Daniel J. ZIMMERMAN and Sara K. Zimmerman, Appellants,
Richard W. BROWN and Brown, Isern & Carpenter, Appellees.
[Copyrighted Material Omitted]
Syllabus by the Court
1. The standard of review relating to summary judgment is discussed and applied.
2. The common-law defense of in pari delicto prohibits a plaintiff from recovering damages arising from misconduct for which the plaintiff bears equal responsibility. Thus, relief will be denied where the parties are shown to have been in pari delicto or to have acted with the same degree of knowledge as to the illegality of the transaction.
3. The in pari delicto doctrine applies only when the wrong of the plaintiff equals that of the defendant in order to avoid allowing an overwhelmingly offensive act of the defendant to stand merely because the plaintiff's conduct was also wrongful, although slight.
4. For purposes of determining whether the in pari delicto doctrine applies, the existence of a fiduciary relationship between the parties does not automatically render the fiduciary's wrongful actions more blameworthy than the wrongful actions of the beneficiary; instead, a fiduciary relationship is a fact that must be considered along with all of the other facts in comparing the culpability of the parties.
5. If a dispute of material fact exists on summary judgment with respect to the parties' relative appreciation of the wrongfulness of their actions and resolution of this factual dispute bears on applicability of the in pari delicto doctrine to bar the plaintiff from recovering damages for malpractice, it is the role of the jury, not the court, to determine whether a party's actions were wrongful and, if so, whether they were wrongful enough to equal or outweigh the other party's wrongful conduct for purposes of invoking in pari delicto as a defense to recovery.
[49 Kan.App.2d 144] 6. A contract that is illegal or is against public policy is unenforceable.
7. The public policy of a state is the law of that state as found in its constitution, its statutory enactments, and its judicial decisions.
8. For a defendant to properly assert an illegality defense in a tort action, it must prove that the illegal act was the proximate cause of the plaintiff's injury. Proximate cause is that which in natural and continuous sequence, unbroken by an efficient intervening cause, produces the injury, and without which the injury would not have occurred, the injury being the natural and probable consequences of the wrongful act.
9. Natural and probable consequences are those which human foresight can anticipate because they happen so frequently they may be expected to recur. Whether a party has established proximate cause is ordinarily a question of fact.
10. In order to prevail on a legal malpractice claim, a plaintiff is required to prove: (1) the duty of the attorney to exercise ordinary skill and knowledge, (2) a breach of that duty, (3) a causal connection between the breach of duty and the resulting injury, and (4) actual loss or damage.
11. The duty of an attorney to his or her client is grounded in a relationship fiduciary in character, binding the attorney to the highest degree of fidelity and good faith
to his or her client on account of the trust and confidence imposed.
12. The Kansas Rules of Professional Conduct do not create a legal duty upon which a negligence action can be based; instead, the existence of a duty must independently arise from common law. But attorney conduct which violates the Kansas Rules of Professional Conduct may also breach an independent legal duty. In such a case, it is the breach of the independent legal duty that gives rise to a tort cause of action, while the Kansas Rules of Professional Conduct reflect the governing standards by which an attorney is measured.
13. To prove a breach of the duty created by the fiduciary relationship between an attorney and his or her client, a plaintiff must establish that the defendant attorney deviated from the professional standards of conduct applicable to the type of law which the defendant attorney practices. Testimony from an expert in that particular area of law is generally required to prove the standard of conduct by which the [49 Kan.App.2d 145] professional actions of the attorney are measured and whether the attorney deviated from the appropriate standard.
Michael J. Wyatt, of Mann Law Offices, L.L.C., of Hutchinson, for appellants.
Gerald L. Green, of Gilliland & Hayes, P.A., of Hutchinson, for appellees.
Before MALONE, C.J., GREEN and STANDRIDGE, JJ.
Daniel and Sara Zimmerman (the plaintiffs) brought a legal malpractice claim against attorney Richard Brown and Richard's law firm, Brown, Isern & Carpenter (the defendants), related to the sale of the plaintiffs' Quixtar (formerly Amway) business to Richard and his wife. Marlene Brown, Richard's wife, was also originally named as a defendant but was later dismissed from the action. The defendants moved for summary judgment on grounds that the doctrines of in pari delicto and illegality prohibit the plaintiffs from recovering damages against the defendants for legal malpractice. Alternatively, the defendants argued the plaintiffs failed to come forward with sufficient evidence to establish the essential elements of a legal malpractice cause of action. The district court granted summary judgment in favor of the defendants based on the defenses of in pari delicto and illegality. In light of this ruling, the court found it unnecessary to address whether the plaintiffs had come forward with sufficient evidence to establish legal malpractice.
But the record on summary judgment reveals several disputes of material fact that must be resolved by a jury before the court can determine whether the in pari delicto defense applies to prohibit the plaintiffs from recovering damages; thus, the district court erred in holding at the summary judgment stage of the proceedings, as a matter of law, that the doctrine prohibits the plaintiffs from recovering damages against the defendants for legal malpractice. Summary judgment in favor of the defendants based on illegality also was improper because there is insufficient evidence in the record to establish as a matter of law that the damages sustained by Richard's alleged breach of fiduciary duty was a natural and probable consequence of the plaintiffs' decision to sell their Quixtar [49 Kan.App.2d 146] business to Richard and his wife. As to the propriety of summary judgment on the merits of the plaintiffs' underlying claim, we find the plaintiffs have satisfied their burden to come forward with sufficient evidence to establish the essential elements of a legal malpractice cause of action; thus, they are entitled to go forward with their claim.
The plaintiffs lived across the street from their friends of many years, Richard and Marlene Brown. Richard had been the plaintiffs' attorney for over 30 years in a variety of business matters. Both couples, along with Roy and Marcia Westhoff, were Quixtar distributors. Quixtar was a multilevel marketing company. Relevant here, the plaintiffs had built up quite a successful Quixtar business, which in 2006 generated income for the plaintiffs in an amount of $23,290. The parties referred to this income
as " mailbox money" because the sales generating this income were transacted not by the plaintiffs themselves, but by a number of distributors at successively lower levels.
At all times relevant to this lawsuit, Quixtar prohibited its distributors from participating in any other multilevel marketing business while acting as a distributor for Quixtar and required any distributor who sold or terminated a Quixtar business to wait 6 months before entering into another multilevel marketing business. Additionally, former Quixtar distributors were not allowed to solicit their ...