Waldner v. James et al

Filing 66

ORDER granting 62 Motion for Summary Judgment. Signed by U.S. District Judge Karen E. Schreier on 8/19/2014. (KC)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
ROGER D. WALDNER,
Plaintiff,
vs.
TIMOTHY L. JAMES;
JAMES LAW, P.C.; and
JAMES & ASSOCIATES, P.C.,
Defendants.

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Civ. 12-4153-KES

ORDER GRANTING
DEFENDANTS’ MOTION
FOR SUMMARY JUDGMENT

Plaintiff, Roger D. Waldner, is an inmate at the Federal Prison Camp in
Yankton, South Dakota. Docket 38. Waldner filed a pro se lawsuit against
defendants, Timothy L. James, James Law, P.C., and James & Associates,
P.C., alleging three counts of mail fraud and one count each of wire fraud,
racketeering, legal malpractice, and breach of fiduciary duty. Docket 1. On
February 21, 2014, the court granted defendants’ motion for partial judgment
on the pleadings (Docket 24), thereby dismissing Waldner’s mail fraud, wire
fraud, and racketeering claims (Docket 58). Defendants now move for
summary judgment on Waldner’s remaining claims. Docket 62. Waldner has
not responded to defendants’ motion, and the time for response has passed.
For the reasons set forth herein, the court grants defendants’ motion for
summary judgment (Docket 62).

FACTUAL BACKGROUND
In the light most favorable to Waldner, the nonmoving party, the
relevant facts are as follows1:
Defendant Timothy L. James, through his representation of Waldner in
a legal malpractice action against A. Thomas Pokela, obtained a default
judgment in the amount of $1,652,783.30 in actual damages and $814,618.51
in pre-judgment interest. Dockets 1 at ¶ 28; 29 at ¶ 5; 63 at ¶ 1. Pokela,
however, was and is unable to pay the total $2,467,401.81 award that James
obtained for Waldner. Dockets 29 at ¶ 6; 63 at ¶ 3.
Pokela did not have malpractice liability insurance coverage at the time
he represented Waldner, nor did he have coverage at the time Waldner
brought the malpractice action against him. Dockets 29 at ¶ 8; 63 at ¶¶ 5–6.
There is, therefore, no liability insurance to cover any portion of the damages
award. Docket 62 at ¶ 7. Due to a shoulder injury, Pokela is currently
unemployed. Dockets 29 at ¶ 16; 63 at ¶ 8. His only source of income is a
monthly Social Security payment in the amount of $2,200. Dockets 29 at ¶ 17;
63 at 9. Pokela’s home has been foreclosed, and he does not otherwise have
any significant assets. Dockets 29 at ¶¶ 18, 20; 63 at ¶¶ 17–18. Pokela
currently pays $700 per month for rent. Dockets 29 at ¶ 18; 63 at ¶ 16.
1

Pursuant to Local Rule 56.1.D, “[a]ll material facts set forth in the
movant’s statement of material facts will be deemed to be admitted unless
controverted by the opposing party’s statement of material facts.”
2

Additionally, because he was convicted of conspiracy to commit wire fraud on
August 1, 2011, Pokela has an outstanding restitution order of $848,909.48.
Dockets 29 at ¶ 15; 63 at ¶ 12. Pokela also owes the federal government
$50,000 in federal income taxes and has an additional $150,000 in other debt.
Dockets 29 at ¶¶ 13–14; 63 at ¶¶ 13–14.
STANDARD OF REVIEW
“Summary judgment is appropriate when the evidence,2 viewed in a light
most favorable to the non-moving party, demonstrates that there is no genuine
issue of material fact, and that the moving party is entitled to judgment as a
matter of law.” Clark v. Kellogg Co., 205 F.3d 1079, 1082 (8th Cir. 2000); see
also Fed. R. Civ. P. 56(a). “Once the motion for summary judgment is made
and supported, it places an affirmative burden on the non-moving party to go
beyond the pleadings and by affidavit or otherwise designate specific facts
showing that there is a genuine issue for trial.” Commercial Union Ins. Co. v.
Schmidt, 967 F.2d 270, 271 (8th Cir. 1992) (internal quotations and citations
omitted). “Only disputes over facts that might affect the outcome of the suit
under the governing law will properly preclude the entry of summary
judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Although
“the court is required to . . . give [the nonmoving] party the benefit of all
2

The evidence includes the pleadings, depositions, documents,
electronically stored information, stipulations, answers to interrogatories,
admissions, and affidavits. Fed. R. Civ. P. 56(c).
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reasonable inferences to be drawn from the underlying facts,” Vette Co. v.
Aetna Cas. & Sur. Co., 612 F.2d 1076, 1077 (8th Cir. 1980), the nonmoving
party may not “rest upon mere denials or allegations.” Forrest v. Kraft Foods,
Inc., 285 F.3d 688, 691 (8th Cir. 2002). Instead, the nonmoving party must
“set forth specific facts sufficient to raise a genuine issue for trial.” Id.
Prisoners who proceed pro se are entitled to the benefit of liberal
construction at the pleading stage. Quam v. Minnehaha Cnty. Jail, 821 F.2d
522, 522 (8th Cir. 1987). Nonetheless, the summary judgment standard set
forth in Rule 56 of the Federal Rules of Civil Procedure remains applicable to
prisoners proceeding pro se. Id. The district court is not required to “plumb
the record in order to find a genuine issue of material fact.” Barge v. AnheuserBusch, Inc., 87 F.3d 256, 260 (8th Cir. 1996). Moreover, the court is not
“required to speculate on which portion of the record the nonmoving party
relies, nor is it obligated to wade through and search the entire record for
some specific facts that might support the nonmoving party’s claim.” Id. The
court remains sensitive, however, “to the special problems faced by prisoners
attempting to proceed pro se in vindicating their constitutional rights, and [the
Eighth Circuit does] not approve summary dismissal of such pro se claims
without regard for these special problems.” Nickens v. White, 622 F.2d 967,
971 (8th Cir. 1980).

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DISCUSSION
As previously set forth in the court’s order dated February 21, 2014
(Docket 58), Waldner alleges that “Defendant James was negligent and
breached his duty to the Plaintiff” in the following ways:
a.
b.
c.
d.

e.

f.
g.
i.

j.

Failing to assert available claims;
Failing to correctly list all damages suffered by the Plaintiff
Waldner in the complaint;
Failing to Correctly list all damages suffered by the Plaintiff
Waldner in his Affidavit of damages;
Failing to present evidence to the Court at the Prove-Up
Hearing regarding all damages suffered by the Plaintiff
Waldner;
Failing to ensure the Court Entered a Judgement for the
Correct amount of damages suffered by the Plaintiff
Waldner;
Failing to comply with requests from the Plaintiff Waldner to
provide Information regarding the Case;
Failing to File necessary Motions;
Failing to obtain and/or introduce necessary evidence and
testimony regarding damages suffered by the Plaintiff
Waldner;
Generally failing to carry out the duties, obligations and
functions of Legal Counsel with proper skill, diligence and
care required.

Docket 1 at ¶ 100. As a direct and proximate result of James’s alleged
“negligence and breach of duty,” Waldner represents that he suffered actual
money damages, loss of pre- and post-judgment interest, and “other general
and special damages in an amount to be determined at Trial.” Id. at ¶ 101.
To establish a legal malpractice claim under South Dakota law, a
plaintiff must prove the following: “(1) the existence of an attorney-client
relationship giving rise to a duty; (2) that the defendant attorney[], either by
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act or omission, violated or breached that duty; (3) that the attorney[]’s breach
of duty proximately caused injury to plaintiff; and (4) that plaintiff sustained
actual injury, loss, or damage.” Randall v. Bantz, Gosch, Cremer, Peterson and
Sommers, 883 F. Supp. 449, 450 (D.S.D. 1995) (citing Haberer v. Rice, 511
N.W.2d 279, 284 (S.D. 1994)).
To establish a breach of fiduciary duty under South Dakota law, a
plaintiff must prove the following: “(1) that the defendant was acting as
plaintiff’s fiduciary; (2) that the defendant breached a fiduciary duty to
plaintiff; (3) that plaintiff incurred damages; and (4) that the defendant’s
breach of the fiduciary duty was a cause of plaintiff’s damages.” Chem-Age
Indus., Inc. v. Glover, 652 N.W.2d 756, 772 (S.D. 2002) (citation omitted).
Where a plaintiff alleges he was damaged by his attorney’s failure to
secure a particular judgment in a prior case, the plaintiff must demonstrate
“that a judgment in the prior case ‘would have been collectible in some
amount.’ ” Taylor Oil Co. v. Weisensee, 334 N.W.2d 27, 29 (S.D. 1983) (citation
omitted). In other words, failure to prove that some portion of the judgment in
the prior action was collectible amounts to a failure to prove damages in the
subsequent and related negligence action. Id. at 30.
In the instant case, defendants assert they are entitled to summary
judgment because Waldner has failed to produce evidence demonstrating that
he can actually recover the damages award that James obtained against

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Pokela in the prior case. Docket 64. As defendants have asserted and Waldner
has not disputed, Pokela is insolvent and thus incapable of satisfying the
existing damages award. Therefore, even if Waldner could establish that
James was negligent in his failure to obtain a larger damages award against
Pokela, Waldner would be unable to collect such an award. Accordingly,
defendants maintain that Waldner cannot establish a necessary element of
either a legal malpractice or breach of fiduciary claim because he has not
sustained an actual, recoverable loss.
To support their claim that Pokela is insolvent, defendants have once
again submitted evidence to demonstrate that “Pokela could not, and cannot,
pay the total $2,467,401.81 award that James obtained for Waldner.” Docket
63 at ¶ 3 (citing Docket 29 at ¶¶ 6–7). When defendants first made this
argument in support of their motion for summary judgment (Docket 26),
Waldner disputed Pokela’s insolvency and the nature of Pokela’s malpractice
insurance coverage (Docket 55). Construing disputed facts in favor of Waldner,
the nonmoving party, the court granted Waldner additional time to conduct
discovery on the issue of Pokela’s solvency and malpractice insurance
coverage. Docket 58.
One day after the deadline for such discovery passed, Waldner filed a
motion to extend the relevant discovery deadline so that he could retain legal
counsel for the purpose of conducting depositions. Docket 60. Forty-five days
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later, after receiving no notice of appearance from Waldner’s prospective
attorney, the court denied Waldner’s motion to extend deadlines. Docket 65.
To date, Waldner has submitted no evidence to dispute defendants’ assertion
that Pokela is insolvent. The court therefore finds that Pokela is insolvent and
thus unable to pay any portion of the $2,467,401.81 award that James
obtained for Waldner in the prior action. Because Waldner has failed to show
that he could recover some portion of existing damages, Waldner has similarly
failed to demonstrate that he incurred actual damages as a result of James’s
alleged legal malpractice and breach of fiduciary duty. Accordingly, the court
finds that defendants are entitled to judgment as a matter of law, and it is
ORDERED that defendants’ motion for summary judgment (Docket 62)
is granted.
Dated August 19, 2014.
BY THE COURT:

/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE

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