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Zell v. Klingelhafer

United States District Court, S.D. Ohio, Eastern Division

January 8, 2018

EILEEN ZELL, Plaintiff,
KATHERINE M. KLINGELHAFER, et al., Defendants.




         This matter is before the Court on two motions: Plaintiff's Motion for a New Trial, New Findings, and Other Relief (ECF No. 211), and Plaintiff's Motion to Amend the Record (ECF No. 223). For the reasons set forth below, the Motion for a New Trial, New Findings, and Other Relief is DENIED and the Motion to Amend the Record is GRANTED.

         I. BACKGROUND

         This case arises out of a $90, 000 promissory note between Plaintiff Eileen Zell and her nephew, Michael Mindlin, made in December 2000. (Compl., ECF No. 2 at ¶ 13). While planning her strategy to collect on the note, Plaintiff engaged a law firm, Frost Brown Todd, LLC (“FBT”) to advise her. (Id. at ¶ 14). Before she could bring suit, however, Mindlin filed his own affirmative action for declaratory relief in Franklin County, Ohio. Based on advice from FBT attorneys, Plaintiff consented to the jurisdiction of the Ohio courts and participated in Mindlin's case. From the pre-lawsuit planning stage through the conclusion of her nephew's case and subsequent appeals, Plaintiff was represented personally by a succession of FBT attorneys. At first, Plaintiff was represented by Patricia Laub, a partner at FBT, assisted by Shannah Morris and Douglas Bozelle, and overseen by Joseph Dehner. Ms. Laub's personal representation of Plaintiff ended on October 22, 2010, when Ms. Morris assumed primary responsibility. On May 6, 2011, Plaintiff requested that FBT replace Ms. Morris, and Mr. Rupert took over four days later. (Id. at ¶¶ 39-40). Mr. Rupert personally represented Plaintiff from May 10, 2011 through March 28, 2012, at which time he moved to Seattle. (Id. at ¶ 57).

         Katherine Klingelhafer also worked on Plaintiff's case, drafting at least two research memoranda on July 13 and August 8, 2011, addressing the choice of law issue related to Plaintiff's note. (Id. at ¶¶ 123, 125-26, 135-38, 140, 146). After Mr. Rupert's departure, Mr. Dehner took over personal representation of Plaintiff, including representing Plaintiff on appeal, and provided his opinion on her seeking review by the Ohio Supreme Court. (Id. at ¶¶ 59, 151). Mr. Dehner's last interaction with Plaintiff as her attorney was August 13, 2012, after which he informed her that FBT was withdrawing from her case. (Id. at ¶¶ 59-61).

         Plaintiff ultimately lost her case against her nephew. Judge Richard Sheward of the Franklin County Court of Common Pleas, found that, because she attempted to recover on her note more than six years after its execution, Plaintiff's claim was not timely under Ohio law, and the court thus entered judgment against her. Mindlin v. Zell, No. 10CVH-14965 (Franklin Cty. C.P. Oct. 12, 2011). On appeal, the Court of Appeals for the Tenth Appellate district agreed, and further rejected Plaintiff's alternative arguments on the basis that they were not raised at the trial level, and thus could not be considered on appeal. Mindlin v. Zell, No. 11AP-983 (Ohio App. Aug. 7, 2012). The Tenth District twice denied Plaintiff's requests that it reconsider its decision. Mindlin v. Zell, No. 11AP-983 (Ohio App. Oct. 25, 2012); Mindlin v. Zell, No. 11AP-983 (Ohio App. Dec. 31, 2012). Plaintiff opted not to seek review by the Ohio Supreme Court.

         In her Complaint, Plaintiff alleged at least two distinct acts of malpractice by FBT and several of the attorneys at the firm related to their representation of her on the promissory note matter. First, she argued that Defendants erroneously advised her that her note would be subject to Missouri's ten-year statute of limitations, rather than Ohio's six-year period, even if her case were adjudicated in Ohio. (Id. at ¶¶ 81-82, 84). Based on these representations, Plaintiff alleged that she rejected an offer to settle the case against her nephew for $63, 000. (Id. at ¶¶ 101-02, 104, 106-07). She further agreed to submit to the jurisdiction of the Ohio court and to participate in the declaratory action filed by her nephew, with adverse results. (Id. at ¶¶ 74-76, 104, 123). As the appellate court explained, “by choosing Ohio as the forum for pursuing her action, [Plaintiff] was subject to Ohio's statute of limitations even if her claim would be timely in Missouri.” Mindlin v. Zell, No. 11AP-983, ¶ 15 (Ohio App. Aug. 7, 2012). Next, Plaintiff alleged that Defendants erred when they failed to argue before the trial court any alternative or tolling arguments under Ohio law. (ECF No. 2 at ¶¶ 72, 78); see Mindlin v. Zell, No. 11AP-983, ¶¶ 17-18 (“Appellant did not, however, raise any of these [alternative] arguments [as to why the promissory note was timely under Ohio law] in the trial court.

         In ruling on Defendant's motion for Summary Judgment, this Court dismissed Mrs. Zell's claims against Ms. Laub, Mr. Bozelle, and Ms. Morris, but permitted her claims against Ms. Klingelhafer, Mr. Rupert, Mr. Dehner, and FBT to proceed. (ECF No. 121).

         A bench trial on the remaining claims commenced on April 10, 2017. (ECF No. 185). The proceedings lasted four days. At the conclusion of Plaintiff's case, Defendants moved for judgment on partial findings pursuant to Rule 52(c) of the Federal Rules of Civil Procedure. (Trial Trans., Vol. 5, ECF No. 222 at 1019). Rule 52(c) provides:

If a party has been fully heard on an issue during a nonjury trial and the court finds against the party on that issue, the court may enter judgment against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue. The court may, however, decline to render any judgment until the close of the evidence. A judgment on partial findings must be supported by findings of fact and conclusions of law as required by Rule 52(a).

         After consideration, this Court orally presented its judgment on partial findings as well as its findings of fact and conclusions of law on April 14, 2017. (ECF No. 222, 1064-1076). It rejected all three claims: the legal malpractice claim (Id. at 1072), the breach of fiduciary duty claim (Id. at 1074), and the breach of contract claim (Id. at 1075).

         As for the malpractice claim, the Court first noted that “[t]o establish a cause of action for legal malpractice, a plaintiff must show the existence of an attorney-client relationship giving rise to a duty, a breach of that duty, and damages proximately caused by the breach.” (Id. at 1065 (citing Ratonel v. Roetzel & Andress, L.P.A., 2016-Ohio-8013, ¶ 6, 147 Ohio St.3d 485, 486, 67 N.E.3d 775, 777 (Ohio 2016)). The firm itself could not be directly liable for legal malpractice, but may be vicariously liable when one or more of its principals or associates are liable for legal malpractice. (Id. at 1066 (citing Nat'l. Union Fire Ins. Co. of Pittsburgh v. Wuerth, 2009-Ohio-3601, ¶ 26, 122 Ohio St.3d 594, 600, 913 N.E.2d 939, 945 (Ohio 2009)). The Court found that each of the Defendants had an attorney-client relationship with Ms. Zell that gave rise to a duty, but determined that Mrs. Zell had not shown that Mr. Dehner, Ms. Klingelhafer, or Mr. Rupert breached their respective duties. (Id. at 1068-1070). The Court observed that FBT attorneys had, in fact, advised Mrs. Zell that the statute of limitations in Missouri was perhaps more generous than that of Ohio, and that she should consider seeking counsel in Missouri to advise her on the applicable law. (Id. at 1071-72). Under those circumstances, no legal malpractice claim could lie.

         To establish a breach of fiduciary duty, the Court noted that “a plaintiff must show the existence of a duty arising from a fiduciary relationship . . ., a failure to observe the duty . . . and . . . a resulting injury.” (Id. at 1072 (citing Franklin Park Lincoln-Mercury, Inc. v. Ford Motor Co., 530 F. App'x 542, 545 (6th Cir. 2013)). Mrs. Zell argued that FBT had a fiduciary duty to advise her-after the case was filed in Ohio but before Mrs. Zell was served-to file in Missouri or to evade service of process on the Ohio suit by retreating to Florida. (Id. at 1073). But, as with the malpractice claim, the breach of fiduciary duty claim failed because Mrs. Zell was advised of the statute of limitations issue in Ohio and “was told that if she wanted to pursue collection, then they needed to take immediate actions to determine whether the Missouri laws were more favorable from a limitation vantage point.” (Id.). Mrs. Zell's fiduciary duty claim therefore failed.

         Finally, as for the breach of contract claim, the Court noted that because none of the FBT attorney defendants were liable for legal malpractice, there can be no finding of breach of contract by FBT. (Id. at 1075).

         The case was dismissed with prejudice on April 21, 2017. (ECF No. 200).

         Plaintiff now moves for a “new trial, ” “new findings, ” “relief from the findings of fact and conclusions of law” presented at the conclusion of the bench trial, and “relief from th[e] Court's Judgment___” (ECF No. 211). Plaintiff also seeks to amend the trial record to correct ...

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