Duvall v. Yungwirth

• Decision Date: 10 November 2020
• Docket Number: WD 83645
• Parties: D. Lynn DUVALL and Connie S. Duvall, Appellants, v. Joseph J. YUNGWIRTH, Respondent.
• Court: Missouri Court of Appeals

613 S.W.3d 71

D. Lynn DUVALL and Connie S. Duvall, Appellants,

v.Joseph J. YUNGWIRTH, Respondent.

WD 83645

Missouri Court of Appeals, Western District.

Filed: November 10, 2020

Motion for Rehearing and/or Transfer to Supreme Court Denied December 22, 2020

Danieal H. Miller, Columbia, for appellant.

Wade H. Ford, Jr., Columbia, for respondent.

Before Division Three: Edward R. Ardini, Jr., P.J., and Alok Ahuja and Gary D. Witt, JJ.

Alok Ahuja, Judge

Lynn and Connie Duvall filed suit against attorney Joseph Yungwirth in the Circuit Court of Boone County, alleging claims for legal malpractice, breach of fiduciary duty, and negligent misrepresentation. The circuit court granted summary judgment to Yungwirth, finding that the Duvalls’ claims were time-barred under the five-year statute of limitations found in § 516.120(4).¹ The Duvalls appeal. We affirm.

Factual Background²

Lynn Duvall was Mildred Ruth Duvall's nephew. Connie Duvall is Lynn Duvall's wife. We refer to Lynn and Connie collectively as "the Duvalls" in this opinion, and use Lynn, Connie and Ruth's first names to refer to them individually for sake of clarity.

The Duvalls’ claims in this action arise from estate-planning legal services provided by Yungwirth to Ruth in 2002. One of the goals of Yungwirth's work was to qualify Ruth for Medicaid benefits.

On July 28, 2002, Ruth executed documents prepared by Yungwirth to establish the M. Ruth Duvall Trust, with Lynn Duvall as trustee.

Yungwirth calculated that the value of Ruth's assets, together with the amounts she had gifted to the Duvalls and their children in the previous three years, was equal to 98% of the value of the Duvalls’ home in Monroe County. In order to qualify for Medicaid benefits, and based on Yungwirth's recommendation, Ruth transferred all of her assets (including her home, bank and investment accounts, and personal property) to the Duvalls. In exchange, the Duvalls executed a quitclaim deed granting Ruth's Trust a 98% interest in the Duvalls’ home. The Duvalls alleged that Yungwirth represented to them that, as a result of these transactions, Ruth's property would not be subject to probate, or subject to any claim by the State for recovery of Medicaid benefits.

Following the execution of the documents Yungwirth had prepared, Ruth began receiving Medicaid benefits. While Ruth's Medicaid application was being processed in 2003, the Department of Health and Senior Services ("DHSS") received a "hotline" report that Lynn was financially exploiting Ruth. As a result, on July 11, 2003, DHSS filed a petition seeking to have the Randolph County Public Administrator appointed as Ruth's guardian and conservator. On Yungwirth's recommendation, the Duvalls retained attorney Dan Dunham to oppose DHSS's petition.

In the summary judgment proceedings the Duvalls admitted that, "[f]rom the beginning of the 2003 action to appoint the public administrator as Ruth Duvall's guardian and conservator, Plaintiff Lynn Duvall blamed Defendant Joe Yungwirth for said action being filed."

Following an evidentiary hearing on July 23, 2004, the circuit court found good cause not to appoint Lynn as Ruth's guardian and conservator, and instead appointed the Public Administrator. In open court, the judge expressed his concerns with the appropriateness of the various transactions consummated as part of Yungwirth's estate-planning services in 2002. The judge observed that

An attorney-client relationship was established on the same day that this client deeded away her entire life's savings and assets, and this was done with the person that stood to gain the most being in the same room while this is happening, without any independent legal advice. The Court is incredulous as to how something like this is – can be done and not reported to the Missouri Bar.

....

The Court feels like, if not Medicaid fraud, not any of that, not bad estate planning, at least it's an extreme gross negligence....

In September 2004, the Duvalls’ attorney Daniel Dunham consulted with another attorney about the possibility of asserting a claim against Yungwirth arising out of the legal services he had provided in 2002.

Ruth died on April 26, 2005.

After the circuit court's judgment appointing the Public Administrator as Ruth's guardian and conservator was affirmed by this Court, In re Duvall , 178 S.W.3d 617 (Mo. App. W.D. 2005), Missouri Lawyers Weekly published an article in October 2005 entitled "Nephew Exploits Aunt's Assets, Loses Chance to Administer Estate." Dunham showed the article to Lynn Duvall "right after it was published." Lynn Duvall complained that he experienced a substantial decrease in the referrals to his insurance business as a result of the derogatory article.

On January 11, 2006, Dunham made demand on Yungwirth for payment of $31,269.24 in legal fees which the Duvalls had incurred in connection with the guardianship and conservatorship proceeding. Dunham's letter noted that, beyond the appointment of the Public Administrator,

[i]t now remains to be seen what, if any, other actions will be taken with adverse consequences for Lynn and/or Connie, e.g., the opening of a probate estate to seek Medicaid reimbursements and possibly an accounting action against Lynn [or a discovery of assets proceeding], etc. based on the report of suspected financial exploitation by them.

The letter – on which Lynn was copied – stated that "[w]e have not fully analyzed Lynn's and/or Connie's legal theories or ascertained the full extent of the damages they might have for any legal claim against you based on the property transfers and estate planning services you provided in connection with qualifying Ruth for nursing home Medicaid payments." Dunham noted that he might "refer that matter to other attorneys should that be the direction [the Duvalls] need to go."

On April 18, 2006, DHSS filed a claim in the probate proceeding involving Ruth's estate, which was pending in the Circuit Court of Randolph County. DHSS's claim sought to recover over $75,000 in Medicaid benefits paid by the State on Ruth's behalf. In August 2006, DHSS filed a petition against the Duvalls in the probate proceeding for an accounting and discovery of assets. On July 15, 2008, DHSS filed a lis pendens against the Duvalls’ Monroe County home, in which Ruth's Trust held a 98% interest, in connection with its claim to recover Medicaid benefits.

From May 2006 through February 2008, the Duvalls consulted with a second attorney about potentially bringing a legal malpractice action against Yungwirth. In February 2008, the attorney wrote to Lynn Duvall. The attorney stated that, in his view, Lynn would likely prevail on the State's claims against him to recover the Medicaid benefits. He also stated that, "if you do lose and damages are assessed against you either on the real estate or any of the other monetary holdings, such as mutual funds, then I believe you would have a cause of action against [Yungwirth] for negligence."

In June 2007, Dunham wrote to the Assistant Attorney General prosecuting the State's discovery of assets and accounting claims. Dunham wrote that the Duvalls "are wanting to recoup their losses from Joe Yungwirth if they can." He stated that, although they did not intend to pursue claims against Yungwirth while the probate proceeding was pending, "statute of limitations concerns are approaching which might make it necessary to attempt to third-party Yungwir[th] in the pending action."

On August 6, 2008, Dunham sent a second demand by e-mail to an attorney representing Yungwirth. Dunham noted that the State's claims were set for hearing on August 25. In his e-mail, Dunham stated that he expected that, if liability was imposed on Lynn Duvall in Ruth's probate proceeding, it would be based on provisions of the Trust Agreement Yungwirth had drafted. Dunham stated that such a ruling "would create a liability claim against [Yungwirth] by the Duvalls." Dunham asked that Yungwirth "step[ ] up to the plate to help resolve these matters by ... paying for a compromised amount to either the State or into the estate or [by] join[ing] the Duvalls in defending these matters if he believes the Duvalls should not be liable as a result of his work."

On August 29, 2008, the circuit court entered partial summary judgment in favor of the State in the probate proceeding, finding that Lynn Duvall was liable to account to Ruth's estate, and was liable for all allowed claims, attorney's fees, and costs of administration of the estate.

Five years later, on August 20, 2013, the Duvalls entered into a settlement agreement with the State, which required the Duvalls to pay $10,300 to Ruth Duvall's estate.

Eight days after settling the State's claims, on August 28, 2013, the Duvalls filed the present action against Yungwirth, asserting claims for legal malpractice, breach of fiduciary duty, and negligent misrepresentation. The Duvalls’ petition sought to recover as damages the attorney's fees they had incurred beginning in 2003 in the guardianship and conservatorship proceeding involving Ruth; attorney's fees incurred in the probate proceeding involving her estate, beginning in 2006; attorney's fees and a reduction in property value caused by DHSS’ filing of a lis pendens against the Duvalls’ Monroe County property in July 2008; and loss of income to Lynn Duvall's insurance business.

Yungwirth filed a motion for summary judgment, claiming that the statute of limitations had expired on the Duvalls’ claims. In a Final Judgment and Decree entered on January 30, 2020, the circuit court granted Yungwirth's motion for summary judgment. In its judgment, the circuit court noted that the Duvalls had admitted three of Yungwirth's statements of uncontroverted material fact. As to the remaining thirteen facts alleged by Yungwirth, the court noted that the Duvalls did not deny them, but instead made evidentiary objections to Yungwirth's supporting exhibits (which the court rejected), and alleged that the facts were "irrelevant" as ...