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Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 

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FILED 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

Uniced States Court of Appeals 

Tenth Circuit 

AUG 8 1991 

&OBERT L. HOECKER 

Clerk 

FEDERAL DEPOSIT INSURANCE ) 

CORPORATION, in its Corporate ) 

Capacity, as Successor in Interest to ) 

Home Savings & Loan Association, F.A., ) 

) 

Plaintiff-Appellant, ) 

) 

v. ) 

) 

DONALD P. FERGUSON, an Individual; ) 

JMS & ASSOCIATES, INC., an Oklahoma ) 

Corporation, ) 

) 

Defendants-Appellees. ) 

ORDER AND JUDGMENT* 

No. 90-6195 

(D.C. No. 88-1685-A) 

(W. D. Okla.) 

Before LOGAN, MOORE, and BALDOCK, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. 

submitted without oral argument. 

The case is therefore ordered 

Plaintiff Federal Deposit Insurance Corporation (FDIC) 

appeals the jury verdict in favor of defendant Donald P. Ferguson 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 90-6195 Document: 010110131456 Date Filed: 08/08/1991 Page: 1 
in this diversity action for attorney malpractice. Ferguson 

formerly represented Home Savings and Loan Association (Home) in 

two loan closings. The FDIC, as successor in interest to Home, 

alleged at trial that Ferguson was negligent in representing Home 

at the loan closings. 1 The jury returned a verdict finding that 

Home was seventy percent negligent, Ferguson was fifteen percent 

negligent, and JMS Associates, Inc. (JMS), the closing agent, was 

fifteen percent negligent. Under Oklahoma comparative negligence 

law, Okla. Stat. Ann. tit. 23, § 13; Bode v. Clark Equip. Co., 719 

P.2d 824, 826 (Okla. 1986), the FDIC recovered nothing. After the 

district court denied the FDIC's post-trial motions, it appealed. 

The FDIC argues that (1) comparative and contributory 

negligence principles do not apply to legal malpractice claims; 

(2) an attorney should be allowed to assert the contributory 

negligence of his client only when the client's negligence 

prevents the attorney from performing his work; and (3) public 

policy considerations require that Ferguson be held responsible 

for his negligence notwithstanding any contributory negligence by 

Home. 

I 

The FDIC first argues that the district court erred in 

admitting evidence concerning the negligence of Home's employees. 

The FDIC also argues that contributory and comparative negligence 

1 The Federal Home Loan Bank Board appointed the Federal 

Savings and Loan Insurance Corporation as receiver for Home, 

causing it, in its corporate capacity, to succeed to Home's claim 

against Ferguson. After enactment of the Financial Institutions 

Reform, Recovery and Enforcement Act, the FDIC succeeded to Home's 

claim. 

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Appellate Case: 90-6195 Document: 010110131456 Date Filed: 08/08/1991 Page: 2 
principles do not apply because the FDIC's claims were based only 

on Ferguson's malpractice, and the FDIC did not seek recovery for 

pre-closing losses. It believes Ferguson's alleged malpractice 

and conflict of interest should not be shielded by any lack of 

diligence by Home's employees. 

To prevail in an action for attorney negligence, a client 

must prove the existence of an attorney-client relationship, 

breach of duty by the attorney, facts constituting the alleged 

negligence, that the negligence was the proximate cause of the 

injury, and that but for the negligence the client would not have 

suffered damage. Allred v. Rabon, 572 P.2d 979, 981 (Okla. 1977). 

Generally, the burden is met if the client proves the attorney 

failed to exercise the degree of care, skill, and diligence 

typically possessed and exercised by another attorney in a similar 

circumstance. Frank v. Bloom, 634 F.2d 1245, 1257 (10th Cir. 

1980); Collins v. Wanner, 382 P.2d 105, 108 (Okla. 1963). For 

actionable negligence, however, the attorney must actually owe the 

client a duty. Birchfield v. Harrod, 640 P.2d 1003, 1005 (Okla. 

Ct. App. 1982). 

In a malpractice action brought by a client against his 

attorney sounding in negligence, contributory negligence is a 

proper defense. Somma v. Gracey, 544 A.2d 668, 671-72 (Conn. App. 

Ct. 1988); Cicerelli v. Capobianco, 453 N.Y.S.2d 21, 22 (N.Y. App. 

Div. 1982), aff'd, 463 N.Y.S.2d 195, 449 N.E.2d 1273 (N.Y. 1983); 

Hansen v. Wightman, 538 P.2d 1238, 1245 (Wash. Ct. App. 1975); 

Feil v. Wishek, 193 N.W.2d 218, 225-26 (N.D. 1971); Theobald v. 

Byers, 13 Cal. Rptr. 864, 865-66 (Cal. Dist. Ct. App. 1961); see 

3 

Appellate Case: 90-6195 Document: 010110131456 Date Filed: 08/08/1991 Page: 3 
also Erwin v. Frazier, 786 P.2d 61, 63-64 (Okla. 1989) (in 

attorney malpractice action where summary judgment held 

inappropriate, and case remanded for trial, court indicated that 

contributory negligence principles applied). In asserting this 

defense, the attorney has the burden to prove that his client was 

negligent in failing to act or disclose information to the 

attorney. See Hansen, 538 P.2d at 1245. The determination of 

contributory negligence is then a question of fact for the jury. 

Okla. Const. art. 23, § 6; Okla. Stat. Ann. tit. 23, § 12; see 

Bishop's Restaurants, Inc. v. Whomble, 355 P.2d 560, 563 (Okla. 

1960) (if there is sufficient evidence to require a jury 

instruction on contributory negligence, the jury verdict on the 

question is conclusive). 

The jury in this case found that Ferguson was fifteen percent 

and Home seventy percent at fault in connection with the losses 

suffered by Home. These findings are supported by the record. 

Evidence presented at trial supported Ferguson's argument that he 

was hired to draft closing documents and to file the appropriate 

papers after the closings, and that either JMS, as closing agent, 

or Home, through its employees, had the responsibility of 

obtaining the certificates of occupancy and ensuring that the 

projects were completed at the time of the closings. Ferguson, 

for his part, failed to check to determine if the certificates of 

occupancy were obtained. Ferguson, however, could reasonably rely 

on either his client or the closing agent to perform the functions 

they were to perform. See Hansen, 538 P.2d at 1245 (attorney need 

not investigate if responsibility assumed by client). Ferguson 

4 

Appellate Case: 90-6195 Document: 010110131456 Date Filed: 08/08/1991 Page: 4 
only had an obligation to provide those services for which he was 

hired. See Somma v. Gracey, 544 A.2d at 672. Because the record 

supports Ferguson's contention that he was not hired to act as the 

closing agent, the jury, properly instructed, could determine, as 

it did, that Ferguson was not solely responsible for the loss. 

II 

The FDIC argues that a client's contributory negligence 

should not be allowed as a defense by an attorney, unless such 

negligence prevents the attorney from performing his work. The 

FDIC presents no authority that this higher standard of care 

applies in suits between a client and his attorney, involving 

typical attorney-client relationships. Under the circumstances of 

this case, the higher standard does not apply. Ferguson had no 

responsibility to do what Home indicated it would do. 

III 

The FDIC argues that public policy considerations require 

that Ferguson be held responsible for his negligence 

notwithstanding the negligence of others. The FDIC argues that 

Ferguson, as a director of Home, was required to exercise 

diligence and supervision in maintaining supervision and control 

of Home and as such should not escape liability. 

The issue of director liability was neither raised nor 

instructed on below and the district court and jury never 

addressed the issue. In most cases, this would preclude appellate 

review. See Petrini v. Howard, 918 F.2d 1482, 1483 n.4 (10th Cir. 

1990) (federal courts will not review a judgment on the basis of 

an issue not presented below). Courts may consider an issue first 

5 

Appellate Case: 90-6195 Document: 010110131456 Date Filed: 08/08/1991 Page: 5 
raised on appeal, however, if it is a purely legal issue central 

to the case, such that there need be no further development of the 

facts, and it is important to the public interest. Dean Witter 

Reynolds, Inc. v. Fernandez, 741 F.2d 355, 360-61 (11th Cir. 

1984); Franki Found. Co. v. Alger-Rau & Assocs., Inc. 513 F.2d 

581, 586 (3d Cir. 1975); Brennan v. Gilles & Cottinq, Inc., 504 

F.2d 1255, 1266 (4th Cir. 1974); Green v. Brown, 398 F.2d 1006, 

1009 (2d Cir. 1968). 

We decline to consider this newly raised issue. See FDIC v. 

232, Inc., 920 F.2d 815, 817 (11th Cir. 1991) ("Whether to 

consider an argument first made on appeal ... is left primarily 

to the discretion of the appellate courts."). In part, the issue 

is a question of fact. See Grubb v. FDIC, 833 F.2d 222, 224 (10th 

Cir. 1987) (court of appeals will not consider fact questions not 

first presented to fact finder). Furthermore, Horne originally 

instituted this action when it was solvent, when the case was 

simply one between an attorney and his client. The FDIC's 

stepping in after nearly three years of litigation, asserting the 

taxpayers' loss as guarantor of insured deposits, does not 

transfer the case into the realm of the public interest. 

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Appellate Case: 90-6195 Document: 010110131456 Date Filed: 08/08/1991 Page: 6 
The judgment of the United States District Court for the 

Western District of Oklahoma is AFFIRMED. 

dismissed as a party is GRANTED. 2 

JMS's motion to be 

Entered for the Court 

James K. Logan 

Circuit Judge 

2 In its brief, the FDIC states it is not "appealing the 

District Court's decision with respect to JMS." Appellant's Brief 

at 3 n.2. 

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