Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any
FILED
Nov 07 2012, 9:21 am
court except for the purpose of
establishing the defense of res judicata, CLERK
collateral estoppel, or the law of the case. of the supreme court,
court of appeals and
tax court
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
WILLIAM H. WALDEN PATRICK P. DEVINE
Munster, Indiana SCOTT B. COCKRUM
NATHAN D. HANSEN
Hinshaw & Culbertson LLP
Schererville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
THOMAS DUDLEY AND )
BARBARA DUDLEY, )
)
Appellants-Plaintiffs, )
)
vs. ) No. 46A03-1204-PL-147
)
THE ESTATE OF EARL STUDTMANN, )
)
Appellee-Defendant. )
APPEAL FROM THE LAPORTE SUPERIOR COURT
The Honorable Richard R. Stalbrink, Jr., Judge
Cause No. 46D02-1106-PL-072
November 7, 2012
MEMORANDUM DECISION – NOT FOR PUBLICATION
BAKER, Judge
Appellants-plaintiffs Thomas and Barbara Dudley (the Dudleys) appeal from the
trial court’s order granting summary judgment in favor of appellee-defendant, the Estate
of Earl Studtmann (the Estate). More particularly, the Dudleys argue that the trial court
erred by concluding that collateral estoppel arising from previous contract litigation
against an insurance company barred their claim for damages for legal malpractice
against the Estate.
The Estate cross-appeals, asking that this Court strike the Dudleys’ reply to the
Estate’s response to the Dudleys’ motion for summary judgment and contending that
because the Dudleys’ attorney was disqualified, his affidavit should be stricken.
Concluding that the trial court erred by entering summary judgment for the Estate
and finding the Estate’s cross-appeal unavailing, we reverse and remand for further
proceedings.
FACTS
The Underlying Contract Litigation
On January 10, 2002, the Dudleys’ Chesterton home was damaged by a fire.
Within several months of the loss, the Dudleys retained attorney Earl Studtmann1 to
pursue a breach of contract claim against their homeowner’s insurer, Meridian Insurance
Company (Meridian), after Meridian denied payment on their personal property claims.
1
Although the Dudleys hired Studtmann as their counsel, he used other counsel throughout the
representation, including Crystal Sharp Bauer, whose appearance was entered on June 25, 2007.
Appellant’s App. p. 38.
2
Studtmann received several copies of the Dudleys’ insurance policy within months of the
loss.
In June 2002, Studtmann filed the first complaint against Midwest Construction
Company alleging, in part, breach of contract and negligence; on September 5, 2002,
Studtmann filed the second complaint against Horizon Carpet Restoration alleging breach
of contract and negligence; and on December 2, 2003, Studtmann filed the third
complaint against Meridian alleging breach of contract and requested punitive damages.
Studtmann represented the Dudleys from Spring 2002 until 2010, when he became ill,
and successor counsel had to be retained.
On August 2, 2010, Attorney Kevin W. Marshall entered his appearance on behalf
of the Dudleys and requested a hearing. Marshall attended the October 12, 2010 status
hearing where he discovered that the court was prepared to dismiss the case, but instead,
placed strict conditions on the eight-year pending litigation, including the inability to
name new witnesses or exhibits. That order resulted in renewed motions to dismiss by
Meridian, which the trial court denied on April 7, 2011.
A jury trial commenced on May 9, 2011. During the trial, an inventory of damage
was presented, which included the Dudleys’ possessions that could and could not be
cleaned.
On May 10, 2011, the trial court entered judgment for Meridian on a motion for a
directed verdict based on the Dudleys’ failure to file the complaint within the one-year
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provision contained in the insurance contract and their inability to designate the damages
at trial that resulted from the fire, smoke, and water.
Proceedings in the Legal Malpractice Suit
After receiving the trial court’s minutes containing the reasons for the judgment on
the evidence, the Dudleys filed their complaint against Studtmann for attorney negligence
on June 13, 2011. Among other things, the Dudleys alleged that Studtmann filed the
complaint against Meridian “beyond the one (1) year policy requirement required by the
contractual statute of limitations time period.” Appellant’s App. p. 2. Additionally, the
Dudleys alleged that the “damages are liquidated in that they include only the personal
property damage loss in the amount of $124,500.00 plus 27.30 per day since January 10,
2002.” Id.
On July 29, 2011, Studtmann moved to disqualify Marshall as counsel for the
Dudleys under Indiana Professional Conduct Rule 3.7,2 arguing that Marshall had been
named as a non-party and that he was a material witness to the underlying litigation. The
trial court granted this motion.
On August 15, 2011, Marshall moved to reconsider the trial court’s order
disqualifying him, and Studtmann filed a response on August 29, 2011. On November
10, 2011, while the motion for reconsideration was pending, Studtmann moved for
summary judgment, claiming that the Dudleys could not prove damages in this action
2
Indiana Professional Conduct Rule 3.7 provides, in relevant part, that “[a] lawyer shall not act as
advocate at a trial in which the lawyer is likely to be a necessary witness . . . .”
4
because the trial court had determined in the underlying litigation that the Dudleys had
failed to prove that there were any damages caused by the fire.
On November 28, 2011, the trial court denied Marshall’s motion to reconsider his
disqualification. Marshall filed a motion for extension of time on behalf of the Dudleys
to obtain successor counsel, which was granted the same day.
On December 12, 2011, the Estate filed a motion to require the Dudleys to
substitute the proper party defendant, or alternatively for dismissal, due to the death of
Studtmann on October 18, 2011. The next day, on December 13, 2011, the Estate moved
to compel written responses to written discovery requests, and the trial court ordered
these motions set for a February 15, 2012 hearing, which was the same date the court had
set for a hearing on Studtmann’s motion for summary judgment.
On January 30, 2012, the Dudleys, through successor counsel, William Walden,
filed a motion for summary judgment, designation of evidence, and a memorandum in
support of the motion for summary judgment. Also on January 30, an estate was opened
for Studtmann by Marshall as counsel for the personal representative. On February 1,
2012, Walden petitioned the trial court and received an order substituting the Estate as
the proper defendant in the lawsuit. Defense counsel appeared on behalf of the Estate on
February 8, 2012.
Because LaPorte County did not have a local rule with respect to filing replies to
responses to summary judgment motions, on February 8, 2012, the Estate moved for
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leave to file a reply to the Dudleys’ response to the Estate’s motion for summary
judgment. The trial court granted the Estate leave to file a reply.
One week later, on February 15, 2012, the Estate filed its response to the Dudleys’
motion for summary judgment and supporting designation of evidence prior to the trial
court’s hearing on all pending motions. Counsel for the Estate addressed the trial court
and advised that he was prepared to argue both motions for summary judgment.
The Dudleys’ counsel did not request leave of court to file a reply to the Estate’s
response to their motion for summary judgment and made no objection to proceeding
with oral argument on the Dudleys’ motion for summary judgment. Indeed, counsel
argued the merits of the Dudleys’ motion but admitted that he had not had “a chance to
fully review the response that was provided me this morning, but if the Court wishes, I
can file a response to that at a later time.” Appellee’s App. p. 240.
At the close of the proceedings, the trial court took the matter under advisement
and did not request a reply from the Dudleys. Two weeks later, on February 29, 2012,
the Dudleys filed a reply to the Estate’s response to their motion for summary judgment.
Appellant’s App. p. 308. In the reply, the Dudleys asserted that they had an expert and
that the Estate’s argument that “successor counsel failed to bring in additional evidence
on damages is contrary to the trial procedure and Court Orders entered soon after
counsel’s appearance restricting him to no additional witnesses or evidence.” Id. at 308-
09. Additionally, the Dudleys again alleged that “damages are uncontroverted as
liquidated at this time since the inventory already in evidence outlines the property that is
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cleanable and the property that is not cleanable, with the only damage amount on the non-
cleanable which is in a fixed sum.” Id. at 309.
On March 9, 2012, the Estate filed its objection and motion to strike the reply,
arguing that that it was not timely filed and that it was inappropriate for Marshall to serve
as an expert on behalf of the Dudleys.3 However, unbeknownst to the Estate, on the same
day, the trial court entered its order denying the Dudleys’ summary judgment motion and
granting the Estate’s motion for summary judgment ruling, in part:
In the present case, the Court finds that [the Dudleys] had a full and fair
opportunity to litigate the issue in Porter County and their inability to prove
damages in this case renders their legal malpractice claim against [the
Estate] insufficient.
Appellant’s App. p. 336. The Dudleys now appeal.
DISCUSSION AND DECISION
I. Standard of Review
The Dudleys argue that the trial court erred by denying their motion for summary
judgment while granting the Estate’s motion for summary judgment. Summary judgment
is appropriate when the designated evidence shows that there are no genuine issues of
material fact and that the moving party is entitled to judgment as a matter of law.
Wagner v. Yates, 912 N.E.2d 805, 808 (Ind. 2009); see also Ind. Trial Rule 56(C).
Nevertheless, the trial court’s grant of summary judgment “enters appellate review
clothed with a presumption of validity,” and the appellant bears the burden of
3
Presumably because the trial court granted the Estate’s motion for summary judgment, its motion to
strike the Dudleys’ reply was not ruled upon.
7
demonstrating that the trial court erred. Cnty. Council v. Nw. Ind. Reg’l. Dev. Auth., 944
N.E.2d 519, 523-24 (Ind. Ct. App. 2011), trans. denied. We must construe all factual
inferences in favor of the nonmoving party, and all doubts as to the existence of a
material issue must be resolved against the moving party. Scribner v. Gibbs, 953 N.E.2d
475, 479 (Ind. Ct. App. 2011). The fact that the parties filed cross-motions for summary
judgment does not alter the standard of review on appeal. Deckler v. Zengler, 883
N.E.2d 839, 842 (Ind. Ct. App. 2008).
II. Collateral Estoppel
Initially, we note that for the Dudleys to succeed on their legal malpractice claim
against the Estate, they must prove that Studtmann’s negligence caused damage to them.
See Legacy Healthcare, Inc. v. Barnes & Thornburg, 837 N.E.2d 619, 624 (Ind. Ct. App.
2005) (stating that the elements of attorney malpractice are employment of an attorney,
the attorney’s failure to exercise ordinary care, and that failure being the proximate cause
of damage to the plaintiff).
As stated above, the trial court concluded that the Dudleys had a full and fair
opportunity to litigate but failed to prove that there were any damages resulting from their
claim against Meridian. Thus, according to the trial court, they are collaterally estopped
from arguing that they suffered any damage from Studtmann’s negligence. The Dudleys
counter that this is inaccurate insofar as Studtmann’s negligence, resulting in a nine-year
delay, shielded Meridian from liability through a contractual time limitations clause.
Additionally, the nine-year delay resulted in the trial court imposing strict requirements,
8
including no additional witnesses, thereby preventing the Dudleys from securing an
expert witness to prove damages.
In Sullivan v. American Casualty Co., 605 N.E.2d 134 (Ind. 1992), our Supreme
Court formulated the modern rule for the application of collateral estoppel. Eliminating
the historical prerequisites of privity and mutuality, the Sullivan Court determined that
“the prime consideration is whether the party against whom the prior judgment is pled
had a full and fair opportunity to litigate the issue and whether it would be otherwise
unfair under the circumstances to permit the use of collateral estoppel.” Id. at 138.
In this case, Studtmann filed three separate lawsuits. The claims against Midwest
Construction and Horizon Restoration were filed in June 2002 and September 2002
respectively, less than one year after the loss. However, Studtmann failed to file a
complaint against Meridian until December 2003, which was twenty-three months after
the Dudleys suffered their loss and eleven months after the time limitations imposed upon
the Dudleys by contract had ended. This effectively relieved Meridan of liability and
consequently, of paying any damages. Thus, we cannot say that the issue of damages
was fully and fairly litigated in the trial court during the underlying litigation.
Moreover, perhaps because Studtmann had been ill, by the time Marshall entered
his appearance and attended the October 12, 2010 hearing, the trial court was prepared to
dismiss the action, which had already been pending for eight years. Instead, the trial
court placed strict conditions on the matter, including the inability to name witnesses who
had not been previously identified. This new condition prevented Marshall from securing
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an expert witness, such as a public adjuster, who could have testified to the damages that
the Dudleys had sustained in the fire. While it may be that the factfinder ultimately
concludes that the Dudleys fail to prove damages, in light of these circumstances, we
think it is unfair to permit the use of collateral estoppel. Accordingly, we cannot agree
that summary judgment was appropriate in this case and reverse and remand for further
proceedings.
III. Cross-Appeal
A. Reply to Summary Judgment Response
The Estate cross-appeals, urging this Court to strike the Dudleys’ reply to its
response to the Dudleys’ motion for summary judgment and the supporting affidavits. At
the outset, we note that the Estate failed to cite to the parts of the record pertaining to the
Dudleys’ motion for summary judgment, the Estate’s response, or the Dudleys’ reply.
Consequently, we direct the Estate’s attention to Indiana Appellate Rule 22(C).
The Estate concedes that Indiana Trial Rule 56, which governs motions for
summary judgment “does not specifically permit or disallow the filing of a reply brief by
a movant for summary judgment. Although some Indiana county local rules [permit] the
filing of a reply brief, LaPorte County is silent with respect to such a filing.” Appellee’s
Br. p. 14. Therefore, there is no local rule prohibiting such a filing, and this argument is
unavailing.
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B. Disqualified Attorney Affidavit
Marshall was eventually disqualified by the trial court because he was a material
witness, having represented the Dudleys in the underlying litigation. In what seems to be
a somewhat paradoxical argument, the Estate argues that Marshall cannot reasonably
serve as an expert witness in this matter.
As an initial matter, although the Estate cites Indiana Professional Conduct Rule
1.74 in support of its position, Marshall was disqualified under Rule 3.7, and we believe
that Rule to be more on point. As stated in footnote two, Rule 3.7 provides, in part, a
“lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary
witness . . . .”
Here, after Marshall was disqualified, he filed a motion for extension of time so
that the Dudleys could obtain successor counsel, which was granted, and he opened an
estate for Studtmann.5 Although the Estate argues that Marshall’s “presence pervades
this case” and that “[h]e should never have attempted to represent the Dudleys as their
counsel in the legal malpractice case,” Appellee’s Br. p. 17, we fail to see how Marshall’s
actions require that his affidavit be stricken. Indeed, we encourage attorneys who have
4
Rule 1.7 provides, in relevant part, that “a lawyer shall not represent a client if the representation
involves concurrent conflict of interest. A concurrent conflict of interest exists if: (1) the representation
of one client will be directly adverse to another client; or (2) there is a significant risk that the
representation of one or more clients will be materially limited . . . by a personal interest of the lawyer.”
5
The Estate also directs us to a CCS Entry Form contending that Marshall filed the Dudleys’ reply to the
Estate’s response to the Dudleys’ motion for summary judgment. While it appears that Marshall may
have filed the reply, it was submitted by successor counsel William H. Walden, Attorney for Plaintiffs.
Appellee’s App. p. 246.
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been disqualified, to minimize the impact of their disqualification on their clients, which
is what Marshall did by requesting additional time to seek successor counsel.
Furthermore, as a practical matter, we think it goes too far to say that Marshall
was acting as an advocate in the malpractice case when he opened Studtmann’s estate.
Perhaps most compelling, the fact that Marshall provided an affidavit of his expert
opinion regarding Studtmann’s negligence is expected and anticipated by the very fact
that he was disqualified from acting as the Dudleys’ counsel in the malpractice suit,
insofar as he was expected to be a witness. Consequently, this argument fails, and we
reverse the decision of the trial court and remand for further proceedings.
The judgment of the trial court is reversed and remanded for further proceedings.
ROBB, C.J., and BRADFORD, J., concur.
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