Bjorgen v. Kinsey

466 N.W.2d 553, 1991 N.D. LEXIS 22, 1991 WL 21504
CourtNorth Dakota Supreme Court
DecidedFebruary 21, 1991
DocketCiv. 900155
StatusPublished
Cited by27 cases

This text of 466 N.W.2d 553 (Bjorgen v. Kinsey) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bjorgen v. Kinsey, 466 N.W.2d 553, 1991 N.D. LEXIS 22, 1991 WL 21504 (N.D. 1991).

Opinions

GIERKE, Justice.

Robert W. Kinsey and his professional corporation [Kinsey], appeal from a judgment entered on a jury verdict awarding Anita Bjorgen [Anita] $526,964.30 in damages for fraud, deceit, and legal malpractice, and from orders denying post-trial motions. Anita has filed a cross-appeal from the judgment. We affirm.

Viewed in the light most favorable to the jury verdict, the evidence reveals that Kinsey had maintained a general law practice in Crosby since 1968. In 1972 Kinsey served as one of the legal counsel for the First National Bank of Crosby [Bank] in seeking a charter. After the charter was obtained in 1977, Kinsey continued to provide legal services for the Bank. In addition, Kinsey served for a period of time on the Bank’s board of directors and by June 1983 owned approximately four percent of the Bank stock and between 12 and 13 percent of the stock in the Bank’s holding company.

In 1975 Kinsey developed an estate plan for Anita and her husband, Lyle Bjorgen, in which the couple’s farm property was placed in Lyle’s name alone. Anita and Lyle encountered marital difficulties and eventually separated. In April 1982 Anita and Lyle were divorced and the parties stipulated to a property settlement in which Lyle received property worth approximately $217,000 and Anita received property [555]*555worth approximately $160,000. Anita, who had not been represented by counsel, shortly thereafter hired an attorney to attempt to have the 1982 divorce and property settlement agreement set aside. This was accomplished by the end of 1982. Kinsey was not involved in the 1982 divorce proceedings.

In March 1983 Anita consulted Kinsey about a proposed property settlement agreement she had received from Lyle’s attorney. Kinsey agreed to represent Anita in a new divorce action and, at her request, recorded a lis pendens on all of the farm property in April 1983.

In the meantime, Lyle had become substantially indebted to the Bank. On January 10, 1983, Lyle renewed promissory notes to the Bank in the amount of $90,000. The Bank took a security interest in a motor home, two cars, and mineral acres which were in Lyle’s name. Lyle obtained another $10,000 loan from the Bank one month later. The notes were not due until December 15, 1983, and Anita did not sign either of the notes. Kinsey was on the Bank’s board of directors when the Board approved the loans to Lyle, and Kinsey did a title opinion on the mineral acres Lyle mortgaged to the Bank to secure the debt.

On June 17, 1983, Kinsey sent Anita the first draft of a proposed property settlement agreement in the divorce action. Under the agreement, Anita was to receive substantially all of the parties’ farm property including the mineral interests. She was also to receive 10,000 shares of the Bank’s holding company stock which were owned by Lyle.

The day before Kinsey sent Anita the proposed agreement, he contacted a Willi-ston law firm to bring an action on behalf of the Bank against Lyle on his promissory notes even though they were not due until December 15, 1983. Kinsey had previously gone to the Bank president and informed him that the Bjorgens were getting a divorce and that the Bank should call the promissory notes due and bring an action against Lyle directly on the notes. In a letter dated June 20, 1983, to the Williston law firm, Kinsey stated:

“I am enclosing copies of the two notes signed by Lyle Bjorgen to the First National Bank of Crosby.
“As I explained to you, because of a pending divorce between Lyle Bjorgen and his wife the bank believes that its prospect for payment is significantly impaired. Consequently, the bank wants to declare the notes due and payable immediately.
“Because I am representing Mr. Bjor-gen’s wife, I do not believe that I can represent the bank. I appreciate your willingness to undertake a review of this matter.
“I am enclosing the following:
“1) Copies of Mr. Bjorgen’s Financial Statements.
“2) Copy of the Real Estate Mortgage.
“3) Copies of the Ownership Certificates of the two vehicles which are additional security for the loan.
“4) A copy of the Notice of Lis Pendens which we filed in the divorce action describing all of the real estate in which Mr. Bjorgen has an interest.
“As we discussed, it may be best for the bank to release its mortgage on the mineral interests which Mr. Bjorgen has and go after the equity in his real estate and personal property.
“If you decide that that is the best course of action, please file a Lis Pen-dens against his real estate.
“Additionally, Mr. Bjorgen owns 10,000 shares of Dakota Bancorporation, the holding company which owns eighty percent of the First National Bank of Crosby. Please attach these shares of stock. “I do think that it is important that this matter receive your prompt attention.”

Kinsey did not inform Anita about the Bank’s pending action and continued to contact the Williston law firm periodically regarding the status of the Bank’s case against Lyle. Kinsey billed the Bank for these telephone consultations.

After an unsuccessful attempt at a reconciliation with Lyle, Anita and Lyle agreed to a settlement and she instructed Kinsey on August 15, 1983, to discontinue [556]*556the divorce action and to prepare a deed transferring all of the property to her. Anita believed that if the divorce action was dismissed, the property could be conveyed without adverse tax consequences. Anita still intended to obtain the divorce from Lyle, but only after the property was conveyed to her. Kinsey agreed to prepare a deed, but did not do so. On August 24 and 25, 1983, Kinsey again consulted by telephone with the Williston law firm regarding the Bank’s action against Lyle.

After failing to receive the deed to the property, Anita contacted Kinsey on September 9, 1983, and again asked for a deed. Kinsey noted in his file that Anita wanted all property transferred to her and that she “will assume the debts.” Anita asked Kinsey to do research on the tax consequences and Kinsey informed her that he could not begin the research until September 19, 1983. Kinsey was in contact with the Willi-ston law firm on September 12, 13, and 14, 1983, and was informed by letter that the Bank had obtained a writ of attachment but that no attachment could take place for ten days. On September 14, 1983, Kinsey wrote to Anita and informed her that he could not transfer the property from Lyle to her because it had been attached by the Bank.

Because the lis pendens recorded by Kinsey in April 1983 was still of record, the Williston law firm was concerned about its effect on the Bank’s attachment of the property. Kinsey testified that he knew if the divorce action were dismissed the lis pendens would no longer be effective and Anita would be left with no protection. Kinsey also admitted that he did not explain the effect of the dismissal of the divorce action to Anita though he knew that if the action were dismissed, the Bank’s attachment would take precedence. Kinsey had Anita’s divorce case dismissed without prejudice in November 1983.

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Cite This Page — Counsel Stack

Bluebook (online)
466 N.W.2d 553, 1991 N.D. LEXIS 22, 1991 WL 21504, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bjorgen-v-kinsey-nd-1991.