Timmerman v. Eich
| Decision Date | 12 September 2011 |
| Docket Number | No. C 09–3072–MWB.,C 09–3072–MWB. |
| Citation | 809 F.Supp.2d 932 |
| Parties | Dean TIMMERMAN, Ann Timmerman, and Larry Eide, solely in his capacity as Chapter 7 Bankruptcy Trustee, Plaintiffs, v. Ronald F. EICH, R. Patrick Eich, and Eich Law Firm, P.C., Defendants. |
| Court | U.S. District Court — Northern District of Iowa |
OPINION TEXT STARTS HERE
Jay Elliott Denne, Stanley E. Munger, Munger, Reinschmidt & Denne, Sioux City, IA, for Plaintiffs.
David Stubstad, Michael L. Schleich, Fraser Stryker PC LLO, Omaha, NE, for Defendants.
In this action, the plaintiff farmers assert that their bankruptcy attorneys were professionally negligent in their bankruptcy case and breached warranties about their qualifications to litigate bankruptcy matters. The bankruptcy attorneys have moved for summary judgment on various grounds, but the central one is that the farmers caused their injuries through their own fraudulent acts. Thus, in lay terms, the farmers call the bankruptcy attorneys stupid, and the bankruptcy attorneys call the farmers liars. Perhaps it is fortunate that the arguments have been framed in legal argot, not schoolyard vernacular.
I will not attempt here an exhaustive dissertation on the undisputed and disputed facts in this case. Rather, I will set forth sufficient of the facts, both undisputed and disputed, to put in context the parties' arguments concerning the defendants' motion for summary judgment. Unless expressly indicated otherwise, the parties agree that the facts stated are undisputed. 1
Unless circumstances dictate otherwise, I will identify plaintiffs Dean and Ann Timmerman separately as Dean and Ann and plaintiff Larry Eide, the Chapter 7 bankruptcy case trustee, separately as “the Trustee,” but all three plaintiffs collectively as “the Timmermans.” I will identify defendants Ronald F. Eich, R. Patrick Eich, and the Eich Law Firm, P.C., collectively as “the Eichs.”
Dean and Ann have been involved in farming since the early 1970s. By 2005, Dean and Ann farmed 4,000 to 5,000 acres, most of it leased land. American National Bank (ANB) financed their farming operation and had been their only bank for many years. In 2006, and for many year before that, United Ag Processors (UAP) supplied Dean and Ann with everything they needed for their crop inputs, including fertilizer, chemicals, and seed. Dean had an agreement with UAP to pay UAP for his fertilizer, chemicals, and seed for the 2005 crop year by January 12, 2006.
In January 2006, three days before Dean's payment was due to UAP, the manager of the UAP plant and one of the salesmen came to see Dean. At that time, Dean wrote a check to UAP for more than $400,000.00. ANB refused to honor the check, however, and returned it to UAP. The parties agree that, if Dean did not pay UAP, he would not have had an alternate supplier available for his 2006 crop, and he also needed money from ANB in order to pay his cash rents, which were due on March 1, 2006. Thus, in January 2006, Dean was already suffering what he described as “very high stress” from the financial pressures on his farming operation from UAP, ANB, and his landlords.
In mid-February of 2006, Dean received a call from Mr. Koster, his banker with ANB. Mr. Koster told Dean that he and Ann were going to have to declare bankruptcy, but that if they did, then ANB would advance them money for the next crop year. The parties agree that ANB wanted Dean and Ann to file a Chapter 7 bankruptcy. At some point, it is not clear from the parties' statements of facts whether it was in the same telephone call, Mr. Koster suggested that Dean talk to the bank's lawyer. Dean did talk to the bank's lawyer, who referred him to an attorney in Sioux City. Dean and his son met with that attorney and discussed what would be involved in filing a bankruptcy, but ultimately decided not to retain that attorney, because of the distance between the Timmerman residence and Sioux City. Instead, Dean sought a local attorney, presumably meaning one in the Sac County/Carroll County area. 2
On February 21, 2006, Dean met with defendant Ron Eich, an attorney with the Eich Law Firm in Carroll, Carroll County, Iowa, and the Eich Law Firm agreed to represent Dean and Ann in their bankruptcy proceedings. The parties agree that Dean never signed a fee agreement, and the Timmermans contend that the Eichs never informed Dean or Ann of what the Eichs' hourly rate would be. Dean brought the Eichs all of the farm account books, bank statements, receipts, lease papers, and financial paperwork in Dean and Ann's possession for the years 2005 and 2006. Dean and Ann assert that they relied on the Eichs to prepare the appropriate bankruptcy documents based on the information that they had provided. Dean asserts that the Eichs never asked him for any more information or about any transactions in the prior two years. He also asserts that he and Ann just turned everything over to the Eichs. Dean and Ann eventually signed the schedules and bankruptcy petition electronically, although Ann testified that she personally went to the Eichs' law office to sign the original petition and schedules, and that she was given the impression that all of the appropriate information was in them, based on what they had provided to the Eichs. Ann also contends that she was not given time to review the filings before signing them, but that she did review them afterwards. Dean did not review the filings before signing them.
On March 15, 2006, notwithstanding that ANB wanted Dean and Ann to file a Chapter 7 (liquidation) petition, the Eichs actually filed a voluntary Chapter 12 (family farm reorganization) petition for them in the United States Bankruptcy Court for the Northern District of Iowa. The Eichs maintain that Ann would not consent to the filing of a Chapter 7 petition. The Timmermans assert that, despite the requirement that Chapter 12 debtors go through credit counseling prior to the filing of the petition, the Eichs did not mention that counseling to Dean or Ann until after the petition was filed. They also assert that, despite the Eichs signing under oath that they had informed Dean and Ann about the kinds of relief available under the various bankruptcy code chapters and their eligibility to file under each chapter, the Eichs never did so.
The Timmermans contend, and the Eichs admit, that during the same month that the Chapter 12 petition was filed, the Eichs told Dean and Ann to empty their bank accounts down to a minimal ($50) balance and to deposit the funds, instead, into the Eichs' trust account, and Dean and Ann did deposit $9,379 into the Eichs' trust account; that the Eichs did not inform Dean or Ann about what the Eichs would be doing with their money; that Dean and Ann did not authorize the Eichs to do anything with the money; that Dean and Ann also deposited in the Eichs' trust account $112,00 in proceeds from cashing in Dean's mother's life insurance policy, also on the advice of the Eichs; and that the Eich Law Firm took a $15,000 fee out of those deposits, but had not previously billed Dean or Ann for the pertinent work.
On February 2, 2007, the Eichs converted Dean and Ann's bankruptcy petition from a Chapter 12 petition to a Chapter 7 petition, because the Eichs had been unable to get a reorganization plan confirmed. The Timmermans contend that, although the Eichs did discuss the possibility of a conversion of the bankruptcy from Chapter 12 to Chapter 7, the Eichs filed the conversion pleading without authorization from the Timmermans. The Timmermans also contend that the Eichs did not discuss with them any other options, nor did they discuss the possible consequences of any other options.
At a meeting of creditors in the Chapter 12 proceeding on April 11, 2006, and again in a meeting of creditors in the Chapter 7 proceeding on March 19, 2007, Dean and Ann confirmed the accuracy of the schedules and statement of affairs in the bankruptcy filings. There is now no dispute that the schedules and statement of affairs did not...
To continue reading
Request your trial
-
Blumenthal v. Cronk (In re M & M Mktg., L.L.C.)
...harm to a debtor when the debtor himself or herself colluded in or engaged in the wrongful conduct alleged." Timmerman v. Eich, 809 F. Supp. 2d 932, 952 (N.D. Iowa 2011). In this case, the trustee is asserting these state-law claims on behalf of the debtors. He admits that Mr. Anselmo, as t......
-
Du Trac Cmty. Credit Union v. Hefel (In re Hefel)
...if there is a genuine dispute as to those facts." Ricci v. DeStefano, 557 U.S. 557, 129 S. Ct. 2658, 2677 (2009); Timmerman v. Eich, 809 F. Supp. 2d 932, 941 (N.D. Iowa 2011). Summary judgment is particularly appropriate when only questions of law are involved. Cremona v. R.S. Bacon Veneer ......