices provided by each of the
appellees similarly do not contain the necessary trial record; the burden is on
appellants to provide the appellate court with a suitable record on appeal. See
Fed. R. App. P. 10(b)(2). Where the evidentiary record before us is insufficient
to permit assessment of appellants’ claims of error, we must affirm. Deines v.
Vermeer Mfg. Co. , 969 F.2d 977, 979-80 (10th Cir. 1992).
IV
Defendants’ motions to dismiss appeal 00-6398 are denied as moot. The
judgment of the district court is AFFIRMED .
ENTERED FOR THE COURT
Carlos F. Lucero
Circuit Judge
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