1st Union Natl. Bank v. Paul Benham

have been be- absent breach would Morton, BANK, In the de- 27-33 months. FIRST UNION NATIONAL

tween at the bottom of the was sentenced fendant Trustee of the Southeast Timber Leas offense, leading for his sentencing range ing Statutory Trust, —Appel Plaintif f that a lesser sentence the court to believe lant, imposed govern- had the might have been v. obligation to move for ment fulfilled its BENHAM; Benham, PA; Paul Paul 3El.l(b). under one-level reduction Friday, Eldredge Clark, LLP, & because are led to this conclusion We Appellees, Defendants — explic- sentencing Jensen the district itly guidelines being adviso- deemed Benham; Benham, PA; Paul Paul (“I See Sen. only. going Tr. at am ry Friday, Eldredge Clark, LLP, & advisory sentencing guidelines as view the Party Plaintiffs, Third binding particu- under the only and not as case.”). of this As indi- lar circumstances above, the court concluded cated Stoney; Kuhns, Carl J. Jason in the middle of the advi- that “a sentence Party Third Defendants. ap- of months is sory guideline range No. 04-3656. propriate.” Id. emphasizes 38. Jensen Appeals, United States Court “in phrase of the the district court’s use Eighth Circuit. language the middle” and infers from this that, breach, the district court absent the Submitted: June 2005. months, him would have sentenced to 30 Sept. Filed: range which is the middle gov- Rehearing Rehearing En Banc have had the been down- ernment moved for the additional Denied Oct. 2005.* argu- find this departure ward level. We unpersuasive. light of the district

ment guidelines as advi-

court’s treatment

sory discussion of only and its extensive myriad that went into its sen- factors (including the fact

tencing determination put at risk the lives

that Jensen’s actions children, sister, and the

of his her three id., officers), enforcement Jensen has

law probability

not demonstrated reasonable imposed court would have the district government had the

a lesser sentence reduction level.

moved for the additional preju- he has not established

Accordingly, the third Olmo satisfy sufficient to

dice

factor.

The sentence is affirmed.

* Judge Judge did not this matter. Chief Loken and Arnold participate in the consideration or decision of attorney.

Arkansas At SE end of chief, case the district court granted judgment as a matter of law Benham, favor of holding that SE because present expert testimony, failed to prove SE Timber was unable to Benham’s acts amounted to malprac- tice and was unable to show as a matter of law that but for Benham’s negligence, it could have won a con- trial cerning the fair value of the stock it ac- quired merger. timely SE Timber appealed the district court’s of exclusion its expert judgment and aas matter of law in favor of Benham. We reverse and to remand the district court for a new trial. Counsel presented argument who on be- Background I.

half of the was appellant Harry E. McDer- Fayetteville, mott of Arkansas. First Land and Timber hired (“Brown”) Frank Brown and Brown presented argument Counsel who on be- Partners, Capital Burke Inc. to determine half of appellee was John K. Baker of all price fair for of its timberland and Rock, Little appearing Arkansas. Also bank stock arrange and a sale of the stock. Beard, the brief was R.T. III. price Brown estimated the at between $51 BYE, MURPHY, SMITH, Before and million and million. Brown SE $54 formed Circuit Judges. Timber purpose for the sole all buying of First Land and Timber’s stock of- and

SMITH, Judge. Circuit a price fered million. SE Timber $65 Bank, First Union National as hired Stoney (“Stoney”), Trustee Carl a California of the Southeast Leasing Statutory Timber merger acquisitions attorney, and to assist (“SE Timber”) Trust, commenced by arranging this le- sale a merger between gal malpractice against lawsuit Paul Ben- First Land and Timber and SE Timber. (“Benham”), ham merger a acquisi- merger, Timber, Pursuant to the SE as tions attorney, firm, and his law Friday, surviving entity, pay First Land Eldredge Clark, LLP, & failure to Timber’s stockholders million. $65 timely a file lawsuit pursuant to This approved by Ark.Code amount was fair value § Ann. 4-27-1330 to determine all the fair but one of First Land and Timber’s value of acquired by stockholders, stock Corp. Pictet Overseas Trust during a merger Ltd., with First Land and Tim- as Trustee of the Henrietta Y. Jones (“First Corporation (hereinafter “Pictet”). ber Land and Tim- Trust Because ber”). The Stoney excluded was not licensed to in Ar- proffered testimony kansas, Benham, SE Timber’s SE hired Timber an Ar- expert, ruling that the partner lacked the kansas in the law qualifications necessary to testify regard- Clark, firm of Friday, Eldredge LLP, & ing represent standard care of an it against Pictet’s dissenters’ § SE to file a Pictet that he 4-27-1330 Timber informed Benham. claim. judicially fair concerning lawsuit obtain a derived Timber representing SE was the amount demanded. value avoid claims. Pictet’s SE Timber instructed Benham to file suit to Benham dated Pictet wrote letter 15,1999. on March 30, 1998, a of which was also copy October Timber, demanding First Land and sent to suit, granted In that the district court Land of First fair value estimate Pictet, summary favor of hold- million instead of $88 § 4- ing comply SE failed to stated that million.1 Pictet also $65 days a lawsuit filing 27-1330 pursuant was made Ark.Code demand of the October 1998 letter. SE Timber 4-27-1328, allows dissent- Ann. which pay according was Pictet ordered reject corporation’s shareholder ing million, fair value estimate $88 notify corpora- payment offer $1,789,303 receiving resulted Pictet writing own estimate tion more than the other stockholders. SE of its fair shares. value pay further ordered to Pictet $80,514.37 attorney’s in costs and fees.2 suit within 60 bring Timber did not 30, 1998 Pictet’s October letter days of complaint in the Unit- SE Timber filed § by Ann. 4-27-1330. required Ark.Code for Eastern ed States District Court 1999, Instead, 6, Benham, on January on of against District Arkansas Benham Timber, pay to Pictet of SE offered behalf Clark, LLP, Friday, Eldredge alleging & mil- on a fair value estimate $65 based legal malpractice. SE filed a mo- Timber rejected January This offer on lion. judgment, for includ- summary tion 1999, 15, virtually in a that was letter (“Owen”), ed the of Charles Owen affidavit by on to the letter sent Pictet identical attorney, opined an who Arkansas 20, 30, 1999, January 1998. On October in representing Benham’s conduct SE Timber of advised Pictet’s Benham SE applicable fallen below the had 15, According 1999 to January letter. opinion, his standard care. Owen based 15, Benham, trig- letter January 1999 notify to part, upon in Benham’s failure § gered 60-day under 4-27-1330. rule 30, Pictet’s 1998 SE Timber that October did not advise Timber that the Benham SE § Ben- 4-27-1328 and complied letter 30, trigger 1998 letter would October suit ham’s to file a stock valuation failure 60-day rule. by days required of that letter as support opposition § In his initially 4-27-1330. Benham advised summary judgment, Benham submitted required Arkansas law Pictet file a attorney of Arkansas John to obtain the the affidavit against SE Timber lawsuit (“Tisdale”). opined that Tisdale Tisdale value of million demanded its fair $88 Later, 12, and dil- however, reasonable skill February on Benham exercised letter. attor- ordinarily used other 1999, igence Timber that Benham advised SE assets, investment. a bid sell its not make another estimate was based on from 1. This years that seven after mak- Brown also noted ing MERL, swap company offered to called who offer, went MERL out of business. preferred for all the stock in some of its stock pro- Land and Under MERL's First Timber. addition, con- Pictet sued Timber for years swap, it posal, after the seven fiduciary duty. Ac- version and breach $88 buy preferred for million. back its Timber, claims, cording these as well to SE Brown, According unaccepta- summary the offer was resisting judgment, have Pictet’s $182,183.31 an to defend. cost additional because First Land and wanted to ble neys standing qualified testify in Arkansas. good Ac- as an to the Tisdale, 30, cording Pictet’s October practice standard Arkan- (2) requirements sas; did not determining 1998 letter meet erred that the is- § of a demand letter as under 4- malpractice sue of this case was 60-day 27-1328 and therefore the rule un- knowledge not within the common excep- triggered tion; der 4-27-1330 was not until ruling erred in aas receipt January law, 1999 letter. matter of was re- The district court denied quired SE Timber’s mo- to show that but Benham’s al- summary tion for judgment, ruling that leged negligence, the outcome the un- genuine concerning fact issues remained derlying stock valuation law suit would whether Benham’s representation fell be- have been different.

low generally accepted standard of II. Discussion

care. A. Law: Legal Malpractice Arkansas malpractice against SE Timber’s suit proceeded jury Benham trial to a on Octo- We review the district court’s in already ber 2004. After having denied terpretation of state law de novo. Vander in limine disqualify motion Owen as an Penix, (8th 39 F.3d Cir. ford expert, the district court ruled him unqual- 1994). law, “an attorney Under Arkansas testify ified to 702 of under Rule the Fed- if negligent he or she fails to exercise According eral Rules Evidence. to the diligence on reasonable and skill behalf of court, experience Owen lacked the Everett, client.” Barnes v. 351 Ark. relating education to the standards and (citations S.W.3d omit- Arkansas for his ted). prevail To of attorney its claim testimony show sufficient relevance and malpractice, SE must Timber show that reliability under the facts and circum- “conduct fell the generally Benham’s below stances of this case. At the close of SE accepted of practice standard and that chief, in Timber’s case Benham moved for such proximately conduct caused ... [SE aas matter of The law. district damages.” prove Id. To damages Timber] court that ruled SE was required Timber cause, proximate SE Timber must to present expert testimony to the rele- that, show alleged but for the negligence practice vant of an standard Arkansas Benham, the result in the underlying attorney because the was not issue action have would been different. Id. This the a knowledge lay person. common requires Timber prove SE case within The district court also determined that case, words, or in other SE Timber must expert testimony was to show prove underlying the merits of the case as prevailed whether Timber have SE part proof malpractice. of its Ar- Id. underlying the stock valuation suit consistently “has kansas law held that the against Pictet. Because pro- SE Timber’s attorney’s conduct must be measured posed expert disqualified, was against generally the accepted standard of presented expert testimony no on either practice.” Id. determinations, issue. upon Based these attorney An is not to a liable client the court granted judgment district as a when, faith, acting in good he or she matter of law favor of Benham. judgment. makes mere errors of More- SE timely over, ap- not, filed notice of an as a is matter of peal, (1) law, that arguing the court opinion district for a liable mistaken on a abused by ruling its discretion point Owen un- of law that has not been settled

861 reliability requisites the Rule 702. jurisdiction and meets highest a court the Inc., Limousine, attorneys may differ. 363 F.3d reasonable Craftsmen 702, judge, Rule it is the trial Under jury, to a SE prove To its case Id. expert testimony, admitting who has the testimony as to present “expert had responsibility to gatekeeping “ensurfe] is, unless the the standard what expert’s testimony an both on a rests that such determine[d] court [district] foundation and is relevant to the reliable necessary the because testimony not [wa]s at hand.” Kumho Tire Co. v. task Carmi- common-knowledge falls within the case chael, 141, 1167, 119 526 U.S. S.Ct. Id. at 749. exception.” (1999) (citing 238 143 L.Ed.2d Daubert case, court ruled In this the district Pharm., Inc., Dow 509 Merrell U.S. (1) testify as an qualified Owen not 113 S.Ct. L.Ed.2d prac- standard of expert (1993)). determination, making (2) attorney and of an Arkansas tice one all of may evaluate or of law claim failed as matter (1) following whether the- factors: (a) legal malpractice issue of because tested; ory technique or has been or can be common- case did not fall within the in this (2) theory has technique whether (b) testi- knowledge exception subjected to peer publica- been review and out- required to show that the mony was tion; theory or technique whether the have underlying lawsuit would come of the potential a known or error rate and has alleged malprac- different but for been technique’s controlling oper- standards in turn. address these issues tice. We ation; theory whether the or tech- generally accepted is the scientific Expert Testimony nique Admissibility B. Daubert, 593-94, community. 509 U.S. at court’s We review the district 2786; Limou 113 S.Ct. see also Craftsmen admissibility of ex regarding decision Inc., sine, (applying at 776-77 F.3d an of dis testimony for abuse pert-witness testimony Daubert witness Limousine, Inc. v. cretion. Craftsmen case). Regardless of fac antitrust what (8th Co., Motor 363 F.3d Ford evaluated, inquiry are the main tors Cir.2004). Rule of Federal Evidence proffered expert’s whether expert testimony the admission of governs Ti sufficiently See Unrein v. is reliable. provides: and (8th mesavers, Inc., F.3d scientific, technical, special- If or other (“[t]here Cir.2005) single requirement nois trier of knowledge ized will assist the admissibility long proffer as as or to fact to the evidence understand reli expert that the evidence is indicates issue, qual- a fact in witness determine relevant”). and able skill, by knowledge, an or expert ified as education, may training, or experience, that had The district court ruled Owen testify opinion in the form of an thereto experience or the not demonstrated the (1) otherwise, is testimony or if reliability to education show sufficient data, upon facts or based sufficient opinions. acknowledging While Owen’s his product reliable testimony is the in the and experience merger substantial methods, the wit- principles and fields, district court found acquisition applied principles ness has conclusions were that because Owen’s the case. reliably methods to the facts of from experience on his own not based lawyers, assess- experience other his give great district courts latitude We lawyer might testimony of what reasonable determining expert ment whether small, do Specifically, portant, is insufficient. district but I mean specific issues court reasoned that are at here. that: issue added.) (Emphasis

Mr. Owen testified to substantial experi- merger acquisition ence ruling The court’s cannot be rec- I think fair say fields. it that he has with expressly onciled Rule al- broadly expertise established in that qualify expert lows a witness to an here, specific of the area. What issues skill, knowledge, based on his own experi- knowledge which is the about what ence, training or education. See Fed. lawyer Arkansas reasonable would do R.Evid. 702. We have expert excluded respect that complying with stat- a proffered expert because interpreted As I testimony, ute? his in the personal experience lacked area of cases, experience in testimony. that comes two Wheeling Pittsburgh See Steel from lawyers Terminals, Inc., and not what other Corp. have v. Beelman River from (8th done, did, Cir.2001). but he what In Wheeling F.3d from Pittsburgh Corp., concludes that a lawyer reasonable Steel we that it held was hydrolo- would do what he did. I don’t think abuse discretion allow gist testify passes having expertise- expert the test as an regarding safe warehousing practices. it doesn’t mean his is Id. at 715. In bad or so ruling, we reasoned that it clear that he would it I’m was wrong. talking do hydrologist “a specializing all in flood talking not at about that. I’m risk about ... management easily qualifies as an ex- his assessment what a reasonable pert under Federal Rule lawyer rely It not Evidence 702 upon do. does ... education, t]hough qualified works, eminently [and investigation, scholarly kind, testify as an any hydrologist regarding special study tests that he management, matters flood risk has made as by writings. [the exhibited education, expert] sorely lacked the em- ployment, practical personal other ex- No effort was made to learn the history periences testify as an expert specifical- Why statute: was done? ly regarding practices.” warehousing safe How it done? What are the con- added.) Id. (Emphasis cepts that being are breathed into the ruling The district court’s also at well, Hopefully expressed statute? are tacks the factual basis of Owen’s hopefully interpreted will rightly, testimony. rule, general “As a the factual legislature intended. an expert opinion goes basis of to the

credibility of testimony, not the admis Owen, I it say mean Mr. when I I sibility, mean it up opposing party to the disrespect no am you. to But I to desert- examine the factual the opinion basis for ing my I gatekeeping duty if say Only don’t expert’s cross-examination. if the mean, I is, what opinion and what I mean I fundamentally unsupported is so circumstance, think that in this the is- that it can offer jury no assistance the case, sues involved in this that I must- must such be testimony excluded.” Bon say you Tech., Inc., have not demonstrated the ex- ner v. ISP 259 F.3d 929- (8th perience Cir.2001) or the education to show suffi- 30 (quoting Hose v. Chicago cient reliability your Co., relevance and Transp. Northwestern 70 F.3d issues, (8th Cir.1995) (internal opinions relating the 974 are citations and small, very tight, omitted)). may quotations be-not unim- testimony Owen’s

863 50(a)(1). In unsupported ap- that issue.” Fed.R.Civ.P. fundamentally so was not standard, plying we draw “all reason- jury. no to the offer assistance that it can nonmoving in favor of the able inferences attorney an been licensed Owen has making party credibility without assess- years 36 for over the state of Arkansas or the Phil- weighing ments evidence.” extensively the area practiced and has (citations omitted). 256 lips, F.3d at 847 acquisitions. Arkansas is mergers may “A inference is ‘which reasonable one has only the state where Owen maintained drawn from the evidence without resort previously has received a license. Owen ” speculation.’ Fought Hayes v. Wheels dissenting from sharehold- demand letters Int’l, (8th Inc., 101 F.3d 1277 Cir. §§ ers familiar with 4-27-1328 and was 1996) (quoting Sip-Top, Inc. v. Ekco in the He affir- and 4-27-1330. answered (8th Inc., Group, F.3d Cir. opinion his when asked whether mative 1996)). as a Judgment matter of law attorney with reasonable dili- refers to the no appropriate record contains “[w]hen by ordinarily used at- gence and the skill beyond proof speculation support [a] in the affirmative torneys. He answered Inc., Sip-Top, verdict.” F.3d at 830 experience made when asked whether his (citation omitted). degree of him of the reasonable care aware expert The district court ruled that tes- in this apply that an must case. timony is required to show SE Timber’s relied making opinion, upon In his Owen ac- underlying likelihood success the parties, wit- depositions ruling, court rea- tion. so nesses, facts circumstances sur- soned: merger with First rounding say, Suffice it to Mr. McDermott’s client acquisition

Land Timber and stock, here hasn’t shown there would have experience. and his own Given facts, victory require been there. Would that these we hold the district court Well, disallowing suspect I so.... discretion in Owen’s evidence? abused its require I it ex- expert testimony strongly suspect on issue of mal- pert certainly requires and it damage, in Arkansas.3 they

some would have evidence Judgment won, C. a Matter Law had evi- just they not would have jury found for dence that the could have grant denial We review them if it had believed all its evidence novo, a matter of law de judgment as all the I others. don’t disbelieved used applying the same standards think would do so the evidence is Collings, Phillips district court. to show that there insufficient here (8th Cir.2001). According F.3d victory for his side of would have been of Civil Rule 50 of the Federal Rules Pro fight. cedure, a matter law require law party “a Arkansas does not granted not be unless has should prove the likelihood of fully heard on an issue and there is been underlying in the evidentiary basis for a a different outcome legally no sufficient law, evaluation Under Arkansas jury party to find for that suit.4 reasonable 4- §§ and Having 4. We that both 4-27-1328 3. determined the district also note excluding expert, Annotated re- we 27-1330 of the Arkansas Code erred in SE Timber’s § placed repealed of the 1980 this 64-707 need reach the whether mal- and not issue was first common-knowledge Section 64-707 case fits the ex- Arkansas Statutes. and had almost the exact ception. enacted 1965 864 “fair recognized Corp.,

term value” as also (citing is 477 S.W.2d at 463 Phelps v. Co., referring “value,” value,” 1124, “fair Watson-Stillman 365 Mo. cash 293 (1956)). Moreover, value,” “full S.W.2d the Arkan “market value.” market Watson, Supreme sas 1066, Court has held a stock Corp. Gen. Sec. v. 251 Ark. stock, broker hired to value the of 461, shares 462, (discussing 477 S.W.2d n. actually and who did be cause to made an “fair value” under dissen shareholder’s stock, evaluation of the shares of 64-707). was a § ter’s suit under Arkansas also qualified give witness sufficient evidence recognizes that is no “there set formula to fair of on the value stock. Sec. Corp., Gen. determine the ‘fair cash value’ of stock.”5 477 S.W.2d at 464. Co., (citing Id. Victor Broad. Inc. Mahu v.

rin, (1963)). Ark. 365 S.W.2d 265 The district court also misread Barnes Relying jurisdictions, cases from other Vanderford, required neither of which following Arkansas has examined the when expert testimony prove proximate determining fair of value stock: val “asset a legal cause element of malpractice action. ue, dividends, earnings, management and Barnes, the Arkansas Supreme Court ‘[ejvery relevant fact and circumstance not testimony did hold that which enters corpo into the value of the required prove whether the outcome of property rate and which itself in reflects underlying case would have been dif- ” ferent, the worth of corporate stock.’ Sec. testimony Gen. rather was re- Arkansas Business Business terpretation Timothy D. Matthews, L.R. L.Rev. 27-1328 and 4-27-1330 are new and thus shares”). viving od, finding and determination of thirty his shares. See id. determination of the fair value of such dissenting days shareholder to file a 27-1330, taken, thereof ... such 1965 Act and the 1987 surviving written days after the date on which the vote was of the fair value consolidation, same ration which is a dation (repealed dissenter’s shareholder file after language. ^[30] ... shall make written demand on the shall ... objection Corporation petition require expert or new 1987) (“If Therefore shareholder A days corporation Brewer, 64-707 file with Statutory expiration and shall disingenuous. (1987) (same). the shareholder and the sur- of his See Ark. Stat. Ann. 64-707 party shareholder, corporation 453-57 to such Corporation (“[i]f a shareholder An Overview the 1987 any argument Act asking such to a Primer: The Arkansas shares”). may, petition asking Act); Mary do within such not plan merger merger not so corporation rights for a the fair ... for within Act, thirty-day peri- vote See or novel (comparison 1987 Ark. L. Unlike finding aof under the or agree, 10 Ark. dissenting Elizabeth sixty § period generally payment value ten [10] consoli- U. corpo- §§ for a ... a favor § ^[60] law in- 4- 4- or Am. Gen. Sec. has reasoned: public, would be his stock. particular kind of stock intrinsic its market senting owner received this certained, he would receive amount of the share. On assets the number of shares held would be entitled to receive in the distribution of the net press criterion of fair value.... The owner tled preciation, of shares of whether the unite with the lar instance. Since the dissentient will not The change stock is a (1937)). Gen. this to receive the eliminates problem existence should not be and liabilities of the Corp. Camp, Corp., Thus, by issue, value of the special problem every particu- which value, stock in a result be the Arkansas corporate but is majority, finding he at an aliquot S.W.2d at 462-63 determined. when traded in otherwise affords no ex- ascertainment affected refused to the statute stock, 171 Md. appreciation end corporation funds which his proportion the fair value of the value of his corporation, Supreme amount, would by corporate fair participate, not If recognizes entitled to value of the dis- be enti- merely 190 A. (citing all the whose so as- Court de- III. Conclusion applicable the standard to quired establish attorney in Arkansas for of an above, For the reasons stated we re- See legal malpractice.6 purposes for trial verse and remand a new consis- Barnes, at 749. The issue of 95 S.W.3d with in expressed opin- tent the views this in raised Van- evidence was never expert ion. summary judg- affirmed derford, we malpractice the ment on the basis BYE, Judge, concurring in part Circuit present any evidence that failed to plaintiff dissenting part. in action have been the outcome of his agree I improperly the district court malpractice. the alleged but for different in granted judgment a matter law As at 211-12. we Vanderford, 39 F.3d respect favor of Benham with to both lia- Carter, in 972 F.2d explained Justice bility damages, I concur in the (8th Cir.1992), “[although the 957-58 Court’s decision reverse and remand for malpractice in the case is a at hand issue I agree a new trial. also the district court of the of the outcome under- determination when, grounds on the abused its discretion case, malpractice jury the in the lying experience or Owen lacked the education to decide this substi- permitted case is testify necessary regarding in this case judgment tuting the by lawyer the of care standard factfinder, jury judge, in it the the Arkansas, in it practicing excluded the tes- case.” earlier timony legal expert, of SE Timber’s chief, present- In its case in Charles Owen. Brown, who deposition the video was ed however, I the disagree, value do Court’s to make a of SE Timber’s engaged the mal- merger. Brown failure to address whether before the testified in case fits within the surrounding practice involved this to the facts and circumstances common-knowledge exception, he the merger, including the fact that was issue price a fair states it need not address after de- analyze what would be Court hired the district court erred ex- termining First and Timber’s timberland for all Land view, cluding testimony. my Brown Owen’s and bank stock. testified (declining one to address the common- of First Land and the fair value of the stock necessarily exception) does not agreed knowledge it to sell it the time was (deciding other Brown follow from the no more than million. also $65 issue). contrary, To I view testimony Land Timber’s that First di- testified unnecessary to it as decide whether million accepted rectors $65 erroneously excluded Owen’s it was the offer. Ac- district court offer because best fact, if, Brown, malpractice was testimony there was no basis for cording expert testimony was unneces- acquired claim that the stock was so obvious Pictet’s a new on testimony sary. By remanding for trial million. Brown’s was worth $88 implicit- we are liability damages, of the fair both sufficient evidence value ly indicating genuine there issue Land and Timber’s stock. shares First respect fact with to whether conduct Accordingly, judgment a matter law standard fell below the improper. case was Appel- Appellants argue appeal not rule on this issue because Bornes did did erroneously al- it at trial properly preserve lants failed Bornes, whether a dismissal lowed determine at 748. court. 95 S.W.3d however, underlying proper, suit was pay Because are no must Pictet amount it genuine ber] care. there de- issue, 30, 1998, I manded is issues of material fact on such on October $5,130,752.00,plus Timber should be saved the interest. believe SE liability. a I expense of second trial at App. 149-50. would, instead, with remand instructions The presiding district court over the fair matter enter as a of law SE valuation suit also noted the liability, favor on the issue and statutory procedure simple “is scope limit of the second trial to the straightforward.” I App. agree. the legal malpractice issue whether caused The Corporation Arkansas Business Act any damage. (the Act), 4, 27, ch. Ark.Code tit. sets lawyer no Benham dispute There is in very straightforward forth a manner applicable statutory missed the deadline step-by-step procedure dissenting a share- a fair filing for valuation suit. As the holder must undertake to assert dissen- notes, Likewise, Court SE lost fair valua- rights Timber its ter’s under the Act. corporation tion suit it to file time- a in re- steps because failed such must consider ly. sponding to a presiding exercising The district court over the shareholder dis- rights senter’s are in a specifically straight- valuation suit held Oc- set forth Pictet’s 1998, Up forward manner. SE triggered tober letter Tim- until SE to respond timely pay- failed to Pictet’s obligation days: ber’s to file suit within 60 demands, ment both and Pictet § complied Pictet Octo- its precisely procedures required followed the by demanding pay- ber 1998 letter by the Act. ment Pictet’s own estimated fair value .... According § of its shares First, SE Timber informed Pictet a vote (60) sixty had days [SE Timber] from merger on the would take at a place spe- 30, 1998, pro- October commence cial meeting, shareholder’s and notified ceeding resolve Pictet’s claim. [SE Pictet its dissenter’s rights.7 re- did not commence proceed- Timber] this sponse, Pictet notified it SE Timber would 15, 1999, ing March until two and one- merger preserved dissent from the summarize, half To months late.... [SE rights.8 provided dissenter’s Benham next clearly pay failed to Pictet as Timber] notification of approved merger required by § the statute under advised Pictet it should amake demand for clearly timely failed to commence a payment deposit the certificates for judicial proceeding § under dissenting timely shares.9 Pictet certi- consequence of which is that Tim- it 6,000 fied was the beneficial [SE owner of proposed corporate creating 7. "If action dis- is effectuated and must not vote his shares rights senters' is submitted to a at a vote proposed favor action.” Ark.Code meeting, meeting shareholders’ notice 27-1321(a). §Ann. 4— may must state that shareholders are or be rights entitled assert dissenters' under corporation 9."[T]he shall deliver a written chapter accompanied by copy of this dissenters' notice to all shareholders who sat- 4-27-1321(a). chapter.” § Ark.Code Ann. requirements § isfied the of 4-27-1321 [stat- ing] payment where the must be demand sent proposed corporate creating 8. “If action dis- and where and when certificates for certifi- rights ... senters' is submitted at a to vote deposited setting] cated shares must be [and meeting, shareholders’ a shareholder who corporation date which the must receive rights wishes assert dissenters' must payment demand.” Ark.Code Ann. 4— corporation deliver to vote before the 27-1322. taken written notice his intent to demand payment his proposed shares if the action stock, of pay- Pictet the full amount its estimate if no of First Land demanded shares shares, the and such suit was of fair value of filed.14 ment the share certificates.10 deposited its Indeed, undisputed the facts this case payment receipt of Pictet’s de- Upon lawyer establish Benham knew the Octo mand, 60-day the Act letter triggered ber 30 the dead a) fair value of the filing estimate the either line for a fair valuation suit. theAs notes, Pictet its shares within pay for Pictet sent Court a second demand b) days, return the share certifi- sixty 15, 1999, or January to SE on letter pay SE Timber failed to cates Pictet.11 substantively which was identical the within days, triggering Pictet’s Pictet October 30 receiving letter. After the own value statutory right to make its fair letter, January 15 Benham advised SE estimate.12 January the triggered letter 60-day § the under It rule 4-27-1330. specifically Pictet’s re- October letter then, necessarily follows, if Benham knew “[sjixty have days fact that ferred the January 60-day the 15 letter the triggered elapsed date set out for now since the deadline, he have knew or should known in your let- demanding payment contained substantively the identical 30 let October to us we have not received ter [and] already triggered had the ter deadline. nor the estimate payment for our shares Thus, case, simply in this I particular can let- by the The October 30 corporation.” any genuine not determine there is issues to Pictet’s specifically also referred ter jury of material for the concerning fact statutory right to make its own fair value of Benham’s the reasonableness conduct 4-27-1328, § forth under set estimate Thus, missing statutory Although the deadline. I million. a fair value estimate $88 this, great joy no noting missing take no the October 30 simply dispute there statutory example deadline is the 60-day the for classic triggered letter deadline suit,13 lawyer’s lack of fair and SE when care skill is so SE Timber’s valuation , obligation pay negli the trier of fact can find Timber’s concomitant obvious may notify corporation "A notice 12. "A dissenter the 10. shareholder sent dissenters' pay- § writing described in 4-27-1322 must demand estimate of the fair his own value ment, due, certify acquired whether he beneficial shares amount interest his ownership the before the date re- shares payment ... demand of his estimate [if] quired to be set forth in the dissenters’ notice corporation payment § 4- to make under fails deposit ... and his in accordance certificates sixty days after the date 27-1325 within with the terms of the notice.” Ark.Code Ann. demanding payment.” Ark.Code Ann. set for 4-27-1323(a). § § 4-27-1328. proposed corporate ac- "[A]s 11. soon as the § payment “If a for under 4-27- 13. demand taken, upon receipt payment of a tion is unsettled, corporation shall 1328 remains demand, pay corporation each dis- shall sixty proceeding days commence a within complied § senter who 4-27-1323 receiving payment peti- after demand and corporation amount the estimates to be to determine the fair value of tion shares, plus accrued inter- fair value of his the shares and accrued interest.” Ark.Code 4-27-1325(a). § est.” Ark Code Ann. "If the §Ann. 4-27-1330. corporation proposed does not take the action (60) days sixty within after the date set corporation "If the does not commence demanding payment depositing share sixty-day period, proceeding it certificates, corporation shall return the pay demand re- shall each dissenter whose deposited transfer certificates and release the Ark mains unsettled the amount demanded.” imposed uncertificated restrictions 4-27-1326(a). § Code Ann. 4-27-1330. shares.” Id. gence knowledge. as a matter of common Myers, Kaempe

See v. DAVIS, 367 F.3d Don William Petitioner— (D.C.Cir.2004) ac (“Examples Appellant, (or act) fall tions failures within the knowledge’ ‘common exception include

allowing Larry NORRIS, Director, the statute of to run limitations Arkansas claim[.]”); Williams v. Calla on a client’s Department Correction, (D.D.C.1996) ghan, 46, F.Supp. Appellee. Defendant — (“Allowing a statute of run limitations to No. 04-2192. example an the type of conduct attorney can negligent found United of Appeals, States Court O’Neil knowledge.”); matter common Eighth Circuit. (D.C.1982) Bergan, 452 A.2d 337, 20, (same); Reagan, Barth v. Submitted: June Ill.App.3d 2005. 137 Ill.Dec. 546 N.E.2d 90-91 Sept. Filed: 2005. (1989) (“Expert testimony has been held Rehearing Rehearing En Banc unnecessary to be in Illinois ... in cases Denied Nov. comply where the failed has limitations.”); statute Michael DiSabatino, J.D., A. ADMISSIBILITY

AND NECESSITY OF EXPERT EVIDENCE

A TO STANDARDS OF S AND

PRACTICE IN NEGLIGENCE

MALPRACTICE ACTION AGAINST

ATTORNEY 14 A.L.R.4th 170 at

(1982) (discussing cases in which or was not where

alleged malpractice stemmed from attor

ney’s failure file a case a statuto deadline).

ry joy

I also in discussing find no obvi- malpractice

ousness of the committed believe, however,

this case. I do not

parties or the district court should suffer

the unnecessary expense of a trial second liability spare the issue of appel- this

late court displeasure doing from the so. consequence,

As a I respectfully dissent

from the Court’s failure to address wheth-

er the malpractice involved fits case

within the common-knowledge exception.

I would reverse and remand for a trial

solely on the issue whether the malpractice any damages.

caused SE Notes 84-85

Case Details

Case Name: 1st Union Natl. Bank v. Paul Benham

Court Name: Court of Appeals for the Eighth Circuit

Date Published: Sep 13, 2005

Citation: 423 F.3d 855

Docket Number: 04-3656

Court Abbreviation: 8th Cir.