The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge
MEMORANDUM OPINION GRANTING THE DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
This matter is before the court on the defendant's motion for summary judgment. The plaintiffs in this case are two female farmers who hired the defendant, attorney Phillip Fraas, to represent them in a civil rights action against the United States Department of Agriculture ("USDA"). After settlement negotiations with the USDA ultimately failed, the plaintiffs commenced this action against Fraas for legal malpractice and breach of fiduciary duty, claiming that the defendant failed to exercise reasonable skill, care and diligence while representing them in their civil rights action. Because the defendant has demonstrated that there is no genuine dispute of material fact and that he is entitled to judgment as a matter of law, the court grants the defendant's motion.
II. FACTUAL & PROCEDURAL BACKGROUND
The plaintiffs, A. Margaret and Juanita Carranza, are female farmers who reside in Richland County, Montana. Compl. ¶ 3. In January 1998, they filed a lawsuit against the USDA, alleging that the USDA's Farm Service Agency ("FSA") had exhibited a pattern of gender discrimination in its loan practices. Pls.' Opp'n to Def.'s 2d Renewed Mot. for Summ. J. ("Pls.' Opp'n") at 2; Def.'s Stmt. of Material Facts not in Dispute ("Def.'s Stmt.") ¶ 1. The plaintiffs retained the defendant to legally represent them in their suit. Def.'s Stmt. of Material Facts not in Dispute ("Def.'s Stmt.") ¶ 1. At the same time, the plaintiffs owed a substantial debt to the FSA. Id. ¶ 2.
In December 1998, the Director of the USDA's Office of Civil Rights ("OCR"), Ms. Rosalind Gray, extended a settlement offer ("1998 Offer") to the plaintiffs that would resolve their lawsuit. Def.'s 2d Renewed Mot. for Summ. J. ("Def.'s Mot."), Ex. 4. The 1998 Offer would have forgiven the plaintiffs' outstanding debt to the FSA (then valued at $546,915.84), offered $98,000 in compensatory damages and allowed the plaintiffs to participate in future USDA programs. Id. The plaintiffs deemed the offer to be insufficient. Id. The plaintiffs therefore responded to Ms. Gray in February 1999 with a counteroffer that sought significantly higher compensatory damages.*fn1 Def.'s Mot., Ex. 5.
By January 2001, the Carranzas' outstanding debt to the USDA had been converted into a substantial money judgment against them that was owed to the U.S. Attorney's Office for the District of Montana ("USAO Montana"). Def.'s Mot., Ex. 9. Including accumulated interest, the value of the judgment neared $700,000.*fn2 See Def.'s Mot., Ex. 9; Pls.' Opp'n, Ex. 22. This conversion of the debt to a judgment significantly altered the settlement options that the OCR was willing or able to consider. See id.; Def.'s Mot. Ex. 9. Previously, the OCR could have simply written off the plaintiffs' debt to the USDA and paid compensatory damages, as it had offered to do in 1998. Def.'s Mot. Ex. 9. Once the debt had been converted to a money judgment, however, the OCR was faced with sticker shock: it would have been forced to write a significantly larger check (by a margin of $700,000) in order to cover both compensatory damages and the value of the judgment. Id.
Although the OCR was apparently receptive to this idea, the USDA's Office of General Counsel ("OGC"), whose approval was required in order to settle, was not. Id. The defendant's handwritten notes from a January 9, 2001, phone conversation with Ms. Gray allude to this fact: "[Gray] wanted to offer 1.2M -- told she only has $300k." Pls.' Opp'n Ex. 22. The OGC balked at taking this approach because it would have resulted in an unprecedented payout from the informal claims process. See id.
Caught between the USDA and the USAO Montana, on January 9, 2001, the defendant asked Senator Baucus's office to help negotiate a compromise with the USAO Montana and the USDA. Id. The defendant hoped to reach a deal before the Bush administration assumed control later that month, but the talks were unsuccessful. Id.
On January 18, 2001, Ms. Gray also sent a letter to the parties that
confirmed that the OCR was unable to make an acceptable offer to the
plaintiffs and offered them advice regarding possible next steps.
Pls.' Opp'n, Ex. 24. On January 23, 2001, the defendant sent a
memorandum to the Carranzas' congressional representatives,*fn3
describing how the settlement talks had come to an impasse:
"those efforts did not pan out in the seven days left in Gray's
tenure, so a settlement offer was not made." Def.'s Mot., Ex. 11. In
the same memorandum, the defendant alluded to an offer "drawn up (but
not actually made) by Gray" that might have proven workable had it
been possible to dispose of the USAO Montana's judgment against the
plaintiffs. Def.'s Mot., Ex. 11. Ultimately, as the defendant
indicates, the size of the judgment inhibited any progress and
eventually stymied any deal. Id.
The defendant subsequently indicated that he was making efforts to resume settlement negotiations with the "new folks at OCR" (that is to say, OCR employees under the leadership of the newly elected Bush administration). Id. At the plaintiffs' behest, the defendant sent a letter in February 2001 to Scot Brown, an Agricultural Loan Officer at the McCone County Federal Credit Union in Montana, advising him of the current status of the plaintiffs' claims. Def.'s Mot., Ex. 14. This letter reiterates that, while the defendant had been continuing negotiations as the OCR had transitioned from the Clinton to the Bush Administration, no offer had been made. Id.
Another piece of correspondence dated March 2001 indicates that the talks fell short. A series of letters between Keith Luse, Staff Director for the Senate Committee on Agriculture, and the parties explain that while Ms. Gray had hoped to make the Carranzas an offer, the value of the judgment against the Carranzas would have eclipsed any offer she was authorized to make. Pls.' Opp'n, Ex. 27. Accordingly, the March 2001 letter explained that the defendant had informed Ms. Gray that any such offer would be unacceptable to his clients (the plaintiffs), and that she therefore need not bother formally putting such an offer on the table. Id.
In January 2002, plaintiff Juanita Carranza traveled to Washington, D.C. to testify at trial for Sharon Mavity, an individual who had levied discrimination claims against the USDA that were similar to the claim brought by the plaintiffs. Pls.' Opp'n, Ex. 1 ("Carranza Aff.") ¶ 7. At one point during the proceedings, plaintiff Juanita Carranza, Ms. Gray, Mr. Garsjo and Betty Pucket, another witness, were placed together in a witness room.*fn4 Id. ¶ 8; Id., Ex. 30 ("Garsjo Aff.") ¶ 5; Def.'s Mot., Ex. 15 ("Gray Aff.") ¶¶ 11-15. During this time, the plaintiffs allege that Ms. Gray, who had since left her position as Director of the OCR at the USDA, revealed that, in addition to the 1998 Offer, she had extended a second, significantly greater, settlement offer to the Carranzas in January 2001 ("2001 Alleged Offer").*fn5 Because this allegation is central to the present motion, it is worth quoting in full:
[Ms. Gray] said the Montana cases were signed off to be debt settled but Fraas would not respond with the needed paperwork. She said that our case settlement would have been the highest settlement ever to come out of the Office of Civil Rights[.] She signed off on it, the Office of General Counsel signed off on it, but Fraas dropped the ball. Dennis [Garsjo] asked [Ms. Gray] if $780,000 was the highest settlement ever offered as these were the figures he'd calculated for the Carranza damages. Ms. Gray grinned and shook her head no. I asked her if $1,800,000 was the amount as Mr. Fraas had said this was the amount of total damages to me. (Although we never got the final proposal from Mr. Fraas to Gray until we received the Fraas Records). Ms. Gray nodded her head yes. Not only was Dennis in shock, but so was I as Phillip Fraas had never mentioned any amount over the Judgment to me or my mother. He'd always said the Judgment would have eaten up the settlement proposal in all of his letters to the Congressional delegation and to me. [Ms. Gray] also referred [to] the Deficiency Judgment that I'd been told by Mr. Fraas that stopped the settlement, Gray said: "that was just something cooked up between Mr. Fraas and [Assistant U.S. Attorney for the District of Montana] Victoria Francis. We discussed many other topics relating to USDA civil rights in a friendly way just as a way to pass the long hours in the witness room.
Carranza Aff. ¶ 8. The plaintiffs thus allege that the defendant never informed them of this second offer, and that as a result of his failure to do so, they were unable to accept the offer. Id. ¶¶ 8, 11. On January 29, 2002, the plaintiffs terminated their attorney-client relationship with the defendant. Def.'s Mot., Ex. 12.
In January 2005, the plaintiffs brought suit against the defendant, alleging legal malpractice and breach of fiduciary duty. See generally Compl. The defendant filed a motion for summary judgment in March 2009. See generally Def.'s Renewed Mot. for Summ. J. This court granted in part and held in abeyance in part the defendant's motion. See generally Mem. Op. (Feb. 7, 2011). The court granted summary judgment to the defendant on various claims, including the plaintiff's ...