Brown v. LaChance
| Decision Date | 17 September 1991 |
| Docket Number | No. 91-0240,No. 3501,3501,91-0240 |
| Citation | 477 N.W.2d 296,165 Wis.2d 52 |
| Parties | Harold BROWN, Plaintiff, v. John LaCHANCE, American Bankers Insurance Company, a foreign insurance corporation, and David Smith, Defendants-Third Party Plaintiffs-Appellants-Cross Respondents, v. Hirsh FREED, Marvin N. Geller, Donald E. Paulson, Peter D. Gens, Stephen Wolfberg, M. Frederick Pritzker, Andre C. Jasse, Jr., Carl E. Axelrod, Sheldon M. Drucker, Daniel D. Sullivan, James E. McQuire, Elizabeth A. Ritvo, Marc D. Cumsky, David M. Murphree, Howard L. Levin, Stephen A. Hantman, Louis C. Miller, Alan R. Hollander, Paul P. Perocchi, Nancy R. Wilsker, James R. Kane, Jeffrey L. Keffer, Henry Gesmer, Jack H. Calechman, Kenneth A. Korb, Lawrence M. Levy, Philip C. Schneider, Joel M. Reck, Jeffrey M. Freedman, Gerald P. Tishler, Peter B. Farrow, M. Robert Dushman, Joseph F. Ryan, Forrest David Milder, Neal B. Glick, John Achatz, David A. Garbus, Barbara A. Lenk, Marilyn D. Stempler, Howard A. Levine, John A. Wortmann, Jr., Howard G. Zaharoff, Steven R. London, Steven B. Levine, the Firm of Brown, Rudnick, Freed and Gesmer, Third Party Defendants-Respondents-Cross Appellants, d Gary Leonard Griffiths, a Representative of Those Certain Underwriters Subscribing to Lawyers Professional Indemnity Coverage Policy01500, H.S. Weavers (UWR) Agencies, Ltd., Unionamerica Insurance Company, Ltd., G.R.E. Assurance, Ltd., Yasuda Fire and Marine Insurance Company (UK), Ltd., Trident General Insurance Company, Ltd., Terra Nova Insurance Company, Ltd., Assicurazioni Generali, Turegum Insurance Company, Gjensidige Norsk Skadeforsikring, Kansa General Insurance Company, Ltd., Professional and General Insurance Company, Insco, Ltd., Beneficial American Insurance Company, Ltd., and Employers Insurance of Wausau, Third Party Defendants-Respondents. |
| Court | Wisconsin Court of Appeals |
Richard J. Carlson and M. Robert Dushman of Patterson, Jensen, Wylie, Silton & Seifert, S.C., Appleton, for third party defendants-respondents-cross appellants, Hirsh Freed, et al.
John A. Hansen and Barbara A. Neider of Stafford, Rosenbaum, Rieser & Hansen, Madison, for third party defendants-respondents, Gary Leonard Griffiths, et al.
Thomas G.A. Herz of Michael, Best & Friedrich, Milwaukee, and Robert McCracken of Nash, Spindler, Dean & Grimstad, co-counsel, Manitowoc, for defendants-third party plaintiffs-appellants-cross respondents, John LaChance, et al.
Before CANE, P.J., and LaROCQUE and MOSER, JJ.
John LaChance, his insurer, American Bankers Insurance Company, and David Smith (LaChance and Smith) appeal the trial court's summary judgment dismissing their third-party claim against Hirsh Freed, et al., Gary Leonard Griffiths, et al., and the Massachusetts law firm of Brown, Rudnick, Freed & Gesmer (collectively, Rudnick). LaChance and Smith contend the trial court erred by concluding that they failed to set forth a cause of action for contribution or, in the alternative, indemnity against Rudnick. LaChance and Smith further request that we rule on motions in limine for protective orders regarding information and events occurring prior to the involvement of Harold Brown in the Northernaire transaction. Rudnick cross-appeals the trial court's order denying its motion to dismiss for lack of personal jurisdiction. Rudnick asserts that Wisconsin courts have no personal jurisdiction over it under Wisconsin's long-arm statute and because it did not have sufficient "minimum contacts" with Wisconsin.
We conclude that summary judgment is inappropriate because there is a material issue of fact as to the negligence of Rudnick. Also, because privity is not essential to a cause of action for contribution between joint tortfeasors, LaChance and Smith state a claim upon which relief can be granted. Furthermore, the court has personal jurisdiction under Wisconsin's long-arm statute. Finally, we do not address the motion in limine regarding the protective orders as we do not give advisory opinions. The judgment is therefore affirmed in part, reversed in part and the matter remanded for further proceedings.
Brown, a Massachusetts resident, loaned funds to Fred Schlegel, a Wisconsin resident and owner of Northernaire, Inc., as an investment in that Wisconsin real estate. Brown's loan was to be secured by mortgages on the Northernaire resort and other property located in Vilas County, Wisconsin. Rudnick, a Massachusetts law firm, was Brown's primary counsel throughout the Northernaire transaction.
LaChance and Smith, attorneys licensed to practice in Wisconsin, represented Schlegel and Northernaire, Inc. However, Rudnick, on behalf of Brown, requested LaChance and Smith to perform certain services. These services included making sure certain documents complied with Wisconsin law, recording such documents, filing U.C.C. statements and disbursing Brown sued LaChance and Smith, alleging that they were negligent in failing to attain priority with respect to his security interests. Among other things, the complaint alleges that LaChance and Smith misrepresented to Brown that his mortgages were paramount to certain liens when in fact they were not, failed to file certain documents and inserted damaging language in the subordination agreement. LaChance and Smith filed third-party complaints against Rudnick, alleging that if they are found to be negligent toward Brown, they are entitled to contribution from Rudnick who is also negligent. Alternatively, they seek indemnification.
funds. Smith denies having any agency or subagency relationship with [165 Wis.2d 59] Rudnick, while LaChance states he was asked to act for Rudnick.
Rudnick filed a motion to dismiss on the basis that the court lacked personal jurisdiction and the third-party complaint failed to state a claim upon which relief could be granted. 1 The motion was denied. The court found that it had personal jurisdiction under SEC. 801.05(4)(A), (5)(B) AND (5)(E), STATS2. It also found that Rudnick had sufficient contacts with Wisconsin through its working relationship with LaChance and Smith. Additionally, the trial court held that the complaint was sufficient because it satisfied notice pleading requirements.
Approximately three years later, Rudnick filed a second motion to dismiss, again alleging that the third-party complaint failed to state a claim. The trial court granted this motion, concluding that because there was no privity between Rudnick and LaChance and Smith, LaChance and Smith were precluded from suing Rudnick for contribution or, in the alternative, indemnity. In addition, the court held that the pleadings and discovery materials attached to the motions failed to indicate any acts of negligence by Rudnick. Thereafter, LaChance and Smith filed a motion to reconsider in light of our holding in Grosskopf Oil v. Winter, 156 Wis.2d 575, 457 N.W.2d 514 (Ct.App.1990), dealing with the privity requirement, and the testimony of their expert witness regarding Rudnick's alleged negligence. However, the trial court denied the motion, stating that the Grosskopf decision was not controlling. 3
We first address LaChance and Smith's appeal of the trial court's judgment granting the motion to dismiss for failure to state a claim. Pursuant to sec. 802.06(2), Stats., we treat this motion as a motion for summary judgment. 4 The standard of review of a summary judgment is de novo. Grosskopf, 156 Wis.2d at 581, 457 N.W.2d at 517. This court has set forth the methodology for reviewing a summary judgment many times, and it need not be repeated at great length. See Grams v. Boss, 97 Wis.2d 332, 338, 294 N.W.2d 473, 476 (1980). summary judgment is proper where all issues of material fact are undisputed. The moving party has the burden to establish the absence of a disputed issue as to any material fact. Id. at 338, 294 N.W.2d at 477. Where the moving party cannot meet this burden, summary judgment is not appropriate.
LaChance and Smith allege that if they are found to be negligent toward Brown, they are entitled to contribution from Rudnick who is also negligent. Alternatively, they seek indemnification. The trial court granted Rudnick's motion to dismiss However, in an affidavit attached to LaChance and Smith's motion to reconsider, they provided the court with an expert's deposition setting forth what he believed were negligent acts and omissions by Rudnick. Although this affidavit was not included in the materials presented on the motion to dismiss, it was included with the motion to reconsider and accepted by the trial court. The expert alleged that Rudnick was negligent, among other things, in failing to request LaChance and Smith to delete the Schedule B standard exceptions contained in the title policy, to determine who had construction liens and obtaining releases from them, to request formal opinion letters and to verify the priority of Brown's security interests. Based on the affidavit, we conclude that there is a disputed issue of material fact concerning whether Rudnick was negligent in its representation of Brown in the Northernaire transaction.
holding that the pleadings and the discovery materials did not allege any negligence by Rudnick and thus failed to state a claim. Additionally, it concluded there was no basis for indemnification.
The trial court also relied on the lack of privity between LaChance and Smith and Rudnick as a basis for granting Rudnick's motion to dismiss. 5 The dismissal was based on the trial court's application of Green Spring Farms v. Kersten, 136 Wis.2d 304, 401 N.W.2d 816 (1987). In Green Spring Farms, the supreme court followed the general rule in Wisconsin that an attorney cannot be held liable to a third party for acts committed within the scope of an attorney-client relationship, absent fraud or negligence in the drafting of a will. Id. at 321-22, 401...
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