Seevers v. Arkenberg

• Decision Date: 06 December 1989
• Docket Number: No. NA 87-15-C.,NA 87-15-C.
• Citation: 726 F. Supp. 1159
• Parties: Shawn SEEVERS and Gloria Seevers, Plaintiffs, v. Franklin W. ARKENBERG, Defendant.
• Court: U.S. District Court — Southern District of Indiana

726 F. Supp. 1159

Shawn SEEVERS and Gloria Seevers, Plaintiffs, v. Franklin W. ARKENBERG, Defendant.

No. NA 87-15-C.

United States District Court, S.D. Indiana, New Albany Division.

December 6, 1989.

COPYRIGHT MATERIAL OMITTED

William E. Goering, II, Eckert, Alcorn, Goering & Colussi, Madison, Ind., for plaintiffs.

Tom G. Jones, Jones, Loveall, Johnson & Bailey, Franklin, Ind., James E. Bourne, Wyatt, Tarrant, Combs & Orbison, New Albany, Ind., for defendant.

ENTRY

BARKER, District Judge.

In The Trial, Franz Kafka depicts the plight of Joseph K., a young man entangled in the arcane and inscrutable webs of the law. Unable to navigate "the system"'s labrinthine ways on his own, Joseph K. implores the aid of a distinguished yet equally cryptic attorney. Instead of illuminating his client's situation, however, the attorney only compounds the darkness. Thus the legal system, which should mediate between an individual and society, itself became a vehicle of alienation used by the attorney against his own client.

The present case, though not as fantastic as Kafka's version, uncomfortably echoes the estrangement produced when attorneys manipulate the law to beguile laymen. Here the plaintiffs, Gloria and Shawn Seevers, believed defendant Arkenberg to be their champion and guide in the legal arena, until events revealed a startling metamorphosis: Arkenberg had not protected the plaintiffs because, unbeknownst to them, he represented an adverse interest. This situation, detailed below, gave rise to the present action.

The Seevers have charged Arkenberg with malpractice, deceit, fraud, breach of an equitable duty, and a civil rights violation. The defendant has moved for summary judgment on all of the charges except the civil rights claim, which he has moved to dismiss. Arkenberg's principal defenses are that collateral estoppel prevents the litigation of these issues because the plaintiffs litigated and lost them in state court, and that the claims are barred by the statute of limitations. For the reasons articulated below, the court GRANTS the motion to dismiss Count V, and GRANTS the defendant summary judgment on Count I, but DENIES summary judgment on Counts II-IV.

Background

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment shall be entered if

the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

The purpose of Rule 56 is to "isolate and dispose of factually unsupported claims or defenses." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Goka v. Bobbitt, 862 F.2d 646, 650 (7th Cir.1988). If the nonmovant bears the burden of proof at trial on a dispositive issue, Rule 56 directs him to adduce specific facts demonstrating that the issue is genuinely in dispute:

The plain language of Rule 56(c) mandates the entry of summary judgment ... against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be "no genuine issue as to any material fact," since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.

Id. 477 U.S. at 322-23, 106 S.Ct. at 2552.

The burden thus placed upon the nonmovant is not unduly onerous, however, because "the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986). The facts in the present case, construed favorably for the Seevers, are as follows:

In January of 1983 Gloria and William Seevers consulted with attorney Arkenberg about an intended dissolution of their marriage. The Seevers wanted to handle the dissolution and disposition of property amicably, so they decided to engage a single attorney to do the legal work, rather than retaining separate counsel. Arkenberg seemed the natural choice for this common representation, because he had previously represented the Seevers in connection with their landfill business; he was their "family lawyer" and, like a country doctor, had been consulted to remedy all their legal ills. The defendant apparently agreed to the joint representation provided that no conflict of interests arose, while cautioning that conflict would necessitate separate representation.¹ Subsequent events show that in undertaking this double representation, Arkenberg had grabbed the tiger by the proverbial tail. The record reflects that the Seevers basically agreed upon how the property should be divided, and simply wanted Arkenberg to prepare papers giving legal effect to the agreement.² The Seevers consulted with Arkenberg several times, sometimes together and sometimes separately, concerning the preparation of what came to be styled the "Guaranty Agreement" (or "the Agreement"). At some point during this time the Seevers' son Shawn also became involved in the discussions.³

Consequent to these meetings Arkenberg drafted the Guaranty Agreement; this document references a "Property Settlement Agreement" ("PSA"), and grants Shawn Seevers a remainder interest in fee simple in the property described in the PSA. The Guaranty Agreement also provides that upon William Seevers' death, Shawn will pay Gloria either $300 per week or $20,000 total. This provision obviously contemplates that Shawn will have come into possession of the real estate detailed in the PSA. All three of the Seevers signed this document, but Arkenberg never filed it.

The referenced PSA effects a curious division of the Seevers' property. While Gloria received a used Cadillac and a player piano, William received title to over $1 million worth of real estate, which is described in Schedule "A". One reason that the property was split in this seemingly inequitable manner was that the landfill company constituted the bulk of the Seevers' assets, and they did not want to break it up. The business had been in the family for several generations, and it was intended that Shawn continue the business after William's death. More importantly, Gloria and Shawn believed the PSA would be read in conjunction with the Guaranty Agreement, and that the real estate would ultimately vest in Shawn, who in turn would look after his mother. Arkenberg, responding to a question from Shawn, opined that the Guaranty Agreement was a "good deal" for all concerned.

Two days before the dissolution hearing, Gloria spoke with Arkenberg and expressed trepidation at attending the hearing, because she feared William would be present. Arkenberg said he did not know if William would attend, and promised to meet Gloria outside the court house on the day of the hearing to tell her if William was there. William did not appear, and Arkenberg accompanied Gloria into court and they sat down at the same table together. Though Arkenberg has subsequently declared that he was representing only William at that hearing,⁴ it seems clear that Gloria thought he was representing her as well. When the presiding judge evidenced surprise at the allocation of property, Gloria explained that she did not want the landfill business to be split up, and the judge accepted this explanation.⁵ No record of these proceedings was made.

Approximately one year later, William Seevers decided to sell his business to Rumpke of Indiana Corporation, a competitor. The Seevers' landfill business was apparently stagnating, in part because illness precluded William from running it, and Shawn (who had been managing the business) had been dismissed by William after a falling-out. The attorney who negotiated the sale to Rumpke was none other than Franklin Arkenberg who, having personally drafted the un-filed Guaranty Agreement, knew that the Seevers had intended that Shawn have a remainder interest in fee simple for the landfill real estate as part of the dissolution settlement. Arkenberg, however, took no steps to inform either Gloria or Shawn of this development,⁶ and drafted a sale agreement with Rumpke representing that William Seevers was the sole owner of the real estate (which he was because Arkenberg failed to file the Guaranty Agreement) and had full authority to convey its title.⁷ Upon learning that the landfill acreage had not been included in the legal descriptions presented to the state court at the dissolution hearing, Arkenberg secured a Nunc Pro Tunc decree (which he apparently typed himself) from the state court which conveyed title to that land to William. The plaintiffs were given no notice of this proceeding.⁸ Arkenberg argues that there was nothing underhanded in obtaining the Nunc Pro Tunc decree because it merely stated what all parties had previously agreed to, namely that the real estate would go to William. This assertion is disingenuous. Had the Guaranty Agreement been filed, the Nunc Pro Tunc decree would have been consistent with the terms of Gloria and William's dissolution negotiations. But when coupled with the pending sale to Rumpke and the fact that the Guaranty Agreement had not been filed, the Nunc Pro Tunc decree effectively cut off both Shawn's remainder interest and Gloria's allowance.

The consequences of Arkenberg's actions are as dismal as they are predictable. When William Seevers died in 1985,⁹ Shawn and Gloria learned that their rights to the family business — for which he had left school, and to which she had given her life's energy — no longer existed, and that the very man they had trusted to protect these interests had been instrumental in taking them away.¹⁰ Unlike Joseph K., however, the plaintiffs did not slit their throats in despair, but rather filed suit to regain their...