Court Opinion

ID: 9925306
Source: CourtListenerOpinion
Date Created: 2024-01-19 15:00:40.100038+00
Date Added: 2024-06-11T09:20:01.753632
License: Public Domain

23-858-cv
Lyons v. Birmingham Law Office, LLC

                      UNITED STATES COURT OF APPEALS
                          FOR THE SECOND CIRCUIT

                                  SUMMARY ORDER

Rulings by summary order do not have precedential effect. Citation to a summary order
filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.

       At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 19th day of January, two thousand twenty-four.

       PRESENT:        Steven J. Menashi,
                       Alison J. Nathan,
                       Maria Araújo Kahn,
                                Circuit Judges.
____________________________________________

JUSTINE LYONS,

                Plaintiff-Appellant,

          v.                                                   No. 23-858-cv

BIRMINGHAM LAW OFFICE, LLC, MATTHEW
BIRMINGHAM, MARYLOU SCOFIELD, PC, and
MARYLOU SCOFIELD,

                Defendants-Appellees.
____________________________________________
For Plaintiff-Appellant:                     DAVID BOND, Strouse & Bond, PLLC,
                                             Burlington, VT.

For Defendants-Appellees Birmingham          ANDREW H. MAASS (Antonin Robbason,
Law Office, LLC, and Matthew                 on the brief), Ryan Smith & Carbine, Ltd.,
Birmingham:                                  Rutland, VT.

For Defendants-Appellees Marylou             LAURA D. DEVINE, Boyle | Shaughnessy
Scofield, PC, and Marylou Scofield:          Law, PC, Woodstock, VT.

      Appeal from a judgment entered in the United States District Court for the
District of Vermont (Sessions, J.).

      Upon due consideration, it is hereby ORDERED, ADJUDGED, and
DECREED that the judgment of the district court is AFFIRMED.

      Plaintiff-Appellant Justine Lyons appeals the judgment of the district court
dismissing her claims against Birmingham Law Office, LLC, and Matthew
Birmingham (collectively, “Birmingham”) and Marylou Scofield, PC, and Marylou
Scofield (collectively, “Scofield”). Birmingham and Scofield represented the seller
and buyer, respectively, in a real estate transaction. Lyons was not a party to that
transaction but the seller had instructed that the sale proceeds be wired directly to
Lyons’s account. The wire transfer failed, however, and then the seller—Alfred
Ducharme—suddenly died. The defendants subsequently transferred the funds to
Ducharme’s estate. Lyons filed suit, asserting claims for conversion and
professional negligence. We assume the parties’ familiarity with the facts,
procedural history, and issues on appeal.

      “We review a district court’s grant of a motion to dismiss de novo, accepting
as true all factual claims in the complaint and drawing all reasonable inferences in
the plaintiff’s favor.” Henry v. County of Nassau, 6 F.4th 324, 328 (2d Cir. 2021)

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(internal quotation marks omitted). To avoid dismissal, the “complaint must plead
‘enough facts to state a claim to relief that is plausible on its face.’” Green v. Dep’t
of Educ., 16 F.4th 1070, 1076-77 (2d Cir. 2021) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)).

      In considering Lyons’s conversion and professional negligence claims, we
assume without deciding that Lyons has adequately pleaded ownership of the
funds. We note, however, that her allegation of ownership is a legal conclusion
that we “are not bound to accept as true” on a motion to dismiss. Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555).

                                           I

      Lyons argues that the defendants are liable for conversion because they held
the sale proceeds and then transferred the proceeds to the seller’s estate instead of
delivering the funds directly to her in accordance with Ducharme’s instructions.
We agree with the district court that Lyons has failed to state a conversion claim.

      In Vermont, “the key element of conversion … is the wrongful exercise of
dominion over property of another.” P.F. Jurgs & Co. v. O’Brien, 160 Vt. 294, 299
(1993). The owner of the property may establish a claim for conversion by showing
that the defendant has (1) “appropriated the property to that party’s own use and
beneficial enjoyment,” (2) “exercised dominion over it in exclusion and defiance
of the owner’s right,” or (3) “withheld possession from the owner under a claim of
title inconsistent with the owner’s title.” Montgomery v. Devoid, 181 Vt. 154, 160
(2006) (quoting O’Brien, 160 Vt. at 299). These are not the “only ways in which
conversion may occur” but provide a guide for “determining whether there was
sufficient unauthorized interference with plaintiff’s property interest to amount to
conversion by an overt act of dominion.” O’Brien, 160 Vt. at 299.

      In determining whether conversion has occurred, a court considers several
factors: “(a) the extent and duration of the actor’s exercise of dominion or control;
(b) the actor’s intent to assert a right in fact inconsistent with the other’s right of
control; (c) the actor’s good faith; (d) the extent and duration of the resulting
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interference with the other’s right of control[;] (e) the harm done to the chattel;
(f) the inconvenience and expense caused to the other.” Montgomery, 181 Vt. at 161
(quoting Restatement (Second) of Torts § 222A(2)).

      Even accepting Lyons’s factual allegations as true and making all reasonable
inferences in her favor, we cannot conclude that the defendants exercised
wrongful dominion over the funds. The allegations indicate that the defendants
attempted in good faith to place the funds with the proper party following an
unusual sequence of events. The allegations do not establish that the defendants
should have transferred the funds to Lyons after the wire transfer failed and they
could not obtain further instruction from Ducharme on how to deliver the funds. 1
Lyons argues that, at the very least, Birmingham should have filed an interpleader
action rather than transferring the money to the estate. But Birmingham did
something similar—he delivered the money to the estate to be held in trust while
the probate court resolves the ownership dispute.

       The Restatement factors lead us to the same conclusion. First, the defendants
did not exercise extensive dominion over the funds. Birmingham held the funds
in escrow for several weeks until an estate administrator was appointed, and then
transferred the funds to the estate to hold in trust during the probate proceedings.
Second, the defendants “acted in good faith to deliver the money according to the
deceased seller’s wishes.” Lyons v. Birmingham Law Office, LLC, No. 2:23-CV-16,
2023 WL 3294276, at *3 (D. Vt. May 5, 2023). The allegations show that the
defendants did not intend to “assert actual dominion over the money for any
length of time” or to “assert a right in fact inconsistent with any other person’s
right of control.” Montgomery, 181 Vt. at 162. Finally, the consequence of the

1 Lyons contends that the wiring instructions constituted an escrow agreement the terms
of which the defendants were required to fulfill even after Ducharme’s death. We do not
agree that the instructions constituted such an agreement. Even if there were an escrow
agreement, however, the defendants’ transfer of the funds to be held in trust by the estate
pending resolution of the ownership dispute would not, under the circumstances, give
rise to a conversion claim.

                                            4
defendants’ actions is that Lyons must wait for the probate court to resolve her
claim to the sale proceeds. We recognize that—assuming Lyons prevails on her
claim—she will have been deprived of the use of the funds in the interim. But that
delay would result from a series of events including the wire failure, Ducharme’s
death, and the estate’s claim to the money—not from the defendants’ exercise of
control over the funds. We conclude that the defendants’ actions were not so
wrongful as to “justify requiring [them] to pay [the] full value” of the proceeds. Id.
at 161 (quoting Restatement (Second) of Torts § 222A, cmt. c).

                                           II

      Lyons additionally argues that the defendants are liable for professional
negligence because they failed to transfer the funds to her in accordance with
Ducharme’s instructions. We agree with the district court that this claim fails
because the defendants did not owe Lyons a duty of care.

      Generally, “an attorney owes a duty of care only to the client and not to third
parties.” Hedges v. Durrance, 175 Vt. 588, 589 (2003). Exceptions to this general rule
may exist when “the primary purpose and intent of the attorney-client relationship
itself was to benefit or influence the third party,” such as in estate-planning or will-
drafting. Id. at 590 (quoting Pelham v. Griesheimer, 440 N.E.2d 96, 100 (Ill. 1982)).

      Lyons was not a client of either Birmingham or Scofield. Nor was the
primary purpose of the defendants’ respective attorney-client relationships to
benefit Lyons. Lyons argues that the primary purpose was to benefit her because
the proceeds of the sale were directed to her. We disagree. As the district court
concluded, the primary purpose of the relationships was the purchase and sale of
Ducharme’s property. See Lyons, 2023 WL 3294276, at *4. Lyons was not identified
in the sale agreement at all. And even if, as Lyons argues, there was an escrow
agreement, that agreement was not the primary purpose of the attorney-client
relationships so the defendants would still not owe Lyons a duty of care. Finally,
because the defendants did not owe Lyons a duty of care, the provisions of the
Vermont Rules of Professional Conduct cannot provide a basis for her claim.

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                                  *     *    *

         We have considered Lyons’s remaining arguments, which we conclude are
without merit. For the foregoing reasons, we affirm the judgment of the district
court.

                                      FOR THE COURT:
                                      Catherine O’Hagan Wolfe, Clerk of Court

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