Sandhu v. Kanzler, No. 18-2957 (8th Cir. 2019)
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The Eighth Circuit affirmed the district court's grant of summary judgment to defendant in an action brought by plaintiffs and Glow Hospitality alleging claims against defendant, an attorney, for fraud and breach of fiduciary duties. Plaintiffs also alleged a vicarious liability claims against defendant's law firm.
Count I is premised on a factually-complex relationship and intertwined history and on allegations that defendant failed to disclose information, failed to investigate, made false statements to the state court, and, primarily, engaged in dual representation. The court held that the district court correctly granted summary judgment, because Glow failed to support Count I, which lies outside the jury's common knowledge, with expert testimony. Count II alleged that defendant breached his fiduciary duties to Glow by failing to conduct further investigation into Glow's ownership interests, failing to update his opinion letter to First National, making false representations in his affidavits to the state court, and negligently overseeing the operation of Glow. The court held that Minn. Stat. 544.42 applies to Count II, and Glow's failure to comply with section 544.42's affidavit requirements mandated dismissal of this claim. Finally, the court held that the fraud claims were property dismissed, summary judgment on the aiding and abetting claim was proper, and the vicarious liability claims failed.
Court Description: Shepherd, Author, with Arnold and Kobes, Circuit Judges] Civil Case - Diversity. In action for breach of fiduciary duty, collusion and fraud against attorney and law firm involved in commercial transactions, district court's grant of summary judgment to attorneys is affirmed. District court correctly concluded that the breach of fiduciary duty claims stemming from an attorney-client relationship are derivative of legal malpractice claims and are, therefore subject to Minn. Stat. sec. 544.42, requiring expert affidavits; absent expert witness affidavit or disclosure of expert, the claims against attorney and law firm were properly dismissed; claim that attorney breached a statutory duty of candor and a duty to investigate also requires compliance with affidavit requirements and failure to comply mandates dismissal; fraud claims were properly dismissed based on lack of evidence of attorney's knowledge of ownership interest; summary judgment on the aiding and abetting claim was also proper based on the lack of evidence. Vicarious liability claims failed. Judge Arnold concurs in part and dissents in part.
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