US Bank NA v. Glogowski Law Firm et al, No. 2:2019cv00074 - Document 100 (W.D. Wash. 2021)
Court Description: ORDER denying as moot Defendants' 82 Motion for Leave to File Over-length Motions and Briefs. Plaintiff's 84 Motion for Summary Judgment is granted in part and denied in part; summary judgment is GRANTED to U.S. Bank on Defendants coun terclaims, which are DISMISSED with prejudice, and on U.S. Bank's malpractice claim solely related to the Patten property. Defendant's 88 Motion for Summary Judgment is granted in part and denied in part; summary judgment is GRANTED to Defendants on U.S. Bank's breach of contract claims, which are DISMISSED with prejudice. Signed by U.S. District Judge John C. Coughenour.(SR)
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US Bank NA v. Glogowski Law Firm et al Doc. 100 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 1 of 13 THE HONORABLE JOHN C. COUGHENOUR 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 U.S. BANK, N.A., 10 Plaintiff, 13 ORDER v. 11 12 CASE NO. C19-0074-JCC THE GLOGOWSKI LAW FIRM, PLLC, d/b/a ALLEGIANT LAW GROUP, and KATRINA GLOGOWSKI, 14 Defendants. 15 16 This matter comes before the Court on Plaintiff’s motion for summary judgment (Dkt. 17 No. 84), Defendants’ motion for summary judgment (Dkt. No. 88), and Defendants’ motion to 18 file an overlength brief (Dkt. No. 82). Having thoroughly considered the parties’ briefing and the 19 relevant record, the Court finds oral argument unnecessary and hereby GRANTS in part and 20 DENIES in part the motions for summary judgment (Dkt. Nos. 84, 88) and DENIES as moot the 21 motion to file an overlength brief (Dkt. No. 82) for the reasons explained herein. 22 I. 23 BACKGROUND This is a legal malpractice action. (See generally Dkt. No. 36.) U.S. Bank alleges that 24 Katrina Glogowski and the Glogowski Law Firm, PLLC, d/b/a Allegiant Law Group 25 (collectively “Defendants”), breached their professional duties and their agreement with U.S. 26 Bank when they inadequately represented U.S. Bank in foreclosure actions and related matters ORDER C19-0074-JCC PAGE - 1 Dockets.Justia.com Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 2 of 13 1 regarding properties in Seattle, Washington (the “Erickson property”); Salem, Oregon (the 2 “Patten property”); and Lake Oswego, Oregon (the “Cohen property”). (Id.) 3 Defendants counter they were not paid for services they provided to a U.S. Bank 4 contractor, Asset Foreclosure Services, now known as Peak Foreclosure Services. (See Dkt. No. 5 40 at 12–14.) Defendants argue that because U.S. Bank benefitted from those earlier services, it 6 is liable for Peak Foreclosure’s nonpayment. (See Dkt. No. 40 at 12–14.) Defendants assert 7 counterclaims for breach of contract, quantum meruit, and unjust enrichment. (Id.) 8 U.S. Bank seeks summary judgment on all claims and Defendants seek summary 9 judgment solely on U.S. Bank’s claims. (See generally Dkt. Nos. 84, 88.) Defendants also move 10 for leave to file an overlength motion for summary judgment. (Dkt. No. 82). 11 II. DISCUSSION 12 A. 13 The statutes of limitations for legal malpractice claims in Minnesota, Washington, and Choice of Law 14 Oregon vary substantially, compare Minn. Stat. § 541.05 (six years), with Wash. Rev. Code 15 § 4.16.080 (three years) and Or. Rev. Stat. § 12.110 (two years). Defendants argue that, to the 16 extent Washington or Oregon’s shorter statute of limitations applies to U.S. Bank’s malpractice 17 claims, they would be time-barred. (Dkt. Nos. 88 at 10–11, 93 at 7–8.) 18 Defendants signed U.S. Bank’s engagement letter on October 22, 2014. (See Dkt. No. 87 19 at 10–41.) It “govern[s] all services provided to and conducted on behalf of U.S. Bank” and 20 contains a choice-of-law clause indicating that its terms should be “governed by and construed 21 and enforced in accordance with the laws of the State of Minnesota, without regard to its conflict 22 of law principles.” (Id. at 10, 20.) 23 This Court, sitting in diversity, applies Washington’s choice-of-law rules. See Downing v. 24 Abercrombie & Fitch, 265 F.3d 994, 1005 (9th Cir. 2001). Those rules provide that the Court 25 must engage in a conflict-of-laws analysis if an actual conflict exists between the laws or 26 interests of Washington and the laws or interests of another state. Erwin v. Cotter Health ORDER C19-0074-JCC PAGE - 2 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 3 of 13 1 Centers, 167 P.3d 1112, 1120 (Wash. 2007). Except in limited circumstances, if a conflict of law 2 exists and the parties selected the governing law, the Court enforces that agreement. See McKee 3 v. AT&T Corp., 191 P.3d 845, 851 (Wash. 2008). However, this is not the case for “tort claims 4 arising out of the contract.” Haberman v. Wash. Pub. Power Supply Sys., 744 P.2d 1032, 1066 5 (Wash. 1987). Instead, the parties’ agreement is a consideration “in the most significant 6 relationship test.” Id. 7 Under the most significant relationship test, the Court looks to relevant contacts, such as 8 the place of contracting, the place of performance, and the domicile of the parties. Mulcahy v. 9 Farmers Ins. Co. of Wash., 95 P.3d 313, 317 (Wash. 2004). “These contacts are to be evaluated 10 according to their relative importance with respect to the particular issue.” Id. Here, the relevant 11 contacts favor the application of Minnesota’s statute of limitations. First and most importantly, 12 this is consistent with the engagement letter. (See Dkt. No. 87 at 10, 20.) When interpreting an 13 agreement, the Court focuses on “the actual words used.” Hearst Commc’ns, Inc. v. Seattle 14 Times Co., 115 P.3d 262, 267 (Wash. 2005). The words used in this instance, agreed to by 15 sophisticated parties, provide that Minnesota law would apply. Second, no single jurisdiction has 16 the majority of contacts regarding Defendants’ services to U.S. Bank because Defendants 17 provided legal services to U.S. Bank in various states, including Alaska, Oregon, and 18 Washington. (Dkt. No. 85-1 at 9–10.) Third, U.S. Bank is a Minnesota-based corporation—it 19 negotiated its agreement with Defendants for services rendered in Minnesota and incurred its 20 alleged injuries in Minnesota. (See Dkt. Nos. 36 at 3, 95 at 4.) 21 The Court does not find Defendants’ argument, that Washington’s statute of limitations 22 cannot be overridden by a generic choice-of-law provision requiring the application of 23 Minnesota law, persuasive. (See Dkt. No. 97 at 4.) As the Ninth Circuit stated in the case 24 Defendants rely on, the statute of limitations of the desired forum can apply in circumstances 25 where that forum would otherwise be unavailable to a plaintiff. See In re Sterba, 852 F.3d 1175, 26 1178, 1180–81 (9th Cir. 2017). Here, the Minnesota forum would be unavailable to U.S. Bank ORDER C19-0074-JCC PAGE - 3 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 4 of 13 1 because Defendants are citizens of Washington and provide the Court no assurance that they 2 would be subject to a court’s personal jurisdiction in Minnesota. (See Dkt. No. 36 at 3.) Without 3 this assurance, it would be inequitable for this Court to ignore the parties’ clear choice-of-law 4 provision. 5 Accordingly, the Court finds that Minnesota law applies. 6 B. 7 Defendants moved for leave to file an overlength motion for summary judgment (Dkt. Defendants’ Motion to File an Overlength Brief 8 No. 82) and U.S. Bank asked the Court to strike the overlength portion of Defendants’ motion. 9 (See Dkt. No. 95 at 13–14.) At issue are six pages within Defendants’ motion containing 10 arguments based on Washington law supporting summary judgment on U.S. Bank’s breach of 11 contract claims. (See Dkt. No. 88 at 24–30.) But, as discussed above, the parties’ agreement for 12 legal services contains a clear choice-of-law clause that requires the application of Minnesota 13 law to this dispute. (See Dkt. No. 87 at 20.) Therefore, the Court need not address the parties’ 14 requests because the pages at issue in Defendants’ motion are not relevant in considering the 15 merit of U.S. Bank’s breach of contract claims under Minnesota law. Accordingly, Defendants’ 16 motion to file an overlength brief (Dkt. No. 82) is DENIED as moot. 17 C. 18 “The court shall grant summary judgment if the movant shows that there is no genuine Legal Standard – Motion for Summary Judgment 19 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. 20 Civ. P. 56(a). Material facts are those that may affect the outcome of the case, and a dispute 21 about a material fact is genuine if there is sufficient evidence for a reasonable jury to return a 22 verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986). 23 In deciding whether there is a genuine dispute of material fact, the Court must view the facts and 24 justifiable inferences drawn from them in the light most favorable to the nonmoving party. Id. at 25 255. The Court is therefore prohibited from weighing the evidence or resolving disputed issues 26 in the moving party’s favor. Tolan v. Cotton, 572 U.S. 650, 657 (2014). ORDER C19-0074-JCC PAGE - 4 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 5 of 13 1 “The moving party bears the initial burden of establishing the absence of a genuine issue 2 of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “If a moving party fails to 3 carry its initial burden of production, the nonmoving party has no obligation to produce anything, 4 even if the nonmoving party would have the ultimate burden of persuasion at trial.” Nissan Fire 5 & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102–03 (9th Cir. 2000). But once the moving 6 party properly supports its motion, the nonmoving party “must come forward with ‘specific facts 7 showing that there is a genuine issue for trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio 8 Corp., 475 U.S. 574, 587 (1986) (quoting former Fed. R. Civ. P. 56(e)). Ultimately, summary 9 judgment is appropriate against a party who “fails to make a showing sufficient to establish the 10 existence of an element essential to that party’s case, and on which that party will bear the 11 burden of proof at trial.” Celotex, 477 U.S. at 322. 12 D. 13 14 U.S. Bank’s Malpractice Claims 1. Statute of Limitations As a threshold matter, the Court addresses Defendant’s argument that U.S. Bank’s claims 15 are barred by Washington’s three-year statute of limitations on malpractice claims. (See Dkt. 16 Nos. 88 at 10, 93 at 7–8, 97 at 4–9 (citing Cawdrey v. Hanson Baker Ludlow Drumheller, P.S., 17 120 P.3d 605, 608 (Wash. Ct. App. 2005).) As discussed above, see supra Part II.A., the Court 18 relies on Minnesota’s statute of limitations for U.S. Bank’s legal malpractice claim, which is six 19 years. See Minn. Stat. § 541.05. Therefore, a six-year statute of limitations applies, and 20 Defendants do not argue that this term would serve as a bar for U.S. Bank’s claims. (See 21 generally Dkt. Nos. 88, 93.) 22 Moreover, even if Washington’s statute of limitations were to apply, U.S. Bank presents 23 sufficient evidence suggesting that, in fact, it did not have adequate notice of the nature and 24 scope of its injury from Defendants’ actions on these properties until well after U.S. Bank 25 terminated their relationship. (See Dkt. No. 95 at 6–7.) In light of Washington’s discovery rule, 26 see Huff v. Roach, 106 P.3d 268, 269 (Wash. Ct. App. 2005), summary judgment on U.S. Bank’s ORDER C19-0074-JCC PAGE - 5 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 6 of 13 1 malpractice claim, based on Washington’s statute of limitations, would also be inappropriate. 2 3 Accordingly, summary judgment on U.S. Bank’s tort-based malpractice claim based on the statute of limitations is DENIED. 4 2. 5 Merits To bring a claim for legal malpractice based on Minnesota law, a plaintiff must establish 6 (1) the existence of an attorney-client relationship, (2) a negligent act or breach of the parties’ 7 agreement, (3) that this act or breach was the proximate cause of the plaintiff’s injuries, and (4) 8 but for the attorney’s conduct, the plaintiff would have been successful in the prosecution or 9 defense of the underlying claim or would have obtained a more favorable result in the underlying 10 transaction. See Frederick v. Wallerich, 907 N.W.2d 167, 173 (Minn. 2018); Jerry’s Enters., Inc. 11 v. Larkin, Hoffman, Daly & Lindgren, Ltd., 711 N.W.2d 811, 816 (Minn. 2006). Defendants 12 challenge U.S. Bank’s malpractice claims for each of the three properties at issue, taking 13 exception with whether they breached the relevant standard of care and, if they did, whether that 14 breach was the proximate cause of U.S. Bank’s injuries. (See Dkt. Nos. 88 at 9–24, 93 at 7–19.) 15 While Minnesota law controls the outcome, the Court looks to local law for the properties at 16 issue to determine an attorney’s standard of care. Attorneys practicing in Oregon have a duty of 17 care to “act as a reasonably competent attorney in protective and defending the interests of the 18 client.” Pereira v. Thompson, 217 P.3d 236, 247 (Or. Ct. App. 2009). Similarly, attorneys 19 practicing in Washington must be “reasonable, careful and prudent” in representing their clients. 20 Clark Cnty. Fire Dist. No. 5 v. Bullivant Houser Bailey P.C., 324 P.3d 743, 751 (Wash. Ct. App. 21 2014). 22 a. Patten Property 23 Following U.S. Bank’s foreclosure sale of the Patten property, which resulted in proceeds 24 exceeding the amount owed to U.S. Bank, U.S. Bank alleges that Defendants improperly pursued 25 an interpleader action on their behalf, failed to serve the prior homeowner during the interpleader 26 action, and disbursed the excess funds to an ineligible party. (Dkt. No. 36 at 4, 10–11.) U.S. ORDER C19-0074-JCC PAGE - 6 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 7 of 13 1 Bank argues each represents a violation of the relevant standard of care and that the $14,070.21 2 in legal fees and $2,000 settlement payment it incurred to resolve a resulting claim brought by 3 the prior homeowner was proximately caused by Defendants’ negligence. (Dkt. No. 87 at 4.) 4 Defendants admit that they incorrectly captioned the interpleader action to include U.S. 5 Bank as a party. (See Dkt. Nos. 88 at 19, 93 at 8–9; see also Dkt. No. 85-1 at 46–47 (deposition 6 testimony from Defendant Katrina Glogowski describing the caption as “honestly . . . an error.”) 7 They also admit they should have served the former homeowner in the interpleader action. (See 8 Dkt. No. 85-1 at 54 (deposition testimony from Defendant Katrina Glogowski admitting that it 9 would have been “best practice to serve [the homeowner].”).) But they dispute that this error 10 proximately caused U.S. Bank’s injuries, since it decided to “voluntarily settle the case for a 11 nominal amount.” (Dkt. No. 88 at 19.) Reason dictates that these errors were a but-for cause of 12 U.S. Bank’s injuries. They were also, as a matter of law, a proximate cause, irrespective of 13 whether the distribution of funds to the third party was consistent with Oregon law; U.S. Bank 14 should not be penalized for attempting to mitigate its injury from Defendants’ actions. See First 15 Bank of Minn. v. Olson, 557 N.W.2d 621, 624 (Minn. App. 1997) (suggesting such a rule would 16 “discourage settlement”). 17 18 Accordingly, summary judgment is GRANTED to U.S. Bank on its malpractice claims relating to the Patten property. 19 20 b. Cohen Property U.S. Bank alleges that Defendants failed to serve necessary parties in a foreclosure 21 proceeding of the Cohen property, namely, the heirs and estate of the decedent whose property 22 U.S. Bank sought to foreclose on. (Dkt. No. 36 at 4–5, 11–12.) U.S. Bank alleges that, as a 23 result, it had to pay $54,284.16 in fees and costs to the revocable trust that held title to the 24 property. (Id. at 12.) It is undisputed that U.S. Bank lost on the issue at trial, that Defendants 25 believe the court committed reversible error in finding that the estate was a necessary party, and 26 that U.S. Bank elected not to appeal the ruling. (See Dkt. Nos. 84 at 14, 88 at 19–23, 93 at 15–16, ORDER C19-0074-JCC PAGE - 7 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 8 of 13 1 95 at 13.) Whether this constitutes actionable malpractice, though, is a function of whether 2 Defendants’ actions fell below professional norms, irrespective of the trial outcome and, if so, 3 whether the trial outcome would have been more favorable absent the deficient performance. See 4 Frederick, 907 N.W.2d at 173. 5 U.S. Bank presents uncontroverted evidence that Defendants were warned by the Circuit 6 Court of Oregon that it viewed the estate as a necessary party and believed Defendants should 7 have petitioned for the appointment of a personal representative for the estate, yet Defendants 8 never cured this deficiency. (See Dkt. No. 85-1 at 284.) Nevertheless, Defendants insist they had 9 a “colorable argument that the estate was not only unnecessary to the litigation, but also an 10 improper party.” (Dkt. No. 93 at 16.) Specifically, they argue that the property passed directly to 11 the revocable trust upon the grantor’s death, such that the estate had no interest in the property 12 and, therefore, there was no need to name the estate in the foreclosure proceeding. (Dkt. Nos. 88 13 at 22, 93 at 16 (citing Or. Rev. Stat. § 130.001 et seq.; Windle v. Flinn, 251 P.2d 136, 146 (Or. 14 1952)).) Further, the parties present dueling expert reports on whether Defendants’ actions in the 15 Cohen matter fell below the standard for a reasonable attorney practicing in Oregon. (Compare 16 Dkt. No. 86 at 16–20, with 90-1 at 140–43.) This is sufficient to establish a disputed issue of 17 material fact. A lawyer does not breach a duty of care simply by asserting a colorable but 18 unsuccessful argument. See Rowlett v. Fagan, 369 P.3d 1132, 1141 (Or. 2016). 19 20 Accordingly, summary judgment is DENIED to both parties on U.S. Bank’s malpractice claims relating to the Cohen property. 21 22 c. Erickson Property Finally, U.S. Bank alleges Defendants did not provide appropriate legal advice or take 23 necessary actions to perfect U.S. Bank’s title to the Erickson property after U.S. Bank, with the 24 assistance of separate counsel, Bishop, Marshall & Weibel (“BMW”), redeemed the property in a 25 foreclosure sale. (Dkt. No. 36 at 3–4.) This allowed a third party to obtain title to the property 26 through the property condominium owner association’s (“COA”) subsequent foreclosure sale, ORDER C19-0074-JCC PAGE - 8 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 9 of 13 1 requiring U.S Bank to pay the third party $356,276 to reacquire title. (Id. at 6–10.) Primarily at 2 issue is whether Defendants’ undisputed failure to seek a sheriff’s deed on the property after they 3 inherited the file from BMW and their alleged failure to communicate the status of the file to 4 U.S. Bank was a breach of their professional duties to U.S. Bank. (See Dkt. Nos. 84 at 15–17, 88 5 at 10–15, 93 at 16–19.) Defendants present sufficient evidence to establish genuine factual 6 disputes regarding (a) the nature of their duties on the file, in light of BMW’s earlier 7 representation regarding the property and (b) the role that BMW and U.S. Bank’s alleged failure 8 to respond Defendants’ requests for information may have played in Defendants’ alleged failure 9 to meet their professional obligations. (See Dkt. Nos. 90 at 2, 90-1 at 5, 8–12, 29–30.) Moreover, 10 there are also disputed facts regarding causation. It is undisputed that U.S. Bank failed to pay the 11 COA fees; failed to notify Defendants that it had been served in the COA’s foreclosure action, 12 which led to the third party acquiring title; and failed to mitigate its injury on the Erickson 13 property by seeking a sheriff’s deed following Defendants’ termination. (See Dkt. No. 90-1 at 22, 14 34.) 15 16 Accordingly, summary judgment is DENIED to both parties on U.S. Bank’s malpractice claims relating to the Erickson property. 17 E. 18 According to Minnesota law, “[a] breach of contract is a failure, without legal excuse, to U.S. Bank’s Breach of Contract Claims 19 perform any promise that forms the whole or part of the contract.” Lyon Fin. Servs., Inc. v. Ill. 20 Paper and Copier Co., 848 N.W.2d 539, 543 (Minn. 2014). To establish breach, a plaintiff must 21 prove “(1) the formation of a contract, (2) the performance of conditions precedent by the 22 plaintiff, and (3) the breach of the contract by the defendant.” Thomas B. Olson & Assocs., P.A. 23 v. Leffert, Jay & Polglaze, P.A., 756 N.W.2d 907, 918 (Minn. App. 2008). 24 25 U.S. Bank argues that Defendants breached their contract by allegedly failing to comply with the following provisions in the parties’ engagement letter: (1) an articulation of U.S. Bank’s 26 ORDER C19-0074-JCC PAGE - 9 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 10 of 13 1 reliance on Defendant’s professionalism; 1 (2) timeliness, notification, and other obligations 2 regarding the handling of third-party funds; and (3) a duty to indemnify. (See Dkt. No. 36 at 15; 3 see also Dkt. No. 84 at 19–21 (citing Dkt. No. 87 at 10, 12–14, 22, 25).) The parties seek 4 summary judgment on U.S. Bank’s claims flowing from these provisions. (See Dkt. Nos. 84 at 5 18–21, 88 at 27–29.) For the reasons described below, summary judgment is GRANTED to 6 Defendants on U.S. Bank’s breach of contract claims. 7 8 1. Reliance U.S. Bank first argues that Defendants breached the language in the engagement letter 9 describing U.S. Bank’s reliance on their professional competencies. (See Dkt. No. 84 at 19.) But 10 this language is not a “promise.” Lyon Fin. Servs., Inc., 848 N.W.2d at 543. It is an articulation 11 of U.S. Bank’s reliance on the professional standards Defendants were subject to during their 12 engagement. This cannot form the basis of a breach of contract claim. 13 14 2. Timeliness, Notification, and Handling of Third-Party Funds U.S. Bank next argues that Defendants violated the engagement letter’s provisions 15 regarding timeliness, handling of third-party funds, and Defendants’ obligation to notify U.S. 16 Bank of adverse actions. (Dkt. No. 84 at 19–21.) 2 These allegations are more appropriately used 17 1 18 19 20 21 22 Specifically, the engagement letter contains the following language in its introductory section, i.e., prior to the articulation of terms with separate headings: U.S. Bank relies on [Defendants’] professional competencies and obligations, ethical standards, and judgment to ensure that [Defendant’s services] are handled appropriately and that [Defendants] take[] all steps necessary to protect U.S. Bank’s reputation and interests during the course of providing the Legal Services]. (Dkt. No. 87 at 10.) 23 2 24 [Defendants] shall commence and complete the Legal Services in a timely manner . . . [Defendants] shall keep U.S. Bank apprised of the timing and status of the Legal Services, and shall promptly notify U.S. Bank if at any time it appears that the Legal Services will be subject to significant unanticipated delays. 25 26 U.S. Bank relies on the following terms: Third-Party Funds – The Firm shall comply with U.S. Bank’s instructions for the ORDER C19-0074-JCC PAGE - 10 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 11 of 13 1 to support U.S. Bank’s tort-based legal malpractice claims. Under Minnesota law, the attorney- 2 client relationship can be established under “a ‘contract theory’ and a ‘tort theory.’” Veit v. 3 Anderson, 428 N.W.2d 429, 431 (Minn. Ct. App. 1988); see Christy v. Saliterman, 179 N.W.2d 4 288, 293 (Minn. 1970) (in an action brought against attorney for breach of contract the plaintiff 5 must prove the existence of an attorney-client relationship.) Defendants’ contractual obligations 6 regarding the timeliness, notification, and handling of third-party funds are consistent with the 7 professional standards established by the relevant governing bodies in Oregon and Washington. 8 (See Dkt. Nos. 86 at 11–28, 90-1 at 143–45 (articulation of Oregon and Washington’s 9 professional standards by the parties’ experts).) To the extent that Defendants failed to fulfill 10 these obligations, the appropriate claim is a tort-based legal malpractice claim; not breach of 11 contract. See Lyon Fin. Servs., Inc., 848 N.W.2d at 544 (discussing the inappropriate use of 12 “[e]ngrafting an element of reliance from tort law onto a breach of contract action” which “blurs 13 the distinction between the two theories of recovery.”) 14 15 3. Indemnification U.S. Bank finally argues that Defendants violated the engagement letter’s 16 indemnification provision by failing to reimburse it for its damages resulting from Defendants’ 17 allegedly deficient legal services. (Dkt. No. 84 at 21.) 3 But U.S. Bank did not make this 18 19 20 21 22 23 24 25 26 transmission to U.S. Bank of funds paid by third-parties, such as purchase funds or redemption funds from a junior lienholder. In the event there is a claim asserted or legal action brought against U.S. Bank that creates exposure to U.S. Bank, the Firm shall promptly notify U.S. Bank. . . . If at any time the Firm encounters or learns of any delays, adverse actions, or other matters in connection with or involving a foreclosure . . . file that could create a risk of regulatory, legal, reputational, or other risk to U.S. Bank, the Firm shall promptly notify the U.S. Bank Law Division contact . . . (Dkt. No. 87 at 12, 22, 25.) 3 At issue is the following language: “[Defendants] agree[] to defend, indemnify and hold U.S. Bank harmless from and against all claims, liabilities, obligations, demands, action costs and expenses . . . relating to or resulting from [Defendants’] negligence or willful misconduct.” (Dkt. No. 87 at 13.) ORDER C19-0074-JCC PAGE - 11 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 12 of 13 1 allegation in its Amended Complaint, (see generally Dkt. No. 36), and U.S. Bank cannot raise it 2 for the first time in a motion for summary judgment, as this “makes it difficult, if not impossible” 3 to “know how to defend” such a claim. Coleman v. Quaker Oats Co., 232 F.3d 1271, 1292 (9th 4 Cir. 2000). 5 6 For the reasons described above, summary judgment is GRANTED to Defendants on U.S. Bank’s breach of contract claims. 7 F. 8 U.S. Bank also moves for summary judgment on Defendants’ counterclaims. (See Dkt. 9 Defendants’ Counterclaims No. 84 at 21–24.) In response, Defendants present no evidence to support their counterclaims for 10 breach of contract, nor would the Court expect that they could, since the parties seem to agree 11 that U.S. Bank did not contract directly with Defendants before their October 2014 engagement 12 letter. (See Dkt. No. 87 at 10–41.) And Defendants concede U.S. Bank paid the bills that 13 Defendants issued for services rendered pursuant to that letter. (See Dkt. No. 85-1 at 11–12.) Nor 14 do they provide sufficient disputed facts or legal argument to support their quantum meruit and 15 unjust enrichment claims. (See generally Dkt. No. 93 at 23.) 16 Accordingly, summary judgment is GRANTED to U.S. Bank on Defendants’ 17 counterclaims. 18 III. 19 CONCLUSION For the foregoing reasons, U.S. Bank’s motion for summary judgment (Dkt. No. 84) is 20 GRANTED in part and DENIED in part; summary judgment is GRANTED to U.S. Bank on 21 Defendants counterclaims, which are DISMISSED with prejudice, and on U.S. Bank’s 22 malpractice claim solely related to the Patten property. Defendant’s motion for summary 23 judgment (Dkt. No. 88) is GRANTED in part and DENIED in part; summary judgment is 24 GRANTED to Defendants on U.S. Bank’s breach of contract claims, which are DISMISSED 25 with prejudice. Defendants’ motion for leave to file an overlength brief (Dkt. No. 82) is DENIED 26 ORDER C19-0074-JCC PAGE - 12 Case 2:19-cv-00074-JCC Document 100 Filed 08/03/21 Page 13 of 13 1 2 as moot. DATED this 3rd day of August 2021. A 3 4 5 John C. Coughenour UNITED STATES DISTRICT JUDGE 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ORDER C19-0074-JCC PAGE - 13
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