Lecates v. Barker

• Court: Court of Appeals for the Tenth Circuit
• Decided: November 16, 2000
• Docket: 00-4026
• Status: Unpublished

Opinion

F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS NOV 16 2000 FOR THE TENTH CIRCUIT PATRICK FISHER Clerk

JEFFERSON E. LECATES,

Plaintiff-Appellant,

v. No. 00-4026 (D.C. No. 99-CV-220) RONALD BARKER; RICHARD A. (D. Utah) ISAACSON; JEAN ISAACSON,

Defendants-Appellees.

ORDER AND JUDGMENT *

Before TACHA , EBEL , and LUCERO , Circuit Judges.

After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination

of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument.

* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. Plaintiff-appellant Jefferson E. LeCates appeals from the district court’s

order dismissing his complaint against the defendants. The district court

dismissed LeCates’ claims for malicious prosecution, legal malpractice and abuse

of process for failure to state a claim. See Fed. R. Civ. P. 12(b)(6). It dismissed

without prejudice 1 his claim for fraud on the basis that he failed to comply with

the pleading requirements of Fed. R. Civ. P. 9(b). We now determine that the

Rooker-Feldman doctrine bars all of LeCates’ claims, with the exception of his

claims for malpractice and abuse of process. Accordingly, we vacate the 12(b)(6)

dismissal of those claims barred by Rooker-Feldman and remand with instructions

to dismiss them for lack of subject matter jurisdiction. We affirm the dismissal of

the claims for malpractice and abuse of process.

1 Defendants argue that the order dismissing LeCates’ fraud claim without prejudice was not a final order for purposes of appeal. Where a district court intends to dismiss an entire action rather than merely dismissing a complaint, the order of dismissal is final and appealable even if entered without prejudice. See Mobley v. McCormick , 40 F.3d 337, 339-40 (10th Cir. 1994); see also United States v. Wallace & Tiernan Co. , 336 U.S. 793, 794 n.1 (1949); 15A Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3914.6 at 533-35 (2d ed. 1992). Here, as will be seen, regardless of its intent the district court had no jurisdiction to do anything with the fraud claim other than to dismiss it for lack of subject matter jurisdiction pursuant to the Rooker- Feldman doctrine. We therefore have jurisdiction to consider this appeal.

-2- FACTS

This suit arises out of a flurry of litigation between the parties in the Utah

state courts. Kent S. Walker, LeCates’ client, claimed to have relied to his

detriment on certain promises or fraudulent misrepresentations made to him by

defendants Richard A. Isaacson and Jean Isaacson (the “Isaacsons”) and/or their

corporation, Specialized Planning and Insurance, Inc. d/b/a Specialized Planning

and Insurance Services, Inc. (“SPIS”).

The parties filed three suits in rapid succession in Utah state court. The

first was a suit by the Isaacsons against Boyd Corbett, Walker’s son-in-law,

seeking to remove a lien Corbett had placed on their home. LeCates sought but

was denied leave to intervene on behalf of Walker in that suit. Walker and the

Isaacsons filed the second and third suits against each other to adjudicate

Walker’s entitlement to unearned commissions.

On September 11, 1993, LeCates filed a motion to withdraw from each of

these two cases. His motion was granted. Over one year later, in December

1994, the Isaacsons filed the fourth state court action involved here, a complaint

against LeCates seeking damages against him for his conduct in the prior

litigation under Utah Rule Civ. P. 11 and various other theories. When LeCates

failed to respond, the state district court entered default judgment against him in

the amount of $166,343.86.

-3- Although he believed the default judgment had been procured by fraudulent

misrepresentations to the Utah court, LeCates did not move to set aside the

default judgment. Instead, he filed this suit in the Southern District of Florida,

seeking damages from the defendants for violation of Utah Code Ann. § 78-51-31,

and for malicious prosecution, fraud, abuse of process and legal malpractice.

LeCates’ complaint charged that the Isaacsons had obtained the default judgment

against him by fraud and deceit in collusion with Barker. He also complained that

the defendants had attempted to collect the judgment, knowing that it was

obtained by fraud and deceit, and that they were harassing him through their

collection activities.

DISCUSSION

The Rooker-Feldman doctrine provides that federal courts, other than the

United States Supreme Court, lack jurisdiction to adjudicate claims seeking

review of state court judgments. See District of Columbia Court of Appeals v.

Feldman , 460 U.S. 462, 486 (1983); Rooker v. Fidelity Trust Co. , 263 U.S. 413,

415-16 (1923). 2 Because it is a jurisdictional doctrine, we must consider whether

2 Although the default judgment here was entered by a state district court, it may still be precluded by Rooker-Feldman , because the doctrine “precludes not only review of adjudications of the state’s highest court, but also the decisions of its lower courts.” Jordahl v. Democratic Party of Va. , 122 F.3d 192, 199 (4th Cir. 1997).

-4- Rooker-Feldman bars any of LeCates’ claims before addressing any of the

arguments he raises on the merits. See Long v. Shorebank Dev. Corp. , 182 F.3d

548, 554-55 (7th Cir. 1999).

A. Fraud claim

In his fraud claim, LeCates does not request that his default in Utah state

court be set aside or that the judgment against him be overturned. Instead, he

seeks damages from the defendants for their conduct in procuring the allegedly

fraudulent judgment against him. Rooker-Feldman bars not only cases seeking

direct view of state court judgments, however; it also bars cases that are

“inextricably intertwined” with a prior state court judgment. See Feldman ,

460 U.S. at 482 n.16.

If adjudication of a claim in federal court would require the court to

determine that a state court judgment was erroneously entered or was void, the

claim is inextricably intertwined with the merits of the state court judgment.

See, e.g. , Jordahl v. Democratic Party of Va. , 122 F.3d 192, 202 (4th Cir. 1997).

That is the case here. In order to grant LeCates relief on his fraud claim, it would

be necessary to determine that the Utah state court default judgment was

fraudulently obtained and therefore void. We therefore conclude that the fraud

claim is barred by the Rooker-Feldman doctrine.

-5- B. Deceit and collusion

Section 78-51-31 of the Utah Code provides that “[a]n attorney and

counselor who is guilty of deceit or collusion, or who consents thereto, with

intent to deceive a court or judge or a party to an action or proceeding is liable to

be disbarred, and shall forfeit to the injured party treble damages to be recovered

in a civil action.” LeCates has included a claim for treble damages under this

statute in his complaint.

Application of Rooker-Feldman to this claim is complicated by the fact that

the disciplinary provisions of the statute may apply even if the court has not been

deceived. See In re Norton , 146 P.2d 899, 900-01 (Utah 1944). In other words, it

would be possible for a court to determine that an attorney violated this section

without calling the resulting state court judgment into question.

Norton , however, concerned the disciplinary remedy, not the damages

remedy, provided in the statute. LeCates seeks treble damages based on the

amount of the judgment entered against him. In order to prove his treble damages

claim, he will have to prove that the judgment was entered by fraudulent means

(deceit and collusion), thus calling into question the validity of the default

judgment. The only support for damages would be the default judgment, and the

only support for a finding of liability would be events that were or should have

been contested in the Utah state court proceedings which resulted in the default

-6- judgment. LeCates’ argument that he does not seek to set aside the judgment

itself, only damages for its wrongful entry, is unavailing.

C. Malpractice claim

LeCates’ complaint includes a claim against Ronald Barker, opposing

counsel in the Utah state court actions, for legal malpractice. Malpractice claims,

when brought against an attorney who was not a party to the state court

proceeding, may lie outside the scope of Rooker-Feldman . See Kamilewicz v.

Bank of Boston Corp. , 100 F.3d 1348, 1351-52 (7th Cir. 1996) (Easterbrook, J.,

dissenting from the denial of rehearing en banc). LeCates argues that his claim

can be construed to attack the actions of attorney Barker in obtaining the default

judgment, not the default judgment itself. To the extent that it can be construed

to avoid Rooker-Feldman , however, the claim fails because Utah law does not

recognize a cause of action for legal malpractice against opposing counsel.

The elements of a cause of action for legal malpractice in Utah include “an

attorney-client relationship” and “duty of the attorney to the client arising from

their relationship.” Glencore, Ltd. v. Ince , 972 P.2d 376, 379 (Utah 1998). While

Utah has acknowledged the modern trend toward relaxing the privity requirement

and recognizing a cause of action by nonparties affected by a lawyer’s failure to

exercise reasonable care, its cases suggest that such a third party cause of action

arises only where there is at least a nonadversarial relationship between the

-7- attorney and the third party. See Oxendine v. Overturf , 973 P.2d 417, 421 (Utah

1999) (requiring that third party be an intended beneficiary of the attorney-client

relationship); Atkinson v. IHC Hosp., Inc. , 798 P.2d 733,736 (Utah 1990) (stating

that any duty attorney owes to third party is derivative of his duty to client, and

not owed to adversary in litigation). LeCates has pled no such relationship here;

his legal malpractice claim therefore fails as a matter of law.

D. Malicious prosecution/abuse of process

LeCates concedes that his malicious prosecution claim may be barred by

Rooker-Feldman . This claim cannot be determined without an outcome in state

court favorable to LeCates. Any attempt by a federal court to anticipate such an

outcome would require the court to determine that the state court judgment was

erroneously entered or void, thus running afoul of Rooker-Feldman .

The abuse of process claim is more difficult, because it is ambiguously

worded. To the extent LeCates raises an abuse of process claim targeting the

fraudulent means used to obtain the default judgment, his allegations call the

default judgment into question and therefore violate Rooker-Feldman .

At times, however, LeCates’ complaint appears to assert that Barker’s

methods in collecting the default judgment constituted an abuse of process. Such

a claim might not run afoul of Rooker-Feldman , because it targets the collection

process rather than the underlying judgment. Even if this is so, however, LeCates

-8- has failed to satisfy the rigorous standard applicable to an abuse of process claim

under Utah law: that the process was used against him primarily to accomplish a

purpose for which it was not designed. See Gilbert v. Ince , 981 P.2d 841, 845

(Utah 1999). Therefore, the 12(b)(6) dismissal of this claim was appropriate.

We AFFIRM the dismissal of LeCates’ claims for malpractice and abuse of

process. We VACATE the dismissal of his claims for fraud, deceit and collusion

pursuant to Utah Code § 78-51-31, legal malpractice, and malicious prosecution,

and REMAND with instructions to dismiss these claims for lack of subject matter

jurisdiction.

Entered for the Court

Deanell Reece Tacha Circuit Judge

-9-