Beach TV Props. Inc. v. Solomon
Beach TV Props. Inc. v. Solomon
Opinion of the Court
I. INTRODUCTION
In 1999, Defendant Henry Solomon submitted an incomplete form to the Federal Communications Commission ("FCC") on behalf of his then-client, Plaintiff the Atlanta Channel, Inc. ("ACI"). The incomplete form resulted in ACI being denied a valuable license for one of its TV channels, a decision that was upheld on review and on reconsideration by the FCC over a decade later. ACI filed suit against Solomon for legal malpractice in 2015. In 2017, ACI added to its complaint malpractice claims against Defendants Melodie Virtue and her law firm Garvey, Schubert & Barer. P.C. (together, the "Garvey Defendants"), who took over the FCC licensing dispute from Solomon when he retired in 2010 and who ACI alleges failed to disclose that Solomon's retirement could start the limitations clock on any malpractice claims against him. In their answer to ACI's complaint, the Garvey Defendants brought a crossclaim against Solomon for equitable indemnification or contribution. Solomon now moves to dismiss that crossclaim, arguing that it is barred under D.C. law. The Court grants the motion to dismiss the crossclaim for contribution but denies the motion as to indemnification.
II. FACTUAL BACKGROUND
This Court has already discussed the factual background for this case in detail in prior opinions. See, e.g. , Beach TV Props., Inc. v. Solomon ,
ACI is a broadcast television company that operates the low power television station WTHC-LD in Atlanta. Second Am. Compl. ¶ 15, ECF No. 69. Following the passage of the Community Broadcasters Protection Act of 1999, Pub. L. No. 106-113,
In 2000, Solomon joined the law firm of Garvey Schubert Barer, P.C. Garvey Defs.' Answer 2, ECF No. 99. Melodie Virtue, a lawyer at the firm, worked with Solomon on ACI matters while he was employed at Garvey Schubert Barer. Id. at 2-3. After Solomon left the firm in 2010, Virtue took over the ACI licensing matter, reviewing the pending FCC application for review starting in early 2012 and representing ACI in its petition for reconsideration after the FCC's affirmance of the denial. Id. at 6-7. ACI contends that Virtue failed to make a number of required disclosures to ACI upon assuming responsibility for the FCC proceedings relating to the license, including warning ACI about Solomon's malpractice and the resulting conflict of interests between Solomon and the Garvey Defendants, and advising ACI to retain independent counsel. Second Am. Compl. ¶¶ 59-61. According to ACI, Virtue's work on the FCC proceedings "lulled [it] into inaction in filing its malpractice claim against ... Solomon." Id. ¶ 57.
ACI initially filed suit on October 26, 2015. See Compl., ECF No. 1. After extensive litigation and the dismissal of most of the claims in ACI's first amended complaint, see Beach TV, Props., Inc. v. Solomon , No. 15-1823,
After the Court denied their motion to dismiss counts three and four, the Garvey Defendants filed an Answer and Crossclaim against Solomon on September 21, 2018, Garvey Defs.' Answer 1. In the Crossclaim, the Garvey Defendants allege that they are entitled to "equitable indemnification, restitution, reimbursement and/or contribution in whole or in part" from Solomon because he would be unjustly enriched if the Garvey Defendants were the only ones to pay for damages substantially resulting from his malpractice. Id. at 15. Solomon filed a motion to dismiss the Crossclaim on October 12, 2018. Solomon Mot. Dismiss Crossclaim, ECF No. 102. The Garvey Defendants filed their opposition on October 25, 2018, Garvey Defs.' Mem. Opp'n, ECF No. 103, and Solomon filed his reply on November 1, 2018, Solomon *29Reply, ECF No. 104. The motion is now ripe for review.
III. LEGAL STANDARD
To prevail on a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a plaintiff need only provide a "short and plain statement of the claim," Fed. R. Civ. P. 8(a)(2), that "give[s] the defendant fair notice of what the ... claim is and the grounds upon which it rests," Erickson v. Pardus ,
Nevertheless, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal ,
IV. ANALYSIS
Solomon moves to dismiss the Garvey Defendants' crossclaim in its entirety, arguing that the Crossclaim only raises claims for contribution and indemnification, both of which are unavailable as a matter of law in this case. Solomon Mem. Supp. Mot. Dismiss 4-6, ECF No. 102-1. The Garvey Defendants retort that both claims are well-supported under D.C. law and that the motion to dismiss is premature.
*30A. Contribution
First, Solomon moves to dismiss the Garvey Defendants' contribution crossclaim because he and the Garvey Defendants were not joint tortfeasors. Solomon asserts that, assuming both parties were negligent, his alleged negligence occurred thirteen years before the Garvey Defendants' and was an independent act resulting in a separate injury to ACI. Solomon Mem. Supp. Mot. Dismiss 4-6, ECF No. 102-1. In response, the Garvey Defendants contend that, should they be found liable for malpractice in failing to make the required disclosures to ACI, they and Solomon would in fact be joint tortfeasors because the Garvey Defendants' malpractice would stem from Solomon's and ACI seeks the same judgment for the same amount of damages against the Garvey Defendants as it does against Solomon. Garvey Defs.' Mem. Opp'n 9-10. The Court is unconvinced.
The D.C. Court of Appeals has consistently held that a defendant can only obtain contribution from a codefendant if they are joint tortfeasors. "An essential prerequisite for entitlement to contribution is that the parties be joint tortfeasors in the sense that their negligence concurred in causing the harm to the injured party." District of Columbia v. Washington Hosp. Ctr. ,
And while the D.C. Court of Appeals has not squarely addressed the issue, "other jurisdictions consistently have held that attorneys sued for legal malpractice have no valid claims for contribution against the alleged original wrongdoer." Threlkeld v. Haskins Law Firm ,
Here, ACI alleges that Solomon and the Garvey Defendants caused it separate, distinct injuries. The Garvey Defendants focus on the identical money judgment sought by ACI against both sets of defendants and on the uncontested link between the injury allegedly caused by Solomon and the injury they allegedly caused. Garvey Defs.' Mem. Opp'n 9-10. But just because one alleged injury could not have occurred without the other does not mean that the injuries were caused concurrently, or that they are not independent. On one hand, ACI alleges that Solomon's malpractice resulted in the denial of a Class A license for WTHC-LD almost twenty years ago. See Second Am. Compl. ¶¶ 73-75. As a result, ACI lost out on the *31$ 25,000,000 value the Class A license would have given WTHC-LD. See
B. Indemnification
Next, Solomon moves to dismiss the Garvey Defendants' crossclaim for equitable indemnification, asserting that the Garvey Defendants were "actively negligent" in their legal malpractice and therefore cannot be indemnified. Solomon Mem. Supp. 4. The Garvey Defendants retort that active negligence does not prevent indemnification because the D.C. Court of Appeals has treated claims for indemnification on a case-by-case basis, taking into account the parties' relationship and their relative culpability as factors to consider in deciding such claims. Garvey Defs.' Mem. Opp'n 4-5. Without taking a position as to the ultimate validity of the indemnification claim, the Court agrees that the Garvey Defendants' active negligence would not, in itself, defeat their claim. The Court accordingly denies the motion to dismiss the Garvey Defendants' crossclaim for indemnification.
In his motion to dismiss, Solomon argues that "if the Garvey Defendants have any liability at all, it would arise from their own active negligence," Solomon Mem. Supp. 4, and that under D.C. law "[w]here joint tort-feasors are guilty of active negligence and their negligence concurs in causing the injury, none is entitled to indemnity,"
As the Garvey Defendants point out, the D.C. Court of Appeals has in fact applied equitable indemnification in a number of situations involving successive, "actively" negligent tortfeasors. Under the principle that equitable indemnity can be "implied out of a relationship between the parties to prevent a result which is unjust,"
*32Caglioti v. Dist. Hosp. Partners, LP ,
In his reply, Solomon changes course and argues that the Garvey Defendants' claim must fail because their opposition distinguishes between their "passive" negligence and his "active" negligence, a distinction the D.C. Court of Appeals has found without merit in recent indemnification cases. The Court is unconvinced. To be sure, the Court of Appeals has rejected the active/passive theory of indemnification. In East Penn Manufacturing. Co. v. Pineda ,
Arguably, portions of the Garvey Defendants' opposition appear to be alluding to this rejected theory. E.g. Garvey Defs.' Opp'n 8 ("[A]t a minimum[,] ... Mr. Solomon's alleged duties of disclosure and alleged breaches thereof were primary and direct, while those alleged against Ms. Virtue were, at most , conditional and secondary."). But Solomon fails to address the Garvey Defendants' remaining arguments, that their relationship with him and the relative degrees of culpability of each party in causing a loss to ACI warrants indemnification. See Garvey Defs.' Mem. Opp'n 4-5. And in any event, the only ground advanced for dismissal in Solomon's motion was that the "Garvey Defendants' active negligence bars their claim[ ]." Solomon Mem. Supp. 4. While the Court is unsure whether an indemnification claim can ultimately succeed,
V. CONCLUSION
For the foregoing reasons, Defendant Henry A. Solomon's motion to dismiss the crossclaim of Defendants Melodie A. Virtue and Garvey Schubert Barer, P.C. (ECF No. 102) is GRANTED IN PART AND DENIED IN PART . The motion to dismiss is granted as to the crossclaim for contribution but denied as to the crossclaim for indemnification. An order consistent with this Memorandum Opinion is separately and contemporaneously issued.
On a motion to dismiss for failure to state a claim, the Court accepts as true the factual allegations in the complaint and construes them liberally in the Plaintiff's favor. See, e.g. , United States v. Philip Morris, Inc. ,
The Second Amended Complaint erroneously includes a second claim against Solomon, a proposed amendment that ACI acknowledges the Court rejected in a prior opinion. See Beach TV Props. ,
In their opposition, the Garvey Defendants summarily state that they "seek indemnification, contribution and/or other relief," Garvey Defs.' Mem. Opp'n 1, but they do not otherwise challenge Solomon's assertion that the claims for "restitution" and "reimbursement" are synonyms for indemnification. The Court agrees with Solomon that, given that equitable indemnification is a form of restitution that provides for the full "reimbursement" the Garvey Defendants otherwise seek, the claims are synonymous. The Court accordingly treats the indemnification, restitution, and reimbursement claims as one below.
The Court notes that the Restatement of Torts, which the D.C. Court of Appeals has consistently relied on to establish the boundaries of indemnification, e.g. East Penn ,
Reference
- Full Case Name
- BEACH TV PROPERTIES INC. v. Henry A. SOLOMON
- Cited By
- 1 case
- Status
- Published