LOGAN, Circuit Judge.
These consolidated appeals arise out of a diversity action three shareholders of the Wichita Eagle and Beacon Publishing Company brought for monetary recovery from Paul R. Kitch, a director, officer, and lawyer for the corporation, and Harry Britton Brown, Jr., a director, officer, and shareholder, for breach of fiduciary duty in a transaction involving the sale of all of the corporation's stock to Ridder Publications, Inc. (Ridder). After trial a jury awarded the plaintiffs recovery and punitive damages against Kitch and held Brown jointly liable for some of the award against Kitch. The trial court granted a new trial on the issues of punitive damages and Brown's joint liability. Finding no just reason for delay on the other jury determinations, the trial court entered judgments pursuant to Fed.R.Civ.P. 54(b) permitting appeals by
The principal issue in these appeals is whether Kitch owed and breached a fiduciary duty to the suing minority shareholders. Other issues concern the law of the case, alleged trial error, prejudgment interest, and whether Ridder's contract with Brown assuring his continued employment as an officer of the publishing company breached Brown's fiduciary duty to the shareholders.
The essential facts are largely undisputed. The Wichita Eagle and Beacon Publishing Company publishes the only daily newspaper in Wichita, Kansas. Colonel Marshall Murdock founded the newspaper in 1872 and ownership remained in his family until the sale to Ridder. At the time of the sale, defendant Brown was a director and president of the company and was in charge of daily operations. He owned 20,000 of the 60,000 outstanding issued shares, and the following parties owned the remainder of the stock: plaintiff Delano, 10,000 shares; plaintiff First National Bank, 10,000 shares held as executor of Marcellus M. Murdock's estate; plaintiff Victoria Bloom, 2,000 shares; Katherine Henderson, 10,000 shares; and six other descendants of Murdock, 8,000 shares in various amounts. Defendant Kitch was neither a Murdock family member nor a shareholder, but he was a director, the assistant secretary, and the principal lawyer for the corporation.
In conversations that did not include any of the plaintiffs, Brown and Kitch discussed finding a buyer for the stock of the corporation. Brown apparently believed Kitch possessed special bargaining skills and asked Kitch to negotiate a sale. Kitch was willing to find a purchaser, but demanded the right to require the purchaser to pay him a 3% "finder's fee." Brown agreed. Kitch then sought a buyer willing to pay cash for all of the stock and willing to employ Brown for ten years at $100,000 per year. During his search and until he successfully negotiated a sale, Kitch continued to serve as director, assistant secretary, and legal counsel to the corporation.
Kitch obtained an attractive offer from Ridder: all of the corporate stock for $42,000,000,
Plaintiffs then brought suit against Kitch and Brown for breach of fiduciary duty. The jury awarded each plaintiff the commission Kitch received for the sale of that plaintiff's stock: $202,500 to Delano, $202,500 to First National Bank, and $40,500 to Bloom. The jury determined that neither the bank nor Bloom could recover damages from Kitch or Brown based upon Brown's employment contract. The jury also found that Kitch could not have obtained a higher purchase price for the newspaper.
In ruling on posttrial motions, the court vacated the jury's decisions to award Delano $202,500 against Kitch as punitive damages, and to award Bloom $40,500 against Brown as joint liability for Kitch's finder's fee.
This is the second time this case comes to our Court after a full trial.
After our opinion in Delano I and before the trial on remand, the Kansas Court of Appeals decided Ritchie v. McGrath, 1 Kan.App.2d 481, 571 P.2d 17 (1977). Although affirming that directors, officers, and majority shareholders owe strict fiduciary duties, the Kansas Court of Appeals held that majority shareholders do not breach that duty by selling their stock and concomitant control of the corporation, as long as the majority shareholders do not dominate, interfere with, or mislead other shareholders in exercising their rights to sell (hereinafter the control sales doctrine). Id. 571 P.2d at 23. Control of a corporation is not a corporate asset, and the majority shareholders are not required to share with the minority shareholders any premium received for control. Id. at 25. The court qualified its holding by noting that the sellers would have violated their fiduciary duties if they knew or should have known the purchasers were looters or were likely to mismanage the corporation, or if the sale involved fraud, misuse of confidential information, siphoning off of a business advantage belonging to the corporation or the shareholders in common, or wrongful appropriation of corporate assets. Id. at 22. See also Harman v. Willbern, 520 F.2d 1333, 1334 (10th Cir. 1975); McDaniel v. Painter, 418 F.2d 545, 547-48 (10th Cir. 1969). Ritchie did not disagree with Delano I but instead found it did not address the duty owed by majority stockholders.
During and after the retrial we ordered in Delano I, the trial court expressed concern that the law of the case we set forth in Delano I unduly restricted the retrial. The court concluded its posttrial order with the following:
The trial court misunderstood the effect Delano I should have upon the issues before the court on remand. Normally, in conducting the retrial a trial court should follow rulings of law the appellate court previously made. However, the law of the case doctrine is not so rigid as the rule of res judicata, Southern Ry. v. Clift, 260 U.S. 316, 319, 43 S.Ct. 126, 127, 67 L.Ed. 283 (1922), and must yield to a controlling decision between the date of the first ruling and the retrial. In this diversity case Kansas substantive law applies. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). In Chicago, Rock Island & Pac. R.R. v. Hugh Breeding, Inc., 247 F.2d 217 (10th Cir.), cert. dismissed, 355 U.S. 880, 78 S.Ct. 138, 2 L.Ed.2d 107 (1957), after a federal court decided an issue of Kansas substantive law, the Kansas Supreme Court made a contrary decision on the same issue. Under such circumstances, we said, "it is the duty of the Federal court that still has jurisdiction of the case to conform its decision and judgment to the latest decision of the supreme court of the state." Id. at 223. In the absence of a state supreme court ruling, a federal court must follow an intermediate state court decision unless other authority convinces the federal court that the state supreme court would decide otherwise. E. g., West v. American Tel. & Tel. Co., 311 U.S. 223, 237, 61 S.Ct. 179, 183, 85 L.Ed. 139 (1940). Therefore, on retrial the court should have considered Ritchie's application to this case. We may, indeed must, reassess Kansas law in light of Ritchie to determine whether, pursuant to our remand order in Delano I, the trial court gave erroneous instructions that prejudiced the defendants.
Kitch contends that the control sales doctrine of Ritchie protected Brown; as representative of a group of Eagle-Beacon stockholders controlling a majority of the shares, Brown could arrange for the sale of the corporation's controlling interest without breaching any fiduciary duty to minority shareholders. Kitch then asserts that the doctrine protects him as well because he was acting as Brown's agent. Moreover, Kitch argues, not only did he breach no fiduciary duty to the plaintiff minority shareholders, but his activities benefitted them by securing for them the right to tender their stock on the same terms as the majority shareholders. Kitch argues that the minority shareholders could have avoided contributing to Kitch's finder's fee merely by declining to sell their stock, and therefore, by tendering their stock with knowledge of his fee arrangement, they ratified his actions and foreclosed any right to claim injury. On this basis Kitch asserts he is entitled to judgment notwithstanding the verdict.
We recognize that in Ritchie Kansas adopted the control sales doctrine. But we do not believe that doctrine applies to Kitch. We think that Kansas courts would find Kitch owed a fiduciary duty to the plaintiff shareholders, and that Delano I correctly states Kansas law as it applies to Kitch.
Kansas imposes a strict fiduciary duty of loyalty upon directors and officers. For example, unlike some states, Kansas
Kansas has long recognized that a director has a duty of loyalty to stockholders as well as to the corporation. See, e. g., Newton v. Hornblower, 224 Kan. 506, 582 P.2d 1136, 1143-44 (1978); Stewart v. Harris, 69 Kan. 498, 77 P. 277, 279 (1904); Mulvane v. O'Brien, 58 Kan. 463, 49 P. 607, 612 (1897); Sargent v. Kansas Midland R. Co., 48 Kan. 672, 29 P. 1063, 1069 (1892). In Stewart the Kansas Supreme Court quoted approvingly from J. Pomeroy, Equity Jurisprudence, as follows:
69 Kan. at 504, 77 P. at 279-80. The court further relied upon Oliver v. Oliver, 118 Ga. 362, 45 S.E. 232 (1903). In Oliver the Georgia Supreme Court held that a director owes a fiduciary duty to the individual shareholders, stating that:
Id. 45 S.E. at 235 quoted in Stewart, 69 Kan. at 506-07, 77 P. at 280.
The Kansas cases have variously stated that directors and officers owe "the highest measure of duty, and the most scrupulous good faith," Thomas v. Sweet, 37 Kan. 183, 207, 14 P. 545, 557 (1887); accord, Arkansas Valley Agricultural Soc'y v. Eichholtz, 45 Kan. 164, 167, 25 P. 613, 614 (1891); that they may not "secure a personal advantage," Peckham v. Lane, 81 Kan. 489, 496, 106 P. 464, 467 (1910); and that principles of trust and agency law apply, Stewart, 69 Kan. at 505, 77 P. at 280; Mulvane v. O'Brien, 58 Kan. at 473, 49 P. at 612; Thomas v. Sweet, 37 Kan. at 207, 14 P. at 557. No Kansas court has decided a case precisely like the one before us, and neither has any other court so far as we can ascertain. Kansas courts have required a director-officer to surrender a secret profit he made while serving as agent in the sale of a fellow shareholder's stock, Mulvane v. O'Brien, 58 Kan. 463, 49 P. 607 (1897), and
Ritchie implicitly recognizes that a director-officer who is a shareholder wears two hats: first, as owner of stock who may sell at the best obtainable price, and second, as fiduciary to the corporation and its shareholders. Ritchie holds that the power to control the corporation through majority stock ownership is not a corporate asset which must be shared with all stockholders; in a sale of stock, the role as owner takes precedence over the role as fiduciary. Thus, as a general rule a director, officer, and majority shareholder may freely negotiate a sale at a premium price of his or her stock and the benefits incident to majority ownership: the power to determine who will serve as officers and directors and, through them, the policy of the corporation.
While Brown had substantial stock ownership and is entitled to the benefit of Ritchie's control sales doctrine, Kitch owned no stock;
Kitch, however, did not resign his positions. He continued as director, officer, and counsel for the newspaper corporation until the sale was consummated. We do not decide whether a director or employee must always give up the position to serve one group of shareholders against another.
The jury could find Kitch acted for his own pecuniary interest by procuring a finder's fee from Ridder for the sale of the plaintiff shareholders' stock without their consent. He thus violated an established rule that no fiduciary or agent may serve his own interests or those of a third party
Kitch argues no violation because the plaintiffs in effect ratified his actions: if he owed a duty to plaintiffs, they consented to his finder's fee by selling their stock; they could have avoided contributing to his fee by simply retaining their stock in the corporation. We treated this situation specifically in Delano I, 542 F.2d at 553, and adhere to that position here. Ratification is not effective in favor of the fiduciary and against the beneficiary if the beneficiary must act to protect his or her own interests or acts under duress imposed by the fiduciary. Cf. Restatement (Second) of Trusts § 218(2)(c) (1959) (trustee cannot obtain beneficiary's ratification through improper conduct); Restatement (Second) of Agency §§ 101, 462 (1957) (agent cannot force principal to ratify under duress). Plaintiffs acted under duress and to protect their interests. They learned of the contract after a majority had already agreed to it and when they had only ten days to decide whether to participate.
Justice (then Judge) Cardozo's oft-cited words describe the duty of a fiduciary as follows:
Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545, 546 (1928). Perhaps these sentiments declare too strict a standard for the complex demands of corporate business. But our reading of the Kansas cases convinces us that Kansas would proscribe Kitch's conduct toward the plaintiff shareholders and require Kitch to surrender his 3% commission on the sale of their stock.
Kitch maintains that the trial court erred in not granting a new trial because of inconsistent verdicts. The jury found in favor of plaintiffs on their claims that Kitch had breached his fiduciary duty. As directed by the court's instruction that a fiduciary who has violated his duties to his beneficiaries must surrender to them whatever profit he has received, the jury concluded that Kitch must disgorge his commission. The jury also found against plaintiffs on their claims that the newspaper could have been sold for more than it was. Kitch contends that for the jury to be consistent with its verdict returning plaintiffs' portions of the finder's fee, it should have found that the newspaper could have been sold for an additional amount equal to the fee.
A court will find jury verdicts inconsistent when it cannot fairly harmonize the answers. Gallick v. Baltimore & O.R.R., 372 U.S. 108, 119, 83 S.Ct. 659, 666, 9 L.Ed.2d 618 (1963). We can, however, harmonize the jury's verdicts. Kitch cannot deny that he realized a profit from the sale. Kitch's realization of a profit does not mean that Ridder would necessarily have paid more if there was no finder's fee — evidence was introduced that Ridder regarded the
Kitch next focuses upon allegedly erroneous instructions. He claims the court's instruction that the transaction was "a sale of the entire corporation" is inconsistent with placing the burden of proof on Kitch to show that he had complied with his fiduciary duties. Kitch maintains that if the sale were of the entire corporation, a majority of the stockholders could ratify the entire transaction, including his fee, and the burden would fall upon the objecting stockholders to show the transaction was inconsistent with sound business judgment. As we note above, however, this case concerns a fiduciary's duty of loyalty, akin to the duty of an agent not to serve conflicting interests of a third party and not to accept compensation from a third party with whom he contracts on behalf of his principal unless the principal expressly approves. The trial court therefore properly required Kitch to prove he had complied with his fiduciary duty, and the instruction on the sale of the entire corporation was neither necessary nor prejudicial error.
Finally, Kitch complains that the trial was unfair. Kitch complains specifically about the plaintiffs' characterization of the secret sales negotiations as wrongful; the plaintiffs' emphasis on Kitch's failure to pursue a stock-for-stock exchange when minority stockholders have no right to such an exchange; Delano's suggestion that Kitch should be punished for suggesting that Ridder should not make its offer available to Delano; and plaintiffs' emphasis on long-standing family tensions among the shareholders. According to Kitch, these unfair comments and characterizations infected the jury with passion and prejudice against Kitch. Kitch also stresses the trial judge's statements concerning fairness we have quoted from the November 20, 1978 order on posttrial motions as well as the trial judge's statements at oral argument on April 13, 1979.
We note first that the trial judge has granted a new trial on punitive damages and on Brown's liability to Bloom. Kitch's contentions, then, must go to whether the judge should have granted a new trial on his liability for the finder's fee. Kitch's specific complaints do not warrant a new trial on this issue. As we have analyzed Kitch's legal duty to the minority shareholders, the issue is primarily legal. There is no dispute that Kitch retained his position as a director, officer, and legal counsel to the corporation throughout. There is no essential dispute on the other facts relevant to his liability to repay the fee he collected for the sale of plaintiffs' stock. Kitch assumed he owed no fiduciary duty to these shareholders with respect to this transaction or that they effectively ratified his fee arrangement by selling their stock. We have held differently. The trial judge's posttrial statements indicate his primary concern was the conflict he perceived between Delano I and Ritchie. Since we have determined Ritchie does not shield one in Kitch's position, the judge's comments about fairness are not relevant.
Cross-appellants Delano, Bloom, and First National Bank claim that the trial court's posttrial rulings favoring Kitch and the order granting Brown a new trial are contrary to law and the record and are wholly capricious. In its posttrial orders of November 17, 1978, the trial court refused to award the costs of the action to plaintiffs, assessed no prejudgment interest against Kitch, vacated the punitive damages award against Kitch, and vacated the jury's verdict finding Brown jointly liable with Kitch for Kitch's finder's fee. The court ordered a new trial on the issues of punitive damages and Brown's liability.
Regarding the refusal to award costs, Fed.R.Civ.P. 54(d) provides that they "shall be allowed as of course to the prevailing party unless the court otherwise directs ...." When a trial court refuses to award costs to the prevailing party, it must state its reasons so that the appellate court will have a basis for judging whether the trial court acted within its discretion. Serna v. Manzano, 616 F.2d 1165, 1168 (10th Cir. 1980). The trial court ordered each party to bear its own costs because the defendants prevailed in the first action and the plaintiffs in the second. However, we agree with the plaintiffs that the defendants did not prevail in the first trial inasmuch as this Court reversed the judgment for defendants. The defendant Kitch therefore must pay plaintiffs' costs.
Plaintiffs also object to the trial court's failure to award prejudgment interest at the rate of 6% per annum from April 30, 1973, to August 31, 1978. The trial court concluded, "Plaintiffs' various claims involve unliquidated damages and do not entitle plaintiffs to prejudgment interest." Under Kansas law, plaintiffs are entitled to prejudgment interest on a liquidated claim. Kan.Stat.Ann. § 16-201. A claim is liquidated "when both the amount due and the date on which it is due are fixed and certain, or when the same become definitely ascertainable by mathematical computation." First Nat'l Bank of Girard v. Bankers Dispatch Corp., 221 Kan. 528, 562 P.2d 32, 40 (1977).
The record supports the liquidated nature of the claim. As reflected in the pretrial order, plaintiffs claimed definite dollar amounts equal to their proportionate shares of the finder's fee. The trial judge instructed the jury as follows: "If you find from the evidence that the plaintiffs are entitled to damages by reason of the finder's fee paid to Kitch, it is your duty to award each plaintiff his share of the finder's fee paid to Kitch."
The jury determined that Kitch had breached his fiduciary duty to plaintiffs and must give up the profits he had wrongfully gained. Since those damages were a sum certain, the trial court erred in refusing to award interest at 6% per annum from April 30, 1973, to August 31, 1978.
Delano and Bloom appeal the trial court's order granting a new trial on the issues of Kitch's liability for punitive damages and Brown's liability for Kitch's finder's fee. Orders granting a new trial, however, are not final and appealable. Stradley v. Cortez, 518 F.2d 488, 491 (3d Cir. 1975); Kanatser v. Chrysler Corp., 195 F.2d 104 (10th Cir. 1952), cert. denied, 344 U.S. 921, 73 S.Ct. 388, 97 L.Ed. 710 (1953).
In Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 101 S.Ct. 188, 66 L.Ed.2d 193 (1981), the Supreme Court reversed per curiam our issuance of a writ of mandamus that would have prohibited the trial judge from conducting a new trial. The Court noted that a writ of mandamus should issue only in exceptional circumstances amounting to a judicial usurpation
Allied Chemical, 449 U.S. at 36, 101 S.Ct. at 190. In the case before us, Delano and Bloom have failed to establish that they lack all other adequate means to relief and that they have a clear and indisputable right to issuance of writs of mandamus. Thus, no writs will issue.
Bloom and First National Bank raise several issues in their cross-appeals. Bloom contends the trial court abused its discretion when it permitted Brown and Kitch to withdraw certain admissions they had made several years earlier. In the amended complaint of May 21, 1973, plaintiffs alleged:
In his answer filed May 25, 1973, Brown admitted these allegations. At the second trial in 1978, Brown attempted to introduce evidence contrary to the admissions in the earlier pleadings. The trial court overruled the objection of Bloom's counsel and prohibited him from reading the admissions to the jury at that time.
The trial court subsequently stated that Brown's admissions had been superseded by the pretrial order filed before the second trial, an order that contained no reference to such admissions. The order expressly included among defendants' contentions the following: "The employment contract was a normal contract provision. Ridder, not Brown, was the beneficiary and the one requiring the provision." (Emphasis added.) Thus plaintiffs were on notice that defendants disputed the issue whether Brown demanded the employment contract as a condition precedent to the stock sale.
The trial court was right, of course, that the pretrial order supersedes the pleadings. Having failed to object to that order, Bloom and First National Bank cannot object to Brown's testimony in support of the contentions contained in the pretrial order. The trial court subsequently allowed plaintiffs' counsel to read the admissions to the jury "as party admissions and competent evidence, but not as judicial admissions which cannot be controverted." While the attorneys expressed some confusion over whether the statements were "contentions" or "party admissions," the trial court properly instructed the jurors that the statements covered issues they were to resolve.
Bloom also maintains the trial court abused its discretion when it reopened the case to permit surrebuttal by Kitch. At trial Kitch testified that he had narrowed the list of prospective purchasers to four by studying information in the "Securities and Exchange Commission's offices, in their library." Kitch stated he visited that library
Reopening a case for additional evidence is within the discretion of the trial court. Hickok v. G. D. Searle & Co., 496 F.2d 444, 447 (10th Cir. 1974); Nichols v. United States, 460 F.2d 671, 675 (10th Cir.), cert. denied, 409 U.S. 966, 93 S.Ct. 268, 34 L.Ed.2d 232 (1972). The record does not indicate that the court's unexpected change of position prejudiced any party. We hold the trial court did not abuse its discretion by permitting surrebuttal by Kitch.
Bloom asserts the trial court should have granted judgment against Brown notwithstanding the verdict (n. o. v.) because he breached a fiduciary duty to her by demanding an employment contract for himself as a condition precedent to the stock sale. Although First National Bank settled with Brown on this issue, both Bloom and First National Bank contend Kitch is jointly liable with Brown on this claim and ask for the entry of judgment n. o. v. against Kitch.
Judgment n. o. v. is proper only when the evidence so strongly supports an issue that reasonable minds could not differ. Symons v. Mueller Co., 493 F.2d 972, 976 (10th Cir. 1974); Swearngin v. Sears Roebuck & Co., 376 F.2d 637, 639 (10th Cir. 1967). The jury instruction, to which Bloom and First National Bank did not object, was general, asking only that the jury award damages if the employment contract was a breach of fiduciary duty. We must determine if reasonable minds might differ.
Even if Brown insisted upon a continuing employment contract, it is not per se a violation of the fiduciary duty of loyalty to other shareholders to negotiate such an agreement as part of a stock sales contract. See McDaniel v. Painter, 418 F.2d 545 (10th Cir. 1969). The continued employment of one or more major officers of the corporation "reflect[s] the high concern of all parties that the transaction period be as smooth and businesslike as possible." Id. at 548. The employment contract may not be used to defraud; for example, to make continuing shareholders bear part of the stock purchase price. But plaintiffs were not continuing shareholders, and they requested no instructions directed to the reasonableness of Brown's salary, term of employment, or services required.
An employment contract is certainly permissible if the salary paid is reasonable in regard to the services performed. A $65,000 annual salary and a term of nine or ten years is not unreasonable on its face for services as president and chief executive officer of a newspaper which sold for $42,000,000. The contract did not guarantee employment; it was terminable for mental or physical illness, for failure to perform assigned duties properly, or for action adverse to the newspaper's best interests. It required Brown to devote "full productive time, energy and ability" to the corporation's business. Further, the record contains substantial evidence that neither Brown nor Kitch made Brown's continued employment a condition precedent for the stock sale. Ridder's representative in the negotiations with Kitch and Brown testified that the employment contract was not a precondition to the sale. Ridder did not negotiate the employment contract with Brown until after it had agreed on the stock sale's principal terms, and Brown accepted the term and salary first offered by Ridder.
Reasonable minds might differ on whether the employment contract was a breach of fiduciary duty. In view of the
Bloom and First National Bank both urge that the trial court should have granted judgment n. o. v. on the issue of the newspaper's sale price. The jury found that the conduct of Brown and Kitch had not reduced the price Ridder would have paid. Substantial evidence supports the jury's verdict. Several newspaper representatives testified that the Wichita newspaper had brought a high cash price. The evidence does not clearly establish that the employment contract depressed the sales price. According to the testimony, the selling shareholders might have obtained a higher dollar value in a stock-for-stock exchange than in a cash sale. However, there was substantial evidence of serious disadvantages to accepting stock for payment. Because reasonable minds could differ on this issue, the jury's verdict must stand.
With respect to assessment of costs and prejudgment interest, the judgment and orders of the trial court are reversed and remanded with directions to assess costs against Kitch for all proceedings prior to the instant appeal and to require him to pay prejudgment interest on the award in favor of plaintiffs at the legal rate. In all other respects the judgment is affirmed. All parties shall bear their own costs for this appeal except appellee Brown, whose costs shall be paid by cross-appellant Bloom.
571 P.2d at 22.
An attorney also has a fiduciary duty of undivided loyalty to his or her client as codified in Canon 5 and the related Ethical Considerations and Disciplinary Rules of the American Bar Association Code of Professional Responsibility. E. g., Fund of Funds, Ltd. v. Arthur Anderson & Co., 567 F.2d 225, 232-33 (2d Cir 1977); Financial General Bankshares, Inc. v. Metzger, 523 F.Supp. 744 at 763 (D.D.C. 1981). The Kansas Supreme Court and United States District Court for the District of Kansas have adopted the Code.
Plaintiffs rely on Financial General Bankshares, Inc. v. Metzger, 523 F.Supp. 744 (D.D.C. 1981), to show that Kitch breached his professional duties under the Code, and argue that we should affirm the jury's verdict on this basis. Plaintiffs, however, did not specifically and separately address at trial Kitch's duties as legal counsel, and we decline to inject the issue of whether the Code should serve as the basis for private litigation into this action.