Feltman v. Gaustad , 2020 ND 89 ( 2020 )


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  •                  Filed 5/7/20 by Clerk of Supreme Court
    IN THE SUPREME COURT
    STATE OF NORTH DAKOTA
    
    2020 ND 89
    Roger Feltman,                                      Plaintiff and Appellant
    and
    TRRP, LLC,                                                           Plaintiff
    v.
    Daniel Gaustad and Pearson, Christensen
    & Clapp, PLLP,                                   Defendants and Appellees
    No. 20190247
    Appeal from the District Court of Grand Forks County, Northeast Central
    Judicial District, the Honorable Stacy J. Louser, Judge.
    AFFIRMED.
    Opinion of the Court by Crothers, Justice.
    DeWayne A. Johnston, Grand Forks, ND, for plaintiff and appellant.
    Peter W. Zuger (argued) and Ronald H. McLean (on brief), Fargo, ND, for
    defendants and appellees.
    Feltman v. Gaustad
    No. 20190247
    Crothers, Justice.
    [¶1] Roger Feltman and TRRP LLC (Feltman) appeal a district court
    judgment dismissing their malpractice lawsuit against attorney Daniel
    Gaustad and the Pearson, Christensen & Clapp law firm (Gaustad). The court
    concluded summary judgment was appropriate because Feltman failed to
    establish a factual dispute as to the elements of legal malpractice. We affirm.
    I
    [¶2] Feltman retained Gaustad to represent him in matters relating to
    numerous loans with Washington Mutual Bank. In 2007, Feltman sued the
    bank in state court and the bank removed the case to federal district court.
    After Feltman sued, the bank was placed into receivership and the Federal
    Deposit Insurance Corporation (FDIC) was appointed the bank’s receiver. JP
    Morgan Chase later acquired the bank’s assets and became a party to
    Feltman’s lawsuit.
    [¶3] In March 2012, Feltman and Chase executed a settlement agreement
    covering eight loans Feltman had with Washington Mutual Bank. In April
    2012, Gaustad, on Feltman’s behalf, filed a stipulation to dismiss the federal
    lawsuit.
    [¶4] In July 2015, Feltman brought a legal malpractice lawsuit against
    Gaustad. Feltman alleged Gaustad breached his fiduciary duties by providing
    improper legal advice and failing to act in Feltman’s best interests. Feltman
    claimed Gaustad acted negligently because he dismissed the federal lawsuit
    against Chase before Chase satisfied the terms of the settlement agreement.
    [¶5] Gaustad and the law firm denied the allegations, claiming Feltman was
    appropriately represented. Both parties moved for summary judgment.
    Gaustad argued the statute of limitations barred Feltman’s case, and Gaustad
    1
    had no duty to enforce the settlement agreement that Feltman voluntarily
    agreed to.
    [¶6] The district court granted Gaustad’s motion, concluding Feltman did not
    establish that he suffered damages or that Gaustad breached a duty when he
    dismissed the federal lawsuit. The court dismissed Feltman’s lawsuit against
    Gaustad.
    II
    [¶7] Feltman argues the district court erred by granting Gaustad’s motion for
    summary judgment. This Court’s standard of review for summary judgments
    is well established:
    “Summary judgment is a procedural device for the prompt
    resolution of a controversy on the merits without a trial if there
    are no genuine issues of material fact or inferences that can
    reasonably be drawn from undisputed facts, or if the only issues to
    be resolved are questions of law. A party moving for summary
    judgment has the burden of showing there are no genuine issues
    of material fact and the moving party is entitled to judgment as a
    matter of law. In determining whether summary judgment was
    appropriately granted, we must view the evidence in the light most
    favorable to the party opposing the motion, and that party will be
    given the benefit of all favorable inferences which can reasonably
    be drawn from the record. On appeal, this Court decides whether
    the information available to the district court precluded the
    existence of a genuine issue of material fact and entitled the
    moving party to judgment as a matter of law. Whether the district
    court properly granted summary judgment is a question of law
    which we review de novo on the entire record.”
    Pennington v. Cont’l Res., Inc., 
    2019 ND 228
    , ¶ 6, 
    932 N.W.2d 897
    (quoting
    Horob v. Zavanna, LLC, 
    2016 ND 168
    , ¶ 8, 
    883 N.W.2d 855
    ).
    [¶8] The elements of a claim against an attorney for legal malpractice are: “1)
    the existence of an attorney-client relationship, 2) a duty by the attorney to the
    client, 3) a breach of that duty by the attorney, and 4) damages to the client
    2
    proximately caused by the breach of duty.” Davis v. Enget, 
    2010 ND 34
    , ¶ 7,
    
    779 N.W.2d 126
    .
    III
    [¶9] Feltman claims Gaustad was negligent when he dismissed the federal
    lawsuit before Chase satisfied all terms of the settlement agreement. Feltman
    argues that since Gaustad dismissed the lawsuit before Chase satisfied the
    terms of the agreement, Chase was relieved from complying with the
    agreement and Feltman lacked a remedy against Chase.
    [¶10] The district court concluded:
    “One of the elements of legal malpractice is damages.
    Feltman has not established any duty by Gaustad that was
    breached when the federal case was dismissed. The dismissal
    ‘with prejudice’ did not leave Feltman without a remedy, because
    Feltman had six years after the Agreement was executed to file an
    action to have the Settlement Agreement enforced.
    ....
    “As determined in Section II of this Order, Feltman has not
    established one of the elements of legal malpractice, i.e., that
    Feltman suffered damages when Gaustad breached a duty and
    ‘prematurely’ dismissed the federal lawsuit, because, as a matter
    of law, Feltman had six years within which to sue Chase for
    enforcement of the Settlement Agreement and dismissal did not
    foreclose that remedy.
    “‘Rule 56 requires the entry of summary judgment against a
    party who fails to establish the existence of a material factual
    dispute as to an essential element of the claim and on which the
    party will bear the burden of proof at trial.’ Barbie v. Minko Const.,
    Inc., 
    2009 ND 99
    , ¶ 6, 
    766 N.W.2d 458
    . Because Feltman has failed
    to establish a factual dispute as to an element of legal malpractice,
    summary judgment dismissing Feltman’s claims is appropriate.”
    3
    [¶11] Paragraph 8 of the settlement agreement, “Dismissal of Federal
    Litigation,” provided that, “Within 10 days of the completion of the items
    delineated in Paragraphs 2-6 above, the Feltmans shall cause the Federal
    Litigation to be dismissed, with prejudice.” Gaustad executed the stipulation
    to dismiss on April 12, 2012, and the court dismissed the federal lawsuit on
    April 13, 2012.
    [¶12] Feltman argues Chase failed to satisfy certain terms contained in
    paragraphs 2-6 of the settlement agreement before Gaustad dismissed the
    federal lawsuit. Specifically, Feltman claims Chase did not comply with
    paragraph 4 relating to escrow balances associated with the loans. Paragraph
    4 stated Chase would forgive all negative escrow balances and would refund
    all positive escrow balances. Even assuming without deciding Gaustad
    breached a duty when he dismissed the lawsuit before Chase satisfied
    paragraphs 2-6 of the settlement agreement, Feltman provided no evidence of
    damages that were proximately caused by the breach.
    [¶13] Feltman asserts his damages are that he lacks a remedy against Chase
    when Gaustad dismissed the federal lawsuit before Chase satisfied paragraphs
    2-6 of the settlement agreement. We disagree.
    [¶14] The settlement agreement does not state it becomes valid and enforceable
    upon Chase’s satisfaction of paragraphs 2-6. Paragraph 22 of the agreement
    states the terms and conditions are “contractual in nature,” and “when fully
    executed, shall constitute a legal, valid and binding obligation of the parties,
    enforceable in accordance with its terms.” The agreement became valid and
    enforceable when Feltman, Chase and the FDIC executed it in March 2012.
    [¶15] Paragraph 10 of the settlement agreement, “Release by Feltmans of
    Chase,” states in part:
    “Upon full execution of this Settlement Agreement, the
    Feltmans release and forever discharge Chase of and from any and
    all claims, demands, actions, causes of action, liabilities, [and]
    suits . . . with respect to any and all matters relating to the Loans
    and the Properties as of the date of this Settlement Agreement.”
    4
    Paragraph 17, titled “Non-Litigation Covenant,” provides:
    “Except to enforce any obligation, term or condition of this
    Settlement Agreement the parties agree that none of the parties
    shall in any manner challenge this Settlement Agreement. . . .
    Notwithstanding the mutual releases found at Paragraphs 10, 11,
    12 and 13 nothing in this Settlement Agreement is, nor shall it be
    deemed to be, a release of the obligations, terms and conditions of
    this Settlement Agreement, and nothing herein shall in any
    manner limit or otherwise preclude the parties from commencing
    an action solely for the purpose of enforcing any obligation, term
    or condition of this Settlement Agreement.”
    [¶16] Paragraph 22 provides the settlement agreement is valid and
    enforceable on execution. Under paragraph 10, Feltman released all of his
    original claims against Chase when he executed the agreement on March 22,
    2012. Paragraph 17 plainly states that regardless of the release, Feltman may
    bring an “action solely for the purpose of enforcing any obligation, term or
    condition of [the agreement].” Although paragraph 8 required Chase to satisfy
    certain conditions before dismissal of the federal lawsuit, the failure to satisfy
    those conditions did not prohibit Feltman from bringing an action against
    Chase for noncompliance with the agreement following dismissal of the
    lawsuit. Additionally, Feltman has not claimed enforcement of the settlement
    agreement would be more costly than his original cost of pursuing remedies
    against Chase, or that enforcing the settlement agreement left him with an
    inferior remedy against Chase.
    [¶17] Feltman has not established that Gaustad’s dismissal of the federal
    lawsuit before Chase satisfied paragraphs 2-6 of the settlement agreement
    foreclosed an action against Chase for breaching the agreement. Feltman
    cannot show Gaustad’s alleged breach of duty was the proximate cause of
    damages resulting from Chase’s noncompliance with the agreement. The
    district court did not err in granting summary judgment dismissing Feltman’s
    lawsuit.
    5
    IV
    [¶18] Feltman’s remaining arguments have been considered and are either
    without merit or not necessary to our decision. The judgment is affirmed.
    [¶19] Daniel J. Crothers, Acting C.J.
    Gerald W. VandeWalle
    Bruce B. Haskell, S.J.
    Dale V. Sandstrom, S.J.
    Jerod E. Tufte
    [¶20] The Honorable Bruce B. Haskell, S.J., sitting in place of McEvers, J.,
    disqualified.
    [¶21] The Honorable Dale V. Sandstrom, S.J., sitting in place of Jensen, C.J.,
    disqualified.
    6