Alerding Castor Hewitt LLP v. Fletcher

          ORDER GRANTING ALERDING CASTOR'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON DEFENDANTS' COUNTERCLAIM

          James Patrick Hanlon United States District Judge

         Alerding Castor Hewitt LLP sued Carole Wockner and Paul Fletcher (collectively “Defendants”) in Marion County Circuit Court alleging that Defendants failed to pay for legal services provided. Defendants removed the case to federal court and filed their Counterclaim against Alerding Castor. Dkt. 14. Before the Court is Alerding Castor's Motion for Partial Summary Judgment on Defendants' Counterclaim. Dkt. [129]. Because Defendants did not timely respond, this Motion is ripe for review. See dkt. 160; dkt. 165; dkt. 169. For the reasons stated below, the Motion is GRANTED.

         I. Factual and Procedural History

         Under Rule 56(a), the Court views the evidence “in the light most favorable to the non-moving party and draw[s] all reasonable inferences in that party's favor.” Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009) (citation omitted). Because Defendants did not timely respond to Alerding Castor's motion for summary judgment, the Court treats Alerding Castor's supported factual assertions as uncontested. S.D. Ind. L.R. 56.1(b). See, e.g., Smith v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003).

         Defendants' Counterclaim against Alerding Castor alleges breach of contract (Count I), legal malpractice (Count II), and breach of fiduciary duty (Count III). Dkt. 14 (Countercl.). Alerding Castor represented Defendants in a lawsuit against Mark Zupan and Fidelity Brokerage Services LLC (“Fidelity”) in the Lake County Superior Court (the “Forgery Lawsuit”), to recover Fidelity investment accounts that were signed over from Defendants to Zupan. Id. at 7, 24 (Countercl. ¶¶ 38, 106). The Counterclaim alleges Alerding Castor failed to complete certain tasks and duties during its legal representation of Defendants in the Forgery Lawsuit. Id. at 29-31 (¶¶ 127-42).

         The relevant and undisputed material facts regarding the Forgery Lawsuit are summarized as follows. In 1998, Scott Taylor named Fletcher, one of the Defendants in this case, as the sole beneficiary on three of his Fidelity investment accounts. Id. at 2-3 (¶¶ 11, 15-16). Taylor was diagnosed with terminal lymphoma, and on July 25, 2008, he moved to his parents' home, where he died on September 23, 2008. Id. at 4 (¶ 22). Defendants were advised after Taylor's death that a change of beneficiary form was executed on August 2, 2008 (the “Change of Beneficiary Form”), which changed the beneficiary of Taylor's Fidelity investment accounts to Zupan. Id. at 6 (¶ 33).

         Defendants sued Zupan and Fidelity, alleging that Taylor's signature on the Change of Beneficiary Form was forged after Zupan had improperly obtained “information relating to Taylor's financial affairs, including his retirement accounts with Fidelity investments.” Id. at 7 (¶ 38); dkt. 130-1 at 9 (Michael Alerding Aff., Ex. A, Compl. in Forgery Lawsuit, ¶ 12). As a result of the “intentional tortious misconduct, ” Defendants sought (1) an injunction against the distribution of any funds in Taylor's Fidelity retirement accounts to Zupan, (2) an award of damages in the amount of the Fidelity retirement accounts, (3) the recovery of punitive damages, and (4) attorney's fees. Dkt. 130-1 at 11-12 (Alerding Aff., Ex. A, Compl. in Forgery Lawsuit at 3-4). Subsequently, Fidelity was dismissed as a defendant. Id. at 14-15 (Ex. C, Order Dismissing Fidelity).

         After initiating the Forgery Lawsuit, Defendants' first attorney-Alerding Castor was the fourth law firm to represent Defendants in the Forgery Lawsuit-communicated his doubts to Defendants about the accuracy of the allegations against Zupan. Id. at 13 (Ex. B, Paarlberg May 12, 2009 Email). Fidelity's counsel informed Defendants' attorney that Taylor telephoned a Fidelity representative and told the representative to prepare the forms and name Zupan as his beneficiary. Id.

         Defendants' second attorney deposed Fidelity's employee, Kim Rice, who had spoken with Taylor about changing his beneficiary. Dkt. 130-2 at 49 (Roach Aff., Trial Tr., Rice Dep. 43:6-9). Rice testified that she called Taylor on August 1, 2008, and Taylor asked her to change the beneficiary on all three of his Fidelity accounts to Zupan. Id. (Roach Aff., Ex. A, Rice Dep. 43:1-24). After the call, she prefilled the Change of Beneficiary Form and mailed it by United Parcel Service (“UPS”) for Taylor to execute with a return envelope addressed to Fidelity's office. Id. at 50, 52 (44:1-17; 46:14-17). Rice testified that she received the Change of Beneficiary Form with Taylor's signature for his Fidelity retirement accounts and that she noted her dealing with Taylor in Fidelity's record keeping system. Id. at 44-47 (38:22-41:24). Fidelity's record keeping system corroborated Rice's testimony. Id. at 45-50 (39:1-44:14).

         Defendants' second attorney also deposed Taylor's mother, Elsie Taylor. Id. at 30 (Elsie Dep.). Taylor's mother testified that Taylor received a package containing paperwork, he completed the paperwork, and he gave the package back to her for return delivery to Fidelity, which she did. Id. at 32-37 (26:13- 31:5). Taylor's mother testified that Taylor's signature was on the Change of Beneficiary Form. Id. at 37 (31:1-3).

         Defendants' third attorney obtained records from UPS, which corroborated Rice's testimony that Fidelity sent a prefilled Change of Beneficiary Form to Taylor on August 1, 2008. Dkt. 130-1 at 46-48 (Alerding Aff., Ex. G, UPS Records).

         A document examiner reviewed handwriting exemplars by Taylor and concluded that it is “extremely probable that the signature on the questioned beneficiary change is authentic.” Id. at 50 (Ex. H., Michael Meyer, June 7, 2012 Email).

         When Alerding Castor began representing Defendants, discovery had closed and Zupan's motion for summary judgment was pending. Dkt. 14 at 15 (¶ 76). After the trial court granted Zupan's motion for summary judgment, Alerding Castor successfully appealed the decision and the case was remanded the case to the trial court. Id. (¶¶ 77-79). Both the trial court and appellate court disallowed reopening discovery. Id. at 15-16 (¶ 80). The trial court also granted Zupan's motion to convert the jury trial into a bench trial. Dkt. 130-1 at 5 (Alerding Aff. ¶ 26). On November 6, 2015, Alerding Castor spoke with Defendants and expressed concern that there was no evidence of forgery. Id. at 4 (¶ 23).

         In November 2015, Anthony Roach, an attorney from Alerding Castor, began assisting with the Forgery Lawsuit. Dkt. 130-2 at 1 (Roach Aff. ¶ 2). On May 25, 2016, Michael Alerding informed the Court and Defendants that he, Mr. Alerding, was undergoing a series of medical procedures that would prohibit him from traveling and conducting the trial. Dkt. 130-1 at 6 (Alerding Aff. ¶ 33). The ...