Seed Company Limited v. Westerman
266 F. Supp. 3d 143
| D.D.C. | 2017Background
- Seed Co. Ltd. and its inventor/leader Shigeru Tamai sued their former attorneys (Westerman and Kratz firms) for legal malpractice arising from mishandling a patent prosecution that resulted in the patent being awarded to another inventor (Stevens).
- Plaintiffs allege two primary malpractice theories: (1) failure to file an English translation of a PCT application and (2) erroneous advice minimizing the significance/finality of a Federal Circuit appeal; Counts I and II named both firms; Counts III and IV were contingent claims against Kratz regarding statute-of-limitations advice.
- District court originally found claims timely and granted judgment to defendants on Counts I and II; Court of Appeals reversed as to timeliness for Kratz, remanded Count I for trial and asked the district court to interpret Count II and adjudicate contingent Counts III and IV in the first instance.
- On remand Westerman moved for judgment on the pleadings as to Count II (whether Count II seeks damages for delayed discovery due to defendants’ advice and whether plaintiffs waived such damages); Kratz moved for summary judgment on Counts III and IV (contingent claims based on alleged erroneous accrual-date advice from Kratz counsel).
- The district court held Count II on its face could plausibly allege delayed-discovery damages but found plaintiffs had previously and broadly waived damages under Count II and therefore granted judgment on the pleadings for Westerman as to Count II.
- The court granted summary judgment to Kratz on Counts III and IV because the alleged accrual-date advice related to claims against Westerman (not Kratz), and even if erroneous caused no harm: the continuous-representation rule tolled the statute of limitations for the Westerman claims so plaintiffs suffered no damages from that advice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Count II allege damages from delayed discovery caused by defendants' advice about the Federal Circuit appeal? | Count II includes allegations that defendants "lulled" Seed into believing its rights were protected and therefore delayed discovery of malpractice. | Westerman argued the Court of Appeals resolved this negatively and remand was unnecessary. | Court: Complaint plausibly alleges delayed-discovery damages; ambiguity resolved for pleader. |
| Did plaintiffs waive any Count II damages (including delayed-discovery damages) by prior stipulation/withdrawal? | Plaintiffs contend prior withdrawal was partial — they waived settlement-related damages but not delayed-discovery damages. | Westerman points to plaintiffs' broad prior stipulations and admissions withdrawing claims under Count II. | Court: Plaintiffs’ prior statements constituted a broad waiver of damages under Count II; judgment for Westerman on Count II. |
| Are Counts III and IV (contingent claims against Kratz based on accrual-date advice) moot because claims against Westerman were timely? | Plaintiffs argue reinstatement by the D.C. Circuit requires adjudication and causation/damages may flow to Kratz claims. | Kratz contends contingent counts are moot or otherwise fail on causation/damages grounds. | Court: Not moot per appellate instruction, but dismissed on the merits—Kratz entitled to summary judgment. |
| Can plaintiffs show causation/damages from Kratz counsel's May 2005 accrual-date advice? | Plaintiffs claim Armstrong’s email misstated accrual date and caused them to delay asserting malpractice, injuring Seed. | Kratz shows the advice concerned accrual of claims against Westerman (not Kratz) and, crucially, the continuous-representation rule tolled the limitation period so no harm resulted. | Court: No causation/damages; summary judgment for Kratz on Counts III and IV. |
Key Cases Cited
- Seed Co. Ltd. v. Westerman, 832 F.3d 325 (D.C. Cir. 2016) (appellate decision reversing/splitting district court rulings and remanding Counts for further proceedings)
- Schuler v. PricewaterhouseCoopers, LLP, 514 F.3d 1365 (D.C. Cir. 2008) (standard for judgment on the pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard; accept well-pleaded allegations)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard; materiality and genuine dispute definitions)
- El Paso Nat. Gas Co. v. United States, 750 F.3d 863 (D.C. Cir. 2014) (parties are held to prior admissions in briefs/filings)
- United States v. Monsanto, 491 U.S. 600 (1989) (general-terms canon; give broad language full scope)