Opinion ID: 1033706
Heading Depth: 1
Heading Rank: 1

Heading: background and procedural

Text: HISTORY Young and Davis were married on January 7, 1989, in Omaha, Nebraska. Two children were born during the marriage. 1. First Dissolution P roceeding Davis filed a petition for dissolution of the marriage on July 23, 2001, in the district court for Douglas County. Young filed a cross-petition on July 26. While this proceeding was pending, Young and Davis entered into a postmarital agreement (PMA) in which they acknowledged marital difficulties. The PMA included covenants given “in consideration of the continuation of the marriage of the parties, and in consideration of the mutual promises, waivers and releases” made by each party. The PMA provided that Davis’ ownership interest in a Nebraska Advance Sheets 228 286 NEBRASKA REPORTS meatpacking company would be considered separate nonmarital property and that his salary, earnings, and stock in the company would always be considered as such. In the PMA, the parties identified marital property, which included cash, stocks, life insurance, jewelry, automobiles, a home, and a residential lot. The total value of the listed property was more than $6.28 million. The PMA provided that in the event of divorce, Young would receive $3 million; the Jaguar automobile; and her clothing, personal effects, and jewelry. Davis would retain the other assets, including the home and the residential lot. Young agreed to renounce any claim to Davis’ nonmarital assets. The PMA further provided that Young would not receive alimony or additional property. According to the PMA, any marital home acquired by either party during the continuation of the marriage would be titled in the name of the person whose separate property was used for the purchase. If they purchased property together, it was to be titled in both names as tenants in common without rights of survivorship. All income earned by either party during the continuation of the marriage was to remain separate property. The PMA stated that each party had received the advice of counsel and was entering into the agreement freely and voluntarily, free and clear of any duress or undue influence from the other party, and with full knowledge and access to any necessary information. If either party was required to bring legal action against the other to enforce rights under the PMA, or if either attempted to challenge or set aside any term of the agreement, the prevailing party would be entitled to recover costs and expenses, including reasonable attorney fees. Each party agreed that the terms of the agreement were fair, reasonable, not unconscionable, and equitable. The PMA was signed on November 26, 2001. On January 9, 2002, Davis was given leave to dismiss his petition for dissolution without prejudice. Young was given leave to file an amended cross-petition. In that pleading, filed on January 15, Young alleged that the marriage was irretrievably broken and should be dissolved. She also sought a declaratory judgment that the PMA was void because it was executed when she was under stress, duress, and emotional collapse and was Nebraska Advance Sheets YOUNG v. GOVIER & MILONE 229 Cite as 286 Neb. 224 without control of her decisionmaking abilities. She alleged that because of her mental state, she did not knowingly, intelligently, or voluntarily execute the PMA, and that it was therefore null and void. While Young’s cross-petition was pending, Young and Davis participated in private mediation in which neither was represented by counsel. Young and Davis entered into an amended postmarital agreement (APMA) on April 17, 2002. The APMA incorporated the PMA by reference and attachment. Young signed the APMA against the advice of the attorneys who represented her in the dissolution proceeding and who are not parties to this action. The APMA included specific provisions contemplating continuation of the marriage. It provided that upon execution of the APMA and the dismissal of all pending litigation, Young and Davis would again live together with their children. They agreed to “continue participating in family counseling and/or family therapy to further facilitate their reconciliation.” The APMA provided that neither it nor the PMA would be enforceable if Davis initiated a new action for dissolution or legal separation within 12 months, unless the action was based on evidence of Young’s infidelity. The APMA provided that Davis would pay the state and federal income taxes on the income Young earned from the $3 million payment she was to receive under the PMA. Young was also to receive sole ownership of the parties’ residence. In the event the marriage was dissolved, Young would receive alimony of $12,500 per month for up to 10 years unless she remarried or she or Davis died. The APMA also provided that Young would receive an additional $1 million on the fourth anniversary of the execution of the APMA, regardless of whether the parties were married at the time. The APMA further provided that if either party contested its terms, the prevailing party would be responsible for paying all attorney fees and costs. The APMA included an agreement by both parties to dismiss all pending litigation between them, including “[Young’s] declaratory judgment claim,” which had been filed at the time of her cross-petition for dissolution. The APMA further provided that if counsel for either party desired, the terms of the Nebraska Advance Sheets 230 286 NEBRASKA REPORTS PMA and APMA would be submitted for approval to the court in which the action was pending. Like the PMA, the APMA included representations that it was executed by both parties voluntarily, without undue influence, and with a full understanding of its terms. At a hearing on April 23, 2002, Young and Davis presented a stipulation asking the district court to approve the terms of the PMA and APMA, to dismiss the dissolution proceeding without prejudice, and to dismiss Young’s declaratory judgment claim with prejudice. The stipulation expressly stated that dismissal of Young’s declaratory judgment claim with prejudice would mean she would be precluded from challenging the validity of the PMA and APMA. The stipulation was not signed by counsel for either party, although both parties were represented by counsel at the hearing. Davis’ counsel called both parties to testify regarding their understanding of the PMA and APMA. Both testified that they intended to continue in their marital relationship upon resolving their differences with the PMA and APMA and that they understood both documents, considered them fair and reasonable, and were requesting the court’s approval of them. Young testified that she understood that if her declaratory judgment action was dismissed with prejudice, the APMA would be binding on her. She also testified that she understood the declaratory judgment could be dismissed without the court’s approving the PMA and APMA. Further questioning by the court elicited testimony from the parties regarding their educational backgrounds and the absence of any impairment to their ability to understand the proceedings. In an order entered on April 24, 2002, the court found that it had jurisdiction of the parties and the subject matter, approved the PMA and APMA, dismissed Young’s declaratory judgment claim with prejudice, and dismissed Young’s amended cross-petition for dissolution of marriage without prejudice. 2. Second Dissolution P roceeding Thereafter, the parties lived together for approximately 17 months. During that time, pursuant to the PMA and APMA, Nebraska Advance Sheets YOUNG v. GOVIER & MILONE 231 Cite as 286 Neb. 224 Davis transferred ownership of the family residence, two automobiles, and $3 million to Young. On October 6, 2003, Young filed a petition for dissolution of the marriage. At that time, she was represented by Pamela Govier and the law firm of Govier, Milone & Streff, L.L.P. (Govier firm), and a second law firm that is not a party to this action. The case was assigned to a district court judge who had not been involved in the prior proceedings. In his answer and cross-petition, Davis admitted Young’s allegations that the marriage was irretrievably broken and that every reasonable effort to effect reconciliation had been made. He affirmatively alleged that the PMA and APMA controlled the determination of alimony and the distribution of real and personal property and that by virtue of the 2002 order approving the PMA and APMA, Young was barred from relitigating property and alimony issues by the doctrines of res judicata, collateral estoppel, and judicial estoppel. Davis sought custody of the parties’ minor children, an order granting him exclusive occupancy of his residence, a decree of dissolution incorporating the terms of the PMA and APMA, and other relief, including attorney fees and costs. In her reply, Young alleged that the PMA and APMA were “procured by fraud, duress, and without full disclosure” and were “unconscionable, unenforceable, void, and against public policy.” Davis then filed a motion for partial summary judgment, asserting that the enforceability of the PMA and APMA had already been determined by a court and again asserting that Young was estopped from challenging their validity. The court overruled Davis’ motion for summary judgment, concluding that the PMA and APMA were unenforceable because they were made in contemplation of divorce, were not consistent with “statutes regarding post-marital agreements,” and were contrary to public policy. Davis filed a motion for reconsideration, which the court also overruled. The law firm which had originally served as cocounsel with the Govier firm withdrew from the case, and in August 2004, Young retained the law firm of Baird, Holm, McEachen, Pedersen, Hamann & Strasheim, L.L.P. (Baird Holm firm), as Nebraska Advance Sheets 232 286 NEBRASKA REPORTS cocounsel with the Govier firm. William Dittrick, a partner in the Baird Holm firm, was primarily responsible for the firm’s work on the case. Early in his involvement, Dittrick was advised by Govier that the district court had denied Davis’ motion for partial summary judgment and had held that the PMA and APMA were unenforceable. That holding was reaffirmed in February 2006, when the district court ­ overruled Davis’ motion to bifurcate the trial in order to first determine the enforceability of the PMA and APMA. The court reaffirmed its prior order determining that the agreements were unenforceable. But approximately 7 months later, the court, on its own motion, announced that it would reconsider its holding on Davis’ motion for partial summary judgment. After additional briefing, the court reversed its prior order and sustained Davis’ motion for partial summary judgment. The court reasoned that the April 2002 ruling that the PMA and APMA were fair, just, and not unconscionable is res judicata and bars further litigation between the parties. Having prevailed on that critical issue, Davis proposed a settlement. He offered to abide by the PMA and APMA and to pay alimony of $12,500 per month for 106 months and child support of $60,000 per year for two children or $36,000 per year for one child. He also offered to waive his claim for reimbursement of $175,000 in attorney fees and waive any claim to additional attorney fees based on Young’s challenge of the APMA. The offer stated that if the matter were not settled, Davis would seek reimbursement of the $175,000, payment of all attorney fees and costs expended in defense of the PMA and APMA, and reduction of alimony for a term equal to one-half the length of the parties’ actual cohabitation (88 months) less a credit for the alimony paid during the proceedings. The total alimony award would extend for an additional 64 months. He also would seek return of all personal property Young removed from Davis’ home. After consultation with her attorneys, Young agreed to accept the settlement offer. Dittrick stated in a letter dated December 4, 2006, that Young believed she must accept the terms of the settlement “because of the incredible economic Nebraska Advance Sheets YOUNG v. GOVIER & MILONE 233 Cite as 286 Neb. 224 risk confronting her.” At a hearing on December 11, Davis testified that the parties had agreed that each would pay his or her own attorney fees and that he would not seek repayment of $175,000 that had been previously ordered by the court. Young testified that she understood she had no alternative but to accept the settlement because she would face bankruptcy if she went to trial. She said that her attorneys had explained the situation to her in great detail and that she understood that neither party would appeal the settlement. The court approved the settlement agreement and, on December 11, entered an order of dissolution incorporating the PMA and APMA. 3. P rofessional Negligence P roceeding On November 14, 2008, Young filed this professional negligence action against the Baird Holm firm; the Govier firm, now Govier & Milone, L.L.P.; and individual members of the firms, including Dittrick and Govier. During the course of the proceeding, various other individual defendants were dismissed, and those dismissals are not at issue in this appeal. Young alleged that the PMA and APMA were unenforceable because they were fraudulently procured by Davis, signed while she was under duress, and void as against public policy. She alleged that her attorneys, the appellees, were negligent in advising her about the PMA and APMA and in litigating issues regarding the enforceability of the agreement. She also alleged that they charged her excessive fees. She alleged that as a proximate result of their negligence, she lost the ability to appeal the enforceability of the PMA and APMA and “the ability to share in up to one-half of what [the attorneys] informed her was a $192 Million Marital Estate.” She prayed for judgment against the appellees, jointly and severally; for monetary damages of $100 million; and for disgorgement of attorney fees, interest, and costs. The appellees filed answers denying all claims and asking for dismissal of the action. The appellees filed motions for summary judgment, and Young filed a cross-motion for summary judgment. The district court overruled Young’s motion, finding that there were genuine issues of material fact as to whether the appellees were negligent. However, the court granted the appellees’ Nebraska Advance Sheets 234 286 NEBRASKA REPORTS motions for summary judgment in part, finding that the order approving the PMA and APMA entered in the first dissolution proceeding was binding on the court in the second dissolution proceeding under the doctrines of res judicata and judicial estoppel. The court determined that even if Young could establish negligence by the appellees, she could not prove proximate causation. The court reserved three issues for trial: (1) whether Govier failed to convey a $2 million settlement offer to Young, (2) whether there was a failure to submit counteroffers, and (3) whether the appellees charged excessive fees. Subsequently, the district court modified its order and granted summary judgment for the appellees on the first two of the previously preserved claims, leaving only the claim regarding excessive attorney fees for trial. Eventually, the parties reached a settlement as to the attorney fees and stipulated to the entry of a final judgment, which was entered on November 1, 2011. Young perfected this timely appeal.