Court Opinion

ID: 882519
Source: CourtListenerOpinion
Date Created: 2013-06-05 01:36:08.138995+00
Date Added: 2024-06-11T15:33:31.721345
License: Public Domain

No.                 91-336

                IN THE SUPREME COURT OF THE STATE OF MONTANA

    OAR LOCK LAND & CATTLE CO. , a/k/a
    OAR LOCK LAND & CATTLE COMPANY;
    JTMMIE LUE EDDLEMAN; and WARREN
    DAN EDDLEMAN,
3
                        Plaintiffs and Appellants,
         -vs-
    CROWLEY, HAUGHEY, HANSON, TOOLE & DIETRICH,
    a partnership; JOHN M. DIETRICH;
I   ARTHUR F. LAMEY, JR.; ALLAN L. KARELL;
    AND HALL & HALL, INC., a corporation,
                             Defendants and Respondents.

    APPEAL FROM:     District Court of the Thirteenth Judicial District,
                     In and for the County of Yellowstone,
                     The Honorable Robert W. Holmstrom, Judge presiding.

    COUNSEL OF RECORD:
               For Appellants:
                     Eldon Silverman; Elrod, Katz, Preeo, Look, Moison &
                     Silverman, Denver, Colorado
                     Randy S , Laedeke; Laedeke Law o f f i c e , ~illings,
                     Montana
               For Respondents:
                     Stephen H. Foster, Jeanne M.                             Bender; Holland         &
                     Hart, ~illings,Montana

                                                   Submitted on Briefs:            April 15, 1992
            MAY 2 8 1992
                                                                        Decided:   May 2 8 ,   1992
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                                                        Clerk
Justice John Conway Harrison delivered the Opinion of the Court.

     This is an appeal from an order of the Thirteenth Judicial
District      Court,     Yellowstone       County,    Montana,     which   granted
respondents' motion for summary judgment in an attorney malpractice
claim.      We affirm.
     This action arose from a series of loan transactions which
initially began sometime in 1965.                 At that time, John Dietrich
(Dietrich) and Art Lamey (Lamey) of the Crowley, Haughey, Hanson,
Toole   &   Dietrich Law Firm (Crowley) represented both the appellants
and the Connecticut Mutual Life Insurance Corporation (CML) in a
real estate/loan transaction in which the appellants acquired ranch
land.       In 1967, Crowley again aided the appellants and CML in
another      loan   transaction.           From   1967   through    1972   Crowley
represented the appellants in numerous ranch related matters.
        In 1974, the appellants requested that Dietrich draft their
wills.      Dietrich declined due to his workload and appellants then
hired Gene LaLonde (LaLonde), a non-Crowley lawyer, to handle their
wills.        LaLonde also represented the appellants in 1975 to
incorporate the Oar Lock Land          &    Cattle Company.
        In 1978 the appellants formed a partnership with Sumner Gerard
(Gerard) known as the Paradise Land and Livestock Company; the
purpose of the partnership was to purchase a ranch in Nevada.
During this transaction Gerard was represented by Crowley and
appellants were again represented by LaLonde.                      Also in 1978,
appellants obtained another loan from CML and there is disagreement
about who represented the parties.                   The appellants claim that
                                            2
Crowley and another non-Crowley lawyer jointly represented the
parties-       Crowley contends that it represented CML and LaLonde

represented the appellants.
       In the e a r l y to mid 1980s, the appellants began to experience

financial difficulties and          the Crowley   firm   represented   the
Paradise Land and Livestock Company in the sale of the Nevada
ranch.    In 1984, Dietrich reviewed an agreement for M.E. Eddleman,
one of the appellants, regarding a txust/financing arrangement with
an individual in North Dakota.         Dietrich advised Mr. Eddleman to
find     out   more   about   the   individual before    considering the
transaction and referred Mr. Eddleman to a New York branch office
of a Swiss bank.      Dietrich never heard about the matter again.      In
1985-86, the appellants hired the firm of Anderson, Brown to
represent them in a bank loan d e f a u l t initiated by Norwest bank.
        In 1986, Anderson, Brown        represented the appellants      in
negotiations with CML regarding delinquent payments on the 1978
loan.     In 1988, the appellants defaulted in their payments to CML
on the 1978 loan and the Crowley firm, while representing CML,
foreclosed upon appellants.          The District Court entered default
judgment against the appellants on September 28, 1988, after which
a foreclosure sale took place.
        On November 29, 1989, with counsel of record Chris J. Nelson

(Nelson), the appellants moved, but later withdrew their motion, to
set aside the judgment with respect to a grazing lease.                 On
February 7, 1990, Nelson filed two motions: first, a Rule 60(b)
motion to set aside the default judgment and decree of foreclosure;
and   second, a    motion     to   disqualify    the Crowley      firm   from
representing CML.    The primary claim asserted in the motions was

that Crowley acted adversely to its former clients (the appellants)
when it represented CML in the foreclosure proceeding. The motions
were deemed denied pursuant to Rules 60(c) and 59 (g), M,R.Civ,P.
Further, the parties also stipulated to dismissal of the motions
without prejudice on April 17, 1990.
      On May 25, 1990, the appellants filed a complaint alleging
various   causes    of    action    including    that   Crowley   committed
malpractice by acting adversely to the appellants by refusing to
resign as attorneys for CML.        Crowley moved for summary judgment.
After a November 2, 1990 hearing, the District Court found no
genuine issues of material fact and granted Crowleygs motion for
summary judgment.    Appellants now appeal to this Court.
      The dispositive issue on appeal is whether the District Court
erred in granting the respondent's motion for summary judgment in
an attorney malpractice claim.
      Summary judgment is proper only when no genuine issues of
material fact exist and the moving party is entitled to judgment as
a matter of law.         Rule 5 6 ( c ) , M.R.Civ.P.;   also see Cexeck v.
Albertson's Inc. (1981), 195 Monk. 409, 411, 637 P.2d 509, 510.
The moving party has the initial burden of proof to show that no
genuine issues of material fact exist.            Westmont Tractor Co. v.
Continental I, Inc. (1986), 224 M m t . 516, 521, 731 P.2d 327, 330.
Once the moving party meets the burden, it is up to the non-moving
party to establish that genuine issues of material fact exist.
Simmons v. Jenkins (l988), 230 Mont. 429, 432, 750 P.2d 1067, 1069.
Therefore, we confine our review in the case at bar to a
determination of whether genuine issues of material fact exist that
would require reversing the District Court.
     In addressing the malpractice claim, we first state the
requisite elements for attorney malpractice:
     In a malpractice action, the plaintiff must prove that an
     attorney-client relationship existed and that the act
     constituting negligence or breach occurred.           The
     plaintiff must show that "but forffsuch negligence the
     client would have been successful in the prosecution or
     defense of the action. Lorash v. Epstein (1989), 236
     Mont. 21, 24, 767 P.2d 1335, 1337.          Finally, the
     plaintiff must establish that the negligent act
     proximately caused his damages.      Thelen v. City of
     Billings (1989), 238 Mont. 82, 85-6, 776 P.2d 520, 523-
     24.

Grenz v. Prezeau (1990), 244 Mont. 419, 426, 798 P.2d 112, 116.
     This case can be decided on the basis of the first element,
the existence of an attorney-client relationship.   The appellants
assert that an attorney-client relationship existed from 1965 until
the time of the 1988 foreclosure proceeding, when the Crowley firm
committed legal malpractice by representing CML in the foreclosure
action against them.    We disagree.    The record indicates that
Crowley did represent the appellants in various matters over the
years, but had not represented them in any matter since 1984.
     The appellants claim that the interactions they had with
Crowley throughout the foreclosure proceedings in 1988 prove it was
still acting as counsel for the appellants. To support this claim,
among other things, appellants assert that several documents
generated during the 1978 loan prove that Crowley was representing
them.     These documents included a memo created internally by
Crowley entitled Itnew matter memon which listed the appellants1
names under !'additional names to be indexed: for client" and, a
letter from Crowley to CML stating that !!Mr. Eddleman is anxious
for an early closing."         The District Court did not find this
evidence persuasive      in    establishing that     an   attorney-client
relationship existed between Crowley and the appellants subsequent
to 1984, and neither do we.
        The new matter memo clearly lists the name of Connecticut
Mutual Life Insurance under the heading of "Client." Further, the
letter referencing Eddleman's desire for an early closing does not
prove or even suggest that Crowley was representing the appellants.
        In total, the documents and other information asserted by the
appellants do not amount to an attorney-client relationship.         The
attorney-client relationship between Crowley and the appellants was
terminated prior to the foreclosure proceeding.
             The general rule is that an attorney cannot be an
        attorney for both adverse parties.    ..
                                               Nor does it a£fect
        the situation that there has been a termination of the
        relationship as to one adverse party.       . .
                                                     The obvious
        reason for the latter is that an attorney cannot use the
        information gained in confidence against the person
        confiding in him. However, this rule does not bar the
        attorney, when the relationship has terminated, from
        representing a client adverse to his former client if the
        matter in controversy is different or even though the
        controversy arises out of facts with which the attorney
        might have been familiar. Before appellant can complain
        of the participation of [the attorney] in the trial, he
        must show that the disclosures made in the former
        employment were used prejudicially against appellant.
        [Citations omitted.]
Butler Brothers Dev. Co.      V.   Butler (1941), 111 Mont. 329, 351, 108
P.2d 1041, 1052, overlld in part on other qrounds, 213 Mont. 6, 13,

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689   P.2d 268, 2 7 2 (1984). After reviewing the record, we find that
under Butler, C r o w l e y was not barred from representing   CML   in the
foreclosure proceeding, and did not commit malpractice in doing so.
       Finding that no attorney-client relationship existed between
the appellants and Crowley at the time of the foreclosure, we find
it    unnecessary    to address the other two      requisite attorney
malpractice elements.       The appellants' claims are insufficient to
withstand summary judgment since they failed to raise genuine
issues of material fact regarding attorney malpractice.                 The
District Court did not err in granting summary judgment to Crowley.
Affirmed.

We concur:          /

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  /         Chief Justice   f