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Adams v. John M. O' Quinn & Associates, PLLC

United States District Court, N.D. Mississippi, Greenville Division

March 21, 2017

RANDY L. ADAMS; DAVID J. AMONS; FREDDIE BOLTON, JR.; WILEY BROOKS; JR., Individually and as Representative of Estate of Wiley Brooks; ESTATE OF WILEY BROOKS; CLARENCE EDWARD BRYANT, SR.; JESSIE L. CARTER, JR.; SHURMON CHAFFEE; ZADIE DYKES, Individually and as Representative of the Estate of Billy E. Dykes; ESTATE OF BILLY E. DYKES; CHARLIE HARRIS, JR.; WALTER L. McCOY; PENELOPE McCOY, Individually and as Representative of the Estate of Willie J. McCoy; ESTATE OF WILLIE J. McCOY; ANNIE PEARL NEVELS, Individually and as Representative of the Estate of Louis Nevels; ESTATE OF LOUIS NEVELS; SELMOND NORALS; RANDOLPH PERRYMAN; JEAN Y. PEYREGNE; JOHN ALEXANDER PRINE; LARRY NOBLE SEWELL, SR.; LUTHER THREET; and BERDELL WILLIS PLAINTIFFS
v.
JOHN M. O'QUINN & ASSOCIATES, PLLC d/b/a The O'Quinn Law Firm; JOHN M. O'QUINN & ASSOCIATES, L.L.P.; JOHN M. O'QUINN, P.C.; JOHN M. O'QUINN LAW FIRM, PLLC; T. GERALD TREECE, Independent Executor of the Estate of John M. O'Quinn, Deceased; RICHARD N. LAMINACK; JOE GIBSON, DANZIGER & DE LLANO, LLP; and ABEL MANJI DEFENDANTS

          MEMORANDUM OPINION

         Presently before the Court are several motions. On June 23, 2016, Defendant Richard M. Laminack ("Laminack") filed a motion to dismiss [26] for lack of personal jurisdiction. On June 24, 2016, Defendants John M. O'Quinn & Associates PLLC d/b/a The O'Quinn Law Firm, John M. O'Quinn & Associates, L.L.P., John M. O'Quinn, P.C., and John M. O'Quinn Law Firm PLLC (collectively, the "O'Quinn Firms"), as well as T. Gerald Treece, Independent Executor of the Estate of John M. O'Quinn, Deceased ("Treece"), filed a motion to dismiss the action or, in the alternative, to compel arbitration and stay the case [28], as well as a motion for a more definite statement and to dismiss fraud-based claims [30]. On June 27, 2016, Defendant Danziger & De Llano, LLP ("Danziger") filed a motion to dismiss for failure to state a claim or for a more definite statement [34]. These motions are fully briefed and ripe.[1] Finally, on July 12, 2016, Defendant Abel Manji ("Manji") filed a motion to retain Plaintiffs' claims against him with the claims against the O'Quinn Firms [54]; Plaintiffs have not filed a response to that motion, and the time for doing so has now passed. Thus, that motion is ripe, as well. Upon due consideration of all the foregoing, the Court finds that the motion to dismiss [26] for lack of personal jurisdiction must be denied; the motion to dismiss the action or, in the alternative, to compel arbitration and stay the case [28] must be granted in part and denied in part, specifically, the request to compel arbitration and stay the case must be granted, but the request to dismiss the case must be denied; the motion for a more definite statement and to dismiss fraud-based claims [30] must be denied as moot; and the motion to retain claims against Manji with the claims against the O'Quinn Firms [54] must be granted.[2]

         I. Factual and Procedural Background

         On March 14, 2016, Plaintiffs, as listed in the case caption above, filed this legal malpractice suit against the O'Quinn Firms and "related entities and persons." Pis.' State-Ct. Compl. [2] ¶ 13. On April 13, 2016, the Defendants timely removed the case to this Court on the basis of diversity of citizenship. Plaintiffs are citizens of Mississippi or Alabama; Defendants are citizens of Texas. The amount in controversy well exceeds the jurisdictional threshold, as it is undisputed that Plaintiffs seek actual, exemplary, and mental anguish damages in an amount greater than $75, 000 exclusive of interest and costs. Thus, the Court may exercise subject-matter jurisdiction in this case pursuant to 28 U.S.C. § 1332.

         Plaintiffs assert they were exposed to silica dust during their employment in various crafts, such as sandblasting. Due to this exposure, Plaintiffs maintain they were solicited by Defendants as mass tort plaintiffs in silica litigation in the early 2000s when out-of-state law firms came into Mississippi and flooded Mississippi state courts with multiple-plaintiff suits. Plaintiffs allege, inter alia, that Defendants "led clients, the judicial system, defendants in the underlying case, and opposing counsel to believe that its clients had silicosis in order to generate millions of dollars in attorneys' fees and expenses." Id. ¶ 14. According to Plaintiffs, silicosis is a disease caused by the inhalation of silica dust.

         Plaintiffs allege that the O'Quinn Firms represented approximately 3, 000 clients, who were occupationally exposed to silica-containing products and materials, and that law firms, including Danziger, solicited these Plaintiffs to enter into contracts and promised to litigate their silicosis claims against the silicosis defendants, but subsequently referred the silicosis claims to the O'Quinn Firms. It is undisputed that each named Plaintiff in the case sub judice hired the O'Quinn Firms to represent them in silica-related claims. Id. ¶ 15. It is further undisputed that Plaintiffs signed contracts with the O'Quinn Firms that "hired [the O'Quinn Firms] on a contingency fee basis and issued the [O'Quinn Firms] a Power of Attorney ... to represent them in any and all claims against the [s]ilicosis [d]efendants" ("Agreements"). Id. ¶ 17; see generally Agreements [28-1].[3]

         According to Plaintiffs, Defendants improperly billed the amounts they paid to companies for medical screening and/or referrals as expenses in their individual cases. Plaintiffs further assert that although the O'Quinn Firms reached global settlements with several of the silica manufacturers/distributors that were sued, the O'Quinn Firms failed to distribute the settlement proceeds in a timely manner and wrongfully retained portions of those proceeds for their own use. Plaintiffs aver that they were required to pay the O'Quinn Firms a percentage of their settlement proceeds to cover so-called general expenses of the O'Quinn Firms, including referral fees to other law firms and medical screening companies; office overhead and supplies; and costs associated with excessive travel, lodging, and dining. Finally, Plaintiffs allege that Defendants made multiple errors in processing settlements, including delays and lack of communication, and ultimately failed to fully investigate and assess Plaintiffs' individual claims, including ensuring that settlements were paid in accordance with the severity of Plaintiffs' medical conditions, entering into aggregate or global settlements with silica manufacturers and/or distributors and then intimidating and coercing Plaintiffs into accepting those settlements regardless of the nature and extent of their individual silica-related injuries, permitting the wrongful dismissal of claims against several silica manufacturers and/or distributors, failing to provide necessary paperwork to the courts, failing to process and/or finalize settlement agreements, and attempting to conceal wrongful behavior by sending Plaintiffs deceptive disclosure letters and by destroying and/or altering documents in their files. Plaintiffs assert claims for legal malpractice/negligence, gross negligence, breach of fiduciary duty, breach of contract, constructive fraud, fraud, negligent misrepresentation, and negligent supervision.

         II. Analysis and Discussion

         As stated above, several motions are pending before the Court. The Court addresses the motions as follows.

         A. Laminack's Motion to Dismiss for Lack of Personal Jurisdiction

         First, the Court addresses Laminack's motion to dismiss [26] for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure.

         Although Plaintiffs bear the burden of proof in this determination, they need only present prima facie evidence of personal jurisdiction. See Patterson v. Aker Sols. Inc., 826 F.3d 231, 233 (5th Cir. 2016) (citing Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002)). The Court " 'must accept [Plaintiffs'] uncontroverted allegations, and resolve in [their] favor all conflicts between the facts contained in the parties' affidavits and other documentation.' " Id. (quoting Revell, 317 F.3d at 469). " The district court is not obligated to consult only the assertions in [Plaintiffs'] complaint in determining whether a prima facie case for jurisdiction has been made. Rather, the district court may consider the contents of the record at the time of the motion-----' " See Hazim v. Schiel & Denver Book Publishers, 647 F.App'x 455, 457-58 (5th Cir. 2016) (per curiam) (quoting Paz v. Brush Engineered Materials, Inc., 445 F.3d 809, 812 (5th Cir. 2006)).

         In a personal jurisdiction determination, the Court first turns to Rule 4(k)(1)(A), which provides that a court has personal jurisdiction over any defendant who would be subject to personal jurisdiction under the long-arm statute of the state in which the Court sits. Thus, in this diversity action, the Court must conduct a two-prong analysis: first, examine whether Laminack is amenable to suit under the Mississippi long-arm statute, Mississippi Code § 13-3-57; and second, determine whether the exercise of personal jurisdiction over Laminack would comport with the Due Process Clause of the Fourteenth Amendment to the United States Constitution.[4]

         The Mississippi long-arm statute provides that a court has personal jurisdiction over

[a]ny nonresident... who shall [1] make a contract with a resident of this state to be performed in whole or in part by any party in this state, or who shall [2] commit a tort in whole or in part in this state against a resident or nonresident of this state, or who shall [3] do any business or perform any character of work or service in this state.

Miss. Code Ann. § 13-3-57. The three prongs of the statute are commonly referred to as the "contract prong, " the "tort prong, " and the "doing-business prong."

         For the court to have personal jurisdiction over a nonresident defendant pursuant to the doing-business prong, "(1) the non-resident... must purposefully do some act or consummate a transaction in Mississippi; (2) the cause of action must either arise from or be connected with the act or transaction; and (3) the assumption of jurisdiction by Mississippi must not offend traditional notions of fair play and substantial justice." Internet Doorway, Inc. v. Parks, 138 F.Supp.2d 773, 775 (S.D.Miss. 2001) (citing Gross v. Chevrolet Country, Inc., 655 So.2d 873, 877 (Miss. 1995) (citing Rittenhouse v. Mabry, 832 F.2d 1380, 1384 (5th Cir. 1987)). The Mississippi Supreme Court has stated that "the long-arm statute, by its plain terms, applies to any person or corporation performing any character of work in this state." Estate of Jones v. Phillips ex rel. Phillips, 992 So.2d 1131, 1139 (Miss. 2008); see also ITL Int'l, Inc. v. Constenla, S.A., No. 10-60892, 2012 WL 266987, at *2 (5th Cir. Jan. 31, 2012). A nonresident defendant is subject to personal jurisdiction in Mississippi under the contract prong of the Mississippi long- arm statute if the defendant entered into a contract with a Mississippi resident that is to be at least partially performed in Mississippi. Miss. Code Ann. § 13-3-57.

         If the Court is satisfied that the long-arm requirements are satisfied, the Court must determine whether personal jurisdiction over Laminack would comport with the Due Process Clause of the Fourteenth Amendment. An individual should not be subject to the binding judgment of a forum for which he has established no meaningful "contacts, ties, or relations." Int'l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Jurisdiction may be general or specific. For the forum to have general jurisdiction over the defendant, the defendant's contacts with the forum state must be systematic and continuous, and that activity must give rise to the episode-in-suit. Id. at 317, 66 S.Ct. 154; Jackson v. FIE Corp., 302 F.3d 515, 530-31 (5th Cir. 2002). When the plaintiff alleges that specific jurisdiction is proper, as Plaintiffs do in this case, the Court must determine whether the due process requirements are satisfied: (1) the defendant must have minimum contacts purposefully directed at the forum state; (2) a nexus must exist between the defendant's contacts and the plaintiffs claims; and (3) the exercise of jurisdiction over the defendant must be fair and reasonable. See McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009); Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir. 2002). The defendant must have sufficient contacts with the forum state such that it "should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); see Burger King Corp. v. Rudzewicz, 411 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The defendant must have "purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there, " and such contacts must be more than "random, fortuitous, or attenuated, or of the unilateral activity of another party or third person." Burger King, 471 U.S. at 475, 105 S.Ct. 2174 (internal quotation marks and citations omitted). Isolated or sporadic contacts are sufficient for specific jurisdiction, provided the claim arises out of or relates to these contacts. See Id. at 475 n.18, 105 S.Ct. 2174; Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006); Nuovo Pignone, 310 F.3d at 379.

         In his challenge to personal jurisdiction, Laminack, a Texas resident and citizen, argues that he does not have sufficient contacts with the State of Mississippi to permit the exercise of either general or specific in personam jurisdiction over him in this forum. Laminack argues that none of Plaintiffs' allegations against him support personal jurisdiction, because the actions were not taken in his individual or personal capacity, but were instead taken in his capacity as an employee or agent of the O'Quinn Firms. Laminack maintains that he signed the contracts with Plaintiffs on behalf of the O'Quinn Firms as their representative, but that he was not a party to the contracts with Plaintiffs; that he did not enter any contract with referral lawyers in his personal capacity or any contract with an expert or consultant in his personal capacity, signing such agreements on behalf of the O'Quinn Firms; that he did not negotiate, or fail to negotiate, settlements in his personal capacity and that his involvement in the settlements was in the course and scope of his employment with the O'Quinn Firms; and that the fiduciary shield doctrine protects him as an individual transacting business within the State of Mississippi solely as a corporate officer or employee, because Plaintiffs fail to allege or present evidence that Laminack personally benefited through any alleged abuse of the corporate privilege with the O'Quinn Firms. Laminack argues that he does not meet the doing-business prong of the long-arm statute.

         Plaintiffs cite numerous actions taken by Laminack in the silica litigation that allegedly support the exercise of personal jurisdiction by the Court. Among many other allegations of wrongdoing directed at Mississippi, Plaintiffs allege that Laminack, as a principal attorney of the O'Quinn Firms and managing partner of the firm's mass tort division, Pis.' State-Ct. Compl. [2] ¶¶ 14, 24, 62, "wrongfully retained . . . settlement proceeds [in the silicosis litigation with Plaintiffs] for [his] own use, " id. ¶ 26, and "made misrepresentations [by phone to Plaintiffs] concerning [their] settlements rather than tell[ing] [Plaintiffs] the truth and issu[ing] a disbursement, " id. ¶ 27. Plaintiffs further allege that under Laminack's direction, the O'Quinn Firms "held Plaintiffs' funds hostage in order to pay future expenses and interest to the benefit of the [O'Quinn Firms] and to the detriments of Plaintiffs, " id., and under Laminack's management, "permitted numerous charges to be billed to Silicosis General for work done in one group of state's cases that had nothing to do with the other state court litigation, " thus charging Plaintiffs "expenses for their cases that were never actually incurred for their cases, " id. ¶ 30. Plaintiffs aver that Laminack led and managed the O'Quinn Firms to "squander[ ] hundreds of thousands of dollars through frivolous conduct. . . bill[ing] its overhead as 'expenses' to [Plaintiffs]" and "unreasonably increase[] the expenses in the silicosis cases through carelessness and disregard." Id. ¶¶ 31-32. Plaintiffs further aver that at Laminack's hands the O'Quinn Firms "committed numerous errors while processing a number of the settlements with the [s]ilicosis [d]efendants" and were involved in the wrongful dismissal of many cases. Id. ¶¶ 33-38. Plaintiffs allege that Laminack is individually liable, as well as liable on behalf of the O'Quinn Firms.

         Furthermore, in Plaintiffs' response to the personal jurisdiction motion, they attach evidence supporting that Laminack was the former managing attorney of the O'Quinn Firms' mass tort docket, personally represented Plaintiffs in their underlying silica claims that were filed in Mississippi, was listed as Plaintiffs' attorney on an internal settlement memorandum, entered into contracts with Plaintiffs and Mississippi-associating counsel and experts, signed pleadings filed in Mississippi, sent thousands of letters to Plaintiffs concerning the underlying silica litigation with erroneous and fraudulent advice made the subject of the case subjudice, and took private jets to Mississippi for work done on the silica litigation and inappropriately had these expenses billed to Plaintiffs' case as expenses.

         Although Laminack claims the fiduciary shield doctrine applies and would render the exercise of personal jurisdiction over him improper, this Court finds that the allegations and evidentiary submissions Plaintiff has presented to the Court make a prima facie showing that Laminack had purposeful contacts with Mississippi and that the exercise of personal jurisdiction over Laminack would comport with the Due Process Clause of the Fourteenth Amendment.

         "[T]he fiduciary-shield doctrine . . . holds that an individual's transaction of business within the state solely as a corporate officer does not create personal jurisdiction over that individual though the state has in personam jurisdiction over the corporation." Stuart v. Spademan, 772 F.2d 1185, 1197 (5th Cir. 1985); see Gen. Retail Servs., Inc. v. Wireless Toyz Franchise, LLC, 255 F.App'x 775, 794 (5th Cir. 2007) (per curiam) (citing Siskind v. Villa Found, for Educ, Inc., 642 S.W.2d 434, 437-38 (Tex. 1982)). Although the fiduciary shield doctrine could "prohibit this [C]ourt from ascribing acts of [the O'Quinn Firms] to [Laminack], it does not prohibit [Laminack] from being held personally liable for his own tortious conduct simply because he [was an attorney in the O'Quinn Firms]." See Gen. Retail Servs., Inc., 255 F.App'x at 795. A defendant's status as an employee "does not somehow insulate [him] from jurisdiction"; instead, his "contacts with the forum State must be assessed individually." Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 276 (5th Cir. 2006) (quoting Calder v. Jones, 465 U.S. 783, 790, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) (internal quotation marks omitted)). In assessing Laminack's contacts with the State of Mississippi, the Court finds that Plaintiffs' allegations and evidence support that Laminack directed numerous employment-related activities at Mississippi and is an alleged primary participant in wrongdoing intentionally directed at Plaintiffs, many of whom are Mississippi residents. See Calder, 465 U.S. at 790, 104 S.Ct.

         1482. Plaintiffs' claims provide that Laminack engaged in attorney-client relations with them, including appearing as counsel of record on pleadings filed in Mississippi and negotiating settlements with Mississippi companies for Mississippi clients. Laminack's Mississippi-directed employment activities form the basis of Plaintiffs' claims in this case and were allegedly intended to cause economic injury ...


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