Bistline v. Parker, 031419 FED10, 17-4020

Docket Nº:17-4020
Opinion Judge:SEYMOUR, CIRCUIT JUDGE.
Party Name:ALYSSA BISTLINE; RUBY JESSOP; SUSAN BROADBENT; GINA ROHBOCK; NOLAN BARLOW; JASON BLACK; MAY MUSSER; HOLLY BISTLINE; T.B.; M.B.; P.B.; A.B.; A.B.; DERRELL BARLOW; ALICIA ROHBOCK; R.R.; R.R.; B.J.R.; WALLACE JEFFS; LAWRENCE BARLOW; STEVEN DOCKSTADER; MARVIN COOKE; HELEN BARLOW; VERGEL BARLOW; CAROLE JESSOP; BRIELL LIBERTAE DECKER; LYNETTE WARNER;...
Attorney:Brett Godfrey (Karen J. Porter with him on the brief), Godfrey Johnson, P.C., Englewood, Colorado, for Plaintiffs-Appellants. Mark F. James (Brent O. Hatch and Mitchell A. Stephens with him on the brief), Hatch, James & Dodge, P.C., Salt Lake City, Utah, for Defendants-Appellees.
Judge Panel:Before BRISCOE, SEYMOUR, and LUCERO, Circuit Judges. BRISCOE, Circuit Judge, dissenting.
Case Date:March 14, 2019
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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ALYSSA BISTLINE; RUBY JESSOP; SUSAN BROADBENT; GINA ROHBOCK; NOLAN BARLOW; JASON BLACK; MAY MUSSER; HOLLY BISTLINE; T.B.; M.B.; P.B.; A.B.; A.B.; DERRELL BARLOW; ALICIA ROHBOCK; R.R.; R.R.; B.J.R.; WALLACE JEFFS; LAWRENCE BARLOW; STEVEN DOCKSTADER; MARVIN COOKE; HELEN BARLOW; VERGEL BARLOW; CAROLE JESSOP; BRIELL LIBERTAE DECKER; LYNETTE WARNER; AMY NIELSON; SARAH ALLRED; THOMAS JEFFS; JANETTA JESSOP, Plaintiffs - Appellants,

v.

RODNEY R. PARKER; SNOW CHRISTENSEN & MARTINEAU, P.C., Defendants - Appellees,

and

WARREN STEED JEFFS, Defendant.

No. 17-4020

United States Court of Appeals, Tenth Circuit

March 14, 2019

Appeal from the United States District Court No. 2:16-CV-00788-TS for the District of Utah

Brett Godfrey (Karen J. Porter with him on the brief), Godfrey Johnson, P.C., Englewood, Colorado, for Plaintiffs-Appellants.

Mark F. James (Brent O. Hatch and Mitchell A. Stephens with him on the brief), Hatch, James & Dodge, P.C., Salt Lake City, Utah, for Defendants-Appellees.

Before BRISCOE, SEYMOUR, and LUCERO, Circuit Judges.

SEYMOUR, CIRCUIT JUDGE.

TABLE OF CONTENTS

I. Background……………………………………………………………… 5

A. The United Effort Plan Trust………………………………………….... 5

B. The Formation of Attorney-Client Relationships………………………. 11

C. Concealment of Viable Causes of Action………………………………. 13

D. Procedural History……………………………………………………… 17

II. Standard of Review……………………………………………………... 18

III. Discussion……………………………………………………………… 19

A. Whether Plaintiffs' Allegations State a Claim…………………………. 21

1. Legal Malpractice and Breach of Fiduciary Duty………………………. 21

i. Attorney-Client relationship……………………………………………... 22

a. Subjective beliefs of representation…………………………………….. 24

b. Reasonableness of beliefs under the circumstances……………………. 28

2. Fraudulent and Negligent Misrepresentation…………………………… 32

3. Civil Conspiracy………………………………………………………... 32

4. RICO Violations………………………………………………………… 32

5. Violations of the TVPRA………………………………………………. 33

i. The means used to force labor or services………………………………. 35

ii. Specific plaintiffs' labor or services……………………………………. 37

iii. Venture liability………………………………………………………... 40

B. Statutes of Limitations………………………………………………….. 45

1. Applicable Statutes of Limitations……………………………………… 47

i. Fraudulent misrepresentation……………………………………………. 47

ii. Negligent misrepresentation……………………………………………. 48

iii. Malpractice, breach of fiduciary duty, and civil conspiracy…………… 49

iv. TVPRA…………………………………………………………………. 49

2. Tolling the Limitations Periods…………………………………………. 50

i. The age of majority……………………………………………………… 50

ii. Continuing tort doctrine………………………………………………… 50

3. Tolling Through the Discovery Rule…………………………………... 52

i. Statutory tolling………………………………………………………….. 54

ii. Equitable tolling - fraudulent concealment……………………………... 61

a. Concealment…………………………………………………………….. 61

b. Reasonableness…………………………………………………………. 63

4. Tolling for Individual Plaintiffs…………………………………………. 66

IV. Conclusion……………………………………………………………… 71

Plaintiffs are all former members of the Fundamentalist Church of Jesus Christ of Latter-Day Saints ("FLDS"), which illegally practices polygamy. On July 13, 2016, plaintiffs brought this action against the FLDS Prophet, Warren Jeffs ("Mr. Jeffs"), and Mr. Jeff's lawyers, the law firm of Snow Christensen & Martineau ("SC&M") and one of its partners, Rodney Parker.

Plaintiffs allege that defendants: (1) directly worked with Mr. Jeffs to create a legal framework that would shield him from the legal ramifications of child rape, forced labor, extortion, and the causing of emotional distress by separating families; (2) created an illusion of legality to bring about plaintiffs' submission to these abuses and employed various legal instruments and judicial processes to knowingly facilitate the abuse; (3) held themselves out to be the lawyers of each FLDS member individually, thus creating a duty to them to disclose this illegal scheme; and (4) intentionally misused these attorney- client relationships to enable Mr. Jeffs' dominion and criminal enterprise. Mr. Jeffs defaulted, and the district court dismissed every cause of action against the remaining defendants under Fed.R.Civ.P. 12(b)(6). The issue on appeal is the district court's dismissal of all claims against SC&M and Mr. Parker (collectively "defendants"). Reviewing the facts in the light most favorable to plaintiffs, as we must, see SEC v. Shields, 744 F.3d 633, 640 (10th Cir. 2014), we affirm in part and reverse in part.

I. Background

A. The United Effort Plan Trust

Plaintiffs allege that the legal framework defendants created to facilitate Mr. Jeffs' crimes took shape through the 1998 amendment and reinstatement of the United Effort Plan Trust ("Reinstated Trust"). The original UEP Trust ("Trust") was created in 1942 by the predecessors of the FLDS. Snow, Christensen & Martineau v. Lindberg, 299 P.3d 1058, 1061 (Utah 2013). It was founded upon the tenets of the FLDS faith, and membership was established through consecrating real and personal property to the Trust (which would then be redistributed to each family according to its "just wants and needs"). Town of Colo. City v. United Effort Trust Plan, 2013 WL 1932838 at *2 (D. Ariz. May 8, 2013). The original Trust's stated purpose was primarily "charitable and philanthropic." Lindberg, 299 P.3d at 1061. However, on September 1, 1998, the Utah Supreme Court ruled that the Trust was not charitable because it benefitted specific individuals. Jeffs v. Stubbs, 970 P.2d 1234, 1252-53 (Utah 1998). In response to this decision, the Reinstated Trust was executed on November 3, 1998. 1

In the Matter of the UEP Trust, No. 053900848 (Utah Dist. Ct. Dec. 13, 2005).

The Reinstated Trust was theoretically amended and reinstated by Rulon Jeffs, the sole surviving beneficiary of the UEP Trust, who was Warren Jeffs' father and predecessor as Prophet of the FLDS. See Lindberg, 299 P.3d at 1062; Aplt. App. at 27- 28. However, plaintiffs allege a different mechanism laboring beneath this superficial reality. By 1997, Rulon Jeffs was growing old, in ill health, becoming progressively less aware of his surroundings, and demonstrating increasing loss of memory and cognitive function. Aplt. App. at 27. The complaint asserts that under Rulon Jeffs' leadership the FLDS had not practiced the atrocities defining plaintiffs' claims. [T]he concept of celestial or spiritual "marriage" of children was not yet broadly practiced within the FLDS Church, at least to the extent of large-scale sexual domination of children and the use of the badges of religious ceremony to formalize the criminal sexual abuse of minors under the guise of "religious" practices. Up to that point, FLDS Church marriage practices were largely if not exclusively confined to adults, and while the polygamy laws of Utah were violated by the practice of plural marriage, underage marriage and outright child rape was not common within the FLDS Church; neither were extortion, kidnapping, forced labor or, most importantly for the purposes of this averment, the use of lawyers to create a basis of community-wide misplaced belief in the legality of what is actually fundamentally illegal conduct harming large numbers of persons.

Id. at 28. But in Rulon Jeffs' declining years, his son Warren "began to assume the mantle of authority and control." Id. at 27. In early August 1998, Rulon Jeffs suffered a massive stroke that "left him largely impaired and paved the way for [Warren] Jeffs to eventually assume complete and absolute control of the FLDS." Id. at 28. Although the Reinstated Trust was nominally executed by Rulon Jeffs, "[his] signature on the Trust instrument . . . was placed with physical assistance and guidance of others holding [his] pen hand, at the direction of [Warren Jeffs]." Id. at 32-33.

FLDS members knew Rulon Jeffs was ill at this time, but the extent of Rulon's incapacity was kept secret from the people. [Warren] Jeffs controlled what little information was given to them about Rulon's incapacity and claimed to be "the mouthpiece and memory of the Prophet." By "speaking for the Prophet," Warren Jeffs stepped into the Prophet's shoes and took over his roles in late 1998 and early 1999. Warren Jeffs' assertion of power and authority continued-and became complete-while Rulon...

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