Steven Durst v. Matthew Durst
663 F. App'x 231
| 3rd Cir. | 2016Background
- Steven and Reuben (Mike) Durst sued Matt (co-trustee) and various lawyers over handling of the Jake Ball Trust’s 10% interest in the “Millville Asset,” which was subject to an Operating Agreement containing a buyout clause (Section 7.04).
- Steve signed the Operating Agreement in 2005 without reading Section 7.04; in 2010 his employment ended and Goodman asserted a buyout right under Section 7.04.
- Matt, as trustee, sued Goodman in New Jersey Chancery Court and settled after mediation; Steve and Mike later opposed enforcement and sought to set the settlement aside, claiming undervaluation of the Asset.
- The Chancery Court enforced the settlement after limited discovery, finding no proof the Asset was undervalued and treating Steve and Mike as effectively participating parties for discovery and argument.
- Steve and Mike then filed the federal suit; the District Court granted summary judgment for Matt and for the law-firm and lawyer defendants, denied motions to amend to add two additional defendants, and denied reconsideration; the Third Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether issues of Asset value and settlement fairness are precluded by Chancery Court judgment | Steve & Mike: Those issues were not conclusively decided and may be relitigated in federal court | Matt: Chancery Court litigated and decided those issues; issue preclusion applies | Affirmed: collateral estoppel applies; issues identical, litigated, essential, and parties effectively participated |
| Whether Matt lacked authority / breached fiduciary duty by settling | Steve & Mike: Matt exceeded authority; settlement harmed Trust | Matt: Even if authority disputed, Chancery Court found Trust not harmed so no damages for breach | Affirmed: no damages shown; fiduciary breach claim fails |
| Legal malpractice / liability of Galica-Peck, Halloran & Sage, Robinson & Cole | Steve & Mike: Misrepresentations about appraisal reliance caused them to forfeit claims and harmed Trust | Defs: No attorney-client reliance, no causation, and some alleged conduct predated association with firm | Affirmed: no reasonable reliance or causation; summary judgment for defendants |
| Motion to amend complaint to add Yacovelle and Parker Benjamin | Steve & Mike: New facts warrant adding these defendants | Defs: Motions untimely and Magistrate’s non-dispositive rulings were not timely challenged | Affirmed: plaintiffs waived timely challenge; leave to amend denied |
| Motion for reconsideration of District Court orders | Steve & Mike: New deposition (Galica-Peck) is newly discovered evidence that would change outcome; denial causes manifest injustice | Defs: Delay in discovery; testimony would not alter prior rulings given lack of Trustee reliance | Affirmed: denial not an abuse of discretion; deposition not shown to be newly discoverable and would not change result |
Key Cases Cited
- Miller v. Am. Airlines, 632 F.3d 837 (3d Cir.) (summary judgment standard and review)
- Del. River Port Auth. v. Fraternal Order of Police, 290 F.3d 567 (3d Cir.) (state law governs preclusion; framework for issue preclusion)
- Ross v. Ross, 705 A.2d 784 (N.J. Super. Ct. App. Div.) (nonparty who submits interest to court may be bound by judgment)
- F.G. v. MacDonell, 696 A.2d 697 (N.J.) (damages required for fiduciary breach recovery)
- Jerista v. Murray, 883 A.2d 350 (N.J.) (elements of legal malpractice claim)
- Max’s Seafood Café v. Quinteros, 176 F.3d 669 (3d Cir.) (standard of review for motions for reconsideration)
- Blystone v. Horn, 664 F.3d 397 (3d Cir.) (scope of motions for reconsideration; new evidence must have been unavailable earlier)