Kelly v. Offit Kurman, P.A.
| Decision Date | 23 August 2021 |
| Docket Number | CIVIL CCB-17-3668 |
| Parties | BARBARA ANN KELLY v. OFFIT KURMAN, P.A. |
| Court | U.S. District Court — District of Maryland |
In this case plaintiff Barbara Ann Kelly brings breach of contract fraud, malpractice, breach of fiduciary duty, and intentional infliction of emotional distress claims against her prior counsel, defendant Offit Kurman, P.A. (“Offit Kurman”). Pending before the court is Offit Kurman's motion to dismiss, (ECF 25), and several additional motions. Kelly has filed a motion to disqualify counsel for Offit Kurman. (ECF 27). Kelly's husband Gregory Myers, has moved to intervene as a plaintiff in the case. (ECF 52). Offit Kurman opposes those motions. In response to various filings Kelly has made, Offit Kurman has filed a motion to strike Kelly's amended complaint, (ECF 35), and a motion to strike Kelly's suggestion of bankruptcy, (ECF 55). Kelly opposes those motions. These matters have been fully briefed or the parties have had an opportunity to respond, and no oral argument is necessary. See Local Rule 105.6 (D. Md. 2021). For the following reasons, the court will deny the motion for disqualification and the motion to intervene and will grant the motion to strike the amended complaint, the motion to strike the suggestion of bankruptcy, and the motion to dismiss.
On or about December 13, 2013, Kelly and Offit Kurman entered into a Credit Agreement (“Agreement”). . Under the terms of the Agreement, Offit Kurman was to provide “future legal services” to Kelly, by representing her in four pending actions to which Kelly was a party: Kelly v. Davis et al., Case No. 3:10-cv-00392-MW-EMT (N.D. Fla.) (“Seaside Case”); Kelly et al v. Regions Bank, Case No. 3:11-cv-00252-MCR-EMT (N.D. Fla.) (“Regions Case”); Regions Bank v. Kelly et al., Case No. 2010-CA-001162 (1st Jud. Cir. Ct. Walton Cnty.) (“Lot 6 Case”); United States Bank N.A. v. Kelly et al., Case No. 11-2009-CA-010813 (20th Jud. Cir. Ct. Collier Cnty.) (“Naples Case”). ).
In exchange for those future legal services, Kelly agreed to pay a previously accrued balance of $231, 222.40 in legal fees to Offit Kurman, plus the total of all fees and costs rendered in November 2013 in the Regions Case and the Lot 6 Case (“the November Balance”), plus all fees and costs incurred in performing the future legal services. (Id., art. II, Credit and Payment Terms). Kelly agreed to pay the November Balance by no later than December 31, 2013. The remainder of the fees were due according to a payment plan set forth in the Agreement and were secured by a $550, 000 mortgage (“Florida Mortgage”) encumbering in favor of Offit Kurman two unimproved real properties located in Walton County, Florida: “Lot 3 Watercolor, ” owned by Kelly and “Lot 6 Seaside ” owned by Kelly and Myers. . Kelly further agreed that Lot 6 Seaside would be “listed for sale no later than January 20, 2014, and that the list price for the property would be no more than $1.955 million, unless otherwise agreed in writing by Offit Kurman.” .
The Agreement gives Offit Kurman the “sole discretion” to declare Kelly in default of the Agreement in the event of one of several scenarios, including “if Kelly shall breach or fail in the performance of any of the terms, conditions or covenants of this Agreement to be observed or performed by Kelly . . . and such breach or failure is not cured within thirty (30) days after delivery of written notice thereof[.]” (Id.). “Upon the occurrence of any Event of Default, at the option of Offit Kurman, all sums due” under the Agreement (Id.). A failure by Offit Kurman to exercise such option “shall not be deemed a waiver of the right to exercise same at any time, including a subsequent Event of Default.” (Id.). The Agreement may not be modified “unless the [modification] is in writing and signed by all parties.” (Id.).
Myers was not a party to the Agreement nor an obligor with respect to the fees due under the Agreement, but joined the Agreement “for the limited purpose of confirming (a) that he has read this Agreement, (b) that he agrees to execute the Florida mortgage, with the understanding that title to [Lot 6 Seaside] shall be encumbered thereby, and (c) that he agrees to the terms of the Covenant Regarding Lot Sales” . . . to the extent that those terms pertain to [Lot 6 Seaside].” (Id.).
On September 24, 2015, Aaron Bukowitz, on behalf of Offit Kurman, sent Kelly a letter alleging that Kelly was in breach of the Agreement. Specifically, the letter asserted that Kelly had not listed Lot 6 Seaside for sale by the agreed upon deadline, January 20, 2014. . Bukowitz advised that “given that this breach necessarily cannot be cured, inasmuch as it is one related to a failure to act within a specific time frame set forth in the Credit Agreement” Offit Kurman would have the option to discontinue its provision of legal services to Kelly on the thirty-first day following the date of the letter. (ECF 1-7, Sept. 24, 2015, Ltr.).[1]
Kelly alleges that on August 12, 2014, Timothy Lynch, an Offit Kurman attorney, sent Myers an email “which confirms, in writing, that the reason Lot 6 Seaside . . . was not listed for sale pursuant to the term of the Credit Agreement was because Offit Kurman instructed that Lot 6 not be listed pursuant to the terms of the Credit Agreement given the procedural posture of one of the four legal matters identified in the Credit Agreement[.]” (Compl. ¶ 13). The August 12, 2014, email from Lynch to Myers is attached to the complaint as an exhibit. (ECF 1-8, Aug. 12, 2014, Email). In connection with collections efforts by Regions Bank against Myers, Lynch wrote that he wanted to discuss with Myers “when to list Lot 6, ” and further stated: (ECF 1-8). Kelly does not allege that she and Offit Kurman agreed in writing that Lot 6 Seaside should not be listed by January 20, 2014 as contemplated by the Agreement.
Offit Kurman moved to withdraw as counsel for Myers and Kelly in the Naples Case on September 25, 2015 and November 3, 2015, respectively. (ECF 25-35, Myers Withdrawal; ECF 25-9, Kelly Withdrawal). The motion as to Myers was granted on October 1, 2015. (ECF 25-3, Naples Case Dkt. at 25). New counsel entered an appearance on behalf of both Myers and Kelly on May 8, 2017. (Id. at 29). Offit Kurman moved to withdraw as counsel for Kelly in the Seaside Case on July 6, 2012, prior to the Agreement, citing non-payment of fees and irreconcilable differences. (ECF 25-22, Seaside Case First Motion to Withdraw). That motion was renewed on November 7, 2015 and granted on November 10, 2015, after Kelly had obtained new counsel. (ECF 25-20, Seaside Case Dkt.).[2]
On December 2, 2016, Gregory Johnson, an attorney with Offit Kurman, sent a letter to Kelly titled “Supplemental Notice of Default Demand for Payment and Imminent Suit Filing.” . The letter notifies Kelly of a “supplemental default” under the agreement for failure to pay a monthly amount due of $19, 500.00 on or before December 1, 2016. The letter further attaches a ledger of fees for each of the four cases associated with the Agreement, an amortization schedule, and a copy of the September 24, 2015, letter. (Id.).
On July 6, 2017, Kelly sent an email to Bukowitz and Johnson concerning a claim Offit Kurman filed on October 18, 2016, case caption “In re Gregory B. Myers, Case No. 15-26033-WIL.” . Kelly asked, “[p]ursuant to the terms of the attached Mortgage and the disclosure requirements of the federal Truth-in-Lending Act, please immediately forward to me a copy of the legally required disclosure of the purported debt/lien which Offit Kurman, P.A. is claiming in the above referenced case, which disclosure was required by law to be provided to me at the time the purported debt/lien was incurred.” (Id.). Kelly alleges that Offit Kurman did not respond to this request. (ECF 1, Compl.¶ 18).
This case has a lengthy and cumbersome history which the court will explain in considerable detail given the number of motions pending in this case and the relationship between this history and the merits of those motions.
On December 12, 2017 Kelly, proceeding pro se, filed this action against Offit Kurman alleging breach of contract (Count I); Truth-In-Lending Act (“TILA”) (Count II); Fair Debt Collection Practices Act (“FDCPA”) (Count III); constructive fraud, fraudulent inducement, and fraudulent misrepresentation (Count IV); breach of fiduciary duty (Count V); legal malpractice (Count VI); and intentional infliction of emotional distress (“IIED”) (Count VII) claims. (ECF 1, Compl.).
Kelly alleges that Offit Kurman breached the Agreement by failing to prosecute the four actions named in the Agreement and “without just cause, discontinuing the provision of legal services and prematurely withdrawing its representation.” . The breach she alleges, rose to the level of intentional infliction of emotional distress. (Id. ¶ 76-84). She further alleges that her TILA and FDCPA claims arise out of Offit Kurman's alleged failure to provide a...
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