the management of Lincoln. See discussion supra at 2-4. The defendant has made no real effort to dispute that the corporations were not in a position to sue Mr. Gardner without casting possible light upon their own wrongdoing. Lincoln and LinCom were not in a position to protect their own interests. Moreover, the Court notes that the defendant, as an attorney for Lincoln, was in a fiduciary relationship with the corporation, which further decreased the likelihood of Lincoln bringing suit against him.
The RTC has raised additional arguments as to why the statute of limitations does not bar the 1985 claims in this case including the applicability of the continuing tort doctrine, the discovery rule and the continuing representation rule; however, because the Court concludes that the statute of limitations is tolled under the doctrine of adverse domination, it need not consider these additional arguments.
(B) Motion to Amend Complaint
Plaintiff has moved for leave to amend its complaint to assert a legal malpractice claim. Plaintiff alleges that the defendant committed legal malpractice by entering into an unfair business arrangement in violation of his fiduciary duties and ethical obligations.
The defendant argues that the motion should be denied because he would be prejudiced by the addition of the new count, the new count is added to harass him, and because the new count fails to state a claim upon which relief may be granted. Moreover, defendant points out that the new count was proposed almost nine months after the complaint was filed.
Under Fed. R. Civ. P. 15, "leave to amend shall be freely granted when justice so requires." A motion to amend a complaint should be granted unless there is a "clear and solid justification" for denial. Monroe v. Williams, 705 F. Supp. 621, 623 (D.D.C. 1988). Denial is permitted if, for example, the amendment would result in delay or undue prejudice to the opposing party. Williamsburg Wax Museum v. Historic Figures, Inc. 810 F.2d 243, 247 (D.C. Cir. 1987). Here, while the defendant has opposed the motion, he has not demonstrated sufficient reason for this Court to deny it.
The defendant contends that the RTC unduly delayed the addition of this claim, and did so in bad faith. The defendant claims that the only reason the RTC now asserts an additional claim is to increase the pressure on the defendant to settle this case. The RTC "denies unequivocally" the defendant's contention that the delay in amending the complaint is a strategic move. Rather, the RTC states that the amendment is designed as an elaboration of the breach of fiduciary duty claim, and intended to provide the defendant with more detail of the claims he faces. The RTC explains that the claim was added after the defendant stated that he received the compensation at issue in this case pursuant to an agreement between himself and his clients. See Def.'s Response to Plaintiff's First Set of Interrogatories and Requests for Admission, Request for Admission No. 3 (Pl. Reply, Ex. A). Plaintiff contends that this information indicates that the defendant committed malpractice by making the agreement without advising his client that it was a one-sided, unfair arrangement.
Based on this explanation, it appears to the Court that the amendment is justified and bad faith has not been demonstrated. While it would have been preferable for the RTC to file its legal malpractice claim sooner, the defendant has not demonstrated that he will be prejudiced by the addition of the claim now. This case is still in the midst of discovery, and trial is not scheduled until November, 1992. The claim is similar to the breach of fiduciary duty claim; therefore the evidence necessary to defend will likely be quite similar. Moreover, the amendment should not unduly burden the Court.
The defendant also argues that the amendment should not be permitted because it is futile -- the new count could not withstand a motion to dismiss. See, e.g., Brereton v. Communications Satellite Corp, 735 F. Supp. 1085, 1089 (D.D.C. 1990), appeal dism., 925 F.2d 488 (D.C. Cir. 1991); Monroe, 705 F. Supp. at 623. The legal malpractice claim is based on Gardner's alleged violation of Disciplinary Rule 5-104(A) of the District of Columbia Code of Professional Responsibility ("Code") and Ethical Rule 1.8 of the District of Columbia Rules of Professional Conduct. The defendant contends that the claim would be dismissed because a violation of disciplinary rules does not constitute legal malpractice. Indeed, the Code explicitly refrains from defining standards for civil liability.
Yet certainly the violation of disciplinary rules does not preclude malpractice liability.
To state a claim for legal malpractice, a party must prove: (1) that there existed an attorney-client relationship; (2) that the attorney breached the duty of reasonable care; and (3) the negligence resulted in and proximately caused damage to the client. Law Offices of Jerris Leonard, P.C. v. Mideast Systems, Ltd., 111 F.R.D. 359 (D.D.C. 1986); Chase v. Gilbert, 499 A.2d 1203, 1211 (D.C. 1985); see also Knupp v. Schober, 1992 U.S. Dist. LEXIS 9937 at 3 (D.D.C. July 14, 1992). In proposed Count IV, the plaintiff alleges that the defendant, while providing legal advice to Lincoln and LinCom, negligently failed to
exercise the degree of care and skill commonly possessed and exercised by reasonable, careful, and prudent attorneys, by failing to give Old Lincoln his undivided loyalty and fidelity, and by failing to comply with the standards set forth in the applicable codes of professional conduct.
Amended Compl. P 42. The proposed amendment includes a detailed list of the specific alleged incidents of malpractice and breaches of fiduciary duty. See Amended Compl. PP 43-45. The plaintiff also claims that these alleged deficiencies proximately caused damages in the amount of $ 1.5 million. Amended Compl. PP 46-47. These allegations state a claim for legal malpractice and are sufficient to withstand a motion to dismiss. See Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957) (motion to dismiss may be granted only when the moving party has shown "beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief").
The defendant also claims that the proposed amendment is futile because it is repetitive and subject to a motion to strike pursuant to Fed. R. Civ. P. 12(f). The Court agrees that the proposed amendment could have been drafted more concisely. However, striking claims under Rule 12(f) is a drastic action and is viewed with disfavor. Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine Distributors Pty. Ltd., 647 F.2d 200, 201 (D.C. Cir. 1981); 5A C. Wright & A. Miller, Federal Practice & Procedure Civil 2d § 1380. The repetitive nature of some of the allegations in proposed Count IV does not justify the drastic action of striking the claim. Therefore, the defendant cannot base his futility argument on Rule 12(f).
The Court therefore concludes that allowing the plaintiff to amend the complaint will not prejudice the defendant or the Court and would not be futile. Therefore the Court shall grant the RTC's motion for leave to amend the complaint.
For all of the reasons previously stated herein, the Court shall grant the plaintiff's motion for partial summary judgment, and shall deny the defendant's motion for partial summary judgment. In addition, the Court shall grant the plaintiff's motion for leave to amend the complaint. An appropriate Order shall be issued on this date in accordance with this Opinion.
July 30th, 1992
CHARLES R. RICHEY
UNITED STATES DISTRICT JUDGE
EDITOR'S NOTE: The following court-provided text does not appear at this cite in 798 F. Supp. 790.
ORDER - July 30, 1992, Filed
In accordance with the Court's Opinion in the above-captioned case, filed on this date, and for the reasons stated therein, it is, by the Court, this 30 day of July, 1992,
ORDERED that the plaintiff's Motion for Partial Summary Judgment on the statute of limitations defense shall be, and hereby is, GRANTED; and it is
FURTHER ORDERED that the defendant's Motion for Partial Summary Judgment on the statute of limitations defense shall be, and hereby is, DENIED; and it is
FURTHER ORDERED that the plaintiff's Motion for Leave to Amend the Complaint shall be, and hereby is, GRANTED.
CHARLES R. RICHEY
UNITED STATES DISTRICT JUDGE