IN THE SUPREME COURT OF THE STATE OF MONTANA 1992

BENJAMIN L. BROWN, Plaintiff and Appellant,

-vsFLOYD SMALL and JOHN C. DOUBEK, Defendants and Respondents.

APPEAL FROM: District Court of the First Judicial District, In and for the County of Lewis and Clark, The Honorable Jeffrey M. Sherlock,Judge presiding.

COUNSEL OF RECORD: For Appellant: Gerald J. Neely, Attorney at Law,Billings,Montana For Respondent: Douglas A. Ruxbaum and Mark Mattioli; Poore, Roth and Robinson, Butte, Montana

Submitted on Briefs: July 25, 1931

ClerkJustice Terry N. Trieweiler delivered the opinion of the Court. On March 17, 1988, Benjamin Brown filed a legal malpractice complaintagainst Floyd Smalland JohnDoubek inthe~irst Judicial District Court in Lewis and Clark County. The ~istrictCourt granted summary judgment for Small and Doubek and dismissed the complaint on October 9, 1990. Brown appeals. We affirm. The issues are: 1. Did the ~istrictCourt err when it granted summary judgment against Brown on his claim of professional negligence? 2. Did the District Court err when it granted summary judgment against Brown on the portions of his complaint that attempted to reopen an earlier lawsuit that Brown had dismissed with prejudice? In 1981,Brown owned several commercial properties inHelena, including the Denver Block Apartment Building. During the early morning of May 26, 1981, the Denver Block was badly damaged by fire. Brown, who had previously employed Helena attorney Carl Hatch, retained Hatch's partners, Floyd Small and John Doubek, to assist him in recovering payment fromhis insurer. For a number of reasons, coveragewas vigorously disputed. Brown settled his claimwith the insurer on August 19, 1981, for $315,000,and executed a settlementagreement. Claims against Brown's recovery by other parties reduced Brown's share to $109,963.80. Small and Doubek then charged Brown a contingent fee of $25,000. Brown claimed he had not agreed to a contingent fee, but he paid the fee despite his objection.On March 15, 1984, Brown filed a complaint against Small and Doubek,alleging that theyhad overchargedhim for their services. In that action, Brown claimed that by charging a contingent fee Small and Doubekhad breached an oral contract to bill only by the hour. During the preparation of their defense in that action, Smalland Doubek discovered that in 1980Brown's insurer had issued a mid-term endorsement to Brown's fire insurance policy on the DenverBlock. The 1981 settlement with the insurerdid not include the additional coverageavailable under thismid-term endorsement. The reasonswhy this endorsementwas not originally considered are
now disputed by the parties. Small and Doubek then arranged for a settlement conference with Brown on March 19, 1985. Brown attended with his attorney R. J. Sewell, Jr., to whom he had transferred his business after leaving Small, Hatch, and Doubek. At this meeting, Doubek explained that he had come across Itwork product1'thatmight result in recovering more money from Browntsinsurer. Doubek offered to

use this "workproduct" on Brown's behalf in exchange for Brown's agreement to dismiss his complaint against Small and Doubek. Doubek refused todisclose the nature of the "workproducttt he had discovered. Sewell protested vehemently. He took Brown aside and advised him that Brown should refuse to accept the offer. Sewell refused to sign any such agreement between Brown and his former attorneys and left the meeting.Doubek had originally suggested that he could recover asmuch

as $15,000with the "workproduct.I1 Brown,however, insisted that hewould not agree todismiss the first lawsuit unless Doubekwould promise to recover $20,000. Brown then signed an agreement in whichhegave Small and Doubek fourmonths to recover an additional $20,000 from the insurer. In this agreement, Brown specifically consented to a contingent fee arrangement. The agreement also provided that if Small and Doubek succeeded in recovering $20,000 from the insurer, Brown would dismiss his first lawsuit with prejudice

# . Subsequently, Small and Doubek used the mid-term endorsement to recover another $112,500 from the insurer. It appears from the record that this amount was based at least in part on Brown's allegation that his insurer had fraudulently and in bad faith concealed the existence of themid-term endorsement. Brown further alleged that the insurerhad misrepresented the available coverage as $277,200 instead of the true amount, $325,000. Brown netted almost $75,000after deduction of costsand the contingent fee. On August 16, 1985, Brown stipulated to a dismissal of his first lawsuit with prejudice. Small and Doubek regarded the matter as finally settled. Brown then filed thepresent complaint on March 17, 1988. In this second lawsuit, Brown sought (1) damages for the allegedly negligent failure of Small and Doubek to discover the mid-term endorsement before the 1981 settlement with the insurance company; and (2) rescission of the 1985 settlement with Small and Doubek andreinstatement of the first lawsuit. The pretrial order clearly indicates that Brownwas unprepared to present expert testimony on the standard of care applicable to Small and Doubek. Both parties moved for summary judgment. The District Court granted summary judgment for Small and Doubek,noting that the new negligence theory was fatally flawed due to Brown's failure to arrange for expert testimony and that reinstatement of the first lawsuitwas barred under the doctrine of res judicata. The court then dismissed Brown's complaint. It is from this order of summary judgment and dismissal that Brown appeals.

Did the District Court err in granting summary judgment on Brown's claim of professional negligence? Brown's position onhisnegligencetheory isinconsistentwith the theory his agents used to obtain a second recovery from the insurance company. Acting ashis attorneys, Small and Doubek filed a second action against Brown's insurer. Pertinent portions of the complaint in that action read as follows:

VIII. That 

# . . . [the insurer] did not fulfill its clear responsibility to [Brown] at the time of said resolution of theunderlying claimbv not informins rBrownl that the said endorsementwas in effectwhen rBrownl submittedhis proof of loss statement. IX. That said breach of responsibility was false, fraudulent, done in bad faith and for the purpose of producins a substantial loss to rBrownl.That [Brown] did in fact rely upon the false, fraudulent. and bad faith misrewresentations of [the insurer] to his detriment and was damaged thereby. [Emphasisadded.] Small and Doubek settled this second action with the insurer for $112,500, and Brown accepted his share of almost $75,000 without protest. Now,however, he claims that itwas thenegligence of his attorneys,rather than thebad faith of the insurer, that resulted in the inadvertent exclusion of the mid-term endorsement from the first settlement with the insurance company. If the insurer actively concealedtheendorsement inbad faith,it isdifficult to

see how Small and Doubek were negligent in not discovering it. Thisattemptby Brown to take inconsistent positions isbarred by judicial estoppel. InRowland

### v.Hies (1986), 223 Mont. 360, 726 P.2d 310, we said: Judicial estoppel may arisewhen a person has taken a position or asserted a fact under oath in a judicial proceeding contrary to the position he is taking in the present litigation 

# . . . The rule's purpose is to suppress fraud and prevent abuse of the judicial process by deliberate shiftins of positions to suit the exigencies of a particular action, and it will not be applied when the previous act or statement is uncertain or based on undetermined facts, but onlywhen it is clear and certain. (Citations omitted.) [Emphasisadded.] Rowland, 726 P.2d at 316 (quotingLaChancev.McKown (Tex. Ct. App. 1983), 649 S.W.2d 658, 660). In Rowland, we applied judicial estoppel against a party who sought to take a position contrary to



### an earlier sworn affidavit. Rowland, 726 P.2d at 316.Judicial estoppel is equally applicable to aparty like Brown who seeks to take a position contrary to his pleadings in an earlier judicial proceeding. 

### Feyv.AA.OilCop. (1955)

## , 129 Mont

# . 300, 323, 285 P.2d 578, 590. The doctrine applieswith additional force here because Brown's allegation in the second complaint against the insurer resulted in a net recovery by him of almost $75,000. After accepting the benefits of that allegation, Brown cannot now changehis position and allege that negligence by Small and Doubekwas the real reason they did not discover the mid-term endorsement sooner. Furthermore, Brown failed to alleviate this apparent inconsistencyby arranging for expert testimony. In Carlsonv.Morton (1987), 229 Mont. 234, 745 P.2d 1133,we held that expert testimony is ordinarily required in legal malpractice cases. We said: To expect a jury to sit through hours of examination and cross-examination,without the guidance of an attorney's expert testimony and then arrive at a verdict consistent with the evidence is asking much. This is not because the average juror is not capable of understanding such matters but only because he or she has never had the occasionor desireto study suchmatters. The attorney's standard of care depends upon the skill and care ordinarily exercisedby attorneys,acriteriathat rarely falls within the common knowledge of laymen. 

# . . . It is true that there are instances in which legal malpractice actions have been submitted for fact determination without the use of expert testimony. The theory in such cases is that the attorney'smisconduct is so obvious that no reasonable juror could not comprehend the lawer's breach of duty. [Emphasisadded.]Brown attempts to bring his case within the exception rather than the general ruleby arguing that jurorswould not need expert assistancein deciding ''whethera lawyer hired tocollect insurance proceeds ought to look at the piece of paper which says how much insurance there is." We note,however, that the "piece of paper" to which Brown refers is the very same document he previously accused the insurance company of concealing from Small and Doubek in bad faith. Based on that inconsistent representation Brown has already been compensated. In analyzing Brown's argument that the case is too simple to require expert testimony, the District Court said: The allegations of Count One are very complicated. The allegations deal with matters of insurance coverage and an attorney's duty to seek out the maximum coverage possible forhis client for a loss. Theallegations also deal with the duty owed a former client, since in the view of this Court, these parties were not in an attorney/client relationship in March 1985. Rather, on March 19, 1985, they were engaged in a hotly contested lawsuit and it cannot be said that the duty owed by Doubek tohis formerclientBrown is one that is commonly known by lawyers, let alone by lay people. Indeed,the complexity of thismatter canbe seenby looking at page 5 of Plaintiff's supplemental memorandum filed on September 14, 1990. At page 5, Plaintiff indicates that Doubekls duty was to determine the existence, nature,and amount of anymidterm endorsement to the primary policy issued afte; the primary policy. Plaintiff has not directed this Court to any authority that shows that this duty is commonly known to lay people. We agree. In a case such as this one, in which the plaintiff has already been compensatedbased upon an allegation that his insurer took affirmative steps to conceal the key document from thedefendant attorneys, expert testimony on the standard of care is critical. We hold that the District Court did not err when it granted summary judgment againstBrown onhisprofessional negligence claim

on the basis of Brown's failure toprovide expert testimony. I1 Did the District Court err when it granted summary judgment against Brown on the portions of his complaint that attempted to reopenthe earlier lawsuitthat Brown had dismissedwithprejudice? Incounts two through ten of the complaint in the case at bar, Brown sought to set aside the March 1985 settlement agreement 

### and the accompanying dismissal with prejudice of the first lawsuit. Because Brown cannotresurrectthe first lawsuit unlesshe can show grounds to set aside the dismissal, we turn first to the question ofwhether Brownhas shown sufficientgrounds for setting asidethe dismissal. We conclude that he has not. A party who seeks relief from a final order can either file a Rule 60(b) motion for relief or file an independent equitable action based on the grounds enumerated in that Rule's residual clause. Rule 60(b), M.R.Civ.P. Brown has not filed a Rule 60(b) motion sowe treathis actionasarisingunder theresidual clause. 

### See Salwayv.Arkava (1985), 215 Mont. 135, 695 P.2d 1302.
In Salway, we held that the residual clause of Rule 60(b) provides onewho seeksrelief froma judgment with three avenues of attack: extrinsic fraud, lack of personal notification,and fraudupon the court. Salway, 695 P.2d at 1305-06. We do not consider lack of personal notification here because it is inapplicable. In Salway, we characterized extrinsic fraud as "some intentional act or conduct by which the prevailing party has prevented the unsuccessful party from having a fair submission of the controversy." Salway, 695 P.2d at 1306. In this case, Brown was not misled by his former attorneys. He acted contrary to the advice of his new attorneybased onwhat he perceived to be inhis best interest at that time. Small and Doubek did not prevent him from obtaining a fair submission of the controversy. It was Brown's ownaction in stipulatingto thedismissal that resulted in the case not being submitted to the District Court. We conclude that Brown has not made out a case of extrinsic fraud. Fraud upon the court is Itthatspecies of fraud which does or attemptsto subvert the integrityof the court itself.It Salway, 695 P.2d at 1306. Examples of fraud upon the court include bribery, evidence fabrication,and improper attempts to influence the court by counsel. SU~WUY, 695 P.2d at 1306. Generally, fraudbetween the parties,without more, doesnot rise to the level of fraudupon the court. Salway, 695 P.2d at 1306. Brown was an active and informed participant in what he now seeks to characterize as fraud upon the court. He stipulated to the dismissal of his own lawsuit with prejudice despite his attorney's advice to the contrary. Brown may have made a bad bargain with Small and Doubek but it does not rise to the level of

10a fraud that "subvert[s] the integrity of the court itself.It We conclude that Brown has not made out a case of fraud upon the court. Because Brownhas shown neither extrinsic fraudnor fraudupon the court, we hold that the District Court did not err when it granted summary judgment against Brown onhis attempt to set aside his dismissal of the first lawsuit. The judgment of the District Court is affirmed.

We concur: