Joseph Barna v. Preston Law Group, P.C.

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
March 27, 2012 Session
JOSEPH BARNA v. PRESTON LAW GROUP, P.C. ET AL.
Appeal from the Circuit Court for Davidson County
No. 07C-580 Joe Binkley, Judge
No. M2011-02016-COA-R3-CV - Filed May 31, 2012
Plaintiff appeals from the summary dismissal of his legal malpractice claim against his
former attorney who represented him during an arbitration of a securities dispute. Finding
that there are no genuine issues of material fact and that Defendants negated an essential
element of Plaintiff’s claim, causation, we affirm the summary dismissal of the action.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed
F RANK G. C LEMENT, J R., J., delivered the opinion of the Court, in which P ATRICIA J.
C OTTRELL, P.J., M.S., and A NDY D. B ENNETT, J., joined.
Phillip L. Davidson, Nashville, Tennessee, for the appellant, Joseph C. Barna.
C. Bennett Harrison, Jr. and J. Cole Dowsley, Jr., Nashville, Tennessee, for the appellees,
Preston Law Group, P.C., and G. Kline Preston, IV.
OPINION
This is the second appeal in this action. Plaintiff, Joseph Barna, filed this legal
malpractice action against Preston Law Group, P.C. and G. Kline Preston, Esq.
(“Defendants”), in February 2007, alleging that the attorney and law firm were negligent in
their representation of him during an arbitration before a panel of the National Association
of Securities Dealers (“NASD”).
In the first appeal, this court held that the summary dismissal of Plaintiff’s legal
malpractice claim was inappropriate because Defendants failed to negate an essential element
of Plaintiff’s claim against Preston Law Group P.C. and G. Kline Preston, specifically, the
elements of causation and damages. See Barna v. Preston Law Group, No. M2008-02560-
COA-R3-CV, 2009 WL 2616038 (Tenn. Ct. App. Aug. 25, 2009). We held that Defendants
failed to shift the burden of production to Plaintiff. In support of their first motion for
summary judgment, Defendants had submitted the affidavit of Defendant, G. Kline Preston.
We found that Mr. Preston’s “conclusory ‘opinions’ regarding Mr. Barna’s case” were
insufficient to negate an essential element of the legal malpractice claim. Barna, 2009 WL
2616038, at *6. The action was remanded to the trial court.1
On remand, Defendants filed a second motion for summary judgment. In support of
the motion, Defendants submitted the affidavit of Ames Davis, a Nashville attorney with a
wealth of securities experience, as an expert witness to negate the essential element of
causation in Plaintiff’s legal malpractice claim. In his affidavit, Mr. Davis provided what had
been lacking in support of Defendants’ previous motion for summary judgment, a thorough
statement of pertinent facts that provided a basis for and supported Mr. Davis’s expert
opinion that Defendants complied with the applicable standard of care, that no inaction or
action of Defendants caused Plaintiff any damages, and further that no attorney representing
Plaintiff would have won the underlying arbitration. In response to Mr. Davis’s affidavit,
Plaintiff submitted a supplemental affidavit of his expert witness, Michael Radford, and also
filed a response to Defendants’ Statement of Undisputed Facts.
On August 23, 2011, the trial court entered an order granting Defendants’ motion for
summary judgment finding that the affidavit of Ames Davis was sufficient to negate the
essential element of causation and that Plaintiff had failed to rebut that evidence showing an
existence of a dispute of material fact as to that element. Plaintiff filed a timely appeal.
A NALYSIS
I.
On appeal, Plaintiff contends that the trial court erred in summarily dismissing his
claim because there are genuine issues of material fact and therefore summary judgment was
inappropriate. Summary judgment is appropriate when a party establishes that there is no
genuine issue as to any material fact and that a judgment may be rendered as a matter of law.
Tenn. R. Civ. P. 56.04; Stovall v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003). It is
appropriate in virtually all civil cases that can be resolved on the basis of legal issues alone.
Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn. 1993); Pendleton v. Mills, 73 S.W.3d 115, 121
(Tenn. Ct. App. 2001). It is not appropriate when genuine disputes regarding material facts
exist. See Tenn. R. Civ. P. 56.04. The party seeking summary judgment bears the burden of
demonstrating that no genuine disputes of material fact exist and that the party is entitled to
1
A thorough summary of the pertinent facts is available in the opinion from the first appeal, Barna
v. Preston Law Group, No. M2008-02560-COA-R3-CV, 2009 WL 2616038 (Tenn. Ct. App. Aug. 25, 2009).
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judgment as a matter of law. Godfrey v. Ruiz, 90 S.W.3d 692, 695 (Tenn. 2002). To be
entitled to summary judgment, the moving party must affirmatively negate an essential
element of the nonmoving party’s claim or show that the moving party cannot prove an
essential element of the claim at trial. Martin v. Norfolk S. Ry. Co., 271 S.W.3d 76, 83 (Tenn.
2008).
Summary judgments do not enjoy a presumption of correctness on appeal. BellSouth
Adver. & Publ’g Co. v. Johnson, 100 S.W.3d 202, 205 (Tenn. 2003). Because the resolution
of a motion for summary judgment is a matter of law, we review the trial court's judgment
de novo with no presumption of correctness. Martin v. Norfolk Southern Ry. Co., 271
S.W.3d 76, 84 (Tenn. 2008) The appellate court makes a fresh determination that the
requirements of Tenn. R. Civ. P. 56 have been satisfied. Hunter v. Brown, 955 S.W.2d 49,
50-51 (Tenn. 1977). As does the trial court, the appellate court considers the evidence in the
light most favorable to the nonmoving party and resolve all inferences in that party’s favor.
Martin, 271 S.W.3d at 84; Stovall v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003); Godfrey v.
Ruiz, 90 S.W.3d 692, 695 (Tenn. 2002). When reviewing the evidence, the appellate court
first determines whether factual disputes exist. If a factual dispute exists, the court then
determines whether the fact is material to the claim or defense upon which the summary
judgment is predicated and whether the disputed fact creates a genuine issue for trial. Byrd
v. Hall, 847 S.W.2d 208, 215 (Tenn.1993).
A party is entitled to summary judgment only if the “pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits . . . show that there is
no genuine issue as to any material fact and that the moving party is entitled to a judgment
as a matter of law.” Tenn. R. Civ. P. 56.04. A properly supported motion for summary
judgment must show that there are no genuine issues of material fact and that the moving
party is entitled to judgment as a matter of law. Staples v. CBL & Assocs., Inc., 15 S.W.3d
83, 88 (Tenn. 2000); McCarley v. W. Quality Food Serv., 960 S.W.2d 585, 588 (Tenn. 1998).
If the moving party makes a properly supported motion, then the nonmoving party is required
to establish the existence of the essential elements of the claim. McCarley, 960 S.W.2d at
588; Byrd, 847 S.W.2d at 215. If, however, the moving party does not properly support the
motion, then the nonmoving party’s burden to produce either supporting affidavits or
discovery is relieved and the motion must fail. McCarley, 960 S.W.2d at 588; Martin, 271
S.W.3d at 83.
To make this showing and shift the burden of production, a moving party may: 1)
affirmatively negate an essential element of the nonmoving party’s claim; or 2) show that the
nonmoving party cannot prove an essential element of the claim at trial. Martin, 271 S.W.3d
at 83; Hannan v. Alltel Publ’g Co., 270 S.W.3d 1, 5 (Tenn. 2008); Byrd, 847 S.W.2d at 215
n.5. Whichever approach the moving party takes, both require more than assertions of the
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nonmoving party’s lack of evidence. Martin, 271 S.W.3d at 83-84. In addition, the moving
party must present evidence that more than “raises doubts” about the ability of the
nonmoving party to prove its claim at trial. Id. at 84. The moving party must produce
evidence or refer to previously submitted evidence. Id.; accord Hannan, 270 S.W.3d at 5.
Thus, to negate an essential element of a claim, a moving party must refer to evidence that
tends to disprove an essential element of the claim made by the nonmoving party. Martin,
271 S.W.3d at 84.
Therefore, as the moving party, Defendants had the burden to negate an essential
element of Plaintiff’s claim of legal malpractice or establish that Plaintiff cannot prove an
essential element of the claim at trial. See Martin, 271 S.W.3d at 83 (citing Hannan, 270
S.W.3d at 5; McCarley, 960 S.W.2d at 588; Byrd, 847 S.W.2d at 215 n.5). Accordingly,
Defendants were required to shift the burden of production to Plaintiff by either affirmatively
negating an essential element of Plaintiff’s claim or showing that Plaintiff cannot prove an
essential element of his claim at trial. Martin, 271 S.W.3d at 83; Hannan, 270 S.W.3d at 8-9;
McCarley, 960 S.W.2d at 588.
II.
A prima facie case of legal malpractice requires a showing of the following elements:
1) the defendant attorney owed a duty to the plaintiff; 2) a breach of that duty; 3) that
plaintiff suffered damages as a result of the breach; 4) that defendant attorney’s breach was
the factual cause of those damages; and 5) that defendant attorney’s breach was the
proximate, or legal cause of the plaintiff’s damages. Barna, 2009 WL 2616038, at *4 (citing
Gibson v. Trant, 58 S.W.3d 103, 108 (Tenn. 2001); Shearon v. Seaman, 198 S.W.3d 209, 214
(Tenn. Ct. App. 2005)). Further, in order to prove damages in a legal malpractice action, the
plaintiff must prove that he would have obtained relief in the underlying lawsuit, but for the
attorney’s malpractice. Shearon, 198 S.W.3d at 218 (citing Gibson, 58 S.W.3d at 108).
In his affidavit, Mr. Davis set forth facts to establish that he was experienced in
securities litigation and arbitration. Mr. Davis then identified the applicable standard of care
and set forth facts to support his conclusion that Defendants complied with the applicable
standard of care. He further stated that if Defendants had departed from the applicable
standard of care no departure from such standard would have caused damages to Plaintiff.
Mr. Davis’s affidavit provides a detailed analysis of the actions taken by Defendants
in their representation of Plaintiff leading to his ultimate conclusion that Defendants
complied with the applicable standard of care. Mr. Davis stated that:
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[T]he evidence presented by [Kline Preston] and admitted during the
arbitration proceedings appears to me to have been sufficient to establish a
prima facie case that representatives of Firstrade, acting within the scope of
their employment, advised Plaintiff that he could transfer shares out of his IRA
into his margin account and back again whenever the value of the shares in his
margin account increased sufficiently so that the shares were no longer
required as collateral.
Mr. Davis also noted that Mr. Preston successfully established in cross-examination facts that
“might arguably have established that Firstrade’s representatives gave tax advice for which
they were not trained, and might have supported a ‘garden variety’ claim for negligent
misrepresentation.” Mr. Davis reasoned that despite this, Plaintiff’s claim was undermined,
not by the actions or inactions of Defendants, but by the evidence presented by Firstrade,
which established a number of facts that Plaintiff had failed to disclose to Defendants,
including a separate lawsuit by Plaintiff against another broker and actions by Plaintiff that
were “suggestive of an illegal check-kiting scheme.” While in our previous opinion in this
matter, we determined that Mr. Preston’s factual statements were conclusory and failed to
provide any factual statements to prove that [Plaintiff] would not have prevailed in the
arbitration regardless of any negligence on Mr. Preston’s part, Mr. Davis’s affidavit provides
factual statements to support his conclusion that “the arbitration prosecuted by Mr. Preston
on behalf of Mr. Barna was not winnable by any attorney.” Further, we note that Mr. Davis’s
affidavit also addressed the failure of Defendants to present an expert witness. In the prior
appeal of this action, we determined that the mere statement by Mr. Preston in his affidavit
that he was unable to find an expert witness for the arbitration proceedings, without more,
did not negate an essential element of Plaintiff’s claim. Id. at *6. However, Mr. Davis opined
that in his opinion the failure to call an expert witness was not a departure from the
applicable standard of professional care based upon the facts in Plaintiff’s securities claim.
We agree with the trial court that the affidavit of Mr. Davis was sufficient to shift the
burden of production to Plaintiff by affirmatively negating the essential element of causation
in Plaintiff’s legal malpractice claim. In fact, Plaintiff agrees that the affidavit shifts the
burden noting in his brief that this appeal “essentially rises and falls” on the affidavit of
Plaintiff’s expert witness, Michael Radford. Plaintiff argues however that the affidavit and
supplemental affidavit of his expert witness, Michael Radford, is sufficient to create a
genuine issue of material fact on the issue of causation thereby making summary judgment
inappropriate. We disagree. In his brief, Plaintiff points to the following paragraph in Mr.
Radford’s affidavit in order to support his argument that there is a dispute of material fact:
If Firstrade delayed selling Mr. Barna’s securities to comply with margin
requirements and the market value of the securities decreased between the time
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they should have been sold and the time they were actually sold, the difference
in value on those two dates establishes the extent to which Mr. Barna was
damaged by that conduct.
Plaintiff argues this statement by Mr. Radford establishes an issue for the jury to determine
whether or not Defendants provided sufficient proof on this issue to the arbitration panel. We
do not believe this sole statement by Mr. Radford is sufficient to overcome the factual
statements, analysis, and conclusions of Mr. Davis that Plaintiff would have been
unsuccessful on his arbitration claim based upon no action or inaction of the Defendants. We
agree with Defendants’ assertion that Mr. Radford’s affidavit is insufficient to create a
dispute of fact on the issue of whether Plaintiff had a meritorious case and whether he could
have succeeded in the underlying arbitration.
For the reasons stated above, we affirm the summary dismissal of Plaintiff’s claim for
legal malpractice finding that Defendants are entitled to summary judgment as a matter of
law because they affirmatively negated the essential element of causation in Plaintiff’s legal
malpractice claim.
In Conclusion
The judgment of the trial court is affirmed, and this matter is remanded with costs of
appeal assessed against the Appellant, Joseph Barna.
______________________________
FRANK G. CLEMENT, JR., JUDGE
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