Silverman v. Greenfield

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' RULE 702 AND SUMMARY JUDGMENT MOTIONS

          WILLIAM J. MARTINEZ UNITED STATES DISTRICT JUDGE

         This is a legal malpractice action arising from a high-dollar divorce. Plaintiff Drorit Silverman, a/k/a Drorit DeAngelo, was the wife in the now-dissolved marriage. The Court will refer to her as “DeAngelo, ” to avoid confusion with her ex-husband, Paul Silverman (“Silverman”).

         DeAngelo sues Dallas D. Greenfield, her divorce attorney, and his law firm at the time of the divorce proceedings, Houtchens, Greenfield & Sedlik, LLC. The parties generally refer to Greenfield himself as the target of DeAngelo's accusations, so the Court, for simplicity, will refer to Defendants collectively as “Greenfield.” This Court has jurisdiction over the dispute because DeAngelo is a Nevada resident, Greenfield is a Colorado resident, and DeAngelo claims that, but for Greenfield's alleged malpractice, she would have received many hundreds of thousands of dollars more from her ex-husband. See 28 U.S.C. § 1332(a).

         Currently before the Court are Greenfield's Motion to Strike Unsupported Opinions of Scott Saltzman (“Rule 702 Motion”) (ECF No. 71) and Greenfield's Motion for Summary Judgment (ECF No. 72). For the reasons explained in detail below, the Court grants in part and denies in part both motions. The upshot is that the case will proceed to trial solely on DeAngelo's theories that Greenfield violated the standard of care when he (a) did not argue for a more favorable distribution of marital property, and (b) failed to propose terms for a promissory note to effectuate the marital property equalization payment.

         The analysis below first sets forth the factual background because it is helpful to understanding all issues argued below. The Court then turns to Greenfield's Rule 702 arguments, and finally to his summary judgment arguments.

         I. FACTS

         The following facts are undisputed unless attributed to a party or otherwise noted.

         A. Divorce Proceedings Before Entry of Permanent Orders

          1. Commencement of Divorce Proceedings

         In March 2012, DeAngelo hired Greenfield to represent her in proceedings to dissolve her marriage to Silverman, which had lasted ten years. (ECF No. 81 at 8, ¶¶ 1-2.)^[1] At the time, Silverman had close to $4.9 million in personal, nonmarital assets and earned approximately $42, 000 per month in passive income. (Id. at 9, ¶ 5.) DeAngelo had $25.00 in personal, nonmarital assets. (Id.) Their marital assets were mostly unliquidated partnership interests, worth about $2.5 million. (Id.)

         Divorce proceedings took place in Weld County District Court. (ECF No. 72 at 5, ¶ 3 n.1.) “In Weld County District Court at that time, consent to having a magistrate preside over a domestic relations case was presumed absent objection.” (Id.) Greenfield never advised DeAngelo that she had the option to object. (ECF No. 81 at 9, ¶ 7.) Greenfield (on DeAngelo's behalf) did not object, and neither did Silverman. (Id.)

         During divorce proceedings, Greenfield understood that Silverman faced serious health issues and was hospitalized periodically, although the parties dispute the extent of Greenfield's knowledge about Silverman's medical conditions. (Id. ¶ 6; ECF No. 85 at 6 ¶ 6.) In August 2012, however, DeAngelo e-mailed Greenfield about various topics, and mentioned that Silverman was “getting a home dialysis machine.” (ECF No. 81-5.) She continued, “Does that mean he is going to live a long time? I don't think so. SO I still want this to be a loooong divorce. He is sick every time we think about getting [the] kids over to his house. So it[']s difficult for me to gauge where he is at.” (Id. (emphasis in original).) By preferring a “loooong divorce, ” DeAngelo meant that she hoped Silverman would die before the magistrate could finalize the divorce, thus mooting the proceeding and allowing her to inherit Silverman's assets. (ECF No. 81 at 10, ¶ 10.)

         2. Contempt Citation

         On November 5, 2012, Greenfield moved to hold Silverman in contempt for having recently withdrawn, without consent, about $82, 000 from a bank account he held jointly with DeAngelo, allegedly in violation of the preliminary injunction that automatically takes effect when a divorce petition is filed (see Colo. Rev. Stat. § 14-10-107(4)(b)(I)(A)). (ECF No. 72 at 5, ¶ 4.)^[2] On November 14, 2012, the magistrate issued a show-cause citation to Silverman. (Id. at 6, ¶ 5.) The citation had no return date. (ECF No. 72-3.)

         3. Preparations for Permanent Orders Hearing, and Postponement of Contempt

         At some point, not clear in the record, the magistrate scheduled a “permanent orders hearing” for February 11 and 13, 2013. (ECF No. 85-1 at 1.) On January 18, 2013, in the run-up to the permanent orders hearing, the parties filed a joint trial management certificate. (Id.) In the “Pretrial Motions” section of that certificate, Greenfield listed the contempt motion as a “matter[] or motion[] [that] should be addressed before [the] hearing commences.” (Id. at 2.)

         For reasons not clear on the record, the permanent orders hearing never took place in February 2013. On February 14, 2013-the day after the hearing would have concluded-the magistrate entered a decree of dissolution of marriage, “leaving various issues, including division of marital assets and debt, maintenance, child support, attorney's fees, and the contempt citation” for a later trial to the court. (ECF No. 72 at 6, ¶ 6; ECF No. 15 ¶ 15.)

         The permanent orders hearing eventually was rescheduled for January 21-22, 2014. (ECF No. 72-4 at 1-2.) On December 6, 2013, in the run-up to the continued hearing, the parties again filed a joint trial management certificate. (Id.) The “Pretrial Motions” section of that certificate again lists the contempt motion as a “matter[] or motion[] [that] should be addressed before [the] hearing commences.” (Id. at 2.)

         At some point before the continued hearing, and no later than January 17, 2014, Greenfield explained to DeAngelo the difference between the two types of spousal maintenance (colloquially known as alimony): contractual and statutory. (ECF No. 72 at 6, ¶ 8.) In particular, Greenfield explained to DeAngelo that contractual maintenance would survive Silverman's death, but statutory maintenance (i.e., the form of maintenance a court could order) would not. (Id. ¶ 9.)

         4. The Permanent Orders Hearing

         The continued permanent orders hearing took place as scheduled on January 21 and 22, 2014, before Weld County Magistrate Andrea Koppenhofer. (See, e.g., ECF No. 81-6.) The parties apparently agree that Magistrate Koppenhofer did not hear evidence regarding the contempt citation, but, for reasons this Court cannot fathom, neither side explains why. The Court has reviewed the report of attorney Kathleen Hogan, whom DeAngelo has designated as her expert on the standard of care in divorce proceedings. (ECF No. 72-36.) Hogan's account of the permanent orders hearing suggests that Magistrate Koppenhofer had forgotten about, or was unaware of, a minute order (not in the record) specifically designating the permanent orders hearing as the forum to hear evidence on the contempt citation. (Id. at 10-11.)^[3] Hogan also faults Greenfield for not bringing that minute order to Magistrate Koppenhofer's attention. (Id. at 11.) Hogan faults Greenfield for misunderstanding the nature of the contempt he was seeking, which in some way prompted Magistrate Koppenhofer to direct the parties to address contempt at a later hearing. (Id. at 10-11.)

         Magistrate Koppenhofer issued no orders at the end of the permanent orders hearing. (See ECF No. 81-6 at 3.) She instead called for written closing arguments, which she expected to include a proposal for a promissory note that would effectuate whatever division of marital property she would ultimately order. (Id.)

         Greenfield submitted his written closing argument on January 31, 2014. (ECF No. 72-7.) That document did not propose terms for a promissory note, nor did Greenfield at any other time provide Magistrate Koppenhofer with proposed terms for a promissory note. (ECF No. 81 at 13, ¶ 21.) Greenfield did raise the contempt issue, however, stating that DeAngelo would withdraw the contempt motion if the permanent orders included a requirement that Silverman pay DeAngelo $41, 000 “to represent one-half of [the joint bank] account.” (ECF No. 72-7 at 4; see also id. at 2 (same).)

         Greenfield further argued for two alternatives as to an equitable distribution of the marital property. The first alternative was an equalization payment from Silverman to DeAngelo of $1, 183, 114. (Id. at 2.) This would have equalized the parties' assets but not their substantial tax debts, calculated by DeAngelo at $450, 307 and by Silverman at $484, 375. (See ECF No. 72-8 at 3-4.) Greenfield thus proposed a second alternative in the event that Magistrate Koppenhofer decided to distribute the tax debts evenly. In that case, Greenfield said, a payment from Silverman to DeAngelo of $958, 010.50 would “equalize the net assets of the parties.” (ECF No. 72-7 at 2.)

         B. The Magistrate's Permanent Orders

         Magistrate Koppenhofer issued her permanent orders on February 28, 2014. (ECF No. 72-8.) In terms of dividing the marital estate, she adopted Greenfield's first alternative, allocating all tax debt to Silverman and ordering him to make an equalization payment to DeAngelo of $1, 183, 114. (Id. at 3-4.) She also awarded the equity in a Nevada residence to DeAngelo, which the parties represent to be $12, 000. (Id. at 2.)^[4]

         Regarding the $1, 183, 114 equalization payment, Magistrate Koppenhofer ordered Silverman “to execute a promissory note to [DeAngelo] in that amount, with payments to be made monthly in the amount of $3, 000. Interest shall be annual at 8%. [DeAngelo] is permitted to collateralize the outstanding debt if she so chooses.” (Id. at 4.) Concerning spousal maintenance, she ordered Silverman to pay DeAngelo “$10, 000 per month for 5.5 years or 65 months.” (Id. at 6.) And, “to secure the maintenance and the distribution of property payment, ” Magistrate Koppenhofer ordered Silverman to maintain a $100, 000 life insurance policy with DeAngelo as sole beneficiary. (Id. at 7.) As for a request from Greenfield that Silverman be required to pay DeAngelo's attorneys' fees, she ordered further briefing. (Id. at 8.)

         Finally, Magistrate Koppenhofer concluded with a warning about availability of an appeal: “This order was entered by a magistrate in a hearing to which consent was necessary; the parties consented when they scheduled the hearing in the magistrate's division. Any appeal of this ruling must be taken to the Colorado Court of Appeals pursuant to C.R.M. 7(b).” (Id.) The cited rule-from the Colorado Rules for Magistrates-says that, in consent-required cases, the magistrate's judgment is treated as if from a district judge and “shall be appealed pursuant to the Colorado Rules of Appellate Procedure in the same manner as an order or judgment of a district court.” In other words, the aggrieved party may not request a district judge to review the magistrate's order.

         C. Divorce Proceedings, and Related Proceedings, After Entry of Permanent Orders

          1. Errors Discovered & Appeals Discussed

“Shortly afterwards, ” DeAngelo met with Greenfield to discuss the problem inherent in the requirement that Silverman pay $1, 183, 114 to DeAngelo in monthly installments of $3, 000 at 8% annual interest. (ECF No. 72 at 8, ¶ 12.) Specifically, at 8% interest, $3, 000 per month ($36, 000/year) would not cover the accruing interest ($94, 659.12/year), much less the required principal payments. (Id.)

         Whether in this same conversation or sometime later, DeAngelo raised with Greenfield the possibility of an appeal, and Greenfield said that she would need to retain different counsel. (Id. at 9, ¶ 14.) According to DeAngelo, Greenfield specifically advised that her only option was an appeal to the Colorado Court of Appeals in Denver and that she would therefore need to hire a Denver lawyer. (Id.) DeAngelo believed she could not afford that course of action. (Id. ¶ 15; ECF No. 81 at 5, ¶ 15; ECF No. 85 at 4, ¶ 15.)

         DeAngelo claims that Greenfield was wrong to advise that an appeal to the Colorado Court of Appeals was DeAngelo's only option. She points to Colorado Rule for Magistrates 5(a), which states, in relevant part, “Except for correction of clerical errors pursuant to [Colorado Rule of Civil Procedure] 60(a), a magistrate has no authority to consider a petition for rehearing.” (See ECF No. 81 at 15, ¶¶ 27, 29.) The cross-referenced Rule 60(a) reads, in relevant part, “Clerical mistakes in judgments, orders, or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party and after such notice, if any, as the court orders.” Accordingly, DeAngelo claims that Greenfield could have moved Magistrate Koppenhofer to reconsider her permanent orders under the theory that they contained

clerical errors, including omissions of the date or means by which Plaintiff ever would or could receive the principal of the property division, whether the monthly payment was intended to be credited towards the principal, the interest or a combination thereof, and a reservation of jurisdiction over the terms of any promissory note issued.

(Id. ¶ 29.) Greenfield denies that he could have asked Magistrate Koppenhofer to revisit her orders under a clerical error theory. (ECF No. 85 at 9, ¶ 29.) The Court will address this denial below in Part VI.C.3.

         2. Further Proceedings in Weld County and Silverman's Death

         Regardless, proceedings continued before Magistrate Koppenhofer on issues not yet resolved. On March 20, 2014, Greenfield filed a notice to set a hearing on the contempt citation. (ECF No. 72 at 10, ¶ 18.) On June 24, 2014, Magistrate Koppenhofer denied DeAngelo's request to require Silverman to pay her attorneys' fees, finding it would be “fair, equitable, and appropriate to order each party to pay their own remaining attorney fees.” (ECF No. 72-9 at 2.) On December 15, 2014, she dismissed the contempt citation without prejudice

[i]n light of [Silverman's] failing health . . . and his inability to appear in person for a remedial and punitive contempt hearing, or even testify at such and based upon the Court's many attempts to reset this matter and the need for the Court to have [Silverman] present for a hearing on punitive contempt . . . .

(ECF No. 72-11 at 1.) On January 5, 2015, Greenfield petitioned for district judge review of that order. (ECF No. 72-12.)^[5] But Silverman died on January 30, 2015. (ECF No. 72 at 10, ¶ 21.) By that time, he had made eleven maintenance payments of $10, 000 each. (ECF No. 81 at 15, ¶ 31.) His death terminated DeAngelo's rights to those payments. (Id.)^[6]

         On March 24, 2015, DeAngelo replaced Greenfield with a new attorney, Jessica Catlin. (ECF No. 72 at 10, ¶ 22.) Three days later, a Weld County district judge ruled on the January 5 petition for review of Magistrate Koppenhofer's order dismissing the contempt citation. (ECF No. 72-16.) The district judge held that the magistrate erred in

dismiss[ing] the contempt citation on the court's own motion. However, given the Husband's subsequent death, the issue of contempt is now moot, except for the request by the Wife concerning her attorney's fees associated with seeking compliance by the Husband with the trial court's prior orders. The Wife's request for attorney fee's [sic] shall be addressed by the trial court upon remand, once the party representing the Husband's estate is joined as a necessary party to this action.

(Id. at 2.) Greenfield and DeAngelo both characterize this ruling from the district judge as a “dismissal” of the contempt citation, although DeAngelo adds that it was “without prejudice.” (ECF No. 72 at 10, ¶ 24; ECF No. 81 at 6, ¶ 24.) Catlin, DeAngelo's new attorney, did not appeal from this order. (Id.)

         3. Moving for Relief from Judgment, Moving for Transfer to Boulder County, and DeAngelo's Remarriage

         On April 2, 2015, Catlin moved for relief from Magistrate Koppenhofer's permanent orders under Colorado Rule of Civil Procedure 60(b)(5) (“the court may relieve a party or his legal representative from a final judgment, order, or proceeding for . . . any other reason justifying relief from the operation of the judgment”). (ECF No. 72-17.) She pointed out that the payment terms of the marital property equalization payment were nonsensical, and asked for a modification that effected full payment within three to five years. (Id. ¶¶ 5, 14.)

         However, also on April 2, 2015, Catlin and counsel for Silverman's estate jointly moved to change venue to Boulder County District Court because Silverman's probate case was pending in that court, his personal representative lived in Boulder, all counsel lived in Boulder, and DeAngelo no longer lived in Weld County. (ECF No. 72-18.) Magistrate Koppenhofer denied that motion, considering herself in the best position to rule on still-pending matters. (ECF No. 72-19.)

         DeAngelo remarried on April 6, 2015. (ECF No. 72 at 11, ¶ 28.)

         On May 7, 2015, Catlin and counsel for Silverman's estate jointly moved for district judge review of Magistrate Koppenhofer's ruling on the motion to transfer. (ECF No. 72-20.) On May 22, 2015, the district judge overturned that ruling and transferred the proceeding to Boulder County District Court. (ECF No. 72-21.)

         4. Proceedings in Boulder County

         On August 4, 2015, the Boulder County District Court denied DeAngelo's motion for Rule 60(b)(5) relief. (ECF No. 72-22.) The court reasoned that the “mathematical anomaly” regarding the marital property equalization payment was better characterized as “mistake, inadvertence, surprise, or excusable neglect” under Colorado Rule of Civil Procedure 60(b)(1), and the time for bringing a Rule 60(b)(1) motion had expired. (Id. at 6-7.)

         The next day, Catlin, on DeAngelo's behalf, moved for Rule 60(a) relief. (ECF No. 72-23.) As previously noted, Rule 60(a) allows the court to correct “[c]lerical mistakes in judgments, orders, or other parts of the record and errors therein arising from oversight or omission . . . at any time.” Catlin noted the Boulder court's “mathematical anomaly” reasoning but argued that “mistake, inadvertence, surprise, or excusable neglect”-i.e., error apparently attributable to one of the parties-was not the proper lens to view the problem. (ECF No. 72-23 ¶ 5.) Rather, “to the best of counsel's knowledge, the ‘mathematical anomaly' was the product of the Magistrate's own doing.” (Id.) Catlin continued, “The failure of the magistrate to mathematically effectuate her division of property should not be borne by [DeAngelo], and the error must be corrected under C.R.C.P. 60(a).” (Id. ¶ 9.)

         On August 12, 2015, Silverman's estate responded to the new motion. (ECF No. 81-4.) The estate argued that Rule 60(a) cannot be used to obtain relief already denied under Rule 60(b)(5); and, in any event, the motion did not establish an instance of clerical error because Magistrate Koppenhofer's intent was unclear and so it was not possible to conclude that the words of her order deviated from her intent. (Id.)

         On August 13, 2015, the court denied the Rule 60(a) motion in a short order stating that the court adopted Silverman's estate's response arguments. (ECF No. 72-24.)

         D. Proceedings in the Colorado Court of Appeals

          1. DeAngelo's Appellate Arguments

         On September 17, 2015, DeAngelo appealed the denial of the two Rule 60 motions to the Colorado Court of Appeals. (ECF No. 72-25.) Referring to the order denying Rule 60(b)(5) relief, she argued to the appellate court that “[t]he Trial Court's effort to shoe horn the Magistrate's clerical error into a ‘mistake' [under Rule 60(b)(1))] which was required to be raised within [an already-expired] time frame . . . was an abuse of discretion.” (ECF No. 72-26 at 30.) This was so she said, because Rule 60(b)(1) addresses mistakes committed by the parties, not the judge, and a mistake committed by a party was not at issue: “The failure of the Magistrate to effectuate a payment schedule (or, indeed understand algebraic concepts) was not a ‘mistake,' ‘inadvertence' or ‘neglect' on the part of [DeAngelo], nor that of her former counsel.” (Id.) DeAngelo alternatively argued that, even assuming she “was somehow remiss in not catching the Magistrate's mathematical error, C.R.C.P. 60(a)'s purpose is to allow the Court to correct its own errors and those of a party.” (Id. at 24 (emphasis in original).)

         2. The Appellate Decision

         On November 3, 2016, the Colorado Court of Appeals resolved the appeal in an unpublished disposition. (ECF No. 72-27.)^[7] The court was convinced that the record evinced Magistrate Koppenhofer's “inten[t] to divide the marital property equally as both husband and wife had requested.” (Id. ¶ 16.) The question of her former attorney's (Greenfield's) potential error did not matter because DeAngelo “did not argue for relief based on her counsel's inaction, but rather because the judgment does not reflect the court's intent in dividing the marital property.” (Id. ¶ 17.) Noting its prior interpretation that Rule 60(a) “applies to clerical mistakes made not only by a clerk, but also to mistakes made by the court and the parties, ” Reisbeck, LLC v. Levis, 342 P.3d 603, 605 (Colo.App. 2014), the Court of Appeals concluded that Rule 60(a) relief was appropriate because Magistrate Koppenhofer intended an equal distribution of marital property but, for unexplained reasons, created payment terms that could never lead to equal distribution. (Id. ¶¶ 12, 16-17.) The court also concluded that Rule 60(b)(5) was an available source of relief. (Id. ¶¶ 18-22.) “Thus, ” the court said, “we remand the case for the district court to reconsider payment terms for the $1, 183, 114 property equalization payment.” (Id. ¶ 23.)

         The court also addressed issues related to the contempt proceeding. The court held that reopening those proceedings on remand was not required because the record did not support the notion that Magistrate Koppenhofer “intended to divide [the $82, 000] yet failed to do so.” (Id. ¶ 25.) Moreover, Greenfield had not argued that Silverman dissipated the marital estate in anticipation of dissolution, but only that he had violated the automatic preliminary injunction. (Id. ¶ 26.)

         Finally, the appellate court directed the district court on remand “to determine [DeAngelo's] request” for attorneys' fees incurred on appeal. (Id. ¶ 31.)

         E. ...