Jordan v. Beeks

• Decision Date: 29 March 2001
• Docket Number: No. 25592.,25592.
• Citation: 21 P.3d 908,135 Idaho 586
• Court: Idaho Supreme Court
• Parties: Chris and Betsy JORDAN, husband and wife, and Chris Jordan Volkswagen, Inc., Plaintiffs-Appellants, v. Paul BEEKS, individually, and Smith, Beeks & Hodges, P.L.L.C., Defendants-Respondents.

21 P.3d 908

135 Idaho 586

Chris and Betsy JORDAN, husband and wife, and Chris Jordan Volkswagen, Inc., Plaintiffs-Appellants, v. Paul BEEKS, individually, and Smith, Beeks & Hodges, P.L.L.C., Defendants-Respondents.

No. 25592.

Supreme Court of Idaho, Boise, December 2000 Term.

March 29, 2001.

Jones, Gledhill, Hess, Andrews, Fuhrman, Bradbury & Eiden, P.A., Boise, for appellants. Rory R. Jones argued.

Moffatt, Thomas, Barrett, Rock & Fields, Boise, for respondents. Mark S. Prusynski argued.

WALTERS, Justice.

This is an appeal from a decision of the district court awarding summary judgment to attorney Paul Beeks and the law firm of Smith, Beeks & Hodges, P.L.L.C., in the legal malpractice action brought by Chris and Betsy Jordan. We affirm the district court's decision.

FACTS AND PROCEDURAL BACKGROUND

A. Facts

Chris and Betsy Jordan, husband and wife, hired attorney Beeks for advice regarding the enforceability of an oral agreement entered into with Carl and Margaret Anderson, husband and wife, and Greg Anderson, Carl's son. Chris Jordan is the son of Margaret Anderson. The Jordans informed attorney Beeks that the oral agreement was reached at the June 17, 1994, shareholders' meeting of Chris Jordan Volkswagen, Inc., whereby the Andersons agreed to sell all of their stock in the closely held corporation to the Jordans at a fixed price per share. The Jordans provided to attorney Beeks all of the documents in their possession regarding the sale of the dealership; however, the Stock Purchase Agreement that had been signed on December 8, 1994, by the Jordans and Carl and Margaret Anderson, but not by Greg Anderson, was retained by Russell Kvanvig, the Andersons' attorney who had prepared the agreement.

Attorney Beeks advised the Jordans that in his opinion the parties had reached an enforceable oral agreement in June of 1994. He recommended filing a lawsuit to enforce the agreement, naming as defendants in the action Carl and Margaret Anderson but not Greg Anderson, the minority shareholder. Before filing suit, however, attorney Beeks sent a letter to Greg Anderson on January 23, 1995, which read as follows:

Chris Jordan has contacted me with regard to the potential purchase of your stock in Chris Jordan Volkswagen, Inc. I have a copy of the minutes of the June 17, 1994, annual meeting where it was agreed that Chris and Beth would purchase your and Carl's and Margaret's outstanding stock for $281.00 per share.

You apparently have never actually committed to that sale. Chris asks that I contact and determine whether you are willing to sell your stock on the same terms as agreed with Carl and Margaret.

According to the information I have, the sales price was to be $281.00 per share. Stock was to be paid for in annual installments commencing July 1, 1998, with interest at 8% commencing on July 1, 1996.

If you are agreeable, we will have the necessary documents prepared so that the sale can be completed. If not, please let me know so that we can drop the matter.

Greg Anderson responded to the letter of January 23, 1995, indicating that he had consulted an attorney and would not sell his shares pursuant to the terms agreed to at the June 17, 1994, shareholders' meeting. Attorney Beeks then proceeded with the lawsuit but only as against Carl Anderson and the Estate of Margaret Anderson.¹ Greg Anderson thereafter sought and was granted leave from the district court to intervene in the action.

In the shareholder litigation, the parties submitted cross-motions for summary judgment. Judge Burdick heard the parties' arguments and issued findings and conclusions:

(1) The oral agreement concerning the sale of stock was not an enforceable agreement because a written agreement was both contemplated and intended to be the binding contract.

(2) The stock purchase agreement that was signed by all the parties except Greg Anderson was not fully performed and therefore was unenforceable.

(3) The stock purchase agreement was not divisible and required the sale of all the stock of Carl, Margaret, and Greg, referred to in the agreement collectively as the "Sellers."

(4) The condition precedent, "final documents acceptable to our attorney," was not satisfied in that Greg Anderson's attorney advised against the sale.

The Jordans appealed from the summary judgment entered by Judge Burdick, but subsequently withdrew their appeal. As an alternative, they obtained new counsel to pursue an action against their former attorney, Paul Beeks, for negligent representation and legal malpractice in the handling of the shareholder litigation.

B. Procedural background

In their complaint against attorney Beeks and his law firm, the Jordans alleged various negligent acts of counsel. They claimed that counsel breached the standard of care due to them and that counsel's negligent acts were the proximate cause of the Jordans' failure to prevail in the shareholder litigation to enforce the sale of the stock belonging to Carl, Margaret and Greg Anderson under the terms set forth in the June 17, 1994, minutes of the shareholders' meeting. Specifically, the Jordans alleged that attorney Beeks was negligent (1) when he sent the January 23, 1995, letter to Greg Anderson, which was contrary to his clients' position; (2) in filing suit only as against Carl and the Estate of Margaret Anderson; and (3) in not conducting full discovery and not submitting the testimony of the CPA who was present at the shareholders' June 17, 1994, meeting to corroborate Chris Jordan's testimony.

The defendants moved the district court for summary judgment on October 26, 1998.² In the colloquy of the hearing on the motion, the district court analyzed the decision of Judge Burdick in the underlying shareholder litigation. Addressing the individual allegations of attorney negligence asserted by the Jordans against attorney Beeks, the district court (Judge McKee) concluded that the January 23, 1995, letter was irrelevant to Greg Anderson's intent to abide by the terms of the agreement and not the basis of Judge Burdick's determination that the agreement was non-binding until it was put into writing and approved by the Andersons' counsel; that there were no disputed facts that would have been raised by the affidavit of Gary Evans, CPA, which was cumulative of the evidence presented by the Jordans as to what transpired at the shareholders' meeting; and that any prejudice caused from failing to name Greg Anderson as a defendant in the shareholder litigation was rendered moot when his motion to intervene was granted. Finding that the alleged actions and omissions of attorney Beeks were not the proximate cause of the damages asserted by the Jordans, the district court granted summary judgment to the defendants.

The Jordans moved for reconsideration of the summary judgment, which the district court denied. The Jordans filed a timely notice of appeal from the summary judgment and from the denial of the reconsideration motion. They assert on appeal that the district court improperly weighed the evidence in reviewing Judge Burdick's decision and applied an incorrect standard by failing to consider whether the Jordans had "some chance of success" in the underlying shareholder litigation but for attorney Beeks's alleged negligent acts and omissions.

STANDARD OF REVIEW

When this Court reviews a district court's grant of summary judgment, it uses the same standard properly employed by the district court originally ruling on the motion. McKay v. Owens, 130 Idaho 148, 152, 937 P.2d 1222, 1226 (1997). Under I.R.C.P. 56(b), a party against whom a claim is asserted may at any time, move for summary judgment. Judgment shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. I.R.C.P. 56(c). On a motion for summary judgment, the burden is always on the moving party to prove the absence of a genuine issue of material fact. If, however, the basis of the motion is that no genuine issue of material fact exists with regard to an element of the non-moving party's case, it is incumbent upon the non-moving party to establish an issue of fact regarding that element. Yoakum v. Hartford Fire Ins. Co., 129 Idaho 171, 923 P.2d 416 (1996). All facts and inferences are to be construed most favorably toward the party against whom judgment is sought, and if uncontroverted facts lead to a definite disposition as a matter of law, summary judgment is appropriate. Smith v. Boise Kenworth Sales, Inc., 102 Idaho 63, 625 P.2d 417 (1981). If reasonable people could reach different conclusions as to the facts, however, the motion must be denied. Ashby v. Hubbard, 100 Idaho 67, 593 P.2d 402 (1979).

To establish a claim for attorney malpractice arising out of a civil action, the plaintiff must show: (1) the creation of an attorney-client relationship; (2) the existence of a duty on the part of the lawyer; (3) the breach of the duty or the standard of care by the lawyer; and (4) that the failure to perform the duty was a proximate cause of the damages suffered by the client. Marias v. Marano, 120 Idaho 11, 13, 813 P.2d 350, 352 (1991); Johnson v. Jones, 103 Idaho 702, 652 P.2d 650 (1982). The plaintiff has the burden of proving not only the negligence of the attorney, but also that the negligence was the proximate cause of the loss of a right to recover in the underlying case. Johnson v. Jones, 103 Idaho 702, 652 P.2d 650 (1982).

ANALYSIS

Preliminarily, we note that our review of the summary judgment dismissing the malpractice action does not encompass a review of the summary judgment in the underlying shareholder litigation, where Judge Burdick determined the intent of the Andersons was not to be bound by the oral agreement but by a written agreement which was to follow. Although the Jordans raised the question of...