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Barkal v. Gouveia & Associates

Court of Appeals of Indiana

December 27, 2016

P. Kevin Barkal, M.D. and Pemcor, Inc., Appellants-Plaintiffs,
v.
Gouveia & Associates, Appellee-Plaintiff.

         Appeal from the Lake Circuit Court The Honorable Robert G. Vann, Special Judge The Honorable Alice A. Kuzemka, Magistrate Trial Court Cause No. 45C01-1302-CT-29

          ATTORNEYS FOR APPELLANTS Daniel H. Pfeifer Jerome W. McKeever Pfeifer Morgan & Stesiak South Bend, Indiana

          ATTORNEYS FOR APPELLEE Michael E. O'Neill Daniel W. Glavin Nathan D. Hansen O'Neill McFadden & Willett, LLP Schererville, Indiana

          Riley, Judge.

         STATEMENT OF THE CASE

         [¶1] Appellants-Plaintiffs, P. Kevin Barkal, M.D. (Dr. Barkal) and PEMCOR, Inc. (Pemcor) (collectively, Appellants), appeal the trial court's grant of summary judgment to Appellee-Defendant, Gouveia & Associates (Attorney Gouveia), concluding that Appellants failed to designate expert testimony establishing that Attorney Gouveia breached the standard of care in his legal representation of Pemcor in the underlying bankruptcy case.

         [¶2] We affirm.

         ISSUE

         [¶3] Appellants raise three issues on appeal, one of which we find dispositive and which we restate as: Whether the trial court properly concluded that Appellants failed to designate expert testimony to establish a breach of the appropriate standard of care.

         FACTS AND PROCEDURAL HISTORY

         [¶4] In this seemingly never-ending bankruptcy saga of several medical offices located in California, we are now presented with the alleged legal malpractice component. These sixteen-year-old proceedings arose out of a simple slip and fall personal injury claim which occurred at one of Dr. Barkal's offices in San Diego, California.

         [¶5] On December 1, 2000, Anna May Webb (Webb) filed a personal injury claim premised on a slip and fall in the San Diego County Superior Court in California (California trial court) against Dr. Barkal and the San Diego Pain Management Consultants (SDPMC), in which Dr. Barkal "ha[d] an interest." (Appellants' App. Vol. 3, p. 197). On January 7, 2002, the parties entered into a settlement agreement in the amount of $138, 000 to be paid by SDPMC. The agreement provided for the payment of $42, 000 up front by SDPMC's insurance carrier, with the remaining balance to be paid in 48 installments of $2, 000, and with Dr. Barkal personally guaranteeing payment. Because SDPMC and Dr. Barkal stopped making payments, Webb filed a motion to enforce the settlement on October 15, 2002, which was granted by the California trial court and judgment was entered against Dr. Barkal and SDPMC for $151, 971.21. On December 21, 2005, after having difficulty collecting the judgment, the California trial court appointed Martin Goldberg as post judgment limited receiver (Receiver), and ordered Dr. Barkal to turn over all keys, leases, books, records, ledgers, and all other business records relating to twelve entities, including Pemcor (collectively, Barkal Entities), owned by Dr. Barkal, as well as prohibited Dr. Barkal from using any income generated by these Barkal Entities. On May 5, 2006, Webb filed a motion to amend the original judgment to include Dr. Barkal's aliases and nine of Dr. Barkal's alter ego entities, which was granted on June 26, 2006. On January 4, 2008, the California trial court entered an order of contempt against Dr. Barkal, finding him guilty of contempt of court for "knowingly and willfully" violating the court's orders by attempting to collect accounts of the Barkal Entities and interfering with the duties of the Receiver. (Appellants' App. Vol 2, pp. 179-181).

         [¶6] In January of 2008, Dr. Barkal, who by now had moved to Munster, Indiana, retained the Indiana law firm of Daniel L. Freeland & Associates, P.C. (Attorney Freeland) to file bankruptcy in Indiana. Attorney Freeland agreed to represent Dr. Barkal individually, with the caveat that Attorney Gouveia be hired to separately represent the Barkal Entities to prevent any conflict of interest. After a meeting, Attorney Gouveia accepted representation of the Barkal Entities in Chapter 13 bankruptcy proceedings.

         [¶7] On March 10, 2008, Attorney Freeland filed a voluntary petition for Chapter 13 bankruptcy in the United States Bankruptcy Court for the Northern District of Indiana (Bankruptcy Court) on behalf of Dr. Barkal. Eight days later, on March 18, 2008, Attorney Freeland filed a motion for turnover[1] against the Receiver on behalf of Dr. Barkal and the appointed trustee. In this motion, Dr. Barkal and the trustee requested that the Receiver deliver all items from the collection against Dr. Barkal and the Barkal Entities to the Trustee. On March 28, 2008, by a separate motion, Attorney Gouveia intervened in the proceedings on behalf of the Barkal Entities, claiming that the Entities had an interest in the accounts receivables the Receiver was seeking to collect. On April 18, 2008, the Bankruptcy Court conducted a hearing on the motion for turnover filed by Dr. Barkal and joined by the Barkal Entities. At the hearing, the parties agreed that the "core issue" should be characterized as:

The extent to which proceeds of accounts receivable of the Barkal Entities or of [Dr. Barkal], or corporate governance powers in relation to the Barkal Entities - now or in the future subject to the possession or control of [the Receiver] appointed with respect to Case No. GIC757374 in [the California trial court] - constitute property of the Chapter 13 bankruptcy estate of [Dr. Barkal] in case number 08-20663.

(Appellants' App. Vol. 3, pp. 16-17). After ordering the Receiver to turn over $9, 494.00 to the trustee from an account designated under Dr. Barkal's name, the Bankruptcy Court set an evidentiary hearing for May 16, 2008, or in the alternative for both parties to agree to a statement of designated record approved by all the attorneys. The parties subsequently agreed to a joint index of exhibits regarding appointment of Receiver and judgment - debtor alter egos, which was filed with the Bankruptcy Court on the evidentiary hearing date. On July 15, 2008, the Bankruptcy Court "determined that the accounts receivable of the Barkal Entities are not property of the Chapter 13 bankruptcy estate" filed by Dr. Barkal, and therefore, denied the motion for turnover of the Barkal Entities. (Appellants' App. Vol. 3, p. 42).

         [¶8] On July 21, 2008, a joint conference call was conducted between, among others, Dr. Barkal, Attorney Freeland, and Attorney Gouveia, represented by his associate attorney, Shawn Cox (Attorney Cox). During the meeting, Dr. Barkal was advised that the Barkal Entities could not be in a Chapter 13 bankruptcy, because "a 13 is not even structured to address companies." (Appellants' App. Vol. 4, p. 205). Attorney Freeland recommended withdrawing the Chapter 13 bankruptcy, with which Dr. Barkal agreed, and to re-file the bankruptcy petition as a Chapter 11 in an attempt to save Dr. Barkal's property in California from foreclosure. Dr. Barkal noted that they would "immediately proceed to seek counsel for the filing of bankruptcy by one or more of the 9 companies, so that the liquidation of those companies' assets will provide additional income to the re-filed Barkal bankruptcy." (Appellants' App. Vol. 3, p. 195). That same day, Attorney Freeland, on behalf of Dr. Barkal, moved to dismiss the Chapter 13 bankruptcy case.

         [¶9] On August 11, 2008, Dr. Barkal wrote to Attorney Cox requesting that Attorney Gouveia "immediately file the necessary corporate bankruptcies to accomplish the short-term goal of staying the foreclosure sale of the house on August 18, and buying us additional time to allow the Appellate Court in California to issue a ruling which may drastically alter the draconian orders under which I have been trying to survive." (Appellants' App. Vol. 3, p. 4). Two days later, Attorney Cox responded:

As I relayed to you on Monday, and I reiterated to your California counsel yesterday, I am not in a position to undertake the representation of one or more of the "Barkal Entities" to file Chapter 7 bankruptcies.
As we discussed Monday, our engagement was limited to addressing certain issues in your Chapter 13 [b]ankruptcy, and we did not ever agree to file bankruptcies on behalf of the entities. At no time did we agree to file bankruptcies on behalf of these ...

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