Logan v. Busch

Decision Date06 December 2021
Docket NumberCase No. 4:21-cv-00416-RK
Citation574 F.Supp.3d 660
Parties The ESTATE OF Chad LOGAN, BY AND THROUGH Paula LOGAN, Personal Representative of the Estate of Chad Logan; Plaintiff, v. Thomas S BUSCH, Martin, Pringle, Oliver, Wallace & Bauer, LLP, Defendants.
CourtU.S. District Court — Western District of Missouri

James F. Monafo, Kyle P. Seelbach, St. Louis, MO, Michael S. Hargens, Husch Blackwell LLP, Kansas City, MO, for Plaintiff.

Daniel F. Church, Blake H. Butner, Morrow Willnauer Church LLC, Kansas City, MO, for Defendants.

ORDER

ROSEANN A. KETCHMARK, UNITED STATES DISTRICT JUDGE

Before the Court is Defendants' Motion to Dismiss Plaintiff's Amended Complaint (Doc. 11) and Motion to Stay Discovery (Doc. 12). The motions are fully briefed. (Docs. 11, 23, 25, 28, 31.) For the reasons explained below, and after careful consideration, the Court ORDERS that (1) Defendants' motion to dismiss for improper venue and failing to state a claim (based on the statute of limitations) is DENIED , and (2) Defendants' motion to stay discovery is DENIED .

As to Defendants' motion to dismiss for lack of personal jurisdiction, this is a difficult case. Plaintiff seeks to establish personal jurisdiction by Missouri courts over Defendants, an individual attorney and a law firm, for their representation of an individual(at the time, a Kansas resident and whose estate Plaintiff represents) in a Kansas legal matter that, due to Defendants' alleged legal malpractice, negatively affected the individual's interest and right in a trust governed by Missouri law. Plaintiff's legal malpractice claim rests on positive acts (erroneous legal advice and the filing of a lawsuit in Kansas) and an omission (doing so without first testing the potential effects of the lawsuit under a procedure allowed by Missouri law concerning Missouri trusts). While the Court finds the out-of-state law firm has sufficient minimum contacts with Missouri for personal jurisdiction to satisfy the Due Process Clause, the Court does not find the same is true for the out-of-state attorney's contacts with Missouri while representing the former client. For the reasons explained below, defendants' motion to dismiss for lack of personal jurisdiction is DENIED as to Martin, Pringle, Oliver, Wallace & Bauer, LLP, and is HELD as to Thomas S. Busch pending the parties' supplemental briefing on whether transfer of this case under 28 U.S.C. § 1404(a) is appropriate (as ordered in § IV below).

Background

This lawsuit arises from Thomas S. Busch ("Attorney Busch") and Martin, Pringle, Oliver, Wallace & Bauer, LLP's ("Firm") representation of Chad Logan (now deceased) in 2015 and 2016. Originally filed in the Circuit Court of Jackson County, Missouri, Defendants removed the Complaint to this Court on June 15, 2021, on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332.1 Plaintiff filed an Amended Complaint on July 13, 2021. (Doc. 9.)

In the Amended Complaint, Plaintiff alleges that Mr. Logan was the beneficiary of several significant trusts established by his grandparents. These trusts were created under and governed by Missouri law. (Doc. 9 at 4, ¶ 17 & 5, ¶ 18.) Around 2014 or 2015, the Trustees suspended distributions to Mr. Logan when he stopped taking his medications and receiving professional help for his mental illness. (Id. at 5, ¶ 24 & 6, ¶ 26.) The Trustees had determined that receiving trust assets while not treating his mental illness was not in Mr. Logan's best interest. (Id. at 6, ¶ 26.)

In 2015, Mr. Logan hired Attorney Busch, then a partner at the Firm, to represent him concerning the suspension of his trust benefits. During the time Defendants represented Mr. Logan, Mr. Logan resided in the State of Kansas. (Doc. 11-1 at 3.) Attorney Busch, licensed to practice law in both Kansas and Missouri, practiced out of the Firm's Overland Park, Kansas, office location. (Id. ; Doc. 9 at 4, ¶ 14.) Attorney Busch and others from the Firm only met with Mr. Logan at the Overland Park office and communicated with Mr. Logan only from the Overland Park office. (Doc. 11-1 at 2.) The Firm also maintains an office in Kansas City, Missouri, and advertises and performs legal services in Missouri. (Doc. 9 at 3-4, ¶ 13.)

While representing Mr. Logan, Attorney Busch attended two meetings with the Trustees and Trustees' counsel at the Kansas City, Missouri, office of Trustees' counsel prior to any litigation being filed. (Doc. 9 at 7, ¶ 30 & 9, ¶ 39.) Trustees' counsel informed Attorney Busch at both meetings about a "no-contest" provision in the applicable trusts. (Id. at 12, ¶¶ 48-49). Under this provision, a trust beneficiary's rights would be forfeited if the beneficiary instituted proceedings to challenge the validity of the trusts or the Trustees' discretion in distributing the trust benefits. Defendants consulted with a Missouri law professor, Professor David English, to provide advice as to the enforceability of the no-contest provisions in the trusts. (Docs. 11-1 at 2; 9 at 4, ¶ 15 & 12, ¶¶ 51-53.) Defendants communicated with Professor English by telephone or email all while Attorney Busch was physically located in Kansas. (Doc. 11-1 at 3.) Professor English advised Defendants that no-contest provisions were generally enforced but that Missouri had a "safe harbor" procedure through which a person could test a particular claim or action against a no-contest provision in a trust by filing a petition to determine whether the claim or action would violate the trust provision. (Doc. 9 at 13, ¶ 55.) Professor English advised Defendants that pursuing a "safe harbor" action would eliminate the risk a court could later decide that a contemplated lawsuit, if ultimately pursued, violates a no-contest provision.

Defendants ultimately advised Mr. Logan that filing a lawsuit in Kansas state court under Kansas law accusing the Trustees of conspiring against him with an evil motive not related to a genuine concern for his health and well-being did not violate the no-contest provisions in the trusts. (Docs. 9 at 12, ¶ 50; 25-1 at 42). In April 2016, Defendants filed a lawsuit in the District Court of Johnson County, Kansas ("Kansas Lawsuit"). (Docs. 11-1 at 3; 9 at 11, ¶ 44.) Defendants did not pursue a "safe harbor" action under Missouri law before doing so. (Doc. 9 at 13, ¶ 55.) A few months after filing the Kansas Lawsuit, Defendants withdrew from their representation of Mr. Logan. (Doc. 11-1 at 3.) In December 2016, the Kansas Lawsuit was dismissed with prejudice, in favor of the Trustees. (Doc. 9 at 14, ¶ 61.)

Two years later, in 2018, the Trustees filed a declaratory judgment action in Kansas state court seeking a ruling whether the Kansas Lawsuit violated the no-contest provisions within the trusts. (Id. at ¶ 62.) At trial, Mr. Logan argued that the Kansas Lawsuit did not violate the no-contest provisions. (Id. at 9-10, ¶ 63.) Ultimately, however, the Kansas state district court entered its judgment on May 18, 2018, finding that the Kansas Lawsuit did violate the trusts' no-contest provisions and that, as a result, Mr. Logan forfeited any interest in the trusts. (Id. at 15-16, ¶¶ 67-69.) By this time, Mr. Logan was living in Missouri. (Id. at 16, ¶ 70).

Mr. Logan died on March 11, 2021. (Id. at ¶ 73.)

Plaintiff, Mr. Logan's estate, now asserts a claim of legal malpractice and negligence against Defendants. Specifically, Plaintiff alleges that Defendants: (1) wrongly advised Mr. Logan that the Kansas Lawsuit would not violate the no-contest provisions in the trusts, and (2) filed the Kansas Lawsuit against the Trustees without first testing the claims against the no-contest provisions as permitted by Missouri law and as Professor English had advised. Plaintiff alleges because of Defendants' breach of their duties to Mr. Logan, Mr. Logan was declared on May 18, 2018, to have violated the no-contest provisions and thus to have forfeited any interest in the trusts.

Defendants argue that Plaintiff's Amended Complaint must be dismissed under Federal Rule of Civil Procedure 12(b)(2) (lack of personal jurisdiction), (b)(3) (improper venue), and (b)(6) (failure to state a claim upon which relief can be granted based on the statute of limitations). Plaintiff opposes Defendants' motion to dismiss.

Standard of Review

To survive a motion to dismiss, a complaint must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is plausible if "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The Court "accept[s] the allegations contained in the complaint as true and draw[s] all reasonable inferences in favor of the nonmoving party." Cole v. Homier Distrib. Co. , 599 F.3d 856, 861 (8th Cir. 2010) (citation and quotation marks omitted).

Discussion
I. Personal Jurisdiction

To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must plead "sufficient facts to support a reasonable inference that the defendant[ ] can be subjected to jurisdiction within the state." Creative Calling Sols., Inc. v. LF Beauty Ltd. , 799 F.3d 975, 979 (8th Cir. 2015). If the defendant challenges jurisdiction, the burden is on the plaintiff to present facts supporting jurisdiction. Dairy Farmers of Am., Inc. v. Bassett & Walker Int'l, Inc. , 702 F.3d 472, 475 (8th Cir. 2012). The court views the evidence in the light most favorable to the plaintiff and resolves factual conflicts in plaintiff's favor in determining whether plaintiff has made a prima facie showing of personal jurisdiction over the challenging defendant. Fastpath, Inc. v. Arbela Techs. Corp. , 760 F.3d 816, 820 (8th Cir. 2014). The plaintiff's "prima facie showing" is tested by the pleadings as well as by the affidavits and exhibits submitted...

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