The HONORABLE RICHARD W. GOLDBERG, Judge, United States Court 1 of International Trade, sitting by designation. The Honorable David S. Doty, United States District Judge for the District of 2 Minnesota. 

## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 97-3057

___________ Joyce Witzman, * * Appellant, * * Appeal from the United States v. * District Court for the * District of Minnesota. Bert M. Gross; Phillips & Gross, P.A., * formerly known as Phillips, Gross & * Aaron, P.A., * * Appellees. *

___________ Submitted: March 13, 1998 Filed: July 7, 1998

___________ Before WOLLMAN and HANSEN, Circuit Judges, and GOLDBERG, Judge. 1

___________ WOLLMAN, Circuit Judge. Joyce Witzman appeals from the district court’s grant of summary judgment in 2 favor of Bert Gross, and Phillips & Gross, P.A. (appellees) and the dismissal of her-2-

clai ms with prejudice. Witzman also appeals from the district court’s denial of he r motion to voluntarily dismiss without prejudice. We affirm.

I.
Witzman and Blair Wolfson, her brother, are beneficiaries of several trust s established by their parents. Wolfson also served as trustee of the various trusts and has administered them throughout their existence . During most of that time period, the appellees served as Wolfson’s counsel in his capacity as trustee.
In 1993, Witzman filed three separate petitions in Minnesota state court, which alleged t hat Wolfson had breached his fiduciary duty as trustee. She specificall y alle ged that Wolfson had failed to prepare and file annual accounts of the trusts a s require d by Minnesota law, took excessive fees, engaged in self-dealing, and mad e imprudent investment s with trust assets. In late 1994, Witzman and Wolfson reached
a settlement. The agreement provided, among other things, that: (1) Witzman would receive a substantial amount of property; (2) Witzman’s claims against the appellees were expressly pre served; and (3) Wolfson was obligated to cooperate with Witzman in any a ction against the appellees. As part of the settlement agreement, Witzma n provided Wolfson with a comprehensive release from any claims ari sing out of the trust litigation. Witzman and Wolfson’s cooperative rel ationship eventually deteriorated. After Wi tzman unsuccessfully challenged portions of the settlement agreement an d Wolfson’s performance under those provisi ons, she commenced this action against the appellees in Minnesota state court. Her complaint included allegations of breach o f trust, aiding and abett

ing a breach of trust, negligent misrepresentation, and violations of th e Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § § 1961-1968.Inview of our disposition of the appeal, we need not rule on the appellees ’ 3 motion to dismiss that portion of the appeal that challenges the magistrate judge’ s rulings on the motion to amend the complaint. -3- In January of 1997, after removing the action, the appellees filed a motion fo r s ummary judgment. Witzman then filed a motion to amend her complaint, which the magi strate judge denied after finding that the complaint failed to comply with th e brev ity and specificity requirements of Rules 8 and 9(b) of the Federal Rules of Civil Procedure. A second attempt by Witzman to amend her complaint was denied, he r counsel was sanctioned, and she was granted leave to submit a new motion to amend, subject to the court’s consideration of the pending motion for summary judgment. 3 Witzman subsequently moved the court to dismiss her case without prejudice pursuant to Fed. R. Civ. P. 41(a) (2). After a hearing, the district court issued an order granting the appellees’s motion for summary judgment, dismissed th e action with prejudice and, in effect, denied Witzman’s motion to dismiss without prejudice.

II. We first consider Witzman’s argument that the district court erroneously applied Minnesot a law when it granted the appellees summary judgment and dismissed he r claim with prejudice. The thrust of her argument is that the district court improperly concluded t hat she was unable to state a cause of action for either breach of trust o r aiding and abetting a breach of trust against Wolfson’s attorneys. When considering Witzm an’s supplemental state-law claims, we are bound by Minnesota law. Se e UnitedMine Workers of America v. Gibbs , 383 U.S. 715, 726 (1966); Mangold v

. California Public Util. Comm’n , 67 F.3d 1470, 1478 (9th Cir. 1995) (“The Eri e principles apply equally in the context of pendent jurisdiction.”). “Where state la w supplies the rule of d ecision, it is the duty of federal courts to ascertain and apply that law.” Kizz ier Chevrolet, Co. v. General Motors Corp. , 705 F.2d 322, 329 (8th Cir

. 1983) (citing Stoner v. New York Life Ins. Co. , 311 U.S. 464 (1940)). We review de-4-

novo the district court’s interpretati on of Minnesota law. See Salve Regina College v. Russell , 499 U.S. 225, 231 (1991). It is a well established rule in Minnesota that an attorney is liable for p rofessional mal practice “only to a person with whom the attorney has an attorney-clien t relationship.” Goldberger v. Kaplan, Strangis & Kaplan, P.A. , 534 N.W.2d 734, 738 (Minn. Ct. App. 1995) (review denied) (citing Marker v. Greenberg , 313 N.W.2d 4 , 5 (Minn. 1981) (en banc)). Like many jurisdictions, Minnesota recognizes exceptions to this strict privity requirement. See Marker , 313 N.W.2d at 5. A non-client may sue
an attorney for professional malpractice when the non-client is a direct, intende d beneficiary of the attorney’s services. See Goldbe rger , 534 N.W.2d at 738. Witzman, howev er, can establish neither that she had an attorney-client relationship with th e appellees, nor that she is a direct, intended be neficiary of their services. The appellees were hired by Wolfson to counsel him in his cap acity as trustee for the Wolfson family tr usts. The appellees’ duty and loyalty lie with serving the best interests of the trusts and do not run to Witzman. See id. at 739 (citing Spinner v. Nutt , 631 N.E .2d 542, 546 (Mass. 1994)). Moreover, as a general rule of trust law, a beneficiary cannot bring an action at law in a trust’s stead against a third party for torts or other wrongs. See Uselman v. Uselman , 464 N.W.2d 130, 137 (Minn. 1990) (en banc); Ricke v. Ar mco, Inc. , 92 F.3d 720, 724 (8th Cir. 1996). In Minnesota, this principle extends to beneficiaries wh o attempt to sue a trustee’s attorneys for legal malpractice. See Goldberger , 534 N.W.2d at739; Anoka Orthopaedic Assocs., P.A. v. Mutschler , 773 F. Supp. 158, 168 (D

. Minn. 1991). The rationale for this restriction is three-fold. First, as related above , benefic iaries are not direct recipients of the attorney’s services. Second, such a re striction does not completely preclude all malpractice actions against the trustee’ s attorney. “If a third person commits a tort against trust pr operty, the trustee has a duty to take reasonable steps to co mpel the tortfeasor to redress the injury.” Uselman , 464 N.W.2d at 137. This contingency provides an incentive for the trustee to bring an-5-

a c tion against a wrongdoing attorney. See Goldberger , 534 N.W.2d at 739. Finally, permit ting a beneficiary to sue a trustee’s attorney could create an impermissibl e conflict of interest. See id. ; Spinner , 631 N.E.2d at 553 -54. Under Minnesota law, the mere potential for a conflict makes a direct action by the beneficiary inappropriate. See Goldberge r , 534 N.W.2d at 739. Absent an applicable exception to this principle , Witzman cannot sustain a professional malpractice action against the attorneys.

Wi tzman contends that Uselman , 464 N.W.2d at 137-38, provides her with an exception to the general rule that bene ficiaries cannot sue trustee’s attorneys on behalf of a trust. The court in that case recognized that “[w]hen the trustee fails to bring suit against a third party tortfeasor, the beneficiaries may properly bring an action against the trustees and third parties as co -defendants.” Uselman , 464 N.W.2d at 137-38; see also Anoka Orthopaedics , 773 F. Supp. at 168. Witzman, who originally named th e appellees as defendants, sought to join Wolfson as a defe ndant in her motions for leave to amend her complai nt. She now asserts that by joining Wolfson as a defendant, she
can continue with her claims against the attorneys. We do not agree, for to accep t Witzman’s argument would extend Uselman beyond its facts. The Uselman court, in the process of determining a p urely procedural issue regarding a party’s right to a jury trial, recognized that a beneficiary may join the trustee and tortfeasor as co-defendants if the trustee’s protection of the trust is not forthcoming. Thus, the court described, at most, a mechanism for holding both trustees and third parties re sponsible when trustees fail to carry out their fiduciary duties. The court neither described nor attempted t o create any third party duties to a trust beneficiary. Goldberger , on the other hand, unequivocally states that a beneficiary canno t proceed directly against a trustee’s attorney for professional malpractice. See 53 4 N.W.2d at 739. Witzman is not a direct recipient of the appellees’ services

. Moreover, she is not without alternative methods of pursuing her claims. As th e Goldberger

court suggested, a trustee who fails to bring an acti on against a wrongdoing attorney may be liable for a fiduciary breach. See 534 N.W.2d at 739. Enabling-6-

Witzman to sue Wolfson’s attorneys would create the possibility of an impermissible conflict of interest. We cannot assume that the Minnesota courts would be willing to impose third party duties on a trustee’s attorney. A federal court “should proceed with great caution when the effect of its ruling would be to broaden the l aw beyond the point where any other court has yet ventured.” W. A. Wright v. KDI Sylvan Pools, Inc. , 746 F.2d 215 , 218 (3rd Cir. 1984); see also Afram Export Corp. v. Metallurgiki Halyps , S.A. , 772 F.2d 1358, 1370 (7th Cir. 1985) (“Federal judges are disinclined to mak e bold departures in areas of law that we have no responsibility for developing.”).
Witz man contends that the district court erred in holding that a cause of action for aiding and abetting a breach of trust does not exist in Minnesota. Citing D.W. v. Radisson Plaza Hotel Rochester , 958 F. Supp. 1368, 1380 (D. Minn. 1997), the court concluded that Minnesota did not recognize such an action. Witzman cites tw o Mi nnesota Supreme Court cases for the proposition that aiding and abetting a breach of trust is actionable. See Greenwood v. Evergreen Mines Co , 19 N.W.2d 726, 733 (Minn. 1945); D.E. Virtue v. Creamery P ackage Mfg. Co. , 142 N.W. 930, 939 (Minn. 1919). Because we conclude that her allegations that the appellees aided and abetted
a breach of trust are precluded by Goldberger , we need not consider this argument

. Her aiding and abetting claim against the attorneys creates the same concerns raised by her breach of trust allegations, and she cannot circumv ent the holding in Goldberger by rest ating her claim as an action for aiding and abetting tortious conduct. Once again,
we believe that the prudent course is to hold that Witzman must proceed agains t Wolfson in order to seek redress for any alleged misconduct by his attorneys.

III.
Witzman contends that the district court abused i ts discretion when it denied her motion for voluntary di smissal without prejudice. “[A]n action shall not be dismissed at th e plaintiff’s instance save upon order of the court and upon such terms an d conditions as the court deems proper. . . . Unless otherwise specified in the order, a-7-

dismissal under this paragraph is without prejudice.” Fed .R.Civ.P. 41(a)(2). “Motions to dismiss without prejudice are addressed to the sound discretion of the distric t cour ts.” Kern v. TXO Prod. Corp. , 738 F.2d 968, 970 (8th Cir. 1984). We consider th e following factors when determining whether a district court abused its discretio n in denying a Rule 41(a)(2) motion: (1) the defendant’ s effort and the expense involved in preparing for trial, (2) excessive delay and lack of diligence on the part of the plaintiff i n prosecuting the action, (3) insufficient explanation of the need to take a dismissal, and (4) the fact that a motion for summary judgment has been filed by the defendant. See Paulucci v. City of Duluth , 826 F.2d 780, 783 (8th Cir. 1987). The appelle es have expended considerable effort and money defending against Witzman’s action. Witzman has been lacking in diligence in prosecuting this action. Rather than subm

itting a rebuttal to the appellees’ motion for summary judgment, she
re sponded by offering amended complaints that were inconsistent with the Federa l Rules and by then seeking voluntary dismissal. “Reasons of judicial economy alone would appear to dictate that one full and fair attempt to prove this claim is enough. ” Wakefieldv. Northern Telecom, Inc. , 769 F.2d 109, 114 (2d Cir. 1985). Moreover, we are not persuaded that Witzman has stated a sufficient explanation for her proposed dismissal. As we held in Part II of this decision, Witzman’s claims are precluded by Minnesota

law. Although she argues that Wolfson’s failure to assist her in an action against his attorneys was a violation of their settlement agreement and, as a result , constituted a changed circumstance requiring dismissal without prejudice, sh e nevertheless cannot proceed against his attorneys on her own. Accordingly, the district court acte d within its sound discretion in denying Witzman’s motion to voluntaril y dismiss without prejudice. The judgment is affirmed.-8-

A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.