Harline v. Barker

• Decision Date: 27 May 1993
• Docket Number: No. 920113-CA,920113-CA
• Parties: Wesley G. HARLINE, Plaintiff and Appellant, v. Ronald C. BARKER and Larry Whyte, Defendants and Appellees.
• Court: Utah Court of Appeals

Page 595

854 P.2d 595

Wesley G. HARLINE, Plaintiff and Appellant, v. Ronald C. BARKER and Larry Whyte, Defendants and Appellees.

No. 920113-CA.

Court of Appeals of Utah.

May 27, 1993.

Rehearing Denied June 22, 1993.

Certiorari Denied Sept. 22, 1993.

Paul N. Cotro-Manes (argued), Las Vegas, for appellant.

Thomas L. Kay (argued), Mark O. Morris, Snell & Wilmer, Salt Lake City, for appellees.

Before BILLINGS, P.J., and GARFF and GREENWOOD, JJ.

BILLINGS, Presiding Judge:

Dr. Wesley Harline appeals the trial court's grant of summary judgment in his legal malpractice action against Ronald Barker and Larry Whyte (defendants). He also appeals the court's refusal to compel defendants to respond to interrogatories. We reverse and remand.

FACTS

We recite the facts in the light most favorable to Harline, against whom the summary judgment was entered. See Swift Stop, Inc. v. Wight, 845 P.2d 250, 250 (Utah App.1992). In February 1986, Harline filed a Chapter 11 bankruptcy petition with the U.S. Bankruptcy Court for the District of Utah. Prior to filing for bankruptcy, Harline made several gratuitous property transfers to family members. He did not identify these transfers when filing his bankruptcy schedules. Harline also did not include an account he had with Merrill Lynch. Additionally, his bankruptcy schedules failed to note his interest in a profit-sharing plan. Harline received funds from his Merrill Lynch account after his petition was filed. He used these funds for personal expenses without court approval.

On October 29, 1986, after Harline's bankruptcy had been converted to a Chapter 7 proceeding, the bankruptcy court ordered Harline to amend his bankruptcy schedules by November 18, 1986. On November 14, 1986, Bettie Marsh filed a motion to withdraw as counsel for Harline. For purposes of this appeal, defendants concede they represented Harline sometime before November 14, 1986, during the period Harline's bankruptcy schedules should have been amended. Harline never told defendants of any deficiencies in his schedules or of an amendment deadline. Defendants never inquired about outstanding court orders, nor did they consult with former counsel, Bettie Marsh, about the status of Harline's bankruptcy proceedings. In fact, defendants did not look at the docket sheet of Harline's bankruptcy proceedings until the fall of 1987. Thus, defendants were not aware of the court's order to amend Harline's schedules. As a consequence, defendants filed no amendments to Harline's deficient bankruptcy schedules nor did they advise Harline to amend his schedules.

On August 10, 1988, the bankruptcy court denied Harline's discharge in bankruptcy. The court identified Harline's prefiling gratuitous property transfers, his interest in and use of funds from the Merrill Lynch account, his failure to document his property transactions in his schedules, and his failure to disclose the profit-sharing plan, as the basis for denying the discharge.

On July 10, 1989, Paul Cotro-Manes entered his appearance as Harline's counsel in Harline's bankruptcy proceedings. On April 26, 1990, Harline filed amended bankruptcy schedules which identified his interest in his profit-sharing plan. The bankruptcy court allowed Harline to amend the schedules to include this plan. Harline claimed his interest in this profit-sharing plan should be exempt from creditors. The bankruptcy trustee sued to secure Harline's interest in the profit-sharing plan as an asset of the bankruptcy estate.

On November 9, 1990, the bankruptcy court ruled the money in the profit-sharing plan was not exempt and should be available to Harline's creditors. The U.S. District Court for the District of Utah affirmed the bankruptcy court's decision. The Tenth Circuit reversed and remanded the case, holding the exempt status of Harline's interest in his profit-sharing plan was dependent on unresolved legal and factual issues. In re Harline, 950 F.2d 669, 676 (10th Cir.1991), cert. denied sub nom.

Gladwell v. Harline, 505 U.S. 1204, 112 S.Ct. 2991, 120 L.Ed.2d 869 (1992).

Based on these facts, defendants filed a motion for summary judgment. In the motion defendants claimed (1) they did not breach their duties as attorneys, and (2) they were not the cause of the court's refusal to grant Harline a discharge. The trial court granted summary judgment.

Harline appeals claiming material factual issues exist. Harline argues defendants breached their duty in representing him and that defendants' breach caused the court to deny his discharge. ¹

STANDARD OF REVIEW

"In reviewing the grant of a motion for summary judgment, we review the facts in the light most favorable to the losing party, while giving no deference to the trial court's legal conclusions." Swift Stop, 845 P.2d at 252. " 'Summary judgment is appropriate if the pleadings and all other submissions show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.' " Atkinson v. IHC Hospitals, Inc., 798 P.2d 733, 734 (Utah 1990), cert. denied, 498 U.S. 1090, 111 S.Ct. 970, 112 L.Ed.2d 1056 (1991) (quoting Heglar Ranch, Inc. v. Stillman, 619 P.2d 1390, 1391 (Utah 1980)); see also Utah R.Civ.P. 56(c).

I. LEGAL MALPRACTICE

The elements of legal malpractice include: (1) an attorney-client relationship; (2) a duty of the attorney to the client; (3) a breach of that duty; and (4) damages suffered by the client proximately caused by the attorney's breach of duty. Williams v. Barber, 765 P.2d 887, 889 (Utah 1988). See also Breuer-Harrison, Inc. v. Combe, 799 P.2d 716, 727 (Utah App.1990). To avoid summary judgment, Harline must establish some competent evidence to support each element of his legal malpractice claim. See Robinson v. Intermountain Health Care, Inc., 740 P.2d 262, 267 (Utah App.1987).

A. Breach of Duty

Defendants claim they had no duty to amend Harline's bankruptcy schedules under the undisputed facts before the trial court. They argue because Harline originally filed false schedules and did not make them aware of the deficiencies in his schedules nor of the court's order requiring amendment that they had no duty to either amend the schedules or advise Harline to amend the schedules. ² Harline counters that defendants breached their duty to him by failing to investigate the status of his schedules and the need to amend them.

Once an attorney-client relationship is established, the attorney's duty is to " 'use such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in the performance of tasks which they undertake.' " Williams, 765 P.2d at 889 (quoting Lucas v. Hamm, 56 Cal.2d 583, 15 Cal.Rptr. 821, 825, 364 P.2d 685, 689 (1961), cert. denied, 368 U.S. 987, 82 S.Ct. 603, 7 L.Ed.2d 525 (1962)). We must decide whether, on the Ordinarily, whether a defendant has breached the required standard of care is a question of fact for the jury. Consequently, a motion for summary judgment should be denied where the evidence presents a genuine issue of material fact which, if resolved in favor of the nonmoving party, would entitle him to a judgment as a matter of law. A genuine issue of fact exists where, on the basis of the facts in the record, reasonable minds could differ on whether defendant's conduct measures up to the required standard.

facts before the court, defendants breached this duty of care owed to Harline. ³

Jackson v. Dabney, 645 P.2d 613, 615 (Utah 1982) (citations and footnote omitted).

In Jackson, the Utah Supreme Court reversed and remanded a summary judgment in favor of an attorney in a legal malpractice action. Id. In that case, the client retained the attorney to prevent a foreclosure sale of her home. At the attorney's suggestion, the client obtained $400 to be used in settling the creditor's $800 judgment. Several days before the sale the client took the $400 to the attorney's office. The attorney told the client the opposing attorney had agreed to stop the foreclosure sale in exchange for the $400. The attorney did nothing further to prevent the foreclosure. The court held there was a genuine issue of material fact as to whether the attorney's conduct amounted to a breach of the standard of care. Id.

In an earlier legal malpractice case, Young v. Bridwell, 20 Utah 2d 332, 437 P.2d 686 (1968), clients sued their attorney for failing to advise the clients of their right to appeal after the trial court had ruled against them. The Utah Supreme Court held that if it was established the trial court had ruled in a manner

manifestly against the general law on the subject ... and this fact was discoverable upon reasonable professional research by counsel, upon such a showing a duty conceivably might arise on the part of counsel at least to so inform his client.... However, in this case there is no such established error giving rise to the duty of counsel to advise his client of the right to appeal. Counsel is required to possess the ordinary legal knowledge and skill common to members of his profession, but is not required to know all of the law, nor to second guess the trial judge.

Id. at 690. Thus, counsel is required to undertake the research which a reasonable attorney under the circumstances would do. Id. Accord Williams, 765 P.2d at 889.

In another setting, the supreme court has recognized an attorney can rely on the factual representations of his client. In Milliner v. Elmer Fox and Co., 529 P.2d 806 (Utah 1974), stock purchasers sued the seller's accountant and attorneys to recover the loss of value of the stock. The court dismissed the purchasers' complaint holding they could not recover from the attorneys absent a showing of acts or omissions on the part of the attorneys which amounted to a breach of duty.

In the usual case an attorney acts upon the information furnished by his client, in carrying out his work. As a general rule, an attorney is not required to investigate the truth...