Title: WORMAN v. CARVER

State: wyoming

Issuer: Wyoming Supreme Court

Document:

WORMAN v. CARVER2002 WY 5944 P.3d 82Case Number: 00-332Decided: 04/15/2002

APRIL TERM, A.D. 2002

 

                                                                                                            

 

LOWELL 
LEE WORMAN and

EVELYN 
WORMAN, 

Appellants(Plaintiffs),

 

v.

 

PATTY 
CARVER, d/b/a H&R BLOCK,

and 
H&R BLOCK TAX SERVICES, INC., 

Appellees(Defendants).

 

 

Appeal 
from the District Court of Campbell County

The 
Honorable Keith G. Kautz, Judge

 

Representing 
Appellants:

            
Vance Countryman of Vance T. Countryman, P.C., Lander, Wyoming  

Representing 
Appellees:

Rex O. 
Arney and Timothy M. Stubson of Brown, Drew & Massey, LLP, Casper, 
Wyoming  

 

 

Before 
LEHMAN, C.J., and GOLDEN, HILL, KITE, and VOIGT, 
JJ.

  

            
KITE, Justice. 

[¶1]      Appellants Lowell 
Lee Worman (Lee) and Evelyn Worman (Evelyn) appeal from the district court's 
order granting summary judgment in favor of Appellees Patty Carver, d/b/a 
H&R Block, and H&R Block Tax Services, Inc.  The district court ruled collateral 
estoppel and public policy barred the Wormans from asserting their claims.  We affirm in part, reverse in part, and 
remand.

 

 

ISSUES

 

[¶2]      The Wormans state 
the issues on appeal as follows:

 

            
Whether Evelyn Worman's claims are derivative or independent of Lee 
Worman's claims;

 

            
Whether the submission of a jury instruction regarding Lee Worman's good 
faith adjudicates Evelyn Worman's claims against Patty Carver and H&R 
Block;

 

            
Whether [t]he [g]eneral [p]rinciples [o]f [c]ollateral [e]stoppel [a]pply 
[i]n [t]his [c]ase;

 

            
Whether the submission of a jury instruction regarding Lee Worman's good 
faith precludes Lee Worman's claims against Patty Carver and H&R 
Block;

 

            
Whether Appellants are entitled to a jury decision regarding the 
apportionment of fault;

 

            
Whether public policy precludes the claims of the 
Appellants.

 

The 
appellees frame the issues as follows:

 

            
1.  Whether Appellant Lee 
Worman is collaterally estopped from bringing his claims where they are 
fundamentally inconsistent with his conviction in a criminal trial in the United 
States District Court for the District of Wyoming for willfully signing a 
fraudulent tax return.

 

            
2.  Whether Appellant Evelyn 
Worman is collaterally estopped from bringing her claims where she is in a 
position of privity with Lee Worman and where her claims are dependent upon the 
claims of her husband.

 

            
3.  Whether Appellant Lee 
Worman's claims are barred by public policy where they arise out of his own 
criminal conduct.

 

            
4.  Whether Appellant Evelyn 
Worman is precluded from bringing her claims where those claims are based upon 
Lee Worman's criminal conduct.

 

 

FACTS

 

[¶3]      Lee and Evelyn 
worked for Farmers Cooperative Association (Farmers Co-op) in Gillette.  Lee was the general manager, and Evelyn 
was a bookkeeper.  Ms. Carver 
operated an H&R Block tax service franchise (Gillette H&R Block) in 
Gillette.

 

[¶4]      In 1982, Lee 
became involved in a trucking company known as Whelchel Trucking with his 
brother-in-law, Ernie Whelchel (Ernie).  
Ernie was married to Lee's sister, Dorothy Whelchel (Dorothy).  The Whechels divorced in 1992.  Lee and Ernie disagreed over the extent 
of Lee's involvement in the trucking company.  Lee claimed he was a partner in Whelchel 
Trucking while Ernie maintained Lee simply loaned him money for the 
business.

 

[¶5]      In any event, 
Whelchel Trucking filed partnership tax returns for several years, listing Ernie 
and Lee as partners.  Gillette 
H&R Block prepared the Whelchel Trucking returns and the Wormans' individual 
returns.  In 1989, Ernie instructed 
Ms. Carver not to prepare any more partnership tax returns for Whelchel 
Trucking.

 

[¶6]      Whelchel Trucking 
leased its trucks exclusively to Farmers Co-op.  In 1991, Lee began writing checks from 
the Farmers Co-op checking account to his personal account.  He wrote on the check stubs that the 
payments were to Whelchel Trucking, but the checks were made out to his personal 
account.  Lee did not report these 
funds as income on his personal income tax returns.

 

[¶7]      The United States 
charged Lee with four counts of willfully submitting false tax returns in 
violation of 26 U.S.C. § 7206(1) for the years of 1991 through 1994.1  Lee was tried before a jury in the 
federal district court in August 1998, and the jury found him guilty on all four 
counts.  The federal district court 
denied Lee's motion for a judgment of acquittal notwithstanding the verdict, and 
Lee appealed.  The United States 
Court of Appeals for the Tenth Circuit affirmed Lee's conviction on April 6, 
2000.  United States v. Worman, No. 98-8102, 
2000 WL 358384 (10th Cir. Apr. 6, 2000).

 

[¶8]      The Wormans 
commenced the present action after Lee was convicted of filing false tax 
returns.  They claimed Ms. Carver 
was negligent in preparing their tax returns and H&R Block Tax Services, 
Inc. was negligent in its supervision and training of Ms. Carver.  In addition, they asserted claims for 
negligent misrepresentation, fraud, and respondeat superior.  The Wormans maintained Lee was convicted 
of tax fraud because of the appellees' wrongful actions and, as a result, they 
incurred damages including attorneys' fees in the criminal case, loss of 
credibility and reputation, loss of value from a civil suit, civil tax penalties 
and interest, and emotional distress.  
Evelyn also presented a separate claim for loss of Lee's consortium while 
he served his prison sentence.

 

[¶9]      The appellees 
filed a motion for a summary judgment, and the Wormans filed a motion for a 
partial summary judgment.  The 
district court held a hearing on the motions and subsequently granted the 
appellees' summary judgment motion.  
In its decision letter, the district court ruled Lee was collaterally 
estopped from asserting his claims against the appellees.  It stated in pertinent 
part:

 

The 
central issue in this case is whether Worman relied in good faith on the advice 
and work of the Defendants in preparing his 1991-1994 personal income tax 
returns.  If he cannot establish 
that he relied on the Defendants['] advice and work then he cannot establish 
that any damages he claims were caused by the Defendants.  The Federal Court jury decided, beyond a 
reasonable doubt, that Worman did not rely in good faith on advice or work from 
the Defendants.  Collateral estoppel 
prevents him from claiming that he relied in good faith on the Defendants for 
those tax returns.  

 

            
The Plaintiffs argue that this case raises numerous issues which were not 
decided in Worman's criminal trial.  
Other issues do exist here, but each of them is dependent on Worman's 
ability to show that his damages were caused by the Defendants because he relied 
on them.

 

The 
district court also held Evelyn was in privity with Lee and her claims were 
barred because they derived entirely from Lee's claims.

 

[¶10]   The Wormans filed a motion for 
reconsideration, which the district court denied.  They appealed.

 

 

STANDARD 
OF REVIEW

 

[¶11]   A summary judgment may be granted 
when there are no genuine issues of material fact and the prevailing party is 
entitled to a judgment as a matter of law. Boley v. Greenough, 2001 WY 47, ¶10, 22 P.3d 854, ¶10 (Wyo. 2001); Burbank v. 
Wyodak Resources Development Corp., 11 P.3d 943, 946 (Wyo. 
2000).

  

We 
review a summary judgment in the same light as the district court, using the 
same materials and following the same standards.  We examine the record from the vantage 
point most favorable to the party opposing the motion, and we give that party 
the benefit of all favorable inferences that may fairly be drawn from the 
record. The review of a grant of summary judgment involving a question of law is 
de novo.

 

Rawlinson 
v. Cheyenne Board of Public Utilities, 2001 
WY 6, ¶5, 17 P.3d 13, ¶5 (Wyo. 2001) (citations omitted).

 

 

DISCUSSION

 

A.        
Collateral Estoppel

 

[¶12]   The Wormans contend the district 
court erred by ruling that collateral estoppel barred their claims.  In general, they argue the issue in the 
federal criminal case was not identical to the issue presented in the case at 
bar.  The Wormans also insist 
Evelyn's claims did not derive from Lee's claims and she is not, therefore, 
bound by the federal criminal jury's decision.  

 

[¶13]   Res judicata and collateral estoppel are 
related but distinct concepts which preclude the relitigation in a subsequent 
suit by the same parties or their privies of questions directly determined by a 
court of competent jurisdiction.  Eklund v. PRI Environmental, Inc., 2001 
WY 55, ¶15, 25 P.3d 511, ¶15 (Wyo. 2001); Tenorio v. State ex rel. Wyoming Workers' 
Compensation Division, 931 P.2d 234, 238 (Wyo. 1997).  The United States Supreme Court 
discussed the purpose of the preclusion doctrines in Montana v. United States, 440 U.S. 147, 
153-54 (1979):

 

To 
preclude parties from contesting matters that they have had a full and fair 
opportunity to litigate protects their adversaries from the expense and vexation 
attending multiple lawsuits, conserves judicial resources and fosters reliance 
on judicial action by minimizing the possibility of inconsistent decisions.  

 

[¶14]   Res judicata bars relitigation of 
previously litigated claims or causes of action, and collateral estoppel bars 
relitigation of previously litigated issues.  Slavens v. Board of County Commissioners for 
Uinta County, 854 P.2d 683, 686 (Wyo. 1993).  Collateral estoppel may preclude the 
relitigation in a subsequent civil action of an issue decided in a criminal 
case.  See, e.g., Kennedy v. Mendoza-Martinez, 372 U.S. 144 (1963); see also Restatement 
(Second) of Judgments § 85 (1982); 47 Am. Jur. 2d Judgments § 733 
(1995).

 

[¶15]   The proper doctrine for our 
consideration in this case is collateral estoppel because the matter involves 
issues previously litigated in Lee's criminal case.  Four factors are considered in 
determining whether collateral estoppel applies:

 

(1) 
whether the issue decided in the prior adjudication was identical with the issue 
presented in the present action; (2) whether the prior adjudication resulted in 
a judgment on the merits; (3) whether the party against whom collateral estoppel 
is asserted was a party or in privity with a party to the prior adjudication; 
and (4) whether the party against whom collateral estoppel is asserted had a 
full and fair opportunity to litigate the issue in the prior proceeding. 

 

Eklund, 2001 
WY 55, ¶15.

 

1.         
Lee's 
Claims

 

[¶16]   The parties strongly disagree about 
whether the issues in this case and those in the criminal case were 
identical.  In this case, the 
Wormans stated causes of action for negligence, misrepresentation, and 
fraud.  They maintained Lee was 
convicted of tax fraud as a result of the appellees' wrongful actions and he 
incurred damages including attorneys' fees in the criminal case, loss of 
credibility and reputation, loss of value from a civil suit, civil tax penalties 
and interest, and emotional distress.  
In order to prevail, the Wormans had to prove Lee relied upon the 
appellees' advice and services in signing their 1991 through 1994 income tax 
returns.  If Lee did not rely on the 
appellees' advice and services, the Wormans cannot establish that the appellees 
caused Lee's damages.  Consequently, 
Lee's state of mind was at issue in this action.

 

[¶17]   The criminal case also addressed 
Lee's state of mind.  The federal 
jury found Lee guilty on four counts of willfully submitting a false tax 
return.  The federal court 
instructed the jury that, in order for it to convict Lee, the government had to 
prove the following elements for each of the four years at 
issue:

 

            
One:    The 
defendant, Lowell Lee Worman, made and signed a tax return for the years 1991, 
1992, 1993, and 1994 that contained false information, as to a material matter 
as detailed in the Indictment;

 

            
Two:    The 
defendant knew that this information was false; 

 

            
Three: The return contained a 
written declaration that it was being signed subject to the penalties of 
perjury; and

 

            
Four:   In filing the 
false tax return, the defendant acted wil[l]fully. 

 

The 
court also instructed the jury on the meaning of willfully:  "To act willfully means to act 
voluntarily and deliberately and intending to violate a known legal duty.  Negligent conduct is not sufficient to 
constitute willfulness."  Another 
instruction informed the jury that good faith was a complete defense to the 
charges:

 

            
The good faith of the defendant, Lowell Lee Worman, is a complete defense 
to the tax charge in Counts 1, 2, 3, and 4 of the indictment because good faith 
is simply inconsistent with willfully filing a fraudulent or false tax 
return.

 

            
While the term "good faith" has no precise definition, it means, among 
other things, an honest belief, a lack of malice, and the intent to perform all 
lawful obligations.  A person who 
acts on a belief or on an opinion honestly held is not punishable under the 
statute merely because that honest belief turns out to be incorrect or 
wrong.  The tax laws subject to 
criminal punishment only those people who willfully file[] a fraudulent or false 
tax return.  

 

The jury 
determined Lee's actions were willful when it convicted him of tax 
fraud.

 

[¶18]   In Dover v. Baker, Brown, Sharman & Parker, 
859 S.W.2d 441 (Tex. App. 1993), a Texas Court of Appeals addressed a 
factual situation similar to the one in this case.  Mr. Dover was convicted of making and 
subscribing to false tax statements under 26 U.S.C. § 7206(1) (1988), and 
he subsequently sued his attorneys and accountants for malpractice, claiming he 
was convicted because of their misconduct.  
859 S.W.2d  at 444-45.  The 
trial court dismissed Mr. Dover's claims against the accountants because they 
were barred by the statute of limitations.  
859 S.W.2d  at 447.  The trial 
court also granted summary judgment in favor of the attorneys.  Id.  
The court held Mr. Dover was collaterally estopped from claiming he 
relied upon the attorneys' legal advice.  
859 S.W.2d  at 449.

 

[¶19]   The Texas Court of Appeals affirmed 
the trial court's decision.  It 
explained the jury was required to find Mr. Dover's actions were willful to 
convict him of tax fraud under 26 U.S.C. § 7206(1) and a finding of willfulness 
would be inconsistent with a claim his attorneys were 
negligent:

 

[A] 
critical issue decided in each of these criminal convictions was that Dover 
participated in the corporate transaction knowingly and wil[l]fully, and not out 
of justifiable reliance on [the attorneys'] advice. Dover could not have 
knowingly and wil[l]fully engaged in the underlying transactions and engaged in 
those transactions in good faith mistaken reliance on [the attorneys'] 
advice.  Under the criminal law, those findings were mutually 
exclusive.

 

859 S.W.2d  at 449 (emphasis added); see also Richey v. United States Internal 
Revenue Service, 9 F.3d 1407 (9th Cir. 1993) (holding the issue 
of the taxpayer's willfulness was decided in his criminal tax fraud case and 
could not be relitigated in a subsequent civil suit).

 

[¶20]   The federal jury found Lee guilty 
of willfully signing a false tax return.  
In making that determination, it necessarily concluded Lee did not rely 
in good faith upon the appellees' advice and services in submitting the 
information.  Consequently, the 
appellees' conduct, whether negligent or not, could not have caused Lee to be 
convicted of tax fraud.  The issues 
in the criminal case were identical to those in the civil case.  

 

[¶21]   The other collateral estoppel 
factors are also clearly satisfied as to Lee's claims.  He was a party in the criminal action, 
and his criminal conviction was a judgment on the merits.  See Eklund, 2001 WY 55, ¶15; Dover, 859 S.W.2d  at 449; Richey, 9 F.3d  at 1410-11.  In addition, a criminal trial presents a 
defendant with a full and fair opportunity to litigate the issues because a 
criminal defendant has strong incentives to vigorously defend the charges 
against him.  See, e.g., Kennedy, 372 U.S. 144.  At the criminal trial, Lee attempted to 
prove his actions were not willful and he relied in good faith upon the 
appellees' advice.  Even though he 
was not successful, he had a full and fair opportunity to litigate the 
issue.  

 

[¶22]   The Wormans contend the application 
of collateral estoppel in this case was improper because the decision in another 
civil case altered the underlying facts of this matter.  "It is, of course, true that changes in 
facts essential to a judgment will render collateral estoppel inapplicable in a 
subsequent action raising the same issues."  Montana, 440 U.S.  at 
159.

 

[¶23]   Prior to the criminal trial, Ernie 
filed a civil action against his ex-wifeDorothyand Lee.  Whelchel v. Whelchel, Civ. Case No. 
19963 (6th Jud. Dist. Wyo. 1999).  He also named Farmers Co-op in the 
suit.  Id.  The various parties filed numerous 
claims, cross-claims, and counterclaims.  
Ernie asserted, among other things, that Lee improperly took funds which 
belonged to Whelchel Trucking when he issued the Farmers Co-op checks to his 
personal account.  The case was 
tried to the court, but the court did not issue its decision until after the 
criminal trial was held.  The Whelchel court ultimately ruled 
generally against each of the parties.

 

[¶24]   The Wormans claim the ruling in Whelchel was inconsistent with Lee's 
criminal conviction because, in order to convict Lee of tax fraud, the federal 
jury had to find he converted funds from Whelchel Trucking.  Otherwise, they argue, the funds he 
received would have been partnership distributions which were not taxable.  The Tenth Circuit Court of Appeals ruled 
in Lee's appeal that sufficient evidence existed for the jury to reasonably 
conclude Lee was not a partner in Whelchel Trucking and, consequently, the funds 
he took from Farmers Co-op amounted to income and were taxable.  Worman,  2000 WL 358384, at 
*3.

            

[¶25]   The Wormans assert that the court 
in Whelchel determined Lee did not 
convert funds.  A careful review of 
the decision in Whelchel, however, belies the Wormans' argument.  The Whelchel court did not conclude Ernie 
had failed to establish Lee wrongfully took Whelchel Trucking funds.  In fact, that court did not examine the 
individual elements of any of the asserted causes of action.  Instead, it simply ruled that none of 
the parties met their burden of proof because the evidence was too speculative 
to award a judgment to any party.  
The relevant portion of that court's decision letter 
stated:

 

In 
conclusion I am going to find generally against each party on their claim 
against the others.  The evidence 
before the court was so conflicting it was difficult to tell what the facts 
were.  The lack of contracts, the 
lack of proper and timely accounting (by anyone), the sloppy information 
presented and placed in tax returns, and the misleading paper trail left the 
court with a dim view of the position advocated by each party.  In other words, no one proved their case 
by a preponderance of the evidence despite what could be argued from a view of 
the various bottom lines.  Equity 
and good justice, as I view it from the thorough review of this evidence 
requires that the parties be left where they entered. 

 

[¶26]   The Whelchel decision was not inconsistent 
with Lee's criminal conviction.  The 
application of collateral estoppel in the case at bar was, therefore, 
appropriate because the underlying facts did not change.

 

2.         
Evelyn's 
Claims

 

[¶27]   The district court also dismissed 
Evelyn's claims.  Like Lee, Evelyn 
maintained the appellees' wrongful conduct caused her to suffer damages 
including attorneys' fees from Lee's criminal case, damage to credibility and 
reputation, loss of value from a potential civil case, loss of consortium 
because of Lee's jail sentence, and civil tax penalties and interest.  The district court ruled Evelyn was in 
privity with Lee in the criminal case because her claims derived entirely from 
Lee's conviction.  The district 
court, therefore, concluded collateral estoppel barred her 
claims.

 

[¶28]   Collateral estoppel may be applied 
to one who was a party to the prior proceeding or to one who was in privity with 
a party.  Tenorio, 931 P.2d  at 238-39.  Privity exists when there is a close or 
significant relationship between the party and the nonparty.  Gambocz v. Yelencsics, 468 F.2d 837, 841 
(3d Cir. 1972); see also Seamon v. Bell Telephone Company of 
Pennsylvania, 576 F. Supp. 1458, 1461 (W.D. Penn. 1983), aff'd, 740 F.2d 958 (3d Cir. 1984); Restatement (Second) of Judgments § 85 cmt.  f (1982).  When a nonparty's interests are 
sufficiently represented by a party, the nonparty is considered to be a privy, 
and the preclusive effects of res 
judicata and collateral estoppel will apply to bar a subsequent action by a 
nonparty.  First Options of Chicago, Inc. v. Kaplan, 
913 F. Supp. 377, 383-84 (E.D. Penn. 1996); Eubanks v. Federal Deposit Insurance 
Corporation, 977 F.2d 166, 170 (5th Cir. 1992); Restatement 
(Second) of Judgments § 85(2) (1982).  
A nonparty is adequately represented in a prior action when a party "is 
so closely aligned to her interests as to be her virtual representative." Eubanks, 977 F.2d  at 170.  Thus, when the nonparty's claims 
derive from the claims asserted by the party, the nonparty will be bound by the 
prior judgment against the party.  
Id.   

 

[¶29]   Most of Evelyn's asserted damages 
were actually injuries suffered by Lee; i.e., attorneys' fees from Lee's 
criminal case, damage to reputation and credibility, and loss of value from a 
potential civil case.  It is 
questionable whether Evelyn could individually assert those claims for 
damages.  In any event, we agree 
with the district court that, as to those claims, Evelyn was in privity with 
Lee.  

 

[¶30]   In order to prove the damages from 
Lee's conviction were caused by the appellees' wrongful conduct, Evelyn had to 
establish that Lee relied upon the appellees' advice and services.  As we stated earlier in this opinion, 
that issue was fully litigated in the criminal case.  The jury determined Lee acted willfully 
and did not rely in good faith upon the appellees' advice and services.  Evelyn's claims derived entirely from 
Lee's conviction, and her interests were identical with Lee's interests in the 
criminal case.  Evelyn is, 
therefore, bound by the determinations made in the criminal 
case.

 

[¶31]   Evelyn also presented a claim for 
loss of Lee's consortium while he served his prison term.  In Wyoming, a claim for loss of 
consortium is derivative of the injured party's claim.  See, e.g.,  Massengill v. S.M.A.R.T. Sports Medicine 
Clinic, P.C., 996 P.2d 1132, 1137 (Wyo. 2000); Verschoor v. Mountain West Farm Bureau 
Mutual Insurance Company, 907 P.2d 1293, 1301 (Wyo. 1995).  Therefore, if the injured party's claim 
fails, the loss of consortium claim must also fail.  Massengill, 996 P.2d  at 1137.  The district court correctly concluded 
that, because Lee's claims were barred, Evelyn could not maintain her 
loss-of-consortium claim. 

 

[¶32]   Finally, Evelyn asserted the 
appellees' wrongful conduct caused her to incur civil tax penalties and 
interest.  Illustration 11 of 
Restatement (Second) of Judgments § 85 (1982) recognizes the spouse of a person 
convicted of tax fraud may be independently liable for civil penalties and the 
criminal judgment is not preclusive against the spouse:

 

            
11.       
[The husband] is convicted of the crime of fraudulently understating his 
income tax liability.  The 
government then brings a civil action against [the wife], [the husband's] 
spouse, to recover a civil penalty based upon the same tax return.  The judgment in the criminal prosecution 
is not preclusive against [the wife] as to issues concerning [the wife's] 
liability for the penalty.

 

[¶33]   The Tenth Circuit Court of Appeals 
has similarly recognized that spouses are separate and distinct income taxpayers 
even when they file joint tax returns.  
Tavery v. United States, 897 F.2d 1032, 1034 (10th Cir. 1990).  Consequently, a tax liability 
determination against one spouse is not preclusive against the other spouse in a 
subsequent case.  Id.  
"[A] wife who files a joint return with her husband is not a party 
privy to her husband in [income tax] litigation.'"  Id.  
(quoting  Henry M. Rodney, 53 T.C. 287, 307 
(1969)).

 

[¶34]   Applying this rationale to the case 
at bar, we conclude, with regard to her individual liability for civil tax 
penalties, Evelyn was not in privity with Lee.  Thus, Evelyn's claims against the 
appellees for wrongful conduct which resulted in civil tax penalties being 
assessed against her are not barred as a result of Lee's criminal 
conviction.      

 

B.        
Public Policy 

 

[¶35]   The district court also ruled 
public policy foreclosed the Wormans from sustaining their claims against the 
appellees.  It relied upon Feltner v. Casey Family Program, 902 P.2d 206 (Wyo. 1995), to support its ruling.  In that case, Veronica and Doniv Feltner 
were Jason Feltner's parents.  902 P.2d  at 207.  All three Feltners 
sued the Casey Family Program after a jury convicted nineteen-year-old Jason of 
fourth-degree sexual assault for having sexual intercourse with a 
fourteen-year-old girl.  902 P.2d  at 
207-08.  The Casey Family Program 
had placed the girl in the Feltners' home for foster care.  Id.  
The Feltners alleged claims for recovery of damages resulting from 
Jason's conviction.  902 P.2d  at 
208.

 

[¶36]   The district court dismissed the 
Feltners' claims, and this court affirmed.  
902 P.2d  at 207.  We held 
public policy precludes a plaintiff from bringing suit to recover for injuries 
he sustained as a direct result of his own serious violation of the law.  902 P.2d  at 208.  We also affirmed the dismissal of the 
parents' claims which arose from their son's criminal conduct.    902 P.2d  at 209. The opinion left the possibility open 
that independent claims may not be barred on public policy grounds.  This court acknowledged the parents may 
have had an independent claim for breach of confidentiality which did not derive 
from Jason's criminal actions. 902 P.2d  at 209.  Nevertheless, we declined to consider the 
propriety of the district court's dismissal of that claim because the Feltners 
did not adequately brief the issue.  
902 P.2d  at 210.

 

[¶37]   The Feltner decision unquestionably supports 
the dismissal of Lee's claims.  
Lee's injuries were a direct result of his illegal conduct.  Public policy precludes judicial relief 
for "those injured in the course of committing a serious criminal act.'"  902 P.2d  at 208 (quoting Barker v. Kallash, 468 N.E.2d 39, 41 
(N.Y. 1984)).  Similarly, Feltner 
also barred Evelyn's claims which derived from Lee's conviction.  
902 P.2d  at 209.

 

[¶38]   Public policy does not, however, 
prevent Evelyn from presenting her independent claim for civil tax penalties and 
interest which she maintains the appellees' wrongful acts caused.  Evelyn may have incurred civil tax 
penalties and interest even if Lee had not been convicted of the criminal 
act.

 

[¶39]   Affirmed in part, reversed in part, 
and remanded for further proceedings consistent with this 
opinion.

 

FOOTNOTES

 1Lee was also 
charged with two counts of aiding and assisting in the preparation of a false 
tax return as prohibited by 26 U.S.C. § 7206(2), but the United States dismissed 
those counts.