DAVID A. WILD, Plaintiff-Appellant,
BRUCE A. WILLEY, BRUCE A. WILLEY, P.C., and WILLEY O'BRIEN, L.C., Defendants-Appellees.
from the Iowa District Court for Linn County, Sean
Wild appeals district court rulings granting summary judgment
in favor of defendants.
S. Harding of Harding Law Office, Des Moines, for appellant.
Matthew G. Novak and Bradley J. Kaspar of Pickens, Barnes
& Abernathy, Cedar Rapids, for appellees.
by Doyle, P.J., and Mullins and McDonald, JJ.
Wild appeals district court rulings granting summary judgment
in favor of defendants on his claims of legal malpractice,
breach of a business partner's fiduciary duty, fraudulent
misrepresentation, and equitable indemnity. As to his
legal-malpractice claims, Wild argues expert testimony is not
required because Willey's conduct was so clearly
negligent that it can be recognized by laypersons or,
alternatively, the court should have granted him additional
time to designate an expert. As to the court's grant of
summary judgment on his claims of breach of fiduciary duty
and fraudulent misrepresentation on statute-of-limitations
grounds, Wild argues he commenced his action within the
limitations period and Willey should be equitably estopped
from relying on the statute of limitations. Finally, Wild
challenges the district court's grant of summary judgment
on his equitable-indemnity claim after concluding Willey did
not owe him an independent duty.
Background Facts and Proceedings
an experienced businessman, being self employed as a project
developer since 1975. Bruce Willey is an Iowa attorney who
has provided Wild legal services in personal and business
matters. In 2007, Wild signed a consent and waiver concerning
conflicts of interests arising in relation to Willey entering
into business transactions with Wild.
transactions resulting in this litigation occurred in 2008.
Catalyst Resource Group, LLC (Catalyst) is owned by two other
entities, Braveheart Equity Holdings, LLC (Braveheart) and
Orion's Pride, LLC (Orion). Wild is the sole member of
Braveheart; Willey is the sole member of Orion. Willey was
both a personal attorney to Wild and an attorney for
Catalyst. In these capacities, Willey provided legal services
to Wild and Catalyst in relation to negotiating, drafting,
and executing third-party loan agreements.
2008, Willey negotiated a loan agreement between Catalyst and
Laurus Technologies, Inc. (Laurus), under which Catalyst
would borrow $500, 000 from Laurus. Willey negotiated a
similar arrangement between Catalyst and Midwest S.N.
Investors, LLC (Midwest), for a loan in the amount of $200,
000. The intent was for Catalyst to transfer the borrowed
funds to third parties to secure high-value assets, which
Catalyst could use as collateral for even larger loans in the
future. Willey insisted that Wild agree to the loans and
provide personal guarantees as security. Willey assured Wild
the funds provided to third parties would be secured by
collateral as highly rated as United States treasury bonds.
Wild executed promissory notes and personal guarantees in
relation to both loans.
Catalyst's receipt of the funds, Catalyst-at Willey's
direction-loaned $500, 000 to a third party but did not
receive collateral in return for the loan. The $200, 000 loan
from Midwest went unaccounted for. By approximately June
2008, not receiving any funds and being aware the third-party
loan was unsecured, Wild knew there was a problem. In his
deposition, Wild stated the reason he did not sue Willey at
this time "was because he was a friend, he was a
partner, and he was my attorney, personally and
corporately." Wild further acknowledged in his
deposition that he was aware he could have filed suit against
Willey in 2008, but he waited to do so because Laurus was
willing to work with Catalyst.
third party never repaid the loan from Catalyst.
Consequently, Catalyst had insufficient funds to repay the
Laurus loan. The note securing the loan was extended several
times over the next few years, during which Willey assured
Wild the loan to the third party would be secured by
collateral and the third party would perform. Laurus assigned
its note (with interest) and the personal guarantee to a
third-party creditor. The creditor obtained judgment against
Catalyst in 2013. In April 2014, judgment was granted against
Wild on his personal guarantee in the amount of $827, 753.34.
the foregoing loan transactions, Willey was acting as an
attorney for Laurus and was a close friend with, and acting
as an attorney for, one of its officers. Willey was also
acting as an attorney for Midwest and as an attorney and
accountant for one of its members.
2015, Wild filed a petition at law against defendants
forwarding claims of legal malpractice,  breach of a
business partner's fiduciary duty, fraudulent
misrepresentation, and equitable indemnity. Defendants
answered on March 23, 2016, denying all claims and asserting
defenses. In May, a trial scheduling and discovery plan was
entered requiring Wild to designate his expert witnesses by
September 19. See Iowa Code § 668.11(1)(a)
(2015) (requiring plaintiffs in professional-liability cases
to designate experts within 180 days of defendant's
answer). Wild did not designate an expert or move for an
extension before or after the deadline.
November 3, defendants moved for summary judgment on all
claims, arguing such claims require expert testimony
concerning the standard of care and noting Wild had failed to
timely designate any expert witnesses. Wild resisted, arguing
expert testimony is unnecessary because a layperson could
easily recognize Willey failed to meet a reasonable standard
of care. At a hearing on the motion, Wild's counsel
related the failure to timely designate an expert was a
result of communication issues with an expert and a
"computer meltdown" that affected counsel's
calendared deadlines. Counsel orally moved for an extension
of time to designate an expert witness. Counsel alternatively
repeated his argument that the presentation of expert
testimony was unnecessary.
questioning from the court, counsel advised his
"computer meltdown" occurred in July or August,
agreed the deadline to designate expert witnesses was
September 19, and conceded he still had access to the
court's electronic filing system and could have utilized
it to ascertain the deadline following the computer issues.
The court went on to point out that defendants' motion
for summary judgment for failure to designate was filed in
early November, yet Wild made no request for an extension
until the hearing on the motion, in January 2017. Wild's
counsel agreed with the court that his failure to move for an
extension in response to the summary-judgment motion was not
a result of his previous computer issues. In response to the
court's questioning about whether a layperson could
understand the nature of Wild's claims due to the
"complicated set of business transactions that are
involved," Wild's counsel stated his opinion that
some matters are "pretty clear, straightforward"
while other matters would even be "difficult for lawyers
court denied Wild's motion for an extension of time to
designate experts and granted summary judgment in favor of
defendants on Wild's legal-malpractice claims, concluding
"the issues here are not so plain and obvious as to fall
into the exceptional case not requiring expert
testimony." The court explained "the transactions
described were matters involving highly technical business
transactions" and "Willey's failure to comply
with his duties related to conflicts of interest or breaches
of fiduciary duties as an attorney . . . would be outside the
understanding of a lay person." The court denied
defendants' motion as to Wild's claims of breach of
fiduciary duty as a business partner, fraudulent
misrepresentation, and equitable indemnity. As a result of
the ambiguous nature in which the surviving claims were pled,
the court directed Wild "to recast and replead the
surviving claims . . . to better reflect the nature of such
filed his amended petition in March, restating his surviving
claims, and naming only Willey as a defendant. In its answer,
Willey asserted numerous defenses, including a
statute-of-limitations defense. In April, Willey filed a
second motion for summary judgment. Willey argued the
breach-of-fiduciary-duty and fraudulent-misrepresentation
claims were time barred by the statute of limitations
contained in Iowa Code section 614.1(4). As to the
equitable-indemnity claim, Willey argued the claim had yet to
accrue, because Wild had yet to make payment on the judgment
against him. In October, following a hearing, the court
granted summary judgment in favor of Willey on the first two
claims, concluding the claims accrued in 2008 and Wild's
initial petition, filed in 2015, was not filed within the
five-year limitations period. As to the equitable-indemnity
claim, the court concluded the 2014 entry of judgment against
Wild was sufficient to accrue the claim.
November, Willey filed a third motion for summary judgment as
to the remaining claim, arguing, among other things, Wild
could not establish Willey owed him an independent duty, a
necessary element of the claim. Wild resisted, arguing Willey
owed him fiduciary duties of loyalty and care as business
partners. Willey responded that a breach of professional
duties must be established by expert testimony and Willey was
unable to meet his burden in the absence thereof. The court
found that the transactions underlying the claims related to
a business not directly owned by either Wild or Willey,
Catalyst, but which was instead owned by two other business
entities, Braveheart and Orion, which were in turn separately
owned by Wild and Willey. In determining whether Willey owed
Wild an independent duty in relation to Catalyst, the court
considered the nature of the relationship and found the
parties, both experienced businessmen, structured their
ownership of the business through shell entities to shield
them from personal liability. Based on the nature of the
relationship and notions ...