Oar Lock Land & Cattle Co. v. Crowley, Haughey, Hanson, Toole & Dietrich

• Decision Date: 25 June 1992
• Docket Number: No. 91-336,91-336
• Citation: 833 P.2d 146,253 Mont. 336
• Parties: OAR LOCK LAND & CATTLE CO., a/k/a Oar Lock Land & Cattle Company, Jimmie Lue Eddleman, and Warren Dan Eddleman, Plaintiffs and Appellants, v. CROWLEY, HAUGHEY, HANSON, TOOLE & DIETRICH, a Partnership, John M. Dietrich, Arthur F. Lamey, Jr., Allan L. Karell, and Hall & Hall, Inc., a Corporation, Defendants and Respondents.
• Court: Montana Supreme Court

Page 146

833 P.2d 146

253 Mont. 336

OAR LOCK LAND & CATTLE CO., a/k/a Oar Lock Land & Cattle

Company, Jimmie Lue Eddleman, and Warren Dan

Eddleman, Plaintiffs and Appellants, v. CROWLEY, HAUGHEY, HANSON, TOOLE & DIETRICH, a Partnership, John M. Dietrich, Arthur F. Lamey, Jr., Allan L.

Karell, and Hall & Hall, Inc., a

Corporation, Defendants and

Respondents.

No. 91-336.

Supreme Court of Montana.

Submitted on Briefs April 15, 1992.

Decided May 28, 1992.

Rehearing Denied June 25, 1992.

Eldon Silverman; Elrod, Katz, Preeo, Look, Moison & Silverman, Denver, Colo., Randy S. Laedeke; Laedeke Law Office, Billings, for plaintiffs and appellants.

Stephen H. Foster, Jeanne M. Bender, Holland & Hart, Billings, for defendants and respondents.

HARRISON, Justice.

This is an appeal from an order of the Thirteenth Judicial District Court, Yellowstone County, Montana, which granted respondents' motion for summary judgment in an attorney malpractice claim. We affirm.

This action arose from a series of loan transactions which initially began sometime in 1965. At that time, John Dietrich (Dietrich) and Art Lamey (Lamey) of the Crowley, Haughey, Hanson, Toole & Dietrich Law Firm (Crowley) represented both the appellants and the Connecticut Mutual Life Insurance Corporation (CML) in a real estate/loan transaction in which the appellants acquired ranch land. In 1967, Crowley again aided the appellants and CML in another loan transaction. From 1967 through 1972 Crowley represented the appellants in numerous ranch related matters.

In 1974, the appellants requested that Dietrich draft their wills. Dietrich declined due to his workload and appellants then hired Gene LaLonde (LaLonde), a non-Crowley lawyer, to handle their wills. LaLonde also represented the appellants in 1975 to incorporate the Oar Lock Land & Cattle Company.

In 1978 the appellants formed a partnership with Sumner Gerard (Gerard) known as the Paradise Land and Livestock Company; the purpose of the partnership was to purchase a ranch in Nevada. During this transaction Gerard was represented by Crowley and appellants were again represented by LaLonde. Also in 1978, appellants obtained another loan from CML and there is disagreement about who represented the parties. The appellants claim that Crowley and another non-Crowley lawyer jointly represented the parties. Crowley contends that it represented CML and LaLonde represented the appellants.

In the early to mid 1980s, the appellants began to experience financial difficulties and the Crowley firm represented the Paradise Land and Livestock Company in the sale of the Nevada ranch. In 1984, Dietrich reviewed an agreement for M.E. Eddleman, one of the appellants, regarding a trust/financing arrangement with an individual in North Dakota. Dietrich advised Mr. Eddleman to find out more about the individual before considering the transaction and referred Mr. Eddleman to a New York branch office of a Swiss bank. Dietrich never heard about the matter again. In 1985-86, the appellants hired the firm of Anderson, Brown to represent them in a bank loan default initiated by Norwest bank.

In 1986, Anderson, Brown represented the appellants in negotiations with CML regarding delinquent payments on the 1978 loan. In 1988, the appellants defaulted in their payments to CML on the 1978 loan and the Crowley firm, while representing CML, foreclosed upon appellants. The District Court entered default judgment against the appellants on September 28, 1988, after which a foreclosure sale took place.

On November 29, 1989, with counsel of record Chris J. Nelson (Nelson), the appellants moved, but later withdrew their motion, to set aside the judgment with respect to a grazing lease. On February 7, 1990, Nelson filed two motions: first, a Rule 60(b) motion to set aside the default judgment and decree of foreclosure; and second, a motion to disqualify the Crowley firm from representing CML. The primary claim asserted in the motions was that Crowley acted adversely to its former clients (the appellants) when it represented CML in the foreclosure proceeding. The motions were deemed denied pursuant to Rules 60(c) and 59(g), M.R.Civ.P. Further, the parties also stipulated to dismissal of the motions without prejudice on April 17, 1990.

On May 25, 1990, the appellants filed a complaint alleging various causes of action including that Crowley committed malpractice by acting adversely to the appellants by refusing to resign as attorneys for CML. Crowley moved for summary judgment. After a November 2, 1990 hearing, the District Court found no genuine issues of material fact and granted Crowley's motion for summary judgment. Appellants now appeal to this Court.

The dispositive issue on appeal is whether the District Court erred in granting the respondent's motion for summary judgment in an attorney malpractice claim.

Summary judgment is proper only when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.; also see Cereck v. Albertson's Inc. (1981), 195 Mont. 409, 411, 637 P.2d 509, 510. The moving party has the initial burden of proof to show that no genuine issues of material fact exist. Westmont Tractor Co. v. Continental I, Inc. (1986), 224 Mont. 516, 521, 731 P.2d 327, 330. Once the moving party meets the burden, it is up to the non-moving party to establish that genuine issues of material fact exist. Simmons v. Jenkins (1988), 230 Mont. 429, 432, 750 P.2d 1067, 1069. Therefore, we confine our review in the case at bar to a determination of whether genuine issues of material fact exist that would require reversing the District Court.

In addressing the malpractice claim, we first state the requisite elements for attorney malpractice:

In a malpractice action, the plaintiff must prove that an attorney-client relationship existed and that the act constituting...