Nirala v. Dhali

• Decision Date: 21 April 2020
• Docket Number: Civil Action No. 8:18-cv-03330-PX
• Citation: Nirala v. Dhali, Civil Action No. 8:18-cv-03330-PX (D. Md. Apr 21, 2020)
• Parties: MOHAN NIRALA, Plaintiff, v. A.J. DHALI, et. al., Defendants.
• Court: U.S. District Court — District of Maryland

MOHAN NIRALA, Plaintiff, v. A.J. DHALI, et. al., Defendants.

Civil Action No. 8:18-cv-03330-PX

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

April 21, 2020

MEMORANDUM OPINION

Pending before the Court in this legal malpractice suit is pro se Plaintiff Mohan Nirala's Motion for Leave to File a Second Amended Complaint (ECF No. 26), Defendants A.J. Dhali's and Edgar Ndjatou's Motion for Summary Judgment (ECF No. 31-2), Nirala's Motion for Summary Judgment (ECF No. 34), and Defendants' Motion to Strike Nirala's Motion for Summary Judgment (ECF No. 36). The motions are fully briefed and no hearing is necessary. See D. Md. Loc. R. 105.6. For the reasons stated below, Nirala's Motion to Amend is denied, Defendants' Motion to Strike is denied, Defendants' Motion for Summary Judgment is granted, and Nirala's Motion for Summary Judgment is denied.

I. Background

A. The Underlying State Court Trial

Defendants are attorneys who represented Nirala in a civil action arising from a business dispute. See Ambedkar International Center, Inc., et al., v. Mohan Nirala, Case No. CAE14-11689, Mont. Cty. Cir. Court ("state trial"). After a four-day bench trial, the Honorable Crystal D. Mittelstaedt ruled against Nirala, ECF No. 39-12 at 67-72, and later denied Nirala's two pro se motions to amend or alter the judgment. ECF No. 39-12 at 101-02. Nirala's subsequent appeal to the Maryland Court of Special Appeals was likewise denied. Nirala v. Ambedkar Internatinoal [sic] Ctr., Inc., No. 203, 2017 WL 2180630, at *2 (Md. Ct. Spec. App. May 18, 2017). The following facts established at the bench trial and relevant to the pending motions are as follows.

In 2008, Nirala founded Satyaguru Inc., a nonprofit corporation in Maryland, which was later renamed Ambedkar International Center (AIC). ECF Nos. 12 at 15; 39-12 at 34. AIC's first board of directors, established in 2012, were Nirala and Muni Subramani, Sita Ram Mahey, and Vijay Kumar ("Shankar"). ECF Nos. 39-1 at 18; 33-28. On November 17, 2012, four other individuals, Kranthi Tappita, Rakesh Gupt, Rama Krishna Bhupathi, and Sandeep Chavan each signed a Memorandum of Understanding ("MOU") with AIC. ECF No. 39-12 at 294-96. The MOU specified that each signor who met certain contractual obligations would be added as a director on the Board. Id. Each signor contributed $2,500 to AIC and thereafter participated in Board meetings. Nirala, 2017 WL 2180630, at *2.

In July 2013, a dispute arose about who had the power to act as "directors" of the AIC Board, as well as about Nirala's management of AIC funds and real property. Id.; ECF No. 39-13 at 6-7. At an October 12, 2013 meeting, the Board voted to remove Nirala as AIC President, but Nirala refused to relinquish his position. Nirala, 2017 WL 2180630, at *2.

AIC and board directors Tappita, Gupt, Bhupathi, Mahey, Chavan, and Shankar (collectively "AIC plaintiffs") subsequently filed the state court suit, bringing several common law claims, including conversion, quiet title, ejectment, declaratory judgment, constructive trust, breach of contract, unjust enrichment, accounting, injunctive relief, and constructive fraud. ECF No. 39-12 at 17-28. The AIC plaintiffs principally alleged that Nirala had been "acting as a rogue alter ego of AIC," "mismanaged AIC funds," and unlawfully "transferred AIC property to himself." Nirala, 2017 WL 2180630, at *1-2; ECF No. 39-12 at 17-28. Nirala retainedDefendants to represent him in this suit. ECF Nos. 39-12 at 12; 19 ¶ 3. Defendants filed counterclaims for civil conspiracy to defraud, unfair or deceptive trade practices, defamation, and injunctive relief. ECF No. 39-3. They also represented Nirala up to and including trial. ECF Nos. 19 ¶ 3; 39-12 at 12.

At trial, AIC plaintiffs presented evidence that Nirala continued to hold himself out as the Board President without authority, that he used his position to expend AIC's funds without the knowledge or approval of the Board, and that he unlawfully transferred AIC property to his own name. Nirala, 2017 WL 2180630, at *2; ECF Nos. 33-12-33-25 (trial transcripts). Nirala mounted a robust defense, aimed at demonstrating that he managed AIC funds properly, that his signature on the MOU was fraudulently obtained, and that because AIC plaintiffs were never properly elected to the Board of Directors, they lacked authority to remove him. Id. The Circuit Court also considered evidence regarding the purchase and management of real property belonging to AIC. See, e.g., ECF Nos. 33-23 at 4-16; 39-3 at 7-8. Nirala asserted, for instance, that he contributed personally to the purchase of the property through a $25,000 donation and a $80,000 loan to AIC, the latter for which he offered his house as collateral. Id. Nirala also argued that he paid taxes, utilities, and maintenance for the land. Id.

The Circuit Court found in favor of the AIC plaintiffs in all respects. ECF Nos. 33-24; 33-25; 39-12 at 66-72. More particularly, the trial court declared that the AIC plaintiffs comprised the lawful Board of Directors and found that Nirala had breached the MOU and was properly removed as President in October 2013. ECF No. 39-12 at 69-71. Accordingly, the court ordered Nirala to perform an accounting of all monies transferred from AIC to any account he held personally. As for injunctive relief, the court prohibited Nirala from competing with or improperly associating his name with AIC. Id. at 70-71. Finally, the court granted Nirala'sejectment from the property and issued a quiet title order making clear that Nirala was divested of all right, title and interest in it. Id. at 67-68.

As for Nirala's counterclaims, the parties ultimately withdrew the defamation claim in exchange for the AIC plaintiffs withdrawing their punitive damages request. Id. at 72; ECF No. 33-25 at 25. The trial court found for the AIC plaintiffs as to the remaining counterclaims. ECF Nos. 33-24 at 53; 39-12 at 72.

After suffering this loss at trial, Nirala retained separate counsel, Mark Chalpin, to represent him on appeal. The Court of Special Appeals of Maryland ultimately affirmed the judgment. Nirala, 2017 WL 2180630, at *1. Nirala then sued Chalpin for legal malpractice. ECF Nos. 39-11; 39-2. The case against Chalpin remains open. Id.

B. This Action

On September 11, 2018, Nirala, proceeding pro se, initiated this malpractice action in the Circuit Court for Prince George's County, Maryland. ECF No. 1-1. On October 27, 2018, Defendants removed the case, invoking this Court's diversity jurisdiction. ECF No. 1. Nirala then amended the Complaint on December 4, 2018, ECF No. 12, and Defendants moved to dismiss the Amended Complaint on December 17, 2018, ECF No. 13. This Court granted partial relief on the motion, allowing the legal malpractice (Count I) and negligence claims (Count II) to proceed. ECF No. 17.

On October 15, 2019, Nirala moved once again to amend the Complaint. ECF No. 26. Defendants moved for summary judgment on February 3, 2020, ECF No. 31, and Nirala filed a cross motion for summary judgment on February 26, 2020. ECF No. 34. On March 12, 2020, Defendants moved to strike Nirala's motion for summary judgment. ECF No. 36. The Court addresses each motion below.

II. Nirala's Motion to Amend Complaint

The Court must first decide whether the First Amended Complaint, ECF No. 12, or Nirala's proposed Second Amended Complaint, ECF No. 26-1, is the operative Complaint. The proposed Second Amended Complaint does not include any accompanying motion setting forth grounds for amendment. It also incorporates all allegations included in the First Amended Complaint and realleges the Declaratory Judgment count already dismissed by this Court. Id. at 1, 8-12; see also ECF No. 17. Nirala similarly resurrects his request for court-appointed counsel, also previously denied. Id. The proposed Second Amended Complaint was untimely, filed several weeks after the agreed-upon deadline for amendment of pleadings. See ECF No. 20.

Courts should freely grant leave to amend a complaint "when justice so requires." Fed. R. Civ. P. 15. The motion may be denied, however, when allowing amendment would "be prejudicial to the opposing party, when the moving party has acted in bad faith or with a dilatory motive, or when the amendment would be futile." Arora v. James, 689 F. App'x 190, 190 (4th Cir. 2017) (internal quotation marks omitted) (quoting Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006)).

The Court denies Nirala's motion to amend principally because the amendments are futile. The proposed Second Amended Complaint effectively adds dismissed claims which the Court sees no basis to resurrect. Otherwise, the proposed Second Amended Complaint simply summarizes the operative claims but adds nothing of substance. These summaries, devoid of any new facts, are "frivolous" and thus futile. See Johnson v. Oroweat Foods Co., 785 F.2d 503, 510(4th Cir. 1986).¹ Therefore, Nirala's motion to amend his complaint, ECF No. 26, is denied. The First Amended Complaint remains operative.

III. Motion to Strike

The Court next turns to Defendants' motion to strike Nirala's motion for summary judgment on the grounds that it is untimely, duplicative of his response to Defendants' summary judgment motion, and dependent on record evidence not previously disclosed during discovery. ECF No. 36 at 1.

To be sure, Nirala's motion is untimely and, in many respects, out of compliance with the rules. Compare ECF No. 20 with ECF No. 34. But Nirala proceeds pro se and appears genuinely confused about the proper procedure as reflected in his response to Defendants' motion to strike. ECF No. 37. Because the Court must always endeavor to construe pro se pleadings liberally, as well as to prioritize substance over form, it denies the motion. See Fireman's Ins. Co. of Newark, New Jersey v. Herbert, No. 4:04CV139, 2005 WL 3536091, at *2 (E.D. Va. Dec. 20, 2005) (Courts "do[] not expect a pro se litigant to perfectly comply with all procedural rules.").

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