Wesby v. District of Columbia ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
THEODORE WESBY, et al., :
:
Plaintiffs, : Civil Action No.: 09-501 (RC)
:
v. : Re Document No.: 114
:
DISTRICT OF COLUMBIA, et al., :
:
Defendants. :
MEMORANDUM OPINION
GRANTING IN PART AND DEFERRING RULING IN PART ON DEFENDANTS’ MOTION FOR ENTRY
OF AN ORDER OF RESTITUTION; DENYING DEFENDANTS’ MOTION FOR ENTRY OF AN ORDER
FOR PAYMENT OF COURT-ORDERED COSTS
I. INTRODUCTION
This case comes to this Court on remand from the U.S. Supreme Court, which reversed
the entry of partial summary judgment to Plaintiffs against Defendants the District of Columbia
and Metropolitan Police Department officers. Having satisfied the judgment by paying $680,000
to Plaintiffs after the D.C. Circuit affirmed the district court, Defendants now seek repayment of
those funds as well as payment by Plaintiffs of Defendants’ court-ordered Supreme Court
litigation costs. For the reasons explained below, the Court grants in part and defers ruling in
part on Defendants’ motion for restitution. The Court orders restitution by The Law Offices of
Gregory Lattimer, LLC (“Lattimer Law”), the law firm of Plaintiffs’ then-counsel Gregory
Lattimer, for the portion of the payment allocated to Lattimer Law as part of its contingency fee
agreement with Plaintiffs. The Court defers ruling on the motion for an order of restitution by
Plaintiffs of the remainder of Defendants’ payment, and directs Plaintiffs, Lattimer, and
Defendants to mediation on the issue. And because Defendants have not established that any
further action by this Court is necessary on the issue, the Court denies the motion for entry of an
order for payment of Defendants’ Supreme Court litigation costs.
II. FACTUAL BACKGROUND
The Court presumes familiarity with the prior opinions related to this case, both at the
district court level and on appeal, and confines its discussion to the facts most relevant to the
present motion. See Wesby v. District of Columbia (“Wesby I”), 841 F. Supp. 2d 20 (D.D.C.
2012); Wesby v. District of Columbia (“Wesby II”), 765 F.3d 13 (D.C. Cir. 2014); District of
Columbia v. Wesby (“Wesby III”), 138 S. Ct. 577 (2018). Plaintiffs are sixteen partygoers who
brought suit against the District of Columbia (the “District”) and five officers of the District’s
Metropolitan Police Department (together with the District, “Defendants”) after they were
arrested at a house party. See Wesby III, 138 S. Ct. at 584. Plaintiffs brought claims for false
arrest under 42 U.S.C. § 1983, and for false arrest and negligent supervision by the District under
D.C. law. See id. At the summary judgment stage, the district court found that the officers had
lacked probable cause to arrest Plaintiffs. See Wesby I, 841 F. Supp. 2d at 35. The court entered
summary judgment for Plaintiffs on some of their § 1983 and state law false arrest claims, as
well as on Plaintiffs’ negligent supervision claim against the District. See id at 48–49. After a
damages-only trial, the jury awarded Plaintiffs $680,000 in compensatory damages and the
district court entered judgment for Plaintiffs in the same amount. See Verdict Form 1–2, ECF
No. 73; Judgment 1 (Nov. 9, 2012), ECF No. 75.
On appeal, the D.C. Circuit affirmed. Wesby II, 765 F.3d at 31. The Circuit concluded,
inter alia, that there was no probable cause to arrest Plaintiffs. See id. at 19. Defendants were
subsequently unsuccessful in both their petition for rehearing en banc, see Wesby v. District of
Columbia, 816 F.3d 96, 96 (D.C. Cir. 2016), and motion for a stay of the mandate to seek
2
certiorari, see Order at 1, ECF No. 97. On May 19, 2016, Defendants satisfied the judgment by
submitting payment of $685,003.27 to Lattimer Law. See Satisfaction of J. 1, ECF No. 107;
Check from the District to Lattimer Law, Lattimer Resp. Pls.’ Opp’n Mot. Restitution Ex. 4,
ECF No. 143-4. Forty percent of the judgment, or $272,000, was set off as Lattimer Law’s legal
fees, and $408,000 was distributed to Plaintiffs according to their recovery at trial—where some
plaintiffs were awarded $35,000 and some $50,000, yielding distributions after attorney’s fees of
$21,000 and $30,000, respectively. See Pls.’ Distribution Statements, Decl. of Aderson Francois
Ex. C, ECF. No. 137-4. The remaining $5,003.27 constituted post-judgment interest for the
period between November 9, 2012, and Defendants’ payment of the judgment on May 19, 2016.
See Lattimer Resp. 12 n.2. 1
1
The Court notes that the distribution statements prepared by Lattimer Law are not a
model of clarity. As discussed in Plaintiffs’ opposition and Lattimer’s response, the distribution
statements reflect that Lattimer Law appears to have paid off debts owed by some of the
Plaintiffs before distributing to them what was left from their share of the judgment. See, e.g.,
Pls.’ Distribution Statements 18 (noting payment of a lien held by Excel Legal Funding prior to
distribution of remainder of judgment to plaintiff Shanjah Hunt); see also Pls.’ Opp’n Mot.
Restitution 4 n.2, ECF No. 137; Lattimer Resp. 5. While Lattimer is correct that there is nothing
inherently wrong with this practice (as long as the plaintiffs consented to it), one distribution
statement reflects that, as a result of owing over $38,000 in liens to third parties while receiving
only $21,000 from the judgment, one of the plaintiffs was left with a “balance” of -$17,000 after
the distribution. Pls.’ Distribution Statements 33. The distribution statement could be
interpreted to mean that Lattimer Law was only able to pay part of the plaintiff’s $38,000 third-
party debt with the proceeds of the judgment, and that the plaintiff was left with $17,000 in third-
party debt still owing after the judgment. But one natural interpretation of the statement would
be that the plaintiff was left owing money to Lattimer Law itself after the distribution, which
may explain Plaintiffs’ confusion regarding whether Lattimer retained some of the proceeds of
the judgment to pay debts owed to himself. See Pls.’ Opp’n 4 n.2.
More problematic is the fact that the distribution statements do not indicate whether the
post-judgment interest was distributed, and to whom. The statements reflect the allocation and
distribution of the $680,000 judgment, 40% to Lattimer Law and 60% to Plaintiffs, but not of the
remaining $5,003.27 paid by the District. See generally Pls.’ Distribution Statements. The
Court can only hope that these funds were also distributed according to Plaintiffs’ respective
allocations, and not kept wholesale by Lattimer Law.
3
The Supreme Court granted certiorari, and ultimately issued an opinion reversing the
Circuit and the district court. Wesby III, 138 S. Ct. at 588. The Supreme Court departed from
the lower courts in finding that the arresting officers had probable cause to arrest Plaintiffs and,
in any event, were entitled to qualified immunity. See Wesby III, 138 S. Ct. at 589–90. It
accordingly reversed and remanded the case for entry of summary judgment to Defendants, see
Wesby, 138 S. Ct. at 593, awarding Defendants $5,197 in costs for their appeal, see Judgment 3,
Wesby v. District of Columbia, No. 12-7127 (D.C. Cir. Feb. 23, 2018), ECF No. 1719300.
On March 30, 2018, Defendants moved this Court to order restitution from Plaintiffs and
Lattimer of the payment made in satisfaction of the now-reversed November 9, 2012 judgment,
plus post-judgment interest, as well as to order Plaintiffs to pay the $5,197 in costs ordered by
the Supreme Court. See Defs.’ Mot. Restitution, ECF No. 114. After determining that the
motion created a conflict between him and Plaintiffs, Lattimer withdrew as Plaintiffs’ counsel.
See Lattimer Mot. Withdraw, ECF No. 122; Min. Entry (Nov. 15, 2018). Lattimer then filed his
opposition to the motion for restitution on November 16, 2018, see Lattimer Opp’n Mot.
Restitution, ECF No. 130, with Defendants filing their reply on November 28, 2018, see Defs.’
Reply Sup. Mot. Restitution (“Defs.’ First Reply”), ECF No. 131. Represented by new, court-
appointed counsel, Plaintiffs filed their opposition to the motion on April 9, 2019. See Pls.’
Opp’n Mot. Restitution, ECF No. 137. Antoinette Colbert, the representative for the estate of
one of the deceased plaintiffs, filed her own opposition the same day. Colbert Opp’n Mot.
Restitution, ECF No. 139. Because Plaintiffs’ arguments rested in significant part on accusations
of malpractice by their former counsel, Lattimer filed a response to Plaintiffs’ opposition on
April 30, 2019, see Lattimer Resp., and Plaintiffs filed a surreply on May 2, 2019, see Surreply,
ECF No. 147. Finally, Defendants filed their reply to Plaintiffs’ opposition on May 7, 2019. See
4
Defs.’ Reply Pls.’ Opp’n Mot. Restitution (“Defs.’ Second Reply”), ECF No. 145. Defendants’
motion is now ripe for decision.
III. ANALYSIS
Defendants have moved for restitution of the $685,003.27 payment made to Lattimer
Law in satisfaction of the 2012 judgment, an award of post-judgment interest accruing from May
19, 2016, as well as for this Court to order payment by Plaintiffs of Defendants’ court-ordered
Supreme Court litigation costs. 2 As an initial matter, the Court denies the motion with respect to
Defendants’ Supreme Court litigation costs. The Supreme Court has already issued an order
mandating that Plaintiffs pay the $5,197 in costs, and Defendants do not explain why a further
order from this Court is necessary for that order to be enforceable. 3 In addition, the Court defers
ruling on the motion as to any restitution owed, and by whom, on the share of the judgment
distributed to Plaintiffs. Having taken into consideration the arguments of Defendants, Plaintiffs,
and Lattimer as to the equities of restitution in the rather unique circumstances of this case, the
Court refers the parties to mediation for a potential resolution of the issue.
With these preliminary matters addressed, the Court now considers whether Defendants
are entitled to restitution from Lattimer Law—and Lattimer himself—on the share of the
judgment Lattimer Law retained as attorney’s fees. Defendants argue that they are entitled to
restitution of the judgment because “[t]he right to recover what one has lost by the enforcement
of a judgment subsequently reversed is well established.” Defs.’ Mem. Supp. Mot. Restitution 4
2
Defendants’ motion repeatedly references the figure of $680,000. See, e.g., Defs.’
Mem. Supp. Mot. Restitution 4 (“The check was issued . . . in the full amount of $680,000.”),
ECF No. 114. But because Defendants make clear throughout the motion that they are seeking
restitution of the full amount they paid Lattimer Law on May 19, 2016, the Court treats the
motion for an order of restitution as seeking restitution of that full amount.
3
Defendants are free to make a renewed motion on the issue that lays out any arguments
for why this Court must issue a further order to render the Supreme Court judgment enforceable.
5
(quoting Baltimore & Ohio R.R. Co. v. United States, 279 U.S. 781, 786 (1929)), ECF No. 114.
Pointing out that restitution is an equitable remedy left to the Court’s discretion, Lattimer makes
two arguments for why restitution is unavailable, which the Court addresses in turn. See
Lattimer Opp’n 5–11. The Court first reviews Lattimer’s argument that restitution is improper
because the negligent supervision judgment against Defendants was not reversed by the Supreme
Court. Next, the Court reviews whether Defendants’ failure to post a bond and agreement to pay
the judgment after they lost on appeal in exchange for Plaintiffs withdrawing their request for a
writ of attachment bars restitution. Finding neither of these arguments persuasive, the Court
finally addresses whether restitution by Lattimer Law and Lattimer himself is warranted here.
On the basis of the arguments and record before it, the Court concludes that only restitution from
Lattimer Law would be adequate to prevent unjust enrichment. The Court accordingly grants in
part the motion for restitution, and orders restitution by Lattimer Law of the attorney’s fees
portion of Defendants’ payment in satisfaction of the 2012 judgment, plus post-judgment interest
accruing from May 19, 2016.
A. The Supreme Court Resolved Plaintiffs’ Negligent Supervision Claim
Before reaching Defendants’ right to recover under restitution, the Court must address
Lattimer’s argument that Defendants have not “ultimately and completely prevailed on the
merits.” Lattimer Opp’n 4. Lattimer contends that the Supreme Court’s decision “did not
address [P]laintiffs’ separate and distinct claim of negligent supervision,” Lattimer Opp’n 3–4,
and that because this “tort claim for damages directly against the District . . . has not been
disturbed,” id. at 4, payment in satisfaction of the general jury verdict should also remain
undisturbed. See id. at 3–5. Defendants retort that “[t]here is no question that Defendants
prevailed entirely and completely on all claims.” Defs.’ First Reply at 2. The Court agrees.
6
First, the Supreme Court’s decision in Wesby III unambiguously indicates that the Court
intended to reach all of Plaintiffs’ claims, and that Defendants ultimately and completely
prevailed on the merits. The Supreme Court expressly stated that “the District and its officers
are entitled to summary judgment on all of the partygoers’ claims.” Wesby III, 138 S. Ct. at 589;
see also id. at 589 n.6 (“The partygoers do not contest that the presence of probable cause defeats
all of their claims.”). And the Supreme Court noted that the negligent supervision claim was
predicated on a finding that the officers lacked probable cause to arrest Plaintiffs, see Wesby III,
138 S. Ct. at 584 (“The partygoers’ claims were all ‘predicated upon the allegation that [they]
were arrested without probable cause.’” (quoting Wesby I, 841 F. Supp. 2d at 32)), a finding that
the Court expressly rejected. 4
The District Court’s summary judgment decision similarly made clear that Plaintiffs’
success on their negligent supervision claim was premised on the lack of probable cause. The
court explained that Plaintiffs were entitled to summary judgment on the negligent supervision
claim “because the unlawful arrests were ordered by high level officials who knew or should
have known that probable cause was lacking for these arrests.” Wesby I, 841 F. Supp. 2d at 48
(emphasis added). And the Court of Appeals also understood the negligent supervision judgment
to be based on “one of the District’s supervisory officials[’] direct[ion to] his subordinates to
make an arrest that he should have known was unsupported by probable cause.” Wesby II, 765
F.3d at 31 (emphasis added). 5
4
Lattimer contends that the Supreme Court’s finding regarding probable cause was dicta.
See Lattimer Opp’n 5 n.2. A cursory reading of Wesby III demonstrates that this argument is
baseless. See Wesby III, 138 S. Ct. at 589 (“For all of these reasons, we reverse the D.C.
Circuit’s holding that the officers lacked probable cause to arrest. Accordingly, the District and
its officers are entitled to summary judgment on all of the partygoers’ claims.”).
5
Lattimer points to District of Columbia v. Tulin, 994 A.2d 788 (D.C. 2010), for the
proposition that “negligent supervision is a tort claim . . . not dependent upon whether or not a
7
With the negligent supervision judgment entirely predicated on a lack of probable cause,
and the Supreme Court finding that Plaintiffs’ arrests were supported by probable cause, it is
clear that the Court addressed and resolved Plaintiffs’ negligent supervision claim in favor of
Defendants. See Wesby III, 138 S. Ct. at 589 (determining that “the officers had probable
cause”). Having prevailed on appeal and obtained reversal of the lower court’s judgment in its
entirety, Defendants are entitled to ask this Court to order restitution.
B. Defendants’ Failure to Post Bond or Entry of a Satisfaction of
Judgment Does Not Prejudice Their Entitlement to Restitution
Next, Lattimer argues that restitution is inappropriate because Defendants did not attempt
to post a bond for the judgment, and instead offered to pay the judgment to save future interest
and in exchange for Plaintiffs not pursuing a writ of attachment. See Lattimer Opp’n at 5–6, 8–
10. Lattimer further contends that Defendants’ entry of a satisfaction of judgment formed a
contract and that Defendants intended the payment to be final. See id. at 9–10 (citing
Restatement (First) of Restitution § 74 (1937)). In response, Defendants contend that neither
opting not to post a bond nor satisfying the judgment ceded their right to recover the payment if
they succeeded on appeal. See Defs.’ First Reply 2–3. Again, the Court agrees.
finding of tortious conduct on the part of the supervised officers occurred.” Lattimer Opp’n 4.
But Tulin involved a motorist’s unlawful arrest by an officer who, the jury had found, believed in
good faith that her conduct was lawful. See 994 A.2d at 799–800. Even if the officer herself
was not liable, the plaintiff could still prevail against the officer’s supervisors because the
plaintiff had been unlawfully arrested as a result of their inadequate supervision. See id. And
the district court in this case granted summary judgment to Plaintiffs under the same rationale.
See Wesby I, 841 F. Supp. 2d at 48 (noting that the “high level officials . . . knew or should have
known that probable cause was lacking”); see also Compl. ¶ 42, ECF No. 1 (“As a direct and
proximate result of the acts and omissions of defendant District of Columbia, plaintiffs were
wrongfully and unlawfully arrested, imprisoned and detained.”). With the Supreme Court
finding that Plaintiffs were in fact lawfully arrested, Tulin is inapposite and there is no longer a
basis for Plaintiffs’ claim.
8
First, Defendants’ failure to post a bond does not extinguish their right to restitution. If
judgment is entered against a party, that party “retains the right to appeal even if the judgment is
executed” without posting a bond. Strong v. Laubach, 443 F.3d 1297, 1299 (10th Cir. 2006); see
Restatement (Third) of Restitution and Unjust Enrichment (“Restatement”) § 18 cmt. c, illus. 1
(2011) (“Trial court renders a judgment in favor of A against B. B elects to satisfy the judgment,
although it would have been possible to suspend execution pending appeal by posting a bond.
Appellate court reverses the judgment. B is entitled to restitution from A.”). Upon reversal of
the judgment, a district court may order the party that initially prevailed to return any payments
made in satisfaction of the judgment. See Strong, 443 F.3d at 1299 (citing Baltimore & Ohio
R.R. Co., 279 U.S. at 786). It follows that Defendants’ entitlement to restitution is not prejudiced
by Defendants’ decision to not post a bond while seeking appellate relief.
For essentially the same reason, Defendants’ satisfaction of the judgment in exchange for
Plaintiffs withdrawing their request for a writ of attachment does not preclude their right to
restitution. “By executing on their judgment and receiving . . . funds during the pendency of the
appeal, [Plaintiffs] assumed the risk that they might have to repay the money if [Defendants]
prevailed on appeal.” Strong, 443 F.3d at 1300 (citing Atl. Coast Line R.R. Co. v. Florida, 295
U.S. 301, 309 (1935) and Mohamed v. Kerr, 91 F.3d 1124, 1126 (8th Cir. 1996)). Defendants’
submission of payment to Lattimer Law that simply satisfied the lower court’s judgment is not a
“settlement” that would bar Defendants from pursuing restitution once the judgment is
overturned. It is true that, as Lattimer appears to allude to, restitution may be unavailable when
“parties contract that payment is to be final.” Restatement (First) of Restitution § 74; see
Lattimer Opp’n 9–10; Restatement § 18, cmt. c (“[A] payment by way of compromise and
settlement, where the purpose of the agreement is to effect a final resolution between the parties
9
irrespective of the validity or correctness of any prior decrees, is not subject to recovery in
restitution . . . .”). However, there is nothing in the record to support Lattimer’s assertion that
Defendants entered into such an agreement with Plaintiffs. Accordingly, the Court rejects
Lattimer’s argument that Defendants are precluded from seeking restitution and proceeds to
consider Defendants’ right to recovery from Lattimer Law and Lattimer himself.
C. Defendants are Entitled to Restitution from Lattimer Law
Finally, the Court addresses the core issue in Defendants’ motion, whether equity
considerations support restitution to Defendants of the payment made in satisfaction of the
November 9, 2012 judgment. Defendants argue that they have been entirely vindicated on
appeal, and accordingly that “Lattimer is . . . obligated to return any judgment monies he
personally retained” as part of a contingency fee, Defs.’ Mem. Supp. 6, in order to avoid unjust
enrichment. See Defs.’ Mem. Supp. 5–6. In response, Lattimer appears to contend that there
was no contingency fee agreement with Plaintiffs, and as a result that restitution cannot be
obtained for the attorney’s fees paid by Plaintiffs to Lattimer Law. See Lattimer Opp’n 9 (citing
Mohamed, 91 F.3d at 1126 (“[W]here a judgment creditor pays h[is] attorney for legal services
rendered from the judgment proceeds, the attorney is under no duty to repay the money if the
judgment is subsequently reversed.”)). And Lattimer also argues that to the extent any restitution
can be obtained, it should be from Lattimer Law rather than from himself. The Court first finds
that Plaintiffs entered into a contingency agreement with Lattimer Law. Next, it finds that while
equity requires restitution from Lattimer Law of the share of the $680,000 payment paid as a
contingency fee, Defendants have not sufficiently established that Lattimer himself should be
required to pay restitution.
10
It is well established that courts have the inherent authority to order restitution when a
prior judgment has been set aside, unless restitution would be inequitable. See United States v.
Morgan, 307 U.S. 183, 197–98 (1939); Baltimore & Ohio R.R. Co., 279 U.S. at 786. To succeed
on a restitution claim, the claimant “must show that the money was received in such
circumstances that the possessor will give offense to equity and good conscience if permitted to
retain it.” Atl. Coast Line R.R., 295 U.S. at 310 (citations omitted). “This power is a matter of
equity rather than a matter of right.” In re Deepwater Horizon, 845 F.3d 634, 638 (5th Cir.
2017) (citing Atl. Coast Line R.R., 295 U.S. at 310, and Mohamed, 91 F.3d at 1126).
When facing the question of whether a party is entitled to restitution pursuant to a
judgment that was subsequently reversed on appeal, courts have turned to the Restatement of
Restitution and Unjust Enrichment to guide their determinations. See, e.g., id.; Mohamed, 91
F.3d at 1126. The Restatement provides that “[a] transfer or taking of property, in compliance
with or otherwise in consequence of a judgment that is subsequently reversed or avoided, gives
the disadvantaged party a claim in restitution as necessary to avoid unjust enrichment.”
Restatement § 18. The Restatement also provides that a claimant is entitled to interest accrued
from the date of payment. See Restatement § 18, cmt. h (citing id. § 53 (“A person who is liable
to make restitution of property or its value is liable for supplemental enrichment in the form of
interest . . . .”)).
The Restatement adopts the stance that attorneys who receive attorney’s fees from the
proceeds of a judgment as bona fide payees of their then-prevailing clients are not liable for
restitution. See id. § 18, cmt. g. However, the Restatement indicates that attorneys are liable in
restitution for fees received under contingency fee arrangements, because they wager the
likelihood of nonrecovery, which makes the attorney a “real party in interest.” See id. (“[A]
11
lawyer who receives a share of a judgment pursuant to a contingent-fee arrangement does not
take the money as a bona fide payee . . . . [I]n such circumstances, the lawyer assumes the risk of
nonrecovery: this makes the lawyer, not the client’s creditor, but an assignee pro tanto of the
client’s judgment.”); see also Mohamed, 91 F.3d at 1127 (finding that lawyer who received
contingency fee “was a beneficiary of the trial court’s error” and “under a duty to restore the
amount received” upon reversal of judgment); Ehsani v. McCullough Family P’ship, 159 P.3d
407, 413 (Wash. 2007) (“That an attorney who is not a party to the action but is a real party in
interest [rather than a bona fide payee] can be required to make restitution is confirmed by case
law from a number of other jurisdictions.”); Cox v. Cox, 780 N.E.2d 951, 962 (Mass. App. Ct.
2002) (agreeing that attorneys who are “real parties in interest” are “liable in restitution”). The
Fifth Circuit has explained that:
By conditioning his or her fees on success in litigation, the attorney assumes the
risk of non-recovery. Because the initial judgment creditor ultimately collects
nothing after the judgment is reversed, the attorney is also entitled to nothing
pursuant to the terms of the fee agreement and is therefore liable to repay the
funds in restitution. Many authorities have therefore likened an attorney with a
contingency fee agreement to a real party in interest or assignee pro tanto of the
client’s judgment and thus view the attorney as standing in the client’s shoes.
In re Deepwater Horizon, 845 F.3d at 639 (citations omitted).
Here, Lattimer appears to argue that no restitution can be ordered because there was no
contingency agreement between Plaintiffs and Lattimer Law. See Lattimer Opp’n 9 (“[T]he
defendants have no basis for asserting that the undersigned received compensation based upon a
contingency agreement or any other agreement . . . .”). However, the retainer agreements signed
by Plaintiffs, together with the distribution statements Plaintiffs received when the proceeds of
the judgment were distributed, make abundantly clear that Lattimer Law was paid through a
contingency fee agreement. See generally Pls.’ Distribution Statements (allocating, for each
plaintiff, 35% of the judgment as attorney’s fees for trial work and 5% for appellate work); Pls.’
12
Retainer Agreements, Francois Decl. Ex. J, ECF No. 137-11 (noting, for each plaintiff, an
agreement “to pay said attorneys, as a fee for professional services a sum equal to thirty-five(35)
[sic] percent of any amount(s) received by me in said case(s)”). Restitution can therefore be
ordered for the attorney’s fees portion of Defendants’ payment in satisfaction of judgment.
Having found that restitution is available for the attorney’s fees portion of the payment,
the Court must now determine whether it would be equitable here, and from who. As an initial
matter, the Court takes guidance from the Restatement and concludes that it would offend
notions of equity and good conscience to allow Plaintiffs’ attorney to retain a contingency fee on
a judgment that was subsequently reversed on appeal. See Atlantic Coast Line R.R. Co., 295
U.S. at 309; Restatement § 18. The Court sees no reason not to order restitution to correct this
unjust enrichment. See Morgan, 307 U.S. at 197 (“What has been given or paid under the
compulsion of a judgment the court will restore when its judgment has been set aside and justice
requires restitution.”) (citation omitted). Accordingly, the Court finds that Lattimer Law must
repay the portion of Defendants’ payment, or $272,000, allocated to it as attorney’s fees.
Lattimer Law must also pay interest on that amount, starting from the date of the payment on
May 19, 2019. See Restatement § 18, cmt. h. And because Lattimer Law’s accounting has left
unclear how Defendants’ payment of $5,003.27 in post-judgment interest was distributed, the
Court will also order the firm to promptly provide additional information regarding that portion
of Defendants’ payment.
The more contentious issue is whether Lattimer himself should be required to pay
restitution. In their motion, Defendants do not attempt to differentiate between Lattimer and
Lattimer Law. See generally Defs.’ Mem. Supp. In both his opposition to the motion and his
response to Plaintiffs’ opposition, Lattimer points out that Lattimer Law is a separate, distinct
13
legal entity from himself, a limited liability company organized under D.C. law that shields its
members from personal liability on any liability of the company. See Lattimer Opp’n 8; Lattimer
Resp. 11–12 (citing D.C. Code § 29-803.04). As Lattimer notes in his response to Plaintiffs’
motion, all parties involved only transacted with Lattimer Law: Plaintiffs signed retainers with
Lattimer Law; Defendants made their payment in satisfaction of judgment to Lattimer Law, and
Lattimer Law distributed the proceeds of the judgment to Plaintiffs. See Lattimer Resp. 12; Pls.’
Distribution Statements; Pls.’ Retainer Agreements; Check from the District to Lattimer Law.
In their reply to Plaintiffs’ opposition, Defendants belatedly make the argument that
Lattimer should nonetheless be held personally liable for restitution under the doctrine of veil
piercing. Under D.C. law, in order to pierce the corporate veil and impose personal liability
upon a corporation’s shareholders, the moving party must provide “proof that there is (1) unity of
ownership and interest, and (2) use of the corporate form to perpetrate fraud or wrong, or other
considerations of justice and equity justify it.” 6 Defs.’ Second Reply 8 (quoting Estate of
Raleigh v. Mitchell, 947 A.2d 464, 470 (D.C. 2008)); see also Bingham v. Goldberg,
Marchesano, Kohlman, Inc., 637 A.2d 81, 92 (D.C. 1994) (noting that courts are to consider
such factors as, inter alia, whether corporate funds and assets have been intermingled with
personal assets and whether the corporation is used fraudulently to protect personal business of
the shareholders). Here, Defendants argue that “there is absolute unity of ownership and
interest” between Lattimer and Lattimer Law, and that because Lattimer was the attorney of
record throughout the litigation, “[i]t cannot be doubted that Mr. Lattimer is [Lattimer Law].”
Defs.’ Second Reply 9. Defendants further represent that “the Court should not permit Mr.
6
Lattimer represents in his briefs that Lattimer Law is a limited liability company
organized under D.C. law. See Lattimer Opp’n 8.
14
Lattimer to avoid disgorging an unearned fee—or the entire judgment—by hiding behind a shell
corporate entity that may have few or no assets.” Id.
The Court is unconvinced. As an initial matter, “[c]ourts seldom consider new arguments
first raised in reply briefs.” Slack v. Wash. Metro. Area Transit Auth., 353 F. Supp. 3d 1, 8 n.4.
(D.D.C. 2019) (citing Benton v. Laborers’ Joint Training Fund, 121 F. Supp. 3d 41, 51 (D.D.C.
2015). And defendants did not even mention their piercing the corporate veil argument in reply
to Lattimer’s opposition, but rather in reply to Plaintiffs’ opposition. In any event, Defendants’
one-page argument on the applicability of veil-piercing here, without more, is simply insufficient
for the Court to apply the doctrine and require Lattimer to pay restitution. It may be that
“Lattimer is Gregory L. Lattimer, PLLC.” Defs.’ Second Reply 9. But Defendants do not offer
evidence to support this commonsense conclusion. More importantly, Defendants do not point
to any evidence of fraud or wrong, and the only equitable reason they provide for holding
Lattimer personally liable is contained in one sentence: “[T]he Court should not permit Mr.
Lattimer to avoid disgorging an unearned fee—or the entire judgment—by hiding behind a shell
corporate entity that may have few or no assets,” id. This one-sentence rationale for veil-
piercing, which speculates about Defendants’ potential inability to obtain funds from Lattimer
Law, is simply not enough for the Court to reach beyond the firm and hold Lattimer himself
liable. The Court here is entirely in the dark as to the way Lattimer Law operates, its operating
expenses, assets, or how much of the firm’s income flows directly to Lattimer himself. The
Court therefore does not find that equity requires for Lattimer to be held personally liable, and
orders restitution of the attorney’s fees by Lattimer Law only.
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IV. CONCLUSION
For the foregoing reasons, Defendants’ motion for order of restitution and payment of
court-ordered costs (ECF No. 114) is GRANTED IN PART AND DENIED IN PART.
Defendants’ motion for an order of payment of court-ordered costs is DENIED. The Court
DEFERS RULING ON the motion with respect to restitution of the $408,000 distributed to
Plaintiffs, and will refer Plaintiffs, Lattimer, and Defendants to mediation on the issue. The
Court DENIES the motion with respect to any restitution by Gregory L. Lattimer himself. And
the Court GRANTS the motion with respect to the $272,000 distributed to The Law Offices of
Gregory L. Lattimer, PLLC, as part of its contingency agreement with Plaintiffs, and orders
restitution by The Law Offices of Gregory L. Lattimer, PLLC of the full amount, plus post-
judgment interest starting from May 19, 2016. Finally, the Court orders the firm to provide an
accounting for the $5,008.23 it received in post-judgment interest on the $680,000 judgment
within 30 days. An order consistent with this Memorandum Opinion is separately and
contemporaneously issued.
Dated: June 25, 2019 RUDOLPH CONTRERAS
United States District Judge
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