Court Opinion

ID: 2976700
Source: CourtListenerOpinion
Date Created: 2015-09-22 17:56:11.833589+00
Date Added: 2024-06-11T15:38:08.357278
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                                  File Name: 08a0399n.06
                                     Filed: July 1, 2008

                                                  No. 07-5794

                                 UNITED STATES COURT OF APPEALS
                                      FOR THE SIXTH CIRCUIT

       LAUREL KNUCKLES SWILLEY,                         )
       Individually and in her capacity as General      )
       Partner of the Ruth Hoe Knuckles Family          )
       Limited Partnership,                             )
                                                        )   ON APPEAL FROM U.S. DISTRICT
               Plaintiff/Appellant                      )   COURT EASTERN DISTRICT OF
                                                        )   KENTUCKY SOUTHERN DIVISION
       v.                                               )   at LONDON
                                                        )
       JEFFERY R. TIPTON and                            )
       WESLEY R. TIPTON                                 )

               Defendants/Appellees

               Before: BATCHELDER, SUTTON, and FRIEDMAN,* Circuit Judges.

         FRIEDMAN, Circuit Judge. In this diversity case, a former client sued her lawyer for injuries

that assertedly resulted from the lawyer’s alleged conflict of interest. The United States District Court

for the Eastern District of Kentucky granted summary judgment for the defendants and dismissed the

case, ruling that the client had not shown that she had been injured by the lawyer’s actions. We affirm.

                *Daniel M. Friedman, Senior Circuit Judge of the United States Court of Appeals for the
       Federal Circuit, sitting by designation.
                                                     I

          This case grows out of disagreements among sisters over the administration of their mother’s

estate. Shortly before her death, the mother, Ruth H. Knuckles, a Kentucky resident, created the Ruth

H. Knuckles Family Limited Partnership (“the Partnership”). The Partnership was designed to hold and

engage in transactions in real estate.    Mrs. Knuckles was the only general partner, and her four

daughters were equal limited partners.

        Mrs. Knuckles died less than two months after creating the Partnership. Two of her daughters,

the appellant Laurel Knuckles Swilley (“Swilley”) and her sister Susan Knuckles Roberts (“Roberts”),

were elected general partners.     Under Knuckles’ will, all of her real property was to go to the

Partnership, and her personal property was to be divided equally among her daughters. Roberts and her

sister Melissa Knuckles Barton (“Barton”) were appointed co-executrixes of the estate.

         The appellee Jeffrey R. Tipton (“Tipton”) is a lawyer who practices in Corbin, Kentucky, as a

member of the firm of Tipton & Tipton. After Mrs. Knuckles’ death, Tipton represented the co-

executrixes of the estate (Barton and Roberts) in handling various claims that had been filed by and

against the estate. A partition action was then filed in a Kentucky trial court against the Partnership and

the four partners, seeking to sell property that Mrs. Knuckles and her brother had owned jointly. Tipton

filed an answer and an intervening complaint in that action for the Partnership and its partners. That

litigation resulted in the sale of the property and the distribution, by Tipton, to each of the partners of

her share of the proceeds.

       At around that time, Tipton filed in the Kentucky trial court, on behalf of Roberts and Barton, an

application for judicial dissolution of the Partnership (“the dissolution suit”). Swilley and her sister

                                                         2
Whitcomb Knuckles (“Whitcomb”), represented by their own attorney, filed an answer, counter-claim,

and third-party complaint that alleged that the sisters Roberts and Barton had mismanaged the estate and

the Partnership, dissipated the assets of those entities, and breached their fiduciary duties as

representatives of the estate and the Partnership. Swilley and Whitcomb requested that Barton and

Roberts be removed as co-executrixes of the estate, that they recover damages, and that the Partnership

be continued.

         The dissolution suit was settled when Swilley, Roberts, and Barton executed a “Release of all

Claims” that provided for an Agreed Order of Judgment to be entered, and Swilley received

$235,000.00. Swilley, who is a lawyer, jointly with her sister Roberts (also a lawyer), drafted these

documents.

         The Kentucky trial court entered the Agreed Order, which in a subsequent order it recognized

had terminated Swilley’s interest in the estate and the Partnership. The Kentucky Court of Appeals

dismissed Swilley’s appeal from the latter order as untimely.

       Swilley then filed pro se the present action in the United States District Court against Tipton and

his partner. The complaint accused Tipton of breach of fiduciary duty, fraud, breach of contract, and

negligence. Swilley stated that in agreeing to the settlement of the dissolution suit she believed that the

money she there received “represent[ed] an advance an advance [sic] of $235,000.00 against the balance

of her . . . claims against Susan K. Roberts and Melissa Knuckles as party plaintiffs and individually in

the partnership dissolution action. [sic] litigation. The plaintiff did not intend to and did not release,

relinquish, waive, transfer, or in any manner divest herself of the remainder of plaintiff’s inheritable

interest in the estate nor of her interest in the family limited partnership.” She sought compensatory and

                                                        3
punitive damages. Swilley sought recovery against Tipton’s partner, Wesley Tipton, on a theory of

vicarious liability.

          On cross-motions for summary judgment, the district court granted the defendants’ motion and

dismissed the complaint. The court held that “Swilley has failed to produce any evidence that Tipton’s

actions caused her to enter into the Agreed Order and Release. For this reason, her claims against the

Defendants must be dismissed.” Swilley v. Tipton, No. 04-CV-638-KKC, 2007 WL 316951, at *7

(E.D.Ky. Jan. 30, 2007). The court further held that Swilley had waived any claim that Tipton was

disqualified in the dissolution suit by a conflict of interest because she had not raised that claim in that

action.

                                                     II

             Swilley’s argument apparently is that Tipton had a conflict of interest when he filed the

dissolution suit for Roberts and Barton because their interests were adverse to those of their sisters

Swilley and Whitcomb, whom he still was representing; that he induced Swilley to enter into the

settlement of that action under which the $235,000.00 she received constituted a waiver of her claim to

the additional amount due under her mother’s estate and her Partnership interest; and that Tipton was

responsible and liable for the damage she thus suffered.

           Swilley’s claim fails because, as the district court correctly held, she “failed to produce any

evidence that Tipton’s actions caused her to enter into the Agreed Order and Release.” Id. As that court

pointed out, Tipton “did not represent or advise Swilley” in that action. Id. She was represented by a

different lawyer. Swilley herself is a lawyer and she jointly drafted the Release and Agreed Order by

                                                           4
which, the Kentucky trial court held, she had waived any further interest in her mother’s estate and the

Partnership.

         As the district court stated, “Tipton did not advise Swilley in drafting the Release or have any

role in drafting the Agreed Order.       It is not possible that Tipton misled Swilley as to the legal

significance of a document that she herself drafted.” Id. (internal citations omitted).

         As the district court recognized, under Kentucky law, a legal malpractice claim requires proof

that the lawyer’s misconduct was the proximate cause of the plaintiff’s damage. See Marrs v. Kelly, 95
S.W.3d 856, 860 (Ky. 2003) (for legal malpractice claim, plaintiff must show attorney’s negligence was

proximate cause of damage to client). Although Swilley’s complaint alleged that by holding himself out

as a skilled attorney in various areas of the law Tipton “thereby induced the plaintiff and representatives

of the estate, partnership and trusts to rely upon their advice and counsel,” the district court correctly

stated that Tipton had not advised Swilley about either the dissolution suit or the Release and Agreed

Agreement or had any role in drafting these documents. Swilley points to nothing in the record that

undermines those conclusions. Contrary to her contention, there are no disputed issues of material fact

relating to these issues that precluded the grant of summary judgment in Tipton’s favor.

          In view of our conclusion in this issue, we need not consider the district court’s alternative

ground of decision that Swilley’s failure to seek Tipton’s disqualification in the dissolution suit waived

that contention and precludes her from raising it in the present case.

       The summary judgment of the district court dismissing the suit is affirmed.

                                                         5