United States District Court, D. Colorado
EDWARD H. PHILLIPS, an individual, Plaintiff,
DUANE MORRIS, LLP, a limited liability partnership, JOHN C. HERMAN, individually and as a partner of Duane Morris, LLP, and ALLEN L. GREENBERG, individually and as a partner of Duane Morris, LLP, Defendants.
RECOMMENDATION ON DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT (Docket No. 52)
MICHAEL J. WATANABE, Magistrate Judge.
This case is before this court pursuant to an Order Referring Case (Docket No. 4) issued by Judge Robert E. Blackburn on April 25, 2013. Now before the court for a report and recommendation is Defendants' Motion for Partial Summary Judgment (Docket No. 52). The court has carefully considered the subject motion (Docket No. 52), plaintiff's response (Docket No. 62), and defendants' reply (Docket No. 65). In addition, the court has taken judicial notice of the court's file, and has considered the applicable Federal Rules of Civil Procedure and case law. The court now being fully informed makes the following findings of fact, conclusions of law, and recommendations.
I. Summary of the Case
This matter is a legal malpractice suit stemming from a patent infringement case, Case No. 97-cv-00212, filed in February 1997 in the United States District Court for the District of Colorado (the "Patent Case"). In the Patent case, plaintiff Edward Phillips alleged that the defendants (the "Patent Defendants") infringed his patent, United States Patent Number 4, 677, 798 for Steel Shell Modules for Prisoner Detention Facilities, issued on July 7, 1987 (the "798 Patent"). A jury trial before Judge Marcia S. Krieger was set in the Patent Case, set to commence on February 27, 2006. After the trial date was set, plaintiff's original attorney, Carl Manthei, was terminated, and attorneys Robert Payne and Donald Mollick entered their appearances on behalf of plaintiff.
The jury trial commenced as scheduled. After plaintiff's case-in-chief, the Patent Defendants moved for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(a) (the "JMOL Motion"). Judge Krieger reserved ruling on the JMOL Motion until after she had a final transcript of the trial. On March 10, 2006, the jury returned a verdict in favor of plaintiff on the claims of patent infringement. They awarded base damages of $1.85 million and further found the Patent Defendants were liable for "willful infringement." The Patent Defendants were thus possibly exposed to an award of enhanced damages, interest from the date of infringement, costs, and attorney fees. Plaintiff sought a total of $10.5 million. Attorneys Payne and Mollick continued to represent plaintiff in post-trial matters, including briefing the JMOL Motion.
On November 21, 2006, defendants in this matter, John C. Herman and Allen L. Greenberg of Duanne Morris, LLP (hereinafter "defendants"), entered their appearances of behalf of plaintiff in the Patent Case. On November 28, 2006, Attorneys Payne and Mollick filed a motion to withdraw. Meanwhile, defendant Herman met with lead counsel for the Patent Defendants in an effort to settle the Patent Case. A settlement offer of $2 million was extended by the Patent Defendants. On December 4, 2006, plaintiff rejected the Patent Defendants' offer and made a new offer of $7, 105, 000. On December 6, 2006, the Patent Defendants rejected plaintiff's offer and made a new offer of $2.5 million. The Patent Defendants further requested that plaintiff agree to a joint request to stay the Patent Case for 30 days. On December 11, 2006, plaintiff rejected the Patent Defendants' offer and made a new offer of $6.1 million. In addition, defendants John C. Herman and Allen L. Greenberg of Duanne Morris, LLP decided to reject the request regarding the 30 day stay.
Settlement negotiations, through counsel, continued between December 14, 2006 and December 20, 2006. A tentative settlement for $4 million was reached by the parties. Communications regarding the settlement continued into the morning of December 22, 2006. However, at 9:00 a.m. on the 22nd, Judge Krieger entered an order granting the JMOL Motion and entered judgment in favor of the Patent Defendants on all claims.
Following Judge Krieger's order, the parties continued to negotiate a settlement. On December 29, 2006, the parties reached an agreement wherein plaintiff would dismiss the Patent Case, as well as his rights to seek to enforce the $4 million settlement, in exchange for $2, 550, 000. Defendants took a payment of $250, 000 from the settlement proceeds.
Plaintiff's Complaint (Docket No. 5) in this matter includes seven claims: (1) negligence; (2) breach of fiduciary duty; (3) misrepresentation; (4) concealment of material facts; (5) negligent misrepresentation; (6) unjust enrichment; and (7) respondeat superior against defendant Duane Morris, LLP.
II. Standard of Review
Rule 56(a) provides that summary judgment shall be granted "if the movant 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.P. 56(a). "A party seeking summary judgment bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, interrogatories, and admissions on file together with affidavits, if any, which it believes demonstrate the absence of genuine issues for trial." Robertson v. Bd. of Cnty. Comm'rs of the Cnty. of Morgan , 78 F.Supp.2d 1142, 1146 (D. Colo. 1999) (citing Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986); Mares v. ConAgra Poultry Co. , 971 F.2d 492, 494 (10th Cir. 1992)). "Once a properly supported summary judgment motion is made, the opposing party may not rest on the allegations contained in the complaint, but must respond with specific facts showing the existence of a genuine factual issue to be tried.... These facts may be shown by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere pleadings by themselves.'" Southway v. Central Bank of Nigeria , 149 F.Supp.2d 1268, 1273 (D. Colo. 2001), aff'd, 328 F.3d 1267 (10th Cir. 2003). However, "[i]n order to survive summary judgment, the content of the evidence that the nonmoving party points to must be admissible. The nonmoving party does not have to produce evidence in a form that would be admissible at trial, but the content or substance of the evidence must be admissible. Hearsay testimony that would be inadmissible at trial cannot be used to defeat a motion for summary judgment because a third party's description of a witness supposed testimony is not suitable grist for the summary judgment mill." Adams v. Am. Guarantee & Liability Ins. Co. , 233 F.3d 1242, 1246 (10th Cir. 2000) (internal citations and quotations omitted).
"Summary judgment is also appropriate when the court concludes that no reasonable juror could find for the non-moving party based on the evidence presented in the motion and response." Southway , 149 F.Supp.2d at 1273. "The operative inquiry is whether, based on all documents submitted, reasonable jurors could find by a preponderance of the evidence that the plaintiff is entitled to a verdict." Id . "Unsupported allegations without any significant probative evidence tending to support the complaint' are insufficient... as are conclusory assertions that factual disputes exist." Id . (quoting White v. York Int'l Corp. , 45 F.3d 357, 360 (10th Cir. 1995)). "Evidence presented must be based on more than mere speculation, conjecture, or surmise' to defeat a motion for summary judgment." Id. at 1274. "Summary judgment should not enter if, viewing the evidence in a light most favorable to the non-moving party and drawing all reasonable inferences in that party's favor, a reasonable jury could return a verdict for that party." Id. at 1273.
In their Motion for Partial Summary Judgment (Docket No. 52), defendants argue summary judgment should enter in their favor as to plaintiff's theory that, had defendants' agreed to enter into the 30 day stay, plaintiff would have received a settlement larger than $2, 550, 000. Defendants put forth three arguments in this regard. Defendants first argue the doctrine of judgmental immunity protects them, as a matter of law, from claims based on an action arising from the exercise of judgment, i.e., defendants' decision not to agree to the stay. Defendants also argue there are no genuine factual disputes as to two causation issues: ...