Belmar v. Garza (In Re Belmar)

319 B.R. 748, 2004 Bankr. LEXIS 2176, 2004 WL 3135458
CourtDistrict Court, District of Columbia
DecidedOctober 26, 2004
DocketBankruptcy No. 00-01847. Adversary No. 02-10091
StatusPublished
Cited by12 cases

This text of 319 B.R. 748 (Belmar v. Garza (In Re Belmar)) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Belmar v. Garza (In Re Belmar), 319 B.R. 748, 2004 Bankr. LEXIS 2176, 2004 WL 3135458 (D.D.C. 2004).

Opinion

DECISION REGARDING CROSS-MOTIONS FOR SUMMARY JUDGMENT

S. MARTIN TEEL, JR., Bankruptcy Judge.

This decision addresses the parties’ cross-motions for summary judgment for the alleged legal malpractice, breach of contract, and breach of fiduciary duty of John Garza. The plaintiffs’ claims are also asserted against Garza’s law firm, Garza, Regan & Associates, but the law firm’s liability is based on Garza’s conduct, and for ease of discussion the court will address the issues as though Garza and his firm are one and the same. The court will deny the plaintiffs’ motion for partial summary judgment, grant the defendants’ motion for summary judgment with respect to the legal malpractice claim, and deny the defendants’ motion for summary judgment on plaintiffs’ breach of contract and breach of fiduciary duty claims for the following reasons.

I

Cleo and Patrick Belmar (the “Bel-mars”), the plaintiffs in this action, filed a petition under Chapter 7 of the Bankruptcy Code (11 U.S.C.) in the United States Bankruptcy Court for the District of Columbia on April 20, 2000 (Case No. 00-00777). The Belmars retained John Garza and Garza, Regan & Associates to represent them in those proceedings for a flat fee of $1,000.00. The flat fee did not include the cost of defending against lift stay motions that might be filed during the course of the Chapter 7 proceedings.

On June 1, 2000, Conti Mortgage Corporation (“Conti”), the mortgage holder on the plaintiffs’ real property located at 215 T Street, N.W., Washington D.C. (the “Property”), filed a motion with the Bankruptcy court to modify the automatic stay to permit Conti to foreclose on the Property (hereinafter “Lift Stay Motion”) (Case No. 00-00777, D.E. No. 9). Garza received a copy of that motion and the notice of opportunity to object on or about June 1, 2000. A copy of the motion and notice of opportunity to object was sent by first class mail to the Belmars on May 31, 2000. See Notice of Motion and Certificate of Service (Case No. 00-00777, D.E. No. 10, filed June 1, 2000). The deadline for filing an opposition to the Lift Stay Motion was June 14, 2000, and a hearing on the Motion was scheduled for June 29, 2000.

The Belmars believed that Conti’s records were inaccurate and that the Lift Stay Motion was predicated on Conti’s incorrect assertion that the Belmars were behind on their mortgage payments. Accordingly, the Belmars decided they would challenge Conti’s Lift Stay Motion and foreclosure efforts. On June 6, 2000, Garza spoke with the Belmars regarding a possible opposition to the Lift Stay Motion. The Belmars failed to appear for a June 7, 2000 meeting to discuss the matter with Garza. On June 12, 2000, Garza sent a letter to the Belmars discussing a possible opposition to the Lift Stay Motion, requesting that they provide Garza with information relevant to an opposition, and advising the plaintiffs to give the matter their immediate attention. The first in-person meeting between the parties to discuss the opposition took place on June 20, 2000, several days after the deadline for filing an opposition to the Lift Stay Motion had passed. The Belmars paid Garza a fee of $750.00 to defend against Conti’s *752 foreclosure efforts, which included a defense against the Lift Stay Motion.

Garza did not file a response to the Lift Stay Motion on or before June 14, 2000, nor did he file a motion for an extension of time within which to file an opposition to the Lift Stay Motion. The Chapter 7 trustee did not oppose the Lift Stay Motion. On June 21, 2000, there being no opposition and the deadline for filing oppositions having passed, the court granted Conti’s Lift Stay Motion.

Garza did not file an opposition to the Lift Stay Motion until June 22, 2000 (the “Opposition”) (Case No. 00-00777, D.E. No. 14). Because the court had already granted the motion, however, the Opposition was not taken into consideration and the hearing scheduled for June 29, 2000, was cancelled. Garza was aware that failing to timely file an opposition to the Lift Stay Motion could result in a default against his clients and in the cancellation of the hearing.

Because no hearing was held, Garza was unable to pursue his original plan of negotiating with Conti’s counsel in the courthouse at the time of the hearing. The plaintiffs allege and Garza concedes that leverage Garza would have otherwise had in settlement negotiations with Conti was lost when the motion was granted by default and the hearing cancelled. Conti was free to sell the Property at foreclosure after entry of the order granting the Lift Stay Motion.

On September 15, 2000, the Belmars received a notice of foreclosure from Conti informing the Belmars that Conti would foreclose on the Property on October 12, 2000. At some point between September 15, 2000, and October 3, 2000, the attorney-client relationship between the parties was severed.

The Belmars subsequently retained new counsel, who on October 9, 2000, filed a motion to vacate the June 21 Order granting the Lift Stay Motion (“Motion to Vacate”) (Case No. 00-00777, D.E. No. 25). The Chapter 7 trustee did not join in the Motion to Vacate. This court denied the Motion to Vacate on October 10, 2000. In its order denying the Motion to Vacate, the court commented upon the merits of the Belmars’s objection to the Lift Stay Motion, and determined that the Belmars had not in their original opposition nor in their Motion to Vacate stated any bankruptcy law reason for denying the Lift Stay Motion (Case No. 00-00777, D.E. No. 27, entered October 11, 2000).

To stay the foreclosure, the Belmars commenced a new bankruptcy case under Chapter 13 of the Bankruptcy Code, Case No. 00-01847, the case in which this adversary proceeding is being pursued. The Belmars converted their Chapter 13 case to one under Chapter 11 of the Bankruptcy Code, and a plan of reorganization was successfully confirmed on October 3, 2001. See Order (Case No. 00-01847, D.E. No. 91)

II

The court first addresses the defendants’ motion for summary judgment. For purposes of that analysis, the court views the evidence in the light most favorable to the plaintiffs.

A. Legal Malpractice and Breach of Fiduciary Duty Claims

Given the similarity in law governing legal malpractice actions and breach of fiduciary duty claims, this court will address the plaintiffs’ legal malpractice and breach of fiduciary duty claims together. District of Columbia law requires a legal malpractice plaintiff to establish (1) the existence of an attorney- *753 client relationship; (2) the applicable standard of care; (3) a breach of that standard of care; and (4) a legally cognizable harm. See Smith v. Haden, 872 F.Supp. 1040, 1044 (D.D.C.1994). Similarly, to state a claim for breach of fiduciary duty the plaintiffs must establish that (1) the defendants owed the plaintiffs a fiduciary duty; (2) that the defendants breached that duty; and (3) that the breach proximately caused an injury. 1 See Shapiro, Lifschitz & Schram, P.C. v. R.E. Hazard, Jr., 24 F.Supp.2d 66, 75 (D.D.C.1998).

1.

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Cite This Page — Counsel Stack

Bluebook (online)
319 B.R. 748, 2004 Bankr. LEXIS 2176, 2004 WL 3135458, Counsel Stack Legal Research, https://law.counselstack.com/opinion/belmar-v-garza-in-re-belmar-dcd-2004.