Parkinson v. Bevis, 091019 IDSCCI, 46269
|Opinion Judge:||BEVAN, JUSTICE.|
|Party Name:||REBECCA PARKINSON, Plaintiff-Appellant, v. JAMES BEVIS, Defendant-Respondent|
|Attorney:||Trout Law, PLLC, Boise, attorneys for Appellant. Kim J. Trout argued. Duke Scanlan & Hall, PLLC, Boise, attorneys for Respondent. Keely E. Duke argued.|
|Judge Panel:||Justices BRODY, STEGNER and MOELLER and Justice pro tem WALTERS, CONCUR|
|Case Date:||September 10, 2019|
|Court:||Supreme Court of Idaho|
Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Jonathan Medema, District Judge.
The dismissal by the district court of Parkinson's complaint for breach of fiduciary duty is reversed. The judgment entered in favor of Bevis is vacated. The denial of the motion to amend the Complaint is reversed. The district court's award of costs is vacated. Neither party is awarded attorney fees on appeal. Costs on appeal are awarded to Appellant
Trout Law, PLLC, Boise, attorneys for Appellant. Kim J. Trout argued.
Duke Scanlan & Hall, PLLC, Boise, attorneys for Respondent. Keely E. Duke argued.
I. Nature of the Case
Rebecca Parkinson appeals a district court's dismissal of her claim for breach of fiduciary duty against her attorney, James Bevis. Parkinson filed a complaint alleging Bevis breached his fiduciary duty when he disclosed a confidential email to the opposing attorney after reaching a settlement in Parkinson's divorce action. Bevis moved to dismiss under Idaho Rule of Civil Procedure 12(b)(6), arguing that Parkinson's complaint failed to state a claim for relief. The district court agreed and dismissed Parkinson's claim after determining that it was, in essence, a legal malpractice claim, on which Parkinson could not prevail because she admitted that she suffered no damages from Bevis' disclosure. We reverse and remand for further proceedings consistent with this opinion.
II. Factual and Procedural Background
In 2015, Bevis, a licensed attorney, represented Parkinson in her divorce proceedings. Parkinson alleged that Bevis breached his fiduciary duties to her by forwarding to opposing counsel a copy of an email she sent to Bevis that accused Bevis of failing to represent her adequately at a mediation conference. On May 10, 2017, Parkinson filed a complaint against Bevis for breach of fiduciary duty, which alleged: 4. During the course of Bevis' representation of Parkinson, Bevis, without Parkinson's knowledge or consent, shared attorney-client confidential information with Joe Parkinson's attorney, Stanley Welsh.
5. During the course of the Bevis representation of Parkinson, on information and belief, Bevis was complicit with Welsh in securing a divorce for Joe Parkinson on terms more favorable to Joe Parkinson than with his client Rebecca Parkinson.
6. During the course of the Bevis representation, Bevis failed to fully and adequately represent Parkinson, including but not limited to, a full and complete evaluation of the true value of the community real property held by the Parkinson community.
Parkinson's complaint alleged that Bevis' breach caused her damage in an amount to be proven at trial. On December 1, 2017, Bevis filed a motion to dismiss, arguing that when a plaintiff's claim against her former attorney arises out of the professional relationship with him, the only claim that she may properly assert is one for professional negligence. Thus, Bevis argued that Parkinson improperly styled her cause of action as a breach of fiduciary duty when it was actually a claim for legal malpractice, which she could not prevail on because she suffered no damages. Despite Parkinson's initial assertion that Bevis' breach caused damage, she later admitted that she suffered no economic loss but sought relief in equity, i.e., disgorgement of the attorney fees she paid to Bevis. Although Parkinson did not initially seek to amend her complaint, she abandoned her claim for damages in responding to the motion to dismiss, redirecting her focus from a legal claim to an equitable one. She highlighted that her breach of fiduciary duty claim did not ask "for the value of any lost divorce claims," but that she sought "remedies of disgorgement and forfeiture of attorney fees [which were] implicit in her breach of fiduciary duty claims." During oral argument on the motion to dismiss, Parkinson maintained that it would be appropriate to allow her to amend the complaint to clarify both her factual allegations and the legal basis for her claim. Even so, she did not file a proposed amended complaint at that time.
The district court granted Bevis' motion to dismiss. The court held that "because [Parkinson] has failed to allege sufficient facts to show the information was confidential and/or the communications were privileged, [Parkinson's] complaint fail[ed] to state a cause of action upon which relief may be granted." The district court also determined that it would be futile to allow Parkinson to amend her complaint to clarify the equitable nature of her allegations, because such a claim is indistinguishable from a negligence claim, for which Parkinson would have to show damage.
Even though the district court noted the futility of amending the complaint in its memorandum decision, Parkinson moved to amend her complaint a few weeks later pursuant to Idaho Rule of Civil Procedure 15. The proposed amended complaint specified, "[Parkinson] is entitled to the remedies of equitable forfeiture and fee disgorgement, in amounts to be proven at trial." In a separate motion filed the same day, Parkinson moved for reconsideration of the district court's dismissal of her complaint under Idaho Rule of Civil Procedure 11.2. Parkinson again acknowledged that "legal malpractice claims in Idaho require proof of actual, compensable damages," and that "Parkinson cannot currently bring her fiduciary claim as a legal malpractice claim because she does not have 'objective proof in support of actual damages.'" She thus argued that her claim did not sound in tort and that it should be allowed to proceed. The district court denied both Parkinson's motion for reconsideration and motion to amend her complaint. Parkinson now appeals.
III. Issues on Appeal
1. Did the district court err in dismissing Parkinson's claims?
2. Did the district court abuse its discretion in not allowing Parkinson to amend her complaint?
3. Did the district court err in denying Parkinson's motion for reconsideration?
4. Did the district court abuse its discretion in awarding costs to Bevis?
5. Is Bevis entitled to his attorney fees on appeal?
IV. Standard of Review
This Court reviews a district court's dismissal of a complaint under Idaho Rule of Civil Procedure 12(b)(6) de novo. Taylor v. McNichols, 149 Idaho 826, 832, 243 P.3d 642, 648 (2010). When this Court reviews an order dismissing an action pursuant to I.R.C.P. 12(b)(6), we apply the same standard of review we apply to a motion for summary judgment. A 12(b)(6) motion looks only at the pleadings to determine whether a claim for relief has been stated. On review of a dismissal this Court determines whether the non-movant has alleged sufficient facts in support of his claim, which if true, would entitle him to relief. In doing so, the Court draws all reasonable inferences in favor of the non-moving party.
Savage v. Scandit Inc., 163 Idaho 637, 640, 417 P.3d 234, 237 (2018) (quoting Hammer v. Ribi, 162 Idaho 570, 573, 401 P.3d 148, 151 (2017)).
A. The district court erred in dismissing Parkinson's complaint.
The principal question here is whether a client can sue an attorney for breach of fiduciary duty when the cause of action arises from the attorney-client relationship, no matter whether the breach caused the client actual damages. Parkinson argues that Bevis breached his fiduciary duty by disclosing a confidential attorney-client email and that this breach impaired the value of Bevis' services to Parkinson. On the other hand, Bevis maintains that when an attorney breaches a fiduciary duty to a client, the only cause of action that arises from the attorney-client relationship is legal malpractice.
This Court reviews a district court's dismissal of a complaint under Idaho Rule of Civil Procedure 12(b)(6) de novo. Taylor, 149 Idaho at 832, 243 P.3d at 648. "A 12(b)(6) motion looks only at the pleadings to determine whether a claim for relief has been...
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