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Allen Wolfson v. Christopher Bruno

December 16, 2011


The opinion of the court was delivered by: Andrew J. Peck, United States Magistrate Judge


Pro se plaintiff Allen Wolfson brings this action against defendant Christopher Bruno, his former attorney, claiming legal malpractice. (Dkt. No. 2: Compl.; Dkt. No. 31: Am. Compl.)*fn1 Presently before the Court is Bruno's summary judgment motion.*fn2 The parties have consented to decision of this case by a Magistrate Judge pursuant to 28 U.S.C. § 636(c). (Dkt. No. 32.) For the reasons set forth below, Bruno's summary judgment motion is GRANTED.


Wolfson contacted attorney Bruno*fn3 in October 2002 and formally retained his legal services on October 24, 2002 for his criminal case, United States v. Wolfson, 00 Cr. 0628, known as the "Five Stock Indictment" case. (Bruno Rule 56.1 Stmt. ¶¶ 1-2;*fn4 Bruno Aff. ¶¶ 7-8, 10 & Ex. A: Rep. Agreement.) Wolfson was convicted by a jury on all counts in March 2003. (Bruno Rule 56.1 Stmt. ¶ 3; Bruno Aff. ¶ 11.)

On May 30, 2003, Wolfson and Bruno entered into a second representation agreement "intended for the resolution of these additional matters by way of a global settlement in order to minimize ultimate criminal and civil exposure." (Bruno Rule 56.1 Stmt. ¶¶ 4, 7-10; Bruno Aff. ¶¶ 15-19 & Ex. B: 2d Rep. Agreement.) The "additional matters" were: (1) United States v. Wolfson, 02 Cr. 1588 ("Freedom Surf Indictment"), an unrelated criminal stock fraud case before Judge Hellerstein in this District; (2) an unrelated criminal stock fraud investigation conducted by the U.S. Department of Justice's Criminal Fraud Unit in Washington, DC ("DOJ Investigation"); (3) In re Wolfson, Securities Act Release No. 8614, Exchange Act Release No. 52480 (Sept. 21, 2005) ("SEC-AP"), an administrative proceeding, parallel to the Five Stock Indictment case, before the SEC in Washington, DC; and (4) SEC v. Wolfson, 02 CV 1086 ("SEC-Utah"), a civil case in U.S. District Court for the District of Utah, parallel to the Freedom Surf Indictment criminal case. (Bruno Rule 56.1 Stmt. ¶¶ 5, 9; Bruno Aff. ¶¶ 15, 18 & Ex. B.) The second representation agreement stated:

It is agreed and understood that representation by the firm pursuant to this Representation Agreement does not include the trial of any of the above-referenced matters. It is further agreed that, if for some unforseen reason any of these matters were to proceed to trial, a new retainer would have to be agreed upon. (Bruno Aff. Ex. B: 2d Rep. Agreement.)

In the Freedom Surf Indictment case, in June 2003 Bruno offered that Wolfson would cooperate with the Government against the remaining defendants. (Bruno Rule 56.1 Stmt. ¶ 15; Bruno Aff. ¶¶ 23-25.) Wolfson and Bruno attended a Kastigar session with Assistant United States Attorneys (AUSA) David Esseks and Robert Holtz and the lead FBI agent, and Wolfson detailed his and others' involvement. (Bruno Rule 56.1 Stmt. ¶ 15; Bruno Aff. ¶¶ 24-25.) On January 21, 2004, Wolfson formally entered a guilty plea. (Bruno Rule 56.1 Stmt. ¶ 16; Bruno Aff. ¶ 26.) In February 2004, the Freedom Surf Indictment criminal case was consolidated with the Five Stock Indictment case for comprehensive sentencing before Judge Koeltl. (Bruno Rule 56.1 Stmt. ¶¶ 6, 17; Bruno Aff. ¶¶ 14, 27 & Ex. C: Bruno 2/9/04 Letter to Court.)

Throughout 2003 and into 2004, Bruno interceded with the federal prosecutors resulting in the DOJ Investigation being dropped without Wolfson being indicted. (Bruno Rule 56.1 Stmt. ¶ 18; Bruno Aff. ¶ 28.)

In the SEC-AP case, Wolfson agreed to settle with the SEC in June 2005, and the Order was filed on September 21, 2005. (Bruno Rule 56.1 Stmt. ¶¶ 21, 23; Bruno Aff. ¶¶ 31-33, 35-36, 38-39 & Ex. F: SEC Settlement Order.) In the settlement, Wolfson agreed to a consent decree that neither admitted nor denied the underlying civil allegations, the SEC waived all aspects of a monetary judgment due to Wolfson's inability to pay, and Wolfson agreed to conduct-related bars with a right to reapply for removal in the future. (Bruno Rule 56.1 Stmt. ¶ 22; Bruno Aff. ¶¶ 33-38 & Ex. F: SEC Settlement Order ¶ IV.)

In the SEC-Utah case, Bruno alleges that he negotiated a settlement similar to that in the SEC-AP case. (Bruno Rule 56.1 Stmt. ¶¶ 29-30; Bruno Aff. ¶¶ 41-42.) Bruno alleges that he kept Wolfson apprised of the settlement discussions and that Wolfson authorized Bruno to accept the settlement offer. (Bruno Rule 56.1 Stmt. ¶ 31; Bruno Aff. ¶¶ 43-44.) Wolfson, however, alleges that Bruno never communicated the SEC's settlement offer to him. (Dkt. No. 48: Wolfson Opp. Br. at 2, 3.)

Meanwhile, in September 2005, Wolfson sent a letter to Avraham Moskowitz, his former counsel in the Five Stock Indictment case, asserting that Bruno and Moskowitz were conspiring with the prosecutors to secure his convictions in the consolidated criminal cases. (Bruno Rule 56.1 Stmt. ¶ 32; Bruno Aff. ¶¶ 45-46; Wolfson Opp. Br. at 3-4.) Moskowitz forwarded Wolfson's letter to Bruno and to AUSA Esseks, who forwarded it to Judge Koeltl. (Bruno Aff. ¶ 45 & Ex. H: Bruno 9/9/05 Letter to Court; Wolfson Opp. Br. at 4.) Judge Koeltl appointed Nancy Ennis to serve as Wolfson's Curcio counsel; she informed Judge Koeltl that Wolfson maintained his conspiracy theory even though she was unable to discern a basis for the allegations. (Bruno Aff. ¶¶ 47-48; Wolfson Opp. Br. at 4.) Recognizing an inherent conflict of interest in further representation, Judge Koeltl appointed James Cohen to represent Wolfson in the consolidated criminal cases on September 21, 2005 and relieved Bruno as Wolfson's counsel. (Bruno Rule 56.1 Stmt. ¶ 33; Bruno Aff. ¶¶ 48-49; Wolfson Opp. Br. at 4.) Wolfson asserts that Bruno was dismissed because he was violating his fiduciary duty due to the alleged conspiracy. (Wolfson Opp. Br. at 1.) Moreover, Wolfson alleges that he "never terminated his relationship with [Bruno] when [he] put forth his conspiracy theory to judge [sic] Koeltl." (Wolfson Opp. Br. at 2.)

Bruno alleges that he subsequently brought new counsel Cohen up to speed on the consolidated criminal cases and informed him of the full scope of his representation and that Cohen stated that Wolfson intended to handle the SEC civil cases himself. (Bruno Rule 56.1 Stmt. ¶ 34; Bruno Aff. ¶ 50.) Wolfson and Bruno ceased attorney-client conversations regarding the SEC-AP and SEC-Utah cases. (Bruno Rule 56.1 Stmt. ¶¶ 33, 35; Bruno Aff. ¶¶ 45-46, 51.) Bruno was never contacted by Wolfson or Cohen to continue to represent Wolfson in the SEC-Utah case. (Bruno Rule 56.1 Stmt. ¶¶ 41-42; Bruno Aff. ¶ 60.) Wolfson, however, alleges that he never discussed his other cases with Cohen and that he did not tell Cohen that he intended to handle the SEC-Utah case. (Wolfson Opp. Br. at 4.)

Wolfson litigated the SEC-Utah case. (Bruno Rule 56.1 Stmt. ¶ 37; Bruno Aff. ¶¶ 53-59 & Ex. I: SEC Response 3/7/06; Bruno Aff. Ex. J: Wolfson Aff. 3/1/06 at pp. 1-2; Bruno Aff. Ex. K: Wolfson Aff. 3/7/06.) On February 27, 2006, Wolfson requested a 120-day extension to respond to the SEC's summary judgment motion. (Bruno Aff. ¶ 53.) Wolfson's motion stated that he was "'forced to fire his attorney alleging that he was involved in a criminal conspiracy with the U.S. attorney [sic] in New York to falsely convict'" him. (Bruno Rule 56.1 Stmt. ¶ 38; Bruno Aff. ¶ 54 & Ex. I: SEC Response 3/7/06 at 2 n.2, quoting Wolfson's motion.) In another filing in Utah, Wolfson stated that he "fired his attorney [in the Five Stock Indictment case] alleging that his attorney was working with the prosecutor in order to falsely convict" Wolfson. (Bruno Rule 56.1 Stmt. ¶ 38; Bruno Aff. ¶ 56 & Ex. J: Wolfson Aff. 3/1/06 at 1.) On May 4, 2006, Judge Campbell granted the SEC's summary judgment motion and ordered Wolfson to disgorge $76,562.50 from the sale of Freedom Surf stock, to pay $27,671 in prejudgment interest, and pay a civil penalty of $110,000. (Bruno Rule 56.1 Stmt. ¶¶ 39-40; Bruno Aff. ¶¶ 58-59 & Ex. L: Campbell Order & Memo. Decision.) See also SEC v. Wolfson, No. 2:02 CV 1086, 2006 WL 1214994 at *10-11 (D. Utah 2006), aff'd, 294 F. App'x 701 (10th Cir. 2007).

In the consolidated criminal cases, Judge Koeltl sentenced Wolfson to 104 months imprisonment, $1,000,000 in restitution and conduct-related bars "almost identical to those that he had agreed to in the [SEC-] AP ...

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