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Stephen L. Persons v. Dennis B. Johnson

April 15, 2013


Hennepin County District Court File No. 27-CV-11-18008

The opinion of the court was delivered by: Ross, Judge

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).


Considered and decided by Cleary, Presiding Judge; Ross, Judge; and Kirk, Judge.


ROSS, Judge

In this attorney-client dispute after an unfavorable decision in a marriage dissolution proceeding, the attorney claims that his client failed to pay him and the client claims that his attorney failed to reasonably represent him. Client Stephen Persons argues that the district court erred by granting summary judgment in favor of attorney Dennis Johnson and the Chestnut & Cambronne law firm on Persons's claims that Johnson committed malpractice and on Johnson's counterclaim for the unpaid legal fees. Because Persons does not provide evidence that could lead a fact-finder to find that he has proven all elements of malpractice and because Persons failed to plead a breach-of-fiduciary-duty defense to Johnson's counterclaim, we affirm.


Stephen Persons retained Dennis Johnson of Chestnut & Cambronne in 2005 to represent him in his marital dissolution action. Persons had just moved out of his marital home and into a house he had purchased and furnished with money from a deferred compensation account. Persons stated on the firm's "Client Information Questionnaire" that he purchased the new home and that he had received no assets from his previous marriage dissolution or any inheritance. Persons's disclosure was inconsistent with the fact that he had actually received an inheritance from his mother and that he received funds from his interest in a home that he was awarded in a previous dissolution action.

A significant property-division issue in the later dissolution depended on the value of the Personses' fifty-percent interest in Spin City, a laundromat business. The parties in this malpractice case disagree about how this valuation issue was addressed in the dissolution proceedings. Johnson alleges (and the district court agreed) that Persons had originated a $300,000 estimated valuation of Spin City when he responded to an informal discovery request and that Persons stipulated to the $300,000 valuation. But Persons argued to the district court, and he argues on appeal, that his handwritten estimated valuation of $300,000 was not complete and that an attorney cannot reasonably rely on his client's bare estimate for a binding stipulation. Persons insists that his eventual stipulation to $300,000 resulted from Johnson's false representation to him. Johnson had told Persons that Michael Whalen (Persons's chosen expert and friend), had determined that $300,000 accurately represented the value. Whalen had initially estimated that the net value of Spin City was $287,148, but he indicated that, at the time, the value of the Personses' separate interests would be substantially reduced by a forced sale during a dissolution proceeding. Whalen testified by affidavit that he had estimated the value of the Personses' joint interest in Spin City at between $30,500 and $81,200 and that Johnson had called him to elicit his consent to the $300,000 valuation, representing that Persons had already agreed to it. Persons and Whalen each asserted his having been surprised by Johnson's report that the other had come to such a high valuation.

Another disputed issue in the dissolution proceeding centered on the parties' contributions of non-marital assets to the family home. Persons's wife claimed that she had contributed $35,000 from a workers' compensation award, but Persons claimed that she had contributed only $5,000. Persons asserted that he had contributed $61,000 from an inheritance to him and from the sale of a home from his previous marriage, but he did not produce records to support it.

A referee conducted a bench trial in the dissolution case in April 2007 and found that Persons had dissipated marital assets when he purchased and furnished the second home. She also found that Persons's wife had a 6.76% non-marital interest in the marital home, relying on Persons's admission that she had contributed $5,000 of her non-marital funds. Johnson did not pursue Persons's potential claim that he also had a non-marital interest in the home. Relying on the parties' stipulation, the referee found that the value of each of their combined fifty-percent interest in Spin City was $150,000. The district court concurred. Persons appealed, and this court affirmed. Over the course of Johnson's representation, Persons incurred $35,257.89 in attorney fees, which he did not pay.

Persons sued Johnson and his law firm, alleging a variety of defects in Johnson's representation. Relevant here, Persons alleged that Johnson had failed to assert that Persons had a non-marital interest in the family home even after Persons gave Johnson "sufficient information and documentation"; that Johnson improperly stipulated to the value of Spin City on Persons's behalf; and that the district court's finding that Persons had dissipated marital assets resulted from Johnson's failure to properly advise and represent him. Johnson asserted a counterclaim for the unpaid attorney fees.

Persons submitted affidavits from two experts. Jennifer Loeffler, an expert in financial consulting, opined that Johnson should have been more vigorous in helping Persons trace his non-marital assets and that Johnson should have presented Persons's nonmartial-assets claim on testimony alone if bank records could not be found. Nancy Berg, a family law attorney, shared Loeffler's opinion, stating that Johnson did not diligently pursue Persons's non-marital-assets claim. Berg also criticized Johnson's work on the Spin City valuation, maintaining that even if Johnson accurately claims that Persons originated the $300,000 number, "simple reliance on a number pulled from the air by the client is malpractice." She characterized Johnson's representation as "chaotic and careless" and asserted that "the result would have been different had [Johnson] exercised ordinary skill, care and honesty." Berg called Johnson's presentation of evidence regarding ...

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