Bistline v. Parker

• Decision Date: 14 March 2019
• Docket Number: No. 17-4020,17-4020
• Parties: 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.
• Court: U.S. Court of Appeals — Tenth Circuit

918 F.3d 849

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,andWarren Steed Jeffs, Defendant.

No. 17-4020

United States Court of Appeals, Tenth Circuit.

FILED March 14, 2019

TABLE OF CONTENTS

I. Background...855

A. The United Effort Plan Trust...855

B. The Formation of Attorney-Client Relationships...858

C. Concealment of Viable Causes of Action...859

D. Procedural History...861

II. Standard of Review...862

III. Discussion...863

A. Whether Plaintiffs’ Allegations State a Claim...863

1. Legal Malpractice and Breach of Fiduciary Duty...863

i. Attorney-Client relationship...864

a. Subjective beliefs of representation ...865

b. Reasonableness of beliefs under the circumstances ...867

2. Fraudulent and Negligent Misrepresentation...869

3. Civil Conspiracy...869

4. RICO Violations...869

5. Violations of the TVPRA...870

i. The means used to force labor or services...871

ii. Specific plaintiffs’ labor or services...872

iii. Venture liability...873

B. Statutes of Limitations...876

1. Applicable Statutes of Limitations...877

i. Fraudulent misrepresentation...877

ii. Negligent misrepresentation...878

iii. Malpractice, breach of fiduciary duty, and civil conspiracy...878

iv. TVPRA...878

2. Tolling the Limitations Periods...878

i. The age of majority...878

ii. Continuing tort doctrine...879

3. Tolling Through the Discovery Rule...880

i. Statutory tolling...880

ii. Equitable tolling – fraudulent concealment...884

a. Concealment ...884

b. Reasonableness ...885

4. Tolling for Individual Plaintiffs...886

IV. Conclusion...889

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 Jeffs’ mental and physical health continued to decline.

Id . at 111–12. Warren Jeffs had thus become acting president of the church. See M.J. v. Wisan , 371 P.3d at 24 (labeling Warren Jeffs "acting president of both the FLDS Church and the Board of Trustees of the Trust" in 2001). He retained this role until his father’s death in 2002, when he formally took over the titles of both Prophet and President of the Reinstated Trust. Aplt. App. at 112.

The complaint describes how Warren Jeffs’ activities included the "direction of legal counsel" in his father’s declining years. Id. at 27. It then outlines the process by which the Reinstated Trust was intentionally designed to establish Mr. Jeffs’ dominion. Plaintiffs allege that Warren Jeffs

was obsessed with the creation of a controlled society in which he was the absolute ruler and the wholesale rape of young girls by himself and others was treated as a ceremonially sacrosanct ritual. He sought to institutionalize this atrocious practice and to cloak it with the superficial trappings of legal acceptance, so he retained SC & M to develop an overarching scheme and plan ...

Id . at 28. During 1997 and 1998, prior to executing the Reinstated Trust, Mr. Jeffs and Mr. Parker allegedly had meetings to discuss the "complex and ongoing series of legalistic maneuvers to be carried out by SC & M in order to provide [Mr. Jeffs] absolute, unfettered control" over the FLDS members. Id . at 32. The complaint asserts that defendants then

contrived a complex and detailed scheme to manipulate the law in such a fashion to not only take advantage of the relatively lax marital laws of Nevada, but to create a new enterprise, under the guise of the existing FLDS Church, which would be legally structured to give Jeffs absolute control over all of the bodies, possessions, homes and funds of the FLDS as beneficiaries of the UEP Trust.

Id . at 31.

This absolute control allegedly enabled Mr. Jeffs to subject FLDS members to physical torture, extortion, severe and extreme emotional distress, unlawful imprisonment, kidnapping, and "other extreme and atrocious inhumane punishments in order to secure their utter and complete obedience." Id . at 32. Defendants benefited from creating this scheme because rewriting the Trust would give them "peace of mind that their fees would be paid." Id . at 111 ("[B]efore the UEP Trust was rewritten, the only assurance that Parker and SC & M had that they would be paid was the unsecured signature of FLDS Prophet, Rulon Jeffs, who was in his late 80s and ill.").

The Reinstated Trust served religious purposes, as the Utah Supreme Court described:

The [Reinstated] Trust makes clear that participation in the [Reinstated] Trust is

...