MacHie v. Chardonnet , 140 F. Supp. 3d 4 ( 2015 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
Edmond K. Machie, :
:
Plaintiff, :
v. : Civil Action No. 15-0630 (CKK)
:
Brendan H. Chandonnet et al., :
:
Defendants. :
MEMORANDUM OPINION
Plaintiff, proceeding pro se, has filed suit in this Court based on events that occurred in a
lawsuit in Maryland, which resulted in his settlement with the Washington Metropolitan Area
Transit Authority (WMATA) for $130,000. Invoking diversity jurisdiction, plaintiff sues
WMATA and WMATA attorneys Brendan H. Chandonnet, and Kathleen Carey. In addition,
plaintiff sues his former attorney Eric Rosenberg of Rosenberg & Fayne, LLP, and attorneys
Phillip R. Zuber and Emily Spiering of Sasscer, Clagett & Bucher (SCB defendants). See
Compl. ¶¶ 4-11. Each group of defendants has moved to dismiss, and plaintiff has opposed each
motion. 1 In addition, plaintiff has filed a motion to amend the complaint to add a new defendant,
which defendants have opposed.
Upon careful consideration of the parties’ submissions, the Court finds that it lacks
subject matter jurisdiction. Consequently, the Court will (1) grant the WMATA defendants’
1
The motion documents include: Sasscer, Clagett & Bucher, Zuber and Spiering’s Mot. to
Dismiss, ECF No. 7, and Pl.’s Opp’n to the SCB Defs.’ Mot., ECF No. 26; Eric Rosenberg and
Rosenberg & Fayne, L.L.P.’s Mot. to Dismiss, ECF No. 8, and Pl.’s Opp’n to the Rosenberg Defs.’
Mot., ECF No. 28; Defs.’ WMATA, Carey and Chandonnet’s Mot. to Dismiss, ECF No. 11, Pl.’s
Opp’n to the WMATA Defs.’ Mot., ECF No. 27, and the WMATA defendants’ reply, ECF No.
29.
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motion to dismiss under Rule 12(b)(1), (2) deny all other pending motions, including those to
dismiss under Rule 12(b)(6), as moot, and (3) dismiss the case. See Fed. R. Civ. P. 12(h)(3)
(requiring dismissal at any time the Court finds subject matter jurisdiction wanting).
I. BACKGROUND
As plaintiff recounts in the instant complaint, a WMATA bus driver allegedly threw him
off a bus in Arlington County, Virginia, following a fare dispute, which resulted in his sustaining
“severe bodily injury.” Compl. ¶¶ 12-13. Plaintiff, with the assistance of counsel, filed suit
against WMATA in the Circuit Court for Prince George’s County, Maryland, claiming battery
and intentional infliction of emotional distress. Id. ¶ 12. WMATA removed the case to the
United States District Court for the District of Maryland, and discovery ensued.
In July 2014, plaintiff and his attorney had a disagreement, which resulted ultimately in
the court’s permitting counsel to withdraw from the case. See Compl. ¶¶ 14-16. Plaintiff hired
defendant Rosenberg on August 7, 2014. He signed an agreement, which included the following
provision: “Attorney is hereby retained on a contingent basis and is to receive an amount equal to
40% of any amount which is recovered for Client by settlement.” Rosenberg Defs.’ Ex. 1, ECF
No. 8-2. Rosenberg entered his appearance in the District of Maryland proceedings on August
27, 2014. Compl. ¶ 18. Two days later, following a status conference, the case was referred to
Magistrate Judge Timothy F. Sullivan for mediation, and discovery was stayed. Id. ¶ 19.
On October 8, 2014, Rosenberg informed plaintiff in an e-mail that he would withdraw
his appearance if plaintiff persisted in a settlement demand of $2 million. Compl. ¶¶ 35, 42; see
Compl. Ex. B (“If you are asking me to make a demand of 2,000,000, I must withdraw as your
attorney on numerous levels.”). Plaintiff alleges that at the settlement conference held on
October 17, 2014, he and WMATA “resolved the case for the payment of $130,000 from
2
Defendant WMATA to the Plaintiff Edmond Machie . . . . without [Rosenberg’s] legal
representation [since he] withdrew from the case prior to the settlement conference and/or in the
presence of [Magistrate Judge Sullivan].” Id. ¶ 20. Plaintiff executed a release to WMATA that
same day. See id. ¶¶ 21-22. Allegedly, notwithstanding that Rosenberg no longer represented
plaintiff, WMATA delivered the settlement check to Rosenberg’s law firm. Id. ¶ 25; Rosenberg
Defs.’ Ex. 4, ECF No. 8-5.
Following a settlement hearing on October 17, 2014, a magistrate judge in the District of
Maryland issued a Settlement Order, dismissing the case without prejudice for 30 days and
thereafter with prejudice if neither party had moved to reopen the case. See Machie v. WMATA,
No. 14-207 WGC (D. Md. Feb. 27, 2015) (Connelly, MJ.) (WMATA’s Ex. A, ECF No. 11-2
“Feb. 27 Order”). Contrary to plaintiff’s allegations, the transcript of the hearing establishes that
Rosenberg appeared with plaintiff and spoke on plaintiff’s behalf. See WMATA’s Ex. C, ECF
No. 11-4 (Oct. 17, 2014 Tr.).
On November 6, 2014, Rosenberg filed in the District of Maryland a Motion for
Appropriate Relief, seeking an order “directing Mr. Rosenberg’s law firm to negotiate the
settlement check issued in the [] case, deposit the check in the law firm’s escrow account, retain
the firm’s contingent attorney fee of $52,000, and deposit the remainder of the settlement funds
into the Registry of this court for the benefit of Edmond Machie.” Feb. 27 Order at 1. Plaintiff
opposed the motion and requested that it be denied. Id. Following a hearing on January 29,
2015, the motion was denied. See Rosenberg Defs’ Ex. 2 (Case Docket, ECF No. 8-3).
In the ruling on Rosenberg’s motion, Magistrate Judge William Connelly sets out a
colloquy from the settlement hearing where Rosenberg confirms (1) that the parties “agreed to a
full and final resolution of the matter,” (2) that he “made Mr. Machie aware that this is a full and
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final settlement of any and all claims that are known or unknown resulting from this incident,”
and (3) that “Mr. Machie is fully aware of [the settlement] and has agreed to it.” Feb. 27 Order
at 2. Also in the colloquy, both defendant Chandonnet (for WMATA) and plaintiff affirm their
understanding of the agreement. And plaintiff confirms that it is his signature on the release and
answers “Yes, Your Honor” to whether he was “satisfied as to the services on behalf of Mr.
Rosenberg and his firm.” Id. at 3.
Magistrate Judge Connelly observed:
The motion [for appropriate relief] did not ask the court to reopen the case nor
did it set forth good cause for why the case should be reopened. The motion did
not contain an allegation that settlement had not been consummated. The court
records show that Mr. Machie has executed a notarized general release in favor
of WMATA and that WMATA has delivered to Mr. Rosenberg, Mr. Machie’s
counsel, a check dated October 24, 2014 . . . in the amount of $130,000.
The dispute in this case involves not the settlement of the battery and intentional
infliction of emotional distress claims set forth in the complaint but rather the
appropriateness of Mr. Rosenberg’s fee.
Feb. 27 Order at 3-4. He concluded, based on consummation of the settlement and the lack of a
motion to reopen within 30 days, that “the dismissal [was] final.” Id. at 4.
Most importantly, Magistrate Judge Connelly found that while the parties resided in
different states to satisfy the requirement for diversity jurisdiction under 28 U.S.C. § 1332, the
disputed fee amount of $52,000 did “not exceed the value of $75,000, exclusive of interest and
costs.” Id. at 5 (emphasis in original). Consequently, Magistrate Judge Connelly concluded that
the court lacked jurisdiction to hear the “contractual dispute between Mr. Rosenberg and Mr.
Machie,” denied the motion for appropriate relief without prejudice, and advised the parties that
they “may pursue their respective causes of action in the appropriate state court.” Id.4
In the instant complaint filed four months later, plaintiff disputes the “appropriateness” of
Rosenberg’s 40 percent contingency fee. Compl. ¶ 26. In addition, he seeks a total of $20
million for the following claims:
Count I - Intentional and Negligent Misrepresentation (¶¶ 31-37)
Count II - Fraud, Intentional Legal Malpractice (¶¶ 38-47)
Count III - Fraud, Breach of Contract Breach of Fiduciary Duties, and Unfair
Business Practices pursuant to Lawyer’s Rules of Professional Conduct (¶¶ 48-57)
Count IV - Intentional and Negligent Infliction of Emotional Distress, and Unfair
Business Practices pursuant to Lawyer’s Rules of Professional Conduct (¶¶ 58-62)
Count V - Fraud-Breach of Trust-Poor Standards of Ethical Conduct and
Professional Behavior. Violation of the Rules of Professional Conduct for
Practitioners (Rules) (¶¶ 63-74)
Count VI - Other Types of Misconduct (¶¶ 75-87)
Count VII - Civil Conspiracy (¶¶ 88-97)
Count VIII - Obstruction to Justice (¶¶ 98-109).
II. LEGAL STANDARD
The subject matter jurisdiction of the federal district courts is limited and is set forth
generally at 28 U.S.C. §§ 1331 and 1332. Under those statutes, federal jurisdiction is available
when a “federal question” is presented or the parties are of diverse citizenship and the amount in
controversy exceeds $75,000. Federal courts “possess only that power authorized by
Constitution and statute, which is not expanded by judicial decree.” Kokkonen v. Guardian Life
Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted). The law presumes that “a cause
lies outside this limited jurisdiction[.]” Id. It is the plaintiff’s burden to establish subject matter
jurisdiction by a preponderance of the evidence, which may encompass “the complaint
supplemented by undisputed facts evidence in the record, or the complaint supplemented by
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undisputed facts plus the court’s resolution of disputed facts.” Herbert v. Nat'l Acad. of Scis.,
974 F.2d 192, 197 (D.C. Cir. 1992) (citing Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.
1981)).
“At the motion to dismiss stage, . . . complaints . . . are to be construed with sufficient
liberality to afford all possible inferences favorable to the pleader on allegations of fact.” Settles
v. U.S. Parole Comm’n, 429 F.3d 1098, 1106 (D.C. Cir. 2005). But in deciding a Rule 12(b)(1)
motion for want of subject matter jurisdiction, the Court scrutinizes the alleged facts closer than
it would in deciding a motion under Rule 12(b)(6) for failure to state a claim. See Wright v.
Foreign Serv. Grievance Bd., 503 F. Supp. 2d 163, 170 (D.D.C. 2007) (citations omitted); Grand
Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13-14 (D.D.C. 2001) (citing
5A Charles A. Wright & Arthur R. Miller, Fed.Prac. & Proc.Civ.2d, § 1350)). Moreover, the
Court is not limited to the four corners of the complaint; it “may consider such materials outside
the pleadings as it deems appropriate to resolve the question whether it has jurisdiction to hear
the case.” Scolaro v. D.C. Bd. of Elections & Ethics, 104 F. Supp. 2d 18, 22 (D.D.C. 2000),
aff'd, No. 00-7176, 2001 WL 135857 (D.C. Cir. Jan. 18, 2001).
III. DISCUSSION
Plaintiff invokes diversity jurisdiction, Compl. ¶ 1, which authorizes federal courts to
hear cases involving parties of diverse citizenship where the amount in controversy exceeds
$75,000. See 28 U.S.C. § 1332. “The Supreme Court long has held that states [and their arms or
alter egos] are not subject to diversity jurisdiction under [§ 1332].” Long v. D.C., 820 F.2d 409,
412-13 (D.C. Cir. 1987) (quoting Postal Telegraph Cable Co. v. Alabama, 155 U.S. 482 (1894);
State Highway Commission v. Utah Construction Co., 278 U.S. 194 (1929)). And “when a
person attempts to sue the District under the diversity statute,” the District is treated “like the
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fifty states” and, thus, “is not subject to diversity jurisdiction.” Id. at 414. “WMATA was
created by an interstate compact entered into by the District of Columbia and the states of
Maryland and Virginia.” Watters v. WMATA, 295 F.3d 36, 39 (D.C. Cir. 2002). Therefore,
WMATA argues correctly that as an instrumentality of those states, it cannot be sued in federal
court under the diversity statute. See WMATA’s Mem. of P. & A. at 4. In addition, WMATA
argues persuasively that its attorneys (Chandonnet and Carey), who are being sued for acts
performed during their representation of WMATA, are absolutely immune from this lawsuit
under the Eleventh Amendment immunity conferred upon WMATA by Maryland and Virginia,
which “extends to suits for breach of attorney’s liens” or suits to impose or enforce such liens. 2
Watters, 295 F.3d at 39-42. Consequently, the complaint against the WMATA defendants will
be dismissed with prejudice.
Notwithstanding plaintiff’s list of purported claims and the millions of dollars sought
from the complaint, the gravamen of the complaint is a dispute between plaintiff and Rosenberg
over Rosenberg’s 40 percent contingency fee. 3 Because that amount is $52,000, the Court
2
WMATA also argues persuasively that any breach of contract claim is barred under the doctrine
of accord and satisfaction since, as Magistrate Judge Connelly found, WMATA has complied fully
with the terms of the settlement agreement. See WMATA’s Mem. of P. & A. at 5.
3
Although the counts of the complaint seem to be predicated on fraud, plaintiff has not satisfied
the pleading requirement of Rule 9 of the Federal Rules of Civil Procedure by “stat[ing] with
particularity the circumstances constituting fraud.” Consequently, even if the Court were to accept
plaintiff’s pleaded amount in controversy for purposes of diversity jurisdiction, it would dismiss
the complaint for insufficient pleading. In addition, because the events giving rise to this action
occurred in Maryland where all of the defendants are located, this court sitting in the District of
Columbia is not the proper venue for litigating plaintiff’s claims. See 28 U.S.C. § 1391(b) (“A
civil action may be brought in (1) a judicial district in which any defendant resides, if all defendants
are residents of the State in which the district is located; [or] (2) a judicial district in which a
substantial part of the events or omission giving rise to the claim occurred[.]”). Hence, if any
claim were to survive the jurisdictional hurdle, the Court would likely transfer the case pursuant
to 28 U.S.C. § 1406 to the District of Maryland.
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agrees with the District of Maryland that diversity jurisdiction is defeated, and the claim is
properly redressed in state court. 4 See Info. Strategies, Inc. v. Dumosch, 13 F. Supp. 3d 135,
140-41 (D.D.C. 2014), quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288
(1938) (“For a court to reject the amount claimed by the plaintiff, ‘[i]t must appear to a legal
certainty that the claim is really for less than the jurisdictional amount.’ ”) (alteration in original).
Hence, the remainder of the complaint will be dismissed without prejudice. 5
CONCLUSION
For the foregoing reasons, the Court concludes that it lacks subject matter jurisdiction
and, thus, dismisses the case. A separate order accompanies this Memorandum Opinion.
__________s/s__________________
COLLEEN KOLLAR-KOTELLY
United States District Judge
DATE: October 23, 2015
4
Magistrate Judge Connelly’s February 27, 2015 decision was not appealed. Rosenberg has
since filed a complaint against plaintiff in the Circuit Court for Prince George’s County “seeking
to enforce his claimed attorney fee.” Rosenberg’s Supp’g Mem. at 1, n.1.
5
The complaint’s allegations do not specify the nature of the claim against the SCB defendants
and their relationship to the plaintiff. In their supporting memorandum, the SCB defendants reveal
that they are in fact Rosenberg’s lawyers and that plaintiff alleges only that they “engaged in
activity that violated” his rights under “§ 10-501 of the Business Occupations and Professions
Article of the Maryland Code.’” SCB Defs.’ Supp’g Mem. at 1, 5 (quoting Compl. ¶ 60). Plaintiff
does not dispute the SCB defendants’ characterization of the purported claim. See generally Pl.’s
Opp’n, ECF No. 26. The Court of Appeals has made clear that “once a court determines that it
lacks subject matter jurisdiction, it can proceed no further.” Simpkins v. D.C. Gov't, 108 F.3d 366,
371 (D.C. Cir. 1997). If not for the jurisdictional barrier, the Court would grant the SCB
defendants’ motion to dismiss under Rule 12(b)(6). For a claim based on “ ‘naked assertion[s]’
devoid of ‘further factual enhancement’ ” cannot survive such a motion. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007)).
Furthermore, “the tenet that a court must accept as true all of the allegations contained in a
complaint is inapplicable to [the] legal conclusion[]” pled here. Id.8