Price v. Kuchaes

• Court: Indiana Appellate Court
• Writing for the Court: OPINION
• Citation: Price v. Kuchaes, 950 N.E.2d 1218 (Ind. App. 2011)
• Decision Date: 08 June 2011
• Docket Number: No. 45A04–1007–CT–467.,45A04–1007–CT–467.
• Parties: Charles PRICE, Appellant–Plaintiff,v.Delmar P. KUCHAES, Appellee–Defendant.

950 N.E.2d 1218

Charles PRICE, Appellant–Plaintiff,

v.Delmar P. KUCHAES, Appellee–Defendant.

No. 45A04–1007–CT–467.

Court of Appeals of Indiana.

June 8, 2011.

April L. Board, Stanley Kops, Valparaiso, IN, Attorneys for Appellant.Michael E. O'Neill, Kelly K. McFadden, O'Neill McFadden & Willett LLP, Dyer, IN, Attorneys for Appellee.

OPINION

ROBB, Chief Judge.

Case Summary and Issues

Following the failure of Charles Price's loss of consortium claims, wherein he sought recovery for a vaccine injury to his wife, Price brought this legal malpractice action against Delmar Kuchaes, the attorney who represented him in that litigation. The trial court initially granted partial summary judgment to Price on the issue of liability but denied Price summary judgment on the issue of damages. The following year the trial court reversed course, granting full dispositive summary judgment to Kuchaes based on a theory of judicial estoppel for Price's failure to disclose the malpractice action in his Chapter 13 bankruptcy filing. Price now appeals, and Kuchaes cross-appeals. The parties raise six issues on appeal, of which we find the following three restated issues dispositive: 1) whether Price has standing to maintain this legal malpractice action when it was not initially disclosed in his bankruptcy filing but was later disclosed and the bankruptcy dismissed; 2) whether the trial court properly granted summary judgment to Kuchaes based on judicial estoppel; and 3) whether the trial court correctly decided the merits of Price's legal malpractice claim in its previous grant of partial summary judgment to Price as to Kuchaes's liability.

We conclude Price has standing to pursue this legal malpractice action and that the trial court erred when it granted Kuchaes summary judgment based on judicial estoppel. We further conclude issues of material fact remain such that Price is not entitled to summary judgment as to Kuchaes's liability for malpractice, though the trial court correctly denied Price summary judgment as to damages. We reverse in part, affirm in part, and remand for further proceedings.

Facts and Procedural History

Price and his wife, Cathy Price, are former clients of Kuchaes. The facts relating to Kuchaes's representation of the Prices in the underlying vaccine litigation were summarized as follows by the United States Court of Appeals for the Seventh Circuit:

On June 10, 1993, Cathy and Charles Price filed suit in Indiana state court against American Cyanamid Company and Lederle Laboratories (a division of American Cyanamid) after Cathy contracted polio from a child who recently had been vaccinated. Cathy's claim was based on product liability, and Charles's claim was for loss of consortium.¹ The summons and complaint were served by certified mail on June 14, 1993, and a return of service was entered for American Cyanamid on June 23, 1993. On June 25, 1993, the manager of American Cyanamid's legal department faxed a letter to plaintiffs' counsel, Delmar Kuchaes, informing him that the National Childhood Vaccine Injury Act, 42 U.S.C. § 300aa–1 et seq., requires that vaccination claims first be brought in the U.S. Court of Federal Claims (“Vaccine Court”) pursuant to the federal vaccination compensation program. The letter provided plaintiffs' counsel with the telephone number and mailing address of the federal program and asked that the lawsuit be terminated as required by the Act. After receiving the facsimile letter, plaintiffs' counsel voluntarily dismissed the suit that same day, before either defendant filed an appearance or responsive pleading. Plaintiffs' counsel sent American Cyanamid a copy of the dismissal order, along with a letter stating that the suit had been “discontinue[d], or non-suit[ed].”

Over the next few years, the Prices pursued their claims in the Vaccine Court, where they ultimately learned that Charles's derivative claim was not compensable under the Vaccine Act. Accordingly, in March 1998, Charles voluntarily dismissed his claim in the Vaccine Court. Cathy subsequently obtained a judgment from the Vaccine Court in excess of $1 million. On July 17, 1998, the Prices moved to reinstate their state-court action, but they did not provide any notice of that motion to the defendants. The state court reinstated the case on July 20, 1998, again without notice to either defendant. For the next year and a half, no effort was made to notify the defendants of the reinstated state-court proceedings.

On April 11, 2000, Charles Price filed motions for default judgment against the defendants, stating that process had been served in June 1993 and the defendants had subsequently failed to appear or respond; the motions said nothing about the circumstances of the voluntary dismissal and were not served on the defendants. The court entered default judgments against the defendants on April 26, 2000, and scheduled an evidentiary hearing on damages. At that point, the court ( not Price's attorney) forwarded a notice of the damages hearing to Lederle Laboratories at the address on the original summons served in 1993. On July 7, 2000, the notice was returned to sender, stating “no such office in state.” As it turned out, the address on the original summons had incorrectly attributed Lederle's New York address to New Jersey, but the post office had delivered it to the New York address anyway, presumably based on the New York zip code. Price's attorney made no attempt to notify Lederle or American Cyanamid of the reinstated proceedings, the default judgment motions, or the damages hearing. The hearing went forward on June 16, 2000, and the court awarded $5 million to Charles Price.

The default judgments languished in state court for approximately four years until Price initiated garnishment proceedings on June 1, 2004. At that time, Price provided the state court with a new address at which to serve the defendants, that of the registered agent for American Cyanamid and Lederle. Process for the garnishment proceedings was served on June 14, 2004, marking the first time since June 23, 1993, that the defendants received any notice of the proceedings that were taking place in Indiana state court.

On June 22 the defendants jointly filed a notice of removal to federal court and the case was removed.² Price challenged the removal as untimely and sought a remand to state court. The district court denied remand, holding that the removal was timely because the defendants had no notice that the previously dismissed case had been reinstated until a week before they sought removal. The district court then vacated the default judgments due to Price's failure to comply with notice requirements under Indiana law. The defendants moved for summary judgment on statute of limitations grounds; the district court granted the motion, holding that the two-year statute of limitations had expired during the intervening years between the voluntary dismissal and the reinstatement of the lawsuit.

Price v. Wyeth Holdings Corp., 505 F.3d 624, 626–28 (7th Cir.2007) (emphasis in original; original footnotes omitted); Appendix to Appellant's Brief (“App.”) at 955–58.

On May 9, 2006, approximately two months after the district court decision granting summary judgment to the vaccine defendants, Price, by new counsel, filed this legal malpractice action against Kuchaes. Price alleged that he suffered monetary damages as a proximate result of Kuchaes's failure to timely pursue the loss of consortium claim against the vaccine defendants. Meanwhile, Kuchaes initiated the appeal of the district court decision and argued the appeal before the Seventh Circuit on December 4, 2006.

On April 24, 2007, the Prices filed a voluntary petition for Chapter 13 bankruptcy in the United States Bankruptcy Court for the Eastern District of Tennessee, where they resided. In their bankruptcy petition and schedules, the Prices did not list as potential assets either the malpractice action against Kuchaes or the vaccine litigation that remained pending on appeal. On June 18, 2007, a meeting of the Prices' creditors was held, and on July 17, 2007, an order confirming the Chapter 13 plan was entered.

On September 20, 2007, the Seventh Circuit issued its opinion, affirming summary judgment for the vaccine defendants with the following summation of its holding:

Price's attorney takes the extraordinary position that his ex parte reinstatement of the lawsuit was perfectly appropriate under Indiana law. It certainly was not. The defendants were entitled to notice of the motion to reinstate and all subsequent proceedings under Indiana's trial procedure rules; ex parte conduct of this sort also violates Indiana's Rules of Professional Conduct for attorneys. We affirm the orders of the district court and order Price's attorney to show cause why he should not be sanctioned for filing this frivolous appeal. We also direct the clerk of this court to transmit a copy of this opinion to the Indiana Supreme Court Disciplinary Commission for any action it deems appropriate.

505 F.3d at 626. The Seventh Circuit also explained, regarding the statute of limitations issue:

Price ... contends that the statute of limitations was tolled when he filed with the Vaccine Court in July 1994. But this was five months after the two-year limitations period had expired (the claim accrued no later than February 3, 1992). Because no intervening occurrence tolled the two-year statute of limitations, the district court properly concluded that his claim was barred under Indiana law.

Id. at 633.

On or about June 2, 2008, Price responded to interrogatories from Kuchaes in the malpractice action and disclosed his pending bankruptcy. On June 26, 2008, Price was deposed and again acknowledged that he had filed for bankruptcy in 2007.

In December 2008, Price and Kuchaes filed cross-motions for summary judgment in the malpractice action and accompanying designations of evidence. Price argued that he was...