Filed: Apr. 12, 2018
Latest Update: Apr. 12, 2018
Summary: FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit FOR THE TENTH CIRCUIT April 12, 2018 _ Elisabeth A. Shumaker Clerk of Court ROBERT D. ORR, Plaintiff - Appellant, v. No. 17-3214 (D.C. No. 2:16-CV-02694-CM-GLR) HUSCH BLACKWELL, LLP; DOUGLAS (D. Kan.) J. SCHMIDT; JOHN J. CRUCIANI, Defendants - Appellees. _ ORDER AND JUDGMENT* _ Before MORITZ, McKAY, and KELLY, Circuit Judges. _ Robert D. Orr, proceeding pro se, appeals the district court’s dismissal of his malpract
Summary: FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit FOR THE TENTH CIRCUIT April 12, 2018 _ Elisabeth A. Shumaker Clerk of Court ROBERT D. ORR, Plaintiff - Appellant, v. No. 17-3214 (D.C. No. 2:16-CV-02694-CM-GLR) HUSCH BLACKWELL, LLP; DOUGLAS (D. Kan.) J. SCHMIDT; JOHN J. CRUCIANI, Defendants - Appellees. _ ORDER AND JUDGMENT* _ Before MORITZ, McKAY, and KELLY, Circuit Judges. _ Robert D. Orr, proceeding pro se, appeals the district court’s dismissal of his malpracti..
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FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT April 12, 2018
_________________________________
Elisabeth A. Shumaker
Clerk of Court
ROBERT D. ORR,
Plaintiff - Appellant,
v. No. 17-3214
(D.C. No. 2:16-CV-02694-CM-GLR)
HUSCH BLACKWELL, LLP; DOUGLAS (D. Kan.)
J. SCHMIDT; JOHN J. CRUCIANI,
Defendants - Appellees.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before MORITZ, McKAY, and KELLY, Circuit Judges.
_________________________________
Robert D. Orr, proceeding pro se, appeals the district court’s dismissal of his
malpractice claims against Husch Blackwell, LLP, Douglas J. Schmidt, and John J.
Cruciani (collectively, “Husch”). We exercise jurisdiction under 28 U.S.C. § 1291
and affirm.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
I. Background
Mr. Orr was an officer and shareholder of Brooke Corporation and Brooke
Capital Corporation (collectively, “Brooke”), public corporations in the insurance
agency franchise business. In September 2008, Mr. Orr, Brooke, and several
affiliated companies were sued for fraudulent conduct and other charges in the
United States District Court for the District of Kansas. The court appointed a special
master to manage the companies, and the special master hired Husch as counsel.
Mr. Orr objected numerous times to the special master’s business decisions, in
particular the decision to cease franchise support activities. After Brooke filed for
bankruptcy under Chapter 11, the special master became the Chapter 11 trustee for
the Brooke bankruptcy estate. Husch was counsel for the trustee. The Chapter 11
bankruptcy was later converted to a Chapter 7 bankruptcy, and the trustee’s
appointment ended.
In August 2010, Mr. Orr unsuccessfully sued the special master. Orr v.
Riederer, No. 10-1303-CM,
2012 WL 2583393 (D. Kan. July 3, 2012).
In October 2016, Mr. Orr sued Husch for its representation of the special
master and the Chapter 11 trustee. The gist of his initial claims is that Husch’s
alleged misconduct caused Brooke’s financial collapse. After Husch filed a motion
to dismiss, Mr. Orr added claims based on the theory that he sustained additional
damages as a result of Husch’s alleged misconduct. Husch then supplemented its
motion to dismiss. After the motion was fully briefed, the district court dismissed all
of Mr. Orr’s claims, concluding that he lacked standing; that his claims were barred
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by res judicata, judicial estoppel, and the applicable statute of limitations; and that he
failed to state a claim. As pertinent to this appeal, the court ruled, “If Husch
committed any torts arising out of its representation of the Special Master or Chapter
11 Trustee, they were against Brooke or the bankruptcy estate and the cause of action
lies with Brooke or the Trustee.” R., Vol. 4, at 134. Because Mr. Orr did not
establish that he had either a distinct and disproportionate injury or a contractual
relationship with Husch, the court determined that he lacked standing to bring such
claims.
Mr. Orr challenges the dismissal of only four of his malpractice claims against
Husch. We affirm on the ground that Mr. Orr lacks standing to bring these claims,
and therefore we do not address his other arguments.
II. Analysis
We review de novo whether Mr. Orr has standing. See Bixler v. Foster,
596 F.3d 751, 756 (10th Cir. 2010). Because Mr. Orr is proceeding pro se, we
liberally construe his pleadings. See Garrett v. Selby Connor Maddux & Janer,
425 F.3d 836, 840 (10th Cir. 2005). But pro se parties must follow the same rules of
procedure that govern other litigants, and we will not take on the responsibility of
constructing arguments and searching the record on Mr. Orr’s behalf. See id.
“[C]onduct which harms a corporation confers standing on the corporation, not
its shareholders.” Bixler, 596 F.3d at 756. “A shareholder may only litigate as an
individual if the wrong to the corporation inflicts a distinct and disproportionate
injury on the shareholder, or if the action involves a contractual right of the
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shareholder which exists independently of any right of the corporation.” Lightner v.
Lightner,
266 P.3d 539, 546 (Kan. Ct. App. 2011) (internal quotation marks omitted).
Orr disavows that he is making any derivative claims, see Opening Br. at 61, so we
analyze his claims under the requirements for bringing direct actions. “Direct actions
by a shareholder against officers or directors of a corporation are generally reserved
for injuries affecting the individual legal rights of that shareholder.” Lightner,
266 P.3d at 545. Thus, Mr. Orr must show that he “has suffered an injury that is not
dependent on an injury to the corporation.” Id. (internal quotation marks omitted).
Mr. Orr has not shown he can meet the requirements for bringing an individual
action against Husch. Even if Husch caused Brooke’s bankruptcy and Brooke has
potential causes of action against Husch for malpractice, as Mr. Orr alleges, his own
claims are inextricably linked to Brooke and cannot exist independently of any rights
of the corporations. He has not shown either a distinct disproportionate injury from
Husch’s alleged conduct or a contractual relationship that would confer standing on
him. Although he claims to have consented to the appointment of the special master
and the Chapter 11 trustee, such actions undertaken as an officer of Brooke do not
establish a contractual relationship between Husch and Mr. Orr individually.
Accordingly, he does not have standing to pursue these malpractice claims against
Husch.
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III. Conclusion
We affirm the district court’s judgment of dismissal and deny Husch’s motion
for summary affirmance as moot.
Entered for the Court
Monroe G. McKay
Circuit Judge
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