Court Opinion

ID: 1004681
Source: CourtListenerOpinion
Date Created: 2013-07-04 18:44:55.438604+00
Date Added: 2024-06-11T15:40:39.655529
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

JENNINGS HOLLAND; JETTA SUE            
HOLLAND; KARA HOLLAND; DEBRA
HOLLAND; MARSHA NAPIER; CAROL
RAMEY; JASON SMITH; DAVID RAMEY;
BRANDON HOLLAND,
              Plaintiffs-Appellants,           No. 00-1195
                 v.
STEPHEN KOHN; DAVID COLAPINTO;
KOHN, KOHN, & COLAPINTO, P.C.,
             Defendants-Appellees.
                                       
CHRISTOPHER S. RAMEY,                  
                Plaintiff-Appellant,
                 v.
STEPHEN KOHN; DAVID COLAPINTO;
KOHN, KOHN, & COLAPINTO, P.C.,                 No. 00-1196
             Defendants-Appellees,
                and
MICHAEL KOHN,
                         Defendant.
                                       
           Appeals from the United States District Court
     for the Southern District of West Virginia at Huntington.
              Robert J. Staker, Senior District Judge.
                     (CA-97-880, CA-99-652)

                      Argued: April 6, 2001

                      Decided: June 19, 2001
2                          HOLLAND v. KOHN
    Before LUTTIG and GREGORY, Circuit Judges, and Rebecca
    Beach SMITH, United States District Judge, Eastern District of
                 Virginia, sitting by designation.

Vacated and Remanded by unpublished per curiam opinion.

                             COUNSEL

ARGUED: Richard Allen Robb, South Charleston, West Virginia,
for Appellant. Perry Wayne Oxley, OFFUTT, FISHER & NORD,
Huntington, West Virginia, for Appellees.

Unpublished opinions are not binding precedent in this circuit.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

                              OPINION

PER CURIAM:

   In this legal malpractice action, Appellants Jennings Holland, Jetta
Sue Holland, Kara Holland, Debra Holland, Marsha Napier, Carol
Ramey, Jason Smith, David Ramey, and Brandon Holland (collec-
tively "Appellants" or "Plaintiffs/Appellants") sued their former attor-
neys, Stephen Kohn and David Colapinto, and the attorneys’ law
firm, Kohn, Kohn & Colapinto, P.C., (collectively, "Appellees"), for
causing the dismissal of a toxic tort action. The district court granted
the Appellees’ motion for summary judgment, which was based on
the doctrine of collateral estoppel. Because a genuine issue of mate-
rial fact exists regarding whether Appellants received notice and the
opportunity to be heard in the toxic tort action, we vacate and remand
for further proceedings.
                           HOLLAND v. KOHN                              3
                                    I.

   Appellees began representing Appellants in March 1994 in a toxic
tort action that Appellants filed in West Virginia state court against
Ashland Oil, Incorporated (the "State Court Action"). Holland v. Ash-
land Oil, Inc., Civil Action No. 91-C-631. On November 11, 1994,
Ashland Oil propounded Interrogatories and Requests for Production
on each individual Plaintiff/Appellant in the State Court Action. Ash-
land Oil subsequently agreed to extend the Plaintiffs’/Appellants’
time to respond to the discovery until December 31, 1994, and later
to January 5, 1995. Between November 11, 1994 and January 5, 1995,
neither Plaintiffs/Appellants nor Appellees made much progress in
responding to the discovery requests.

   On February 1, 1995, Ashland Oil filed a Motion to Compel
against the Plaintiffs/Appellants and Appellees for failing to respond
to discovery. Ashland Oil served the motion on Appellees. Appellants
assert, and Appellees do not deny, that they personally did not receive
copies of the motion. Nothing in the record suggests that Ashland Oil
filed or served a Notice of Motion setting the Motion to Compel for
hearing.

  On February 3, 1995, Appellees filed a Motion and Notice of
Motion to Withdraw. The Notice of Motion stated that the matter
would be heard on February 9, 1995, and that it was served on each
Plaintiff/Appellant. The Motion referred to "irreconcilable differences
between plaintiffs’ counsel and the clients", but stated that it would
not provide specifics for fear of violating the attorney-client privilege.

   On February 4, 1995, Appellees responded to Ashland Oil’s
Motion to Compel on their own behalf, but not on Appellants’ behalf.
Appellees’ response stated that Appellees were filing it "on [their]
own behalf because [Ashland Oil’s] motion requests that sanctions be
assessed against counsel for plaintiffs in addition to plaintiffs them-
selves" and because "[o]n February 3, 1995, plaintiffs’ attorneys filed
a motion to withdraw as plaintiffs’ counsel[.]" Appellees’ response
further stated that "some of the irreconcilable differences that have
arisen between plaintiffs and their counsel relate to issues raised by
defendant in its motion to compel[.]" Appellees also stated that they,
"[w]ithout success . . . attempted to resolve those irreconcilable differ-
4                          HOLLAND v. KOHN
ences." The certificate of service accompanying the response stated
that Appellees served the motion on Ashland Oil and all individual
Plaintiffs/Appellants on February 4. Appellants, though, claim they
never received a copy of Appellees’ response to the Motion to Com-
pel.

   At a February 9, 1995 hearing in the State Court Action, Appellees
filed a Memorandum in Support of their Motion to Withdraw. This
Memorandum related purported financial disagreements between the
Plaintiffs/Appellants and Appellees, as well as difficulties Appellees
purportedly experienced in receiving information from the Plain-
tiffs/Appellants sufficient to respond to Ashland Oil’s discovery
requests. Appellees’ Memorandum stated that "[s]ince October 1994,
the plaintiffs have become increasingly less cooperative — to the
point of exhibiting anger, hostility and total non-cooperation towards
[Appellees] and requests for information." Appellees’ Memorandum
related several examples of the Plaintiffs’/Appellants’ purported fail-
ure to cooperate, as well as various incidents supporting Appellees’
motion to withdraw.1

   At the hearing in the State Court Action, the state court noted that
several individual Plaintiffs/Appellants had submitted letters to the
court opposing Appellees’ motion to withdraw. The judge ordered
Appellees to explain to the Plaintiffs/Appellants that their opposition
to the motion to withdraw constituted a waiver of the attorney-client
privilege. After a brief recess during which Appellees complied with
the court’s order to meet with the Plaintiffs/Appellants and explain
the attorney-client privilege to them, Appellee Colapinto reported to
the court that "I don’t know that they fully understand" that they were
waiving the attorney-client privilege. Nonetheless, the court ruled that
each Plaintiff/Appellant who made a written or oral objection to
Appellees’ Motion to Withdraw waived the attorney-client privilege.
The court then heard testimony from Plaintiff/Appellant Sue Holland
in response to the specific allegations made in Appellees’ Memoran-
dum in support of their Motion to Withdraw. At the start of Ms. Hol-
    1
   For example, Appellee alleged in the Memorandum that one plaintiff
"was so angry [at Appellees] that she threatened to hire someone to kill
her attorneys if, in her opinion, they got out of line."
                            HOLLAND v. KOHN                                5
land’s testimony, Ashland Oil’s counsel made the following
statement:

    Mr. Parnell: I only have one observation . . . . The plain-
    tiffs are currently in disobedience of the Court’s discovery
    order. I can’t tell who it is that has done what, but I can say
    to the extent that it turns out that a client, that is, a plaintiff,
    has wilfully failed to do things, I believe we have an interest
    in requesting that those parties, to the extent that they have
    not — either have Rule 11 sanctions or dismissal.

This statement by Ashland Oil’s counsel was the first mention made
at the hearing of Ashland Oil’s motion to compel.

   In response to Mr. Parnell’s statement, Appellee Colapinto stated
that "if I am adversarial to my own clients on that issue, I don’t see
how I can continue as counsel in this matter, and I would move to
withdraw on that ground immediately." The court did not respond to
Appellee Colapinto’s comment, but proceeded to question Ms. Hol-
land.

  All of the questions asked Ms. Holland by the court related to
Appellee Colapinto’s motion to withdraw. Appellee Colapinto
declined the court’s invitation to question Ms. Holland, citing a dis-
comfort with cross-examining his own client. Mr. Parnell then cross-
examined Ms. Holland for Ashland Oil on the issues raised by the
motion to compel. Appellees did not object to any of Mr. Parnell’s
questions or participate in the questioning in any way.

   The court then heard from Juanita Smith, another named plaintiff
in the State Court Action. The court questioned her solely on issues
relating to Appellee’s motion to withdraw. Mr. Parnell then cross-
examined Ms. Smith regarding the motion to compel. Again, Appel-
lees did not object to any of Mr. Parnell’s questions and did not other-
wise participate in the questioning.

  After receiving Ms. Smith’s testimony, the state court allowed
Appellee Colapinto to make a statement in response to Ms. Holland
and Ms. Smith’s testimony. When Ms. Smith objected to the state-
6                          HOLLAND v. KOHN
ment, the state court judge stated that "[Appellee Colapinto] listened
real patiently while you talked, ma’am. I’m afraid I’m going to have
to ask you to do the same, Ms. Smith."

 The state court then asked Appellee Colapinto about Ashland Oil’s
Motion to Compel:

    Q: Is it your representation to the Court that the reason
    that the discovery deadlines that were agreed to and set by
    the Court were not complied with was, in its entirety, the
    responsibility of the plaintiffs?

    A (Colapinto): Yes, Your Honor[.]

The court did not ask the same or similar questions of Ms. Holland,
Ms. Smith or any other Plaintiff/Appellant.

   After receiving Appellant Colapinto’s statement, the court allowed
Ashland Oil to cross-examine Appellee Colapinto. The Plain-
tiffs/Appellants did not object to Appellee Colapinto’s testimony nor
ask to question him. The record is silent as to whether the court would
have allowed such objections or questioning.

   At the end of Appellee Colapinto’s testimony, the court ruled that
Appellees were entitled to withdraw as counsel and dismissed the
case with prejudice for the Plaintiffs’/Appellants’ failure to respond
to discovery. On March 7, 1995, the court issued an order in accor-
dance with its bench ruling, stating that "all of the Plaintiffs in this
action have failed to cooperate with their counsel in compiling infor-
mation that is responsive to these discovery requests and accordingly
GRANTS Ashland Oil’s Motion for Sanctions and . . . will, therefore
DISMISS WITH PREJUDICE this action[.]" The court further stated
that

    [t]he Plaintiffs in this action constitute the last of over 2200
    Plaintiffs that were part of predecessor actions that have
    been pending in this court and others since as early as 1988.
    Since these cases have been pending before this court,
    approximately 700 claims have been settled and approxi-
                           HOLLAND v. KOHN                             7
    mately 1500 claims have been dismissed on a variety of
    grounds, inter alia, failure to comply with discovery dead-
    lines. The court’s position in this regard is well known to all
    of the counsel and all of the participants in this action.

The court concluded that "[i]t is clear to this court that the failure to
comply with the discovery requests . . . rests with the individual
Plaintiffs in this matter."

   Subsequently, Appellants filed this suit against Appellees for legal
malpractice, alleging that Appellees’ negligence caused the State
Court Action’s dismissal. Appellees moved for summary judgment on
the basis of collateral estoppel, asserting that the state court deter-
mined that — Plaintiffs/Appellants — were the causes of the action’s
dismissal. On December 1, 1998, the district court denied Appellees’
motion, explaining that a genuine issue of fact existed regarding
whether Appellants had a full and fair opportunity to litigate the issue.
Specifically, the district court stated that

    [w]hile the plaintiffs were present at the hearing and two of
    them did testify, it appears from the evidence submitted that
    their presence and testimony was related to the motion to
    withdraw. There is nothing in the evidence submitted to this
    court which shows that the plaintiffs were prepared to
    defend against a dismissal of their litigation for failure to
    provide discovery or that they had any opportunity to actu-
    ally litigate the issue, apart from the statements of their
    attorneys, who were seeking to withdraw.

   More than two years later, the district court reconsidered its deci-
sion. The court re-raised the collateral estoppel issue sua sponte,
sought additional briefing, and held a January 28, 2000 hearing on the
matter. The court ruled from the bench, stating:

    [The state court] held a hearing on whether that lawyer
    would be permitted to withdraw or not. Those plaintiffs
    were present at that hearing and that lawyer asserted as one
    of the reasons why those plaintiffs - why he desired to with-
    draw was their refusal indeed to participate in the discovery
8                          HOLLAND v. KOHN
    process. The defendant had moved for dismissal or sanc-
    tions on that ground.

    [The state court] held a hearing on that very issue and made
    findings of fact, one of which was that discovery had not
    been provided and it was the fault of the plaintiffs them-
    selves and not their counsel, an affirmative fact that he
    found, and he sets forth that in his order.

Based on this factual analysis, the district court held that collateral
estoppel precluded Appellants from re-litigating the issue of the cause
of the State Court Action’s dismissal.

                                   II.

                                   A.

   We review the district court’s summary judgment ruling de novo,
viewing the facts in the light most favorable to the non-moving party.
Goldstein v. The Chestnut Ridge Volunteer Fire Co., 218 F.3d 337,
340 (4th Cir. 2000); Binakonsky v. Ford Motor Co., 133 F.3d 281,
284-85 (4th Cir. 1998). Summary judgment is appropriate if "the
pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to
judgment as a matter of law." Fed. R. Civ. P. 56.

                                   B.

   In West Virginia, a plaintiff suing for legal malpractice must prove
"(1) the attorney’s employment; (2) his neglect of a reasonable duty;
and (3) that such negligence resulted in and was the proximate cause
of loss to the client." Keister v. Talbott, 391 S.E.2d 895, 898 (W. Va.
1990). Here, Appellants claim that Appellees’ failure to respond to
Ashland Oil’s discovery resulted in the suit’s dismissal. Appellees
contend that the state court’s decision that "the failure to comply with
the discovery requests . . . rests with the individual [Plain-
tiffs/Appellants]" collaterally estops Appellants from prevailing in
this action.
                           HOLLAND v. KOHN                             9
   Under 28 U.S.C. § 1738, federal courts must give a state court
judgment the same preclusive effect as they would give the judgment
under the law of the state in which the judgment was rendered. Par-
sons Steel, Inc. v. First Alabama Bank, 474 U.S. 518 (1986)). The
doctrine of collateral estoppel forecloses the re-litigation "‘of issues
of fact or law that are identical to issues which have been actually
determined and necessarily decided in prior litigation in which the
party against whom [collateral estoppel] is asserted had a full and fair
opportunity to litigate.’" Sedlack v. Braswell Serv. Group, Inc., 134
F.3d 219, 224 (4th Cir. 1998) (quoting Ramsay v. INS, 14 F.3d 206,
210 (4th Cir. 1994)). Under the doctrine, an issue that has been actu-
ally and necessarily determined "is conclusive in subsequent suits
based on a different cause of action involving a party to the prior liti-
gation." Montana v. United States, 440 U.S. 147, 153 (1979).

   For collateral estoppel to apply under West Virginia law, its propo-
nent must prove the existence of four elements: "(1) the issue previ-
ously decided is identical to the one presented in the action in
question; (2) there is a final adjudication on the merits of the prior
action; (3) the party against whom the doctrine is invoked was a party
or in privity with a party to a prior action; and (4) the party against
whom the doctrine is raised had a full and fair opportunity to litigate
the issue in the prior action." Haba v. The Big Arm Bar & Grill, Inc.,
468 S.E.2d 915, 919 (W. Va. 1996).

   Appellants’ appeal implicates the second and fourth factors of the
collateral estoppel inquiry. Appellants’ first contention — that a dis-
missal for the failure to effect discovery does not constitute a final
adjudication on the merits of the State Court Action — can be easily
resolved, as Appellants confuse the issue that must have been adjudi-
cated in the State Court Action. The State Court Action need not have
been adjudicated on the merits, but the issue to which Appellees raise
collateral estoppel must have been adjudicated on the merits. Here,
that issue is whether Appellants or Appellees caused the dismissal of
the State Court Action. The state court decided that issue on its mer-
its.

   Appellants’ second contention is more troublesome. Appellants
claim that they did not have "a full and fair opportunity to litigate the
issue in the previous forum." It is well settled that the full-and-fair-
10                         HOLLAND v. KOHN
opportunity formulation generally requires that a litigant receive "rea-
sonable notice of the claim against him and opportunity to be heard
in opposition to that claim." Hardy v. Johns-Manville Sales Corp.,
681 F.2d 334, 338 (5th Cir. 1982) (quoting 1B Moore’s Federal Prac-
tice P 0.411 at 1252 (2nd ed. 1982)) (emphasis added). The "right to
a full and fair opportunity to litigate an issue is, of course, protected
by the due process clause of the United States Constitution." Blonder-
Tongue Labs., Inc. v. University of Illinois Foundation, 402 U.S. 313,
329 (1971). See also 47 Am. Jur. 2d Judgments § 650 (1995) (the
"full and fair" formulation generally means "that a person cannot be
bound by a judgment unless he has had reasonable notice of the claim
against him and opportunity to be heard in opposition to that claim").

   A genuine issue of material fact exists regarding whether Appel-
lants received notice of the Motion to Compel, which ultimately led
to the dismissal of the State Court Action, and whether they received
an opportunity to be heard in opposition to that motion. Regarding
their lack of notice, Appellants contend that they did not receive a
copy of Ashland Oil’s Motion to Compel, did not receive a copy of
Appellees’ response to the Motion to Compel, and did not receive
notice that the February 9, 1995 hearing would address the Motion to
Compel. While Appellees claim they provided Appellants a copy of
their response to the Motion to Compel, we must view the facts in the
light most favorable to Appellants, who contend otherwise. See
Binakonsky, 133 F.3d at 284-85. Moreover, Appellees’ notice of Ash-
land Oil’s Motion to Compel cannot be imputed to Appellants under
the facts of this case, see W. Va. R. Civ. P. 6 (when a party is repre-
sented by counsel, service of a motion on counsel constitutes service
upon the party), where Appellees moved to withdraw and explicitly
responded to the motion only on their own behalf. Thus, substantial
evidence exists that Appellants knew nothing about Ashland Oil’s
Motion to Compel until its mention at the February 9, 1995 hearing.

   Regarding Appellants’ opportunity to be heard in opposition to the
Motion to Compel, the undisputed evidence shows that Appellants
lacked that opportunity. The state court questioned the Plain-
tiffs/Appellants only about Appellees’ Motion to Withdraw, Plain-
tiffs/Appellants were not allowed to object to Appellee Colapinto’s
testimony, Plaintiffs/Appellants were not offered the opportunity to
question Appellee Colapinto, and the state court ruled on the Motion
                          HOLLAND v. KOHN                           11
to Compel without seeking any argument on that motion from the
Plaintiffs/Appellants.

   Moreover, Appellees admitted during the state court proceedings
that they did not intend to represent Appellants on that motion. For
example, Appellees’ response to Ashland Oil’s Motion to Compel
stated that they were filing it "on [their] own behalf because defen-
dant’s motion requests that sanctions be assessed against counsel for
plaintiff in addition to plaintiffs themselves." Moreover, Appellee
Colapinto stated at the February 9 hearing that "if I am adversarial to
my own clients on that issue [in other words, the motion to compel],
I don’t see how I can continue as counsel in this matter, and I would
move to withdraw on that ground immediately." Thus, the undisputed
evidence shows that Appellants lacked the opportunity to respond to
the Motion to Compel.

                                 III.

  For the foregoing reasons, the judgment of the district court is
vacated and the suit remanded for further proceedings.

                                        VACATED AND REMANDED.