Dorsey v. Jacobson Holman, Pllc ( 2011 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
DEBRA DORSEY, )
)
Plaintiff, )
)
v. ) Civil Action No. 10-1682 (RMC)
)
JACOBSON HOLMAN PLLC et al., )
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Defendants. )
)
MEMORANDUM OPINION
This is the second action filed in this Court by Plaintiff Debra Dorsey against
Defendants. The first-filed action, Dorsey v. Jacobson Holman PLLC, 09-cv-1085 (RMC) (“Dorsey
I”), remains pending. Both lawsuits address the same set of facts relating to Ms. Dorsey’s leave
status and separation from employment. In this case (“Dorsey II”), Ms. Dorsey advances three
counts against the law firm, its profit-sharing plan, and certain of its members (“Defendants”): (1)
Count I alleges a failure to make contributions to the Jacobson Holman profit-sharing plan on her
behalf at the end of 2007 and a related breach of fiduciary duty; (2) Count II alleges a failure to
provide Ms. Dorsey with timely notice under the American Recovery and Reinvestment Act of 2009
(“ARRA”), Pub. L. No. 111-5, 123 Stat. 115 (2009), and the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), Pub. L. No. 99-272, 100 Stat. 82 (1986), regarding
continuation health coverage and subsidized premium information after her separation from
employment;1 and (3) Count III alleges interference with Ms. Dorsey’s rights under ERISA, 29
1
Part 6 of Title I of the Employee Retirement and Income Security Act (“ERISA”), 29
U.S.C. §§ 1161-1166, and parallel provisions of the Internal Revenue Code, 26 U.S.C. § 4980B,
U.S.C. §§ 1001, et seq., when the law firm required Ms. Dorsey to submit a letter of resignation in
order to receive “documents that would permit her to take a distribution from the [profit-sharing]
plan when she was disabled, which she was.” See Dorsey II, Am. Compl. [Dkt. # 12], ¶¶ 17–46.
Defendants move to dismiss the instant lawsuit, charging Ms. Dorsey with improper “claim
splitting,” and ask that the Court impose sanctions pursuant to Fed. R. Civ. P. 11(c). The Court
agrees that Ms. Dorsey has engaged in “claim splitting,” but will not impose sanctions. Because all
three counts brought in Dorsey II were either previously brought in Dorsey I, or could have been
brought in Dorsey I, the Court will dismiss Dorsey II and all of its counts.
I. FACTS
A. Dorsey I
On June 9, 2009, Ms. Dorsey filed suit in Dorsey I. The First Amended Complaint
in Dorsey I advanced four counts: (1) Count I alleged a failure to make contributions to the Jacobson
Holman profit-sharing plan for Ms. Dorsey’s benefit in 2007; (2) Count II alleged denial of COBRA
benefits;2 (3) Count III alleged unpaid leave and bonuses in violation of the District of Columbia
Wage Payment Act, D.C. Code § 32-1303; and (4) Count IV alleged wrongful termination in
were enacted as part of the COBRA. Under these provisions, a group health care plan must
provide each qualified beneficiary who would lose health insurance coverage as a result of a
“qualifying event” the option of continuing such coverage for 18 months by paying for it
individually. This is commonly referred to as a COBRA benefit.
2
Specifically, Ms. Dorsey complained:
Although Jacobson Holman provided Plaintiff with the proper notice of
continuation coverage under COBRA, as required by ERISA § 606, 29
U.S.C. § 1166, it failed to provide the required notice under ARRA,
which was required by April 19, 2009.
Dorsey I, 1st Am. Compl., [Dkt # 2], ¶ 36.
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violation of the Family and Medical Leave Act (“FMLA”), 29 U.S.C. §§ 2601, et seq., and the D.C.
Family and Medical Leave Act (“DCFMLA”), D.C. Code §§ 32-501, et seq., because Jacobson
Holman did not notify Ms. Dorsey that it considered her on FMLA/DCFMLA covered leave, and
also for retaliation because Ms. Dorsey filed a workers’ compensation claim. See Dorsey I, 1st Am.
Compl., [Dkt # 2].
On January 11, 2010, Ms. Dorsey moved to file a Second Amended Complaint to
supplement the Complaint with two additional counts: (5) Count V alleged retaliation in violation
of the D.C. Worker’s Compensation Act, D.C. Code § 32-1542, due to “Jacobson Holman’s
pervasive insistence that Ms. Dorsey resign her position” because Ms. Dorsey filed a workers’
compensation claim; and (6) Count VI alleged discrimination on the basis of disability. See Dorsey
I, Mot. for Leave to File Plaintiff’s 2d Am. Compl. [Dkt. #16], Ex. 2 ¶¶ 58–67. Ms. Dorsey also
sought to amend Count IV from “Wrongful Termination” to Interference and Retaliation in violation
of the FMLA/DCFMLA. Id. ¶¶ 51–57. On January 25, 2010, Defendants objected only to the
addition of Counts V and VI. See Dorsey I, Opp’n to Mot. for Leave to File Plaintiff’s 2d Am.
Compl. [Dkt. #19]. On April 23, 2010, the Court granted in part and denied in part Plaintiff’s
Motion for Leave to File a Second Amended Complaint. The Court granted the amendment to Count
IV. Having heard no response to Defendants’ legal objections to the addition of Counts V and VI
to the Complaint, the Court denied that part of the motion as conceded. See Dorsey I, Minute Entry
Order of April 23, 2010. Further, on April 27, 2010, the Court dismissed Count II for failure to
exhaust administrative remedies. See Dorsey I, Mem. Op. & Order [Dkt ## 20 & 21]. Ms. Dorsey
filed the Second Amended Complaint on May 14, 2010, though it still, impermissibly, contained
Count II. See 2d Am. Compl. [Dkt. # 28].
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On June 7, 2010, Ms. Dorsey moved to file a Third Amended Complaint, which
sought to (1) add a breach of fiduciary claim against Mr. Simor Moskowitz in Count I; (2) amend
Count II to “Untimely Cobra Notice,” rather than “Denied Cobra Benefits;” and (3) add an additional
count of “Claim for Relief Wrongful Discharge.” See Dorsey I, Mot. for Leave to File Plaintiff’s
3rd Am. Compl. [Dkt. #24], Ex. 2 (labeled as Ex. 1). After initially granting this motion, the Court
reconsidered its decision:
The Third Amended Complaint would prejudice Defendants by
causing discovery to be re-opened due to the new allegation of
wrongful discharge, thereby destroying the bases for the pending
motion for summary judgment. Plaintiff has been given multiple
opportunities to state her case; June 18, 2010, months after discovery
closed and in the face of a motion for summary judgment, is much too
late to add completely new counts, allegations, and defendants.
See Dorsey I, Order of September 14, 2010 [Dkt. #36] at 4. The Court thus denied that request to
amend, leaving only Counts I, III, and IV before the Court at that time.3
B. Dorsey II
Ms. Dorsey filed suit in this case, Dorsey II, on October 4, 2010. Count I of the
instant Complaint in Case No. 10-cv-1682 (“Dorsey II”) also complains of the law firm’s failure to
make contributions to Ms. Dorsey’s account in the profit-sharing plan in 2007, by which Simor
Moskowitz allegedly breached his fiduciary duties. See Dorsey II, Am. Compl. ¶¶ 17–26. Count
II alleges that John C. Holman, administrator of the law firm’s health benefit plan, violated his
fiduciary duties “by failing to provide Plaintiff with the ARRA notice and subsidized premium
information.” Id. ¶¶ 29–38. Count III alleges interference with Ms. Dorsey’s rights under ERISA
3
Subsequently, on December 21, 2010, the Court granted Defendants’ Motion for
Summary Judgment as to Counts III and IV, leaving only Count I. See Memorandum Opinion
and Order [Dkt ## 43 & 44].
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when the law firm required Ms. Dorsey to submit a letter of resignation in order to receive
“documents that would permit her to take a distribution from the [profit-sharing] plan when she was
disabled, which she was.”4 Id. ¶¶ 39–46.
II. ANALYSIS
Defendants contend that the instant lawsuit improperly attempts “claim splitting” and
should be dismissed. Ms. Dorsey offers numerous arguments to the contrary but none is persuasive.
The allegations in Dorsey II are either already covered by Dorsey I or could have been. This separate
lawsuit merely tweaks claims made already in Dorsey I or is based on facts known at the time
Dorsey I was filed. The three counts within the Amended Complaint in Dorsey II mirror counts I,
II, and V in the Third Amended Complaint that Ms. Dorsey attempted to file in Dorsey I, but which
the Court disallowed because it was untimely, contained allegations based on facts previously known
to Ms. Dorsey, and was prejudicial to Defendants, who had already filed a motion for summary
judgment. See Dorsey I, Order of Sept. 14, 2010.
The rule against claim splitting “requires that all claims arising out of a single wrong
be presented in one action.” Sensormatic Security Corp. v. Sensormatic Electronics Corp., 273 Fed.
Appx. 256, 265 (4th Cir. 2008). The rule has a lengthy lineage, being “settled” as early as 1876:
It is undoubtedly a settled principle that a party seeking to enforce a claim,
legal or equitable, must present to the court, either by pleadings or proofs,
or both, all the grounds upon which he expects a judgment in his favor. He
is not at liberty to split up his demand and prosecute it piecemeal, or present
only a portion of the grounds upon which specific relief is sought, and leave
the rest to be presented in a second suit, if the first fail.
4
Ms. Dorsey’s original Complaint under Count III was for Wrongful Discharge, but was
amended as “Interference under ERISA.” Compare Dorsey II, Compl. [Dkt. # 1] with Dorsey II,
Am. Compl. [Dkt. # 12].
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Stark v. Starr, 94 U.S. 477, 485 (1876). “Claim preclusion prevents parties from relitigating issues
they raised or could have raised in a prior action on the same claim.” NextWave Personal
Comm’cns, Inc., v. FCC, 254 F.2d 130, 143 (D.C. Cir. 2001) (citing Allen v. McCurry, 449 U.S. 90,
94 (1980)). In this sense, the rule against claim splitting is based on the same principles as res
judicata; while the latter applies when a first suit has already been adjudicated and the former applies
to suits pending at the same time, the purpose in each instance is to “‘foster[] judicial economy and
protect[] the parties from vexatious and expensive litigation.’” Sensormatic Security Corp. v.
Sensormatic Electronics Corp., 452 F. Supp. 2d 621, 626, n.2 (D. Md. 2006) (citation omitted).
Ms. Dorsey contends that her complaint in Dorsey II is appropriate because she only
learned that Simor Moskowitz considered himself a fiduciary vis-a-vis the profit sharing plan during
discovery in Dorsey I. The answer, of course, would have been to seek to amend the Complaint in
Dorsey I, not to instigate a separate and second lawsuit about the same nucleus of facts. And this
is exactly what did occur. Ms. Dorsey attempted to amend her Complaint in Dorsey I for a third time
and the Court denied her motion to do so because it was significantly untimely and highly prejudicial
to Defendants. Having been denied the right to amend the Dorsey I complaint, however, does not
grant Ms. Dorsey the right to file Dorsey II; she has “no right to maintain two separate actions
involving the same subject matter at the same time in the same court and against the same
defendant.” Walton v. Eaton Corp., 563 F.2d 66, 70 (3rd Cir. 1997); see also Sensormatic Security
Corp. v. Sensormatic Electronics Corp., 329 F. Supp. 2d 574, 580 (D. Md. 2004) (noting that “the
doctrine of claim splitting applies to bar a plaintiff from filing a new lawsuit after the court in an
earlier action denied leave to amend the complaint to add those claims”). Ms. Dorsey did not timely
raise the instant allegations in Dorsey I, and she cannot now circumvent that misfortune with an
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additional lawsuit. She violates the rule against claim splitting by attempting to file Dorsey II to
advance fundamentally the same allegations.
Defendants have been required to expend more time and money to litigate their
motion to dismiss. They urge the Court to consider sanctions for litigation misconduct, under
Federal Rule of Civil Procedure 11(c). The imposition of sanctions is left to the sound discretion
of the district court judge. See Rafferty v. Nynex Corp., 60 F.3d 844, 852 n.12 (D.C. Cir. 1995); Fed.
R. Civ. P. 11(c) (noting that when the rule has been violated, a court may impose an appropriate
sanction). The Court will refrain from sanctions. Ms. Dorsey is represented by a solo practitioner
against a larger law firm. Further, her claims, though unpersuasive, are not what the Court would
consider altogether frivolous. Ms. Dorsey attempts to carve out a distinction between her case and
the caselaw, and this slim reed of distinction compels the Court to deny Rule 11(b) sanctions.
III. CONCLUSION
For the foregoing reasons, Defendant’s Motion to Dismiss [Dkt. # 4] will be granted
in part and denied in part. No sanctions will be levied. The case will be dismissed without prejudice
as to those counts already addressed in Dorsey I and with prejudice as to those counts not already
addressed in Dorsey I. A memorializing Order accompanies this Memorandum Opinion.
Date: February 18, 2010 /s/
ROSEMARY M. COLLYER
United States District Judge
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