Cases
Successful Defense Creates New Law

Successful Defense Creates New Law Following Marital Dissolution

1/5/2011

Anthony Ostlund successfully defends local family law attorney in action commenced against him by client's ex-wife

Client Issue

This lawsuit arose out of the marital termination proceedings of Robert and Katherine Rucker. Steve Schmidt, a lawyer specializing in divorces and family law at the then-existing law firm of Rider Bennett, LLP, represented the husband, Robert Rucker, in the divorce action. Years after the parties divorced, the ex-wife, Katherine Rucker, commenced an action against Steve Schmidt, her ex-husband’s attorney.  Rucker alleged that Schmidt assisted her ex-husband in understating the value of the couple’s largest asset, an ownership interest in the closely-held company, The Tile Shop, during the divorce proceedings. 

The Anthony Ostlund Approach

Anthony Ostlund successfully defended Schmidt in this complex family law-related matter with its experience and knowledge in business valuations and appraisal proceedings. After extensive discovery, Anthony Ostlund filed a motion for summary judgment to dismiss Ms. Rucker’s Complaint on several grounds, including under the res judicata doctrine given the fact that Ms. Rucker had previously sued her ex-husband for the same allegations she was asserting against Schmidt. In addition, Anthony Ostlund was able to uncover extensive evidence demonstrating that Ms. Rucker did not rely on her ex-husband’s divorce laywer, and that Schmidt did not make any representations about the value of the Tile Shop to Ms. Rucker.

Result Achieved

The trial court dismissed the claims against Schmidt on summary judgment.  Ms. Rucker appealed to the Minnesota Court of Appeals. In a split decision, the Court of Appeals reversed. The split Court of Appeals held that Schmidt was not in privity with his client and therefore res judicata did not bar Ms. Rucker’s claims as a matter of law.  The Minnesota Supreme Court accepted review after we filed a Petition for Review on behalf of Schmidt given the important legal issue involving the application of res judicata as between an attorney and his client.  On January 5, 2011, the Minnesota Supreme Court made new law concluding that privity did not exist between Mr. Rucker and his divorce lawyer, Schmidt. The case was remanded to the trial court for further proceedings, including a jury trial.  Days before commencement of the jury trial, Anthony Ostlund obtained a confidential settlement for Schmidt.

Client Testimonial

"I will forever be grateful to Joe Anthony and Janel Dressen for their diligent, persistent and successful defense in a lawsuit brought against me not by my client but the client's wife after their divorce claiming that I had helped him commit fraud and cheat her out of several million dollars. After five years of litigation including the Supreme Court of Minnesota, the case was successfully resolved the day before trial.  The judge presiding at trial predicted that the case was likely to go back up to the Supreme Court if not resolved because there was no case like it previously decided in the entire country. Thanks to Joe and Janel, my professional reputation remains untarnished and my future retirement financially secure."

- Steven Schmidt

 

Katherine Rucker v. Steven Schmidt, Hennepin County Dist. Ct., Court File No., 27-CV-07-514, Minn. Ct. App. A08-1730 (July 21, 2009), Minn. Sup. Ct. 794 N.W.2d 114 (Minn. 2011)