United States District Court, S.D. Indiana, Indianapolis Division
For WILLIAM MILLS, as Personal Representative of the Estate of Larry Mills, Plaintiff: James Piatt, Joseph N. Williams, William N. Riley, PRICE WAICUKAUSKI & RILEY, Indianapolis, IN.
For HAUSMANN-MCNALLY, S.C., Defendant: John W. Mervilde, MEILS THOMPSON DIETZ & BERISH Two Market Square Center, Indianapolis, IN; Neil Andrew Davis, LEBLANC NETTLES DAVIS, Brownsburg, IN; Rick D. Meils, MEILS THOMPSON DIETZ & BERISH, Indianapolis, IN.
ORDER ON PARTIES' MOTIONS FOR SUMMARY JUDGMENT
SARAH EVANS BARKER, United States District Judge.
This cause is before the Court on two motions for summary judgment: Plaintiff William Mills's Motion for Partial Summary
Judgment on Defendant's first affirmative defense [Docket No. 44], filed on September 19, 2013, and Defendant Hausmann-McNally, S.C.'s Motion for Partial Summary Judgment [Docket No. 62], filed on December 9, 2013. For the reasons set forth below, Plaintiff's motion is GRANTED and Defendant's motion is DENIED.
These motions for summary judgment arise out of a legal malpractice action, which in turn arises out of a personal injury claim. Plaintiff William Mills, the personal injury claimant, sued his former counsel, Defendant Hausmann-McNally S.C. (" Hausmann-McNally" ) for legal malpractice. Hausmann-McNally, in turn, has asserted as an affirmative defense to the malpractice claim that a non-party--namely Plaintiff's present counsel, Price Waicukauski & Riley, LLC (" PWR" )--is responsible in whole or in part for any legal malpractice that Hausmann-McNally may have committed. See Docket No. 9 at 6.
1. The Personal Injury Suit
Larry Mills was injured in a traffic accident on October 10, 2008 when his motorcycle was struck by another vehicle at an intersection on State Road 37 in rural Lawrence County, Indiana. Compl. ¶ ¶ 5-6. The driver of the other vehicle was Hannah Nelson, an employee of the Hoosier Uplands Development Corporation, who at the time of the accident was driving on an errand related to her employment with that agency. Id. at ¶ ¶ 7-8. After the accident, Ms. Nelson was interviewed by police; she stated that she was the owner of the vehicle, and she provided her personal insurance information. The crash report created by the investigating police officer states that Nelson used the vehicle for " PERSONAL (FARM, COMPANY)" purposes. Docket No. 31, Ex. A at 3. Shortly thereafter, Mr. Mills retained the law firm of Hausmann-McNally to represent him in claims against " all liable parties" to seek recovery for his injuries; Indiana attorneys Rodney A. Tucker and Christopher Moeller handled the representation of Plaintiff's interests within Hausmann-McNally. Tucker Dep. 132-133; Moeller Decl. ¶ 5. Larry Mills died in February 2012, and Plaintiff William Mills now serves as the representative of the decedent's estate. Compl. ¶ 2.
Shortly after agreeing to represent Plaintiff, Hausmann-McNally contacted Farm Bureau Insurance, Ms. Nelson's personal automobile insurer. On November 6, 2008, Farm Bureau sent Hausmann-McNally copies of Ms. Nelson's insurance policy and a declarations page. The declarations page stated that Nelson's vehicle " is driven to and from work 150 miles or
less each week." Pl.'s Ex. 13 at 5. In preliminary negotiations with Nelson's insurer pursuant to the personal injury claim, Hausmann-McNally discovered that the limit of her personal automobile insurance policy was $50,000--significantly less than the amount of damages Plaintiff planned to seek. Hausmann-McNally did not make any further inquiries about Ms. Nelson's employment status or the possibility of recovering from her employer. Instead, Hausmann-McNally made demand on Farm Bureau for the full $50,000, and Farm Bureau agreed to settle on May 13, 2009 for that amount. Farm Bureau provided Hausmann-McNally with a release, and ordered a $50,000 draft, to be paid to Plaintiff and counsel. Docket No. 45 at 7 (citing Pl.'s Ex. 12 at 1).
Because his damages exceeded the settlement amount, Mr. Mills expressed interest in the possibility of recovering from other entities, such as the manufacturer of his motorcycle helmet and the state agencies responsible for designing the intersection where the accident occurred. To facilitate this expansion of the scope of the case, Mr. Mills retained PWR on October 19, 2009. Docket No. 63 at 3, ¶ 12; Docket No. 45 at 8-9. The parties differ in their recounting of the scope of PWR's representation. According to Hausmann-McNally, PWR took on the role of lead counsel for all of Mr. Mills's potential claims. Docket No. 30 at 4 (" PWR served as lead counsel in the litigation" ). PWR, in contrast, asserts that it was retained only to pursue the new causes of action, and that it had no role in the original claim against Ms. Nelson. Docket No. 45 at 8-10.
The parties also differ in how they explain what happened next. It is undisputed that Hausmann-McNally, at least nominally, remained on as co-counsel after Plaintiff hired PWR. It is also undisputed that PWR filed complaints against Hannah Nelson and others on Plaintiff's behalf. PWR attorneys William Riley and Joseph Williams filed a complaint in Marion County Superior Court on April 21, 2010, alleging negligence against Hannah Nelson and products liability against the helmet manufacturer. Docket No. 31, Ex. C. Two days later, the same PWR attorneys filed an amended complaint on Plaintiff's behalf, adding an additional count against the helmet manufacturers. Docket No. 31, Ex. D. Finally, on July 14, 2010, PWR filed a second amended complaint on Plaintiff's behalf, adding a fourth count against Lawrence County and INDOT for negligence in designing and constructing the intersection where the crash occurred. Docket No. 31, Ex. E. As in the two previous iterations of the Marion County Superior Court complaint, the count against Hannah Nelson alleges negligence only in her personal capacity; it does not mention her employer at all, let alone the fact that her employer was a state agency. Id. at 3.
What is disputed is why Plaintiff, by counsel, filed these personal injury complaints in state court. In PWR's telling, PWR discovered--in the course of preparing for its products liability suit against the helmet manufacturer--that the March 2009 $50,000 settlement check from Ms. Nelson's insurer was not actually in Hausmann-McNally's possession; it also learned around the same time that photographs of the scene crucial to the products liability claim were in Farm Bureau's possession. Docket No. 45 at 12. PWR explains that it named Ms. Nelson as a Defendant in order to enforce the earlier settlement agreement and to obtain an agreement from Farm Bureau to produce
those photographs--in other words, the inclusion of Ms. Nelson was largely incidental to their pursuit of the products liability claim. Id.
Hausmann-McNally remembers differently. According to its account, " there was significant confusion about the status of the Hannah Nelson claim well after PWR entered the case, and ample evidence to support the inference that the claim had not yet been settled . . . ." Docket No. 47 at 5. In sum, Hausmann-McNally asserts that PWR, as the new lead counsel for Plaintiff, filed suit against Ms. Nelson not as an afterthought, but so that it could, for the first time, secure payment up to the policy limit from Ms. Nelson's insurer. Id. at 4-6.
In either event, Ms. Nelson's counsel quickly reached a settlement agreement with Plaintiff, but the products liability suit proceeded. In the course of discovery on that claim, PWR, acting on Plaintiff's behalf, deposed Hannah Nelson as a witness on September 18, 2012. Docket No. 45 at 13-14. During this deposition, Ms. Nelson revealed that she was acting within the course and scope of her employment with the Hoosier Uplands Development Corporation (" Hoosier Uplands" ) at the time of the accident. Docket No. 31, Ex. F. Hoosier Uplands is a " Community Action Agency," and is therefore considered a " political subdivision" of the State of Indiana for the purposes of the Indiana Tort Claims Act. Ind. Code § 34-13-3-8. Under Indiana law, a prospective plaintiff intending to sue a political subdivision of the state for damages must provide written notice to the defendant agency outlining the nature of the claim and damages within 180 days of the injury. See Ind. Code § 34-13-3-8(a). If a prospective plaintiff fails to provide this notice, he is permanently barred from bringing the claim. Id. As of September 18, 2012, when Ms. Nelson was deposed and PWR discovered that the procedural bar applied, the 180-day notice period for any claim by Plaintiff against the state agency had long since run. For the accident occurring in October 2008, notice would have been required by April 2009--some six months before PWR was retained in October 2009.
2. The Malpractice Suit
After deposing Ms. Nelson, an attorney with PWR contacted Mr. Tucker--Plaintiff's primary counsel with Hausmann-McNally--and informed him that since the car accident had been caused by a state agency employee acting within the scope of employment, the 180-day notice period applied. Id. at ¶ 21. According to PWR, Mr. Tucker responded: " Your case just got easier. You have a client to call, and you need to sue us for malpractice." Id. at ¶ 22. Shortly after this deposition, Hausmann-McNally withdrew as Plaintiff's co-counsel; on October 16, 2012, the Marion County Superior Court granted Hausmann-McNally's motion to withdraw in the pending personal injury suit before that court. Docket No. 38 at 14.
Plaintiff subsequently made demand on Hausmann-McNally for its alleged malpractice in allowing the 180-day notice deadline to lapse, thus denying Plaintiff any prospect of recovery from the Hoosier
Uplands Development Corporation for the injury caused by the agency's employee. Id. at ¶ ¶ 24-28. When Hausmann-McNally denied any liability, Plaintiff sued Hausmann-McNally for malpractice, filing its complaint with this Court on January 9, 2013. See Docket No. 1. In its answer, filed on March 4, 2013, Hausmann-McNally continued to deny that it had committed malpractice, and it asserted three affirmative defenses. Docket No. 9. Defendant's first affirmative defense was that PWR was a non-party wholly or partly responsible for any malpractice Hausmann-McNally may have committed. Id. at 6, ¶ 1. In the alternative, it also filed a third party complaint against PWR, seeking recovery on indemnity and contribution theories in the event that Hausmann-McNally is found liable to Plaintiff. Docket No. 9. Hausmann-McNally also filed a motion to disqualify counsel on July 3, 2013. See Docket No. 29.
The Court dismissed Defendant's third-party complaint against PWR for indemnification and contribution in an order dated January 14, 2014. Docket No. 69. The Court also dismissed Defendant's motion to disqualify counsel the same day. Docket No. 70. Plaintiff moved for partial summary judgment on Defendant's first affirmative defense on September 19, 2013, see Docket No. 44, and Defendant filed its cross motion for partial summary judgment on the same issue on December 9, 2013, see Docket No. 62.
Standard of Review
The Federal Rules of Civil Procedure provides that summary judgment should be granted when the record evidence shows that " there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. Pro. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The purpose of summary judgment is to " pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Disputes concerning material facts are genuine where the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In deciding whether genuine issues of material fact exist, the court construes all facts in a light most favorable to the non-moving party and draws all reasonable inferences in favor of the non-moving party. See id. at 255. However, neither the " mere existence of some alleged factual dispute between the ...