Long v. Parry

• Decision Date: 01 February 2013
• Docket Number: Case No. 2:12–cv–81.
• Court: U.S. District Court — District of Vermont
• Parties: Raymond A. LONG, M.D., Plaintiff, v. Lloyd George PARRY and Davis, Parry & Tyler, P.C., Defendants.

921 F.Supp.2d 269

Raymond A. LONG, M.D., Plaintiff,

v.Lloyd George PARRY and Davis, Parry & Tyler, P.C., Defendants.

Case No. 2:12–cv–81.

United States District Court,

D. Vermont.

Feb. 1, 2013.

Herbert G. Ogden, Ogden Law Offices, P.C., Danby, VT, for Plaintiff.

Samuel Hoar, Jr., Esq., Sophie E. Zdatny, Esq., Dinse, Knapp & McAndrew, P.C., Burlington, VT, for Defendants.

MEMORANDUM OPINION and ORDER

WILLIAM K. SESSIONS III, District Judge.

In this six-count complaint arising out of Defendants' legal representation of Plaintiff in a lawsuit he filed against his former employer, Defendants have moved to dismiss the complaint in its entirety pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.¹ Plaintiff has moved to amend his complaint. The motions to dismiss, ECF Nos. 6 & 11, are denied. The motion to amend, ECF No. 21, is granted.

Background

The following facts are taken from the complaint or are the subject of judicial notice and are essentially undisputed. In early 2005 Defendants Lloyd George Parry and the law firm of Davis, Parry & Tyler, P.C. (collectively “Parry”) filed a lawsuit in this Court on behalf of Plaintiff Raymond A. Long, M.D., alleging claims for antitrust, violation of federal health care law, and violations of common law, arising out of the termination of Long's employment as a member of the medical staff at Northwestern Medical Center in St. Albans, Vermont. See Long v. Quorum Health Res., L.L.C., No. 2:05–cv–00021–wks (D. Vt. filed Jan. 24, 2005) (“ Quorum ”). At the time Long filed the Quorum lawsuit, he alleged that he was a citizen of New York, domiciled in New York. Quorum, Compl. ¶ 1. On September 28, 2006, Long filed an amended complaint in which he again alleged that he was a citizen of New York domiciled in New York. Quorum, Am. Compl. ¶ 1. Jurisdiction in the Quorum lawsuit was based upon diversity, as the various individual and corporate defendants were alleged to be citizens of Vermont and Texas.

In January 2008, following a two-day mediation session held in Philadelphia, Pennsylvania, the evaluator reported a full settlement of the dispute. The Quorum defendants agreed to pay Dr. Long $4,000,000.00 to settle all of his claims. Thereafter a dispute arose between Long and Parry over the correct distribution of the proceeds from the settlement. Eventually Parry brought a declaratory action suit against Long in the Court of Common Pleas in Philadelphia County, Pennsylvania to determine the fate of $38,403.00 held in escrow by Defendants. Davis, Parry & Tyler, P.C. v. Long, No. 5182 (C.P. Phila. Cnty. filed Dec. 31, 2008) (“PA suit”). Parry subsequently moved to discontinue the PA suit, Long did not oppose the motion, and the case was dismissed with prejudice on May 7, 2010.

Long filed the instant suit in this Court on April 24, 2012. Jurisdiction is based on diversity, Long claiming that he is a resident of Florida, and that the Defendants are citizens of Pennsylvania. He alleges claims for professional negligence, breach of contract, breach of fiduciary duty, and violation of Vermont's consumer protection law, based on Parry's conduct of the Quorum lawsuit, and abuse of process and malicious prosecution based on Parry's conduct of the PA suit. Parry has moved to dismiss the suit in its entirety, asserting that res judicata bars Counts I through IV of the Complaint and the Court should decline to assert pendent personal jurisdiction over the Defendants with respect to Counts V and VI. Parry also contends that Pennsylvania law applies to Long's claims, that Counts I through III, V and VI are barred by the applicable statutes of limitations, and that Count IV is not cognizable under Pennsylvania law.

Long has moved to amend his complaint to add allegations concerning the conduct of the Quorum lawsuit and his ties to Vermont prior to and during the time of the Quorum lawsuit, and to specify further his damage claim.

Discussion

I. Motion to Amend

Rule 15(a)(2) of the Federal Rules of Civil Procedure provides that a “court should freely give leave” to amend a pleading “when justice so requires.” Fed.R.Civ.P. 15(a)(2). Generally a plaintiff may amend his complaint unless a defendant demonstrates prejudice or bad faith. City of New York v. Group Health Inc., 649 F.3d 151, 157 (2d Cir.2011).

Parry complains that the revised allegations in Long's proposed amended complaintare irrelevant and misleading. In the absence of a showing of bad faith or prejudice, the Court grants leave to amend. See, e.g., Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir.1993).

II. Motions to DismissA. Legal Standard

On a motion to dismiss for lack of personal jurisdiction prior to discovery, the court accepts a plaintiff's jurisdictional allegations as true and construes any disputed facts in plaintiff's favor. See Metro. Life Ins. Co. v. Robertson–Ceco Corp., 84 F.3d 560, 566–67 (2d Cir.1996); see also Ball v. Metallurgie Hoboken–Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.1990) (stating that the motion “assumes the truth of the plaintiff's factual allegations for purposes of the motion and challenges their sufficiency).

“To survive a motion to dismiss [for failure to state a claim], a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The court “accept[s] as true all of the factual allegations contained in the complaint,” Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007), and draws all reasonable inferences in favor of the plaintiff. E.g., Harris v. City of New York, 186 F.3d 243, 247 (2d Cir.1999).

B. Personal Jurisdiction (Counts V and VI)

Parry argues that the Court should decline to exercise jurisdiction over Counts V and VI, because the claims are beyond the reach of Vermont's long-arm statute, Vt. Stat. Ann. tit. 12 § 913(b).

There is no dispute that this Court has personal jurisdiction over the claims presented in Counts I through IV. At issue is whether personal jurisdiction extends over Counts V and VI, the counts for malicious prosecution and abuse of process stemming from the PA suit. In this Circuit, a court sitting in diversity and acquiring personal jurisdiction over a defendant as to some of the claims asserted in the complaint, has the power to determine all other claims asserted in the complaint that have “a common nucleus of critical fact.” Hargrave v. Oki Nursery, Inc., 646 F.2d 716, 720 (2d Cir.1980); accord Hanly v. Powell Goldstein, L.L.P., 290 Fed.Appx. 435, 438 (2d Cir.2008) (“[O]nce a defendant properly is brought before a district court on a claim covered by [a long-arm statute], the court may entertain claims that are not expressly covered by the long-arm statute, so long as they derive from the same nucleus of operative fact as claims that are.”).

In determining whether claims arise from a common nucleus of operative fact, a court asks whether the facts underlying the claims substantially overlap, or whether one claim necessarily brings the facts of the other claim before the court. Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 335 (2d Cir.2006). The question is therefore whether the facts underlying the claims based on the conduct of the Quorum litigation substantially overlap with the facts underlying the claims based on the PA suit, or whether the Quorum litigation claims necessarily bring the facts of the PA suit before the Court.

An examination of the allegations of the Amended Complaint shows that the claims overlap substantially. For example, in Count I, the professional negligence claim, Long alleges, inter alia, that after successful mediation of the Quorum lawsuit in Philadelphia, Parry requested that he sign a broad general release, that there were ongoing negotiations and disagreements over fees and expenses, that Parry escrowed $38, 403.00 of the sum received from the Quorum defendants' insurer, and that Parry's negligence “proximately caused [him] to incur attorney's fees and spend time in obtaining the $38, 403.” Am. Compl. ¶¶ 268–293. In Count V Long alleges that Parry attempted to use the escrowed funds to obtain a covenant not to sue, and when that failed brought the PA suit. Id. ¶¶ 338–352. In Count VI Long alleges that Parry brought the PA suit with improper motive, and not because of a genuine disagreement over an attorney's fee. Id. ¶¶ 355–359.

Accordingly, this Court finds that the claims arise from a common nucleus of operative fact, such that it has the power to entertain the claims in Counts V and VI, regardless of whether the Court has independent personal jurisdiction over Parry with respect to these counts.

The question remains however whether retention of Counts V and VI “would work an undue hardship” on Parry. Hargrave, 646 F.2d at 720. Parry asserts that defending against these two counts, with the parties' conduct having occurred in Pennsylvania, and all of the defense witnesses residing there, would be burdensome. Parry has not shown however that defending these claims in the District of Vermont would be more burdensome than defending against two separate lawsuits, one of them in Vermont and one in Pennsylvania. Although the Court acknowledges that there are sound reasons for trying claims alleging misuse and abuse of Pennsylvania court processes in a Pennsylvania court, judicial economy and the avoidance of duplicative litigation outweigh these reasons when the alternative would be to require Long to bring two lawsuits with overlapping facts.

C. Applicable Law

Parry asserts that the law of Pennsylvania applies to all of Long's claims; Long asserts that the law of Vermont applies.

A federal court sitting in diversity applies the choice of law rules of its forum state. Forest Park Pictures v. Universal Television Network, Inc., ...