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Nwachukwu v. Karl

August 26, 2002


The opinion of the court was delivered by: Ricardo M. Urbina, United States District Judge

Document Nos. 2, 3, 4, 9, 14, 15



This action arises out of a former attorney-client relationship between the parties. The pro se plaintiff alleges various misdeeds committed by his attorney, the defendant, in handling and disbursing funds awarded to the plaintiff in a lawsuit against the plaintiff's insurance company. The plaintiff asserts that he, rather than John Hancock Mutual Life Insurance Company ("John Hancock"), is the rightful owner of certain funds currently subject to an interpleader action filed by the defendant in the Superior Court for the District of Columbia. In a nutshell, the plaintiff contends that the defendant should have distributed the funds directly to the plaintiff.

Before the court are the plaintiff's motions to remand, for summary judgment, for sanctions, and for an order directing the defendant to serve the plaintiff with copies of filings by certified mail. The defendant brings motions for dismissal, for judgment on the pleadings, or for summary judgment. After consideration of the parties' submissions and the relevant law, the court denies all pending motions.


A. Factual Background

The litigation underlying the present action involved injuries caused to the plaintiff by a car accident on October 1, 1994. Compl. ¶ 1. In March 1995, the plaintiff signed a subrogation agreement with John Hancock agreeing to pay John Hancock any funds recovered in connection with the automobile accident as reimbursement for medical claims paid by John Hancock on the plaintiff's behalf. Id. ¶ 4. This agreement included a lien amount of $16,721.20 owed by the plaintiff to John Hancock for the plaintiff's medical expenses paid by John Hancock. Id. ¶ 16. In November 1996, the plaintiff's remaining medical expenses totaled $47,915.21. Id. ¶¶ 6-7. Allstate Insurance Company ("Allstate"), the insurer of the at-fault party in the October 1994 accident, offered a settlement of $46,898.91, which the plaintiff did not accept. Id. ¶ 8. In an effort to increase the settlement amount, the plaintiff retained the services of the defendant in December 1997. Id. ¶ 9. The defendant was able to assist the plaintiff in increasing the settlement amount to $47,000.00, which the plaintiff also rejected. Id. ¶ 10.

After the settlement negotiations failed, the plaintiff filed a lawsuit against Allstate. Id. ¶ 11. The jury found for the plaintiff in the amount of $45,000.00. Id. ¶ 12. The defendant retained those monies in a trust account and distributed them to the plaintiff's creditors, but otherwise did not provide further legal assistance to the plaintiff after the trial concluded. Def.'s Statement of Undisputed Mat. Facts. in Support of Def.'s Mot. for Summ. J. ("Def.'s Undisputed Mat. Facts") ¶ 6.

The plaintiff approved payment to all his creditors with the exception of John Hancock, with whom he apparently was attempting to negotiate the reduction or removal of the lien. Compl. ¶ 19. Toward that end, in September 1998, the plaintiff sent a formal request for a lien reduction to Medical Claim Services, which handles the billing for John Hancock. Id. ¶ 27. According to the plaintiff, a Medical Claim Services employee informed him that his file was closed and John Hancock would "not pursue" the lien. Id. ¶ 29. The plaintiff then attempted to commit this alleged oral agreement to writing so that the defendant would be released from his obligations as trustee to John Hancock, thereby allowing the defendant to give the remaining funds to the plaintiff. Id. ¶¶ 30-32.

On May 8, 2000, the plaintiff sent a letter to the defendant demanding that the defendant release to the plaintiff the remaining monies from the judgment, including those set aside for the John Hancock lien. Id. ¶ 33. The defendant responded that he had an ethical obligation and a "non-delegable fiduciary duty to safeguard funds where the ownership interests are claimed by both the lawyer's client and a third party." Def.'s Undisputed Mat. Facts ¶ 16. He thus refused to disburse the funds without a written waiver from John Hancock. Id. The defendant distributed what was owed to the plaintiff ($5,016.20), leaving $11,704.84 in dispute ("disputed amount"). Compl. ¶ 36. Thereafter, the defendant contacted staff counsel for John Hancock, who informed the defendant that John Hancock had not waived the plaintiff's lien. Def.'s Undisputed Mat. Facts ¶¶ 18-20, 22-24.

The plaintiff proceeded to lodge complaints against the defendant with the District of Columbia Bar ("the Bar"), and requested a hearing with its Attorney/Client Arbitration Board for assignment to him of the disputed amount. Compl. ¶¶ 37-42. The Bar determined that an arbitration hearing was not within its jurisdiction and that the defendant had not committed any ethical violations. Id. ¶¶ 38, 43. The plaintiff then filed a motion for reconsideration with the Bar counsel, who affirmed the Bar's determination. Id. ¶¶ 44-45. The plaintiff filed yet another motion for reconsideration, which the Bar denied. Id. ¶¶ 46-47.

B. Procedural Background

On October 18, 2001, on the advice of the Bar counsel, the defendant filed an interpleader complaint in the Superior Court for the District of Columbia to determine whether John Hancock or the plaintiff was the rightful owner of the disputed funds. Id. ¶ 49, Ex. L. On December 4, 2001, the defendant filed a motion to deposit the disputed funds with the clerk of that court, which that court granted on January 14, 2002. Id. ¶ 51. The defendant deposited those funds with the clerk of that court and that court discharged the defendant from further participation in the case. Id. ¶ 51, Exs. R, S.

The plaintiff filed the instant action with the Superior Court for the District of Columbia on February 12, 2002. The plaintiff alleges that the defendant abdicated his fiduciary responsibility by not playing a larger role in lowering the plaintiff's debts after the jury's decision and in failing to advise the plaintiff as to whether the plaintiff should accept or decline the settlement offered by Allstate in the amount of $47,000.00. Id. ¶¶ 58, 63. The plaintiff also contends that the defendant was negligent in failing to reduce the plaintiff's debt with John Hancock. Id. ¶¶ 67, 68. Further, the plaintiff claims that the defendant was negligent in filing the interpleader action. Id. ¶¶ 71-73. Additionally, the plaintiff claims that the defendant misrepresented himself by contacting John Hancock without the plaintiff's knowledge and approval. Id. ¶¶ 76-78. The plaintiff also alleges that the defendant intentionally misappropriated funds because the defendant commingled the disputed amount with the defendant's other funds. Id. ¶¶ 82-84. Finally, the plaintiff avers that the defendant's actions have resulted in intentional infliction of emotional distress to the plaintiff. Id. ¶¶ 87-88. The plaintiff requests that the defendant pay the plaintiff the disputed amount and alleges $5,000,000.00 in punitive damages.

On March 13, 2002, the defendant removed the action to this court by asserting diversity jurisdiction under 28 U.S.C. § 1442(a). Notice of Removal ¶¶ 6-7. With the case now removed to this court, the plaintiff filed a motion to remand the case to the Superior Court, alleging that the defendant improperly removed the case. Pl.'s Mot. to Remand at 2.

The defendant has brought motions to dismiss, for judgment on the pleadings, or for summary judgment. Def.'s Mot. for J. on Pleadings, Mot. to Dismiss, or for Summ. J. ("Def.'s Mot.") filed April 4, 2002. The defendant asserts that dismissal is proper with respect to the negligence claims because they are time-barred by the applicable statute of limitations. Def.'s Mot. at 1. The defendant further asserts that dismissal is proper because the plaintiff's complaint fails to state a claim for "intent to misappropriate funds," intentional infliction of emotional distress, and negligence in filing the interpleader action. Id.

In addition to his remand motion, the plaintiff has filed a motion for summary judgment, a motion to impose sanctions on the defendant, and a motion for an order directing the defendant to serve the plaintiff with copies of filings by certified mail. Pl.'s Mot. for Summ. J. filed April 24, 2002; Pl.'s Mot. to Impose Sanctions filed May 9, 2002; Pl.'s Praecipe *fn1 filed May 20, 2002 ("Pl.'s ...

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