Taylor v. Casey , 66 F. App'x 749 ( 2003 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
MAR 26 2003
TENTH CIRCUIT
PATRICK FISHER
Clerk
RICHARD K. TAYLOR,
Plaintiff-Appellant,
v.
No. 02-3138
DEREK S. CASEY and HUTTON & (D.C. No. 00-CV-1448-JTM)
HUTTON, (D. Kan.)
Defendants-Appellees.
ORDER AND JUDGMENT*
Before MURPHY, BALDOCK, and HARTZ, Circuit Judges.
Plaintiff Richard K. Taylor appeals the district court’s orders granting summary
judgment in favor of Defendants Derek S. Casey and the law firm for which Casey works,
Hutton & Hutton (hereinafter “Casey”). Casey represented Taylor in a defamation and
tortious interference lawsuit. Although a jury awarded Taylor damages at trial, the
Kansas Court of Appeals reversed the verdict after finding the lawsuit was filed beyond
the one-year statute of limitations, and was not preserved by the Kansas savings statute.
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, 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.
Taylor then sued Casey, alleging Casey (1) negligently failed to file a “substantially
similar” lawsuit protected by the savings statute, and (2) negligently filed a federal
lawsuit that had no hope of success, thereby depriving Taylor of the benefit of the Kansas
savings statute. Casey moved for summary judgment, arguing he was not liable for legal
malpractice as a matter of law. The district court granted Casey’s motion. Taylor
appeals. We have jurisdiction pursuant to 28 U.S.C. § 1291.1 We affirm.
I.
Taylor worked for the International Union of Electronic, Electrical, Salaried,
Machine and Furniture Workers, AFL-CIO (“IUE”) for over twenty years. Shortly after
leaving his position with the IUE in 1992, Taylor initiated a union organizing campaign at
the North American Phillips Plant in Salina, Kansas for the Teamsters Union. On August
3, 1992, IUE prepared an allegedly defamatory letter about Taylor and distributed it to
1
Although not challenged by either party, we have an independent obligation to
examine our own jurisdiction. Amazon, Inc. v. Dirt Camp, Inc., 273 F.3d 1271, 1274
(10th Cir. 2001). The district court granted Defendants’ motion for summary judgment,
and then later dismissed Defendants’ counterclaim without prejudice. A dismissal
without prejudice does not confer finality for appellate jurisdiction. See Heimann v.
Snead, 133 F.3d 767, 769 (10th Cir. 1998) (“Parties may not confer appellate jurisdiction
upon us by obtaining a voluntary dismissal without prejudice of some claims so that
others may be appealed.”). We issued a jurisdictional show cause order directing counsel
to obtain a district court order either granting a Fed. R. Civ. P. 54(b) certification as to the
orders appealed or explicitly adjudicating the remaining counterclaim. See Lewis v. B.F.
Goodrich Co., 850 F.2d 641, 645-46 (10th Cir. 1988) (en banc). The district court
subsequently entered a Rule 54(b) certification. Although Taylor prematurely filed his
notice of appeal, Taylor’s notice of appeal has ripened. Id. at 645. We are satisfied the
district court did not abuse its discretion in certifying the appeal under Rule 54(b), and we
therefore accept jurisdiction. See Heimann, 133 F.3d at 769.
2
employees at the Salina, Kansas plant. Because of the letter, the Teamsters terminated
their relationship with Taylor.
On July 29, 1993, Taylor filed a pro se complaint (“Taylor I”) in Sedgwick
County, Kansas against IUE and several individual IUE union leaders, alleging the letter
was defamatory and tortiously interfered with his business relationship with the
Teamsters. Taylor timely filed the defamation claim within Kansas’ one year statute of
limitations for defamation claims. See Kan. Stat. Ann. § 60-514(a). Taylor served
process on IUE, but did not serve the individually named defendants. After Taylor filed
the pro se complaint, he retained Casey to represent him. Casey subsequently filed a
voluntary dismissal without prejudice, and Taylor I was dismissed.
Two weeks later, Casey filed suit in federal district court in Kansas (“Taylor v.
Bywater”). The complaint named Taylor as plaintiff in his individual capacity and for the
benefit of his wife. The complaint named as defendants several individually named IUE
members, but not the IUE as an entity. The complaint alleged the same defamation and
tortious interference claims as Taylor I, and also included a loss of consortium claim on
behalf of Taylor’s wife. Upon the defendants’ motion to dismiss, the federal district court
ruled that Taylor v. Bywater was filed beyond the one-year statute of limitations, and the
suit was not saved by Kansas’ savings statute. Taylor v. Bywater, 1994 WL 114293, at
*1 (D. Kan. Mar. 29, 1994) (unpublished). Kansas’ savings statute, Kan. Stat. Ann. § 60-
518, permits plaintiffs to re-file a suit beyond the statute of limitations if the new suit is
3
filed within six months of a previous, substantially similar suit that was commenced
within the limitations period and the first suit was dismissed otherwise than on the merits.
The federal district court held § 60-518 did not apply because Taylor I and Taylor v.
Bywater were not “substantially similar” because the complaints named different
defendants. Id. The court also held Taylor’s claims failed because under federal law,
Taylor could not seek money damages against individual union members for acts done on
behalf of the union. Id. at *3.
Following dismissal in Taylor v. Bywater, but within six months of the voluntary
dismissal in Taylor I, Casey filed suit in Saline County, Kansas (“Taylor II”). This time,
the complaint named Taylor as plaintiff in his individual capacity and as representative of
his wife. The complaint named the IUE as defendant. The differences between Taylor I
and Taylor II were (1) the addition of a loss of consortium claim on behalf of Taylor’s
wife; (2) the omission in Taylor II of the individual defendants named but not served in
Taylor I; and (3) the addition in Taylor II of claims for invasion of privacy and outrageous
conduct not alleged in Taylor I. The first difference was eliminated before trial in Taylor
II when Taylor’s wife passed away, and the loss of consortium claim was withdrawn.
Before trial in Taylor II, IUE moved to dismiss Taylor’s defamation claim on
statute of limitations grounds. The trial court held the defamation claim was barred
because it was brought more than one year after the alleged defamation, and § 60-518 did
not apply because Taylor II was not substantially similar to Taylor I. IUE then moved to
4
dismiss Taylor’s tortious interference claim. The court denied the motion, ruling Taylor
timely filed the tortious interference claim within the two-year statute of limitations. See
Kan. Stat. Ann. § 60-513(a)(4). The case proceeded to trial. The jury found for Taylor in
the amount of $105,000, and the court awarded $50,000 in punitive damages.
IUE appealed the jury verdict, arguing the tortious interference claim was barred
by a one-year statute of limitations and § 60-518 did not apply because Taylor I and
Taylor II had different parties. Taylor cross-appealed, arguing § 60-518 should have
saved the defamation claim, and the district court erred by dismissing it. The Kansas
Court of Appeals held Taylor’s tortious interference claim was, essentially, just a
defamation claim subject to a one-year, not a two-year, statute of limitations. Taylor v.
International Union of Electronic, Elec., Salaried, Mach. and Furniture Workers, 968 P.2d
685, 690 (Kan. App. 1998). The court also held that because the parties were different in
Taylor I and Taylor II, § 60-518 did not save either of Taylor’s claims. Id. at 689-90. On
appeal, IUE also argued that the federal filing, Taylor v. Bywater, should be considered a
previous refiling for purposes of § 60-518, barring a second refiling even if within the
six-month savings period. The Kansas Court of Appeals did not address this argument,
relying solely on the reasoning that the parties differed in Taylor I and Taylor II, and
therefore the suits were not “substantially similar” as required by § 60-518. Thus, Taylor
lost on appeal the damages he won at trial.
Taylor thereafter filed suit in diversity against Casey and Hutton & Hutton in
5
federal district court in Kansas (“Taylor v. Casey”), alleging legal malpractice and breach
of fiduciary duty. Taylor alleged two negligent acts: (1) Casey failed to file a
“substantially similar” action in Taylor II to qualify for § 60-518 protection, and (2)
Casey wasted Taylor’s one opportunity to benefit from § 60-518 by filing Taylor v.
Bywater in federal court. Taylor sought as damages the $105,000 jury award and the
$50,000 in punitive damages he lost on appeal in state court.
The district court granted summary judgment in favor of Casey, holding that
Casey’s alleged negligence concerned matters of unsettled law about which informed
legal minds reasonably could disagree. The court also held that Casey’s federal filing in
Taylor v. Bywater was not a cause of Taylor’s damages because the Kansas Court of
Appeals did not rely on the federal filing to rule against Taylor. Finally, the district court
concluded Taylor’s breach of fiduciary duty claim could not survive because it rested on
the same facts and allegations as the negligence claims.
II.
We review the district court’s grant of summary judgment de novo applying the
standard set forth in Fed. R. Civ. P. 56(c). Wright ex rel. Trust Co. of Kansas v. Abbott
Laboratories, Inc., 259 F.3d 1226, 1231 (10th Cir. 2001). Because the district court’s
jurisdiction was based on diversity, we apply the law of the forum state, Kansas. Rancho
Lobo, Ltd. v. Devargas, 303 F.3d 1195, 1200 (10th Cir. 2002).
To prevail on a legal malpractice claim under Kansas law, a plaintiff must show
6
“(1) the duty of the attorney to exercise ordinary skill and knowledge, (2) a breach of that
duty, (3) a causal connection between the breach of duty and the resulting injury, and (4)
actual loss or damage.” Bergstrom v. Noah, 974 P.2d 531, 553 (Kan. 1999). In Kansas,
issues of professional negligence generally should be left to the jury. Id. at 554. But
when, “under the totality of circumstances as demonstrated by the uncontroverted facts, a
conclusion may be reached as a matter of law that negligence has not been established,
judgment may be entered as a matter of law.” Id. An attorney “‘is not liable . . . for a
mistaken opinion on a point of law that has not been settled by a court of last resort and
on which reasonable doubt may well be entertained by informed lawyers.’” Id. at 556(quoting 7 Am. Jur. 2d, Attorneys At Law § 221).
A.
Taylor first alleges Casey negligently failed to file a “substantially similar” action
in Taylor II as required to fall within the protection of the Kansas savings statute. The
federal district court concluded Casey was entitled to summary judgment on this issue
because at the time Casey gave his legal advice, Kansas law was unsettled about the
application of the savings statute, and the statute’s applicability was reasonably debatable
among informed legal minds.
At the time Casey rendered his legal services in this case, Kansas law was clear
that a second action is not “substantially similar” under § 60-518 if it does not have the
same plaintiffs as the first action. Rogers v. Williams, Larson, Voss, Strobel & Estes, 777
7
P.2d 836 (Kan. 1989). In Rogers, the Kansas Supreme Court held that because the
plaintiffs’ second suit (brought by the decedent’s heir in her representative capacity as an
estate administrator) did not have the same plaintiff as the first suit (brought by the
decedent’s heir in her individual capacity), the second action could not be saved by § 60-
518.
As the district court recognized, Rogers did not settle the question of whether § 60-
518 would save the claim of a plaintiff named in the same capacity in both the first and
second actions, even if the second complaint added other plaintiffs to which the saving
statute could not apply.2 Arguably, in such an instance, the plaintiff named in both
complaints does not forfeit his claims. Rather, the court simply should dismiss those
claims not within the savings statute’s protection, but allow to proceed those claims that
do fall within the savings statute’s protection. Rogers did not address this scenario, nor
did it hint at what the proper outcome under Kansas law might be. As a result of this
uncertainty, Casey established the law was unsettled.
2
Although the plaintiffs in Rogers sued in their individual capacities in both their
first and second suits, their individual claims were dismissed from the second action
because of res judicata, not because the parties were different. In Rogers, the district
court in the first action granted summary judgment in favor of the defendant, resulting in
a judgment on the merits to which res judicata would apply. Because § 60-518 applies
only to original actions which were decided “otherwise than on the merits,” the Rogers
plaintiffs’ individual capacity claims were not eligible for § 60-518 protection regardless
of party similarity. In contrast, Taylor I was voluntarily dismissed without prejudice.
Consequently, res judicata would not apply, and § 60-518 could apply because a
voluntary dismissal is not a decision on the merits.
8
Casey also established that informed legal minds reasonably could have disagreed
about how the Kansas court of last resort would rule. To show disagreement, Casey first
presented the district court with a Tenth Circuit case, Goldsmith v. Learjet, Inc., 90 F.3d
1490 (10th Cir. 1996). Casey argues that in Goldsmith, a Tenth Circuit panel held claims
by a plaintiff named in the first and second suits remained viable under § 60-518 even
though the second suit added plaintiffs to which § 60-518 did not apply. Thus, Casey
argues that if judges on the Tenth Circuit held this view of the law, informed legal minds
reasonably could disagree on the point. In Goldsmith, the plaintiff sued in his
representative capacity in the first suit, and in his representative and individual capacities
in the second suit. In conformity with Rogers, the Tenth Circuit dismissed the individual
capacity claims because they were not included in the original suit. The Tenth Circuit did
not dismiss the plaintiff’s representative claims brought in the first and second actions
because the Goldsmith defendants did not challenge the applicability of § 60-518 to the
representative claims.
We agree with Taylor that Goldsmith did not hold as a matter of Kansas law that
§ 60-518 would save the claim of a plaintiff named in the same capacity in both the first
and second actions, even if the second complaint added other plaintiffs to which the
saving statute could not apply. See Goldsmith, 90 F.3d at 1495. But Goldsmith is not
without significance. Apparently the Goldsmith defendant believed the savings statute
preserved these claims. Id. (noting that the parties did not dispute that the Kansas savings
9
statute, if applicable, would save the claims of plaintiffs listed in both the first and second
actions). The defendant’s counsel knew Kansas law well enough to challenge the
individual capacity claims under § 60-518, yet chose not to challenge the representative
capacity claims under the same theory. This strategy at least suggests counsel believed
§ 60-518 saved those claims.
In addition to Goldsmith, Casey presented to the district court a University of
Kansas Law Review article, written by two law professors, criticizing the Kansas Court
of Appeals’ decision in Taylor II. See William E. Westerbeke & Stephen R. McAllister,
Survey of Kansas Tort Law: Part I, 49 U. Kan. L. Rev. 1037, 1135-36 (2001). According
to the professors, the Kansas courts improperly dismissed Taylor’s original defamation
and tortious interference claims because Taylor in his individual capacity was a plaintiff
in both the first and second suits. Taylor argues the article is irrelevant because it was
written after Taylor II, and therefore could not have influenced Casey’s legal decisions.
But the question is not whether Casey relied on the article, but whether reasonable legal
minds could have disagreed about the contours of Kansas law before the Taylor II ruling.
The law professors’ disagreement with the Kansas Court of Appeals’ resolution, although
after the fact, demonstrates legal debate about what Kansas law prior to Taylor II
required.
Taylor also argues he has raised a genuine issue of material fact precluding
summary judgment because his expert, Douglas Richmond, testified Casey was negligent
10
for not filing a substantially similar suit. As stated by Casey, however, Richmond’s
opinion that Casey was wrong amounts to “little more than debating over whether a
debatable point is debatable. The simple fact of the existence of the debate is self-
proving. Which side of the debate is correct . . . is irrelevant.” The mere fact that such a
debate could and did exist demonstrates that informed legal minds reasonably could
disagree on the point. Casey has shown that § 60-518’s applicability was unsettled and
that reasonable doubt may have been entertained by informed lawyers on its scope.
Accordingly, Casey is entitled to judgment as a matter of law.3
B.
Taylor also alleges Casey committed malpractice by filing Bywater v. Taylor in
federal court because plaintiffs have only one opportunity to file a second suit under § 60-
518. Thus, Taylor argues Casey “wasted” his one opportunity to benefit from § 60-518
by filing the federal case when Casey knew or should have known with reasonable
investigation that the case would be dismissed. But the Kansas Court of Appeals did not
reverse Taylor’s verdict on this basis. Thus, Taylor cannot establish the required causal
3
Taylor also argues the federal court’s dismissal order in Bywater gave Casey a
roadmap to follow to avoid dismissal. But, as stated by the district court, Bywater
dismissed the case based on lack of similarity among defendants, and did not address
what would happen when the second complaint added plaintiffs to which § 60-518 did not
apply. See Bywater, 1994 WL 114293, at *1. Finally, Taylor notes that Casey allegedly
told Taylor he “screwed up.” Needless to say, an attorney could feel he “screwed up”
when he interprets, incorrectly, how a court will rule on an unsettled point of law without
the attorney being liable for malpractice.
11
connection between Casey’s alleged negligence in filing Bywater and Taylor’s damages.
See Bergstrom, 974 P.2d at 553 (listing third element of malpractice claim as “a causal
connection between the breach of duty and the resulting injury”).
III.
The district court dismissed Taylor’s breach of fiduciary duty claim because it rests
on the same facts as the negligence claim. Taylor argues the district court erred by
treating his breach of fiduciary duty as synonymous with his negligence claim. On
appeal, Taylor identifies only two alleged breaches of fiduciary duties: (1) Casey took a
“high risk” approach by filing Bywater; and (2) if Casey had performed more research
before filing Bywater, he would have known it was without merit. As discussed above,
Taylor has no negligence claim against Casey, and Taylor cannot show that filing
Bywater caused him any harm. Furthermore, Taylor did not allege or offer proof that
Casey acted in bad faith, or that Casey acted in his own interests instead of his client’s.
See In re Conservatorship of Huerta, 41 P.3d 814, 821 (Kan. 2002) (“A fiduciary has the
duty to act in good faith and with due regard to the interests of the party placing
confidence in the fiduciary.”); Unrau v. Kidron Bethel Retirement Servs., Inc., 27 P.3d 1,
14 (Kan. 2001) (“The goal of courts in imposing fiduciary duties is ensuring loyalty. To
promote this goal, the courts require that a fiduciary act solely on behalf of its charge and
that the fiduciary do so scrupulously and in good faith.”). Taylor has not identified a
cognizable breach of fiduciary duty that caused him harm, and Casey is entitled to
12
judgment as a matter of law.
AFFIRMED.
Entered for the Court,
Bobby R. Baldock
Circuit Judge
13