Wille v. Davis
Filing
129
MEMORANDUM AND ORDER granting 110 Defendants Motion for Summary Judgment. Signed by District Judge Richard D. Rogers on 6/17/15. (meh)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
VIRGIL WILLE,
Plaintiff,
v.
Case No. 11-4121-RDR
GRANT DAVIS,
Defendant.
MEMORANDUM AND ORDER
This is an action alleging legal malpractice.
Plaintiff
alleges that because of defendant’s negligence, fraud and breach
of fiduciary duty during the settlement of a case, plaintiff’s
legal interests in claims brought by his now deceased wife lost
settlement value.
The claims which were settled asserted that
two major drug companies failed to take measures to prevent
chemotherapy drugs from being diluted by a pharmacist.
Hundreds
of cases were brought by other plaintiffs with similar claims
and were settled according to a “Global Settlement Agreement.”
Currently, there are six other cases assigned to this court
with similar claims against defendant.
These cases have not
always been assigned to the undersigned judge.
This case is now
before the court upon defendant’s summary judgment motion.
The
predominant argument in defendant’s motion is that plaintiff’s
claims
are
barred
by
the
statute
of
limitations.
For
the
reasons outlined below, the court finds that plaintiff’s case is
untimely filed.
I.
SUMMARY JUDGMENT STANDARDS
Summary judgment is appropriate “if the movant shows that
there is no genuine dispute as to any material fact and the
movant
is
entitled
FED.R.CIV.P. 56(a).
the
evidence
light
most
and
to
judgment
as
a
matter
of
law.”
In applying this standard, the court views
all
favorable
reasonable
to
the
inferences
nonmoving
therefrom
party.
in
Spaulding
the
v.
United Transp. Union, 279 F.3d 901, 904 (10th Cir.) cert. denied,
537 U.S. 816 (2002).
Such a showing may be made with citation
“to
of
particular
depositions,
parts
documents,
materials
.
.
.
in
the
affidavits
record,
or
including
declarations,
stipulations . . . , admissions, interrogatory answers, or other
materials.”
FED.R.CIV.P. 56(c)(1)(A).
An issue of fact is
“genuine” if “there is sufficient evidence on each side so that
a rational trier of fact could resolve the issue either way.”
Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir.
1998).
The moving party may demonstrate an absence of a genuine
issue of material fact by pointing out a lack of evidence for
the other party on an essential element of that party’s claim.
Adams v. Am. Guar. & Liab. Ins. Co., 233 F.3d 1242, 1246 (10th
Cir. 2000)(quoting Adler, 144 F.3d at 671).
2
II. UNCONTROVERTED FACTS
The following facts are considered uncontroverted for the
purposes of defendant’s summary judgment motion.
A.
The suit against Eli Lilly and Bristol-Myers and its
settlement
On April 23, 2002, defendant’s law firm filed an action in
state court in Jackson County, Missouri on behalf of Evelyn
Wille
against
the
pharmacist
Robert
Courtney,
Company and Bristol-Myers Squibb Company.
that
Ms.
Wille
was
harmed
chemotherapy medication.
Evelyn Wille.
because
Eli
Lilly
and
The lawsuit alleged
she
received
diluted
Plaintiff is the surviving widower of
Ms. Wille died from cancer on February 17, 2007.
On November 5, 2002, Ms. Wille signed a disclosure of global
settlement with Eli Lilly and Bristol-Myers.
The disclosure
document stated that there were over 300 separate lawsuits and
that
defendant’s
law
firm
represented
plaintiffs in those lawsuits.
and
Bristol-Myers
were
the
majority
of
the
It further stated that Eli Lilly
making
a
joint
settlement
offer
to
resolve all of the cases and set aside money for future cases
filed against the companies.
the settlement agreement.
The disclosure makes reference to
By signing the disclosure, Ms. Wille
represented that she understood she had the right to “opt out”
of the settlement agreement and to pursue her claims separately.
She
also
represented
that
she
3
understood
that
her
right
to
receive funds would be determined by a Special Master according
to the terms of the settlement agreement.
Under those terms, a
settlement fund of not less than a specified amount or more than
a specified amount would be established, with the exact amount
to be determined through binding arbitration.
Bethune
&
Jones,
LLC,
further
acknowledged
204
that
P.3d
Tilzer v. Davis,
620
(Kan.
2009).
She
Lilly
Eli
617,
and
Bristol-Myers
each
offered Georgia Hayes (one of the plaintiffs bringing a similar
claim) a separate settlement of approximately $1.45 million to
resolve her case and Georgia Hayes would not be participating in
the distribution of funds by the Special Master.
Trial had
started in Georgia Hayes’ case when the global settlement was
reached.
Also on November 5, 2002, Ms. Wille signed a release and
settlement
agreement
which
stated
that
she
understood
the
process by which settlement amounts would be determined by the
Special Master and acknowledged that she had agreed to accept
the settlement amount determined by the Special Master as a full
and complete compromise of her claims.
On May 20, 2003, the Special Master Committee awarded Ms.
Wille
$176,415.92.
On
June
24,
2003,
Ms.
Wille
signed
a
settlement sheet acknowledging receipt of the settlement amount
minus attorney’s fees.
B.
The Tilzer case
4
Rita Tilzer was another client of defendant with a case
which was settled as part of the global settlement with Eli
Lilly and Bristol-Myers.
She died prior to the settlement and
her husband and children were substituted as plaintiffs.
The
Tilzer
but
plaintiffs
opted
into
the
settlement
agreement,
objected to the award recommended by the Special Master.
motion
to
enforce
the
settlement
and
a
motion
to
A
enforce
defendant’s attorney’s lien were filed in Missouri state court
in late 2003.
legal
Also in late 2003, the Tilzer plaintiffs filed a
malpractice
counterclaim
(later
defendant in Missouri state court.
withdrawn)
against
They also filed a separate
malpractice lawsuit against defendant in Kansas state court in
April 2004.
The malpractice action alleged that the global
settlement was an aggregate settlement and that defendant had
failed
Missouri
to
comply
Rules
of
with
the
disclosure
Professional
Conduct,
requirements
of
the
specifically
Rule
4-
1.8(g).1
The Tilzer plaintiffs lost at the district court level in
Kansas,
but
prevailed
before
decision dated April 3, 2009.
the
Kansas
Supreme
Court
in
a
The court decided that “the terms
1
This rule provides: “A lawyer who represents two or more clients shall not
participate in making an aggregate settlement of the claims of or against the
clients, or in a criminal case an aggregated agreement as to guilty or nolo
contendere pleas, unless each client gives informed consent, in writing
signed by the client.
The lawyer’s disclosure shall include the existence
and nature of all the claims or pleas involved and of the participation of
each person in the settlement.”
5
of the Global Settlement contained all the important features of
an aggregate settlement” and that “[r]ather than establishing a
non-aggregate settlement, the unavailability of the information
required to be disclosed by Rule 4-1.8(g) simply corroborated
that it was an aggregate settlement and rendered it impossible
for [defendant Davis] to obtain an informed consent under the
rule.”
Tilzer, 204 P.3d at 629.
5, 2009.
The mandate was issued on June
Defendant Davis petitioned the United States Supreme
Court for review, which was denied on November 2, 2009.
Davis
v. Tilzer, 558 U.S. 992 (2009).
The pleadings and proceedings in the Tilzer case were under
seal and restrictions were ordered to prevent the Tilzers from
contacting other clients of defendant.
After the Kansas Supreme
Court’s decision, there was continued opposition by defendant to
legal efforts by the Tilzers’ attorneys to obtain permission to
contact other clients of defendant in the diluted drug cases.
On
December
2,
2009,
the
contact defendant’s clients.
Tilzers
were
given
permission
to
Counsel for the Tilzers (who are
now counsel for plaintiff and filed this case for plaintiff)
contacted a limited number of defendants’ clients, but were not
aware
of
the
Wille
family
until
mid-July
2010.
Counsel’s
efforts to contact the Wille family were not successful until
August 2011.
This is when Virgil Wille first became aware of
the Tilzer case.
6
III.
THE COMPLAINT IN THIS CASE
This
alleges:
case
was
filed
on
September
29,
2011.
Plaintiff
that he and his deceased wife were represented by
defendant along with approximately 215 other persons with claims
against
Eli
aggregate
Lilly
and
settlement
Bristol-Myers;
demands
without
that
defendant
advising
his
made
clients,
including plaintiff and his deceased wife; that Georgia Hayes’
case, as the first case filed, was selected to go to trial first
among all of the cases; that settlement amounts were determined
according to tiers related to the timing of the claim and that
Georgia Hayes (the sole member in the first tier) received much
more in settlement than those with claims in the second and
third tiers; that defendant acted to conceal from plaintiff and
other claimants, the specific amounts awarded to all families,
how much money was distributed in total to all families, and the
criteria and methodology used to determining the awards; that
defendant
failed
to
disclose
serious
conflicts
of
interest
between defendant and each of his clients; and that defendant
had
a
strong
interest
in
persuading
each
of
his
clients
to
participate in the global settlement agreement so that he could
obtain his aggregate fee.
IV. THE BOOTH AND SCHMITZ DECISIONS
Both sides make reference to the decisions upon motions to
dismiss in two companion cases:
Booth v. Davis, 2010 WL 4160116
7
(D.Kan. 8/31/2010) and Schmitz v. Davis, 2010 WL 3861843 (D.Kan.
9/23/2010).
These cases were assigned to a different judge at
the time the decisions were written and filed.
The decisions
rejected dismissal upon statute of limitations grounds.
opinions
making
a
are
relevant
statute
of
here,
of
course,
limitations
because
argument.
The
defendant
is
statute
of
The
limitations argument has not been made previously in this case.
When assessing a statute of limitations argument upon a
motion to dismiss, the question before the court is whether “the
dates given in the complaint make clear that the right sued upon
has been extinguished.”
Aldrich v. McCulloch Prop., Inc., 627
F.2d 1036, 1041 n.4 (10th Cir. 1980); see also, Dummar v. Lummis,
543
F.3d
614,
619
(10th
Cir.
2008)(if
pivotal
question
for
application of statute of limitations is apparent on the face of
the
complaint,
dismiss).
the
issue
may
be
resolved
on
a
motion
to
As noted in Booth, the court may consider not only
the complaint itself, but also attached exhibits and documents
incorporated into the complaint by reference.
Booth, at *1
(citing Smith v. United States, 561 F.3d 1090, 1098 (10th Cir.
2009)).
In
Booth
and
Schmitz,
the
court
held
that
the
dates
provided in the complaint, exhibits, and incorporated documents
did not make clear that the plaintiffs’ injuries were reasonably
ascertainable until April 3, 2009.
8
In essence, the court found
that plaintiffs had not pleaded themselves out of court.
In the
decisions, however, the court did make a categorical statement
that the lawsuits, having been filed within two years of April
3, 2009, were timely.
Booth, 2010 WL 4160116 at *7; Schmitz,
2010 WL 3861843 at *6.
This was based upon the conclusion that
“until April 3, 2009 [the date of the Kansas Supreme Court’s
Tilzer
decision],
defendant’s
plaintiffs’
handling
of
the
reasonably apparent to them.”
V.
injury
if
aggregate
any,
arising
settlement
was
from
not
Id.
THE PARTIES’ ARGUMENTS
Defendant contends that the statute of limitations began
running for plaintiff prior to April 3, 2009.
Defendant also
contends that, even assuming that plaintiff’s injury was not
reasonably apparent until April 3, 2009, plaintiff’s action is
barred by the two-year statute of limitations.2
Plaintiff contends that the Booth and Schmitz decisions do
not control the outcome here because the court merely held that
those cases were timely filed because they were filed within two
years of April 3, 2009.
In Booth and Schmitz the court was not
faced with a situation in which the plaintiff had not learned of
the Tilzer case until 2011.
Plaintiff argues that plaintiff’s
claims accrued in 2011 when Virgil Wille was first contacted by
2
It is undisputed by the parties that the Kansas two-year
limitations contained in K.S.A. 60-513(a)(4) applies to this
though Missouri law governs the substance of plaintiff’s claims.
9
statute of
case, even
the Tilzers’ attorney, William Skepnek.
Plaintiff also argues
that defendant should be estopped from asserting a statute of
limitations
defense
because
of
defendant’s
efforts
after
the
Tilzer decision to withhold the identity of clients, such as
Virgil
Wille,
and
to
prevent
contact
between
the
Tilzer
attorneys and those clients.
VI.
PLAINTIFF’S CAUSE OF ACTION ACCRUED MORE THAN TWO YEARS
BEFORE THIS LAWSUIT WAS FILED.
There is no dispute that plaintiff’s cause of action in
this case is a tort action.
generally accrues when:
Under Kansas law, a tort action
“the act giving rise to the cause of
action first causes substantial injury, or, if the fact of the
injury is not reasonably ascertainable until some time after the
initial act, then the period of limitation shall not commence
until the fact of the injury becomes reasonably ascertainable to
the injured party. . .”
K.S.A. 60-513(b).
In Pancake House, Inc. v. Redmond By and Through Redmond,
716
P.2d
575,
579
(Kan.
1986),
the
court
reviewed
accrual
principles in the context of a legal malpractice action:
In general, a cause of action accrues, so as to
start the running of the statute of limitations, as
soon as the right to maintain a legal action arises.
The true test to determine when an action accrues is
that point in time at which the plaintiff could first
have filed and prosecuted his action to a successful
conclusion. Johnston v. Farmers Alliance Mutual Ins.
Co., 218 Kan. 543, 548, 545 P.2d 312 (1976); Yeager v.
National Cooperative Refinery Ass'n, 205 Kan. 504, 470
P.2d 797 (1970).
10
Depending upon the facts and circumstances of each
case, there are at least four theories which can apply
to attorney malpractice in Kansas as to when the
accrual of a cause of action occurs and the statute of
limitations begins to run. These include:
(1) The occurrence rule—the statute begins to run at
the occurrence of the lawyer's negligent act or
omission.
(2) The damage rule—the client does not accrue a cause
of action for malpractice until he suffers appreciable
harm or actual damage as a consequence of his lawyer's
conduct.
(3) The discovery rule—the statute does not begin to
run until the client discovers, or reasonably should
have discovered, the material facts essential to his
cause of action against the attorney.
(4) The continuous representation rule – the client’s
cause of action does not accrue until the attorneyclient relationship is terminated.
Plaintiff is relying upon the discovery rule and estoppel
principles to argue that his case is timely filed.
The court
rejects plaintiff’s discovery rule arguments for the following
reasons.
First, plaintiff does not identify a material fact
essential to his cause of action of which plaintiff was unaware
less than two years before he filed this action.
The “fact”
plaintiff claims he did not know was the Kansas Supreme Court’s
holding in Tilzer.
That ruling, however, was not a material
fact essential to plaintiff’s cause of action in this matter.
Rather, it was a legal holding in a case with similar facts.
Second, persons are presumed to know the law.
11
So, if a legal
holding could be a material fact for the purposes of determining
when
a
cause
of
action
accrued,
then
plaintiff
should
be
presumed to have known it when the legal holding was issued.
See Knight v. Myers, 748 P.2d 896, 901 (Kan.App. 1988)(implying
constructive knowledge of statute of limitations and therefore
of the fact of injury when the statute of limitations passed on
a claim); see also, FDIC v. Alexander, 78 F.3d 1103, 1107-08 (6th
Cir. 1996)(applying Ohio law, constructive knowledge of facts,
not actual knowledge of their legal significance, starts the
limitations period running).
It is undisputed that the Willes were aware of the terms of
their settlement with Eli Lilly and Bristol-Myers.
also
aware
in
2003
that
the
money
Evelyn
Wille
They were
received
in
settlement was vastly less than the amount received by Georgia
Hayes.
They were aware that it was a global settlement and that
a large number of plaintiffs would divide a fixed amount of
money.
Further, they knew what defendant told them regarding
the settlement.
of
fact
to
The court believes there is no material issue
dispute
that
plaintiff
was
aware
of
the
facts
essential to his cause of action more than two years prior to
filing this lawsuit.
12
VII. THERE IS AN ABSENCE OF EVIDENCE TO SUPPORT PLAINTIFF’S
CLAIM OF EQUITABLE ESTOPPEL.
The court is also convinced that there is no material fact
issue to support plaintiff’s claim of estoppel.
In Kansas,
equitable
its
estoppel
exists
when
a
party
by
acts,
representations, admissions, or silence when it had a duty to
speak, induced another party to believe certain facts existed
upon which that party detrimentally relied and acted.
v.
Kansas
Turnpike
Authority,
991
P.2d
889,
Rockers
894
(Kan.
1999)(quoting United American State Bank & Trust Co. v. Wild
West Chrysler Plymouth, Inc., 561 P.2d 792 (1977)); Turon State
Bank v. Bozarth, 684 P.2d 419, 422 (Kan. 1984)(also quoting Wild
West
Plymouth).
mislead
“or
Estoppel
at
least
deceived. . . .”
a
by
silence
requires
willingness
intent
to
others
that
an
should
be
Turon State Bank, 684 P.2d at 423 (interior
quotation omitted).
Plaintiff has the burden of proving the
facts in support of equitable estoppel.
See Rockers, 991 P.2d
at 894.
Plaintiff
does
not
allege
that
defendant
made
a
representation, action or admission upon which plaintiff relied.
Nor
does
silence
to
defendant
plaintiff
his
should
allege
detriment.
be
that
he
Instead,
estopped
from
relied
upon
plaintiff
alleging
defendant’s
asserts
a
statute
that
of
limitations defense because he opposed and thereby delayed the
13
disclosure of plaintiff’s name (among other names) to a third
party - the Tilzers’ and their counsel - and because he opposed
and delayed contact by the Tilzers’ counsel with his former
clients.
Of course, the Tilzers’ counsel were not representing
plaintiff when these actions occurred.
Plaintiff cites one case in support of his estoppel claim,
Freebird, Inc. v. Merit Energy Co., 883 F.Supp.2d 1026 (D.Kan.
2012).
In
Freebird,
the
plaintiff
was
a
royalty
owner
who
alleged that an oil lease operator failed to pay or underpaid
gas royalties.
The plaintiff claimed the statute of limitations
should be tolled on the basis of equitable estoppel because the
oil lease operator engaged in fraudulent concealment by failing
to include relevant information on the check stubs for royalty
payments.
defendant’s
The court held that tolling did not apply because the
“mere
silence”
without
“actual
artifice”
was
not
sufficient to establish fraudulent concealment, and there was
sufficient
information
given
to
plaintiff
that
with
due
diligence it could have discovered the facts necessary to bring
its cause of action.
Thus, the result in Freebird does not
support plaintiff’s tolling claim.
Nor do we find support for equitable estoppel in Freebird’s
legal analysis for the following reasons.
First, Freebird’s
analysis of the doctrine of “fraudulent concealment” does not
address whether opposition to disclosing information to a third
14
party (who will use the information to contact the plaintiff)
should be considered an act of concealment toward the plaintiff.
Second, Freebird involved the alleged nondisclosure of material
facts
giving
rise
to
a
cause
of
action,
i.e.,
financial
information relating to the calculation of gas royalties.
In
the case at bar, the nondisclosure of Tilzer ruling is not the
concealment of a material fact giving rise to a cause of action.
Instead, it is the alleged secreting of a published legal ruling
in favor of a cause of action which was filed in 2004.3
This
distinction is important for, as the court stated in Freebird,
when considering a claim of fraudulent concealment, the object
of concealment is the facts underlying the cause of action.
at
1036
prevent
action,
(“[t]he
the
and
question
discovery
whether
is
of
whether
there
was
facts
which
gave
the
the
act
operated
‘a
as
design
rise
Id.
to
the
means
a
to
of
concealment’”)(quoting Friends Univ. v. W.R. Grace & Co., 608
P.2d 936, 941 (Kan. 1980)).
Finally, as in Freebird, plaintiff
here has not shown that due diligence would have failed to lead
him
to
discover
his
claims,
even
if
the
Tilzer
decision
is
considered to contain “material facts” to his cause of action.
In Freebird, the court remarked that a “party seeking to toll
the
statute
of
limitations
.
.
.
[must]
explain
why
due
diligence did not lead or could not have led to the discovery of
3
The nondisclosure of plaintiff’s name to the Tilzers’ attorney is also not
the concealment of a fact material to plaintiff’s cause of action.
15
the facts and cause of action.”
The court found that with due
diligence
the
Freebird
relevant
information
royalty
owner
by
in
asking
information pursuant to state law.
for
could
payment
Id. at 1037.
have
and
obtained
deduction
In the case at
bar, plaintiff has failed to allege or show facts demonstrating
that with due diligence plaintiff could not have learned of the
Tilzer case.
In sum, plaintiff does not allege that defendant concealed
material facts underlying his cause of action from plaintiff.
Plaintiff
has
not
alleged
facts
showing
that
defendant’s
statements or silence were motivated by an intent or willingness
to deceive plaintiff.
There is also no showing of reliance by
plaintiff upon defendant’s statements, or misrepresentations by
defendant, or silence from defendant when there was a duty to
speak.
The court concludes that critical elements of equitable
estoppel cannot be proven by plaintiff.
VIII.
CONCLUSION
In conclusion, there is no triable issue of material fact
barring the finding that plaintiff’s claims are untimely filed.
More
than
two
years
before
plaintiff
filed
this
lawsuit,
plaintiff was aware, either actually or constructively, of the
essential
facts
which
would
make
his
injury
alleged misconduct reasonably ascertainable.
by
defendant’s
And, plaintiff has
not presented a material fact issue which would support a trial
16
on
the
question
of
equitable
estoppel.
For
these
reasons,
defendant’s motion to summary judgment is granted.
IT IS SO ORDERED
DATED THIS 17th DAY OF JUNE, 2015.
s/ Richard D. Rogers
RICHARD D. ROGERS
UNITED STATES DISTRICT JUDGE
17
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