Kelley v. Buckley

• Decision Date: 24 March 2011
• Docket Number: No. 94847.,94847.
• Parties: KELLEY, Appellant,v.BUCKLEY et al., Appellees.
• Court: Ohio Court of Appeals

193 Ohio App.3d 11

950 N.E.2d 997

2011 -Ohio- 1362

KELLEY, Appellant,

v.BUCKLEY et al., Appellees.

No. 94847.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

Decided March 24, 2011.

William T. Wuliger, Cleveland, for appellant.Baker & Hostetler, Randall L. Solomon, Wayne C. Dabb Jr., Lisa M. Ghannoum, and Stephan J. Schlegelmilch, Cleveland, for appellees.COLLEEN CONWAY COONEY, Judge.

{¶ 1} Plaintiff-appellant Lynn Arko Kelley, individually and as executor of the estate of Michael Vincent Kelley (collectively, “the Kelleys”), appeals the trial court's grant of summary judgment in favor of defendants-appellees, Brent M. Buckley and the law firm Buckley King, L.P.A., on all claims asserted in her complaint. Lynn Kelley also appeals the trial court's denial of her motion to delay ruling on Buckley's motion for summary judgment pending Lynn Kelley's receipt of discovery pursuant to Civ.R. 56(F). We find merit to the appeal and reverse.

{¶ 2} This legal-malpractice case arises from the death of Michael Kelley, one of the founding partners of the law firm Kelley & Ferraro, L.L.P. (“K & F”), an Ohio limited law partnership. The facts, as set forth in the affidavits and depositions in the record, are as follows:

{¶ 3} Lynn Kelley is the widow of Michael Kelley, who died on January 2, 2006. In the spring of 1997, Michael Kelley retained Brent Buckley of the Buckley law firm to represent his interests in the formation of K & F. Attorneys at the Buckley firm drafted several versions of the partnership agreement, financing and security agreements, and other legal documents relating to the formation of K & F. Brent Buckley negotiated the terms of the partnership agreement with William Rafferty, the attorney representing the other 50 percent partner of K & F, James Ferraro. Michael Kelley and Ferraro executed the partnership agreement establishing K & F on June 12, 1997.

{¶ 4} At her deposition, Lynn Kelley testified that over the next nine years, Brent Buckley and the Buckley firm represented both herself and her late husband and K & F on a wide variety of legal, business, and personal matters. The Kelleys considered Brent Buckley to be their family's attorney and sought his counsel numerous times over the years. For example, after entering into the partnership agreement with Ferraro, Michael Kelley became concerned that his former employer might commence legal proceedings against him. He was also anxious to convince his former employer to release client files, which were necessary to commence operations at K & F. The Buckley firm opened a file for Michael Kelley and encoded it with the firm's client-identification number beginning with “5020,” the four-digit number reserved for all the Kelleys' files.

{¶ 5} The Buckley firm also defended Michael Kelley against contempt charges in the case of Morgan v. Owens Corning Fiberglass Corp., Cuyahoga C.P. No. CV–328407. The Buckley firm also represented Michael Kelley in at least one other case referred to as “the Margaritis matter.” The firm performed estate planning for the Kelleys, assisted Lynn Kelley with issues in her judicial campaign, advised Michael Kelley on issues involving his offshore accounts, and assisted Lynn Kelley in the formation of her two businesses, Lindyco and Kellco, Inc.

{¶ 6} The Buckley firm not only represented the Kelleys in their personal and business affairs; Brent Buckley also continued to represent Michael Kelley's interests in K & F. In late 1999, Michael Kelley and Ferraro began renegotiating their existing partnership agreement to explore the possibility of merging K & F with Ferraro & Associates, Ferraro's own separate law firm in Miami, Florida. Michael Kelley and Ferraro discussed this possibility over the next two years. Ferraro was counseled by his own attorney, William Rafferty, and his Florida accountant, Henry Schade. Brent Buckley and business consultant Michael DiCorpo represented Michael Kelley. The parties drafted several proposed agreements, but the merger was never accomplished.

{¶ 7} Notwithstanding the Kelleys' relationship with Brent Buckley and the Buckley firm, Ferraro retained the firm to represent his interests in an anticipated dispute between him and the Estate of Michael Kelley shortly after Michael Kelley's death. The partnership agreement that Michael Kelley had employed the Buckley firm to draft to protect his interests required that upon dissolution of K & F for any reason (including the death of Michael Kelley), Ferraro was obligated to pay 40 percent of the law firm's gross revenues (less a few minor setoffs) to Lynn Kelley. Buckley asserts in his affidavit that he obtained Lynn Kelley's consent to represent Ferraro against her and the estate of Michael Kelley. However, in her deposition, Lynn Kelley denies that she consented to the representation but testified that Buckley misled her into believing he was still representing her interests and those of her family by advising her to settle with Ferraro. Specifically, Lynn Kelley testified:

And he told me, in good confidence he told me, “I'm going to help you through this. I want you to settle this, get out as soon as possible. You know that Jimmy is, you know, not to be trusted.” And that Jimmy is Mr. Ferraro.

{¶ 8} Lynn Kelley testified that Buckley withheld documents and information from her, including a copy of the K & F partnership agreement, which she repeatedly requested for several weeks. Lynn Kelley further testified that without the benefit of reviewing the K & F partnership agreement to assess her legal status, Buckley advised her to settle quickly. She also claims that he used his knowledge of her financial condition and state of mind to assist those who had interests adverse to hers. Prior to Michael Kelley's death, the Kelleys' son Christopher was injured in a car accident and sustained a traumatic brain injury. Lynn Kelley testified:

Mr. Buckley knew of the constant care that was entailed around keeping Christopher at home, caring for him as a quadriplegic and in a vegetative state. Christopher was 6 foot 4, hovered around 190 pounds, and I—we, both Mike and I, had to have around-the-clock care for him. He knew how difficult this was, how emotionally damaging it was to our family.

* * *

But he certainly knew that when Michael passed away, that I had to shoulder that then all by myself, and the costs involved and the emotional wear and tear, * * * he knew, he talked to us personally.

{¶ 9} Although Brent Buckley contended at deposition that he did not represent Ferraro until Lynn Kelley sued K & F in April 2006, Theodore Dunn, a partner at the Buckley firm, admitted in a letter to Lynn Kelley's lawyer that the Buckley firm had “been representing James Ferraro and Kelley & Ferraro, LLP (‘K & F’) in connection with the resolution of the financial interest of the Estate of Michael V. Kelley (the ‘Estate’) since January 2006.” Sheila Thorne, Michael Kelley's former secretary, testified that on the day of Michael Kelley's death, Ferraro flew to Cleveland from his home in Florida to meet with lawyers at the Buckley firm regarding the Kelleys' financial interest in K & F. Thorne testified:

A: What I understood honestly was he was representing Jim Ferraro that night. That's what I understood.

Q: Which night?

A: The night of Michael's death.

Q: How did you come to that understanding?

A: I actually did not understand it until the next day. Well, because Jimmy called, and he was flying into town and they were going to have a meeting at Buckley's office. They were having it there because if Lynn came to the office, they didn't want her to see anybody there.

{¶ 10} Lynn Kelley testified that Brent Buckley and the Buckley firm also withheld copies of two employment contracts they drafted between K & F and attorney John Sivinski (“Sivinski”), which subsequently became the subject of litigation against Lynn Kelley, i.e., Sivinski v. Kelley, Cuyahoga C.P. No. CV–595064. In June 2006, Sivinski sued Lynn Kelley, individually and as executor of Michael Kelley's estate, and K & F alleging that pursuant to an employment agreement executed in July 1997, he was owed a percentage of Michael Kelley's half of K & F's profits. The Buckley firm, as counsel for Ferraro and K & F, filed a cross-claim for indemnification against Lynn Kelley as executor of Michael Kelley's Estate.

{¶ 11} However, another agreement executed in 1999 superseded the first contract and greatly reduced the terms of Sivinski's compensation at K & F. Sivinski denied the existence of the 1999 contract, and the Buckley firm failed to produce a copy of the 1999 agreement, which would have proved that Sivinski's claim was fraudulent. When Lynn Kelley later obtained a copy of the 1999 Sivinski contract from Ferraro, she was able to prove that Sivinski's case was fraudulent. Lynn Kelley ultimately won a directed verdict on Sivinski's claims, as well as $200,000 in compensatory damages, $400,000 in punitive damages, and $296,000 in attorney fees on her counterclaims for spoliation of evidence and abuse of process against Sivinski.¹

{¶ 12} Although the Buckley firm denied drafting these agreements, the firm's partner, Theodore Dunn, admitted that the first Sivinski agreement was generated on the Buckley firm's computers, as evidenced by the tracking codes on the document. The Buckley firm claims that Michael DiCorpo, a nonlawyer with access to the Buckley firm's computers, drafted the 1999 agreement on the firm's computers without its knowledge. DiCorpo denies any involvement in the creation of that contract and testified that Brent Buckley must have drafted the second contract. Although Dunn and DiCorpo testified that the second contract was also generated on the Buckley firm's computers, it is undisputed that the Buckley firm never produced the second document when requested during discovery.

{¶ 13} In November 2006, Lynn Kelley filed the instant malpractice complaint against ...