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Sylvia v. Wisler

United States Court of Appeals, Tenth Circuit

November 22, 2017

CORY SYLVIA, Plaintiff-Appellant,

         Appeal from the United States District Court for the District of Kansas (D.C. No. 2:13-cv-02534-EFM-TJJ)

         Submitted on the briefs:[*]

          Alan V. Johnson of Sloan, Eisenbarth, Glassman, McEntire & Jarboe, L.L.C., Topeka, Kansas, for Plaintiff-Appellant.

          Steven R. Smith, Gates Shields Ferguson Hammond, P.A., Overland Park, Kansas, for Defendants-Appellees James L. Wisler and Xpressions, L.C.

          Daniel F. Church of Morrow Willnauer Klosterman Church, Kansas City, Missouri, for Defendant-Appellee David Trevino.

          Before HARTZ, HOLMES, and MATHESON, Circuit Judges.


         This case presents a difficult question of Kansas law: when do legal malpractice claims involving a failure to act sound in tort rather than contract? Kansas, like other states, distinguishes between legal malpractice claims. Some sound in contract. Others sound in tort. Generally, breach of a specific contractual provision or agreement to do a certain action sounds in contract, while breach of a duty imposed by law on attorneys by virtue of the attorney-client relationship sounds in tort. But the line separating failure to perform an agreed-upon action from breach of a duty imposed by law is not always bright.

         Here, the plaintiff, Cory Sylvia, sued his former attorneys, James L. Wisler and David Trevino, for legal malpractice allegedly sounding in tort and breach of contract arising from their representation of Mr. Sylvia in a suit for wrongful termination against Goodyear Tire & Rubber Co. ("Goodyear"), his former employer. Later, Mr. Sylvia amended his complaint to add as a defendant Xpressions, L.C. ("Xpressions"), a limited liability company formerly known as the Wisler Law Office, L.C.

         Mr. Sylvia's initial complaint characterized his claims as sounding both in tort and in contract. Specifically, he faulted (1) both individual defendants for failing to include in, or to later amend, his complaint to aver a workers' compensation retaliation claim; and (2) solely Mr. Wisler for voluntarily dismissing Mr. Sylvia's case on the erroneous belief that all claims could be refiled, causing one of his claims to become barred by the statute of limitations. For each of these claims, Mr. Sylvia advanced both tort and contract theories of liability.

         Messrs. Wisler and Trevino each filed Federal Rule of Civil Procedure 12(b)(6) motions to dismiss, which were granted in part and denied in part. The court granted dismissal of the legal malpractice claims-allegedly sounding in tort-holding that the claims were not properly characterized as torts and merely duplicated the breach of contract claims. The court allowed the breach of contract claims to go forward. On motions for summary judgment by Mr. Trevino and by Mr. Wisler and Xpressions, filing jointly, the court granted both motions, disposing of the remaining contract claims and the case.

         Mr. Sylvia appeals from both the district court's dismissal of his alleged tort claims and its grant of summary judgment for the defendants on the breach of contract claims. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, [1] we hold that, under Kansas law, Mr. Sylvia has alleged that defendants breached a duty imposed by law in the context of their attorney-client relationship; such claims sound in tort. Accordingly, for reasons further detailed infra, we reverse in part and vacate in part the district court's judgment dismissing Mr. Sylvia's legal malpractice claims. However, regarding the district court's grant of summary judgment for the defendants on the breach of contract claims, we affirm. We remand the case for further proceedings not inconsistent with this opinion.

         I. BACKGROUND

         Mr. Sylvia's claims against Messrs. Wisler and Trevino arose from a lawsuit against Goodyear for wrongful termination in which the defendants represented Mr. Sylvia. Mr. Sylvia had sustained repeated injuries working for Goodyear. He filed multiple workers' compensation claims for those injuries but was fired when he allegedly failed to report a medically necessary absence in violation of a "Last Chance Agreement" Mr. Sylvia had entered into with Goodyear. Aplt.'s App. at 11-13 (Compl., dated Oct. 16, 2013). After his firing, Mr. Sylvia filed a charge with the Equal Employment Opportunity Commission alleging that his termination violated the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12101-213, and later received a notice of right to sue. Between filing the charge and receiving the notice of right to sue, Mr. Sylvia received an award from the Kansas Division of Workers' Compensation for his claims against Goodyear.

         Shortly after receiving the notice of right to sue, Mr. Sylvia retained Wisler & Trevino, L.C., the defendants' former law firm, to represent him in a wrongful termination suit against Goodyear. Mr. Sylvia signed a written contract with Wisler & Trevino, L.C., that stated in part:

Cory Sylvia has been wrongfully discharged due to disability discrimination and FMLA [i.e., Family and Medical Leave Act, 29 U.S.C. §§ 2601-54] violation/retaliation and Workers Compensation retaliation from GoodYear Tire and Rubber Company on or about May 9, 2009. The firm will file suit in federal court in Kansas on one or more of these claims.

Aplt.'s App. at 132 (Wisler & Xpressions' Mem. Supp. Mot. Summ. J., dated Mar. 5, 2015) (emphasis added). Mr. Sylvia alleges that before or at the time the contract was executed, he was assured by Messrs. Wisler and Trevino that all five claims discussed by the parties would be brought against Goodyear.[2] The complaint filed by Mr. Trevino, however, omitted both retaliation claims (i.e., FMLA retaliation and workers' compensation retaliation).

         Further, Mr. Sylvia avers that after the lawsuit was filed he received a copy of the complaint and-alerted to the fact that his attorney had included only three of the claims-raised the issue of the missing retaliation claims with Mr. Wisler, who allegedly responded: "[W]e had to file these three claims first, but we will file the other two claims later." Id. at 191 (Pl.'s Mem. Opp'n Mot. Summ. J., dated Apr. 7, 2015). Mr. Sylvia asserts that, in relying on Mr. Wisler's statement, he did not insist that the written contract be modified to require the filing of all five claims.

         During the course of the underlying litigation, Messrs. Wisler and Trevino dissolved their partnership, and Mr. Sylvia chose Mr. Wisler to continue the representation; Mr. Trevino withdrew. About the same time, the Social Security Administration determined that Mr. Sylvia was disabled and so eligible for disability benefits beginning April 1, 2009-over a month before he was discharged by Goodyear on May 8, 2009. As a result, Mr. Wisler believed that he could not argue in good faith that Mr. Sylvia had a good claim or had suffered substantial damages.

         According to Mr. Sylvia, around this time he and Mr. Wisler had multiple conversations regarding the possibility of voluntarily dismissing the case against Goodyear. Mr. Sylvia allegedly asked Mr. Wisler multiple times not to dismiss so that Mr. Sylvia could find other counsel to prosecute the case. But Mr. Sylvia says that Mr. Wisler repeatedly assured him that he would be able to refile all of the claims. Allegedly relying on those assurances, Mr. Sylvia consented to the voluntary dismissal of his case.

         Mr. Sylvia retained new counsel who filed suit in the District of Kansas against Goodyear for (1) interference in violation of the FMLA, (2) FMLA retaliation, (3) wrongful discharge in violation of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1000-461, and (4) disability discrimination in violation of the ADA. However, on April 26, 2012, Mr. Sylvia's claim for disability discrimination under the ADA was dismissed as time-barred because state tolling and savings statutes do not apply to ADA claims, which must be filed within 90 days of receiving a notice of right to sue. Mr. Sylvia settled his remaining claims against Goodyear for $12, 000.

         On October 16, 2013, Mr. Sylvia brought suit against Messrs. Wisler and Trevino in the District of Kansas for allegedly tortious conduct and breach of contract. Before answering the complaint, Messrs. Wisler and Trevino moved to dismiss the claims against them for failure to state a claim. The district court granted in part the motions to dismiss, dismissing the legal malpractice claims that Mr. Sylvia asserted sounded in tort, while permitting the contract claims to proceed.

         In doing so, the district court held that Mr. Sylvia had failed to state a facially plausible claim that the defendants violated a duty imposed by law and thus committed a tort. Mr. Sylvia then moved to amend his complaint to add Xpressions, formerly Wisler Law Office, L.C., as a defendant. He conformed his amended complaint to the district court's dismissal order by omitting the alleged tort claims.

         After limited discovery, the defendants moved for summary judgment on the remaining contract claims. The district court granted the defendants' motions for summary judgment, dismissing the remaining contract claims. The court rejected Mr. Sylvia's arguments, and held, inter alia, (1) that the parol evidence rule barred evidence of oral statements before or contemporaneous with the execution of the written contract; (2) that Mr. Sylvia had failed to show a subsequent oral agreement supported by consideration; and (3) that the voluntary dismissal of the underlying case did not breach the terms of the written contract or any other contractual obligation.

         Mr. Sylvia now appeals from the district court's dispositions of the motions to dismiss and the motions for summary judgment. We examine each set of motions in turn, beginning with the district court's granting of the motions to dismiss for failure to state a claim as to Mr. Sylvia's alleged tort claims, before turning to the granting of the summary judgment motions in favor of the defendants on Mr. Sylvia's contract claims.


          As to the claims at issue here, we note at the outset that "[b]ecause the district court's jurisdiction was based on diversity of citizenship, [Kansas] substantive law governs . . . . This court must therefore 'ascertain and apply [Kansas] law with the objective that the result obtained in the federal court should be the result that would be reached in [a Kansas] court.'" Brady v. UBS Fin. Servs., Inc., 538 F.3d 1319, 1323 (10th Cir. 2008) (citation omitted) (quoting Blanke v. Alexander, 152 F.3d 1224, 1228 (10th Cir. 1998)). "To properly discern the content of state law, we 'must defer to the most recent decisions of the state's highest court.'" Kokins v. Teleflex, Inc., 621 F.3d 1290, 1295 (10th Cir. 2010) (quoting Wankier v. Crown Equip. Corp., 353 F.3d 862, 866 (10th Cir. 2003)). However, stare decisis requires that we be "bound by our own prior interpretations of state law" "unless an intervening decision of the state's highest court has resolved the issue." Id. (quoting Wankier, 353 F.3d at 866).

         A. Dismissal of Mr. Sylvia's Alleged Tort Claims

         This court reviews "de novo the district court's granting of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)." Albers v. Bd. of Cty. Comm'rs, 771 F.3d 697, 700 (10th Cir. 2014) (quoting Slater v. A.G. Edwards & Sons, Inc., 719 F.3d 1190, 1196 (10th Cir. 2013)). To overcome a motion to dismiss, "a complaint must plead facts sufficient 'to state a "claim to relief that is plausible on its face."'" Slater, 719 F.3d at 1196 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). "[W]e must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff." Albers, 771 F.3d at 700 (quoting Cressman v. Thompson, 719 F.3d 1139, 1152 (10th Cir. 2013)). "[T]he Rule 12(b)(6) standard doesn't require a plaintiff to 'set forth a prima facie case for each element.'" George v. Urban Settlement Servs., 833 F.3d 1242, 1247 (10th Cir. 2016) (quoting Khalik v. United Air Lines, 671 F.3d 1188, 1193 (10th Cir. 2012)). "[A] claim is facially plausible if the plaintiff has pled 'factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Id. (quoting Hogan v. Winder, 762 F.3d 1096, 1104 (10th Cir. 2014)).

         On appeal, Mr. Sylvia argues that his complaint stated facially plausible claims for legal malpractice sounding in tort against Messrs. Wisler and Trevino. Specifically, he argues that the district court erred by not recognizing that he had properly pleaded claims for malpractice sounding in both tort and breach of contract, which is permitted under Kansas law. He further argues that these tort claims are based on violations of a duty imposed by law by virtue of the attorney-client relationship, independent of obligations arising under the contract. Messrs. Wisler and Trevino respond that the district court was correct in its holding and that Mr. Sylvia's claims most closely resemble the kind found in Juhnke v. Hess, 506 P.2d 1142 (Kan. 1973), where the Supreme Court of Kansas held that an attorney's failure to file an appeal where he had been employed for that very purpose sounded in contract rather than tort.

         Because the same principles of Kansas law apply to the dismissal of the claims against Messrs. Wisler and Trevino, we first analyze the Kansas caselaw to establish the relevant legal principles before applying them to these claims.

         1. Kansas Caselaw Characterizing Legal Malpractice Claims

         Under Kansas law, "[l]egal and medical malpractice generally constitute both a tort and a breach of contract." Pancake House, Inc. v. Redmond, 716 P.2d 575, 578 (Kan. 1986). However, Kansas cases distinguish tort and contract malpractice claims by asking "whether the actions or omissions complained of constitute a violation of duties imposed by law, or of duties arising by virtue of the alleged express agreement between the parties." Id. (citing Malone v. Univ. of Kan. Med. Ctr., 552 P.2d 885, 888-89 (Kan. 1976) (holding that a complaint stated a claim for tortious medical malpractice rather than breach of contract where the gravamen of the complaint was failure "to provide necessary, complete, competent, and authorized treatment" (emphasis omitted))).

         The leading Kansas case on the characterization of legal malpractice claims, Pancake House, offers the following guidance:

A breach of contract may be said to be a material failure of performance of a duty arising under or imposed by agreement. A tort, on the other hand, is a violation of a duty imposed by law, a wrong independent of contract. Torts can, of course, be committed by parties to a contract. The question to be determined here is whether the actions or omissions complained of constitute a violation of duties imposed by law, or of duties arising by virtue of the alleged express agreement between the parties.
. . . Where the act complained of is a breach of specific terms of the contract without any reference to the legal duties imposed by law upon the relationship created thereby, the action is contractual. Where the essential claim of the action is a breach of a duty imposed by law upon the relationship of attorney/client and not of the contract itself, the action is in tort.
. . . .
While other jurisdictions are divided as to whether legal malpractice may be categorized as a cause of action in tort or one in contract, Kansas has held that where a legal duty is imposed by law, the cause of action is in tort. Where the malpractice involves failure to perform a contractual obligation, whether express or implied, the cause of action is in contract.

716 P.2d at 578 (citations omitted); accord Kan. Pub. Emps. Ret. Sys. v. Reimer & Koger Assocs., Inc., 936 P.2d 714, 718 (Kan. 1997) (quoting same). Compare W. Page Keeton et al., Prosser and Keeton on Torts § 92, at 656 (5th ed. 1984) (noting that "[c]ontract obligations" are those "based on the manifested intention of the parties to a bargaining transaction"), with id. ("Tort obligations are in general obligations that are imposed by law on policy considerations to avoid some kind of loss to others. They are obligations imposed apart from and independent of promises made and therefore apart from any manifested intention of parties to a contract or other bargaining transaction.").

         As in other jurisdictions, Kansas courts most commonly have addressed legal malpractice claims that sound in tort. See Pancake House, 716 P.2d at 578 (identifying one Kansas Supreme Court case in which claims sounded in contract and noting that "[n]ot all malpractice actions in Kansas may be deemed tort actions"); Roy Ryden Anderson & Walter W. Steele, Jr., Fiduciary Duty, Tort and Contract: A Primer on the Legal Malpractice Puzzle, 47 SMU L. Rev. 235, 236 (1994) (noting that "the action for negligence is the most common and well-developed form for a malpractice claim"). "Lawyers, like other professionals, are required to have and exercise the learning and skill ordinarily possessed by members of their profession in the community." Bowman v. Doherty, 686 P.2d 112, 120 (Kan. 1984). "[W]hen the attorney's performance falls short of that expected of an ordinary, reasonably prudent lawyer, the attorney is guilty of the tort of malpractice." Anderson & Steele, supra, at 245; see Pancake House, 716 P.2d at 578 (noting that "[w]here the essential claim of the action is a breach of a duty imposed by law upon the relationship of attorney/client[, ] . . . the action is in tort").

         In this regard, in a host of cases, the Kansas courts have determined that malpractice actions sounded in tort, where the claims alleged that attorneys failed to properly perform their professional duties imposed on them by law in the context of the attorney-client relationship. For example, in Pancake House, attorneys who had previously represented a corporation filed suit against the corporation on behalf of certain of its shareholders; Kansas's high court held that the corporation's malpractice claim sounded in tort because the obligation allegedly breached was "not a part of any express or implied contract, " but instead stemmed from "a legal duty [] imposed by law." 716 P.2d at 578. The legal duty at issue related to the circumstances under which an attorney is prohibited from suing a business for whom she had previously provided legal services. Id. at 577-78. In effect, the plaintiff claimed that the attorney defendants had "breach[ed] a duty imposed by law upon the relationship of attorney/client" by their allegedly improper actions. Id.

         Likewise, in Kansas Public Employees Retirement System, the Kansas Supreme Court held that a failure "to provide sound and appropriate legal services" or "failing to properly advise" in relation to investment transactions sounded in tort rather than contract. 936 P.2d at 718-19 (emphases added). In Canaan v. Bartee, that court affirmed a district court judgment that the malpractice claims of a criminal defendant against his court-appointed attorneys and their investigator for his wrongful conviction sounded in tort where "the gravamen of [the] lawsuit [was] that his appointed public defenders and their investigator were negligent in providing services." 72 P.3d 911, 913, 921 (Kan. 2003).

         Additionally, in Jeanes v. Bank of America, N.A.-a case cited by all parties-the Kansas Court of Appeals held that a trust and estate attorney's failure to provide legal advice in estate-planning services that would have saved millions in estate tax liability was not a breach of any specific contractual provision and instead sounded in tort as a failure "to exercise ordinary skill and knowledge in giving legal advice." 191 P.3d 325, 331 (Kan.Ct.App. 2008), aff'd on other grounds, 295 P.3d 1045, 1047, 1053 (Kan. 2013) (per curiam). Earlier, the Kansas Court of Appeals had also held, in Chavez v. Saums, that an attorney's conflicted representation in filing suit against a former client breached a "legal dut[y] imposed by law upon the relationship" between the lawyer and client, rather than any "specific terms of the contract." 571 P.2d 62, 65 (Kan.Ct.App. 1977). The court therefore held that the former client's claims against the attorney arising from the conflicted representation sounded in tort. Id.

         On the other hand, in limited instances, the Kansas courts have classified malpractice actions as sounding in contract. A clear example in this regard is the Kansas Supreme Court's decision in Juhnke v. Hess. There, an attorney was expressly retained to file an appeal and failed to do so, resulting in his client's right to appeal becoming time-barred. See 506 P.2d at 1143. The Supreme Court of Kansas held that this constituted "breach of a specific contract-failure to do that which [the attorney] expressly ...

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