Argued September 16, 2014
[Copyrighted Material Omitted]
Appeal from the Superior Court of the District of Columbia. (CAB-1938-10). (Hon. Michael L. Rankin, Trial Judge).
Linda Bolton, Pro se, with whom Shirley A. Bolton and Vickie E. Neal, pro se, were on the brief, for appellants.
Laura M.K. Hassler and Christopher G. Hoge, with whom Aaron L. Handleman and Elena Inga, were on the brief, for appellees.
Before BLACKBURNE-RIGSBY and THOMPSON, Associate Judges, and REID, Senior Judge.
Reid, Senior Judge.
This case relates to three proceedings: (1) an underlying toxic tort class action in the State of Mississippi in which appellants, Shirley A. Bolton, Linda C. Bolton, and Vickie E. Neal (" appellants" or " the Bolton sisters" ), were claimants; (2) appellants' arbitration claim, brought in the District of Columbia, against appellee, Crowley, Hoge & Fein, P.C. (" CHF" ), for legal malpractice; and (3) CHF's claim in the Superior Court of the District of Columbia against appellants for unpaid legal fees, as well as appellants' counterclaims in that action. Appellants challenge the Superior Court's (1) March 6, 2012, order granting in part CHF's motion for summary judgment with respect to certain of appellants' counterclaims, including breach of the fiduciary duty of loyalty;  (2) January 26, 2012, order granting CHF's motion for sanctions in the amount of $7,338.58; and (3) September 20, 2012, judgment entering a jury award against appellants in the amount of $152,973.00 for legal fees owed to CHF. We affirm the trial court's sanctions award, but we reverse the trial court's grant of summary judgment on appellants' breach of the fiduciary duty of loyalty counterclaim and remand that counterclaim for further proceedings. In addition, we affirm the jury's liability finding on the breach of contract claim, but we instruct the trial court to hold the jury's monetary award of attorneys' fees in abeyance until after the resolution of the breach of fiduciary duty counterclaim.
The Underlying Toxic Tort Litigation
The record shows that the Bolton sisters grew up in Richton, Mississippi, in the 1960s and 1970s, near a wood processing facility where wood chips were treated with toxic chemicals. Persons residing nearby were exposed to the chemicals and suffered various illnesses, including cancer, sarcoidosis, and type II diabetes. Attorney Dana G. Kirk and the Kirk Law Firm of Houston, Texas (" Kirk" ), filed a mass tort action in Mississippi against the Joslyn Manufacturing Company (" Joslyn" ) and the Powe Timber Company in December 2001. The Bolton sisters were included in the lawsuit with approximately 1300 other claimants. Unbeknownst to the Bolton sisters, Kirk brought in other law firms from Dallas, Texas to assist with the representation, including Collen A. Clark and the Schmidt & Clark Law Firm. Eventually, in January 2007, Mr. Clark negotiated a Memorandum of Understanding (" MOU" ) with attorneys who represented Joslyn; the MOU created an $11 million settlement fund and divided claimants into two classes -- one consisting of those generally on track to be considered for a settlement award, and the other composed of those whose claims were placed on a dismissal track.
The Bolton sisters were placed in the second class of claimants. Kirk sent different letters to claimants in the two classes. The February 2, 2007, letter that the Bolton sisters received did not mention the January MOU or the $11 million settlement fund, but simply advised that the defendants would soon file a motion for summary judgment " based upon the fact that we have no proof that you have an illness related to exposure to the toxic chemicals in the wood chips from the plant in Richton, MS." The letter also requested proof by February 28, 2007, of specified " illnesses/diseases," in order to prevent
dismissal of their claims. Prior to February 28, 2007, the Bolton sisters wrote to Kirk, indicating that they had already submitted their medical records. Later, they sent additional documentation to Kirk.
Joslyn filed summary judgment motions against the Bolton sisters and others in mid-March 2007. Before the end of March 2007, the Bolton sisters and other claimants terminated Kirk's representation. Appellants hired other lawyers to negotiate a settlement on their behalf, but they did not oppose Joslyn's summary judgment motion. After they signed a settlement and release, gross settlement funds of approximately $70,000 for each of the Bolton sisters were deposited in the Circuit Court of Jasper, Mississippi.
The Arbitration Malpractice Claim
The Bolton sisters filed a pro se arbitration claim in the District of Columbia on January 28, 2008, against Kirk and other attorneys and law firms that handled the Mississippi toxic tort litigation. They alleged " professional negligence, ethical misconduct, breach of contract and breach of fiduciary duties." On March 3, 2009, they signed an engagement agreement with CHF to represent them in the arbitration proceeding. The agreement detailed payment terms for legal fees, costs and expenses. On March 11, 2010, the arbitrators issued a modified order finding that the Bolton sisters " cannot meet the proximate cause requirement imposed by Mississippi law in proving [legal] malpractice," that is, they " cannot demonstrate that, but for the alleged breach of duty allegedly committed by [Kirk and others] by entering into the MOU, [appellants] would not have suffered the economic injuries they claim." On March 2, 2010, CHF filed an attorneys' lien in the Jasper, Mississippi Circuit Court against the Bolton sisters' settlement funds, claiming " unpaid attorneys' fees." By March 22, 2011, CHF's Jasper County lien for unpaid attorneys' fees was held to be invalid.
The Superior Court Litigation
Soon after the failure of its Mississippi lien, CHF filed its Superior Court complaint for unpaid legal fees, in the amount of $137,046.45, on March 25, 2010. The Bolton sisters lodged an amended counterclaim on August 8, 2010, alleging five counts -- breach of contract, professional negligence/malpractice, abuse of process, conversion, fraud, and breach of fiduciary duty of loyalty. In a short hearing on November 19, 2010, the Honorable Brook Hedge dismissed the fraud count on the ground that appellants failed to plead it with specificity. She also dismissed the abuse of process, conversion and fraud claims because she did " not think [that] on its face the complaint states [a] claim with respect to those three causes of action." The dismissal was without prejudice and Judge Hedge informed appellants that they could further amend their counterclaim with respect to these counts. The Bolton sisters did not seek to amend their amended counterclaim during the discovery process.
During the discovery and deposition phase of the trial court litigation, CHF filed a motion for sanctions and/or to compel depositions due to the failure of Shirley Bolton and Vickie Neal to appear for scheduled depositions. Judge Rankin granted the motion on January 26, 2012, and imposed a $7338.58 monetary sanction against appellants. After CHF filed its motion for summary judgment and appellants opposed it, Judge Rankin granted summary judgment, on March 6, 2012, in favor of CHF on all of the Bolton sisters' remaining counterclaim counts, except for the breach of contract count, and he reiterated the dismissal of the fraud, conversion, and abuse of process counterclaims because " no amendment was undertaken" after
Judge Hedge dismissed these counterclaim counts without prejudice. The breach of contract claim proceeded to trial and resulted in a September 20, 2012, jury verdict against the Bolton sisters for unpaid attorneys' fees in the amount of $153,973.00 (with interest and costs). The trial court denied their ...