Seligman v. Tenzer ( 2006 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-1849
JASON SELIGMAN,
Plaintiff - Appellant,
versus
DAVID I. TENZER; GLENN, FELDMANN, DARBY &
GOODLATTE, PC; dba GLENN, FELDMANN, DARBY &
GOODLATTE,
Defendants - Appellees.
Appeal from the United States District Court for the Western
District of Virginia, at Roanoke. James P. Jones, Chief District
Judge. (CA-04-44)
Submitted: March 21, 2006 Decided: March 31, 2006
Before WILLIAMS, KING, and GREGORY, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Neal L. Walters, SCOTT/KRONER, P.L.C., Charlottesville, Virginia,
for Appellant. Paul G. Beers, GLENN, FELDMANN, DARBY & GOODLATTE,
Roanoke, Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
This appeal arises from a corporate governance dispute in
which Mason Cass and Bryant Cass, principals of the corporation,
Adventis, Inc. (“Adventis”), ousted the third principal, Jason
Seligman. Disgruntled with his termination from Adventis, Seligman
first filed suit in Virginia state court against the Casses and
Adventis and settled the dispute. Seligman then filed this
diversity malpractice action against David I. Tenzer and the law
firm, Glenn, Feldmann, Darby & Goodlatte, P.C. (“GFDG”)
(collectively, “defendants”), who had drafted the papers necessary
to incorporate Adventis. The district court granted defendants’
motion for summary judgment and denied Seligman’s motion for
voluntary dismissal or a continuance. We now affirm.
I.
In 1999, the Casses invited Seligman to join their pre-
existing partnership, which advertised the sale of used cars over
the Internet. Shortly thereafter, the three men dissolved the
partnership and formed a new entity, Independent Systems, LLC
(“LLC”). In early 2002, the LLC’s accountant advised the three
principals to reincorporate the LLC as an S-type corporation, so
that they could avoid self-employment taxes.
Consequently, Seligman contacted Tenzer to discuss the
conversion. The parties agreed to reincorporate the LLC as an S-
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type corporation under a new name, Adventis, and to consider
themselves employees, rather than members, of Adventis. Seligman
alleges that, despite these changes, the three principals sought to
preserve the unanimity rule, which had governed their relationship
under the LLC.
At a meeting held on March 29, 2002, Tenzer told Seligman and
the Casses that the corporation could not function by the unanimity
rule and urged them to adopt a majority rule of decisionmaking.
Although Tenzer further encouraged the principals to adopt
immediately the drafted shareholder and employment agreements, the
principals directed him to complete the conversion by March 31,
2002 and to defer the remaining agreements. However, Seligman and
the Casses orally agreed that two of the principals could terminate
the third, but only for cause.
Immediately after the conversion, the principals suffered a
falling out, and the Casses fired Seligman. Seligman filed suit in
Virginia state court against the Casses and Adventis, asserting
state law claims of oppression, breach of fiduciary duty, fraud,
and mismanagement of corporate assets. On March 26, 2003, the
parties executed a settlement agreement, under which Seligman
received, among other things: (1) a yearly compensation package
that included $120,000 in salary, full health benefits, and car
allowance for five years; and (2) a one-time $100,000 dividend
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payment. Although Seligman retained a one-third ownership in
Adventis’s stock, he did not regain a managerial role in Adventis.
In January of 2004, Seligman filed the instant legal
malpractice action in Virginia state court against defendants,
alleging that defendants’ failure to protect him during the
conversion caused his diminished bargaining power within Adventis.
Defendants removed the action to federal district court and moved
for summary judgment after extensive discovery. In connection with
his opposition to defendants’ motion, Seligman filed a motion to
continue the trial date, which was denied. Seligman then moved to
dismiss his complaint without prejudice, or alternatively, for
reconsideration of his original motion for a continuance. The
district court granted defendants’ motion for summary judgment and
denied both of Seligman’s motions.
II.
A.
We first review de novo the district court’s decision to grant
defendants’ motion for summary judgment. Bouchat v. Baltimore
Ravens Football Club, Inc., 346 F.3d 514, 519 (4th Cir. 2003).
According to Rule 56(c) of the Federal Rules of Civil Procedure,
summary judgment is appropriate where “the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, . . . show that there is no genuine issue as to any
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material fact and that the moving party is entitled to a judgment
as a matter of law.” Fed. R. Civ. P. 56(c). Although we view the
facts and inferences drawn therefrom in the light most favorable to
Seligman, the non-moving party, he nevertheless has the ultimate
burden of demonstrating a genuine issue of material fact for trial.
See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);
Thompson v. Potomac Elec. Power Co., 312 F.3d 645, 649 (4th Cir.
2002).
To state a cause of action for legal malpractice under
Virginia law, the plaintiff must show (1) the existence of an
attorney-client relationship giving rise to a duty; (2) the breach
of that duty by the attorney; and (3) damages proximately caused by
the breach. Rutter v. Jones, Blechman, Woltz & Kelly, P.C., 568
S.E.2d 693, 695 (Va. 2002). Setting aside the issues of whether
Seligman established an attorney-client relationship and breaches
arising thereunder, we find that Seligman failed to meet his burden
with respect to damages. Seligman already received compensation
for his claimed injury--i.e., diminished bargaining power within
Adventis, the new corporation, following his termination--from the
Casses and Adventis in a prior lawsuit. Because Seligman made no
distinction between the damages caused by the Casses’ decision to
fire him and the damages caused by defendants’ alleged legal
malpractice, we conclude that he suffered a single, indivisible
injury, for which he had one cause of action. Cox v. Geary, 624
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S.E.2d 16, 20 (Va. 2006) (the plaintiff suffers a single,
indivisible injury where he fails to distinguish between damages
arising from separate and independent acts of negligence); Dwyer v.
Yurgaitis, 294 S.E.2d 792, 794 (Va. 1982) (although the plaintiff
sustained injuries in two separate collisions, she suffered a
single, indivisible injury because she failed to segregate the
damages). Thus, having received compensation for all of the
damages related to his termination, Seligman is precluded from
seeking further recovery from defendants. Cox, 624 S.E.2d at 19
(“It is a generally recognized principle that there can be only one
recovery of damages for a single wrong or injury.”); id. at 23
(the plaintiff, who had been wrongfully imprisoned, could not
attain further relief from the attorneys defending him in the
criminal proceedings based on legal malpractice claims, where he
had already recovered damages related to his wrongful imprisonment
from the Commonwealth). Accordingly, we affirm the district
court’s decision to grant summary judgment to defendants.
B.
We next review the district court’s decision to deny
Seligman’s motion for voluntary dismissal of the action pursuant to
Fed. R. Civ. P. 41(a)(2) or a continuance pursuant to Fed. R. Civ.
P. 7 under the abuse of discretion standard. Ellett Bros., Inc. v.
United States Fid. & Guar. Co., 275 F.3d 384, 388 (4th Cir. 2001);
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United States v. Speed, 53 F.3d 643, 644 (4th Cir. 1995). Seligman
filed the motions for voluntary dismissal or a continuance after
the close of discovery, after defendants had already filed their
motion for summary judgment, and within three weeks of the
scheduled trial date. Given the advanced stage of the proceedings,
we perceive no error in the district court’s decision to deny
Seligman’s efforts to prolong the litigation. See Paturzo v. Home
Life Ins. Co., 503 F.2d 333, 335 (4th Cir. 1974) (no abuse of
discretion in denying motion for voluntary dismissal in light of
the advanced stage of litigation). Accordingly, we affirm the
district court’s denial of the motions.
III.
The district court’s dispositions of the motion for summary
judgment and the motion for a voluntary dismissal or continuance
are therefore affirmed.
AFFIRMED
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