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holding that plaintiff did not have standing to recover damages based solely on a violation of the professional rules
Summary of this case from Miller v. Kirkland & Ellis LLP (In re IH 1, Inc.)Opinion
C.A. No. 05C-12-198 MMJ.
Submitted: October 12, 2006.
Decided: November 1, 2006.
Cathy D. Brooks-McCollum, Crystal McCollum and Jordan McCollum, Plaintiffs, Pro Se.
Jonathan L. Parshall, Esquire, Murphy, Spadaro Landon, Wilmington, Delaware, Attorneys for Defendants Kenneth Shareef, Renford Brevett, Maudy Melville, Valerie Longhurst, Mark Martel and Ruth Visvardis.
Rick S. Miller, Esquire, Ferry, Joseph Pearce, P.A., Wilmington, Delaware.
MEMORANDUM OPINION
PROCEDURAL CONTEXT
Plaintiff Cathy Brooks-McCollum is a former officer and director of the Emerald Ridge Service Corporation. Following a vote by the Corporation's Board of Directors to remove Plaintiff as an officer, Plaintiff filed a complaint in the Court of Chancery on January 30, 2004. By Letter Opinion dated July 29, 2004, the Court of Chancery denied Plaintiff's Motion to Compel Indemnification. Plaintiff's appeals of the Court of Chancery's decision to the Delaware Supreme Court were denied on September 30, 2004. The Supreme Court held:
The Court found that the Motion to Compel Indemnification should have been classified as a request for advancement. Brooks-McCollum v. Emerald Ridge Service Corp., 2004 WL 1752852 (Del.Ch.).
Ordinarily, this Court would await action by the trial court on a petitioner's application to certify an interlocutory appeal. We do not find it necessary in this case, however, because we find it apparent that Brooks-McCollum's application fails on its face to satisfy the procedural or substantive requirements of Supreme Court Rule 42(b). Accordingly, in the exercise of our sound discretion, we have determined that the application should be refused.
Brooks-McCollum v. Shareef, 860 A.2d 809 (Del. 2004); Brooks-McCollum v. Shareef, 871 A.2d 1127 (Del. 2004).
In response to the Court of Chancery's opinion, Plaintiff filed an action in the United States District Court for the District of Delaware against the State of Delaware, the Court of Chancery and the presiding Vice Chancellor. Noting that "Plaintiff Cathy Brooks-McCollum has filed at least eight actions in four different Delaware State and Federal courts on her underlying grievance against the Emerald Ridge Service Corporation and its board of directors," the District Court dismissed the case for lack of subject matter jurisdiction.
Brooks-McCollum v. State of Delaware, 2005 WL 1949674 (D. Del.).
Plaintiff subsequently filed a complaint in this Court. This Court considered all submissions of the parties, including Plaintiff's letter stating that she would not be filing an amended complaint, and dismissed that action with prejudice by Orders dated June 16, 2004 and August 19, 2004. The Delaware Supreme Court affirmed this Court's dismissal, finding that Plaintiff's appeal was without merit.
On June 29, 2004, Plaintiff filed another action involving the same nucleus of operative fact in the United States District Court for the District of Delaware. The District Court dismissed the complaint for lack of federal jurisdiction. The District Court held: "Finally, the Plaintiff's attempt to assert claims under the First, Fifth, and Fourteenth Amendment [sic] do not authorize federal question jurisdiction because those Amendments apply only to state action, not action by private individuals or entities." The District Court's dismissal was affirmed by the United States Court of Appeals for the Third Circuit.
See Avallone v. Wilmington Medical Center, Inc., 553 F. Supp. 931 (D.Del. 1982).
Brooks-McCollum v. Emerald Ridge Service Corporation, No. 05-1264 (3d Cir., Dec. 8, 2005).
On December 22, 2005, Plaintiff Cathy Brooks-McCollum filed the instant action in the Superior Court. Defendants Edward F. Kafader, Esquire and the lawfirm of Ferry, Joseph Pearce, P.A. have moved for dismissal pursuant to Superior Court Civil Rule 12(b)(6). Plaintiff's allegations against the moving defendants fall into four categories: (1) violation of the Delaware Lawyers' Rules of Professional Conduct; (2) violation of Plaintiff's rights guaranteed to her under the First, Ninth and Fourteenth Amendments to the United States Constitution; (3) civil conspiracy; and (4) what appears to be slander by proxy on the grounds that the moving defendants' clients refused to remove allegedly slanderous material from the website of Emerald Ridge Service Corporation.
Defendants Kenneth Shareef, Renford Brevett, Maudy Melville, Valerie Longhurst, Mark Martell and Ruth Visvardis have moved to stay the proceedings until the pending action in the Court of Chancery is resolved.
ANALYSIS Delaware Lawyers' Rules of Professional Conduct
The Complaint alleges that Defendants Edward F. Kafader, Esquire and the lawfirm of Ferry, Joseph Pearce, P.A. breached ethical duties established by the Delaware Lawyers' Rules of Professional Conduct ("DLRPC"). The DLRPC regulate the actions of attorneys and do not apply to law firms. Further, assuming the facts in the light most favorable to the non-moving party, even if there were violations of the DLRPC, Plaintiff does not have standing to recover damages. The Preamble: A lawyer's responsibilities, provides in pertinent part:
Violation of a Rule should not give rise to a cause of action or should it create any presumption that a legal duty has been breached. The Rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability. Furthermore, the purpose of the Rules can be subverted when they are invoked by opposing parties as procedural weapons. The fact that a Rule is a just basis for a lawyer's self-assessment, or for sanctioning a lawyer under the administration of a disciplinary authority, does not imply that an antagonist in a collateral proceeding or transaction has standing to seek enforcement of the Rule. Accordingly, nothing in the Rules should be deemed to augment any substantive legal duty of lawyers or the extra-disciplinary consequences of violating such a duty.
There is no basis for enforcement of a lawyer's substantive legal duties outside the framework of disciplinary proceedings. It is a fundamental constitutional principle that the Delaware Supreme Court has sole and exclusive jurisdiction over all matters affecting governance of members of the Delaware Bar. First, Ninth and Fourteenth Amendments to the United States Constitution
In re Infotechnology, Inc., Shareholder Litigation, 582 A.2d 215, 219-220 (Del. 1990).
In one of the actions filed by Plaintiff in the District Court, Plaintiff similarly claimed that the defendants had violated rights guaranteed her under the First, Fifth and Fourteenth Amendments to the United States Constitution. The District Court found these allegations to be without merit "because those Amendments apply only to state action, not action by private individuals or entities." The United States Supreme Court repeatedly has "insisted that the conduct allegedly causing the deprivation of a federal right be fairly attributable to the State." In affirming the District Court, the United States Court of Appeals for the Third Circuit held: "The defendants in this case, the board and individual directors of a private corporation, and their attorneys, do not in any way qualify as 'state actors'."
See Avallone v. Wilmington Medical Center, Inc., 553 F. Supp. 931 (D.Del. 1982).
Lugar v. Edmonson Oil Co., 457 U.S. 922, 937 (1982).
Brooks-McCollum v. Emerald Ridge Service Corporation, No. 05-1264 (3d Cir., Dec. 8, 2005).
The moving defendants are private parties engaged in the private practice of law. In order to maintain a cause of action on the basis of violation of Constitutional rights, a plaintiff must demonstrate: (1) that the deprivation was caused by "the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State or by a person for whom the State is responsible;" and (2) that the private party "acted together with or . . . obtained significant aid from State officials" or engaged in conduct "otherwise chargeable to the State." Thus,
Wyatt v. Cole, 504 U.S. 158, 160-62 (1992).
[T]he party charged with the deprivation must be a person who may fairly be said to be a state actor. This may be because he is a state official, because he has acted together with or has obtained significant aid from state officials, or because of his conduct is otherwise chargeable to the State.
Id.
Plaintiff has not alleged any facts upon which the Court could find that Kafader or his lawfirm acted under color of state law.
Additionally, such claims must be made pursuant to the Civil Rights Act of 1971, as codified at 42 U.S.C. § 1983. Plaintiff has failed to do so.
42 U.S.C. § 1983 ("Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought against a judicial officer for an act or omission taken in such officer's judicial capacity, injunctive relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable. For the purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia.").
Civil Conspiracy
Plaintiff has asserted that the moving defendants "conspired to cover up their illegal activities and all parties are aware of the violations committed by the other." A civil conspiracy is defined in Delaware as the combination of two or more persons or entities either for an unlawful purpose, or for the accomplishment of a lawful purpose by unlawful means, resulting in damage. Civil conspiracy, standing alone, is not an independent cause of action. There must be some underlying actionable tort by each individual defendant in order to obtain recovery on a civil conspiracy theory. It is not the conspiracy itself, but rather the underlying wrong that must be actionable, even without the alleged conspiracy.
Anderson v. Airco, Inc., 2004 WL 2827887, at *2-3 (Del.Super.); Connolly v. Labowitz, 519 A.2d 138, 143 (Del.Super. 1986); Nutt v. A.C. S. Co., Inc., 517 A.2d 690, 694 (Del.Super. 1986).
Plaintiff's complaint fails to specifically allege any independent torts committed by the moving defendants. The conspiracy allegations appear to be based upon assumptions of conspiratorial conduct. Such generalized allegations are too amorphous to constitute a cognizable claim for civil conspiracy.
Slander by Proxy
As a threshold matter, Delaware courts do not look with favor upon suits for libel or slander. It does not appear to be disputed that neither of the moving defendants authored any of the allegedly slanderous information. Instead, Plaintiff relies on a letter, written by Kafader, indicating that Kafader's clients would not remove any purportedly-slanderous material from the website. Plaintiff has failed to outline any instance in which the moving defendants engaged in conduct that could be construed as slanderous.
Danias v. Fakis, 261 A.2d 529, 532 (Del.Super. 1969).
Defendants' Motion to Stay
Defendants Kenneth Shareef, Renford Brevett, Maudy Melville, Valerie Longhurst, Mark Martell and Ruth Visvardis have moved to stay the proceedings until the pending action in the Court of Chancery is resolved. The relevant Court of Chancery action was filed on January 30, 2004. The instant Superior Court complaint was filed almost two years later, on December 22, 2005.
The allegations in the Chancery Court action are largely duplicative of those in this Superior Court case. The underlying issues involve corporate governance and Plaintiff's entitlement to indemnification of attorneys' fees. The Court of Chancery has exclusive jurisdiction over the dispositive issues.
8 Del. C. § 225 (contested election of directors; proceedings to determine validity); 8 Del. C. § 145(k) (advancement of expenses or indemnification).
To the extent Plaintiff's other claims are purely legal, the Court of Chancery has concurrent jurisdiction. It has long been the rule in Delaware that when the Superior Court and the Court of Chancery have concurrent jurisdiction, the tribunal which first acquires jurisdiction ordinarily will proceed to a final disposition of the case. "The spirit of this ruling harmonizes with the general rule that where one court has assumed jurisdiction of a subject matter, other courts on principles of comity between courts will decline to interfere." THEREFORE, the Court having found that Plaintiff has failed to state any claim upon which relief may be granted against defendants Edward F. Kafader and Ferry, Joseph Pearce, P.A., the Motion for Dismissal pursuant to Superior Court Civil Rule 12(b)(6) of defendants Edward F. Kafader and Ferry, Joseph Pearce, P.A. is hereby GRANTED. All claims in this action against Edward F. Kafader and Ferry, Joseph Pearce, P.A. are hereby DISMISSED WITH PREJUDICE.
Wilmington Trust Co. v. Barry, 397 A.2d 135, 137 (Del.Super. 1979).
DuPont v. DuPont, 83 A.2d 105, 107 (Del.Super. 1951).
Flaherty v. Industrial Trust Co., 178 A.2d 586, 587 (Del.Ch. 1935).
The Court having found that the pending action in the Court of Chancery filed by Plaintiff was first-filed and involves dispositive issues over which the Court of Chancery has exclusive jurisdiction, and the Court of Chancery has concurrent jurisdiction over any purely legal issues, the Motion to Stay of Defendants Kenneth Shareef, Renford Brevett, Maudy Melville, Valerie Longhurst, Mark Martell and Ruth Visvardis is hereby GRANTED. This Superior Court action is hereby STAYED until final resolution of Brooks-McCollum v. Emerald Ridge Service Corporation, Civil Action No. 147-N.
IT IS SO ORDERED.