Winston & Strawn, LLP v. Doley

• Court: District Court, District of Columbia
• Decided: September 17, 2009
• Docket: Civil Action No. 2008-0144
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ____________________________________ ) WINSTON & STRAWN, LLP, ) ) Plaintiff, ) ) v. ) Civil Action No. 08-144 (RBW) ) HAROLD E. DOLEY ) and DOLEY SECURITIES, INC., ) ) Defendants. ) ____________________________________)

MEMORANDUM OPINION

Winston & Strawn, LLP, the plaintiff in this civil lawsuit, seeks $84,412.19 in damages

from Harold E. Doley and Doley Securities, Inc., Complaint at 1, for alleged breach of contract

in the form of non-payment of legal fees allegedly owed to the plaintiff, id. ¶¶ 6–18. On June 26,

2009, the Court held at the conclusion of a hearing on the merits of a motion for summary

judgment filed by the plaintiff that summary judgment in favor of the plaintiff was appropriate.

The Court issued an order to that effect on June 29, 2009. Currently before the Court is the

defendants’ motion for reconsideration of the Court’s oral ruling and subsequent order granting

summary judgment in favor of the plaintiff pursuant to Federal Rule of Civil Procedure 59(e).

Motion of the Defendant[s] Harold E. Doley and Doley Securities, Inc. to Reconsider Order

Granting Plaintiff’s Motion for Summary Judgment (the “Defs.’ Mot.”) at 1. After carefully

considering the defendants’ motion and all memoranda of law and exhibits concerning that motion, 1 the Court concludes that it must deny the defendants’ motion for the reasons that

follow.

“As this Court has noted in the past, motions for reconsideration under Rule 59(e) are

disfavored and should be granted only under extraordinary circumstances.” N.Y.C. Apparel

F.Z.E. v. U.S. Customs and Border Protection Bureau, 618 F. Supp. 2d 75, 76 (D.D.C. 2009)

(Walton, J.) (internal citation and quotation marks omitted). Indeed, a motion of this sort “need

not be granted unless the [Court] finds that there is an intervening change of controlling law, the

availability of new evidence, or the need to correct a clear error or prevent manifest injustice.”

Messina v. Krakower, 439 F.3d 755, 758 (D.C. Cir. 2006) (internal citation and quotation marks

omitted). The plaintiff does not contend that there has been a “change of controlling law” since

the Court denied its motion for attorney’s fees, that there is any “new evidence” that merits the

Court’s attention, or that some form of “manifest injustice” will result from the Court’s order.

Thus, the only possible basis for reconsideration of the Court’s order granting summary

judgment in favor of the plaintiff would be a “clear error” in the legal reasoning leading to the

entry of the order.

The defendants argue that the Court clearly erred in granting summary judgment in favor

of the plaintiff because (1) there is a genuine issue of material fact as to whether the defendants

agreed to the range of rates set forth in the engagement letter provided by the plaintiff and signed

by the defendants, Defs.’ Mot. at 1–2; Defs.’ Mem. at 6–7, (2) the plaintiff failed to deduct

$10,000 from its final bill to reflect the retainer paid by the defendants, Defs.’ Mot. at 2, and (3)

1 In addition to the plaintiff’s complaint as well as all documents relating to its motion for summary judgment, the Court considered the following documents in reaching this decision: (1) the Memorandum of Points and Authorities in Support of the Motion of the Defendant[s] Harold E. Doley and Doley Securities, Inc. to Reconsider Its Order for Summary Judgment (the “Defs.’ Mem.”) and (2) the Plaintiff’s Opposition to Defendants’ Motion to Reconsider (the “Pl.’s Opp’n”). The plaintiff has also filed a separate motion to compel responses to post-judgment interrogatories and requests for production served on the defendants, which the Court will address separately.

2 this case should have been referred to the District of Columbia Bar for mandatory arbitration

notwithstanding the Court’s prior determination that such a defense had been waived by the

defendants, id. at 3. The plaintiff contests each of these assertions. See Pl.’s Opp’n at 2–3

(arguing that Doley’s sworn statement in a declaration that the plaintiff agreed to restrict its rates

to the lower end of the range for each category of employees constitutes inadmissible parol

evidence in light of the executed engagement letter); id. at 3 (contending that “the $10,000

retainer was applied to [the d]efendants’ bills and subtracted from the total that [the d]efendants

owe”); id. at 3–4 (asserting that the defendants’ arguments concerning mandatory arbitration are

untimely).

Each of the issues raised by the defendants in their motion for reconsideration has already

been addressed by this Court. At the hearing on the plaintiff’s motion for summary judgment

held on June 26, the Court explained that Harold Doley’s subjective understanding that the

plaintiff would limit its fees to the lower end of the ranges stated in its engagement letter was

irrelevant in light of the fact that the ranges are clearly set forth without such restrictions in the

engagement letter itself. See Giotis v. Lampkin, 145 A.2d 779, 781 (D.C. 1958) (“[W]hen the

parties to a contract have reduced their entire agreement to writing, the court will disregard and

treat as legally inoperative parol evidence of [] prior negotiations and oral agreements.”). The

Court also rejected the defendants’ arguments regarding the plaintiff’s alleged failure to credit

their retainer based upon the plaintiff’s uncontroverted evidence, which reflected a $10,000

deduction in the plaintiff’s legal fees due to the retainer. See Plaintiff’s Statement of Material

Facts As to Which There Exists No Genuine Issue for Trial, Ex. A (Declaration of Thomas M.

Buchanan, Esq.), at Attachment 4 (Statement of Account dated Jan. 16, 2008) (reflecting the

3 application of a $10,000 credit to the amount of legal fees incurred by the plaintiff delineated in

the invoice dated June 28, 2007).

The defendants’ arguments regarding the need for arbitration have also been presented to

the Court before in the context of a motion filed by the defendants to stay this case pending

arbitration before the District of Columbia bar. See Motion to Stay Proceedings to Allow

Arbitration of Fee Dispute Before the Attorney[-]Client Arbitration Board As Well As

Defendant[s’] Prosecution of Other Gr[i]evances at 1–2 (making this argument). The argument

arises from Rule XIII(a) of the Rules Governing the District of Columbia Bar, which provides in

pertinent part:

An attorney subject to the disciplinary jurisdiction of [the District of Columbia Court of Appeals] shall be deemed to have agreed to arbitrate disputes over fees for legal services and disbursements related thereto when such arbitration is requested by a present or former client, if such client was a resident of the District of Columbia when the services of the attorney were engaged, or if a substantial portion of the services were performed by the attorney in the District of Columbia, or if the services included representation before a District of Columbia court or a District of Columbia government agency.

The Court has never questioned the legitimacy of this rule, which has been recognized as

a valid basis to demand arbitration by the District of Columbia Court of Appeals. See Schwartz

v. Chow, 867 A.2d 230, 232 n.7 (D.C. 2005) (recognizing the validity and applicability of the

rule). However, as the Court explained in rejecting the defendants’ request for a stay based upon

this rule, “[t]he right to arbitration, like any contract right, can be waived,” Nat’l Found. for

Cancer Research v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 774 (D.C. Cir. 1987), including

“by acting inconsistently with the arbitration right,” Khan v. Parsons Global Servs., Ltd., 521

F.3d 421, 425 (D.C. Cir. 2008) (internal citation and quotation marks omitted). “One example of

4 such conduct is active participation in a lawsuit.” Id. (internal citation and quotation marks

omitted).

Although it recognized some differences between the facts in Khan and the situation

presented in this case, the Court held at the hearing on the defendants’ motion to stay, and

concludes again today, that Khan controls the disposition of the defendants’ arbitration request.

In that case, the plaintiffs, Azhar Ali Khan and Asma Azhar Khan, filed suit against Azhar Ali

Khan’s former employer and its agents (collectively “Parsons”) for negligence and intentional

infliction of emotional distress in the District of Columbia Superior Court. Id. at 423–24.

Parsons removed the case to this Court and filed a motion to dismiss or for summary judgment or

to compel arbitration. Id. at 424. Another member of this Court granted summary judgment in

favor of Parsons, but the District of Columbia Circuit reversed that decision. Id. On remand,

Parsons filed a motion to compel arbitration, which was eventually granted by the member of

this Court assigned to the case. Id. The Khans appealed this ruling as well, arguing that Parsons

had waived its right to arbitration under its employment agreement with Azhar Ali Khan. Id. at

424–25.

Once again, the District of Columbia Circuit reversed this Court’s ruling, finding “no

ambiguity concerning Parsons’ involvement in litigation on the merits.” Id. at 426. In reaching

this decision, the court explicitly rejected the argument advanced by Parsons that it had not

waived its right to arbitration because “it did not move for discovery, nor file an answer asserting

affirmative defenses.” Id. The court reasoned that Parsons’ request for summary judgment was

inconsistent with the pursuit of any arbitration remedy because “[a] summary judgment motion

by definition ‘goes to the merits of the case.’” Id. (quoting 10A Charles A. Wright, Arthur R.

Miller & Mary K. Kane, Federal Practice and Procedure § 2712 (3d ed. 2007)). Moreover, the

5 circuit court “[did] not find probative Parsons’ characterization of its motion as one for dismissal

of the complaint, or, in the alternative, for summary judgment” because, from its perspective,

“where . . . a party moves for summary judgment through a motion including or referring to

‘matters outside the pleading,’ . . . that party has made a decision to take advantage of the

judicial system and should not be able thereafter to seek compelled arbitration.” Id. at 427

(quoting Fed. R. Civ. P. 12(d)). As the court explained, “[a] less rigorous approach to summary

judgment based on materials outside the pleadings would encourage parties to attempt repeat

litigation of merits issues not resolved to their satisfaction, undermining the policy that

arbitration may not be used as a strategy to manipulate the legal process.” Id. (internal citation

and quotation marks omitted).

At first blush, Khan would appear to be inapplicable to this case because the defendants

in this case, unlike the defendant in Khan, never requested summary judgment. However, the

basis for the defendants’ motion (at least insofar as the defendants requested dismissal of the

plaintiff’s complaint) was not some defect in the plaintiffs’ pleadings, but rather that the

engagement letter signed by the defendants and the plaintiff was void for vagueness.

Memorandum of Points and Authorities in Support of the Motion of the Defendant[s] Harold E.

Doley and Doley Securities, Inc. to Dismiss the Complaint[] or[,] in the Alternative, for a More

Definite Statement at 5–6. Indeed, the defendants referred to numerous facts outside the

plaintiff’s complaint in their reply memorandum in support of their motion to dismiss or for a

more definite statement, even going so far as to attach exhibits in support of their reply. See

generally Supplemental Memorandum to the Defendant’s Motion to Dismiss or for a More

Definite Statement.

6 In requesting dismissal of the plaintiff’s complaint based on the merits of the plaintiff’s

breach of contract claim (as opposed to a determination of the sufficiency of the plaintiff’s

allegations), the defendants “made a decision to take advantage of the judicial system,” just like

the defendant in Khan. Khan, 521 F.3d at 427. Compelling arbitration under such circumstances

would have given rise to the same problem identified by the court in Khan: namely, allowing the

party seeking arbitration to “indulg[e] in a second bite at the very questions presented to the

court for disposition.” Id. (internal citation and quotation marks omitted). Thus, the Court

correctly followed Khan by denying the defendants’ motion to stay because the defendants,

through their course of conduct in this case, waived any right to arbitration accorded to them by

Rule XIII of the Rules Governing the District of Columbia Bar.

“[A] Rule 59(e) motion is not a second opportunity to present argument upon which the

Court has already ruled, nor is it a means to bring before the Court theories or arguments that

could have been advanced earlier.” Lightfoot v. District of Columbia, 355 F. Supp. 2d 414, 421

(D.D.C. 2005) (internal citation and quotation marks omitted). The defendants’ motion for

reconsideration is replete with such arguments, none of which are any more persuasive than they

were when the Court rejected them the first time around. Accordingly, the Court will deny the

defendants’ motion for reconsideration under Rule 59(e).

SO ORDERED this 17th day of September, 2009. 2

REGGIE B. WALTON United States District Judge

2 An order will be entered contemporaneously with this memorandum opinion denying the defendants’ motion for reconsideration.