McLaughlin v. Copeland
| Decision Date | 07 June 1977 |
| Docket Number | Civ. No. B-76-475. |
| Citation | 435 F. Supp. 513 |
| Parties | Francis X. McLAUGHLIN v. Lammot duPont COPELAND, Jr. and Lammot duPont Copeland, Sr. and E. Norman Veasey. |
| Court | U.S. District Court — District of Maryland |
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Phillip M. Sutley and Michael E. Marr, Baltimore, Md., for plaintiff.
Franklin G. Allen and Francis B. Burch, Jr., Baltimore, Md., for defendant Copeland, Jr.
Wilbur D. Preston, Jr. and Richard J. Magid, Baltimore, Md., for defendant Copeland, Sr.
Francis D. Murnaghan, Jr. and Elizabeth H. Trimble, Baltimore, Md., for defendant Veasey.
This is a tort action brought under the court's diversity jurisdiction after removal from the Circuit Court for Baltimore County pursuant to 28 U.S.C. § 1441. Plaintiff is a Maryland citizen admitted to practice law in Maryland and the District of Columbia. Defendants are Lammot duPont Copeland, Sr. Copeland, his son, Lammot duPont Copeland, Jr. Junior, and E. Norman Veasey Veasey, a Wilmington attorney. The defendants are all citizens of Delaware.
The complaint alleges that Copeland, Junior, and other persons (including Thomas A. Shaheen, the majority shareholder of Columbia Financial Corporation and Junior's financial advisor) conspired to enable Copeland to conceal personal loans or gifts to Junior as business expenses of the Winthrop Lawrence Corporation Winthrop. The plan allegedly called for Junior to pledge his Winthrop stock to Copeland in exchange for $10.4 million in loans and loan guarantees to Winthrop. Winthrop was then to use the funds to acquire control of Transogram, Inc. which thereafter would become the conspirators' conduit for passing Junior's personal financial problems onto the Transogram shareholders. Plaintiff alleges that the conspirators allegedly violated United States securities laws in furtherance of their scheme.
On November 10, 1970, Winthrop filed a Chapter XI arrangement petition in Baltimore. On November 19, 1970, Copeland, representing that he was a Winthrop creditor in the amount of $8,200,000, filed an application for the appointment of a receiver. Junior filed a Chapter XI bankruptcy petition in Wilmington in October 1970 and retained Veasey as counsel. In that proceeding, McLaughlin represented Pappas, one of Junior's alleged creditors. McLaughlin appeared on Pappas' behalf in November 1974 and made references to the prior allegedly fraudulent and potentially criminal activities by the conspirators. McLaughlin informed the defendants that he was prepared to file a class action on behalf of Winthrop creditors against Copeland, Junior, and others based on McLaughlin's investigation of their activities. McLaughlin showed Veasey a draft complaint and told him that he was prepared to provide information about Copeland and Junior to the Justice Department.
At this point McLaughlin alleges that Veasey, Copeland, and Junior became apprehensive about exposure of their activities and that they and others, in an effort to forestall exposure, entered into an agreement to "discredit, defame and damage" him. This is the conspiracy which forms the basis of this suit. McLaughlin contends that Veasey, acting for himself, Copeland, and Junior, attempted to uncover "something `actionable"' against McLaughlin or Pappas which would cause Pappas to reduce or withdraw his Chapter XI claim in Wilmington. Defendants' efforts allegedly increased when they learned that information about them was being submitted to a Senate Committee for referral to the Department of Justice and the FBI. McLaughlin alleges that, before or during January 1975, defendants and others agreed to entice or entrap him into committing extortion or violating a disciplinary rule of the Code of Professional Responsibility.
McLaughlin met Veasey in Baltimore on February 21, 1975 to discuss settlement of Pappas' claim against Junior in the Wilmington bankruptcy proceeding. This meeting was the catalyst for the subsequent events upon which this suit is premised. After his return to Wilmington, Veasey dictated a memorandum about the meeting. Veasey edited this memorandum and sent it in the form of a letter dated March 5, 1975 to United States District Judge Schwartz in Wilmington. (Veasey Motion to Dismiss, Veasey Affidavit, Exhibit A). Copies were sent to Pappas' local counsel, James P. D'Angelo, to counsel for Junior's creditors' committee, Howard L. Williams, and to McLaughlin. With the exception of the McLaughlin copy which was received in Maryland, all mailings were sent and received within Delaware. In the letter, Veasey stated his version of the settlement negotiations with McLaughlin and raised the question of whether McLaughlin's actions were a violation of DR 7-105, Threatening Criminal Prosecution. Judge Schwartz referred the matter to the Disciplinary Board of the District of Columbia Bar which held a hearing June 11, 1975 and concluded that there was insufficient evidence to support a finding that McLaughlin had violated DR 7-105. Plaintiff alleges that the defendants caused the disciplinary proceedings to be instituted by mailing Veasey's letter to Judge Schwartz. The complaint contains three counts alleging civil conspiracy, defamation, and malicious interference with business. Plaintiff seeks twelve million dollars in damages on each count. All defendants have moved to dismiss for lack of in personam jurisdiction. Copeland has moved in the alternative for transfer to the District of Delaware. Also pending are motions to strike which relate to affidavits, exhibits and attachments filed in conjunction with the motions to dismiss.
Before reaching the substantive issues raised by the motions to dismiss, it is necessary to address defendants' motions to strike. Defendants have moved pursuant to Federal Rule of Civil Procedure 12(f) to strike several "pleadings" filed with Plaintiff's Response to Defendants' Motion to Dismiss. Specifically, the "pleadings" are the so-called Appendix, the Liptz and McLaughlin affidavits, and exhibits and attachments to the Appendix and affidavits. Each must be examined individually because the alleged infirmities are different in every case.
The first problem is to determine what the Appendix is. The Appendix is not signed by anyone, nor is it in the form of an affidavit. The first paragraph of the Appendix states:
This "Appendix," part of "Plaintiff's Response in Opposition to Defendants' Motion to Dismiss for Lack of Jurisdiction," explains and supplements information set forth in his Declaration.
This paragraph and Plaintiff's Opposition to Defendants' Motions to Strike (Court Paper 25) indicate that plaintiff intended that the Appendix be incorporated into and considered as part of his Response to the Motion to Dismiss. Taking plaintiff's construction as true, the question is whether a motion to strike should be granted. Under Rule 12(f), a court may order stricken "any redundant, immaterial, impertinent, or scandalous matter." The Appendix is a fourteen-page document which describes the alleged facts giving rise to this law suit. The motion to strike as it relates to the Appendix will be denied because none of the narrative can be classed as either "redundant, immaterial, impertinent, or scandalous" as those terms have been defined. Burke v. Mesta Machine Co., 5 F.R.D. 134, 138 (W.D.Pa.1946). Notwithstanding the fact that the motion to strike has been denied, the Appendix, just as any brief, is not a source of evidence which a court may consider on a motion to dismiss supported by affidavits. Cole v. Ross Coal Co., 150 F.Supp. 808, 809-10 (S.D.W.Va.), aff'd, 249 F.2d 600 (4th Cir. 1957); Kramer v. Scientific Control Corp., 365 F.Supp. 780, 786-87 (E.D.Pa.1973); Harry Winston, Inc. v. Waldfogel, 292 F.Supp. 473, 476 (S.D.N.Y. 1968). Therefore, the court's decision on the motions to dismiss will not be based on the allegations of fact found in the Appendix.
Defendants move to strike the two affidavits on the ground that they do not comport with the requirements of Federal Rule of Civil Procedure 56(e). Defendants assert that neither affiant states that he is competent to testify or that his statement is based on personal knowledge. Defendants also contend that the affidavits contain hearsay which would be inadmissible at trial. In response, plaintiff asserts that allegations contained in his affidavit are based on plaintiff's personal knowledge and are admissible under the rules of evidence, the doctrine of judicial notice, and other unspecified grounds. Plaintiff does not enumerate which exception to the hearsay rule would permit admission of the challenged affidavits.
Federal Rule of Civil Procedure 12(f) relates to matters to be stricken from pleadings. Although affidavits technically do not constitute pleadings, courts have permitted affidavits to be challenged by motions to strike because the Federal Rules provide no other means to contest their sufficiency. Sunshine Kitchens, Inc. v. Alanthus Corp., 66 F.R.D. 15, 17 (S.D.Fla. 1975); Monroe v. Board of Education, 65 F.R.D. 641, 647 (D.Conn.1975); cf. Wimberly v. Clark Controller Co., 364 F.2d 225, 227 (6th Cir. 1966). If portions of an affidavit are inadmissible, the whole affidavit need not be stricken but only those portions which are deficient. Perma Research & Dev. Co. v. Singer Co., 410 F.2d 572, 578-79 (2d Cir. 1969); Monroe v. Board of Education, 65 F.R.D. 641, 647-52 (D.Conn.1975). See J. Moore & J. Wicker, Moore's Federal Practice, ¶ 56.221 at XX-XXXX-XX (2d ed. 1976). The court will treat each of the affidavits separately in order to determine which portions, if any, will be stricken.
While it is true that the Liptz affidavit does not contain the traditional litany of Liptz's personal knowledge and competence to testify, this failure, in and of itself, will not support a motion to strike if it is apparent...
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