McNamara v. Picken , 950 F. Supp. 2d 125 ( 2013 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
)
SCOTT A. McNAMARA, M.D., )
)
Plaintiff/Counter-Defendant, )
)
v. ) Civil Action No. 11-1051 (ESH)
)
CATHERINE A. PICKEN, M.D., et al., )
)
Defendants/Counter-Plaintiffs. )
__________________________________________)
MEMORANDUM OPINION
Plaintiff Scott McNamara, M.D., has sued Catherine A. Picken, M.D. and the
Washington ENT Group PLLC (“WENT”) for an accounting, conversion, breach of contract,
and breach of employment contract. (See Amended Complaint, Jan. 29, 2013 [ECF No. 62-1].)
Defendants have counterclaimed, alleging fraud, breach of fiduciary duty, promissory fraud,
aiding and abetting a breach of fiduciary duty, and inducement of a breach of fiduciary duty.
(See Answer, Affirmative Defenses, and Counterclaims to Amended Complaint, Mar. 29, 2013
[ECF No. 74].) 1 Before the Court are two pretrial motions: plaintiff/counter-defendant’s motion
for partial summary judgment with respect to Counterclaim Three (May 20, 2013 [ECF No. 82]
(“Counter-Def.’s MSJ”)) and defendants’ motion for judgment on the pleadings with respect to
Counts One, Two, and Four (May 20, 2013 [ECF No. 85] (“Rule 12(c) Mot.”)).
BACKGROUND
The relevant factual background was laid out in this Court’s earlier opinion dismissing
plaintiff’s Count Three. McNamara v. Picken, 866 F. Supp. 2d 10, 13-14 (D.D.C. 2012). Since
1
Within this document there are two separate sections, “Answer” and “Affirmative Defenses and
Counterclaims,” each with separately numbered paragraphs. Therefore, this Memorandum
Opinion will cite to the specific section of this document (as “Answer” or “Countercl.”) and the
paragraph number.
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that time, plaintiff has voluntarily dismissed Count Five, which alleged defamation (see Order,
May 22, 2013 [ECF No. 89]), and has added Count Six, which alleges breach of contract under
defendants’ theory that the parties had entered into an employment relationship wherein
McNamara was hired as an employee of WENT. (See Amended Complaint ¶¶ 59-65.)
ANALYSIS
I. Plaintiff/Counter-Defendant’s Motion for Partial Summary Judgment on
Counterclaim Three
A motion for summary judgment is appropriate when the pleadings, the discovery and
disclosure materials on file, and any affidavits show that “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a);
see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). There is a genuine dispute
as to a material fact if a “reasonable jury could return a verdict for the nonmoving party.” Galvin
v. Eli Lilly & Co., 488 F.3d 1026, 1031 (D.C. Cir. 2007) (quoting Anderson, 477 U.S. at 248). A
moving party is entitled to summary judgment if the nonmoving party “fails to make a showing
sufficient to establish the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
When considering a motion for summary judgment, “[t]he evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255.
In Counterclaim Three, counter-plaintiffs (“Picken”) allege that counter-defendant
(“McNamara”) committed promissory fraud by “entering into a business arrangement with
Picken and WENT without revealing to them that he [had] a preconceived and undisclosed
intention of not performing any such arrangement.” (See Countercl. ¶ 98.)
McNamara argues that Picken cannot meet her burden of proof on this claim. (Counter-
Def.’s MSJ at 2.) Specifically, he argues that a necessary element of a claim for promissory
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fraud is a lack of intent to enter into the business relationship in question. (Id.) He insists that
“[w]hile the parties may have had different notions of what that business arrangement entailed,
and when it came into existence,” there is “ample evidence of his intent to enter into a business
relationship with [Picken].” (Id. at 2-3.) Thus, he argues that “there is no genuine dispute as to
the lack of the requisite state of mind on [his] part,” and so summary judgment in his favor is
appropriate. (Id. at 2 (quoting Willis v. Cheek, 387 A.2d 716, 719-20 (D.C. 1978)).)
However, in her opposition, Picken clarifies that Counterclaim Three is premised on
McNamara’s alleged agreement to enter into an employment relationship with Picken and
WENT. (See Opposition to Motion for Partial Summary Judgment on Counterclaim Three, June
4, 2013 [ECF No. 99].) She claims that McNamara agreed that he and his staff would come to
WENT as “employees thereof while [the parties] continued discussion on how, if at all, they
might one day become co-owners of WENT.” (Id. ¶ 3.) She further asserts that McNamara “had
no intention of fulfilling his promise to work for WENT under Picken’s direction” as evidenced
by the fact that he “showed contumacious disregard for WENT’s rules and Picken’s sole control
of WENT.” (Counter-Plaintiffs’ Rule 7(h) Statement of Disputed Facts, June 4, 2013 [ECF No.
99-1] ¶ 3.)
With this understanding of Picken’s claim, it is clear that, construing the evidence in her
favor, she could establish all the necessary elements of her counterclaim, including that
McNamara never intended to enter into an employment relationship with Picken and WENT.
Indeed, McNamara himself has consistently asserted that the parties agreed to enter into a
partnership relationship. (See Amended Complaint ¶ 17 (“It was the agreement of the parties
that [McNamara] and [Picken] would be partners and, as such, would share profits and losses
equally.”); Answer to Counterclaim to Amended Complaint, Apr. 30, 2013 [ECF No. 77] ¶ 32
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(“The Counter-Defendant further avers that he was not merely an ‘employee’ of WENT at times
pertinent to this litigation.”).) Thus, there is clearly a genuine dispute as to the material issue of
whether the parties even agreed to enter into an employment relationship and a further genuine
dispute as to whether McNamara ever fully intended to perform his obligations under any such
agreement and behave as an employee.
McNamara’s motion for partial summary judgment with respect to Counterclaim Three
for promissory fraud will therefore be denied.
II. Defendants’ Motion for Judgment on the Pleadings with Respect to Counts One,
Two, and Four
Under Rule 12(c) of the Federal Rules of Civil Procedure, “[a]fter the pleadings are
closed—but early enough not to delay trial—a party may move for judgment on the pleadings.”
Fed. R. Civ. P. 12(c). A motion pursuant to Rule 12(c) is appropriately granted when, at the
close of the pleadings, “no material issue of fact remains to be resolved, and [the movant] is
clearly entitled to judgment as a matter of law.” Montanans for Multiple Use v. Barbouletos,
542 F. Supp. 2d 9, 13 (D.D.C. 2008) (citations omitted).
When evaluating a motion for judgment on the pleadings under Federal Rule of Civil
Procedure 12(c), courts employ the same standard that governs a Rule 12(b)(6) motion to
dismiss. Jung v. Ass'n of Am. Med. Colls., 339 F. Supp. 2d 26, 35–36 (D.D.C. 2004).
A court must treat the complaint's factual allegations as true, “even if doubtful in fact,”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), but it need not accept as true legal
conclusions set forth in a complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Accordingly,
a court must accept the plaintiff's well-pleaded factual allegations to the extent that “they
plausibly give rise to an entitlement to relief,” id. at 679, and “may thus only grant judgment on
the pleadings if it appears, even accepting as true all inferences from the complaint's factual
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allegations, that the plaintiff cannot prove any set of facts entitling him to relief.” Lans v. Adduci
Mastriani & Schaumberg LLP, 786 F. Supp. 2d 240, 265 (D.D.C. 2011).
Defendants previously moved for judgment on the pleadings with respect to Counts One,
Two, and Four. (See Motion for Judgment on the Pleadings, Oct. 3, 2011 [ECF No. 26] at 6-11.)
Defendants argued that because plaintiff admitted that the parties had discussed executing a
written partnership agreement but had never done so, plaintiff could not establish that the parties
had the requisite intent to create an enforceable oral contract. (See id.) This Court denied that
motion, noting that, under D.C. law, “the fact that a written agreement was contemplated is not
dispositive of whether an enforceable agreement was created.” McNamara, 866 F. Supp. 2d at
15. Thus, this Court ruled that “plaintiff’s factual allegations regarding the parties’ conduct after
the alleged creation of the oral agreement are sufficient to support his contention that they
created a valid oral contract and, therefore, plaintiff has satisfied his burden under Ashcroft v.
Iqbal, 129 S. Ct. 1937.” Id.Defendants have now moved again for judgment on the pleadings for those same three
counts—Counts One, Two, and Four. (See Rule 12(c) Mot.) The only material difference
between the pleadings this Court already found adequate and the pleadings currently before the
Court is that plaintiff has added Count Six for breach of an employment contract. (See Amended
Complaint ¶¶ 59-65.) In that count, plaintiff states that defendants claim he was hired as an
employee of WENT and that he is therefore entitled to damages based on defendants’ breach of
the terms of that alleged employment contract. (See id.) And in fact defendants have admitted
that McNamara was an employee of WENT. (Answer ¶¶ 14, 23.)
Defendants argue that the allegations in Count Six are “judicial admissions” that there
was an employment relationship between the parties rather than a partnership. (See Rule 12(c)
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Mot. at 12.) Thus, defendants insist that plaintiff cannot recover under any theory of liability
premised upon a partnership agreement, as are Counts One, Two, and Four. (See id. at 13-14.)
The Court disagrees for several reasons. First, plaintiff’s Count Six is plainly pled in the
alternative to Counts One, Two, and Four, as permitted under Rule 8(d)(2). Fed. R. Civ. P.
8(d)(2). Under that rule, a plaintiff may plead inconsistent theories of liability, and may even
argue alternative claims to a jury. See Scott v. District of Columbia, 101 F.3d 748, 753 (D.C.
Cir. 1996). To be sure, defendants are correct that “McNamara at no time explicitly pleaded
Count Six in the alternative to Counts One, Two, and Four.” (Reply in Support of Motion for
Judgment on the Pleadings, June 10, 2013 [ECF No. 104] at 7.) However, a plaintiff “need not
use particular words to plead in the alternative as long as it can be reasonably inferred that this is
what [it was] doing.” G-I Holdings, Inc. v. Baron & Budd, 238 F. Supp. 2d 521, 536-37
(S.D.N.Y. 2002) (internal quotation marks omitted) (collecting cases). Such is the case here.
Plaintiff’s allegation in Count Six that he was hired as an employee of WENT is preceded by the
words “[a]ccording to the Defendants.” (Amended Complaint ¶ 59.) That particular allegation is
therefore undeniably intended to raise an alternative theory of liability where plaintiff would be
entitled to recover damages even under defendants’ view of their relationship. Moreover, it is
entirely reasonable to infer that the remaining allegations in Count Six were similarly pled as an
alternative to Counts One, Two, and Four. Bolstering this conclusion is plaintiff’s recent
statement in his opposition that “[a]t the conclusion of the trial, before the jury deliberates, [he]
will make an election as to which theory will be presented to the jury.” (Plaintiff’s Opposition to
Motion for Judgment on the Pleadings, June 3, 2013 [ECF No. 96] at 2.)
Second, plaintiff’s allegations in Count Six are not binding “judicial admissions” that
impermissibly conflict with plaintiff’s other counts, as defendants suggest. To begin with, the
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question of whether an employment relationship exists is a question of law, not of fact. See U.S.
ex rel. Siewick v. Jamieson Sci. & Eng’g, Inc., 322 F.3d 738, 740 (D.C. Cir. 2003). That
question is therefore not susceptible to judicial admission, as “[i]t is well established that judicial
admissions on questions of law have no legal effect.” Dabertin v. HCR Manor Care, Inc., 68 F.
Supp. 2d 998, 1000 (N.D. Ill. 1999), quoted in Globalaw Ltd. v. Carmon & Carmon Law Office,
452 F. Supp. 2d 1, 34 (D.D.C. 2006); see also U.S. ex rel. Miller v. Bill Harbert Int’l Constr.,
Inc., 2007 WL 851871, at *1 (D.D.C. Mar. 14, 2007) (“A judicial admission is usually treated as
absolutely binding, but such admissions go to matters of fact which, otherwise, would require
evidentiary proof.”) (quoting New Amsterdam Cas. Co. v. Waller, 323 F.2d 20, 24 (4th Cir.
1963)). Thus, plaintiff’s allegation in paragraph 59 of his Amended Complaint is not a judicial
admission that can be used against his other counts.
To be sure, the remainder of the allegations in Count Six do contain specific facts that are
properly considered judicial admissions. For example, he states that he was entitled to a salary
of $20,000 per month and reimbursement for business expenses. (Amended Complaint ¶¶ 60-
61.) However, those facts are not necessarily inconsistent with the existence of a partnership
agreement, as they do not disclaim any additional ownership interest in the business. See Queen
v. Schultz, 888 F. Supp. 2d 145, 165 (D.D.C. 2012) (“The critical element of a partnership not
present in an employment relationship is co-ownership.” (internal quotation marks omitted)).
Thus, they do not prevent plaintiff from simultaneously pursuing his claims for breach of a
partnership agreement and an employment agreement.
Because plaintiff’s Count Six simply states an alternative theory of liability from that
stated in Counts One, Two, and Four, defendants’ motion for judgment on the pleadings with
respect to the latter counts will be denied.
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CONCLUSION
For the foregoing reasons, plaintiff/counter-defendant’s Motion for Partial Summary
Judgment is denied and defendants’ Motion for Judgment on the Pleadings is denied. A separate
Order accompanies this Memorandum Opinion.
/s/
ELLEN SEGAL HUVELLE
United States District Judge
Date: June 18, 2013
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