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Bistline v. Jeffs

United States District Court, D. Utah

January 11, 2017



          Ted Stewart United States District Judge.

         This matter is before the Court on Defendants Snow Christensen & Martineau, P.C. (“SC&M”) and Rodney R. Parker's (collectively, “Defendants”) Motion to Dismiss. For the reasons set forth below, the Court will dismiss Plaintiffs' legal malpractice, breach of fiduciary duty, fraud, negligent misrepresentation, civil conspiracy, and civil RICO claims as barred by the relevant statutes of limitation, with the exception of the claims brought by Plaintiff May Musser, for whom the limitations period was tolled. The Court will dismiss Plaintiff May Musser's claims as inadequately pleaded. The Court will also dismiss Plaintiffs' claim under the Trafficking Victims Protections Reauthorization Act (“TVPRA”) as inadequately pleaded, and will dismiss Plaintiffs' aiding and abetting claim as stipulated by Plaintiffs.


         Plaintiffs are all former members of the Fundamentalist Church of Jesus Christ of Latter-Day Saints (“FLDS Church”), and have brought the following claims against Warren Steed Jeffs, Rodney R. Parker, and SC&M: (1) legal malpractice, (2) breach of fiduciary duty, (3) fraud, (4) negligent misrepresentation, (5) civil conspiracy, (6) violation of the TVPRA, (7) aiding and abetting commission of felonies, and (8) civil RICO. Defendant Jeffs has failed to respond and a Default Certificate has been entered against him.

         Plaintiffs allege that when Defendant Jeffs began to assume the responsibilities of President of the FLDS Church, he retained SC&M to develop an “overarching scheme and plan . . . to develop the legal framework within which Jeffs and his favored cohorts would possess means to enforce their lewd, sadistic, tortious and criminal wishes upon the FLDS people.”[1] These wishes allegedly included ritual rape of minors, forced labor, extortionate taking of property and disintegration of family units.[2] Plaintiffs allege that Defendants' legal framework took the shape of a 1998 amendment and reinstatement of the United Effort Plan Trust (“the Trust”), which purportedly gave Jeffs the ability to unilaterally reorganize the FLDS structure and control the distribution of assets, property, funds and real estate used for residential and business purposes by FLDS beneficiaries.[3]

         The amended and reinstated Trust provides that “[t]he doctrines and laws of the Priesthood and the Church are found in . . . revelations received through the [Prophet] and are the guiding tenets by which the trustees of the United Effort Plan Trust shall act.”[4] Plaintiffs allege that Jeffs used the powers given him in this provision as leverage to extort complete obedience, to create a culture that would tolerate his crimes, and to force FLDS members to pay large sums of personal wealth to Defendants for legal fees. Plaintiffs allege that Defendants knew of Jeffs' plans and actions, wanted to bring them about, and participated in bringing them about by assisting to amend and reinstate the Trust, representing certain FLDS members but not others, and by creating an illusion of legality that helped Jeffs control the FLDS community.

         Plaintiffs' 120-page Complaint details the purported losses of each Plaintiff. Many Plaintiffs recount harrowing experiences and claim long-lasting emotional or physical harms resulting from an alleged lack of education, malnutrition, non-consensual sexual encounters, or periods of exile from family members. Many of Plaintiffs' allegations are directed at Defendant Jeffs. While sympathetic to Plaintiffs' claims, the allegations against Defendant Jeffs are not at issue on this Motion, and the Court may only consider the allegations against Defendants Parker and SC&M.


         In considering a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6), all well-pleaded factual allegations, as distinguished from conclusory allegations, are accepted as true and viewed in the light most favorable to Plaintiffs as the nonmoving party.[5] Plaintiffs must provide “enough facts to state a claim to relief that is plausible on its face, ”[6] which requires “more than an unadorned, the-defendant-unlawfully harmed-me accusation.”[7] “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'”[8]

         “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.”[9] As the Court in Iqbal stated,

only a complaint that states a plausible claim for relief survives a motion to dismiss. Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief.[10]



         Plaintiffs' claims center on Defendants' role in the amendment and reinstatement of the Trust in 1998. Defendants' involvement with the Trust ended in 2005, when a Utah court reformed the Trust and appointed a fiduciary. However, Plaintiffs allege that Defendants continued to enable Jeffs' unlawful behaviors by advising Jeffs and by representing FLDS members in custody disputes and criminal matters. Defendants argue that Plaintiffs' claims are time-barred with the exception of Plaintiffs' cause of action under the TVPRA.

         1. Legal Malpractice and Breach of Fiduciary Duty

         Plaintiffs' claims of legal malpractice and breach of fiduciary duty are subject to a four-year statute of limitations.[11] Plaintiffs allege that Defendants formed a relationship of trust with Plaintiffs and that Plaintiffs believed Defendants were protecting their interests. Plaintiffs claim that Defendants' nurtured that belief by representing to courts that individual members of the FLDS community were their clients. Plaintiffs allegedly contributed money to the FLDS Church with the understanding that some or all of it would be used to pay attorney's fees. Plaintiffs claim that Defendants received Plaintiffs' money but took actions that were adverse to Plaintiffs' interests. Plaintiffs' primary criticism of Defendants' conduct is that Defendants assisted Defendant Jeffs' father in the amendment and reinstatement of the Trust nearly twenty years ago. Plaintiffs allege that the amendment was intended to enable Jeffs to abuse the FLDS community. Plaintiffs also allege that Defendants failed to disclose the nature of Jeffs' activities and convictions, and failed to disclose his admission to an FLDS member that he was not the Prophet-an admission that Jeffs later withdrew.

         The Court finds that Plaintiffs' breach of fiduciary duty and malpractice claims are time-barred. As a general rule, “a statute of limitations begins to run upon the happening of the last event necessary to complete the cause of action.”[12] Taking Plaintiffs' allegations as true, the relevant events occurred long before July, 2012. The Trust was amended in 1998. The collection of donations from members for attorney's fees began at least as early as 2001.[13]Defendants allegedly held themselves out as representing individual FLDS members in 2008 and 2011.[14] Jeffs allegedly admitted that he was not the Prophet around 2007. Defendants' involvement with the Trust ended in 2005. In sum, Plaintiffs claims of legal malpractice and breach of fiduciary duty are brought well outside the limitations period.

         2. Fraud and Negligent Misrepresentation

         A three-year statute of limitations applies to Plaintiffs' fraud and negligent misrepresentation claims.[15] Plaintiffs allege that Defendants held themselves out as representing the entire FLDS membership and that Plaintiffs reasonably relied on that representation by donating funds for attorney's fees. The events that form the basis for these claims occurred well before July, 2013. Defendants allegedly made the representations in 2008 and 2011.[16]Donations for legal fees were allegedly collected from FLDS members and Plaintiffs as early as 2001. Therefore, these claims are also untimely.

         3. Civil Conspiracy and Civil RICO

         Plaintiffs' claims of civil conspiracy and civil RICO are subject to four-year statutes of limitation.[17] Plaintiffs allege that Defendants conspired with Jeffs to facilitate Jeffs' criminal behavior, and furthered the conspiracy by preparing documents for the amendment and reinstatement of the Trust. Plaintiffs claim that Defendants benefitted from this course of action because the Trust allowed Jeffs to force Plaintiffs to pay Defendants' fees. Plaintiffs allege that Defendants' representation of FLDS members in legal matters related to the 2008 raid on the Yearning For Zion (“YFZ”) Ranch and Defendants' representation of an FLDS man accused of rape were acts in furtherance of a scheme to give Jeffs absolute control over Plaintiffs.

         These claims are untimely because the underlying events occurred well before July, 2012. Plaintiffs allege that the Trust was the primary means by which Defendants' gave Jeffs power to commit crimes and extract legal fees from Plaintiffs; however, Defendants' assistance with the Trust ended in 2005. Similarly, Defendants' representation of FLDS members in connection with the YFZ raid occurred in 2008. Therefore, these claims are untimely.

         4. Violation of the TVPRA

         A claim under the TVPRA must be brought within either 10 years after the cause of action arose or 10 years after the victim reaches 18 years of age, if the victim was a minor at the time of the alleged offense.[18] Some of the events allegedly supporting this cause of action occurred after July, 2006, and Defendants do not argue that this claim is time-barred. Therefore, this claim will not be dismissed on statute of limitations grounds.


         Although “a statute of limitations begins to run upon the happening of the last event necessary to complete the cause of action, ”[19] there are exceptions to this rule. For example, “in the case of a plaintiff who has not reached the age of majority or is mentally incompetent, the statute of limitations will be tolled until the plaintiff is free from the disability.”[20] In this case, Plaintiff May Musser turned eighteen around 2015. Therefore, the limitations period on all claims were tolled for Ms. Musser until she reached the age of eighteen.[21]

         Plaintiffs argue that the statute of limitations should be tolled for all Plaintiffs because they did not discover or were prevented from discovering facts supporting their claims. Under the discovery rule, a limitations period may be tolled “until the discovery of facts forming the basis for the cause of action.”[22] The discovery rule only operates when there is: “(1) a statutory tolling provision, (2) an exceptional circumstance, or (3) fraudulent concealment.”[23]

         1. Statutory Tolling Provisions

         Of the claims brought by Plaintiffs, only the statute applicable to the fraud claim contains a discovery provision. Utah Code Ann. § 78B-2-305(3) provides that “the cause of action does not accrue until the discovery by the aggrieved party of the facts constituting the fraud or mistake.” Under this provision, a plaintiff is deemed to have “discovered his action when he has actual knowledge of the fraud ‘or by reasonable diligence and inquiry should know, the relevant facts of the fraud perpetrated against him.'”[24] The Utah Supreme Court has emphasized that “‘[a] party who has opportunity of knowing the facts constituting the alleged fraud cannot be inactive and afterwards allege a want of knowledge' and that ‘[a] party is required to make inquiry if his findings would prompt further investigation.'”[25]

         Here, the key facts supporting the alleged fraud began in 1998. Plaintiffs knew of Jeffs' actions and also allege that they knew of the connections between Jeffs and Defendants. Defendants' representation of FLDS members and connection to the Trust was either known to Plaintiffs or was discoverable during the limitations period. Defendants' representation of FLDS members in connection with custody disputes following the 2008 raid was public knowledge. The facts known to Plaintiffs were enough to trigger a duty to inquire into potential claims against Defendants. Plaintiffs failed to do so, and “they cannot now allege that they lacked knowledge of their claims.”[26] Therefore, Utah Code Ann. § 78B-2-305 does not toll the limitations period on Plaintiffs' fraud claim.

         2. Exceptional Circumstances

         Equitable tolling may be appropriate “where the case presents exceptional circumstances and the application of the general rule would be irrational or unjust, regardless of any showing that the defendant . . . prevented the discovery of the cause of action.”[27] This doctrine applies only if Plaintiffs make an initial showing that they “did not know and could not reasonably have discovered the facts underlying the cause of action in time to commence an action within [the limitations period].”[28]

         Plaintiffs argue that they are “not legally sophisticated, and do not have the ability to divine the impact of unknown machinations on the part of a law firm as sophisticated as SC&M.”[29] Plaintiffs also assert that they did not and could not have discovered the facts underlying their claim against the lawyer Defendants because they lived in a community that eschewed news and information from the outside world.

         While ignorance of the fact of injury may postpone the statute of limitations, ignorance of legal rights will not.[30] Plaintiffs have not established that their membership in the FLDS Church prevented them from seeking advice about their claimed injuries. The Court finds that Plaintiffs' association with the FLDS community is not an exceptional circumstance that makes them eligible for application of the exceptional circumstances version of the discovery rule.

         3. Fraudulent Concealment

         Plaintiffs next argue that researching potential wrongs committed by Jeffs was forbidden and that seeking legal advice would have been in vain because Plaintiffs would have been directed by FLDS leadership to Defendants, who allegedly oversaw and controlled the legal representation of FLDS members.[31]

         The fraudulent concealment version of the discovery rule aims to strike a balance between the policy underlying all statutes of limitation, “namely, to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared, ” and the policy against “allowing a defendant who has concealed his wrongdoing to profit from his concealment.”[32] In order to succeed on a fraudulent concealment theory, a plaintiff “must diligently investigate his claim.”[33] This doctrine applies when a plaintiff demonstrates either:

(1) that the plaintiff neither knew nor reasonably should have known of the facts underlying his or her cause of action before the fixed limitations period expired; or (2) that notwithstanding the plaintiff's actual or constructive knowledge of the facts underlying his or her cause of action within the limitations period, a reasonably diligent plaintiff may have delayed in filing his or her complaint until after the statute of limitations expired.[34]

         Plaintiffs do not qualify for this exception. First, Plaintiffs have not established that Defendants concealed any of the alleged wrongdoings. Defendants' assistance with the amended and reinstated Trust was no secret. It was known to at least some Plaintiffs and was discussed in a published decision by the Utah Supreme Court in 2005. Further, Defendants' representation of FLDS members was public knowledge, and Plaintiffs knew that Defendants assisted in the FLDS Church's legal matters. There is no indication that the provisions of the Trust were concealed. Further, there is no indication that Plaintiffs diligently investigated their claims. Plaintiffs claim that seeking legal advice would have been futile, but no Plaintiff ever attempted to do so.

         The Court finds that Plaintiffs were on notice of Defendants' potential wrongdoing and that through the exercise of due diligence, a reasonable plaintiff would have discovered the facts forming the basis of these causes of actions within the limitations periods. Therefore, the limitations periods will not be tolled, and Plaintiffs' claims of legal malpractice, breach of fiduciary duty, fraud, negligent misrepresentation, civil conspiracy, and civil RICO are dismissed as untimely, except in the case of Plaintiff Ms. Musser.


         1. Legal Malpractice and Breach of Fiduciary Duty

         To succeed on a claim of legal malpractice based on negligence, a plaintiff must prove: “(i) an attorney-client relationship; (ii) a duty of the attorney to the client arising from their relationship; (iii) a breach of that duty; (iv) a causal connection between the breach of duty and the resulting injury to the client; and (v) actual damages.”[35] The elements of a legal malpractice claim based on breach of fiduciary duty are substantially the same.[36]

         Defendants argue that Plaintiffs' Complaint fails to allege facts supporting the existence of a duty because no attorney-client relationship was formed between Defendants and the individual Plaintiffs. “The determination of whether a legal duty exists falls to the court.”[37]Utah Rule of Professional Conduct 1.13 provides that a lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents. Although a lawyer is obligated not to disclose the information revealed by the client's constituents or employees, “this does not mean . . . that constituents of an organizational client are the clients of the lawyer.”[38]

         Plaintiffs do not claim that an express attorney-client relationship between Ms. Musser and Defendants was ever formed. However, Plaintiffs argue that an implied attorney-client relationship is adequately pleaded in the Complaint. An implied attorney-client relationship “exists when a person reasonably believes that the attorney represents the person's legal interest.”[39] The person must subjectively believe that the attorney represents him or her and that belief must be reasonable under the circumstances.[40] In addition, the belief must be “induced by representations or conduct of the attorney.”[41]

         Ms. Musser claims that the FLDS Church withheld her paychecks in part for attorneys fees, and that she sometimes saw wheelbarrows at the entrance of the FLDS meetinghouse to collect money for “the lawyers, ” which Ms. Musser allegedly understood to include Defendants. Plaintiffs also allege that Defendants asserted publicly that SC&M represented all residents of the YFZ Ranch in ...

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