Laden & Pearson, P.C. v. Steven McFadden ( 2021 )

IN THE COURT OF APPEALS OF IOWA
No. 20-0093
Filed June 16, 2021
LADEN & PEARSON, P.C.,
Plaintiff-Appellee,
vs.
STEVEN McFADDEN,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Coleman J. McAllister,
Judge.
Steven McFadden appeals from the district court’s adverse summary
judgment rulings on a contract claim and counterclaim. AFFIRMED.
Peter C. Riley and Patrick J. Riley of Tom Riley Law Firm, P.L.C., Cedar
Rapids, for appellant.
Kevin J. Driscoll and Abigail L. Wallace of Finley Law Firm, PC, Des Moines,
for appellee.
Considered by Bower, C.J., and Vaitheswaran and Greer, JJ.
2
BOWER, Chief Judge.
Steven McFadden appeals two rulings granting Laden & Pearson, P.C.’s
summary judgment motion on its contract claim and dismissing McFadden’s
counterclaim of legal malpractice. We affirm both rulings.
I. Background Facts & Proceedings
The law firm Laden & Pearson, P.C. (L&P) represented McFadden in a
marriage dissolution action from 2014-2017. On May 22, 2017, McFadden and his
spouse filed a dissolution stipulation, which the court approved the following day.
L&P hired a third party to help draft the stipulation. According to McFadden,
L&P advised McFadden the stipulation allowed him to be reimbursed for taxes he
had paid on his ex-spouse’s behalf. Consistent with this understanding, after the
decree was issued L&P disbursed an amount from McFadden’s client trust account
to cover the ex-spouse’s half of the 2015 tax liability.
On October 23, McFadden’s ex-spouse filed an application for rule to show
cause and a petition for declaratory judgment, alleging McFadden “willfully and
wantonly violated” the decree in several ways, including directing three wrongful
disbursements from the L&P trust account—among them the 2015 tax
disbursement.
McFadden retained new counsel for the contempt and declaratory judgment
hearing. The court heard conflicting testimony from McFadden and his ex-spouse
on whether the liability was to be split evenly or be McFadden’s sole responsibility.1
1The court found the ex-spouse’s explanation credible and that it comported with
a paragraph and exhibit from the decree making McFadden responsible for the
entire tax liability.
3
The court described the stipulation provisions on the tax liability as, “[i]f not
expressly contradictory, . . . at least poorly crafted and hopelessly vague.” The
court further concluded “assignment of responsibility for 2015 state taxes is vague,
if not thoroughly contradictory.” Under the court’s interpretation of the stipulation,
McFadden was not entitled to reimbursement. McFadden did not appeal.
On June 18, 2018, L&P filed a petition against McFadden for the recovery
of fees accrued between May 16 and November 7, 2017. On October 5, 2018,
McFadden answered the petition, asserting the outstanding fees were “a result of
[L&P]’s attempt to correct their negligence” and included a counterclaim for legal
malpractice. Both the asserted negligence claim and malpractice counterclaim
were based on the drafting and review of the tax liability stipulation. L&P filed an
answer to McFadden’s counterclaim on October 22.
On April 22, 2019, McFadden designated an expert witness to support his
legal malpractice counterclaim. No expert report was included with the
designation. On August 8, L&P filed a motion for summary judgment on
McFadden’s counterclaim, which McFadden resisted. In its reply to McFadden’s
resistance, L&P asserted McFadden’s expert disclosure was not timely and stated
no expert report had been provided by McFadden. See Iowa R. Civ. P. 1.500(2)(b)
(requiring a written report be provided with the disclosure of an expert witness).
On September 12, McFadden provided a “short, conclusory” expert report to L&P.
The summary judgment hearing was held on September 13.
On September 20, the court dismissed McFadden’s legal malpractice
counterclaim based on the untimely disclosure and report of his necessary expert
witness. McFadden filed a motion to reconsider, enlarge, or amend.
4
L&P filed a second motion for summary judgment, this time for their breach-
of-contract claim. On December 9, the court enlarged its September 20 ruling to
address the other grounds raised by L&P in its original motion and granted L&P’s
second summary judgment motion for its claims against McFadden.
McFadden appeals both summary judgment rulings.
II. Standard of Review
“We review the district court’s summary judgment ruling to correct errors at
law.” Vossoughi v. Polaschek, 859 N.W.2d 643, 649 (Iowa 2015). “Summary
judgment is appropriate when the moving party demonstrates that no genuine
issue of material fact exists and that the movant is entitled to judgment as a matter
of law.” Id.III. Analysis
McFadden raises three issues on appeal: (1) his counterclaim and
affirmative defense were not barred by issue preclusion; (2) his designation of a
professional expert witness and delayed expert report complied with Iowa Code
section 668.11 (2018); and (3) he sufficiently pled and supported his affirmative
defense to defeat summary judgment. We find the second and third issues are
determinative and decline to address the issue preclusion claim.
A. Malpractice Counterclaim. “In a claim for legal malpractice, ‘unless the
plaintiff’s claim is based on standards of care and professionalism understood and
expected by laypersons, the plaintiff will have to retain an expert to go forward.’”
Stender v. Blessum, 897 N.W.2d 491, 505 (Iowa 2017) (quoting Barker v.
Capotosto, 875 N.W.2d 157, 167 (Iowa 2016)). The expert witness testifies as to
the standard of care required “of a similarly situated ordinary lawyer.” Id. Summary
5
judgment may be appropriate when expert testimony is required to establish
negligence but not available, because then there is no genuine issue of fact that
can be proved. Kubik v. Burk, 540 N.W.2d 60, 65 (Iowa Ct. App. 1995).
The district court found McFadden’s failure to comply with Iowa Code
section 668.11 was dispositive in his malpractice claim. Iowa Code section 668.11
governs expert witness disclosure in a professional liability case.
1. A party in a professional liability case brought against a
licensed professional pursuant to this chapter who intends to call an
expert witness of their own selection, shall certify to the court and all
other parties the expert’s name, qualifications and the purpose for
calling the expert within the following time period:
a. The plaintiff within one hundred eighty days of the
defendant’s answer unless the court for good cause not ex parte
extends the time of disclosure.
b. The defendant within ninety days of plaintiff’s certification.
2. If a party fails to disclose an expert pursuant to subsection 1
or does not make the expert available for discovery, the expert shall
be prohibited from testifying in the action unless leave for the expert’s
testimony is given by the court for good cause shown.
Iowa Code § 668.11.2 Notably, while the good cause determination is within the
court’s discretion, if the failure to comply with subsection 1 has not been presented,
the court does not have discretion and must prohibit the expert from testifying. See
id. § 668.11(2).
The L&P answer to McFadden’s malpractice counterclaim was filed
October 22, 2018. The statutory time frame of 180 days ended on April 20, 2019,
2 “Good cause under section 668.11 must be ‘more than an excuse, a plea,
apology, extenuation, or sum justification for the resulting effect.’” Thomas v.
Fellows, 456 N.W.2d 170, 172 (Iowa 1990) (citation omitted). The failure to
disclose in a timely manner should not be due to “negligence or want of ordinary
care or attention, or . . . carelessness or inattention.” Donovan v. State, 445
N.W.2d 763, 765–66 (Iowa 1989) (citation omitted) (considering a definition of
“good cause” for purposes of section 668.11).
6
a Saturday. On April 22, McFadden filed his expert designation. McFadden did
not file a motion to extend his time for good cause to designate his expert witness
or provide a good-cause reason for the delay under section 668.11.
Instead, McFadden claims his expert designation, although not within 180
days, was timely due to an extension allowed for weekend deadlines under Iowa
Code section 4.1(34).3
Time—legal holidays. In computing time, the first day shall
be excluded and the last included, unless the last falls on Sunday, in
which case the time prescribed shall be extended so as to include
the whole of the following Monday. However, when by the provisions
of a statute or rule prescribed under authority of a statute, the last
day for the commencement of an action or proceedings, the filing of
a pleading or motion in a pending action or proceedings, or the
perfecting or filing of an appeal from the decision or award of a court,
board, commission, or official falls on a Saturday, a Sunday, . . .
[legal holidays], and the following Monday when any of the foregoing
named legal holidays fall on a Sunday, . . . the time shall be extended
to include the next day which the office of the clerk of the court or . . .
is open to receive the filing of a commencement of an action,
pleading or a motion in a pending action or proceeding, or the
perfecting or filing of an appeal.
Iowa Code § 4.1(34).
The statute is specific, as is its plain language. See Root v. Toney, 841
N.W.2d 83, 88–89 (Iowa 2013) (invalidating a court rule that contradicted the
section 4.1(34) extension). The deadline for filing “the commencement of an
action,” “a pleading or motion in a pending action,” or “an appeal” is extended if it
falls on a Saturday, Sunday, holiday, or if the clerk of court’s office is closed. Iowa
3 McFadden claims, at the time of the first summary judgment hearing, L&P did not
assert the expert designation was untimely. During the summary judgment hearing
on September 13, L&P did tell the court the expert was timely designated but the
report was untimely. However, L&P argued the issue a week before the hearing
in its brief in reply to McFadden’s resistance, clearly indicating the 180-day time
frame expired on April 20.
7
Code § 4.1(34). Any other computed deadlines are extended only if they land on
a Sunday. See id. If the legislature had intended to extend time for all filings due
on either weekend day, it would have done so.
The disclosure of an expert under section 668.11 is not the commencement
of an action or appeal, nor does it qualify as a pleading or motion. See Iowa R.
Civ. P. 1.401 (listing allowable pleadings), 1.431(1) (defining motion).
Consequently, the disclosure deadline is computed under the first sentence of
section 4.1(34) and time is only extended if the last day falls on a Sunday. We
agree with the district court McFadden’s section 668.11 expert disclosure was not
timely.
The district court further considered whether good cause existed to excuse
McFadden from the statutory deadline, ruling,
Simply put, in this case there has been no reason proffered
by McFadden to justify a finding of good cause. The expert
designation was not only untimely, but this untimeliness further
extended the additional [five] months it took McFadden to present
[L&P] with a written report from the late designated expert. [4] The
court concludes good cause does not exist in this case to excuse
McFadden’s noncompliance with Iowa Code section 668.11.
McFadden did not file a motion for extension of time for good cause. On
appeal, he does not make a good cause argument, instead claiming the court
made an error of law in its interpretation of section 668.11 and the computation of
time under section 4.1(34).
4 Iowa Rule of Civil Procedure 1.500(2)(b) requires an expert’s written report
accompany the expert witness disclosure. While this can be modified by
agreement of the parties, the trial scheduling order in this case also provided the
necessary disclosures would be provided at the same time as the expert was
certified.
8
The district court correctly determined McFadden’s failure to comply with
the expert disclosure deadline was without good cause under Iowa Code section
668.11.5 Because expert testimony is necessary to establish negligence in this
case, the lack of such testimony makes summary judgment appropriate. See
Kubik, 540 N.W.2d at 65.
We affirm the district court’s order granting L&P summary judgment on
McFadden’s legal malpractice counterclaim.
B. Affirmative Defense. The district court considered the elements of
L&P’s breach-of-contract claim and held every element was supported by a
preponderance of the evidence.6 McFadden does not challenge this ruling on
appeal. McFadden claims he properly pled and offered sufficient evidence to
support an affirmative defense and was not estopped from bringing a defense of
professional negligence. L&P counters the defense McFadden asserts is not a
defense to a breach-of-contract claim, he cannot establish professional
negligence, and McFadden has provided no credible evidence to prove his
defense.
5 Upon McFadden’s motion to reconsider, the court further noted McFadden’s
expert disclosure timing violated the civil procedure rule and trial scheduling order
requiring a written report accompany the expert witness designation. See Iowa R.
Civ. P. 1.500(2)(b). McFadden did not substantially justify or show as harmless
the five-month delay between expert disclosure and providing expert’s report and,
therefore, was “not allowed to use that information or witness to supply evidence
on a motion, at a hearing, or at a trial.” See Iowa R. Civ. P. 1.517(3).
6 To prove a breach of contract, L&P had to show (1) the existence of a contract,
(2) the terms and conditions of the contract, (3) L&P performed all the terms and
conditions required under the contract, (4) McFadden breached the contract, and
(5) L&P suffered damages as a result of McFadden’s breach. See Royal Indem.
Co. v. Factory Mut. Ins. Co., 786 N.W.2d 839, 846 (Iowa 2010).
9
An affirmative defense is “[a] defendant’s assertion of facts and arguments
that, if true, will defeat the plaintiff’s or prosecution’s claim, even if all the
allegations in the complaint are true.” Affirmative defense, Black’s Law Dictionary
(11th ed. 2019). It “rest[s] on facts not necessary to support plaintiff’s case.” Bond
v. Cedar Rapids Television Co., 518 N.W.2d 352, 355 (Iowa 1994) (citation
omitted). The party pleading an affirmative defense bears the burden of proof.
See Sponsler v. Clarke Elec. Coop., Inc., 329 N.W.2d 663, 665 (Iowa 1983). In
resisting a supported motion for summary judgment, “an adverse party may not
rest upon the mere allegations or denials in the pleadings, but the response, by
affidavits or as otherwise provided in this rule, must set forth specific facts showing
that there is a genuine issue for trial.” Iowa R. Civ. P. 1.981(5). “[M]ere denials of
specific paragraphs in plaintiffs’ petition are insufficient to raise affirmative
defenses.” Bond, 518 N.W.2d at 355.
L&P’s petition asserted, “[McFadden] failed to pay for the services rendered
by [L&P]. After deducting all credits to which [McFadden] is entitled there remains
a balance due of $19,143.95.” McFadden answered that paragraph as follows:
Paragraph 5 of [L&P]’s petition is denied. [McFadden] has
sufficiently paid his bill for services rendered by [L&P]. In its
representation of [McFadden], [L&P]’s negligence caused additional
work to be done in the case due to an ambiguous provision in the
decree. The increased bill claimed to be owed is a result of [L&P]’s
attempts to correct their negligence. [McFadden] does not have a
legal duty pursuant to the fee agreement to pay for [L&P]’s attempts
to correct its own negligence.
McFadden claims this answer is his affirmative defense. There are several
assertions within this answer McFadden had to support: (1) L&P was negligent,
10
(2) additional work was required due to the tax provision, and (3) the outstanding
bill was for work related to the tax provision.
McFadden submitted no exhibits or affidavits with his resistance. See Iowa
R. Civ. P. 1.981(3) (“If affidavits supporting the resistance are filed, they must be
filed with the resistance.”). Examining McFadden’s statement of disputed facts,
including his affidavit he cites from the first summary judgment motion, we find no
factual allegations establishing any of L&P’s unpaid bill was related to the
provision, much less attributing the entire amount to addressing the provision.7
The district court found McFadden failed to show any disputed facts
precluded L&P’s breach-of-contract claim. We agree McFadden failed to allege,
much less establish, sufficient facts to support his purported defense. Because
L&P has shown it is entitled to judgment for breach-of-contract, we affirm.
AFFIRMED.
7 McFadden makes no effort to identify individual parts of the outstanding invoice
that might be attributed to the claimed negligence. The time span included in the
outstanding invoice includes the week immediately before the filing of the
stipulation and dissolution decree, the subsequent asset distribution, and the time
period in which the other issues arose in leading to the contempt action—all of
which detracts from McFadden’s claim that “The increased bill . . . is a result of
[L&P]’s attempts to correct their negligence.” Moreover, any claim for money paid
to another attorney in regards to the stipulation would have been part of the
dismissed counterclaim.