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Sean Michael Swendsen, Individually As A Remainder Beneficiary of and Derivatively On Behalf of the v. Richard I. Corey

April 15, 2011


The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge


Before the Court are Defendant Clayne Corey's Motion for Partial Summary Judgment (Dkt. 73), and Defendant Richard Corey's Motion for Leave to Add Third Party Complaints (Dkt. 75). The Motions are fully briefed and at issue. The Court finds that oral argument would not significantly assist the decisional process. Having considered the record and pleadings filed therein, the Court rules as follows.


Plaintiff Sean Swendsen is a remainder beneficiary of the Richard I. Swendsen Trust. Richard Swendsen, Plaintiff's grandfather, was grantor and trustee of the Swendsen Trust as restated in May 1994. Richard Swendsen's nephew, Defendant Richard Corey, became successor trustee upon Richard Swendsen's death on October 13, 1997. Clayne Corey, Richard Corey's son, is also named as a defendant.

Plaintiff filed this lawsuit against Richard Corey for breach of trust and fiduciary duty, among other claims.*fn1 Against Clayne Corey, Plaintiff alleges professional malpractice, and additional claims related to Clayne Corey's involvement in Richard Corey's breaches against the Trust. According to Plaintiff, Clayne Corey owed a duty to the Trust and its beneficiaries based on the attorney-client relationship formed when he performed legal and accounting work for the Trust. Simmons Aff., Dkt. 81-1 at 12-13. Clayne Corey asserts that his work for the Trust was limited to the preparation of tax forms, for which there is no specific allegation of negligence. See R. Corey Aff., Dkt. 73-4, ¶ 6. Clayne Corey moves to dismiss all claims against him for lack of standing and under the applicable Idaho statute of limitations.

Richard Corey initially retained Breck Barton & Associates, and pro hac vice counsel from the firm of Callister, Nebecker & McCullough (CNM), to represent him in this matter. Counsel represented Richard Corey from roughly August 2009 to August 2010, when they moved for, and were granted, leave to withdraw. Order, Dkt. 58. Richard Corey later filed a Notice of Appearance Pro Se (Dkts. 61, 62), and has since represented himself.

Richard Corey moves for leave to add third party complaints against the partners and employees of CNM, for alleged legal malpractice, conflict of interest, and negligent supervision in representing him in this case. Richard Corey also asks to add third party complaints against Beth Swendsen and the Beth Swendsen Trust for unjust enrichment and fraud, among other claims, and against attorney Richard M. Matheson, for negligence and malpractice in his representation of Richard Corey as trustee.


1. Motion for Partial Summary Judgment

Defendant Clayton Corey moves for summary judgment as to the four causes of action alleged against him: knowingly taking advantage of Richard Corey's breach of fiduciary duty; acquiring Trust property with knowledge of Richard Corey's breach of Trust; trespass on Trust property or constructive trust; and professional malpractice. Clayton Corey argues that Plaintiff lacks standing to assert malpractice, and that the applicable statute of limitations has run on the remaining claims.

A. Legal Standard

One of the principal purposes of summary judgment "is to isolate and dispose of factually unsupported claims . . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is "not a disfavored procedural shortcut," but is instead the "principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources." Id. at 327. "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

The evidence must be viewed in the light most favorable to the non-moving party, id. at 255, and the Court must not make credibility findings. Id. Direct testimony of the non-movant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d 1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d 1205, 1208 (9th Cir. 1988).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (en banc). This shifts the burden to the non-moving party to produce evidence sufficient to support a jury verdict in her favor. Liberty Lobby, 477 U.S. at 256-57. The nonmoving party must go beyond the pleadings and show "by her affidavits, or by the depositions, answers to interrogatories, or admissions on file" that a genuine issue of material fact exists. Celotex, 477 U.S. at 324.

However, the Court is "not required to comb through the record to find some reason to deny a motion for summary judgment." Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1029 (9th Cir. 2001) (quoting Forsberg v. Pac. Northwest Bell Tel. Co., 840 F.2d 1409, 1418 (9th Cir. 1988)). Instead, the "party opposing summary judgment must direct [the Court's] attention to specific triable facts." Southern California Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir. 2003). Statements in a brief, unsupported by the record, cannot be used to create an issue of fact. Barnes v. Independent Auto. Dealers, 64 F.3d 1389, 1396 n.3 (9th Cir. 1995).

B. Standing for Professional Malpractice Claim

In Idaho, "professional malpractice" is defined as "wrongful acts or omissions in the performance of professional services by any person, firm, association, entity or corporation licensed to perform such services under Idaho law." I.C. § 5-219(4). To establish a claim for legal malpractice, one must show: (1) existence of an attorney-client relationship; (2) existence of a duty on the part of the attorney; (3) the attorney's failure to perform that duty; and (4) that the attorney's negligence was a proximate cause of damage to the client. Harrigfeld v. Hancock, 90 P.3d 884, 886 (Idaho 2004)(citations omitted). Clayne Corey argues that, even if the evidence is construed in a light most favorable to the Plaintiff, the first element -- the existence of an attorney-client relationship -- has not been established.

The Plaintiff's claims of professional malpractice against Clayne Corey are based on duties he allegedly owed to the Trust as both an accountant and an attorney. Am. Compl., Dkt. 50, ¶¶ 121-24. It appears from the briefing that Plaintiff does not dispute that Clayne Corey only provided the Trust with accounting services for tax years 1997-1999. However, there is no suggestion in the record that Clayne Corey breached a duty of care to the Plaintiff in the rendering of those accounting services. Nor, is there any suggestion that any damages suffered by the Plaintiff were caused by the manner in which those accounting services were rendered. Accordingly, the Court will grant summary judgment to Clayne Corey as to Plaintiff's claim of accounting malpractice.

Plaintiff argues, however, that Clayne Corey, in a variety of ways, represented that he was providing his services as a lawyer. In determining whether an attorney-client relationship exists, one must look to the putative client's "subjective belief, which [must be] reasonable under the circumstances," or to "assent by both the putative client and attorney." Warner v. Stewart, 930 P.2d 1030, 1035 (Idaho 1997)(citations omitted). Notably, Plaintiff here has not pointed to evidence that he subjectively believed there ...

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