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Luna Gaming - San Diego LLC v. Dorsey & Whitney

March 6, 2009

LUNA GAMING - SAN DIEGO LLC, A MICHIGAN LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
DORSEY & WHITNEY, LLP, HOLLAND & KNIGHT, LLP, BLEDSOE DOWNES & ROSIER, P.C., PHILIP M. BAKER-SHENK, AND BRADLEY GRANT BLEDSOE DOWNES, JOINTLY AND SEVERALLY, DEFENDANT.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

In this case, Plaintiff Luna Gaming-San Diego, LLC ("Luna Gaming")*fn1 filed suit against various law firms and attorneys alleging causes of action for professional negligence, negligent misrepresentation, and breach of fiduciary duty. Defendant Bradley Grant Bledsoe Downes ("Downes"), an attorney formerly with the Dorsey & Whitney law firm, and his current firm, Defendant Bledsoe Downes & Rosier ("BDR") (together, "Defendants"), now move for summary judgment on these claims. Defendants argue that because they did not share an attorney-client relationship with Plaintiff, Plaintiff's professional negligence and breach of fiduciary duty claims necessarily must fail. Defendants further argue that Plaintiffs should be estopped from claiming such an attorney-client relationship existed. Finally, Defendant BDR claims that there is no causal link between its conduct and the damages alleged by Plaintiff.

I. FACTUAL BACKGROUND

In its September 30, 2008 Order granting in part and denying in part Defendants Dorsey & Whitney ("Dorsey"), Holland & Knight ("Holland"), and Philip Baker-Shenk's ("Baker-Shenk") motions for summary judgment [Docket No. 79], the Court described the factual background of this case in detail. The Court incorporates that factual background here. The Court only elaborates on facts newly introduced as part of the instant motion and those which relate specifically to Downes or BDR.

Dorsey employed Downes, in different capacities, from August, 1999 to January, 2006. (PNOL, Ex. 32 p.14:17--15:6.) Although Downes was a Dorsey contract attorney at the time, he was not involved in the preparation and execution of the "Project Agreements" between the Tribe and Luna Gaming. (DUF 8; DNOL, Ex. 12 p. 178:16--179:8.) Downes subsequently devoted approximately one-third of his time to the Project while practicing at Dorsey. (PNOL, Ex. 32 518:12--14.) Downes formed BDR with Philip Rosier in January, 2006. (Downes Decl. ¶ 5.) Downes continued, however, to send communications to the Tribe on Dorsey letterhead throughout 2006 and into 2007. (PNOL, Ex. 38 p. 573--593.) After the firm's formation, BDR also represented the Tribe in connection with the Project. (Downes Decl. ¶¶ 6--7.) BDR entered into a written retainer agreement with the Tribe and Downes served as the primary billing partner on the representation. (Id.) Plaintiff does not dispute that it never executed a written retainer or engagement letter with BDR. (DUF 54.) In accordance with the Project Agreements, however, Plaintiff paid for the work on the Project that BDR performed for the Tribe. (Downes Decl. ¶ 7.)

II. DISCUSSION

Federal Rule of Civil Procedure 56 provides that a party may move for summary judgment when there is no genuine issue as to a material fact and the moving party is entitled to judgment as a matter of law. A "genuine issue" is one where, based on the evidence presented, a fair minded jury could return a verdict in favor of the nonmoving party on the issue in question. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In considering a motion for summary judgment, the Court must examine all of the evidence in the light most favorable to the non-moving party. United States v. Diebold. Inc., 369 U.S. 654, 655 (1962).

Defendants Downes and BDR ("Defendants") request summary judgment on Plaintiff's claims for professional negligence, negligent misrepresentation, and breach of fiduciary duty on three grounds. First, Defendants argue that because Plaintiff cannot establish the existence of an attorney-client relationship with Downes or BDR, they owed no duty to Plaintiff and its claims must fail. Second, Defendants argue that Plaintiff should be estopped from claiming that an attorney-client relationship existed with Downes or BDR because of representations and omissions that Plaintiff made to third parties indicating that Defendants represented solely the Tribe. Third, Defendants argue that there is no causal link between Plaintiff's claim for damages and BDR's conduct, since it did not come into existence until after the alleged misconduct took place.

A. Downes Did Not Represent Plaintiff Prior to the Project Agreements

In its earlier Order on Defendants Dorsey, Holland, and Baker-Shenk's motions for summary judgment, the Court analyzed separately whether an attorney-client relationship existed prior to the Project Agreements and after their execution. The same bifurcation of analysis is appropriate here. The Court concludes that Plaintiff has failed to raise a triable issue of fact as to whether Downes represented it before the Project Agreements were executed.

The Court already granted summary judgment in favor of Dorsey on Plaintiff's claims for professional negligence and breach of fiduciary duty to the extent that they were based on events prior to the execution of the Project Agreements on March 29, 2000.*fn2 Plaintiff also does not dispute that Downes, a contract attorney for Dorsey at the time, was not involved in any of the discussions, negotiations, or preparation preceding the Agreements. (PUF 52.) Therefore, Downes engaged in no contact at all which would suggest that an attorney-client relationship existed with Plaintiff prior to the Project Agreements' execution on March 29, 2000. Because the Court finds that no attorney-client relationship existed between Downes and Plaintiff before the Project Agreements were executed, the Court GRANTS partial summary judgment in favor of Downes on Plaintiff's claims for professional negligence and breach of fiduciary duty to the extent that they are based on events before March 29, 2000.

Unlike Dorsey itself, since Downes had no contact at all with Plaintiff preceding the execution of the Project Agreements, he did not make any statements during that time period out of which Plaintiff's negligent misrepresentation claim could arise. The Court concludes that no triable issue of fact exists regarding Plaintiff's negligent misrepresentation claim against Downes to the extent that it is based on events prior to the Project Agreements' execution. Thus, the Court GRANTS partial summary judgment in favor of Downes on Plaintiff's negligent misrepresentation claim to the extent that it is based on events occurring before March 29, 2000.

B. Downes's Representation of Plaintiff Project While Employed at Dorsey

As set forth above, the Court finds that there is no genuine issue of material fact regarding whether Downes represented Plaintiff before the parties executed the Project Agreements. Plaintiff has raised an issue of fact, however, as to whether ...


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