Meyer v. Christie
2011 WL 873437, 634 F.3d 1152 (2011)
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Rule of Law:
Under Kansas law, each plaintiff asserting a civil conspiracy claim must have personally suffered a wrong giving rise to an independent tortious cause of action and may not base their claim on a tortious injury suffered by a co-plaintiff.
Facts:
- In March 2005, Alan Meyer, John Pratt, David Christie, and Alexander Glenn orally agreed to form a joint venture called 'Junction City Partners' to purchase and develop a residential property.
- The agreement stipulated that Christie's company, D.J. Christie, Inc., would purchase the property and assign it to the joint venture.
- The parties agreed to a 50/50 partnership split between the Meyer/Pratt pair and the Christie/Glenn pair.
- As part of the venture, Meyer and Pratt's construction company, Dovetail Builders, would be hired as the general contractor for the development, to be named 'The Bluffs'.
- Relying on the agreement, Dovetail Builders began preliminary work, including drafting site plans and soliciting subcontractors, while all four individuals jointly sought and obtained a nonbinding agreement for financial incentives from the city.
- A few weeks later, Christie and Glenn terminated their relationship with Meyer and Pratt.
- Christie and Glenn then formed a new entity, The Bluffs, LLC, to which they assigned the property purchase contract, and proceeded with the development using a different general contractor.
Procedural Posture:
- Plaintiffs Alan Meyer, John Pratt, and Dovetail Builders filed a diversity action in the U.S. District Court against Defendants David Christie, Alexander Glenn, D.J. Christie, Inc., and The Bluffs, LLC.
- The complaint alleged claims including breach of a joint venture agreement, breach of fiduciary duty, civil conspiracy, and unjust enrichment.
- Following a nine-day trial, a jury returned a verdict in favor of the Plaintiffs on all claims.
- The jury awarded Plaintiffs actual damages exceeding $9 million for lost joint venture interest, lost contracting profits, and unreimbursed expenses.
- The district court entered a final judgment in favor of Plaintiffs consistent with the jury's verdict.
- Defendants (appellants) appealed the judgment to the U.S. Court of Appeals for the Tenth Circuit.
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Issue:
Does a plaintiff have standing to bring a civil conspiracy claim under Kansas law if that plaintiff has not independently suffered a tortious injury, but is instead relying on a tortious injury suffered by a co-plaintiff?
Opinions:
Majority - McKay, Circuit Judge
No. A plaintiff lacks standing for a civil conspiracy claim under Kansas law unless that plaintiff has independently suffered a tortious injury. The court reasoned that a civil conspiracy claim is not actionable without the commission of an underlying wrong that gives rise to an independent tortious cause of action. In this case, the independent tort was the breach of fiduciary duty owed by Christie and Glenn to their joint venture partners, Meyer and Pratt. Dovetail Builders, however, was not a partner in the joint venture and was not owed such a fiduciary duty; therefore, no independent tort was committed against it. The court rejected the theory that a plaintiff can 'adopt the tortious injury suffered by another,' holding that each plaintiff must have standing for each claim asserted. Because Dovetail failed to allege any actionable tort committed against it, it lacked standing to pursue its civil conspiracy claim.
Analysis:
This decision clarifies the standing requirements for civil conspiracy claims under Kansas law, reinforcing that such claims are not derivative. It establishes that each plaintiff in a multi-party suit must independently satisfy the elements of the claim, including having suffered a direct tortious injury. This prevents parties who are merely economically affected by a tort, such as a contractor like Dovetail, from 'piggybacking' on the claims of the directly injured parties. The ruling forces litigators to be more precise in pleading, ensuring that a conspiracy claim is brought only by those who were the actual targets of an underlying tort, not by all parties who suffered collateral damage.
