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Orr v. Husch Blackwell LLP

United States District Court, D. Kansas

September 5, 2017

ROBERT D. ORR, Plaintiff,
v.
HUSCH BLACKWELL LLP, DOUGLAS J. SCHMIDT, and JOHN J. CRUCIANI, Defendants.

          MEMORANDUM AND ORDER

          CARLOS MURGUIA United States District Judge.

         Plaintiff Robert D. Orr brings this action pro se, claiming that defendants Husch Backwell, LLP, Douglas J Schmidt, and John J. Cruciani (collectively “Husch”) caused plaintiff significant damages in conjunction with the financial collapse of Brooke Corporation (“Brooke Corp.”) and Brooke Capital Corporation (“Brooke Capital”), (collectively “Brooke”), in 2008. Plaintiff was an officer and director of Brooke Corp. and Brooke Capital, which were publicly-traded companies with large investments in franchise loans. The case is now before the court on defendants' motion to dismiss (Doc. 8). After plaintiff amended his complaint, the parties filed supplemental briefing to address the new claims. Defendants ask the court to dismiss plaintiff's complaint on several independent bases: (1) lack of standing; (2) res judicata; (3) judicial estoppel; (4) statute of limitations; and (5) failure to state a claim. For the following reasons, the court grants defendants' motion.

         I. Factual Background

         Condensing the background of this case into a succinct overview is not easy. The relationship between the parties is long and storied. The court attempts to summarize it in the following timeline:

September 2008: In a lawsuit in this court (the “Special Master Suit”), Judge Lungstrum appointed a special master, Albert Riederer (“Special Master”), who took over Brooke's decision-making. The Special Master directed the companies and certain affiliates to file for Chapter 11 bankruptcy. Mr. Riederer then became the Chapter 11 trustee (“Chapter 11 Trustee”) for the Brooke bankruptcy estate. Husch was counsel for the Special Master, and then for the Chapter 11 Trustee.
October 28, 2008: The companies filed for bankruptcy. After that date, Husch did not perform any legal work for the Special Master.
December 1, 2008: Husch filed a fee application, requesting approval of its fees and expenses for representation of the Special Master. Plaintiff did not object to the fees.
December 16, 2008: Plaintiff filed for personal bankruptcy.
December 30, 2008: The district court approved a portion of Husch's fees and expenses.
January 7, 2009: Plaintiff filed his personal bankruptcy schedules. He did not list Husch as an entity against whom he held possible claims. He did, however, list the Special Master.
January 22, 2009: The district court approved the remainder of Husch's fees. Plaintiff did not appeal that order.
February 13, 2009: Plaintiff amended his personal bankruptcy schedules to add individuals and entities against whom he held possible claims. Again, plaintiff did not list Husch. He did, however, list “Other claims as yet unknown, against others growing out of damage to reputation, etc. growing out of all corporate disputes.”
June 29, 2009: The Chapter 11 bankruptcy was converted to a Chapter 7 bankruptcy, and the court terminated the Special Master's appointment.
October 13, 2009: Husch filed an application for fees incurred representing the Chapter 11 Trustee during the Chapter 11 proceedings. Plaintiff did not object.
November 12, 2009: The bankruptcy court approved Husch's fees for the Chapter 11 proceedings, and plaintiff did not object.
April 12, 2010: Plaintiff was discharged from his personal bankruptcy.
August 11, 2010: Plaintiff sued the Special Master in this court, before the undersigned judge. Plaintiff claimed that the Special Master's conduct caused Brooke to collapse, damaging plaintiff.
October 26, 2010: The Chapter 7 Trustee filed an adversary proceeding in the bankruptcy court against Brooke Holdings, Inc. and members of plaintiff s family to recover preference payments and fraudulent transfers (the “BHI Suit”).
December 21, 2010: The undersigned judge held that plaintiff lacked standing to bring claims against the Special Master of breach of fiduciary duty, intentional misconduct, negligence, and unjust enrichment, stating, “It is only because of the corporation's harm that plaintiff suffered harm. In other words, plaintiffs injury is indirect. The corporation is the party with the cause of action, not plaintiff individually.”
July 3, 2012: The undersigned judge granted summary judgment against plaintiff on the remaining claims, holding that the Special Master's failure to report plaintiff's protests to the district court was not misconduct. Plaintiff did not appeal this ruling.
July 10, 2014: Judgment was entered against BHI for $18, 244, 780.77 in the BHI suit.
• October 12, 2016: Plaintiff filed the instant case against Husch. Plaintiff's claims arise out of Husch's representation of the Special Master and the Chapter 11 Trustee. Generally, plaintiff claims that Husch caused the collapse and bankruptcy of Brooke, and mismanaged the bankruptcy estate once Brooke was in bankruptcy. The seventeen counts contained in ...

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