Bode & Grenier, L.L.P. v. Knight

• Decision Date: 20 September 2011
• Docket Number: Civil Action No. 08–1323 (RWR).
• Citation: 821 F.Supp.2d 57
• Court: U.S. District Court — District of Columbia
• Parties: BODE & GRENIER, L.L.P., Plaintiff, v. Carroll L. KNIGHT, et al., Defendants.

821 F.Supp.2d 57

BODE & GRENIER, L.L.P., Plaintiff,

v.Carroll L. KNIGHT, et al., Defendants.

Civil Action No. 08–1323 (RWR).

United States District Court, District of Columbia.

Sept. 20, 2011.

Andre M. Gregorian, Mark Robert Leventhal, Bode & Grenier, LLP, Washington, DC, for Plaintiff.

Vaughn W. Royal, Vaughn W. Royal, Attorney at Law, Washington, DC, Paul T. O'Neill, Paul T. O'Neill, Esq., Detroit, MI, for Defendant.

MEMORANDUM OPINION AND ORDER

RICHARD W. ROBERTS, District Judge.

Plaintiff law firm Bode & Grenier, L.L.P., brings this diversity action for breach of contract and unjust enrichment against Carroll Knight, Delta Fuels, Inc., Delta Fuels of Michigan, Inc., and Knight Enterprises, and breach of guaranty against defendant Carroll Knight only, to recover at least $75,105.97, for defendants' purported failure to pay for legal services provided to them by plaintiff. The parties cross-moved for summary judgment, and the magistrate judge has recommended that both motions for summary judgment be denied. Because the magistrate judge's recommendation to deny the defendants' motion for summary judgment is supported in law and the defendants' objections are without merit, that recommendation will be adopted. However, because there are no issues of material fact in dispute regarding defendants' counterclaim and Bode & Grenier is entitled to judgment in its favor on the counterclaim, Bode & Grenier's objections will be sustained and judgment will be entered for Bode & Grenier on the defendant's counterclaim.

BACKGROUND

From 1994 through 2008, Bode & Grenier represented the defendants in various matters, including litigation relating to gasoline contracts and petroleum futures, regulatory and tax matters, and litigation arising out of a petroleum spill on the defendants' property in Toledo, Ohio. (Compl. ¶ 1; Defs.' Stmt. of Mat. Facts (“Defs.' Stmt.”) ¶ 2.) Bode & Grenier alleges that during the entire 13–year period that it represented the defendants, the defendants had agreed verbally to be billed monthly for Bode & Grenier's services. (Compl.¶ 12.) During the representation over the petroleum spill, Bode & Grenier performed multiple tasks for the defendants, [redacted] ( Id. ¶ 18.)

Bode & Grenier alleges that between December 2005 and January 2007, the defendants sporadically paid Bode & Grenier's monthly bills. However, after January 2007, the defendants ceased paying, causing Bode & Grenier's managing partner William Bode to telephone Knight and ask him to explain the delinquency in the account. [redacted] Further, Knight, assured Bode [redacted] that he personally guaranteed payment of all delinquent and future legal fees and expenses incurred by the defendants. In reliance on that guarantee, Bode & Grenier continued to provide legal services to the defendants. ( Id. ¶¶ 22–27.)

[Redacted] (Compl. ¶ 29.) Bode responded that Bode & Grenier would stop providing legal services to the defendants unless Knight provided partial security for the outstanding legal bills, by executing a promissory note and confession of judgment. Knight then signed a retention letter iterating the terms of the lawyer-client relationship between Bode & Grenier and the defendants and acknowledging that Bode & Grenier was owed $446,566 for legal services, and executed a promissory note for $300,000 payable on May 1, 2008 to Bode & Grenier. On May 1, 2008, the defendants failed to pay the amount owed under the promissory note. Bode & Grenier withdrew as counsel for the defendants in the various cases that were active in which it represented the defendants, and on May 2, 2008, filed in state court in Michigan the confession of judgment accompanying the promissory note. ( Id. ¶¶ 29–32; Defs.' Stmt. ¶ 4.)

Bode & Grenier then filed the instant action, alleging breach of contract against all defendants for $75,105.97 in unpaid legal bills (Count I), alleging unjust enrichment against all defendants (Count II), seeking to enforce Knight's personal guarantee (Count III), and seeking to pierce the corporate veil and hold Knight personally responsible for any liability of the other defendants (Count IV). The defendants answered and filed a counterclaim for disgorgement or forfeiture of legal fees, based on the allegation that the complaint filed by Bode & Grenier divulged privileged communications in violation of its fiduciary duty to keep client confidences secret under Rule 1.6 of the District of Columbia Rules of Professional Conduct.

Both parties moved for summary judgment. The magistrate judge issued two opinions recommending denying both motions for summary judgment. See Bode & Grenier, L.L.P. v. Knight, Civil Action No. 08–1323 (RWR/DAR), 2010 WL 882650 (D.D.C. March 10, 2010), and Bode & Grenier, L.L.P. v. Knight, Civil Action No. 08–1323 (RWR/DAR), 2010 WL 908934 (D.D.C. March 12, 2010). Both parties filed objections to the opinions.

DISCUSSION

“The magistrate judge's report and recommendation is reviewed de novo.” Inversora Murten, S.A. v. Energoprojekt Holding Co., 671 F.Supp.2d 152, 154–155 (D.D.C.2009) (citing LCvR 72.3(c), and Fed.R.Civ.P. 72).

“Summary judgment may be appropriately granted when the moving party demonstrates that there is no genuine issue as to any material fact and that moving party is entitled to judgment as a matter of law.” Bonaccorsy v. Dist. of Columbia, 685 F.Supp.2d 18, 22 (D.D.C.2010) (citing Fed.R.Civ.P. 56(c)). “In considering a motion for summary judgment, [a court is to draw] all ‘justifiable inferences' from the evidence ... in favor of the nonmovant.” Cruz–Packer v. Dist. of Columbia, 539 F.Supp.2d 181, 189 (D.D.C.2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). “However, a non-moving party cannot defeat summary judgment by ‘simply show [ing] that there is some metaphysical doubt as to the material facts.’ ” Bonaccorsy, 685 F.Supp.2d at 22 (quoting Moore v. Hartman, 571 F.3d 62, 66 (D.C.Cir.2009) (quoting Matsushita, 475 U.S. at 586, 106 S.Ct. 1348)). “ ‘Briefs containing mere allegations or merely denying the movant's pleading are not enough to prevent summary judgment; instead, a non-movant must go beyond the pleadings to proffer specific facts rebutting the movant's assertions.’ ” Bonaccorsy, 685 F.Supp.2d at 22 (quoting Graham v. Holder, 657 F.Supp.2d 210, 215 (D.D.C.2009) (citing Greer v. Paulson, 505 F.3d 1306, 1315 (D.C.Cir.2007), and Burke v. Gould, 286 F.3d 513, 517–18 (D.C.Cir.2002))). “The relevant inquiry ‘is the threshold inquiry of determining whether there is a need for a trial—whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.’ ” Single Stick, Inc. v. Johanns, 601 F.Supp.2d 307, 312 (D.D.C.2009) (quoting Anderson, 477 U.S. at 250, 106 S.Ct. 2505) (overruled on other grounds by Prime Time Int'l Co. v. Vilsack, 599 F.3d 678 (D.C.Cir.2010)). A genuine issue is present where the “evidence is such that a reasonable jury could return a verdict for the non-moving party,” although “ ‘[t]he possibility that a jury might speculate in the plaintiff's favor is insufficient to defeat summary judgment.’ ” Pardo–Kronemann v. Donovan, 601 F.3d 599, 611 (D.C.Cir.2010) (affirming summary judgment for defendant despite supervisor's statements that the adverse employment action came from the administrative office where the plaintiff “had some pretty powerful enemies,” because the statements reflected a personal opinion insufficient for a reasonable jury to conclude that the employer's explanation was pretext for retaliation) (quoting Haynes v. Williams, 392 F.3d 478, 485 (D.C.Cir.2004)). Summary judgment is appropriate where the evidence is “so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 248, 252, 106 S.Ct. 2505.

I. DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

The defendants moved for summary judgment, arguing that this action was precluded by the doctrine of res judicata, based on the earlier confession of judgment filed in Michigan by Bode & Grenier against the defendants for $300,000 in attorney fees. (Defs.' Mem. in Supp. of Mot. for Summ. J. (“Defs.' Mem.”) at 2.) According to the defendants, the judgment against the defendants in the Michigan action was a final judgment on the merits, and Michigan law broadly applies the doctrine of res judicata, precluding both claims that were actually litigated and every claim arising from the same transaction that the parties could have raised but did not. Bode & Grenier opposed, arguing that res judicata was inapplicable because the action filed in Michigan was not a final judgment on the merits, and that instead of being characterized as an action to recover attorney fees, it was a specialized proceeding to enforce a promissory note. (Pl.'s Opp'n at 1–2.)

The magistrate judge recommended denying the defendants' motion for summary judgment because the defendants had not established that the Michigan action constituted a final judgment on the merits.

The undersigned finds that Defendants have failed to point to evidence in the record from which the court could determine that “a prior judgment exists [.]” Defendants rely upon the docket sheet and the consent judgment filed in the Michigan court. However, the docket sheet is bereft of any entry which indicates that the parties ever appeared before a judge of the Michigan court, or that a judge of the Michigan court rendered any decision with respect to the merits. The judgment neither includes nor refers to any findings with respect to the merits of the Michigan case; rather, the judgment merely reflects the acknowledgment of Defendants that they had failed to comply with the terms of the promissory note executed by the parties.

Bode & Grenier, 2010 WL 908934, at...