Litigation Lawyers, Professional Association v. Harbison

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

LITIGATION LAWYERS, )

PROFESSIONAL ASSOCIATION, )

)

Plaintiff, )

)

v. ) Case No. 4:24-cv-00793-SRC

)

CHRISTOPHER HARBISON and )

REGINA HARBISON, )

)

Defendants. )

Memorandum and Order

Tensions periodically swell between lawyers and their clients—ofttimes when a

larger-than-anticipated invoice comes knocking. Dissatisfied with Litigation Lawyers’s legal

representation and flummoxed by prolonged legal tasks and mounting fees, Christopher and

Regina Harbison asserted four amended counterclaims against Litigation Lawyers. After

initially suing the Harbisons, Litigation Lawyers looks to shield itself from liability and thus asks

the Court to dismiss all the Harbisons’ claims under Federal Rule of Civil Procedure 12(b)(6).

I. Background

A. Factual background

The Court accepts the following facts from the Harbisons’ amended counterclaims,

doc. 85 at 14–23 (The Court cites to page numbers as assigned by CM/ECF.),1 as well pleaded

and true for the purposes of this memorandum and order. The Harbisons hired Stephen Rakusin,

1 The Court notes that the Harbisons included their amended counterclaims in the same document as their amended

answer. See doc. 85 at 1–14 (amended answer and affirmative defenses); id. at 14–23 (amended counterclaims).

The document includes numerous sets of consecutively numbered paragraphs utilizing the same method of

identification (i.e., paragraph 1, 2, 3, etc.). For the sake of clarity, the Court, in this memorandum and order, cites

only to the paragraph numbers of the Harbisons’ amended counterclaims, beginning on page fourteen of that

document. Id. at 14–23.

an attorney, to represent them in their defense against two lawsuits—one in Missouri state court

and one in this Court, both involving business entities associated with the Harbisons. Id.

at ¶¶ 8–10. Rakusin, who served as the president of Litigation Lawyers, represented the

Harbisons for over one year in both suits. Id. at ¶¶ 6, 11. As part of the representation, the

parties entered a retainer agreement that “set forth the terms and conditions of Rakusin’s

representation and the scope of his legal services.” Id. at ¶¶ 10, 12.

Pursuant to the retainer agreement, “Rakusin was required to only perform services

‘necessary’ to represent the Harbisons including, but not limited to, preparing pleadings and

motions, correspondence with the Harbisons, opposing counsel, and other parties, research, fact

investigation, travel, depositions, and court appearances.” Id. at ¶ 15 (quoting doc. 85-1 at ¶ 1).

Rakusin was also “obligated to represent the Harbisons ‘in a manner most consistent’ with their

goals, including cost efficiency.” Id. at ¶ 16 (quoting doc. 85-1 at ¶ 5). Likewise, Rakusin “was

obligated to practice ‘consistent with legal and ethical standards,’ including the Missouri Rules

of Professional Conduct.” Id. at ¶ 17 (quoting doc. 85-1 at ¶ 10).

In the face of these “legal, ethical, and contractual obligations, Rakusin engaged in

self-serving conduct and ineffective legal actions,” which “did not benefit the Harbisons, did not

resolve the” lawsuits against them, “and resulted in over $1 million in attorneys’ fees and legal

costs.” Id. at ¶ 18. Specifically, “Rakusin engaged in ineffective motion practice, pursued legal

actions contrary to established precedent, . . . unnecessarily prolonged litigation,” and did not

“resolve, or even attempt to resolve, the” lawsuits against the Harbisons. Id. at ¶ 19.

“[T]hroughout Rakusin’s entire representation of the Harbisons,” he “did not prepare and

implement a reasonable settlement strategy, provide advice to the Harbisons about the prospects

of a negotiated settlement, or even mention the potential benefits of a settlement to” them. Id.

at ¶ 21. “Instead of implementing a reasonable settlement strategy,” which “could

have . . . efficiently and justly resolved” the lawsuits against the Harbisons, Rakusin “pursued

costly and unnecessary litigation and invoiced over $1 million in legal fees.” Id. at ¶¶ 22–23.

“Rakusin’s litigation tactics” in the underlying lawsuits caused one opposing party “to incur over

$2 million in attorneys’ fees . . . for which it sought recovery from the Harbisons.” Id. at ¶ 24.

Instead of “bill[ing] for ‘necessary’ legal actions,” Rakusin “routinely billed for excessive

and unnecessary legal actions.” Id. at ¶ 25. For example, he “bill[ed] a total of 371.91 hours”

for work completed in “the 31-day span from October 16, 2021, to November 15, 2021.” Id.

After “approximately one year” of Rakusin’s representation, “and no real progress . . . made,”

the Harbison’s “were forced to retain new counsel at their own expense to remediate the damage

done by Rakusin.” Id. at ¶ 26. When they terminated Rakusin, the Harbisons had paid Litigation

Lawyers “approximately $695,000.” Id. at ¶ 27. “After new counsel was retained, the” lawsuits

against the Harbisons were “resolved via reasonable settlement negotiations in less than one

year.” Id. at ¶ 28.

B. Procedural background

Litigation Lawyers originally filed suit against the Harbisons in Florida state court, and

the Harbisons removed the case to the United States District Court for the Southern District of

Florida. Doc. 1 at 1. The latter court then transferred the case to this Court. See docs. 47–48.

When the Court received the case, it held a hearing to address several pending motions. See

doc. 76. At the hearing, the Court denied all pending motions and ordered the parties to meet

and confer on numerous issues. See doc. 77.

A few weeks later, the Harbisons filed their amended counterclaims, asserting four claims

against Litigation Lawyers: legal malpractice; breach of fiduciary duty; breach of the implied

covenant of good faith and fair dealing; and unjust enrichment. See doc. 85 at ¶¶ 29–60.

Litigation Lawyers countered by filing its motion to dismiss. Docs. 86–87. Following a status

conference in October 2024, see doc. 92, the Court ordered the parties to file supplemental

choice-of-law briefing, see doc. 93, and the parties complied, see docs. 94–96. The Court now

addresses Litigation Lawyers’s motion to dismiss.

II. Standard

Under Rule 12(b)(6), a party may move to dismiss a claim for “failure to state a claim

upon which relief can be granted.” The notice pleading standard of Rule 8(a)(2) requires a

plaintiff to give “a short and plain statement . . . showing that the pleader is entitled to relief.”

Fed. R. Civ. P. 8(a)(2). To meet this standard and to survive a Rule 12(b)(6) motion to dismiss,

“a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief

that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This requirement of facial plausibility means the

factual content of the plaintiff’s allegations must “allow[] the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” Whitney v. Guys, Inc., 700

F.3d 1118, 1128 (8th Cir. 2012) (quoting Iqbal, 556 U.S. at 678). The Court must grant all

reasonable inferences in favor of the nonmoving party. Lustgraaf v. Behrens, 619 F.3d 867,

872–73 (8th Cir. 2010).

When ruling on a motion to dismiss, a court “must liberally construe a complaint in favor

of the plaintiff.” Huggins v. FedEx Ground Package Sys., Inc., 592 F.3d 853, 862 (8th Cir. 2010).

However, if a claim fails to allege one of the elements necessary to recover on a legal theory, the

Court must dismiss that claim for failure to state a claim upon which relief can be granted. Crest

Constr. II, Inc. v. Doe, 660 F.3d 346, 355 (8th Cir. 2011). Threadbare recitals of a cause of action,

supported by mere conclusory statements, do not suffice. Iqbal, 556 U.S. at 678; Twombly, 550

U.S. at 555. Rule 8 does not “unlock the doors of discovery for a plaintiff armed with nothing

more than conclusions.” Iqbal, 556 U.S. at 678–79. “A pleading that merely pleads ‘labels and

conclusions,’ or a ‘formulaic recitation’ of the elements of a cause of action, or ‘naked assertions’

devoid of factual enhancement will not suffice.” Hamilton v. Palm, 621 F.3d 816, 817 (8th Cir.

2010) (quoting Iqbal, 556 U.S. at 678). Although courts must accept all factual allegations as true,

they are not bound to take as true a legal conclusion couched as a factual allegation. Twombly,

550 U.S. at 555; Iqbal, 556 U.S. at 677–78.

Only a complaint that states a plausible claim for relief survives a motion to dismiss.

Iqbal, 556 U.S. at 679. Therefore, the Court must determine if the well-pleaded factual

allegations “plausibly give rise to an entitlement to relief.” Id. This “context-specific task”

requires the Court to “draw on its judicial experience and common sense.” Id.

III. Discussion

A. Applicable law

After reviewing the parties’ motion-to-dismiss briefs, docs. 86–88, 91, the Court

determined that it needed additional briefing to understand which state’s (or states’) law the

Court must apply when reviewing the sufficiency of the Harbisons’ amended counterclaims,

see doc. 93. The Court posed the following question: under Florida’s choice-of-law principles,

does Missouri or Florida substantive law apply to each of the Harbisons’ counterclaims? See

doc. 93. In response to the Court’s order, it received three briefs from the parties. Docs. 94–96.

With that in mind, the Court starts with the applicable choice-of-law rules and then

applies those rules to the Harbisons’ claims.

1. Choice-of-law framework

As the Court explained in its supplemental-briefing order, “Florida’s choice-of-law

principles apply.” Doc. 93 at 2 (first citing Van Dusen v. Barrack, 376 U.S. 612, 639 (1964);

and then citing Lucarelli v. Renal Treatment Ctrs.-Ill., Inc., No. 4:08 CV 00099 ERW, 2008 WL

4402255, at *2 (E.D. Mo. Sept. 24, 2008)). As the Supreme Court of the United States

concluded, “where the defendants seek transfer, the transferee district court must be obligated to

apply the state law that would have been applied if there had been no change of venue.” Van

Dusen, 376 U.S. at 639. And so in this case, “if there had been no change of venue,” Florida

“state law . . . would have been applied.” Id.; see also doc. 1 at 1 (removing the case to the

Southern District of Florida).

Next, the Court must “ascertain the nature of the problem involved: e.g.[,] torts,

contracts, property, divorce, etc.” Aetna Cas. & Sur. Co. v. Huntington Nat’l Bank, 587 So. 2d

483, 485 (Fla. Dist. Ct. App. 1991) (citing Acme Circus Operating Co. v. Kuperstock, 711 F.2d

1538, 1540 (11th Cir. 1983)). To do so, the Court scrutinizes the operative pleading and must

look to Florida law to see how it characterizes each claim. Id.; see, e.g., Hoffman v. Ouellette,

798 So. 2d 42, 44 (Fla. Dist. Ct. App. 2001) (“The issues framed by the pleadings were based in

tort law.” (citation omitted)); Marion Power Shovel Co. v. Hargis, 698 So. 2d 1246, 1247

(Fla. Dist. Ct. App. 1997) (citing Florida law); Potts v. Budget Rent a Car Sys., Inc., No. 4:04-

CV-074-SPM, 2005 WL 3057175, at *2 (N.D. Fla. Nov. 14, 2005) (same).

After determining the nature of each claim (i.e., tort, contract, etc.), the Court must

consider which choice-of-law test applies to each type of legal claim asserted. See, e.g., Aetna,

587 So. 2d at 485 (“The next step in choice of law analysis is to determine the forum’s choice of

law rule.”). For claims sounding in tort, “Florida applies the “significant relationships test.”

Hargis, 698 So. 2d at 1247 (quoting Restatement (Second) of Conflict of Laws § 145(1) (Am. L.

Inst. 1971)); see Hoffman, 798 So. 2d at 44 (applying the significant-relationships test to tort

claims). More on this in a moment. And for claims sounding in contract, “Florida has ‘long

adhered to the rule of lex loci contractus,’ which is that the law of the state where the contract

was executed governs the rights and liabilities of the parties to the contract.” Paquin v.

Campbell, 378 So. 3d 686, 690 (Fla. Dist. Ct. App. 2024) (quoting State Farm Mut. Auto. Ins.

Co. v. Roach, 945 So. 2d 1160, 1163 (Fla. 2006)). More on this later as well.

Once the Court has identified the proper choice-of-law rule, the final step “is to apply”

that “rule to the instant facts and thereby conclude which state’s substantive law applies.” Id.

at 689 (quoting Kuperstock, 711 F.2d at 1540). With all that, the Court first addresses the

Harbisons’ legal-malpractice and breach-of-fiduciary-duty claims.

2. Tort counterclaims

In their joint supplemental brief, the parties stipulated that Missouri law should apply to

the Harbisons’ counterclaims sounding in tort. Doc. 94 at 1–2. They reasoned that, under the

four-factor significant-relationships test, “the relevant factors lead to the conclusion that

Missouri has the most significant relationship to the Harbisons’ tort counterclaims, and therefore

Missouri law should apply to the same.” Id. at 2. But neither in their joint brief nor in their

separate briefs did the parties clarify which of the four claims asserted a tort claim. See

docs. 94–96. And so, while the Court tends to agree with the parties’ stipulation, it must proceed

through the choice-of-law framework and, first, “ascertain the nature of the problem involved.”

Aetna, 587 So. 2d at 485 (citing Kuperstock, 711 F.2d at 1540).

As for the Harbisons’ legal-malpractice claim, Florida courts have not, based on this

Court’s research, clearly held that the cause of action sounds in tort. Nor have Florida courts

clearly held that claims for legal malpractice sound in contract, either. But when addressing the

assignability of legal-malpractice claims, Florida caselaw has characterized “legal malpractice as

a personal tort,” due in part to “the personal nature of legal services which involve highly

confidential relationships.” Cowan Liebowitz & Latman, P.C. v. Kaplan, 902 So. 2d 755, 758

(2005) (quoting Forgione v. Dennis Pirtle Agency, Inc., 701 So. 2d 557, 559 (Fla. 1997);

see, e.g., Nat’l Union Fire Ins. Co. v. Salter, 717 So. 2d 141, 142 (Fla. Dist. Ct. App. 1998)

(citing Forgione, 701 So. 2d at 557). And so although the bulk of Florida caselaw describing

legal-malpractice claims as a tort relates to the assignability of those claims, certainly an issue

distinguishable from the instant case, the Court concludes that a legal-malpractice claim sounds

in tort under Florida law for purposes of this choice-of-law analysis.

Regarding the Harbisons’ claim for breach of fiduciary duty, Florida caselaw has not held

whether a breach-of-fiduciary-duty claim, when raised in the attorney-malpractice context,

sounds in tort or contract. At least one Florida court has, however, determined that “[b]reach of

fiduciary duty is a common law tort . . . .” LeBlanc v. Acevedo, 258 So. 3d 555, 557 (Fla. Dist.

Ct. App. 2018) (citation omitted). To be sure, LeBlanc dealt with a “doctor-patient

relationship”—not one between an attorney and her client. Id. And while differences certainly

exist between the doctor-patient and attorney-client relationships, the Court, for purposes of this

choice-of-law analysis, finds that a claim for breach of fiduciary duty asserted in the

attorney-malpractice context sounds in tort.

Thus, with respect to both the legal-malpractice and breach-of-fiduciary-duty claims, the

Court must then apply the significant-relationships test and consider “the place of injury”; “the

place of the conduct causing the injury”; “the parties’ domicile, residence, place of incorporation,

and place of business”; and “the place where the parties’ relationship is centered.” Hargis, 698

So. 2d at 1247 (citation omitted). As to the first factor, the parties agreed that “the alleged injury

occurred” in “Missouri.” Doc. 94 at 1. For the second factor, the parties agreed that “the alleged

conduct causing the alleged injury occurred” in “both Florida and Missouri.” Id. As for the third

factor, the parties agreed that they reside in “both Florida and Missouri.” Id. at 1–2. And with

respect to the fourth factor, the Harbisons argued that “the relationship between the

[p]arties . . . was centered in Missouri,” while Litigation Lawyers argued that it “was centered in

both Florida and Missouri.” Id. at 2.

“[O]n balance,” the parties stipulated “that the relevant factors lead to the conclusion that

Missouri has the most significant relationship to the Harbisons’ tort counterclaims.” Id.

“[T]herefore,” the parties concluded, “Missouri law should apply to the” Harbisons’ tort

counterclaims. Id. The allegations in the amended counterclaims buttress the parties’

conclusions as to each factor of the significant-relationships test. See doc. 85 at ¶¶ 8–11, 18–24,

26–28 (allegations describing Missouri as the location of the alleged injury); see id. at ¶¶ 11, 13,

18–21, 23, 25, 27, 30, 32, 34–35 (allegations describing both Florida and Missouri as the

location of the conduct causing the alleged injury); see id. at ¶¶ 1–3, 6, 8–9 (allegations

describing both Florida and Missouri as the parties’ residences and places of business); see id.

at ¶¶ 1–3, 6, 8–12, 18–21, 25–28, 34–35 (allegations describing both Florida and Missouri as the

center of the parties’ relationship).

Having analyzed the allegations in the Harbisons’ amended counterclaims as well as the

parties’ arguments in their stipulation, the Court applies Missouri substantive law to the

Harbisons’ claims for legal malpractice and breach of fiduciary duty. See USA Mach. Corp. v.

CSC, Ltd., 184 F.3d 257, 263 (3d Cir. 1999) (“Because the parties appear to be in agreement on

th[e choice-of-law] issue, [the court] will assume, without deciding, that [the agreed-upon] law

supplies the appropriate substantive rules.”).

3. Contractual counterclaims

In its separate brief, Litigation Lawyers argued that Florida law should apply to the

Harbisons’ “contractual counterclaims.” Doc. 95 at 1. Because the retainer agreement “was

made in Florida,” and not Missouri, Litigation Lawyers posited that Florida law should apply to

the Harbisons’ contractual claims. Id. at 2 (citation and quotations omitted). This is a bit

peculiar, considering Litigation Lawyers cited Missouri law, nearly exclusively, in support of its

motion to dismiss. See docs. 87, 91. For their part, the Harbisons, in their separate (and

last-in-time) brief, did not state a position as to the nature of each of their counterclaims or

respond to Litigation Lawyers’s argument that Florida law should apply to the contractual

claims. See doc. 96.

As for the Harbisons’ remaining claims for breach of the implied covenant of good faith

and fair dealing and unjust enrichment, the Court “ascertain[s] the nature of the problem

involved.” Aetna, 587 So. 2d at 485 (citing Kuperstock, 711 F.2d at 1540). In doing so, the

Court determines that, under Florida law, both claims constitute contract or quasi-contract

claims. See, e.g., QBE, Ins. Corp. v. Chalfonte Condo. Apartment Ass’n, Inc., 94 So. 3d 541, 548

(Fla. 2012) (“Florida contract law does recognize an implied covenant of good faith and fair

dealing in every contract.” (citations omitted)); City Nat’l Bank of Fla. ex rel. Land Tr.

No. 2400-9492-00 v. Signature Land, Inc., 397 So. 3d 1133, 1135 (Fla. Dist. Ct. App. 2024) (“In

the absence of an enforceable express or implied-in-fact contract, a party may recover under a

quasi-contract claim—like unjust enrichment.”). On this point, the Court acknowledges its

assertion to the contrary in its supplemental-briefing order, doc. 93 at 2 (commenting that the

Harbisons “exclusively raise[d] tort causes of actions”), and appreciates Litigation Lawyers’s

separate brief noting this oversight, see doc. 95.

Under Florida law, “the law of the state where the contract was executed governs the

rights and liabilities of the parties to the contract.” Paquin, 378 So. 3d at 690 (citing Roach, 945

So. 2d at 1163). Further, “[a] contract is created where the last act necessary to make a binding

agreement takes place.” D.L. Peoples Grp., Inc. v. Hawley, 804 So. 2d 561, 563 (Fla. Dist. Ct.

App. 2002). Thus, “[w]here one contracting party signs the contract, and the other party accepts

and signs the contract, a binding contract results.” Id. (determining that a “contract was made in

Florida” because “the last act necessary to complete the agreement, i.e., [the] President’s

signature, was performed in Florida”).

Litigation Lawyers directed the Court to evidence in the record to conclude that

Litigation Lawyers “was the last party to sign” the retainer agreement, “and it did so in Florida.”

Doc. 95 at 2 (citing doc. 19 at ¶¶ 26–27); see also id. (comparing doc. 7-2 at 16 with doc. 85-1

at 5). But when considering a motion to dismiss, a “court generally must ignore materials

outside the pleadings.” Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).

At the same time, a court “may consider ‘some materials that are part of the public record or do

not contradict the complaint,’ as well as materials that are ‘necessarily embraced by the

pleadings.’” Id. (citations omitted); cf. Stahl v. U.S. Dep’t of Agric., 327 F.3d 697, 700 (8th Cir.

2003) (concluding that the lower court properly considered “the Agreement and the ‘Exhibit B’

form, both of which were also attached to the appellants’ complaint”).

In that regard, the Harbisons appended a copy of the retainer agreement to their

counterclaims. See doc. 85-1 at 1–7. They also cited and quoted language from the agreement

throughout their allegations. See, e.g., doc. 85 at ¶ 15 (quoting doc. 85-1 at ¶ 1); id. at ¶ 16

(quoting doc. 85-1 at ¶ 5); id. at ¶ 17 (quoting doc. 85-1 at ¶ 10). On the signature page of the

agreement, the Harbisons signed their names, but Rakusin had not yet finalized the agreement on

behalf of Litigation Lawyers. See doc. 85-1 at 5.

And so the Court can infer that, had Rakusin (or one of the firm’s agents) signed the

retainer agreement on behalf of Litigation Lawyers, that individual did so after the Harbisons

signed the agreement. See id. Further, both parties acknowledged that they operated under the

retainer agreement. See, e.g., doc. 85 at ¶ 34 (“The Harbisons complied with and performed their

obligations under the [retainer a]greement.”); doc. 87 at 3 (“[The Harbisons] hired [Litigation

Lawyers], pursuant to an engagement agreement . . . .”). But importantly, the Court cannot,

based on the allegations in the counterclaims and the attached copy of the retainer agreement,

deduce where Rakusin (or someone else) signed the retainer agreement on Litigation Lawyers’s

behalf. See doc. 85-1 at 5.

A factual issue thus remains regarding the execution of the retainer agreement. The

Court cannot then, based on the information before it, determine where “the last act necessary to

complete the agreement,” Hawley, 804 So. 2d at 563, took place and, on that basis, cannot

determine “where the contract was executed,” Paquin, 378 So. 3d at 690 (citing Roach, 945

So. 2d at 1163). As a result, the Court cannot “apply the proper choice of law rule to the instant

facts and thereby conclude which state’s substantive law applies,” id. at 689 (quoting

Kuperstock, 711 F.2d at 1540), to the Harbisons’ claims for breach of the implied covenant of

good faith and fair dealing and unjust enrichment.

The Court notes that, at the motion-to-dismiss stage, it cannot consider Litigation

Lawyers’s previously filed affidavit, which provides information regarding where Litigation

Lawyers executed the retainer agreement. See doc. 95 at 2 (citing doc. 19 at ¶¶ 26–27). And

Litigation Lawyers, in its separate supplemental brief, did not put forth any argument as to how

the Court could consider the affidavit at the motion-to-dismiss stage. See doc. 95. To determine

the choice-of-law issue on the contractual counterclaims, the Court needs an evidentiary record;

accordingly, pursuant to Federal Rule of Civil Procedure 56(f), the Court issues a

contemporaneous order, doc. 103, regarding the issue of where Rakusin (or one of Litigation

Lawyers’s agents) signed the retainer agreement. On that basis, the Court holds in abeyance its

ruling on Litigation Lawyers’s motion to dismiss with respect to the Harbisons’ claims for

breach of the implied covenant of good faith and fair dealing and unjust enrichment.

Having determined that Missouri law applies to the Harbisons’ counterclaims sounding in

tort, the Court proceeds to their claim for legal malpractice and then turns to their claim for

breach of fiduciary duty.

B. Legal-malpractice claim

The Harbisons’ first claim concerns Rakusin’s alleged legal malpractice. Throughout his

representation, the Harbisons alleged, Rakusin “did not exercise due care and did not exhibit the

skill and diligence ordinarily possessed and employed by a competent attorney in similar

circumstances” and “breached the” retainer agreement in numerous ways. Doc. 85 at ¶¶ 32, 35.

As a result, “the Harbisons incurred significant attorneys’ fees and legal costs in the” lawsuits

against them “and retained replacement counsel at their own expense to remediate” Rakusin’s

damage. Id. at ¶ 36. “But for Rakusin’s negligence and breach of the” retainer agreement, the

Harbisons claim they “would not have incurred such significant attorneys’ fees and legal costs

and could have prevailed on their defenses or reached a reasonable settlement much earlier in the

case.” Id. at ¶ 37.

Litigation Lawyers seeks dismissal of this claim, because the Harbisons did not “allege

that they would have . . . prevailed on defenses or obtained an earlier settlement in the” lawsuits

against them. Doc. 86 at ¶ 6; see also doc. 87 at 8–12. Instead, “[t]he allegation that [they]

‘could have’ prevailed on defenses or obtained an earlier settlement,” Litigation Lawyers

contends, “is insufficient under Missouri law.” Doc. 86 at ¶ 6.

Under Missouri law, legal-malpractice claims have four elements: “(1) an attorney-client

relationship; (2) negligence or breach of contract by the defendant; (3) proximate causation of

plaintiff’s damages”; and “(4) damages to the plaintiff.” Klemme v. Best, 941 S.W.2d 493, 495

(Mo. 1997) (citation omitted). Notably, the third element includes “[c]ausation in fact,” which

requires “that but for the attorney’s negligence, the result would have been different.” Beazley

Ins. Co., Inc. v. Brown & James, P.C., No. 4:18-cv-01689-AGF, 2019 WL 2285916, at *6

(E.D. Mo. May 29, 2019)2 (quoting Nail v. Husch Blackwell Sanders, LLP, 436 S.W.3d 556, 562

(Mo. 2014)) (applying Missouri law); e.g., PPW Royalty Trust ex rel. Petrie v. Barton, 841 F.3d

746, 753–54 (8th Cir. 2016). “By proving that the result of the underlying proceeding would

have been different ‘but for’ the attorney’s negligence, the plaintiff also proves that the

damages—the difference between what the result would have been and what it was—were the

reasonable and probable consequence of the defendant’s negligence.” Beazley, 2019 WL

2285916, at *6 (emphases in original) (quoting Nail, 436 S.W.3d at 562).

Here, the Court need only analyze the causation element—specifically the

causation-in-fact (also called the case-within-a-case) requirement. Importantly, “[t]he causal

2 In its database, Westlaw reported this case name as Beasley Insurance Co. v. Brown & James, P.C. See Beazley,

2019 WL 2285916, at *1. Lexis, on the other hand, reported the case name as Beazley Insurance Co. v. Brown &

James, P.C. See Beazley Ins. Co., Inc. v. Brown & James, P.C., No. 4:18-cv-01689-AGF, 2019 U.S. Dist. LEXIS

89571, at *1 (E.D. Mo. May 29, 2019). Pursuant to the Court’s official docket for the case, the correct name of the

named plaintiff is Beazley Insurance Company, Inc. Therefore, when citing to the decision in this memorandum and

order, the Court uses the correct spelling—Beazley, with a “z.”

connection cannot be based on speculation or conjecture.” Beazley, 2019 WL 2285916, at *6

(alteration in original) (quoting Nail, 436 S.W.3d at 563). Instead, the claimant must “set forth

facts suggesting” how he or she “would have been successful” absent “the attorney’s

misconduct.” Cain v. Hershewe, 760 S.W.2d 146, 149 (Mo. Ct. App. 1988) (citation omitted);

see also, e.g., Boatright v. Shaw, 804 S.W.2d 795, 796 (Mo. Ct. App. 1990) (affirming lower

court’s decision granting motion to dismiss a legal-malpractice claim because the plaintiff “did

not plead” an “essential element, i.e. ‘that but for defendant’s conduct,’” the plaintiff “would

have been successful in the prosecution of [his] claim” (alteration in original)); Pool v. Burlison,

736 S.W.2d 485, 486 (Mo. Ct. App. 1987) (explaining that the plaintiff’s “bare assertion,”

relying on the success of a different plaintiff who raised a similar issue in an unrelated case, did

not amount to “a sufficient allegation that plaintiff would eventually be successful in his

underlying action”); Healing Chair, Inc. v. Logan Logan & Watson, No. 4:22-cv-00327-SRW,

2023 WL 183829, at *7 (E.D. Mo. Jan. 13, 2023) (granting motion to dismiss on

legal-malpractice claim because the plaintiff “d[id] not allege what [d]efendants or new counsel

could have done differently or how these differences would have impacted the outcome”).

The Harbisons’ cursory allegation that, absent Rakusin’s shortcomings, they “would not

have incurred such significant attorneys’ fees and legal costs and could have prevailed on their

defenses or reached a reasonable settlement much earlier in” their lawsuits, doc. 85 at ¶ 37, does

not demonstrate how they “would have been successful” in the lawsuits against them, Cain, 760

S.W.2d at 149 (citation omitted). Nor do the Harbisons’ speculative allegations set forth “the

difference between what the result would have been and what it was.” Beazley, 2019 WL

2285916, at *6 (emphases omitted) (quoting Nail, 436 S.W.3d at 562). In a nutshell, the

Harbsions put no meat on the causation bone. See doc. 85 at ¶ 37. Instead, they merely grazed

over any allegations that alternative decision-making would “have changed the outcome” in their

underlying litigation. Barton, 841 F.3d at 753–54 (reasoning that “the district court determined

that the” plaintiffs “failed to allege adequately that the attorneys were negligent or that the

outcome of” their underlying dispute “would have been different if the attorneys had raised any

of the theories identified by the” plaintiffs “in their complaint”).

And while the parties spent a significant portion of their briefing disputing the linguistic

differences between “would be” and “could be,” see doc. 87 at 9–12; doc. 88 at 7–8, the

Harbisons’ allegations relating to causation in fact set forth nothing more than “speculation” and

“conjecture,” Beazley, 2019 WL 2285916, at *6 (quoting Nail, 436 S.W.3d at 563). As

Litigation Lawyers posited, the Harbisons “fail[ed] to allege . . . any facts to support the notion

that the” terms of the subsequently reached settlement, “or better, . . . were available and would

have been agreed to by the other parties” in the lawsuits against the Harbisons “when [Rakusin]

represented them.” Doc. 87 at 11 n.1. Likewise, the Harbisons did not cite “to any authority

holding that they can assert a legal malpractice claim based on alleged failure to settle a case on

specific terms without alleging what those terms would have been or that the failure to obtain a

settlement on those unalleged terms was caused by” Rakusin. Doc. 91 at 6 n.2.

Moreover, the Harbisons’ post-hoc rationalizations that, “[a]fter new counsel was

retained,” the lawsuits against them were “resolved via reasonable settlement negotiations in less

than one year,” doc. 85 at ¶ 28, do not rise to the level of “plausibly alleg[ing] that,” but for

Rakusin’s alleged transgressions, the Harbisons “would have obtained a better”—or even the

same—“outcome,” Beazley, 2019 WL 2285916, at *8. Thus, the Harbisons failed to sufficiently

plead the causation element of a legal-malpractice claim; therefore, the Court dismisses their

legal-malpractice claim.

C. Breach-of-fiduciary-duty claim

As an initial matter, Litigation Lawyers argued that the Court must, in one fell swoop,

dismiss the Harbisons’ remaining claims—breach of fiduciary duty; breach of the implied

covenant of good faith and fair dealing; and unjust enrichment—because “they are each

subsumed by” the legal-malpractice claim. Doc. 87 at 5. But for the reasons analyzed above,

supra Section III.B, the Harbisons failed to sufficiently plead their claim for legal malpractice;

therefore, the Court need not wade into the fray of the subsumption issue.

Also, while the parties did not argue whether that specific issue is substantive or

procedural, the Court assumes (without deciding) that the issue is substantive due to the nature of

the issue and therefore applies Missouri law to both (i) dismiss the legal-malpractice claim and

(ii) decline to weigh in on the subsumption issue.

It is axiomatic that, without a claim for legal malpractice in this case, the Court must go

on and analyze the sufficiency of the Harbisons’ remaining breach-of-fiduciary-duty claim. See

also Beazley, 2019 WL 2285916, at *6–*9 (granting motion to dismiss a legal-malpractice claim

and then analyzing the sufficiency of breach-of-fiduciary-duty and unjust-enrichment claims);

Oetting v. Green Jacobson, P.C., No. 4:13-CV-1148 (CEJ), 2014 WL 942952, at *2–*3 (E.D.

Mo. Mar. 11, 2014) (dismissing legal-malpractice claim at the motion-to-dismiss stage and then

analyzing the viability of the remaining breach-of-fiduciary-duty claim).

The Harbisons alleged that Rakusin “engag[ed] in disloyal and self-serving conduct that

placed” Litigation Lawyers’s “interests above” the Harbisons’ interests. Doc. 85 at ¶ 41.

Likewise, “Rakusin did not exhibit undivided loyalty to the Harbisons and disregarded the[ir]

interests and goals in the” underlying lawsuits against them “in order to prolong litigation and

increase” Litigation Lawyers’s “compensation.” Id. at ¶ 42. This conduct, the Harbisons

alleged, amounted to a breach of Rakusin’s fiduciary duty. Id. at ¶¶ 38–44; see also doc. 88 at 5.

The Harbisons also made clear that “the support for the[ir]” breach-of-fiduciary-duty claim

“relies on . . . circumstances that focus on loyalty[,] not Rakusin’s duty of care or contractual

obligations.” Doc. 88 at 5 (emphasis omitted).

In response, Litigation Lawyers argued that the Court must dismiss the claim for two

reasons. First, the Harbisons “fail[ed] to allege facts, beyond legal conclusions, as to how their

purported damages – the alleged ‘significant attorneys’ fees and legals costs in the Underlying

Litigation – were caused by” Litigation Lawyers’s “alleged ‘disloyal and self-serving conduct.’”

Doc. 87 at 12 (quoting doc. 85 at ¶¶ 41–43). And second, the Harbisons “fail[ed] to allege the

existence of damages.” Doc. 86 at ¶ 7.

Under Missouri law, a breach-of-fiduciary-duty claim against an attorney contains five

elements: “(1) an attorney-client relationship; (2) breach of a fiduciary obligation by the

attorney; (3) proximate causation; (4) damages to the client; (5) no other recognized tort

encompasses the facts alleged.” Klemme, 941 S.W.2d at 496. In their briefing, the parties zero

in on the causation and damages elements. See doc. 86 at ¶ 7; doc. 87 at 12–13; doc. 88 at 8–9;

doc. 91 at 6–7. But as the Court sees it, taking “as true the” Harbisons’ “factual allegations” in

their amended counterclaims “and grant[ing] all reasonable inferences in” their “favor,” the

Harbisons satisfy each of the five elements of a breach-of-fiduciary-duty claim.

As for the first element, the Harbsions alleged that they “entered into an attorney-client

relationship” with Rakusin, doc. 85 at ¶ 39—an allegation that Litigation Lawyers does not

dispute, see doc. 87 at 3 (“The[]” Harbisons “hired” Rakusin, “pursuant to an engagement

agreement.”).

Second, the Harbisons asserted numerous allegations of Rakusin’s purported breach:

(i) he “engaged in ineffective motion practice, pursued legal actions contrary to established

precedent, and other improper actions that unnecessarily prolonged litigation,” doc. 85 at ¶ 19;

(ii) he, throughout the “entire representation of the Harbisons,” did “not prepare and implement a

reasonable settlement strategy, provide advice to the Harbisons about the prospects of a

negotiated settlement, or even mention the potential benefits of a settlement,” id. at ¶ 21; (iii) he

engaged “in disloyal and self-serving conduct that placed” Litigation Lawyers’s “interests above

those of the Harbisons,” id. at ¶ 41; (iv) he “pursued costly and unnecessary litigation and

invoiced over $1 million in legal fees when doing so was not necessary or appropriate,” id.

at ¶ 23; and (v) he “did not bill for ‘necessary’ legal actions but instead routinely billed for

excessive and unnecessary legal actions,” including “billing a total of 371.91 hours” for work

completed in an uninterrupted “31-day span,” id. at ¶ 25. Thus, at this stage of the case, the

Harbisons satisfied facial plausibility of the breach element. See Iqbal, 556 U.S. at 678.

As for the third element, the Harbisons sufficiently alleged proximate causation: “As a

direct result of Rakusin’s breach of his fiduciary duty, the Harbisons incurred significant

attorneys’ fees and legal costs in” their underlying litigation “and retained replacement counsel

at their own expense.” Doc. 85 at ¶ 43. Further, the Harbisons alleged that, in one instance in

the underlying suits, “Rakusin’s litigation tactics caused” an opposing party “to incur over $2

million in attorneys’ fees . . . for which it sought recovery from the Harbisons.” Id. at ¶ 24.

Based on these allegations, the Court reasonably infers that the Harbisons incurred legal fees

(and therefore damages) in defending against the claim for over $2 million in legal fees. And so

the Harbisons, consequently, plausibly pleaded that they “incurred significant attorneys’ fees

and legal costs . . . to remediate the damage caused by Rakusin.” Id. at ¶ 36.

Fourth, if the allegations recited here were not enough to satisfy the damages element

(which the Court finds that they do), the Harbisons also alleged that, while they paid Rakusin

“approximately $695,000” at the time of his termination, id. at § 27, they remain stuck with

“significant attorneys’ fees and legal costs” from their underlying lawsuits, id. at § 43.

And as for the fifth element, the Harbisons alleged that “[n]o other recognized causes of action

encompass the facts as alleged” in their breach-of-fiduciary-duty claim. J/d. at J 44.

Consequently, the Court determines that the Harbisons have “alleged facts that constitute the tort

of breach of fiduciary duty . . . against” their “attorney,” Rakusin, and, therefore, stated a

breach-of-fiduciary-duty claim. Klemme, 941 S.W.2d at 496.

IV. Conclusion

Accordingly, the Court grants in part, denies in part, and holds in abeyance in part

Litigation Lawyers’s [86] Motion to Dismiss Amended Counterclaims. Specifically, the Court

(1) dismisses the Harbisons’ amended counterclaim for legal malpractice and (2) does not

dismiss the Harbisons’ claim for breach of fiduciary duty. A separate order of partial dismissal

accompanies this memorandum and order. Doc. 102. The Court also, pending the parties’

responses to its contemporaneously issued order, doc. 103, holds in abeyance its ruling on the

motion as it relates to the Harbisons’ claims for breach of the implied covenant of good faith and

fair dealing and unjust enrichment.

So ordered this 2nd day of July 2025.

SLIP. □□

STEPHEN R. CLARK .

CHIEF UNITED STATES DISTRICT JUDGE

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