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Steen v. Murray

United States Court of Appeals, Eighth Circuit

October 21, 2014

Richard " Bud" Steen; Lloydene Steen, Plaintiffs - Appellants
v.
Robert Murray, et al., Defendants - Appellees

Submitted June 10, 2014

Page 699

Appeal from United States District Court for the District of Nebraska - Omaha.

For Richard " Bud" Steen, Lloydene Steen, Plaintiffs - Appellants: Marc Steven Harding, Harding & Thomas, Des Moines, IA; James David Sherrets, Diana Vogt, Sherrets & Bruno, Omaha, NE.

For Robert Murray, Individually, Lamson, Dugan & Murray, LLP, Ryan Boe, Defendants - Appellees: Andre Robert Barry, Cline & Williams, Lincoln, NE; James M. Bausch, Jonathan J. Papik, Cline & Williams, Omaha, NE; Peter J. Leo, Heidman Law Firm, Sioux City, IA.

Before LOKEN, BEAM, and GRUENDER, Circuit Judges.

OPINION

Page 700

LOKEN, Circuit Judge.

When lender Farm Credit Services threatened to foreclose on his farm in Emerson, Iowa, Richard " Bud" Steen retained Lamson, Dugan & Murray, LLP, an Omaha law firm, and Robert Murray, a member of the firm. To generate funds to repay the loan, Steen and his wife Lloydene agreed to sell part of the farm to AGR-Keast, an Iowa general partnership. At Steen's request, Murray, assisted by Ryan Boe of the Lamson law firm, prepared agreements by which AGR-Keast would buy 80 acres of the Steens' farm and lease another 331 acres for six years, with an option to purchase the leased property. After executing the agreements, the parties closed the transaction at the Lamson firm's Omaha office in April 2003. In July 2012, after state court litigation with AGR-Keast, the Steens filed this action in the Southern District of Iowa against Murray, Boe, and the Lamson law firm, alleging that defendants breached a contract for legal services when they " drafted an unrestricted option in favor of" AGR-Keast instead of " a first option to purchase or a first right of refusal." The Steens sought compensatory damages for litigation costs and the loss of their land, plus punitive damages for defendants' allegedly unethical failure to disclose that Murray also represented AGR-Keast at the time of the 2003 agreements.

On defendants' motion, the district court[1] transferred the legal malpractice suit to the District of Nebraska under 28 U.S.C. § 1406(a), ruling that the Southern District of Iowa was an improper venue. In the District of Nebraska, defendants moved for judgment on the pleadings, asserting the claims were time-barred under Nebraska law. The Steens moved to retransfer the case to the Southern District of Iowa. Alternatively, they urged the Nebraska court to treat the case as transferred under 28 U.S.C. § 1404(a), apply Iowa law, and conclude the suit was timely filed under the applicable Iowa statute of limitations. The district court[2] denied the Steens' motion to retransfer and, applying the Nebraska statute of limitations, concluded the malpractice claims were time-barred. The Steens appeal dismissal of their complaint with prejudice, arguing the claims were timely under Iowa law because the case was properly venued in the

Page 701

Southern District of Iowa and therefore Iowa law applies, or because the district court erred in applying the Nebraska statute of limitations under Nebraska choice-of-law principles. Reviewing these issues de novo, we affirm.

I. Framing the Issues on Appeal.

A.

Defendants provided the challenged legal services in early 2003. The Steens allege they first discovered the alleged malpractice in October 2008. The complaint was filed in July 2012. Under Nebraska law, a legal malpractice claim is time-barred unless brought within two years after the act or omission " providing the basis for" the claim, or, if not discovered within that period, within one year from the discovery of facts which would reasonably lead to discovery of the claim. Neb. Rev. Stat. § 25-222; see Guinn v. Murray,286 Neb. 584, 837 N.W.2d 805, 816 (Neb. 2013). The Steens do not appeal the ...


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