U.S. Bank v. The Glogowski Law Firm, PLLC

U.S. BANK, N.A., Plaintiff, v. THE GLOGOWSKI LAW FIRM, PLLC, d/b/a ALLEGIANT LAW GROUP, and KATRINA GLOGOWSKI, Defendants.

No. C19-0074-JCC

United States District Court, W.D. Washington, Seattle

August 3, 2021

ORDER

JOHN C. COUGHENOUR, UNITED STATES DISTRICT JUDGE.

This matter comes before the Court on Plaintiff's motion for summary judgment (Dkt. No. 84), Defendants' motion for summary judgment (Dkt. No. 88), and Defendants' motion to file an overlength brief (Dkt. No. 82). Having thoroughly considered the parties' briefing and the relevant record the Court finds oral argument unnecessary and hereby GRANTS in part and DENIES in part the motions for summary judgment (Dkt. Nos. 84, 88) and DENIES as moot the motion to file an overlength brief (Dkt. No. 82) for the reasons explained herein.

I. BACKGROUND

This is a legal malpractice action. (See generally Dkt. No. 36.) U.S Bank alleges that Katrina Glogowski and the Glogowski Law Firm, PLLC, d/b/a Allegiant Law Group (collectively “Defendants”), breached their professional duties and their agreement with U.S. Bank when they inadequately represented U.S. Bank in foreclosure actions and related matters regarding properties in Seattle, Washington (the “Erickson property”); Salem, Oregon (the “Patten property”); and Lake Oswego, Oregon (the “Cohen property”). (Id.)

Defendants counter they were not paid for services they provided to a U.S. Bank contractor, Asset Foreclosure Services, now known as Peak Foreclosure Services. (See Dkt. No. 40 at 12-14.) Defendants argue that because U.S. Bank benefited from those earlier services, it is liable for Peak Foreclosure's nonpayment. (See Dkt. No. 40 at 12-14.) Defendants assert counterclaims for breach of contract, quantum meruit, and unjust enrichment. (Id.)

U.S. Bank seeks summary judgment on all claims and Defendants seek summary judgment solely on U.S. Bank's claims. (See generally Dkt. Nos. 84, 88.) Defendants also move for leave to file an overlength motion for summary judgment. (Dkt. No. 82).

II. DISCUSSION

A. Choice of Law

The statutes of limitations for legal malpractice claims in Minnesota, Washington, and Oregon vary substantially, compare Minn. Stat. § 541.05 (six years), with Wash. Rev. Code § 4.16.080 (three years) and Or. Rev. Stat. § 12.110 (two years). Defendants argue that, to the extent Washington or Oregon's shorter statute of limitations applies to U.S. Bank's malpractice claims, they would be time-barred. (Dkt. Nos. 88 at 10-11, 93 at 7-8.)

Defendants signed U.S. Bank's engagement letter on October 22, 2014. (See Dkt. No. 87 at 10-41.) It “govern[s] all services provided to and conducted on behalf of U.S. Bank” and contains a choice-of-law clause indicating that its terms should be “governed by and construed and enforced in accordance with the laws of the State of Minnesota, without regard to its conflict of law principles.” (Id. at 10, 20.)

This Court, sitting in diversity, applies Washington's choice-of-law rules. See Downing v. Abercrombie & Fitch, 265 F.3d 994, 1005 (9th Cir. 2001). Those rules provide that the Court must engage in a conflict-of-laws analysis if an actual conflict exists between the laws or interests of Washington and the laws or interests of another state. Erwin v. Cotter Health Centers, 167 P.3d 1112, 1120 (Wash. 2007). Except in limited circumstances, if a conflict of law exists and the parties selected the governing law, the Court enforces that agreement. See McKee v. AT&T Corp., 191 P.3d 845, 851 (Wash. 2008). However, this is not the case for “tort claims arising out of the contract.” Haberman v. Wash. Pub. Power Supply Sys., 744 P.2d 1032, 1066 (Wash. 1987). Instead, the parties' agreement is a consideration “in the most significant relationship test.” Id.

Under the most significant relationship test, the Court looks to relevant contacts, such as the place of contracting, the place of performance, and the domicile of the parties. Mulcahy v. Farmers Ins. Co. of Wash., 95 P.3d 313, 317 (Wash. 2004). “These contacts are to be evaluated according to their relative importance with respect to the particular issue.” Id. Here, the relevant contacts favor the application of Minnesota's statute of limitations. First and most importantly, this is consistent with the engagement letter. (See Dkt. No. 87 at 10, 20.) When interpreting an agreement, the Court focuses on “the actual words used.” Hearst Commc'ns, Inc. v. Seattle Times Co., 115 P.3d 262, 267 (Wash. 2005). The words used in this instance, agreed to by sophisticated parties, provide that Minnesota law would apply. Second, no single jurisdiction has the majority of contacts regarding Defendants' services to U.S. Bank because Defendants provided legal services to U.S. Bank in various states, including Alaska, Oregon, and Washington. (Dkt. No. 85-1 at 9-10.) Third, U.S. Bank is a Minnesota-based corporation-it negotiated its agreement with Defendants for services rendered in Minnesota and incurred its alleged injuries in Minnesota. (See Dkt. Nos. 36 at 3, 95 at 4.)

The Court does not find Defendants' argument, that Washington's statute of limitations cannot be overridden by a generic choice-of-law provision requiring the application of Minnesota law, persuasive. (See Dkt. No. 97 at 4.) As the Ninth Circuit stated in the case Defendants rely on, the statute of limitations of the desired forum can apply in circumstances where that forum would otherwise be unavailable to a plaintiff. See In re Sterba, 852 F.3d 1175, 1178, 1180-81 (9th Cir. 2017). Here, the Minnesota forum would be unavailable to U.S. Bank because Defendants are citizens of Washington and provide the Court no assurance that they would be subject to a court's personal jurisdiction in Minnesota. (See Dkt. No. 36 at 3.) Without this assurance, it would be inequitable for this Court to ignore the parties' clear choice-of-law provision.

Accordingly, the Court finds that Minnesota law applies.

B. Defendants' Motion to File an Overlength Brief

Defendants moved for leave to file an overlength motion for summary judgment (Dkt. No. 82) and U.S. Bank asked the Court to strike the overlength portion of Defendants' motion. (See Dkt. No. 95 at 13-14.) At issue are six pages within Defendants' motion containing arguments based on Washington law supporting summary judgment on U.S. Bank's breach of contract claims. (See Dkt. No. 88 at 24-30.) But, as discussed above, the parties' agreement for legal services contains a clear choice-of-law clause that requires the application of Minnesota law to this dispute. (See Dkt. No. 87 at 20.) Therefore, the Court need not address the parties' requests because the pages at issue in Defendants' motion are not relevant in considering the merit of U.S. Bank's breach of contract claims under Minnesota law. Accordingly, Defendants' motion to file an overlength brief (Dkt. No. 82) is DENIED as moot.

C. Legal Standard - Motion for Summary Judgment

“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Material facts are those that may affect the outcome of the case, and a dispute about a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). In deciding whether there is a genuine dispute of material fact, the Court must view the facts and justifiable inferences drawn from them in the light most favorable to the nonmoving party. Id. at 255. The Court is therefore prohibited from weighing the evidence or resolving disputed issues in the moving party's favor. Tolan v. Cotton, 572 U.S. 650, 657 (2014).

“The moving party bears the initial burden of establishing the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “If a moving party fails to carry its initial burden of production, the nonmoving party has no obligation to produce anything, even if the nonmoving party would have the ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102-03 (9th Cir. 2000). But once the moving party properly supports its motion, the nonmoving party “must come forward with ‘specific facts showing that there is a genuine issue for trial.'” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting former Fed.R.Civ.P. 56(e)). Ultimately, summary judgment is appropriate against a party who “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322.

D. U.S. Bank's Malpractice Claims

1. Statute of Limitations

As a threshold matter, the Court addresses Defendant's argument that U.S. Bank's claims are barred by Washington's three-year statute of limitations on malpractice claims. (See Dkt. Nos. 88 at 10, 93 at 7-8, 97 at 4-9 (citing Cawdrey v. Hanson Baker Ludlow Drumheller, P.S., 120 P.3d 605, 608 (Wash.Ct.App. 2005).) As discussed above, see supra Part II.A., the Court relies on Minnesota's statute of limitations for U.S. Bank's legal malpractice claim, which is six years. See Minn. Stat. § 541.05. Therefore, a six-year statute of limitations applies, and Defendants do not argue that this term would serve as a bar for U.S. Bank's claims. (See generally Dkt. Nos. 88, 93.)

Moreover even if Washington's statute of limitations were to apply, U.S. Bank presents sufficient evidence suggesting that, in fact, it did not have adequate notice of the nature and scope of its injury from Defendants' actions on these properties until well after U.S. Bank...