Beach Tv Properties Inc. v. Soloman , 254 F. Supp. 3d 118 ( 2017 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
BEACH TV PROPERTIES, INC., :
:
Plaintiff, : Civil Action No.: 15-1823 (RC)
:
v. : Re Document No.: 59
:
HENRY A. SOLOMON, :
:
Defendant. :
MEMORANDUM OPINION
GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO AMEND ITS COMPLAINT
I. INTRODUCTION
Plaintiff the Atlanta Channel, Inc. (“ACI”), seeks leave to amend its complaint for a
second time. The proposed second amended complaint includes two new defendants, three new
grounds for recovery, and new factual allegations. The only active defendant prior to this motion
was ACI’s former attorney, Henry Solomon. The only active claim was that he failed to
complete one page of routine paperwork at the FCC. Now, Plaintiff alleges that Mr. Solomon,
his colleague Melodie Virtue, and their law firm, Garvey Schubert Barer (“Garvey”), were all
negligent when they advised ACI to assign its television license to former-plaintiff Beach TV
Properties, Inc. (“Beach TV”). Without explicitly pleading facts supporting it, Plaintiff alleges
that the assignment somehow diminished ACI’s malpractice claim against Mr. Solomon.
Plaintiff also alleges that Ms. Virtue and Mr. Solomon “lulled” ACI into not filing this suit
earlier.
Garvey opposes Plaintiff’s motion on the grounds that amendment of the complaint
would be futile, because it would not withstand a motion to dismiss. In support of its opposition,
Garvey argues that the added count against Mr. Solomon does not adequately allege the elements
of legal malpractice. It makes this same argument with respect to the “duty” element for the new
count against Ms. Virtue. In addition, Garvey argues that the new claim against Ms. Virtue is
not yet ripe, that adding her as a defendant would be disruptive, and that the complaint does not
support an argument that Ms. Virtue “lulled” ACI into inaction.
The Court agrees with Garvey that adding the new count against Mr. Solomon would be
futile. Plaintiff’s proposed second amended complaint in no way describes how the assignment
of ACI’s television license could have caused its malpractice suit to lose value. Its negligence
claim thus does not contain a plausible theory of causation. However, the Court finds that ACI
adequately alleged the other elements of the new claims, including the duty element of the claim
against Ms. Virtue. The Court also finds that the claim against Ms. Virtue, though contingent
upon certain legal rulings that have not yet occurred, is ripe. Moreover, adding such a claim
would not be so disruptive as to justify denying Plaintiff a forum to raise its claims. Finally,
Defendant’s arguments pertaining to “lulling” are not applicable here—Plaintiff’s lulling claim is
a preemptive response to the affirmative defense that the statute of limitations bars recovery, not
a freestanding claim in the complaint. Because adding the new count against Ms. Virtue would
not be futile and Garvey is allegedly liable under the doctrine of respondeat superior, the Court
grants Plaintiff’s motion in part and denies it in part.
II. FACTUAL BACKGROUND
The Court already provided a detailed factual background in its memorandum opinion
addressing Defendants’ motions to dismiss. See Beach TV Props., Inc. v. Solomon, No. 15-1823,
2016 WL 6068806, at *3 (D.D.C. Oct. 14, 2016). Assuming familiarity with the prior opinion,
the Court outlines only the most relevant facts to the resolution of Plaintiff’s motion to amend.
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This legal malpractice case arises out of attorney Henry Solomon’s alleged failure to
adequately complete an FCC Statement of Eligibility, which would have entitled ACI to an FCC
Low-Power Television class A license. Id. at *1. Key omissions on routine FCC paperwork
completed by Mr. Solomon allegedly caused ACI to forfeit its statutory right to a class A license,
resulting in a claimed loss of hundreds of millions of dollars. Id. Mr. Solomon represented ACI
from the time of filing the license application in 2000 until at least 2012. See id.; see also Pl.’s
Proposed Second Am. Compl. ¶ 39, ECF No. 59-3. In 2009, Mr. Solomon allegedly advised
ACI to assign its TV license to Beach TV, but “failed to advise ACI on the effect the assignment
would have on ACI’s malpractice claim against him.” Pl.’s Proposed Second Am. Compl. ¶ 45.
During the administrative appeals of the FCC’s rejection, Mr. Solomon moved from the
law firm Haley Bader to Garvey. Beach TV Props., 2016 WL 6068806, at *3. The Court
dismissed Plaintiff’s claims against Haley Bader for lack of personal jurisdiction and against
Garvey for failure to state cognizable claims. Id. at *1. It also dismissed claims made by Beach
TV for lack of standing, because ACI’s attempted assignment of the malpractice claims was
invalid under Virginia law. Id. at *1, *17.
Plaintiff’s proposed amended complaint makes four distinct claims and seeks to add two
defendants. See Pl.’s Proposed Second Am. Compl. ¶¶ 51–62; 73–87. The first count is largely
the same as it was in Plaintiff’s original complaint, and alleges that Mr. Solomon committed
malpractice by failing to complete the FCC Statement of Eligibility. Compare Pl.’s Proposed
Second Am. Compl. ¶¶ 73–75 with Am. Compl. ¶¶ 122–23, ECF No. 21.
Plaintiff seeks to add a second count—“Count Two”—alleging that Mr. Solomon’s
failure to adequately counsel ACI with respect to the license that ACI assigned to Beach TV was
negligent and “compromise[d] ACI’s ability to recover damages based on its ownership of
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WTHC-LD.” Pl.’s Mot. Am. Compl. ¶ 15; Pl.’s Proposed Second Am. Compl. ¶¶ 76–79.
Plaintiff alleges that Mr. Solomon negligently advised ACI that the assignment of the television
license WTHC-LD would shield that license from potential ACI creditors, and prepared and filed
documents for the assignment. Pl.’s Proposed Second Am. Compl. ¶¶ 42–43. Mr. Solomon was
negligent, ACI argues, because “Mr. Solomon failed to advise ACI that the License Assignment
could adversely affect ACI’s legal malpractice claim against him.” Pl.’s Proposed Second Am.
Compl. ¶ 45. ACI’s proposed amended complaint does not detail why or how the assignment of
the license could adversely affect the malpractice claim, but its motion suggests that ownership
of the WTHC-LD license is a prerequisite to recovering for malpractice, and that assigning the
license without the malpractice claim undermined the holder of the malpractice claim’s ability to
recover damages. Pl.’s Mot. Am. Compl. ¶ 15; see generally Pl.’s Proposed Second Am. Compl.
After the Court ruled that the assignment of the malpractice claim against Mr. Solomon was
invalid because D.C. law did not apply, Beach TV assigned the WTHC-LD license back to ACI,
so ACI now holds both the malpractice claim and the license. Pl.’s Proposed Second Am.
Compl. ¶¶ 47–50. Thus, to the extent that Beach TV’s ownership of the license for seven years
does not affect ACI’s ability to recover damages on the malpractice claim in Count One or the
amount of such damages, Plaintiff concedes Count Two is moot. Pl.’s Reply Def.’s Opp’n to
Pl.’s Mot. Amend Compl. at 5, ECF No. 64.
Notably, moving to add Count Two is somewhat inconsistent with ACI’s prior argument
at the motion-to-dismiss stage. In its opposition to Haley Bader’s motion to dismiss, ACI
previously argued that the assignment from ACI to Beach TV was “governed by District of
Columbia law, which permits” the assignment of both TV licenses and malpractice claims. Pl.’s
Opp’n Haley Bader Mot. Dismiss at 16, ECF No. 36. Thus, Plaintiff argued, the malpractice
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claim did not lose any value when it was assigned from ACI to Beach TV along with the WTHC-
LD license. Pl.’s Opp’n Haley Bader Mot. Dismiss at 18. But now, after the Court held that
D.C. law does not apply, meaning that the assignment of the malpractice claim was invalid, see
Beach TV Properties, Inc., 2016 WL 6068806, at *16, ACI accuses Mr. Solomon of malpractice
for failing to recognize that assignment of the malpractice claim was invalid.
The third count—and first new proposed defendant—arises out of the alleged negligence
of attorney Melodie Virtue. According to the complaint, Ms. Virtue worked with Mr. Solomon
and then, after Mr. Solomon stopped working as a full-time attorney, took over as lead counsel to
ACI. Pl.’s Proposed Second Am. Compl. ¶¶ 51–56. Plaintiff alleges that Ms. Virtue was
negligent in failing to inform ACI that Mr. Solomon had committed malpractice, that his
withdrawal from the case could affect the statute of limitations of malpractice claims, that she
had a conflict of interest in light of her professional relationship with Mr. Solomon, and that ACI
should retain separate counsel. Pl.’s Proposed Second Am. Compl. ¶¶ 59, 80–84. The proposed
amended complaint also alleges that both Mr. Solomon and Ms. Virtue “lull[ed] ACI into
inaction in filing its malpractice claims against” them by continuing to work on their case. Pl.’s
Proposed Second Am. Compl. ¶¶ 57–58.
The final count of the proposed amended complaint seeks to add Garvey as a defendant
for the malpractice of Mr. Solomon and Ms. Virtue through the doctrine of respondeat superior.
Pl.’s Proposed Second Am. Compl. ¶ 85–87. Thus, the facts alleged for ACI’s second and third
counts are also relevant to its fourth count.
III. ANALYSIS
Defendant Solomon and his former law firm, Garvey, oppose Plaintiff’s motion on the
grounds that amendment of the complaint would be futile. See Garvey’s Mem. P. & A. Opp’n
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Pl.’s Mot. Leave Amend Compl. (“Garvey’s Opp’n”) at 14, ECF No. 62; Def. Solomon’s Opp’n
Pl.’s Mot. Leave Amend Compl. (“Def.’s Opp’n”) at 4, ECF No. 63. They specifically argue
that Counts Two and Three—and, effectually, Count Four—do not state cognizable claims, and
therefore allowing Plaintiff to amend its complaint to include them would be futile. See
Garvey’s Opp’n at 16–27. They also assert that Plaintiff’s claims against Ms. Virtue are not ripe,
and that adding them would be unduly disruptive to the case. Garvey’s Opp’n at 25–27.
Garvey is partially correct. Although Plaintiff is not precluded from making its argument
in light of its position at the motion-to-dismiss stage and adequately pleads the elements of duty
and breach, Plaintiff does not adequately plead causation, because it never explains how the
assignment of a television license could adversely affect the value of its malpractice claim
against Mr. Solomon. With that said, adding the claim against Ms. Virtue would not be futile.
Plaintiff adequately states the legal duty that she owed ACI and does not seek recovery on the
independent ground of “lulling,” as Garvey seems to suggest. And, despite ACI’s failure to
respond to Garvey’s arguments with respect to disruption and ripeness, the Court recognizes that
amendment would not be unduly disruptive, and that the claim against Ms. Virtue is ripe.
A. Legal Standard
In general, “[t]he court should freely give leave [to amend] when justice so requires.”
Fed. R. Civ. P. 15(a)(2). Although the standard is generous, leave should be denied in cases
involving “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to
cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, [and] futility of amendment.” Foman v. Davis, 371 U.S.
178, 182 (1962). “Courts may deny a motion to amend a complaint as futile . . . if the proposed
claim would not survive a motion to dismiss.” James Madison Ltd. v. Ludwig, 82 F.3d 1085,
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1099 (D.C. Cir. 1996) (citing Foman, 371 U.S. at 181–82). Accordingly, in determining the
futility of amendment, the Court applies the same standard it applies in resolving a motion to
dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Id.As noted in the Court’s previous opinion, to survive a motion to dismiss for failure to
state a claim under Federal Rule of Civil Procedure 12(b)(6), a complaint must contain sufficient
factual allegations that, if accepted as true, would state a plausible claim to relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). “Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.” Id. Instead, plaintiffs must “nudge[]
their claims across the line from conceivable to plausible.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007).
B. Count Two
As noted above, ACI seeks to add a count—“Count Two”—to the complaint. Count Two
alleges that Mr. Solomon negligently recommended that ACI should assign its WTHC-LD
license to Beach TV without counseling ACI that such an assignment could adversely affect its
malpractice claim against Mr. Solomon. Pl.’s Proposed Second Am. Compl. ¶¶ 78–79; Pl.’s
Mot. Am. Compl. ¶ 15.
Garvey makes three arguments in support of its claim that the proposed addition of Count
Two is futile. First, it argues that the count fails because it is predicated upon ACI’s previous,
faulty assumption that D.C. law applies. Garvey’s Opp’n at 16–18. Second, Garvey argues that
the claims proposed in Count Two fail because they do not adequately plead the duty or breach
elements of malpractice. Garvey’s Opp’n at 18–20. Third, Garvey argues that the claims in
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Count Two fail because they do not adequately allege proximate causation and damages. See
Garvey’s Opp’n at 21–22.1 The Court addresses each of these arguments in turn.
1. ACI is Not Estopped from Alleging that Mr. Solomon Should
Have Advised His Client that the Assignment Could be Held Invalid,
Despite Previously Arguing that D.C. Law Applies
In its opposition to Haley Bader’s motion to dismiss its original complaint, ACI asserted
that the assignment from ACI to Beach TV was “governed by District of Columbia law, which
permits” the assignment of both licenses and malpractice claims in certain circumstances. Pl.’s
Opp’n Haley Bader Mot. Dismiss at 16. Thus, ACI argued at that time that the malpractice claim
did not lose any value when it was assigned from ACI to Beach TV. Pl.’s Opp’n Haley Bader
Mot. Dismiss at 18. In its previous memorandum opinion, the Court disagreed with ACI’s
position, instead holding that Virginia law applies instead of D.C. law, meaning that the
assignment of the malpractice claim was invalid, leaving ACI with the malpractice claim but
Beach TV with the WTHC-LD license. See Beach TV Properties, Inc., 2016 WL 6068806, at
*16. Now ACI moves to add a new count alleging that Mr. Solomon committed an additional
act of negligence because he should have known that the assignment of the malpractice claim
was invalid, and failed to advise ACI that assigning the WTHC-LD license could jeopardize
ACI’s earlier malpractice claim against him.
Garvey argues that amending the complaint to include this new claim is futile. It argues
that, because ACI itself previously asserted that D.C. law applied to the assignment to Beach TV
of both the WTHC-LD license and the malpractice claim, Mr. Solomon could not have been
negligent in advising ACI to convey the license to Beach TV under the same D.C. law that ACI
1
Defendant Solomon similarly argues that Count Two does not contain sufficient factual
material to constitute a plausible claim. See Def.’s Opp’n at 4–5. His argument is largely
duplicative of Garvey’s second two arguments.
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previously argued applied to the assignment. Garvey’s Opp’n at 16–18. Garvey does not cite to
any cases suggesting that advancing a legal argument in opposition to a motion to dismiss estops
a party from advancing an inconsistent argument later in the case. Garvey’s Opp’n at 16–18.
The Court concludes that ACI is not estopped from advancing this argument.
“Where a party assumes a certain position in a legal proceeding, and succeeds in
maintaining that position, he may not thereafter, simply because his interests have changed,
assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in
the position formerly taken by him.” Zedner v. United States, 547 U.S. 489, 504 (2006) (quoting
Davis v. Wakelee, 156 U.S. 680, 689 (1895)) (internal quotations and alterations omitted).
Although “the circumstances under which judicial estoppel may appropriately be invoked are
probably not reducible to any general formulation of principle,” three factors generally guide
courts’ analyses. New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (internal citations
omitted). First, the party’s later position usually must be “clearly inconsistent” with its earlier
position. Id. (internal quotation marks and citation omitted). Second, a party generally must
have succeeded in its earlier position to be estopped from advancing its later position. Id. at
750–51 (reasoning that judicial estoppel of inconsistent positions generally does not apply
“absent success in a prior proceeding,” because “a party’s later inconsistent position introduces
no ‘risk of inconsistent court determinations’” (quoting United States v. C.I.T. Constr. Inc., 944
F.2d 253, 259 (5th Cir. 1991)); see also 18 C. Wright, A. Miller, & E. Cooper, Federal Practice
and Procedure § 4477 (2d ed. 2002). Third, courts consider whether the party seeking to assert
an inconsistent position would derive an unfair advantage if it is not estopped. New Hampshire
v. Maine, 532 U.S. at 751.
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In light of the three factors outlined above, ACI’s addition of Count Two would not be
futile. Because ACI now relies on the application of Virginia law to establish that Mr. Solomon
was negligent when it previously argued that D.C. law applied to the assignment, its positions are
clearly inconsistent, and the first factor weighs in favor of estoppel. But the second and third
factors weigh heavily against estoppel. ACI did not prevail in its argument that District of
Columbia law applied to the assignment of the malpractice claim. See Beach TV Properties,
Inc., 2016 WL 6068806, at *16. Not only does the lack of success weigh against judicial
estoppel, but it generally serves as a prerequisite to its application. New Hampshire v. Maine,
532 U.S. at 750–51 (reasoning that judicial estoppel of inconsistent positions generally does not
apply “absent success in a prior proceeding,” because “a party’s later inconsistent position
introduces no ‘risk of inconsistent court determinations’” (quoting C.I.T. Constr., 944 F.2d at
259); see also Wright, Miller & Cooper, supra, § 4477 (discussing the “demand that the party to
be estopped have benefited from the prior inconsistent statement” (emphasis added)).
The third factor further weighs against estoppel. It may have been in ACI’s best interest
to advance a difficult, but potentially advantageous choice-of-law position when it opposed the
motion to dismiss. But ACI does not unfairly benefit from now being able to assert that Mr.
Solomon should have anticipated the difficulty of that argument. ACI now simply alleges that,
in light of the applicability of Virginia law, Mr. Solomon was negligent in advising ACI to
assign the WTHC-LD license, because such assignment “could adversely affect ACI’s legal
malpractice claim against him arising out of his preparation, review[,] and filing of the defective
ACI Statement.” Pl.’s Proposed Second Am. Compl. ¶¶ 44–45. Because ACI failed in
advancing its first position and advancing a contrary position now does not unfairly advantage
ACI, the Court finds that ACI’s previous argument that D.C. law applied does not estop it from
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asserting malpractice against Mr. Solomon for failing to anticipate that the assignment could be
held invalid based on the applicability of Virginia law.
2. ACI Plausibly Alleges Duty and Breach in Connection with Count Two
Garvey argues that allowing ACI to amend its complaint to add Count Two—which
alleges that Mr. Solomon negligently failed to advise ACI on the effect assigning the television
license could have on its malpractice claim against him—would be futile because ACI never
“articulat[ed] . . . what exactly the standard of care purportedly required Mr. Solomon to do—or
not do”—with respect to assignment of the license. Garvey’s Opp’n at 19. Garvey also contends
that the proposed amended complaint never articulates how Mr. Solomon breached such a duty.
Garvey’s Opp’n at 19. Garvey then sets out several bullet points of questions that the proposed
amended complaint supposedly leaves unanswered. Among them are the following: (1) “[w]hy
Beach TV’s transfer of the TV license back to ACI . . . has not remedied their concerns;” (2)
whether Plaintiff believes Beach TV should also proceed as a plaintiff; (3) the basis for
Plaintiff’s ostensible contention that the license should not have been assigned; (4) what risks
ACI and Beach TV were exposed to through the assignment; and (5) what advice an independent
lawyer would have given about the assignment of either the license or the malpractice claim.
Garvey’s Opp’n at 19–20. Because these questions need not be answered at this stage of the
proceedings, Plaintiff adequately pled the elements of duty and breach in Count Two.
The elements of a legal malpractice claim “are the same as those of an ordinary
negligence action.” Chase v. Gilbert, 499 A.2d 1203, 1211 (D.C. 1985) (quoting O’Neil v.
Bergan, 452 A.2d 337, 341 (D.C. 1982)). However, as part of the duty that one owes under the
circumstances, “those with special training and experience adhere to a standard of conduct
commensurate with such attributes.” O’Neil, 452 A.2d at 341 (quoting Morrison v. MacNamara,
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407 A.2d 555, 560 (D.C. 1979)). Stated in terms tailored to the actions of a legal expert, to state
a claim for legal malpractice, a plaintiff must allege plausible facts showing that (1) an attorney–
client relationship existed; (2) the attorney breached a duty of reasonable care; (3) causation; and
(4) damages. Mawalla v. Hoffman, 569 F. Supp. 2d 253, 256 (D.D.C. 2008) (citing Chase, 499
A.2d at 1211–12). Establishing the applicable standard of care often requires the testimony of
expert witnesses. See Burke v. Scaggs, 867 A.2d 213, 219 (D.C. 2005) (citing Ray v. American
Nat’l Red Cross, 696 A.2d 399, 404 (D.C. 1997)).
Federal Rule of Civil Procedure 8(a) provides that “a claim for relief must contain . . . a
short and plain statement of the claim showing that the pleader is entitled to relief.” Because a
uniform standard of care applies in actions for negligence in the District of Columbia, plaintiffs
need not engage in a formal recitation of the elements for negligence to properly plead a
plausible claim for relief. See Sherrod v. McHugh, No. 16-0816, 2017 WL 627377, at *6
(D.D.C. Feb. 15, 2017); see also Smith v. Carnival Corp., 584 F. Supp. 2d 1343, 1352 (S.D. Fla.
2008) (“conclud[ing] that under . . . Federal Rule of Civil Procedure 8, [p]laintiffs are not
required to allege the applicable standard of care in their complaint,” and that because the
“[d]efendant . . . is on notice of the general nature of [p]laintiffs’ negligence claim, [the
defendant’s] request to dismiss that claim is” insufficient). Under Rule 8(d), a party may set out
a claim in the alternative, in which case “the pleading is sufficient if any one of them is
sufficient.” Fed. R. Civ. P. 8(d)(2).
Garvey’s conclusory assertions that ACI did not set forth the applicable standard of care
or allege breach are not suited for this stage of the proceedings. Although Plaintiff’s negligence
claim related to the assignment of the WTHC-LD license from ACI to Beach TV is not a
paragon of clarity, it suffices to survive a motion to dismiss, because a plaintiff need not predict
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and answer every possible objection when pleading the elements of negligence. Succinctly
stated, Plaintiff claims, in the alternative, that Mr. Solomon failed to behave as a reasonable and
prudent attorney would have when he did not “advise ACI that the License Assignment could
adversely affect ACI’s legal malpractice claim against him.” Pl.’s Proposed Second Am. Compl.
¶¶ 44–45. The alleged advice regarding assignment of the license took place in the context of an
attorney–client relationship. See Pl.’s Proposed Second Am. Compl. ¶¶ 27, 42–43. Thus, a duty
is established. Mawalla, 569 F. Supp. 2d at 256. And, with respect to breach of that duty,
whether a reasonable and prudent attorney would have given such advice is a question of fact
that may require the consultation of expert witnesses. See Burke, 867 A.2d at 219. Given that
ACI need not spell out the standard of care in any greater detail at this time, it has established a
duty and a breach. See Chase, 499 A.2d 1211–12; Mawalla, 569 F. Supp. 2d at 256.
The questions that Garvey raises are either answered by the proposed amended complaint
or irrelevant at this stage. At this stage of the proceedings, ACI is not required to show that the
assignment of the license from Beach TV to ACI did not fully restore the value of ACI’s
malpractice claim. ACI makes its claim in the alternative: if the license assignment did not
affect the value of the malpractice claim, Count Two will be moot. Pl.’s Reply Def.’s Opp’n to
Pl.’s Mot. Am. Compl. at 5. But if the value of the malpractice action is diminished by the
assignment, Mr. Solomon was negligent in the advice he gave ACI regarding the assignment.
Moreover, whether ACI believes Beach TV should proceed as an additional plaintiff in
this case is irrelevant to ACI’s malpractice claim. And, although Garvey is correct that ACI
provided little explanation as to the basis for its contention that the license should not have been
assigned from ACI to Beach TV, the plausible negligence claim outlined above was sufficient to
put Mr. Solomon and Garvey on notice of that claim. The same can be said for the risks that
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ACI and Beach TV were each exposed to by the assignment—which, as the Court discusses
below, are not described in any detail in the proposed amended complaint. To advance its claim,
however, ACI need not plead the specific risks and benefits that a negligent lawyer failed to
consider. It suffices that Mr. Solomon unreasonably “failed to advise ACI on the risks or merits
of assigning [the] malpractice claim,” see Pl.’s Proposed Second Am. Compl. ¶ 46. Finally, ACI
did, in effect, answer Garvey’s question about what an independent lawyer would have advised
in ACI’s situation. According to ACI, an independent and reasonable lawyer would have
advised ACI that the value of its malpractice claim could decrease as a result of the assignment.
See Pl.’s Proposed Second Am. Compl. ¶¶ 44–45. Although this claim seems suspect in light of
Plaintiff’s previous argument that D.C. law applies, see Beach TV Properties, Inc., 2016 WL
6068806, at *16, it suffices to survive a motion to dismiss.
3. ACI Does Not Allege a Plausible Theory of Causation
The Court next addresses Garvey’s argument that the addition of Count Two is futile
because ACI fails to adequately allege causation and damages. See Garvey’s Opp’n at 21.
Garvey contends that Plaintiff does not explain “how ACI’s ability to recover . . . might be
diminished by the assignment of either the license or the malpractice claim,” and that it is not
“obvious or self-evident what concerns Plaintiff[] ha[s] in mind.” Garvey’s Opp’n at 21.
Simply, Garvey’s issue is that Plaintiff fails to present a coherent story of how the assignment of
the WTHC-LD license could have led to the damages Plaintiff alleges.
To survive a motion to dismiss under the standards of Iqbal and Twombly, a “plaintiff
must give enough details about the subject-matter of the case to present a story that holds
together.” Swanson v. Citibank, NA, 614 F.3d 400, 404 (7th Cir. 2010); accord Poola v. Howard
Univ., 147 A.3d 267, 280–81 (D.C. 2016). In the context of causation in a legal malpractice
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case, a plaintiff must “set forth a plausible statement not only that a breach of duty occurred but
that the breach caused the plaintiff to lose a valid claim or defense in the underlying action and
that, absent that loss, the underlying claim “would have been successful.” W. Bend Mut. Ins. Co.
v. Schumacher, 844 F.3d 670, 676 (7th Cir. 2016) (internal citations omitted). This effectively
requires a plaintiff to “present two cases, one showing that [its] attorney performed negligently,
and a second or predicate ‘case within a case’ showing that [it] had a meritorious claim that [it]
lost due to [its] attorney’s negligence.” Jacobsen v. Oliver, 451 F. Supp. 2d 181, 187 (D.D.C.
2006) (quoting Mihailovich v. Laatsch, 359 F.3d 892, 904–05 (7th Cir. 2004)). “Only by making
out both cases can a plaintiff demonstrate a ‘causal relationship, or proximate cause . . . .’” Id.(quoting Smith v. Haden, 872 F. Supp. 1040, 1053 (D.D.C. 1994)).
In Schumacher, an employer sued its attorney for negligently handling the defense of a
workers’ compensation claim against it. 844 F.3d at 673. Although the employer described its
lawyer’s alleged conduct in detail, he described the underlying workers’ compensation claim “in
rather summary fashion,” alleging only that “there existed certain factual defenses and a medical
causation defense” that were not asserted against the employee. See id. at 677 (emphasis
omitted). This, the complaint alleged, “forced [the plaintiff] to accept a disadvantageous
position which greatly compromised its ability to defend the claim.” Id. (emphasis omitted).
Because these allegations were conclusory and did not “set forth a plausible description of a lost
defense that, absent [the attorney’s] alleged neglect, would have assured [the plaintiff] success
on the underlying claim,” the trial court was left to speculate about the underlying claim. See id.
at 677–79. The Seventh Circuit thus found that the employer did not state a plausible claim with
respect to causation. See id. at 678.
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As noted above, ACI never explains why or how the assignment of the license could have
adversely affected the malpractice claim.2 Instead, it simply asserts that Mr. Solomon failed to
exercise reasonable care when it advised ACI to assign the license to Beach TV, and that “ACI
was damaged as a direct and proximate result of Mr. Solomon’s [negligence] if and to the extent
the [assignment] adversely affected ACI’s malpractice claims . . . in Count One.” Pl.’s Proposed
Second Am. Compl. ¶¶ 44–48, 78. Just as in Schumacher, this Court is left to speculate about
what effect, if any, the underlying assignment of the WTHC-LD license from ACI to Beach TV,
and then back to ACI had on ACI’s malpractice claim. This pleading gap between Mr.
Solomon’s alleged malpractice and the damages that ACI alleges shows that amendment of
Plaintiff’s complaint, as proposed, would be futile. As Garvey simply and correctly states it,
ACI “fail[s] to explain how ACI’s ability to recover under Count One might be diminished by
the assignment of either the license or the malpractice claim. Nor, by any means, is it obvious or
self-evident what concerns Plaintiff[] ha[s] in mind.” Garvey’s Opp’n at 21. Although there has
been, lurking in the background of this case, some vague sense that the assignment of the license
or legal malpractice claim could have adversely affected either ACI or Beach TV, Plaintiff never
sufficiently connects the dots to state a plausible claim. Plaintiff does not even go so far as to
state that it has been, like the plaintiff in Schumacher, “forced to accept a disadvantageous
position which greatly compromised its ability to defend the claim.” 844 F.3d at 673 (emphasis
omitted). Instead, it vaguely suggests that its malpractice claim may have been harmed by the
license assignment. Without explaining how the assignment might have, in the alternative from
2
The Court notes the possibility that this analysis could apply equally to Count Three of
the proposed amended complaint. However, because no defendant or potential defendant has
raised the issue at this point, see Garvey’s Opp’n; Def.’s Opp’n, the Court need not address it
here.
16
Count One, harmed ACI’s interest, the Court cannot even begin to analyze the “case within the
case” to determine whether there was a meritorious malpractice claim that was harmed by
assignment of the television license to Beach TV. Thus, ACI’s proposed amended complaint
fails to allege a plausible theory of causation in Count Two, making such amendment futile.
Consequently, the Court will deny ACI leave to amend its complaint to include it.
C. Count Three
ACI seeks to add Count Three to its complaint, alleging that, after Ms. Virtue took over
the representation of ACI from Mr. Solomon, she failed to advise ACI that it had a malpractice
claim against him, that the statute of limitations could make that malpractice claim time-
sensitive, and that she could not appropriately provide advice because she had a conflict of
interest given her relationship to Mr. Solomon. See Pl.’s Proposed Second Am. Compl. ¶¶ 59–
61, 80–84.
Garvey argues that adding Count Three to the amended complaint would be futile in four
ways. See Garvey’s Opp’n at 22–27. First, it argues that ACI’s claim against Ms. Virtue fails
because “lulling” is not a discrete cause of action under either D.C. or Virginia law. Garvey’s
Opp’n at 22–24. Second, in summary terms, Garvey contends that ACI has not adequately
alleged the standard of care that Ms. Virtue breached. Garvey’s Opp’n at 24–25. Garvey’s third
contention is that adding Ms. Virtue to this case would be disruptive and unnecessary. Garvey’s
Opp’n at 25–26. Finally, Garvey argues that any claims for injuries allegedly caused by Ms.
Virtue’s alleged malpractice are not yet ripe. Garvey’s Opp’n at 26–27. ACI responds only to
the first two arguments, essentially ignoring the final two. See Pl.’s Reply Def.’s Opp’n to Pl.’s
Mot. Am. Compl.; see also id. at 1 (incorrectly asserting that Garvey and Mr. Solomon “oppose
the amendment of the complaint solely on the grounds [that] Counts Two and Three fail to state
17
claims for relief”). The Court will first address Garvey’s ripeness argument, then proceed to
Garvey’s argument pertaining to the alleged disruption of joining Ms. Virtue, then conclude with
the arguments about whether ACI stated a plausible claim of lulling against Ms. Virtue.3
1. Garvey’s “Ripeness” Argument is Inapplicable;
ACI is Entitled to Plead in the Alternative
Garvey argues that because Plaintiff only seeks recovery “if and to the extent” that it was
damaged by the license assignment or Ms. Virtue’s actions somehow jeopardized its claims
under the statute of limitations, the cause of action is not yet ripe. See Garvey’s Opp’n at 26–27.
The alleged injury, Garvey argues, would ripen only if the Court rules that Plaintiff’s malpractice
claim lost value as a result of Ms. Virtue’s negligence and, even if it does, that date is well into
the future. See Garvey’s Opp’n at 26. Because that date is well into the future and may never
come, Garvey argues that the claim is not ripe. As noted above, ACI does not address this
argument but does, in the context of other arguments, justify its language by noting that Counts
Two and Three are made in the alternative to Count One. See Pl.’s Reply Def.’s Opp’n to Pl.’s
Mot. Am. Compl. at 2–7. That is, if the statute of limitations has not run on Plaintiff’s claim
against Mr. Solomon, the claim against Ms. Virtue is moot because her alleged negligence would
not have caused ACI any damages. See Pl.’s Reply Def.’s Opp’n to Pl.’s Mot. Am. Compl. at 5–
6.
3
Although courts have discretion to treat unanswered arguments as conceded, doing so is
not a requirement. See, e.g., Mason v. Geithner, 811 F. Supp. 2d 128, 178 (D.D.C. 2011), aff’d,
492 F. App’x 122 (D.C. Cir. 2012); U.S. ex rel. Rockefeller v. Westinghouse Elec. Co., 274 F.
Supp. 2d 10, 13 (D.D.C. 2003), aff’d sub nom. Rockefeller ex rel. U.S. v. Washington TRU Sols.
LLC, No. 03-7120, 2004 WL 180264 (D.C. Cir. Jan. 21, 2004). Because ACI’s other arguments
shed light on its likely responses to the unresponded to arguments, the issue of ripeness is
relatively straightforward, and the issue of ripeness is uniquely important to a court’s exercise of
jurisdiction, see Nat’l Park Hosp. Ass’n v. Dep’t of Interior, 538 U.S. 803, 808 (2003), the Court
will not treat Garvey’s ripeness argument as conceded. Cf. id. (noting that courts may consider
ripeness sua sponte).
18
Unlike the other claims addressed herein, a motion to dismiss for ripeness is governed by
Federal Rule of Evidence 12(b)(1) because questions of ripeness go to the Court’s subject-matter
jurisdiction. Exxon Mobil Corp. v. FERC, 501 F.3d 204, 207 (D.C. Cir. 2007); Venetian Casino
Resort, LLC v. EEOC, 409 F.3d 359, 366 (D.C. Cir. 2005). The plaintiff has the burden of
proving ripeness, and its allegations are not entitled to presumptive truthfulness. See Renne v.
Geary, 501 U.S. 312, 316 (1991). Indeed, the Court must give Plaintiff’s allegations “closer
scrutiny when resolving a Rule 12(b)(1) motion than would be required for a Rule 12(b)(6)
motion for failure to state a claim.” Ludvigson v. United States, 525 F. Supp. 2d 55, 57 (D.D.C.
2007). In doing so, the Court may consider evidence outside of the pleadings. See Herbert v.
Nat’l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992); Al-Owhali v. Ashcroft, 279 F. Supp. 2d
13, 21 (D.D.C. 2003).
“Ripeness is a justiciability doctrine designed ‘to prevent the courts, through avoidance
of premature adjudication, from entangling themselves in abstract disagreements . . . .’” Nat’l
Park Hosp. Ass’n v. Dep’t of Interior, 538 U.S. 803, 807–08 (2003) (quoting Abbott Labs. v.
Gardner, 387 U.S. 136, 148 (1967)). Determining ripeness requires the Court to evaluate “[(1)]
the fitness of the issues for judicial decision and [(2)] the hardship to the parties of withholding
court consideration.” Id. at 808 (citing Abbott Labs., 387 U.S. at 148–49). Malpractice claims
can ripen even before the underlying claim subject to the negligent representation has been fully
resolved. See Wolcott v. Ginsburg, 746 F. Supp. 1113, 1117 (D.D.C. 1990). Decreased
settlement value and increased litigation costs associated with recovering on the underlying
claim constitute concrete injury in malpractice actions. See id.; Lorenzetti v. Jolles, 120 F. Supp.
2d 181, 190 (D. Conn. 2000) (citing Winter v. Brown, 365 A.2d 381, 386 (D.C. 1976)).
19
“Simply because the outcome of one claim is contingent upon the outcome of another
claim in the case does not mean that the first claim cannot be alleged or that the first claim is not
ripe.” Dimensional Music Publ’g, LLC v. Kersey ex rel. Estate of Kersey, 448 F. Supp. 2d 643,
653 (E.D. Pa. 2006). In Dimensional Music Publishing, the defendant law firm claimed that the
malpractice claim against it was not ripe because it was contingent upon the court ruling that the
plaintiff did not have rights that the law firm was hired to secure. 448 F. Supp. 2d at 645–46,
653. The court found that the case was indeed ripe despite the contingency, because a claim in
the alternative can be sufficiently concrete for subject-matter jurisdiction despite the uncertain
nature of damages. Id. at 653.
This case is similar to Dimensional Music Publishing. Although, as noted above, ACI’s
proposed amended complaint could have been clearer, it states Count Three in the alternative.
Stated differently, ACI seeks recovery from Ms. Virtue only if its claim against Mr. Solomon
was devalued either by the assignment of the WTHC-LD license to Beach TV or lost entirely due
to the passage of time as a result of the applicable statute of limitations. See Pl.’s Reply Def.’s
Opp’n to Pl.’s Mot. Am. Compl. at 5. Notwithstanding the uncertain nature of the source of
ACI’s alleged damages, ACI has pleaded sufficiently concrete alternative theories for recovery.
See Dimensional Music Publ’g, LLC, 448 F. Supp. 2d at 653. Under one alternative, Ms. Virtue
was not negligent because she did not cause ACI’s malpractice claim to lose any value. Under
the other, Ms. Virtue’s malpractice adversely affected ACI’s rights with respect to its
malpractice claim against Mr. Solomon. See id. Assuming, just as the court did in Dimensional
Music Publishing, that this latter theory turns out to be correct, ACI alleges a ripe claim against
Ms. Virtue. ACI claims that her negligence—specifically, her failure to inform ACI that Mr.
Solomon had committed malpractice, that his withdrawal from the case could affect the statute of
20
limitations of malpractice claims, that she had a conflict of interest in light of her professional
relationship with Mr. Solomon, and that ACI should retain separate counsel—devalued its case
against Mr. Solomon. Thus Count Three, though stated in the alternative, is sufficiently concrete
to survive dismissal. See Wolcott v. Ginsburg, 746 F. Supp. at 1117.
2. The Disruption Associated with Adding Ms. Virtue as a Party
Does Not Justify Preventing Plaintiff from Doing So
The Court next addresses Garvey’s contention that the Court should not exercise its
discretion to allow Plaintiff to add Ms. Virtue as a defendant in this case, because to do so would
be disruptive to discovery. See Garvey’s Opp’n at 25–26. Although ACI did not directly
address this point, the Court declines to deny amendment of the complaint to add Ms. Virtue as a
defendant on the basis of the potential disruption to discovery her addition might cause.
In general, courts should freely allow parties to amend pleadings to include new parties
“when justice so requires.” Garnes-El v. District of Columbia, 841 F. Supp. 2d 116, 124 (D.D.C.
2012). However, Garvey cites to Garnes-El for the proposition that leave should not be given
when the moving party had no excuse for failing to include the party in its previous complaint,
already had chances to amend the complaint, and adding the new party would cause unfair delay.
In Garnes-El, the plaintiff provided no excuse for his failure to move to amend earlier in the
proceedings, despite the fact that he had already amended his complaint twice before. Id. at 124.
Moreover, the plaintiff moved to add the new party almost three years after the deadline to
amend in the court’s scheduling order, and did so only in his opposition to the defendant’s
motion for summary judgment after discovery had closed. See Garnes-El, 841 F. Supp. 2d 116,
No. 08-cv-2233, ECF Nos. 27, 28, 59, 2/11/2011 Minute Order. The court found that allowing
amendment of the new party would be prejudicial to the new party the plaintiff sought to join as
21
well as the existing defendant, who had already moved for summary judgment. See Garnes-El,
841 F. Supp. 2d at 124.
But Garnes-El is inapposite for three reasons. First, as Garvey concedes, in contrast to
the plaintiff in Garnes-El who moved to amend three years after the deadline to amend had
passed, here ACI met the Court’s deadline for filing a motion to add new claims or parties to the
complaint. See Garvey’s Opp’n at 25; compare Scheduling Order, ECF No. 58 with Pl.’s Mot.
Am. Compl. at 6. Although justice may not “require” that the Court allow the addition of
appropriate parties before the scheduling order deadline, justice favors allowing ACI to do so
here. Second, in Garnes-El, the court took issue with the large amount of discovery that had
already taken place (indeed, discovery had closed) and that the new party would have missed.
See 841 F. Supp. 2d at 124. That sort of unfair prejudice does not exist here, because ACI
sought to amend the complaint a mere two months after the Court ordered the start of discovery.
Compare Scheduling Order, ECF No. 58 with Pl.’s Mot. Am. Compl. at 6. Third, in Garnes-El,
the plaintiff had already amended his complaint twice, and sought to do so again only in
opposition to summary judgment after the close of discovery without excuse for not having acted
sooner, which the court found unfair to the defendant. 841 F. Supp. 2d at 124. Here, ACI has
not yet amended its complaint and does not do so only to avoid a defendant’s motion for
summary judgment. Taken together, the holding in Garnes-El is inapposite and the Court
concludes that justice requires permitting ACI to amend its complaint to include Ms. Virtue as a
defendant.
3. ACI’s Mention of “Lulling” Does Not Render Amendment Futile
Plaintiff seeks to add the factual allegation that Ms. Virtue “lulled ACI into inaction in
filing its malpractice claims.” Pl.’s Proposed Second Am. Compl. ¶¶ 57–58. The addition of
22
this allegation seems to be a preemptive response to the affirmative defense of statute of
limitations. See Pl.’s Mot. Am. Compl. ¶ 12. Garvey opposes amendment, arguing that “lulling”
is not an independent cause of action. See Garvey’s Opp’n at 22–23. Although Garvey may be
correct, that conclusion does not render the addition of Count Three futile.
“Lulling” is not an element of malpractice in the District of Columbia. See Chase, 499
A.2d at 1211 (quoting O’Neil, 452 A.2d at 341) (outlining the elements of a malpractice claim).
As shown by the cases that Garvey cites, lulling is instead an exception to the affirmative
defense of statute of limitations. See Barry v. Donnelly, 781 F.2d 1040, 1042 (4th Cir. 1986);
Bailey v. Greenberg, 516 A.2d 934, 937 (D.C. 1986). In general, a plaintiff need not plead facts
in its complaint that might be responsive to potential affirmative defenses that an opponent may
raise. Goodman v. Praxair, Inc., 494 F.3d 458, 466 (4th Cir. 2007). The only potential
exception to this rule would be for “the unusual case where a claim is filed clearly beyond the
applicable limitations period and the plaintiff seeks to forestall its dismissal by alleging the facts
of discovery.” Id.Count Three does not assert a cause of action for “lulling,” but rather it alleges
malpractice by Ms. Virtue. See Pl.’s Proposed Second Am. Compl. ¶¶ 80–84. The “lulling”
allegation in the complaint is alleged separate from Count Three, see Pl.’s Proposed Second Am.
Compl. ¶ 57, ostensibly to preemptively address a looming statute of limitations affirmative
defense. The addition of this paragraph does not render Count Three futile. Garvey does not
move to strike the portions of the complaint discussing lulling as superfluous to the malpractice
23
claims.4 Accordingly, Garvey’s argument that “lulling” is not an independent cause of action is
inapposite at this stage of the proceedings.
4. ACI Adequately Alleges Ms. Virtue’s Standard of Care
Finally, the Court addresses whether ACI has adequately alleged the appropriate standard
of care to which Ms. Virtue is to be held. Garvey’s argument is cursory and primarily relies
upon its arguments against adding Count Two. See Garvey’s Opp’n at 24–25. In total, Garvey
argues that ACI’s assertions are “vague and conclusory” and “to the extent understandable” are
“implausible, raising questions such as” whether a reasonable and prudent attorney would have
been familiar with the doctrine of “continuing representation” and “[w]hat specific conduct . . .
was required by the standard of care and the basis for such a contention.” Garvey’s Opp’n at 24.
As noted above, a party need not engage in a formal recitation of the elements of
negligence to state a claim for relief. A uniform standard of reasonable care applies to all actions
for negligence in the District of Columbia. See Sherrod, 2017 WL 627377 at *6. Determining
what a reasonable attorney would have done in a given situation often requires expert testimony,
see Burke, 867 A.2d at 219.
ACI alleges that Ms. Virtue had an obligation—consistent with what a reasonable and
prudent attorney would have done under the circumstances—to inform ACI of certain
information, including that it had a cause of action for malpractice against Mr. Solomon and that
it should retain separate counsel to assess it because she had a conflict given her relationship to
him. See Pl.’s Proposed Second Am. Compl. ¶ 59. Whether a reasonable attorney would have
been aware of the doctrine of continuing representation and “[w]hat specific conduct . . . was
4
Neither party argues that this is the unusual case where the plaintiff’s claims are clearly
beyond the applicable limitations period and the preemptive response to a statute-of-limitations
defense is required to be added. See Garvey’s Opp’n at 22–23.
24
required by the standard of care and the basis for such a contention,” see Garvey’s Opp’n at 24,
are questions of fact that may be resolved with the aid of expert testimony. See Burke, 867 A.2d
at 219. For now, ACI has alleged enough to survive a motion to dismiss. Accordingly, for the
same reasons that ACI stated a plausible standard of care in Count Two, it also did so in Count
Three.
D. Count Four
Garvey’s sole argument that adding Count Four would be futile is that, because Plaintiff
seeks to hold Garvey liable only under the doctrine of respondeat superior, “if the claims in
Count Two and Three are dismissed, then the claims in Count Four” must be dismissed as well.
See Garvey’s Opp’n at 27. Because the Court does not dismiss Count Three, Count Four
remains insofar as it seeks recovery for Ms. Virtue’s alleged malpractice.
IV. CONCLUSION
For the foregoing reasons, Plaintiff’s Motion for Leave to Amend its Complaint is
GRANTED IN PART and DENIED IN PART. An order consistent with this Memorandum
Opinion is separately and contemporaneously issued.
Dated: June 1, 2017 RUDOLPH CONTRERAS
United States District Judge
25