Court Opinion

ID: 1018814
Source: CourtListenerOpinion
Date Created: 2013-07-04 22:26:24.246399+00
Date Added: 2024-06-11T09:56:22.017532
License: Public Domain

UNPUBLISHED

                      UNITED STATES COURT OF APPEALS
                          FOR THE FOURTH CIRCUIT

                               No. 05-1849

JASON SELIGMAN,

                                               Plaintiff - Appellant,

             versus

DAVID I. TENZER; GLENN, FELDMANN, DARBY &
GOODLATTE, PC; dba GLENN, FELDMANN, DARBY &
GOODLATTE,

                                              Defendants - Appellees.

Appeal from the United States District Court for the Western
District of Virginia, at Roanoke. James P. Jones, Chief District
Judge. (CA-04-44)

Submitted:    March 21, 2006                 Decided:   March 31, 2006

Before WILLIAMS, KING, and GREGORY, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Neal L. Walters, SCOTT/KRONER, P.L.C., Charlottesville, Virginia,
for Appellant. Paul G. Beers, GLENN, FELDMANN, DARBY & GOODLATTE,
Roanoke, Virginia, for Appellees.

Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:

     This appeal arises from a corporate governance dispute in

which Mason Cass and Bryant Cass, principals of the corporation,

Adventis, Inc. (“Adventis”), ousted the third principal, Jason

Seligman. Disgruntled with his termination from Adventis, Seligman

first filed suit in Virginia state court against the Casses and

Adventis   and    settled   the    dispute.      Seligman   then    filed    this

diversity malpractice action against David I. Tenzer and the law

firm,   Glenn,     Feldmann,      Darby    &   Goodlatte,    P.C.     (“GFDG”)

(collectively, “defendants”), who had drafted the papers necessary

to incorporate Adventis.          The district court granted defendants’

motion for summary judgment and denied Seligman’s motion for

voluntary dismissal or a continuance.            We now affirm.

                                      I.

     In 1999, the Casses invited Seligman to join their pre-

existing partnership, which advertised the sale of used cars over

the Internet.       Shortly thereafter, the three men dissolved the

partnership and formed a new entity, Independent Systems, LLC

(“LLC”).   In early 2002, the LLC’s accountant advised the three

principals to reincorporate the LLC as an S-type corporation, so

that they could avoid self-employment taxes.

     Consequently,     Seligman      contacted    Tenzer    to     discuss   the

conversion.      The parties agreed to reincorporate the LLC as an S-

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type corporation under a new name, Adventis, and to consider

themselves employees, rather than members, of Adventis.       Seligman

alleges that, despite these changes, the three principals sought to

preserve the unanimity rule, which had governed their relationship

under the LLC.

     At a meeting held on March 29, 2002, Tenzer told Seligman and

the Casses that the corporation could not function by the unanimity

rule and urged them to adopt a majority rule of decisionmaking.

Although   Tenzer   further   encouraged   the   principals   to   adopt

immediately the drafted shareholder and employment agreements, the

principals directed him to complete the conversion by March 31,

2002 and to defer the remaining agreements.      However, Seligman and

the Casses orally agreed that two of the principals could terminate

the third, but only for cause.

     Immediately after the conversion, the principals suffered a

falling out, and the Casses fired Seligman. Seligman filed suit in

Virginia state court against the Casses and Adventis, asserting

state law claims of oppression, breach of fiduciary duty, fraud,

and mismanagement of corporate assets.       On March 26, 2003, the

parties executed a settlement agreement, under which Seligman

received, among other things: (1) a yearly compensation package

that included $120,000 in salary, full health benefits, and car

allowance for five years; and (2) a one-time $100,000 dividend

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payment.     Although Seligman retained a one-third ownership in

Adventis’s stock, he did not regain a managerial role in Adventis.

     In    January   of   2004,   Seligman    filed    the    instant   legal

malpractice action in Virginia state court against defendants,

alleging   that   defendants’     failure    to   protect    him   during   the

conversion caused his diminished bargaining power within Adventis.

Defendants removed the action to federal district court and moved

for summary judgment after extensive discovery. In connection with

his opposition to defendants’ motion, Seligman filed a motion to

continue the trial date, which was denied.          Seligman then moved to

dismiss his complaint without prejudice, or alternatively, for

reconsideration of his original motion for a continuance.                   The

district court granted defendants’ motion for summary judgment and

denied both of Seligman’s motions.

                                    II.

                                     A.

     We first review de novo the district court’s decision to grant

defendants’ motion for summary judgment.              Bouchat v. Baltimore

Ravens Football Club, Inc., 346 F.3d 514, 519 (4th Cir. 2003).

According to Rule 56(c) of the Federal Rules of Civil Procedure,

summary judgment is appropriate where “the pleadings, depositions,

answers to interrogatories, and admissions on file, together with

the affidavits, . . . show that there is no genuine issue as to any

                                     4
material fact and that the moving party is entitled to a judgment

as a matter of law.”     Fed. R. Civ. P. 56(c).      Although we view the

facts and inferences drawn therefrom in the light most favorable to

Seligman, the non-moving party, he nevertheless has the ultimate

burden of demonstrating a genuine issue of material fact for trial.

See   Celotex   Corp.   v.   Catrett,   477   U.S.   317,   322-23   (1986);

Thompson v. Potomac Elec. Power Co., 312 F.3d 645, 649 (4th Cir.

2002).

         To state a cause of action for legal malpractice under

Virginia law, the plaintiff must show (1) the existence of an

attorney-client relationship giving rise to a duty; (2) the breach

of that duty by the attorney; and (3) damages proximately caused by

the breach.     Rutter v. Jones, Blechman, Woltz & Kelly, P.C., 568

S.E.2d 693, 695 (Va. 2002).       Setting aside the issues of whether

Seligman established an attorney-client relationship and breaches

arising thereunder, we find that Seligman failed to meet his burden

with respect to damages.       Seligman already received compensation

for his claimed injury--i.e., diminished bargaining power within

Adventis, the new corporation, following his termination--from the

Casses and Adventis in a prior lawsuit.         Because Seligman made no

distinction between the damages caused by the Casses’ decision to

fire him and the damages caused by defendants’ alleged legal

malpractice, we conclude that he suffered a single, indivisible

injury, for which he had one cause of action.           Cox v. Geary, 624

                                    5
S.E.2d    16,   20    (Va.    2006)    (the   plaintiff    suffers     a   single,

indivisible injury where he fails to distinguish between damages

arising from separate and independent acts of negligence); Dwyer v.

Yurgaitis, 294 S.E.2d 792, 794 (Va. 1982) (although the plaintiff

sustained injuries in two separate collisions, she suffered a

single, indivisible injury because she failed to segregate the

damages).       Thus, having received compensation for all of the

damages related to his termination, Seligman is precluded from

seeking further recovery from defendants.             Cox, 624 S.E.2d at 19

(“It is a generally recognized principle that there can be only one

recovery of damages for a single wrong or injury.”);                   id. at 23

(the plaintiff, who had been wrongfully imprisoned, could not

attain further relief from the attorneys defending him in the

criminal proceedings based on legal malpractice claims, where he

had already recovered damages related to his wrongful imprisonment

from the Commonwealth).             Accordingly, we affirm the district

court’s decision to grant summary judgment to defendants.

                                         B.

     We    next      review   the     district   court’s    decision       to   deny

Seligman’s motion for voluntary dismissal of the action pursuant to

Fed. R. Civ. P. 41(a)(2) or a continuance pursuant to Fed. R. Civ.

P. 7 under the abuse of discretion standard.              Ellett Bros., Inc. v.

United States Fid. & Guar. Co., 275 F.3d 384, 388 (4th Cir. 2001);

                                          6
United States v. Speed, 53 F.3d 643, 644 (4th Cir. 1995).            Seligman

filed the motions for voluntary dismissal or a continuance after

the close of discovery, after defendants had already filed their

motion   for   summary   judgment,    and   within   three   weeks    of   the

scheduled trial date. Given the advanced stage of the proceedings,

we perceive no error in the district court’s decision to deny

Seligman’s efforts to prolong the litigation.         See Paturzo v. Home

Life Ins. Co., 503 F.2d 333, 335 (4th Cir. 1974) (no abuse of

discretion in denying motion for voluntary dismissal in light of

the advanced stage of litigation).           Accordingly, we affirm the

district court’s denial of the motions.

                                     III.

     The district court’s dispositions of the motion for summary

judgment and the motion for a voluntary dismissal or continuance

are therefore affirmed.

                                                                     AFFIRMED

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