Danziger v. Morgan

24 F.4th 491
CourtCourt of Appeals for the Fifth Circuit
DecidedJanuary 27, 2022
Docket21-20186
StatusPublished
Cited by35 cases

This text of 24 F.4th 491 (Danziger v. Morgan) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Danziger v. Morgan, 24 F.4th 491 (5th Cir. 2022).

Opinion

Case: 21-20186 Document: 00516182633 Page: 1 Date Filed: 01/27/2022

United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

FILED January 27, 2022 No. 21-20186 Lyle W. Cayce Clerk Danziger & De Llano, L.L.P.,

Plaintiff—Appellant,

versus

Morgan Verkamp, L.L.C.; Frederick M. Morgan, Jr., Esquire; Jennifer Verkamp, Esquire,

Defendants—Appellees.

Appeal from the United States District Court for the Southern District of Texas USDC No. 4:20-CV-144

Before Davis, Higginson, and Engelhardt, Circuit Judges. Stephen A. Higginson, Circuit Judge: Danziger & De Llano, LLP, a Texas resident, sued Morgan Verkamp, LLC, and two of its members, all non-residents of Texas. The Texas-based district court granted the defendants’ motion to dismiss for lack of personal jurisdiction. We AFFIRM. I. On January 15, 2020, Danziger & De Llano, LLP, (“Danziger”) filed a complaint in the United States District Court for the Southern District of Case: 21-20186 Document: 00516182633 Page: 2 Date Filed: 01/27/2022

No. 21-20186

Texas against Morgan Verkamp, LLC, and two of its members, Frederick M. Morgan, Jr., and Jennifer Verkamp (collectively “Morgan Verkamp”). 1 The complaint, which raises claims of fraud, unjust enrichment, tortious interference with prospective contractual relations, and breach of contract, alleges the following relevant facts. Danziger is a Texas-based law firm. Frederick Morgan and Jennifer Verkamp are attorneys residing in Ohio, and Morgan Verkamp, LLC, is an Ohio-based law firm. In 2006, Danziger referred two qui tam matters to Morgan Verkamp. The parties agreed to split the attorneys’ fees in both cases, with 33 percent going to Morgan Verkamp, 33 percent to Danziger, and the remaining 34 percent divided in proportion to the hours each firm worked on the case. The following year, Danziger referred a potential qui tam relator named Michael Epp to Morgan Verkamp. 2 The parties agreed to split the fees from the Epp matter in the same manner as the previous cases. Danziger stopped hearing from Epp in January 2008. However, Danziger and Morgan Verkamp continued to work together on the other two qui tam matters. In January 2010, Danziger asked Morgan Verkamp if a recently publicized qui tam settlement was related to the Epp case, and Morgan Verkamp replied that it was not. Shortly thereafter, Morgan Verkamp emailed a fee agreement to Epp. Danziger was not included on that

1 Danziger had previously sued Morgan Verkamp in Pennsylvania, but the Third Circuit determined that Pennsylvania courts lacked personal jurisdiction over Morgan Verkamp. See Danziger & De Llano, LLP v. Morgan Verkamp, LLC, 948 F.3d 124 (3d Cir. 2020). 2 Though Danziger’s complaint makes no allegations regarding Epp’s residence, Morgan Verkamp asserts that “Mr. Epp is a German national who lived in Dubai . . . and Thailand” during the relevant time periods. Danziger does not challenge this statement, and the district court accepted it. Further, there is evidence in the record supporting this assertion. For purposes of this appeal, the important fact is that Danziger does not allege, and we have no reason to infer, that Epp had any connection to Texas other than Danziger.

2 Case: 21-20186 Document: 00516182633 Page: 3 Date Filed: 01/27/2022

email, though Morgan Verkamp assured Epp that Danziger would be “reasonably compensated.” In March 2010, Morgan Verkamp filed suit on Epp’s behalf in a Pennsylvania federal court. Morgan Verkamp never informed Danziger that it was representing Epp. In 2016, while investigating a lawsuit against Morgan Verkamp related to one of the other qui tam cases that the parties had worked on together, 3 Danziger learned that Morgan Verkamp had received over $5 million in attorneys’ fees as a result of its representation of Epp. Danziger argues that Morgan Verkamp owes it $2,133,333, in accordance with the firms’ alleged fee-sharing agreement. After Danziger filed this complaint, Morgan Verkamp moved to dismiss the case for both lack of personal jurisdiction and failure to state a claim. The district court concluded that dismissal was appropriate on personal jurisdiction grounds and accordingly granted the motion. Danziger appealed. II. “[O]n a motion to dismiss for lack of jurisdiction, uncontroverted allegations in the plaintiff’s complaint must be taken as true.” Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990). For purposes of this appeal, Morgan Verkamp does not dispute Danziger’s factual allegations. “A district court’s dismissal of a suit for lack of personal jurisdiction where the facts are not disputed is a question of law, which is reviewed de novo.” Herman v. Cataphora, Inc., 730 F.3d 460, 464 (5th Cir. 2013). “The party invoking the court’s jurisdiction bears the burden of establishing that a defendant has the

3 The two qui tam matters that Danziger initially referred to Morgan Verkamp involved relators named Vanderslice and Galmines. Although the two firms split the fees from the Vanderslice matter in accordance with their arrangement, Morgan Verkamp initially declined to pay Danziger for its work on the Galmines matter, citing ethical concerns. Danziger filed suit, and the parties eventually settled.

3 Case: 21-20186 Document: 00516182633 Page: 4 Date Filed: 01/27/2022

requisite minimum contacts with the forum state to justify the court’s jurisdiction.” Id. “Where, as here, the court rules on a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, that burden requires only that the nonmovant make a prima facie showing.” Id. Danziger does not allege that any of the defendants are residents of Texas. “A nonresident defendant is subject to personal jurisdiction in a federal diversity suit to the extent permitted by the laws of the forum state and considerations of constitutional due process.” Command-Aire Corp. v. Ontario Mech. Sales & Serv. Inc., 963 F.2d 90, 93 (5th Cir. 1992). “Because the Texas long-arm statute extends to the limits of federal due process, the two-step inquiry collapses into one federal due process analysis.” Sangha v. Navig8 ShipManagement Priv. Ltd., 882 F.3d 96, 101 (5th Cir. 2018) (citation omitted). “Due process requires that the defendant have ‘minimum contacts’ with the forum state (i.e., that the defendant has purposely availed himself of the privilege of conducting activities within the forum state) and that exercising jurisdiction is consistent with ‘traditional notions of fair play and substantial justice.’” Id. (citation omitted). Because Danziger is “bringing multiple claims that arise out of different forum contacts of the defendant,” it “must establish specific jurisdiction for each claim.” Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 274 (5th Cir. 2006). III. Danziger asserts three intentional tort claims against Morgan Verkamp: fraud, unjust enrichment, and tortious interference with prospective contractual relations. To establish personal jurisdiction in intentional tort cases, it is “insufficient to rely on a defendant’s ‘random, fortuitous, or attenuated contacts’ or on the ‘unilateral activity’ of a plaintiff.

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24 F.4th 491, Counsel Stack Legal Research, https://law.counselstack.com/opinion/danziger-v-morgan-ca5-2022.