Zimmerman v. Brown

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No. 108,087

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

DANIEL J. ZIMMERMAN and SARA K. ZIMMERMAN,
Appellants,

v.

RICHARD W. BROWN and
BROWN, ISERN & CARPENTER,
Appellees.


SYLLABUS BY THE COURT

1.
The standard of review relating to summary judgment is discussed and applied.

2.
The common-law defense of in pari delicto prohibits a plaintiff from recovering
damages arising from misconduct for which the plaintiff bears equal responsibility. Thus,
relief will be denied where the parties are shown to have been in pari delicto or to have
acted with the same degree of knowledge as to the illegality of the transaction.

3.
The in pari delicto doctrine applies only when the wrong of the plaintiff equals
that of the defendant in order to avoid allowing an overwhelmingly offensive act of the
defendant to stand merely because the plaintiff's conduct was also wrongful, although
slight.

4.
For purposes of determining whether the in pari delicto doctrine applies, the
existence of a fiduciary relationship between the parties does not automatically render the
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fiduciary's wrongful actions more blameworthy than the wrongful actions of the
beneficiary; instead, a fiduciary relationship is a fact that must be considered along with
all of the other facts in comparing the culpability of the parties.

5.
If a dispute of material fact exists on summary judgment with respect to the
parties' relative appreciation of the wrongfulness of their actions and resolution of this
factual dispute bears on applicability of the in pari delicto doctrine to bar the plaintiff
from recovering damages for malpractice, it is the role of the jury, not the court, to
determine whether a party's actions were wrongful and, if so, whether they were wrongful
enough to equal or outweigh the other party's wrongful conduct for purposes of invoking
in pari delicto as a defense to recovery.

6.
A contract that is illegal or is against public policy is unenforceable.

7.
The public policy of a state is the law of that state as found in its constitution, its
statutory enactments, and its judicial decisions.

8.
For a defendant to properly assert an illegality defense in a tort action, it must
prove that the illegal act was the proximate cause of the plaintiff's injury. Proximate
cause is that which in natural and continuous sequence, unbroken by an efficient
intervening cause, produces the injury, and without which the injury would not have
occurred, the injury being the natural and probable consequences of the wrongful act.



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9.
Natural and probable consequences are those which human foresight can
anticipate because they happen so frequently they may be expected to recur. Whether a
party has established proximate cause is ordinarily a question of fact.

10.
In order to prevail on a legal malpractice claim, a plaintiff is required to prove: (1)
the duty of the attorney to exercise ordinary skill and knowledge, (2) a breach of that
duty, (3) a causal connection between the breach of duty and the resulting injury, and (4)
actual loss or damage.

11.
The duty of an attorney to his or her client is grounded in a relationship fiduciary
in character, binding the attorney to the highest degree of fidelity and good faith to his or
her client on account of the trust and confidence imposed.

12.
The Kansas Rules of Professional Conduct do not create a legal duty upon which a
negligence action can be based; instead, the existence of a duty must independently arise
from common law. But attorney conduct which violates the Kansas Rules of Professional
Conduct may also breach an independent legal duty. In such a case, it is the breach of the
independent legal duty that gives rise to a tort cause of action, while the Kansas Rules of
Professional Conduct reflect the governing standards by which an attorney is measured.

13.
To prove a breach of the duty created by the fiduciary relationship between an
attorney and his or her client, a plaintiff must establish that the defendant attorney
deviated from the professional standards of conduct applicable to the type of law which
the defendant attorney practices. Testimony from an expert in that particular area of law
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is generally required to prove the standard of conduct by which the professional actions
of the attorney are measured and whether the attorney deviated from the appropriate
standard.

Appeal from Barton District Court; JOHN E. SANDERS, judge. Opinion filed July 12, 2013.
Reversed and remanded.

Michael J. Wyatt, of Mann Law Offices, L.L.C., of Hutchinson, for appellants.

Gerald L. Green, of Gilliland & Hayes, P.A., of Hutchinson, for appellees.

Before MALONE, C.J., GREEN and STANDRIDGE, JJ.

STANDRIDGE, J.: Daniel and Sara Zimmerman (the plaintiffs) brought a legal
malpractice claim against attorney Richard Brown and Richard's law firm, Brown, Isern
& Carpenter (the defendants), related to the sale of the plaintiffs' Quixtar (formerly
Amway) business to Richard and his wife. Marlene Brown, Richard's wife, was also
originally named as a defendant but was later dismissed from the action. The defendants
moved for summary judgment on grounds that the doctrines of in pari delicto and
illegality prohibit the plaintiffs from recovering damages against the defendants for legal
malpractice. Alternatively, the defendants argued the plaintiffs failed to come forward
with sufficient evidence to establish the essential elements of a legal malpractice cause of
action. The district court granted summary judgment in favor of the defendants based on
the defenses of in pari delicto and illegality. In light of this ruling, the court found it
unnecessary to address whether the plaintiffs had come forward with sufficient evidence
to establish legal malpractice.

But the record on summary judgment reveals several disputes of material fact that
must be resolved by a jury before the court can determine whether the in pari delicto
defense applies to prohibit the plaintiffs from recovering damages; thus, the district court
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erred in holding at the summary judgment stage of the proceedings, as a matter of law,
that the doctrine prohibits the plaintiffs from recovering damages against the defendants
for legal malpractice. Summary judgment in favor of the defendants based on illegality
also was improper because there is insufficient evidence in the record to establish as a
matter of law that the damages sustained by Richard's alleged breach of fiduciary duty
was a natural and probable consequence of the plaintiffs' decision to sell their Quixtar
business to Richard and his wife. As to the propriety of summary judgment on the merits
of the plaintiffs' underlying claim, we find the plaintiffs have satisfied their burden to
come forward with sufficient evidence to establish the essential elements of a legal
malpractice cause of action; thus, they are entitled to go forward with their claim.

FACTS

The plaintiffs lived across the street from their friends of many years, Richard and
Marlene Brown. Richard had been the plaintiffs' attorney for over 30 years in a variety of
business matters. Both couples, along with Roy and Marcia Westhoff, were Quixtar
distributors. Quixtar was a multilevel marketing company. Relevant here, the plaintiffs
had built up quite a successful Quixtar business, which in 2006 generated income for the
plaintiffs in an amount of $23,290. The parties referred to this income as "mailbox
money" because the sales generating this income were transacted not by the plaintiffs
themselves, but by a number of distributors at successively lower levels.

At all times relevant to this lawsuit, Quixtar prohibited its distributors from
participating in any other multilevel marketing business while acting as a distributor for
Quixtar and required any distributor who sold or terminated a Quixtar business to wait 6
months before entering into another multilevel marketing business. Additionally, former
Quixtar distributors were not allowed to solicit their Quixtar contacts for purposes of
involvement with another multilevel company for 2 years after leaving Quixtar.

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In late 2006, the plaintiffs, the Browns, and the Westhoffs were presented with an
opportunity to participate in XanGo, a multilevel juice and supplement marketing
company. All three couples were interested in XanGo but had concerns because of
rumors that various Quixtar distributors found to have violated their noncompete
agreement by becoming involved in other multilevel marketing businesses had been
forced to relinquish their Quixtar distributorships. The three couples later met to discuss
whether they should get involved with XanGo and whether doing so would violate the
Quixtar noncompete restrictions.

After this initial meeting, Richard obtained a copy of Quixtar's compendium,
which contained all the Quixtar rules and regulations. Thereafter, the three couples met
again. Richard informed the group that in order to become involved with XanGo without
violating Quixtar's restrictions, each couple would need to set up a corporation owned by
a straw man to set up and manage the XanGo business so that ownership could not be
traced back to any of the couples. Because the plaintiffs' Quixtar business was so
lucrative, Richard specifically told them that they should enter into a false sale of their
Quixtar business to another straw man. Richard advised the plaintiffs that it was
important that they pick individuals they could really trust in connection with the
formation of the XanGo business and the false sale of the Quixtar business. After some
discussion, the parties decided that plaintiffs would "sell" their Quixtar business to the
Browns, their direct up-line Quixtar distributor, because Quixtar required the plaintiffs to
first offer the business to their direct up-line distributor. The parties thought this
arrangement was best because the Quixtar higher-ups, or "diamonds," would "have their
eyes on [the plaintiffs]," and a sale to the Browns would not "stir up a lot of stuff with the
diamonds."

On January 18, 2007, the plaintiffs and the Browns executed an Independent
Business Sale Agreement pursuant to which the plaintiffs "sold" their Quixtar business to
the Browns for $36,550.22. As was required, the agreement subsequently was approved
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by Quixtar. Significant for purposes of summary judgment, the parties agreed that they
understood that the written agreement would not be an actual sale and that the Browns
would forward all earnings received to the plaintiffs "forever." In connection with the
false sale and as an additional measure to avoid violating Quixtar's noncompete
provisions, the plaintiffs established GreenTree Corporation in the name of Sara's father,
George Miller, to manage the XanGo business. Richard prepared GreenTree's
incorporation papers and submitted them to the Kansas Secretary of State on the
letterhead of his law firm, Brown, Isern & Carpenter. Richard also prepared a stock
purchase agreement allowing the plaintiffs to purchase the corporation from Miller after
expiration of the 6-month noncompete period.

Both parties to the sales agreement actively participated in XanGo until April or
May 2007, when the Westhoffs got into trouble with Quixtar for soliciting Quixtar
customers for their XanGo distributorship. Daniel and Richard were not happy about the
Westhoffs getting caught by Quixtar because they did not want any red flags. Thereafter,
the plaintiffs ceased all local XanGo business because they were worried about getting
into trouble with Quixtar like the Westhoffs.

From March 15, 2007, to July 15, 2008, the Browns deposited payments received
from Quixtar into the plaintiffs' bank account. The Browns made no more payments to
the plaintiffs after July 2008.

On November 9, 2009, the plaintiffs filed suit against Richard, Marlene, and
Brown, Isern & Carpenter, alleging breach of fiduciary duty, fraud and fraudulent
inducement, breach of contract, promissory estoppel, tortious interference with existing
contractual relations, tortious interference with prospective business advantage or
relationship, and negligence/legal malpractice. The plaintiffs claimed that Richard, as
their attorney, advised them to enter into a false sale of their business to Richard and
Marlene in order to legitimize the plaintiffs' future involvement in XanGo, but the
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Browns had wrongfully retained plaintiffs' Quixtar earnings since August 2008. The
defendants answered, generally denying the plaintiffs' allegations and claiming the
Browns had legitimately purchased the plaintiffs' business for fair market value.

The plaintiffs later dismissed all claims except for legal malpractice and breach of
contract. Relying on the doctrines of in pari delicto and illegality, the defendants moved
for summary judgment on grounds that the plaintiffs' own knowledge of and participation
in circumventing the Quixtar noncompete clause barred them from recovering damages
on their claims. The defendants further argued that the plaintiffs could not prove that the
defendants were guilty of any professional negligence and, even if they could, the
plaintiffs could not prove the alleged negligence caused the damages claimed.

Thereafter, the plaintiffs dismissed Marlene as a defendant and dropped the breach
of contract claim. Following argument, the district court granted summary judgment in
favor of the defendants on the legal malpractice claim based on the doctrines of in pari
delicto and illegality. In so doing, the court determined that the parties had committed
equal wrongs with respect to their efforts to circumvent the Quixtar noncompete
agreement, regardless of any attorney-client or fiduciary relationship between the parties.
Given its decision, the court found it unnecessary to address whether the undisputed facts
established that the defendants were entitled to judgment as a matter of law with respect
to the substantive claim of legal malpractice. The plaintiffs appeal.

STANDARD OF REVIEW

When the pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, show that there is no genuine issue as to any material
fact, the moving party is entitled to judgment as a matter of law and summary judgment
is appropriate. The district court is required to resolve all facts and inferences which may
reasonably be drawn from the evidence in favor of the party against whom the ruling is
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sought. When opposing a motion for summary judgment, the adverse party must come
forward with evidence to establish a dispute as to a material fact. In order to preclude
summary judgment, the facts subject to the dispute must be material to the conclusive
issues in the case. On appeal, the same rules apply; summary judgment must be denied if
reasonable minds could differ as to the conclusions drawn from the evidence. Osterhaus
v. Toth, 291 Kan. 759, 768, 249 P.3d 888 (2011).

"'An issue of fact is not genuine unless it has legal controlling force as to the
controlling issue. The disputed question of fact which is immaterial to the issue does not
preclude summary judgment. If the disputed fact, however resolved, could not affect the
judgment, it does not present a genuine issue of material fact. [Citation omitted.]'"
Mitchell v. City of Wichita, 270 Kan. 56, 59, 12 P.3d 402 (2000) (quoting Bergstrom v.
Noah, 266 Kan. 847, 871-72, 974 P.2d 531 [1999]).

See Hall v. Shelter Mutual Ins. Co., 45 Kan. App. 2d 797, 800, 253 P.3d 377 (2011), rev.
denied 293 Kan. __ (2012).

ANALYSIS

In pari delicto

The plaintiffs argue the district court erred in holding, as a matter of law, that the
doctrine of in pari delicto prohibits them from recovering damages against the defendants
for legal malpractice. Specifically, the plaintiffs contend that when considered in a light
most favorable to them—as the party opposing summary judgment—the evidence
submitted by the parties establishes at least two disputes of material fact that would affect
the outcome at trial. The first dispute identified by the plaintiffs is the question of
whether the actions taken by the plaintiffs to circumvent the Quixtar noncompete
agreement even qualify as wrongdoing for purposes of invoking the doctrine of in pari
delicto as a defense to recovering damages in this suit for legal malpractice. If the finder
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of fact resolves this first dispute in favor of the defendants, the second factual dispute
identified by the plaintiffs is whether their actions were wrongful enough to equal or
outweigh Richard's wrongful conduct for purposes of invoking in pari delicto as a
defense to recovery. Thus, the crux of the plaintiffs' argument is that the court's decision
to grant summary judgment based on a finding that the parties were in pari delicto was
premature, because it is the role of the jury, not the court, to determine whether the
plaintiffs engaged in any misconduct and, if so, to weigh that misconduct against
Richard's misconduct. For the reasons set forth below, we agree.

The doctrine of in pari delicto is the "principle that a plaintiff who has participated
in wrongdoing may not recover damages resulting from the wrongdoing." Black's Law
Dictionary 862 (9th ed. 2009).

"The common-law defense of in pari delicto prohibits a party from recovering damages
arising from misconduct for which the party bears responsibility[,] bears fault, or which
resulted from his or her wrongdoing. Thus, relief will be denied where the parties are
shown to have been in pari delicto or to have acted with the same degree of knowledge as
to the illegality of the transaction. The law will leave the parties just in the condition in
which it finds them." (Emphasis added.) 27A Am. Jur. 2d, Equity § 103, pp. 641-42.

Particularly relevant to the issue presented here, the in pari delicto doctrine applies
only when "'the wrong of the one party equals that of the other.'" (Emphasis added.)
Goben v. Barry, 234 Kan. 721, 727, 676 P.2d 90 (1984) (quoting 27 Am. Jur. 2d, Equity
§ 141, p. 676). As such, the wrongful acts of each party must be weighed in order "to
avoid allowing an overwhelmingly offensive act of the defendant to stand merely because
the plaintiff's conduct was also wrongful, although slight." 234 Kan. at 727.

In this case, the district court weighed the wrongful acts of each party and
concluded that the parties were equally responsible for any damages sustained by the
plaintiffs as a result of those acts.
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"The Zimmermans and Browns stood on equal ground and their interests came
together in agreement and relative positions. Both were long-time Quixtar distributors
and each built up a good business. Both were approached together by a XanGo recruiter.
Both wanted to participate in XanGo and Quixtar at the same time and receive money
from both businesses. Both sought to avoid Quixtar restrictions and the loss of income
from their Quixtar businesses. Both sought to avoid detection of their arrangements by
Quixtar."

As they did in their briefing to the district court, the plaintiffs once again argue
that Richard's culpability, as an attorney, is far greater than their culpability as clients
who engaged in misconduct at the direction of their attorney. With regard to this
argument, the district court agreed that Richard's participation as an attorney in the
misconduct was a factor to be considered in this case to determine whether the parties
stood in parity with each other.

"It is true that [Richard] is an attorney and the others are not. It does not
necessarily follow however, considering all the undisputed facts in this particular unique
situation in which all three couples found themselves, that [Richard] was in an unequal
(higher) or fiduciary relationship with the other parties. The parties were in parity . . . .
. . . .
"The issue of whether or not plaintiffs sought out [Richard] as a friend or as an
attorney is only relevant, if what they claim is true, to discover whether or not they acted
together on equal footing in their attempt to avoid their obligations to Quixtar. The Court
has determined that they stood in parity."

We agree with the district court that the fiduciary relationship between the parties
does not automatically render Richard's wrongful actions in deceiving Quixtar more
blameworthy than the plaintiffs' actions but, instead, is a fact that must be considered
along with all of the other facts in comparing the culpability of the parties. Nevertheless,
it does not appear that the district court did, in fact, consider the fiduciary relationship
between the parties in assessing the wrongfulness of the acts in which each of the
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individual parties engaged in their attempt to avoid their obligations to Quixtar. Since we
are in as good a position as the district court to review the record on a motion for
summary judgment, we could reassess the culpability of the parties and consider the
fiduciary relationship between the parties as part of that assessment. We decline to do so,
however, because—as the following discussion demonstrates—the record on summary
judgment reveals several disputes of material fact that must be resolved by a jury before
the court can determine, as a matter of law, whether the in pari delicto defense applies to
prohibit the plaintiffs from recovering damages.

We begin our discussion by acknowledging that the record on summary judgment
reflects the following uncontroverted facts. Both parties were long-time Quixtar
distributors. Both had built up a good business over the years and were receiving
significant mailbox money as a result. Both were approached together by a XanGo
recruiter. Both wanted to participate in XanGo and Quixtar and receive money from the
two businesses at the same time. Both sought to avoid Quixtar restrictions and the loss of
income from their Quixtar businesses. And finally, both sought to avoid detection of their
arrangements by Quixtar. From these uncontroverted facts it appears—as the defendants
assert—that the objective of both parties was to avoid their contractual obligations to
Quixtar. But the fact that both parties may have had the same objective does not
necessarily mean that the conduct in which each of the individual parties engaged to
achieve that objective was wrongful and/or weighed equally.

Regarding the propriety of the conduct in which they engaged, the plaintiffs assert
that they never believed that they were doing anything morally or ethically wrong when
they sold their Quixtar business to the Browns on paper only and created a new
corporation for their XanGo business. The defendants dispute this factual assertion but
argue this dispute does not preclude summary judgment in their favor because the dispute
is supported by sham testimony created by the plaintiffs for the sole purpose of avoiding
summary judgment. Specifically, the defendants maintain the plaintiffs' assertion is
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supported only by a "self-serving" statement in Daniel's deposition and is contradicted by
other statements made by Daniel earlier in the deposition in which he acknowledged that
he and Sara did not want Quixtar to know that they had sold their Quixtar business to the
Browns on paper only and had created a new corporation for their XanGo business.
Because it granted summary judgment in favor of the defendants, it appears the district
court found Daniel's testimony that he and his wife did not believe they engaged in
unethical conduct was insufficient to create a genuine issue of material fact.

Upon review of the relevant portions of the transcript from Daniel's deposition
testimony, however, we find the statements perceived by the defendants as
inconsistencies are not the sort of contradictory sworn statements that Kansas courts have
held insufficient to avoid summary judgment. "Sham testimony" in that context occurs
when an affidavit is created to contradict information found in previous sworn statements
in order to create an issue of material fact and defeat a motion for summary judgment.
See Bacon v. Mercy Hosp. of Ft. Scott, 243 Kan. 303, 313-14, 756 P.2d 416 (1988); Mays
v. Ciba-Geigy Corp., 233 Kan. 38, 45-46, 661 P.2d 348 (1983). To that end, we see no
contradiction between the plaintiffs' attempt to avoid detection by Quixtar in order to
circumvent the limitations of the noncompete agreement and the plaintiffs' asserted good-
faith belief based on their attorney's advice that they were not doing anything unethical or
otherwise impermissible according to the Quixtar noncompete agreement. The plaintiffs
readily acknowledge that they wanted to participate in XanGo, but Richard, as their long-
time attorney, specifically advised the plaintiffs that without selling their Quixtar
business they would be violating their noncompete agreement with Quixtar. Thereafter,
Richard urged the plaintiffs, as their attorney and a beneficiary of the prospective
transaction, to sell their business to he and his wife "on paper" and start another company
in the name of a third party to avoid detection by Quixtar and circumvent the limitations
of the noncompete agreement. Given the way in which Richard presented the proposal
(that the plaintiffs would be in violation of the noncompete agreement unless they
followed this advice), the plaintiffs assert they never believed that they were engaging in
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any impermissible act under the terms of the Quixtar noncompete agreement. The
plaintiffs maintain they were simply given a step-by-step plan to structure their
businesses and were sternly warned by Richard to avoid detection by Quixtar so that they
would not have any disputes with their up-line distributors.

The plaintiffs' contention that they did not believe they were engaging in unethical
conduct finds support in evidence other than Daniel's testimony as well. The plaintiffs
assert Richard's position as an attorney is a significant factor that must be considered in
assessing the parties' relative appreciation of the wrongfulness of the acts in which each
of the individual parties engaged in their attempt to avoid their obligations to Quixtar.
Specifically, the plaintiffs contend that, as an attorney, Richard fully appreciated the legal
impropriety of devising and executing the January 18, 2007, Independent Business Sale
Agreement pursuant to which the plaintiffs "sold" their Quixtar business to the Browns
for $36,550.22 while agreeing orally that the transaction would not be an actual sale of
the plaintiffs' business but, instead, the Browns would forward all earnings received to
the plaintiffs "forever." As an attorney, Richard also appreciated the legal effect of the
written transaction on he and his wife's ability to own and control the monthly mailbox
money generated and on he and his wife's ability to claim legal ownership of the
distributorship, regardless of any oral agreement to the contrary.

Notably, the district court neither acknowledged nor determined to what extent a
disparity in the parties' relative appreciation of the wrongfulness of the transactions at
issue was material to a decision regarding whether the in pari delicto doctrine applied in
this case. But it is reasonable to infer from Richard's 30-plus years' experience as a
practicing attorney that he has extensive knowledge regarding the formation and
enforcement of contracts and the mechanisms through which his clients will act under his
direction. It also is reasonable to infer that lay persons may be confused about the legality
of sham transactions employed to avoid contractual obligations such as the one presented
here. This is especially true here given that Daniel testified he had only a high school
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education. Viewing the evidence in a light most favorable to the plaintiffs, as we must do
on summary judgment, we find that a dispute of material fact exists with respect to the
parties' relative appreciation of the wrongfulness of their actions and that resolution of
this factual dispute bears on applicability of the in pari delicto doctrine as a defense to bar
the plaintiffs from recovering damages for legal malpractice. When such a dispute of
material fact exists, it is the role of the jury, not the court, to determine whether the
plaintiffs' actions were wrongful and, if so, whether they were wrongful enough to equal
or outweigh Richard's wrongful conduct for purposes of invoking in pari delicto as a
defense to recovery.

Before closing on this issue, we believe it is appropriate to specifically note what
we do not find in this case. We do not find applicability of the in pari delicto doctrine to
be an issue that can never be resolved on summary judgment. We do not find that the
defense of in pari delicto will be inapplicable after the disputes of material fact in this
particular case are resolved by a jury. We merely find that the plaintiffs have satisfied
their burden to provide evidence sufficient to create a factual dispute regarding the
parties' relative appreciation of the wrongfulness of their actions and that this factual
dispute is material to the outcome of this case because its resolution bears directly on
whether the in pari delicto doctrine applies to prohibit the plaintiffs from recovering
damages from the defendants for legal malpractice.

Illegality

As an alternative to in pari delicto, the defendants argue the doctrine of illegality
applies to prohibit the plaintiffs from recovering damages from the defendants for legal
malpractice. "An illegal contract is a promise that is prohibited because the performance,
formation, or object of the agreement is against the law. [Citation omitted.]" Petty v. City
of El Dorado, 270 Kan. 847, 853, 19 P.3d 167 (2001). In this case, the defendants did not
allege, let alone present any evidence to establish, that the contract for sale of the
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plaintiffs' business to the defendants violated any law. Instead, the defendants allege that
the plaintiffs' deceptive use of otherwise lawful means to avoid contractual commitments
to others is against public policy and thereby renders the underlying business sale
agreement, and all rights arising from it, unenforceable. See Varney Business Services,
Inc. v. Pottroff, 275 Kan. 20, 39, 59 P.3d 1003 (2002) (a contract that is illegal or against
public policy is unenforceable under Kansas law).

The public policy of a state is the law of that state as found in its constitution, its
statutory enactments, and its judicial decisions. McAllister v. Fair, 72 Kan. 533, 540, 84
P. 112 (1906), superceded by statute on other grounds as stated in In re Foster's Estate,
182 Kan. 315, 316-17, 320 P.2d 855 (1958). But the defendants fail to cite to any
constitutional principle, statutory provision, or judicial decision to support their allegation
that the contract for sale of the plaintiffs' Quixtar business to the Browns contravenes
public policy. In fact, the defendants have failed to even allege, let alone provide any
evidence to establish, that the contract for sale of the plaintiffs' Quixtar business to the
defendants (which the parties agree for purposes of summary judgment required the
defendants to make monthly payments forever) is in any way contrary to the terms and
conditions of the Quixtar distributor agreement between the plaintiffs and Quixtar.

Even if the defendants had submitted sufficient facts and relevant law to establish
the sales contract here violated Kansas public policy, we fail to see how the doctrine of
illegality would apply to prohibit the plaintiffs from recovering damages for legal
malpractice. Notably, it is the defendants, not the plaintiffs, who are in favor of
preserving the terms and conditions of the underlying sale agreement. Thus, the
defendants' position on this issue outside the context of summary judgment—that their
purchase of the plaintiffs' business is legally binding—is in direct conflict with their
stated position that the sale agreement is unenforceable because it violates public policy.
If we agree with the defendants on the position they have taken on summary judgment
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here, we would be required to strike down the sale agreement as void, which necessarily
would place the parties in the respective positions they held prior to the sale.

Even if we were to ignore the fact that the defendants essentially are arguing on
summary judgment that the sales contract is void, the defense of illegality would still be
inapplicable to the specific facts presented here. For a defendant to properly assert an
illegality defense in a tort action, it must prove that the illegal act was the proximate
cause of the plaintiff's injury. Beggerly v. Walker, 194 Kan. 61, 66-67, 397 P.2d 395
(1964). Although in the context of proving negligence instead of an illegality defense, our
Supreme Court has defined proximate cause as that "cause 'which in natural and
continuous sequence, unbroken by an efficient intervening cause, produces the injury,
and without which the injury would not have occurred, the injury being the natural and
probable consequence of the wrongful act.'" Rhoten v. Dickson, 290 Kan. 92, 114-15, 223
P.3d 786 (2010) (quoting Yount v. Deibert, 282 Kan. 619, 624-25, 147 P.3d 1065 [2006]).
To satisfy the burden of proof on the causation element, the party who bears that burden
must produce evidence that "'"affords a reasonable basis for the conclusion that it is more
likely than not that the conduct of the defendant was a cause in fact of the result."'" 290
Kan. at 115 (quoting Yount, 282 Kan. at 628).

In support of proximate cause, the defendants argue there could be no legal
malpractice action in the absence of the underlying sales contract. By posting it as a "but
for" argument, the flaw in that argument becomes clear. In retrospect, it can often be said
that, but for a certain fact, damages would not have been sustained. For purposes of
proximate cause, however, the inquiry must go beyond this "but for" analysis; the
damages sustained must also be an ordinary and natural consequence of the wrongful
conduct. Aguirre v. Adams, 15 Kan. App. 2d 470, 474, 809 P.2d 8 (1991). "Natural and
probable consequences are those which human foresight can anticipate because they
happen so frequently they may be expected to recur. [Citation omitted.]" Norton Farms,
Inc. v. Anadarko Petroleum Corp., 32 Kan. App. 2d 899, 904-05, 91 P.3d 1239 (2004).
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Whether a party has established proximate cause is ordinarily a question of fact. Hale v.
Brown, 287 Kan. 320, 324, 197 P.3d 438 (2008).

In order to preclude the plaintiffs from recovering damages for legal malpractice
based on illegality in this case, the defendants must establish as a matter of law that the
damages sustained by Richard's alleged breach of fiduciary duty (the failure to advise the
plaintiffs to explore the need for independent counsel under circumstances where Richard
was acting both as attorney to the plaintiffs and a party to the sales transaction) was a
natural and probable consequence of the plaintiffs' decision to sell their Quixtar business
to the Browns. The defendants have failed to satisfy that burden.

Attorney Malpractice

Having determined that the district court's decision to grant summary judgment in
favor of the defendants based on the doctrines of in pari delicto and illegality were
premature and improper, respectively, we now address the defendants' argument that the
plaintiffs failed to come forward with sufficient evidence to establish the essential
elements of a legal malpractice cause of action.

In order to prevail on a legal malpractice claim, a plaintiff is required to prove: (1)
the duty of the attorney to exercise ordinary skill and knowledge, (2) a breach of that
duty, (3) a causal connection between the breach of duty and the resulting injury, and (4)
actual loss or damage. Canaan v. Bartee, 276 Kan. 116, 120, 72 P.3d 911, cert. denied
540 U.S. 1090 (2003).

Duty

The plaintiffs contend in their petition that Richard had served as their attorney for
nearly 30 years and was acting in that capacity during all times relevant to the
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transactions at issue in this case. In the pretrial order, the parties agreed that the issue of
whether Richard was acting as the plaintiffs' attorney in conjunction with the transactions
at issue was a question of fact. Consistent with the pretrial order, the defendants did not
seek summary judgment on this particular question. Viewing the evidence in a light most
favorable to the plaintiffs, we assume for purposes of summary judgment that Richard
was acting as the plaintiffs' attorney with respect to the transactions at issue.

The duty of an attorney to his or her client is well established in Kansas and has
been held by our Supreme Court to be a relationship "fiduciary in character, binding the
attorney to the highest degree of fidelity and good faith to his client on account of the
trust and confidence imposed." Ford v. Guarantee Abstract & Title Co., 220 Kan. 244,
Syl. ¶ 3, 553 P.2d 254 (1976). Based on the fact that Richard acted as both their attorney
and a party to the Quixtar business transaction, the plaintiffs alleged Richard had a duty
to advise them to seek the advice of independent counsel and breached that duty by
failing to do so.

But the defendants argue there is insufficient evidence in this case from which a
jury could find the defendants had a duty to advise the plaintiffs to seek independent
counsel. Specifically, the defendants assert that the plaintiffs and plaintiffs' expert have
relied exclusively on the Kansas Rules of Professional Conduct (KRPC) to establish that
such a duty exists; however an attorney's violation of the KRPC does not, in and of itself,
create a legal duty upon which a civil cause of action for negligence can be based. See
Shamberg, Johnson & Bergman, Chtd. v. Oliver, 289 Kan. 891, Syl. ¶ 1, 220 P.3d 333
(2009); Kansas Supreme Court Rule 226 (preamble [20]) (2012 Kan. Ct. R. Annot. 431).

We agree that the ethical rules in Kansas do not create a legal duty upon which a
negligence action can be based. Instead, the existence of a duty must independently arise
from common law. Attorney conduct which violates an ethical rule, however, may also
violate an independent legal duty. In such a case, it is the violation of the independent
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legal duty that gives rise to a tort cause of action, while the ethical rule reflects the
governing standards of conduct by which an attorney is measured. To that end, and
independent of the ethical rules governing attorney conduct in Kansas, we find the
attorney-client relationship between the parties in this case is sufficient to establish the
existence of Richard's legal duty, fiduciary in character, binding him "to the highest
degree of fidelity and good faith to his client on account of the trust and confidence
imposed." Ford, 220 Kan. 244, Syl. ¶ 3.

Breach

The next element of a legal malpractice claim is proving a breach of the duty
created by the fiduciary relationship between attorney and client. See Canaan, 276 Kan.
at 120. To prove breach, a plaintiff must establish that the defendant attorney deviated
from the professional standards of conduct applicable to the type of practice in which the
defendant attorney practices law. Testimony from an expert in that particular area of law
is generally required to prove the standard of conduct by which the professional actions
of the attorney are measured and whether the attorney deviated from the appropriate
standard. Leeper v. Schroer, Rice, Bryan & Lykins, P.A., 241 Kan. 241, 246, 736 P.2d
882 (1987); PIK Civ. 4th 123.44.

In opposing the defendants' motion for summary judgment, the plaintiffs presented
the opinion of John Terry Moore, a trial attorney practicing in Wichita, Kansas, who has
experience representing both plaintiffs and defendants in legal malpractice cases. Based
on his experience and his review of the relevant evidence, Moore presented his opinion
that the defendants owed a duty to the plaintiffs as their clients and that they breached
this duty by "failing to use the degree of care and skill that a reasonably competent
attorney practicing in the state of Kansas would have used in similar circumstances."
Specifically, Moore identified the following conduct, in pertinent part, as the basis for his
opinion regarding that breach:
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 Richard's failure to explain to the plaintiffs that there was an inherent conflict of
interest in entering into a contract or agreement with the attorney who was
representing them in that very same transaction and the failure to obtain a written
informed consent to waive the conflict.
 Richard's failure to advise his clients, in writing, of the risk of entering into a
contract or agreement with the attorney who was representing them in that very
same transaction without seeking the advice of independent legal counsel.
 Richard's use of information gleaned in representing the plaintiffs to the plaintiffs'
detriment without written informed consent.
 Richard's failure to withdraw as counsel for the plaintiffs before engaging in
negotiations and ultimately purchasing the plaintiffs' business.

We find Moore's expert opinion is sufficient evidence from which a jury could
find that the defendants owed a duty to the plaintiffs as their clients and that they
breached this duty by failing to use the degree of care and skill that a reasonably
competent attorney practicing in the state of Kansas would have used in similar
circumstances.

Causation

The defendants assert that there is insufficient evidence from which a jury could
find that the plaintiffs' alleged damages were caused in any way by Richard's negligence
in preparing and/or participating in the Independent Business Sale Agreement dated
January 18, 2007. But the defendants misconstrue the plaintiffs' assertions regarding the
cause of the damages they allegedly sustained. Specifically, the plaintiffs assert that they
would not have gone through with the sale of their business to the Browns if Richard had
adequately satisfied his legal duty to inform them of the conflict of interest presented by
the sale of their business to the attorney representing them in the transaction and his legal
duty to advise them to seek the advice of independent counsel before entering into that
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agreement. To support this assertion, the plaintiffs offered as evidence the opinion of
Moore, who stated that Richard's breach of his duties caused the plaintiffs to sustain
damages in the form of lost compensation and business development opportunities. The
plaintiffs also offered as evidence the expert opinion of Gary Baker, Ph.D., an economist.
Relying on the historical earnings of the plaintiffs' Quixtar business and projecting those
earnings out over a period of 30 years, Dr. Baker calculated the damages sustained by the
plaintiffs range from a low of $751,665 to a high of $1,503,330. Based on these
submissions, we find sufficient evidence from which a jury could find that the plaintiffs
suffered damages and that these damages were caused by the defendants' breach of legal
duty.

Reversed and remanded.