Maccartney v. Kevin D. O'Dell & Christopher J. Walsh, Individually & Doing Bus. O'Dell, P.C.
| Decision Date | 29 February 2016 |
| Docket Number | No. 14-cv-3925 (NSR),14-cv-3925 (NSR) |
| Parties | HAROLD Y. MacCARTNEY, JR., Plaintiff, v. KEVIN D. O'DELL and CHRISTOPHER J. WALSH, individually and doing business as MacCARTNEY, MacCARTNEY, KERRIGAN & MacCARTNEY, LAW OFFICE OF KEVIN D. O'DELL, P.C., and WILLIAM K. KERRIGAN, individually and doing business as MacCARTNEY, MacCARTNEY, KERRIGAN & MacCARTNEY, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Plaintiff Harold Y. MacCartney, Jr. brings this action alleging breach of fiduciary duty and aiding and abetting breach of fiduciary duty, breach of contract, breach of New York partnership law, unjust enrichment, and an accounting claim arising out of the dissolution of a former law practice partnership. Defendants Kevin D. O'Dell, William K. Kerrigan, and the Law Offices of Kevin D. O'Dell ("O'Dell Law Office") collectively move to dismiss Plaintiff's amended complaint (ECF No. 38, or the "Amended Complaint") pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.1 (ECF No. 51.) For the following reasons, Defendants' motion is GRANTED in part and DENIED in part.
The following facts are taken from the Amended Complaint unless otherwise noted and are accepted as true for the purposes of this motion.
Plaintiff and Defendant Kerrigan were partners in an at-will partnership—MacCartney, MacCartney, Kerrigan & MacCartney—engaged in the practice of law (the "Old Firm"). (Am. Compl. ¶ 5.) The Old Firm was formed pursuant to a verbal agreement, and no written partnership contract exists. (Id. ¶ 10.) Defendant Walsh was employed as an associate at the Old Firm pursuant to an oral, at-will employment agreement. (Id. ¶ 11.) In 2008, Defendant O'Dell was hired as an associate by the Old Firm, also pursuant to an oral, at-will employment agreement. (Id. ¶ 13.) Under the terms of his employment agreement, in the event O'Dell secured personal injury cases for the Old Firm, the legal fees generated from those cases were to be divided equally between O'Dell and the Old Firm. (Id.)
In the spring of 2012, Plaintiff advised Kerrigan that he intended to withdraw as a partner from the Old Firm. (Id. ¶ 14.) Therefore, Plaintiff and Kerrigan set about winding up the affairs of the Old Firm, which included planning the formation of a successor partnership that would finish up the affairs of the Old Firm and continue the law practice. (Id.) As a result of negotiations that took place during the summer of 2012, it was agreed that O'Dell and Walsh would become partners with Kerrigan and would continue the partnership under the firm's old name at the same location without interruption (the "New Firm"). (Id. ¶ 15.) Defendants further agreed that following their collection of the assets, fees, and debts due the Old Firm; payment of the debts owed by the Old Firm; and completion of all unfinished business of the Old Firm, the Old Firm would account and pay to Plaintiff the following:
It was further agreed that Defendants would periodically render to Plaintiff, at Plaintiff's request, full statements of amounts still owed pursuant to Plaintiff's Payout. (Id. ¶ 17.) On or about September 13, 2012, Plaintiff withdrew from the Old Firm and the New Firm began its operation. (Id. ¶ 19.) Defendants have continued to carry out the business of the New Firm but have failed to pay Plaintiff the full amount owed pursuant to Plaintiff's Payout. (Id. ¶ 21.)
"A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Nike, Inc. v. Already, LLC, 663 F.3d 89, 94 (2d Cir. 2011) (internal quotation omitted). "A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008). In assessing whether there is subject matter jurisdiction, the Court must accept as true all material facts alleged in the complaint, Conyers v. Rossides, 558 F.3d 137, 143 (2d Cir. 2009), but "the court may resolve [any] disputed jurisdictional fact issues by referring to evidence outside the pleadings such as affidavits . . . ." Zappia Middle E. Contr. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir. 2000).
Under Rule 12(b)(6), "[t]o survive a motion to dismiss, 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, 566 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 566 U.S. at 678. Although "a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Starr v. Sony BMG Music Entm't, 592 F.3d 314, 321 (2d Cir. 2010). A court should accept non-conclusory allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Ruotolo v. City of N.Y., 514 F.3d 184, 188 (2d Cir. 2008). "[T]he duty of a court 'is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.'" DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 113 (2d Cir. 2010) (quoting Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998)). While courts generally review pro se pleadings liberally, "licensed attorneys proceeding pro se need not be afforded the same" liberal standard. Smith v. New York Presbyterian Hops., 254 Fed. App'x 68, 70 (2d Cir. 2007).
When ruling on a motion to dismiss for failure to state a claim under Rule 12(b)(6), a "court may consider the facts as asserted within the four corners of the complaint together with the documents attached to the complaint as exhibits, and any documents incorporated in the complaint by reference." Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57, 64 (2d Cir. 2010) (internal quotation marks and citation omitted). Courts also may consider "matters of which judicial notice may be taken" and "documents either in plaintiffs' possessionor of which plaintiffs had knowledge and relied on in bringing suit." Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993). One way a document may be deemed incorporated by reference is where the complaint "refers to" the document. EQT Infrastructure Ltd. v. Smith, 861 F. Supp. 2d 220, 224 n.2 (S.D.N.Y. 2012). However, factual assertions raised for the first time in a plaintiff's opposition papers, including supporting affidavits and exhibits, are not properly considered by the Court on a motion to dismiss "as that would constitute 'improper[] reli[ance] on matters outside the pleadings.'" Universal Trading & Inv. Co. v. Tymoshenko, No. 11-cv-7877 (PAC), 2012 WL 6186471, at *1 (S.D.N.Y. Dec. 12, 2012) (quoting Friedl v. City of New York, 210 F.3d 79, 83-84 (2d Cir. 2000) (internal quotations omitted)).
Plaintiff's first cause of action alleges that Defendants breached their fiduciary duties to him by, among other things, misappropriating fees and property of the Old Firm; failing to collect fees due the Old Firm; failing to complete the unfinished business of the Old Firm; withdrawing fees from the bank accounts of the Old Firm for personal use instead of paying out Plaintiff; and failing to render accountings to Plaintiff. (Am. Compl. ¶ 23.) Defendants contend that (i) Plaintiff lacks standing to assert claims for breach of fiduciary duty as against Defendant O'Dell and (ii) the Amended Complaint fails to state a claim for breach of fiduciary duty as against Kerrigan.
The Court must assess whether Plaintiff, a former partner in the Old Firm, has standing to assert a breach of fiduciary duty claim against O'Dell, a former employee of the Old Firm. With respect to O'Dell, Plaintiff asserts that an employee owes a fiduciary duty of loyalty to hisemployer. (Pl.'s Opp. at 18.) Defendants contend, on the other hand, that any breach of fiduciary duty claim as against O'Dell necessarily belongs to the partnership—the actual employer—not individual partners, since O'Dell was merely an employee of, not a partner in, the Old Firm. (Memorandum of Law in Support of Defendants' Motion to Dismiss the Amended Complaint ( ) at 16.) The Amended Complaint alleges that O'Dell was hired as an associate in the Old Firm in 2008. (Am. Compl. ¶ 13.) O'Dell received a salary from the...
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