Williams v. Mordkofsky

• Decision Date: 17 April 1990
• Docket Number: No. 89-7133,89-7133
• Citation: 901 F.2d 158,284 U.S.App.D.C. 52
• Parties: David R. WILLIAMS, et al., Appellants v. Harold MORDKOFSKY, et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 158

901 F.2d 158

284 U.S.App.D.C. 52

David R. WILLIAMS, et al., Appellants v. Harold MORDKOFSKY, et al.

No. 89-7133.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 21, 1990.

Decided April 17, 1990.

Robert M. Adler, Washington, D.C., for appellants.

Jacob A. Stein, with whom Stein, Mitchell & Mezines, Washington, D.C., were on the brief, for appellees.

Before BUCKLEY, Circuit Judge, ROBINSON, Senior Circuit Judge, and WILLIAM H. TIMBERS, ^* Senior Circuit Judge for the Second Circuit.

Opinion for the court filed by Circuit Judge TIMBERS.

TIMBERS, Circuit Judge:

Appellants in this legal malpractice action are David R. and Deanna M. Williams and the corporation they own jointly, Intermountain Broadcasting, Inc. ("Intermountain"). Appellees are Harold Mordkofsky, his law firm, Blooston & Mordkofsky, and several other partners of that firm.

Appellants appeal from an order entered on May 5, 1989, in the U.S. District Court for the District of Columbia, Oliver Gasch, District Judge, granting summary judgment in favor of appellees on all counts. The district court held that appellants' claims of negligence, breach of contract, breach of third-party beneficiary contract and breach of implied contract were time-barred by the three-year statute of limitations applicable to such claims in the District of Columbia. In addition, the court held that appellants' claim of "intentional breach of duty and conflict of interest" warranted dismissal on the merits.

On appeal, appellants assert: (1) that the court erred in its construction of the District of Columbia statute of limitations and failed to draw relevant factual inferences in their favor, as it was required to do on appellees' motion for summary judgment; and (2) that all of the court's rulings with respect to the breach of duty count were erroneous.

For the reasons that follow, we affirm the district court's order in all respects.

I.

We summarize only those facts and prior proceedings believed necessary to an understanding of the issues raised on appeal. Since we are reviewing a summary judgment in favor of appellees, we view the evidence in the light most favorable to appellants.

David R. and Deanna M. Williams, residents of Utah, are husband and wife. For many years Mr. Williams owned and operated Industrial Communications, a company which provided common carrier mobile radio facilities licensed by the Federal Communications Commission ("FCC"). From 1969 to 1985, Harold Mordkofsky and his firm were counsel to Industrial Communications. The Williamses own and operate two other corporations which play a part on the instant appeal: appellant Intermountain and Utah Telecourier, Inc. ("UTI"). In the instant action, the Williamses sued in their capacities as shareholders of Intermountain and UTI.

The Williamses were successful in the common carrier field, but desired to move into the broadcast field. They apparently organized Intermountain for that purpose. In 1981, an opportunity arose for them; the FCC announced that it was accepting applications for a license to construct a television station in Salt Lake City, Utah. In connection with that application, Intermountain retained the law firm of Arent, Fox, Kintner, Plotkin & Kahn ("Arent Fox"), which was experienced in such matters. At the suggestion of Arent Fox, the Williamses included an "integration statement" in the application, i.e., a commitment to devote full-time to the management of the station. The FCC looks favorably on integration statements. The Williams' commitment to full-time management, however, probably existed independently of the expediency of the statement.

Intermountain filed the television application on March 10, 1981. In late 1982, while the application was still pending, an opportunity to construct a cellular radio facility arose. The Williamses, through UTI, decided to apply. They asked Mordkofsky to prepare the application. Mordkofsky knew that the UTI application, too, would be more likely to succeed if it contained a commitment that the Williamses would devote full-time to the facility. When Mordkofsky suggested the inclusion of an integration statement in the UTI application, Mr. Williams told him of their wish to be full-time broadcasters and asked if it would not be better to qualify the statement in the UTI application to reflect that wish. Mordkofsky told him that that would not be necessary; that they could always withdraw the UTI application if the FCC granted them the television license. He added that "two different versions" of the FCC would act on the applications so that the conflicting statements would not raise an issue of credibility. Based on Mordkofsky's statements, the Williamses filed the UTI application containing the conflicting integration statement. It is not disputed that Arent Fox received a copy of the UTI application soon after the November 8, 1982 filing date and did not react to the application. Pursuant to FCC rules, the television application was updated to include mention of the cellular application.

On August 21, 1984, Mr. Williams testified before Administrative Law Judge ("ALJ") Kuhlmann in support of Intermountain's television application. He restated his intention to devote full-time to the station's management. A competing applicant on cross-examination asked about the conflicting UTI integration statement. Mr. Williams replied that he always intended the television application to have priority. That evening, attorneys from Arent Fox told him that due to the conflicting statements the television application was in "deep trouble" unless he could explain the inconsistency to the FCC. Mr. Williams replied that the conflict was due to Mordkofsky's advice and that, in view of the long relationship between the Williamses and Mordkofsky, there would be no problem getting Mordkofsky to explain.

On November 5, the ALJ requested an additional hearing "to determine whether Intermountain misrepresented or lacked candor" in its failure to report the conflicting statements. Arent Fox did a substantial amount of work in the attempt to straighten out the confusion, for which it billed Intermountain a total of $7,235. The nature of the work was clearly designated in the materials sent to Intermountain during that period.

Prior to the hearing, Mordkofsky submitted a written declaration as requested but failed to state with complete candor that the conflicting UTI integration statement was inserted solely at his suggestion. At the hearing, on January 7, 1985, Mordkofsky essentially reiterated the statements from his declaration. As a result, his testimony was not helpful. On May 20, 1985, the ALJ issued an opinion denying Intermountain's application. He refused to give Intermountain credit for its integration statement and assessed a demerit for its perceived lack of candor.

Intermountain decided to appeal the decision to the FCC review board. In connection with the appeal, Intermountain again sought a statement from Mordkofsky explaining his actions in 1982. Mordkofsky at first refused unless the Williamses agreed to release him from liability. Later, after the Williams' new counsel advised him that he might be in violation of the Code of Professional Responsibility as a result of that refusal, he did issue a statement which took some responsibility for inserting the conflicting statement in the UTI application. Nevertheless, on December 10, 1985, the review board turned down Intermountain's appeal. Intermountain initially sought further review en banc by the review board but later withdrew the appeal in exchange for a settlement agreement with another applicant.

Appellants commenced the instant action on January 7, 1988, alleging five counts of malpractice: (1) negligence; (2) intentional breach of duty and conflict of interest; (3) breach of contract; (4) breach of third-party beneficiary contract; and (5) breach of implied contract. In granting appellees' motion for summary judgment on May 5, 1989, the district court dismissed counts 1 and 3-5, holding that they were brought more than three years after the cause of action accrued, and thus were barred by the relevant District of Columbia statute of limitations. D.C.Code Sec. 12-301 (1981). As part of the summary judgment, the court dismissed count 2 on the merits.

This appeal followed.

II.

In reviewing an appeal from a summary judgment, we assess the entire record de novo. Riddell v. Riddell Washington Corp., 866 F.2d 1480, 1485 (D.C.Cir.1989). We view the record in the light most favorable to the nonmoving party. American Federation of Gov't Employees v. Skinner, 885 F.2d 884, 893 (D.C.Cir.1989). However, " '[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.' " Riddell, supra, 866 F.2d at 1484-85 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986)).

III.

With that standard in mind, we turn to the question whether counts 1 and 3-5 of the complaint are time-barred.

(A)

Subject matter jurisdiction here is premised on the diverse citizenship of the parties. 28 U.S.C. Sec. 1332 (1988). It is uncontroverted that we look to the law of the District of Columbia for the rule of decision on this appeal. We apply the District of Columbia's law of limitations as well. Kuwait Airways Corp. v. American Security Bank, 890 F.2d 456, 460 (D.C.Cir.1989). In the District of Columbia, the limitations period for count 1, which sounds in negligence, and counts 3-5, which sound in contract, is three years "from the time the right to maintain the action accrues." D.C.Code Sec. 12-301 (1981).

When the occurrence of a harmful act and the plaintiff's awareness of that act coincide, determination of the time of accrual is simple. Such coincidences in legal malpractice actions, however, are rare....