Lipson v. Birch
| Decision Date | 23 September 2014 |
| Docket Number | No. 14–cv–2586 ADSGRB.,14–cv–2586 ADSGRB. |
| Citation | 46 F.Supp.3d 206 |
| Parties | Scott Seymour Matthew LIPSON, Plaintiff, v. Robert J. BIRCH, Robert J. Birch, Esq., P.C., Carter Williamson, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Robert P. Macchia & Associates, by Robert P. Macchia, Esq., Frank C. Lanzo, Esq., Priscilla DeLing Kam, Esq., of Counsel, Mineola, NY, for Plaintiffs.
Robert J. Birch, Esq., pro se.
Carter Williamson, Esq., pro se.
Robert J. Birch, Esq., P.C., pro se.
DECISION AND ORDER
On April 23, 2014, the Plaintiff Scott Seymour Matthew Lipson (the “Plaintiff”) brought this action against the Defendants for (1) violations of the Federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq.; (2) common law fraud; (3) unjust enrichment; (4) common law conversion; and (5) tortious conduct, including negligence.
On July 23, 2014, the Defendant Robert J. Birch, Esq., pro se filed a notice of motion pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ.P.”) 12(b)(1) and 12(b)(2) to dismiss the complaint for lack of subject matter jurisdiction and lack of personal jurisdiction, respectively. However, the memorandum of law in support of that motion is signed by both Birch and co-defendant, Carter Williamson, Esq. The Court construes the motion to dismiss as being made by both Birch and Williamson. In any event, “this Court has discretion to consider documents filed in violation of procedural rules.” Church & Dwight Co. v. Kaloti Enters. of Mich., L.L.C., 07 Civ. 0612(BMC), 2011 WL 4529605, at *1 n. 1 (E.D.N.Y. Sept. 27, 2011) (citation and internal quotation marks omitted).
For the following reasons, that part of the motion to dismiss by Birch and Williamson for lack of personal jurisdiction is granted and the complaint is dismissed as against them without prejudice.
Unless otherwise stated, the following facts are drawn from the complaint. “As this decision involves a motion to dismiss for lack of personal jurisdiction [ ], the Court will also consider the various affidavits submitted by the parties.” Photoactive Prods., Inc. v. AL–OR Int'l Ltd., 99 F.Supp.2d 281, 285 (E.D.N.Y.2000).
The Plaintiff is a Canadian citizen lawfully admitted for permanent residence in the United States and is domiciled in Nassau County, New York.
The Defendant Birch is an attorney who resides in North Wales, Pennsylvania.
The Defendant Williamson is an attorney who resides in Bala Cynwyd, Pennsylvania.
The Defendant Birch P.C. is a corporation with an address of 617 Swede Street, Norristown, Pennsylvania 19401.
In April 2012, the Plaintiff, desperate for money and facing homelessness, reached out to Williamson on a friend's referral. The Plaintiff, who suffers from mental illness, believed he may be entitled to a significant amount of money as he came from a wealthy family in Canada.
Williamson directed the Plaintiff to Birch and his law firm, the Defendant Robert J. Birch, Esq. P.C., which Williamson thought was better equipped and more experienced to counsel the Plaintiff.
After their first meeting, Birch agreed to represent the Plaintiff and requested $750 as compensation. Birch stated that any future fees would be negotiated between them. According to the Plaintiff, “[a]s [the] Defendants were aware that [the Plaintiff came] from a wealthy family, it is alleged that [they] conspired to exploit a desperate and destitute man who believed the Defendants would act in his best interest to claim any financial rights he may have had to his family's fortune.” (Compl., at ¶ 22.)
The Plaintiff further alleges that, although Williamson referred the Plaintiff to Birch and Birch's law firm, he remained one of the Plaintiff's attorneys; was in constant contact with the Plaintiff; and has been referred to in communications as the Plaintiff's counsel.
The Plaintiff repeatedly requested a written retainer agreement and for the return of certain original documents which he had left in Birch's possession. However, the Plaintiff alleges that his requests were ignored.
Nonetheless, the Plaintiff alleges that Birch, in his capacity as the principal of Birch P.C., proceeded to “represent” Lipson. (Id. at ¶ 25.) In this regard, Birch contacted John Rosenthal (“Rosenthal”), the Plaintiff's brother-in-law and personal accountant, who resided in Toronto. Rosenthal represented to Birch that he was acting on behalf of the Lipson family in all negotiations between Lipson and his family.
After speaking with Rosenthal, Birch advised the Plaintiff of the existence of a family company, Ontario Limited 11084096 (“Ontario”), of which the Plaintiff was a shareholder. Birch further advised him that the Plaintiff's mother, Bertha Lipson, agreed to purchase the Plaintiff's shares in Ontario, thereby buying out his interests. The Plaintiff maintains that he had previously never heard of this company and never knew that he owned shares in it.
According to the Plaintiff, the Lipson family desired to buy out the Plaintiff's interest in Ontario and permit him to receive a lump sum from the sale in exchange for giving up any and all existing and/or future interest in any of the family's property, tangible or intangible. The Plaintiff alleges that the Lipson family wished to have no future contact with him.
Desperate and on the verge of homelessness, the Plaintiff allegedly entrusted the Defendants to enter into negotiations with the Lipson family on his behalf. However, the Plaintiff alleges that the Defendants engaged in tortious conduct and were negligent by failing to act with reasonable care and due diligence in handling the valuation and sale of Ontario. For example, the Plaintiff allegedly requested that Birch retrieve five years of Ontario's company books for review before accepting any offers from the family. Instead, Birch produced three years of books, all of which were unaudited.
The Plaintiff notes that Rosenthal's accounting firm handled the books for each Lipson business, including Ontario. Rosenthal disclosed that he was related to all the parties and was therefore not “independent,” yet, according to the Plaintiff, the Defendants unreasonably and negligently accepted the unaudited books at face value.
The Plaintiff also contends that the Defendants negligently failed to investigate any other financial or property interest—including any real estate, bank accounts, beneficiary accounts, corporations, stocks, will instruments, etc.—that may have been available to the Plaintiff. The Plaintiff also asserts that the Defendants failed to communicate with him regarding the negotiations. Rather, the Plaintiff maintains that he “communicated, via an interstate email from New Jersey to Pennsylvania, his concerns to Williamson that decisions were being made on his behalf without his consent as no one had contacted him to inform him of the status of negotiations with his family or to ask his opinions.” (Id. at ¶ 31.)
The Plaintiff also alleges that the Defendants “pushed [him] to accept the offer which would, per the Defendants, eliminate a long, drawn out court battle and avoid unnecessary stress and conflict within the family” (Id. at ¶ 32.), even though the Defendants made no attempt to confirm the value of Ontario, or to investigate other possible financial rights the Plaintiff may have enjoyed.
Upon the advice of the Defendants, and desperate for money to survive, on July 30, 2012, the Plaintiff reluctantly signed a release statement and accepted his family's offer.
The Plaintiff contends that (Id. at ¶ 32.)
According to the Plaintiff, he and Birch met only four times before the sale of his shares of Ontario took place in July 2012. Each meeting took place in Birch's office in Pennsylvania.
The Plaintiff further alleges that most, if not all, of the documents prepared to finalize the sale of his shares of Ontario “were authored solely by the representatives of the Lipson family.” (Id. at ¶ 33.)
The Plaintiff alleges that the proceeds of the sale of the Ontario shares, which, after taxes, had a net value of $1,424,233, were originally intended to be deposited into an existing TD Bank account. Rather, the Plaintiff alleges, the Defendants directed the proceeds into several irrevocable trust accounts (collectively the “Trust Enterprise”), including an irrevocable trust in the amount of $1,000,000 at TD Wealth Management in Philadelphia, entitled “Lipson Scott M It R. Birch TTEE IMA,” with an account number of 66–9050–01–5. The Trust Enterprise provided as follows: “The situs of all trusts hereunder shall be in the Commonwealth of Pennsylvania, and all questions as to the validity, construction and administration shall be determined by the Orphans' Court Division of Montgomery County, Pennsylvania.”
Birch was named as the sole trustee of the Trust Enterprise, thereby guaranteeing Birch a salary for years to come and access to the corpus of the Trust Enterprise. The Plaintiff was not advised, nor provided with a written document suggesting that he seek independent legal counsel on the propriety of having his attorney also serve as a trustee on his behalf.
The Plaintiff maintains that the Defendants never provided a credible explanation as to why the $1,424,233 was not placed into the originally intended account or why the proceeds were not deposited into one account in their entirety. While it appears several trust accounts exist, it is not clear as to whether the remaining...
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