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