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Rich v. Sheppard

United States District Court, S.D. Mississippi, Northern Division

February 28, 2017




         This tort action is before the Court on Defendants Alexandria Victoria Sheppard's and James Patrick Sheppard's Motion to Dismiss [9] and Motion to Amend [28]; and Defendant Philip Thomas's Motion to Dismiss [10] and Motion for Sanctions [23]. For the reasons that follow, the Court grants the dismissal motions in part; grants Defendants' motion for leave to amend; but denies the motion for sanctions.

         I. Facts and Procedural History

         This matter is a sad one and relates to the death of Patricia Hall Sheppard in May 2015. The following facts are asserted in the Complaint and assumed true under Federal Rule of Civil Procedure 12(c).

         Plaintiff Gerald M. Rich says he entered into a “life partnership” with Patricia in the summer of 2007. Compl. [1-1] ¶¶ 7-8. At that time, she had two children from a previous marriage, Defendants Alexandria Victoria Sheppard (“Victoria”) and James Patrick Sheppard (“James”) (collectively “the Sheppards”). Id. ¶ 7. During the relationship, Rich was involved in many aspects of Patricia's life, including her personal and financial matters. Id. ¶¶ 9-10. And it was through this involvement that Rich came to know Patricia's attorney, Defendant Philip Thomas, during his representation of her in an unrelated legal action involving Regions Bank. Id. ¶ 10.

         On December 11, 2014, Patricia was diagnosed with pancreatic cancer. Id. ¶ 11. And on December 30, 2014, she executed a Last Will and Testament bequeathing to Rich investment accounts valued around $180, 000 and to her children the remainder of her estate. Id. ¶ 13. She also named Rich the executor and, along with her children, her attorney in fact. Id. The next month, on January 3, 2015, Patricia executed a second will identical to the first, changing only that Rich was to receive $125, 000 outright. Id. Thomas prepared both wills.

         With her health declining, Patricia was admitted to a hospital in Minnesota on March 27, 2015, accompanied by Rich and Victoria. Id. ¶ 21. When Rich returned home nearly two weeks later, he learned that the beneficiaries on the investment accounts previously bequeathed to him had been changed to the Sheppards. Id. ¶ 24. Rich called Patricia about this change and later spoke with Victoria, who told him that he “had upset her mother after which she hung up on him.” Id. Then, on April 11, 2015, James met Rich at the Jackson, Mississippi, home Rich and Patricia shared, explaining that Rich was no longer welcome at the hospital where Patricia was admitted. Id. ¶ 26. James also told Rich that he was there to collect his mother's checkbook, cash, and other personal items. Id. That same day, unbeknownst to Rich, Patricia executed her third and final will, completely excluding Rich from any testamentary gift. Id. ¶ 27.

         Over the next month, Rich attempted to establish contact with Patricia, the Sheppards, and Thomas to no avail. Id. ¶ 30. Then, on May 16, Patricia sent Rich a text message stating, “Help P.” Id. ¶ 31. Rich “immediately” left his Louisiana home and drove to Mississippi. Id. But upon arriving at the Jackson home, he discovered that the locks had been changed, and a police officer instructed him to either leave or face trespassing charges. Id.

         By this time, Patricia had moved to Hospice Ministries in Ridgeland, Mississippi. Id. ¶ 32. And when Rich attempted to visit her, Thomas and his wife “informed [Rich] that ‘he was not to be there' and that the [previous] Power of Attorney was invalid.” Id. Rich called a police officer, id.; but when the officer arrived, he went into the facility and “returned . . . to say that [Rich] was not wanted by the family” and that he should leave the premises or face trespassing charges. Id. ¶ 33. Rich neither spoke with nor saw Patricia again-she passed away on May 23, 2015. Id. ¶ 34.

         Aggrieved by Defendants' alleged actions, Rich filed suit on April 8, 2016, in the Circuit Court of Hinds County, Mississippi. In his Complaint, Rich alleges four claims: (1) intentional infliction of emotional distress, (2) negligent infliction of emotional distress, (3) slander and defamation, and (4) fraud, against all Defendants. In their answer [8], the Sheppards assert counterclaims of (1) fraud in the execution and/or negligent misrepresentation and (2) conversion.

         Victoria subsequently removed the case on diversity grounds on May 16, 2016. A few weeks later, on June 1, 2016, the Sheppards refiled their affirmative defenses as a motion to dismiss [9], without an accompanying memorandum of law. Thomas then moved for dismissal [10] the next day. He later filed his Motion for Sanctions [23] on September 15, 2016.

         On January 30, 2017, the Court entered a show-cause order questioning whether diversity jurisdiction exists because Rich is a Louisiana resident and Defendant James pleaded in his Answer that he too resides in Louisiana. See Jan. 30, 2017 Order [26]. The Sheppards responded to the Court's Order on February 9, 2017, stating that a drafting error had occurred and that James actually resides in Mississippi. They likewise filed a motion to amend the error that same day. Rich filed no response to the Motion to Amend [28], and the time to do so passed February 23, 2017. The Motion to Amend [28] is therefore granted as unopposed. See L.U. Civ. R. 7(b)(3)(E). And in light of the amendment, the Court is satisfied that personal and subject-matter jurisdiction exist.

         II. Standard

         As an initial matter, the parties offer factual allegations in their briefs that fall beyond the pleadings. If the Court considers them, then it would be required to convert the motions to dismiss into motions for summary judgment. Fed.R.Civ.P. 12(d). Whether to do so is a matter left to the district court's “complete discretion.” Isquith ex rel. Isquith v. Middle S. Utils., Inc., 847 F.2d 186, 193 n.3 (5th Cir. 1988). But here, many of the new allegations-mostly from Rich-are nothing more than assertions from counsel that lack evidentiary support and would therefore be insufficient under Rule 56(c). Accordingly, the Court will not invoke Rule 12(d) and will disregard allegations that are not found in the pleadings.

         In addition, Thomas and the Sheppards answered the Complaint before seeking dismissal, so technically their Rule 12(b)(6) motions must be considered under Federal Rule of Civil Procedure 12(c). Regardless, the standard under either rule is the same. Great Plains Tr. Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 313 n.8 (5th Cir. 2002). Under that standard, the “court accepts ‘all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'” Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999) (per curiam)). But “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To overcome a motion to dismiss, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555 (citations and footnote omitted).

         III. Analysis

         As noted above, Rich brings four common-law tort claims against the three defendants. This Order addresses each in turn. But before looking at the specific claims, the Court will consider Defendant Thomas's argument that he acted as Patricia's attorney and therefore owed Rich no duty. As discussed next, the Court agrees with that argument to the extent Rich attacks Thomas's acts related to Patricia's estate planning. The remaining allegations will then be considered separately as to each cause of action.

         A. Thomas's Duty to Rich

         The allegations against Thomas fall into two broad categories. First, the Complaint indicates that Thomas unduly influenced Patricia related to her estate planning. Second, Rich contends that Thomas shut Rich out of Patricia's life after becoming “personally involved.” Compl. [1-1] 32. Turning to the first assertion, Rich generally says Thomas had a “higher duty because of his professional relationship with Patricia and with [Rich] in connection with the Regions lawsuit.” Id. ¶ 39. But the Complaint does not plausibly allege that Thomas ever represented Rich, and there seems to be no dispute that he did not. So the question, in considering the claims related to Thomas's actions as Patricia's attorney, is whether an attorney owes a duty of care-much less a higher one-to someone other than his or her client.

         In his opening memorandum, Thomas cites two Mississippi cases holding that an attorney has no duty to a client's adversary because it would create a conflict of interest. Def.'s Mem. [11] at 10 (citing James v. Chase Manhattan Bank, 173 F.Supp.2d 544, 551 (N.D. Miss. 2001); Roussel v. Robbins, 688 So.2d 714, 725 n.4 (Miss. 1996)). He therefore contends that he owed no duty to Rich. Rich neither addresses Thomas's authority nor offers countervailing authority on this point, and he instead relies on the general reasonable-care standard that applies in most contexts. See Pl.'s Mem. [18] at 6 (citing McIntosh v. Victoria Corp., 877 So.2d 519, 523 (Miss. Ct. App. 2004)). Thomas's argument is essentially unrebutted and carries greater weight.

         That said, Thomas's authority is not in this exact context, and neither the parties nor the Court has found a Mississippi case that is substantially similar. Thomas's conflict-related argument does, however, find some support in First National Bank of Durant v. Trans Terra Corp. International, where a lender sued an attorney related to his work on a title opinion for the borrower. 142 F.3d 802, 805 (5th Cir. 1998). It must be noted that First National Bank of Durant ultimately turned on a Texas privity rule that may conflict with Mississippi Code section 11-7-20. Nevertheless, the policy addressed in First National Bank of Durant dovetails with the conflict-of-interest concerns that could preclude an attorney's duty to an adversary under Mississippi law. Specifically, the court noted three policy issues:

(1) “potential tort liability to third parties would create a conflict during the estate planning process, dividing the attorney's loyalty between his or her client and the third-party beneficiaries;” (2) the privity requirement “will ensure that attorneys may in all cases zealously represent their clients without the threat of suit from third parties compromising that representation;” and (3) “[w]ithout this ‘privity barrier' . . . clients would ...

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