The opinion of the court was delivered by: RICARDO URBINA, District Judge
GRANTING IN PART AND DENYING IN PART DEFENDANT MICHAELSON'SMOTION
TO DISMISS; DENYING THE PLAINTIFF'S MOTIONS FOR SANCTIONS; DENYING
THE PLAINTIFF'S MOTION TO STRIKE DEFENDANT
MICHAELSON'SRESPONSEDOCUMENT; DENYING THE PLAINTIFF'S MOTION TO
STRIKE THE NOTICE OF AUTOMATIC STAY; GRANTING THE DEFENDANTS'
MOTION TO STAY; AND DENYING ALL REMAINING MOTIONS AS MOOT
The plaintiff brings this eight count complaint against Deanna
Albers, Raymond Albers, II, Lloyd Michaelson, and Does 1 through
10 (collectively, "the defendants") alleging, inter alia,
breach of contract, anticipatory breach of contract, fraud and
deceit, common law conspiracy to commit fraud and deceit,
negligent misrepresentation, tortious interference with contract,
and conspiracy to commit tortious interference with contract. The
parties bombarded the court with a multitude of motions before
even sufficiently addressing the subject-matter jurisdiction of
this court to hear any of their sundry claims. Currently pending
before the court are the defendants' notices of automatic stay,
which the court treats as a collective motion for stay; the
plaintiff's motion to strike the defendants notices of automatic
stay ("plaintiff's motion to strike stay"); defendant Michaelson's motion to dismiss; the plaintiff's motion
for sanctions; defendant Michaelson's motion to continue the
summary judgment hearing ("defendant Michaelson's motion to
continue"); the plaintiff's motion to quash notice of deposition
by defendant Michaelson ("plaintiff's motion to quash"); the
plaintiff's second motion for sanctions; and the plaintiff's
motion to strike the defendant's response to the court's June 18,
2004 order ("plaintiff's motion to strike"). Before ruling on the
pending motions, the court takes a moment to review the somewhat
tangled procedural posture of this case.
The court faces a contractual dispute between two parties, each
tugging for jurisdiction either in California or in the
District of Columbia. With a suit filed in this court and
arbitration proceedings commencing in California, the parties
have refused to play in the same judicial ballpark. Instead, they
have engaged in Rambo-style litigation tactics, each arguing for
proceedings to commence in his respective venue, and bombarded
the court with a series of motions, including oppositions to
motions that do not exist and multiple oppositions to a single
motion. The court has ruled only on a motion to seal documents
and a motion for extension of time. After wading through the
flood of submissions offered by the parties, the court denies
defendant Michaelson's motion to dismiss for lack of subject
matter jurisdiction, but grants his motion for lack of personal
jurisdiction; denies both of the plaintiff's motions for
sanctions; denies the plaintiff's motion to strike the
defendants' notices of automatic stay; denies the plaintiff's
motion to strike defendant Michaelson's response document; grants
the defendants Albers' motion to stay; and denies all remaining
motions as moot. Moreover, the court dismisses defendant
Michaelson from this action and stays all proceedings pending
arbitration in California. By providing the parties with a single forum for debate, that
is, arbitration in California, the court hopes that the parties
will resolve at least some of their issues before returning to
this jurisdiction. The parties are required to jointly notify the
court of the results of the arbitration in California.
Furthermore, should the parties return to this court, the parties
are on notice that the first matters of inquiry will again be the
subject matter jurisdiction of this court and the real parties in
interest. The court now addresses the convoluted background of
Timothy D. Naegele brings this action against Deanna J. Albers
("D. Albers"), Raymond H. Albers II ("R. Albers"), Lloyd J.
Michaelson, and John Does #1-10 to recover fees and damages for
legal services he claims his firm rendered to the Albers. Pl.'s
Am. Compl. ¶¶ 4-6. All of the defendants are citizens of
California, see id., and the plaintiff is an attorney licensed
to practice law in California and the District of Columbia. Pl.'s
Opp'n to Mot. to Dismiss ("Pl.'s Opp'n to MTD") at ¶ 2. In
December 1998, the Albers asked the plaintiff to represent them
in a separate legal dispute ("the Suit"). Pl.'s Am. Compl. ¶ 7.
They signed a contract ("the Fee Agreement") on December 18,
1998, with three subsequent addenda detailing costs. Id. ¶ 8.
These addenda included a forum-selection clause that states that
"a court of the District of Columbia and/or . . . the United
States District Court for the District of Columbia" shall be the
forum for the resolution of any dispute or litigation arising
from the attorney-client agreement. Pl.'s Resp. to MTD, Ex. A
(Fee Agreement) at 3.
The plaintiff claims that in December 2002, attorney Lloyd J.
Michaelson and other agents and/or lawyers (Does #1-10)*fn1 advised the Albers to
take certain actions or engage in inaction which resulted in
injuries to the plaintiff. Pl.'s Am. Compl. ¶ 10. But the Albers
signed the third and final addendum in January 2003, with one
extra stipulation: an $82,000 retainer that required them to sign
a note placing a lien on their home. Pl.'s Resp. to MTD, Attach.
A (Third Addendum). In August 2003, Michaelson notified the
plaintiff that he was now representing the Albers in the Suit.
Pl.'s Resp. to MTD at ¶ 8(D)(6). The plaintiff responded by suing
the defendants for breach of contract, conspiracy, and tortious
interference with the contract. Pl.'s Am. Compl. ¶¶ 11-48.
Back in their home state, California, the defendants filed a
notice of automatic stay under the California Business and
Professions Code ("Cal. Prof. & Bus. Code"), § 6201(c), to halt
the current suit and allow the parties to arbitrate this fee
dispute in Los Angeles. Yet, the plaintiff is denying the terms
of the California stay and attempting to proceed with this suit.
He first filed a motion to strike the notice of automatic stay,
setting off an avalanche of successive motions that now inundate
this court. The defendants, all filing pro se, continue to
insist the stay freezes any further court action. Reply to Opp'n
to Pl.'s Mot. to Strike Not. of Automatic Stay at 4.
In May 2004, pro se defendant Michaelson filed a motion to
dismiss for lack of subject matter and personal jurisdiction.
Def. Michaelson's Mot. to Dismiss ("Def. Michaelson's MTD"). On
June 18, 2004, this court directed the plaintiff to show cause
that the court has subject matter jurisdiction over the present
suit. Order dated June 18, 2004. In the plaintiff's declaration
and in his supplemental memorandum, he claims that diversity
jurisdiction exists and requests the dismissal of Michaelson's motion with prejudice. The
parties continued to fire motions directed at one another, and
currently have six motions pending before the court. The court
faces a tangle of issues all blinking for attention, and the
court now addresses each motion in turn.
A. The Court Grants in Part and Denies in Part the Defendant
Michaelson's Motion to Dismiss
1. Legal Standard for Diversity Jurisdiction
A federal district court has subject-matter jurisdiction over a
suit when the amount in controversy exceeds $75,000 and the
parties are diverse in citizenship. 28 U.S.C. § 1332(a); DeBerry
v. First Gov't Mortgage & Investors Corp., 170 F.3d 1105
n. 1 (D.C. Cir. 1999); see also Stevenson v. Severs,
158 F.3d 1332
, 1334 (D.C. Cir. 1998) (per curiam) (identifying the $75,000
amount-in-controversy requirement for federal diversity
jurisdiction under 28 U.S.C. § 1332(a)). The amount in
controversy is established at the commencement of the action.
28 U.S.C. § 1335(a). Subsequent events reducing the amount in
controversy will not divest the court of its jurisdiction. St.
Paul, 303 U.S. at 289-90. If it becomes apparent during the
course of litigation that from the outset the maximum conceivable
amount in controversy was less than the jurisdictional minimum,
the court must dismiss the case for lack of subject matter
jurisdiction. Watson v. Blankinship, 20 F.3d 383
, 387-88 (10th
Cir. 1994); Jones v. Knox Exploration Corp., 2 F.3d 181, 182-83
(6th Cir. 1993). Where the plaintiff has alleged a sum certain
that exceeds the requisite amount in controversy, that amount
controls if made in good faith. St. Paul, 303 U.S. at 289-90.
Additionally, to justify dismissal, it must appear to a legal certainty that the claim is for less than the jurisdictional
amount. Id. at 288-89; Hartigh v. Latin, 485 F.2d 1068, 1071
(D.C. Cir. 1973) (citing Gomez v. Wilson, 477 F.2d 411 (D.C.
Punitive damages are properly considered as part of the amount
in controversy. Hartigh, 485 F.2d at 1072 (citing Bell v.
Preferred Life Assurance Soc'y, 320 U.S. 238, 240, (1943)). In
considering punitive damages to satisfy the jurisdictional
minimum in a diversity case, the court must conduct a two-part
inquiry. Bell, 320 U.S. at 240; Cadek v. Great Lakes Dragaway,
Inc., 58 F.3d 1209 (7th Cir. 1995). First, the court must
determine whether the plaintiff can recover punitive damages as a
matter of governing substantive law. Bell, 320 U.S. at 240. If
so, the court has subject-matter jurisdiction unless it is clear
beyond a legal certainty that the plaintiff would under no
circumstances be entitled to recover the jurisdictional amount.
Cadek, 58 F.3d at 1212. In this second step, the plaintiff must
present some factual evidence of entitlement to punitive damages.
Larkin v. Brown, 41 F.3d 387, 388-89 (8th Cir. 1994) (citing
Esler v. Northrop Corp., 86 F.R.D. 20, 28 (W.D. Mo. 1979)
(recognizing that "when the plaintiff's allegation of the amount
in controversy is challenged . . . existence of the required
amount must be supported by competent proof") (citing
Hulsenbusch v. Davidson Rubber Co., 344 F.2d 730 (8th Cir.
2. The Plaintiff Adequately Demonstrates That This Court has
Subject Matter Jurisdiction
The defendant argues that the court lacks subject matter
jurisdiction to hear this claim for the following reasons: (1)
there is not complete diversity between the parties because the
defendants are all domiciled in the State of California, see
Def. Michaelson's MTD at 3, and the plaintiff moved to California
in 1995 and has since resided there, see id. at 3-4; and (2)
the plaintiff's claim does not meet the amount in controversy
requirement, that is, the amount claimed does not exceed $75,000.*fn2
Def. Michaelson's Reply
to Pl.'s Opp'n to Def. Michaelson's MTD ("Def. Michaelson's
Reply") at 3-4.
The plaintiff argues that there is diversity of citizenship
between the parties because he is a citizen of Florida, see
Pl.'s Resp. to MTD at ¶ 2, while the defendants are all residents
of California. Pl.'s Opp'n to Def.'s MTD ("Pl.'s Opp'n to MTD")
at 7-10. Additionally, the plaintiff contends that he is entitled
to judgment in the sum of $7,411,477.14, see Pl.'s Opp'n to MTD
at 40, which is an amount that exceeds the statutory requirement
For the purpose of diversity jurisdiction, "[d]omicile is
determined by two factors: physical presence in a state, and
intent to remain there for an unspecified or indefinite period of
time." Prakash v. Am. Univ., 727 F.2d 1174, 1180 (D.C. Cir.
1984) (citations omitted). "Citizenship depends upon domicile,
and, as domicile and residence are two different things, it
follows that citizenship is not determined by residence." Shafer
v. Children's Hosp. Soc. of Los Angeles, Cal., 265 F.2d 107, 122
(D.C. Cir. 1959) (quotations omitted); see also Williams v.
Wash. Post Co., 1990 U.S. Dist. LEXIS 11183, at *5 (D.D.C. 1990)
(stating that "[d]omicile, a concept drawn from conflicts of law,
is more narrow than the concept of residency . . . one can reside
in one place but be domiciled in another"). Hence, a mere
allegation of residence in a state is not an assertion of
citizenship therein. Id. at 121. While residency is indicative
of domicile, it is not determinative; therefore, a "prolonged
absence from one's domicile is not determinative of abandonment."
Wagshal v. Rigler, 947 F. Supp. 10, 13 (D.D.C. 1996).
"The question of domicile is a mixed question of law and fact."
Hicks v. Hicks, 80 F. Supp. 219, 220 (D.D.C. 1940). In many instances, a party's intent
to remain in a particular state for an indefinite period of time
will be clear from the factual evidence presented to the court.
See Mayo v. Questech, Inc., 1989 U.S. Dist. LEXIS 4267, at *2
(D.D.C. 1989). A plaintiff may submit "a number of generally
accepted indicia of domiciliary status," including sworn
declaration of domicile; voting registration; state driver's
license; ownership of personal property in a given state; bank
accounts and club membership. Wagshal, 947 F. Supp. at 13. Once
a party presents to the court evidence of substantial indicia of
domiciliary status, the party is entitled to a presumption that
it has established a domicile. Id. An evidentiary hearing is
necessary, however, when the opposing party's written submissions
contradict the stated intent of the party whose domicile is in
dispute. See Prakash, 727 F.2d at 1179. Finally, it is the
plaintiff that bears the burden of proof when jurisdictional
facts are challenged. McNutt v. General Motors Acceptance
Corp., 298 U.S. 178, 188-89 (1936); Mayo, 1989 U.S. Dist. LEXIS
4267, at *2 (citing Thompson v. Gaskill, 315 U.S. 442, 446
The plaintiff declares that he was a citizen of Florida at the
time of filing of the lawsuit and that he currently remains a
domiciliary of Florida. Naegele Decl. in Support of Pl.'s Opp'n
to Def. Michaelson's MTD ("Naegele Decl. dated Aug. 2, 2004") ¶
7. In support of his claim, the plaintiff has submitted a copy of
his Florida driver's license; a copy of the Declaration of
Domicile and Citizenship filed with the Clerk of the Circuit
Court of Monroe County, Florida; and proof of his membership in
the Ocean Reef Club, located in the Florida Keys. Naegele Decl.
dated Aug.2, 2004, Attach. A, B. He further asserts that he is
registered to vote in Florida and that he maintained two bank
accounts at Florida bank branches. Naegele Decl. dated Aug. 2,
2004, ¶¶ 5, 7. Defendant Michaelson alleges that the plaintiff's
domicile is California because he maintained offices in
California. Def. Michealson's Mot. to Dismiss at 3. The defendant further argues that the co-defendants, the Albers, assert that
the plaintiff had "resided in the Malibu/Calabasas area in Los
Angeles County" between 1998 and March 2003. R. Albers Decl., ¶
Because the plaintiff has presented substantial evidence that
his domicile is Florida and that he has an intent to remain there
for an indefinite period of time, and the defendant has only
proffered unsupported allegations to contest the plaintiff's
domicile, the plaintiff is entitled to the presumption that he
successfully established Florida as his domicile. Wagshal,
947 F. Supp. at 13. Based on the evidence presented by the parties,
the court finds it unnecessary to engage in an evidentiary
hearing to determine the plaintiff's domicile. The court is
persuaded that the plaintiff's domicile is indeed Florida and the
domicile of all the named defendants is California; thus, there
is complete diversity between the plaintiff and the defendants.
Diversity jurisdiction, however, requires not only diversity in
citizenship but also that the amount in controversy exceed
$75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a);
DeBerry, 170 F.3d at 1106 n. 1. The plaintiff's claim for money
damages in the amount of $69,018.37 towards prejudgment interest
and an amount of $8,237.82 towards attorney fees and costs would
not contribute to the amount in controversy. 28 U.S.C. § 1332(a),
see also Velez v. Crown Life Ins. Co., 599 F.2d 471, 473 (1st
Cir. 1979) (stating that "[i]nterest is specifically excluded . . .
as part of the jurisdictional amount"); 15-102 Moore's Federal
Practice § 102.106 (2004). The court, however, finds that the
plaintiff has a right to claim an amount of $160,071.74 in legal
fees and expenses incurred by his representation of the Albers
with respect to the Albers' appeal. Additionally, the D.C.
Circuit has instructed that a plaintiff's punitive damages claim,
which here is an amount of $4 million, is properly considered as
part of the amount in controversy when the plaintiff proffers
factual evidence that he is entitled to punitive damages and it is not clear beyond a legal certainty that the
plaintiff would be unable to recover such damages. Hartigh,
485 F.2d at 1072 (citing Bell v. Preferred Life Assurance Soc'y,
320 U.S. 238, 240, (1943)). Because the plaintiff meets the
amount in controversy requirement even excluding the punitive
damages claim, the court deems it unnecessary to decide the issue
of whether the punitive damages claim in the instant case
contributes to the amount in controversy. Therefore, the
plaintiff met his burden in proving that the two prongs of
diversity jurisdiction exist, diversity of citizenship and amount
in controversy. Accordingly, the court concludes that it has
subject matter jurisdiction over this action.
3. Legal Standard for a Motion to Dismiss for Lack of Personal
On a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(2), the plaintiff has the burden of establishing
a prima facie case that personal jurisdiction exists. E.g.,
Second Amendment Found. v. U.S. Conference of Mayors,
274 F.3d 521
, 524 (D.C. Cir. 2001). A prima facie case in this context
means that the plaintiff must present evidence sufficient to
defeat a motion for judgment as a matter of law. See Cable/Home
Communication Corp. v. Network Productions, Inc., 902 F.2d 829
855 (11th Cir. 1990); Carter v. Duncan-Huggins, Ltd.,
727 F.2d 1225, 1227 (D.C. Cir. 1984) (indicating, under a differently
labeled but similar standard, that such motions should be denied
unless "the evidence, together with all inferences that can
reasonably be drawn therefrom is so one-sided that reasonable men
could not disagree on the verdict").
To determine if a basis for personal jurisdiction exists, the
court should resolve factual discrepancies in the complaint and
affidavits in favor of the plaintiff. Crane v. New York
Zoological Soc., 894 F.2d 454, 456 (D.C. Cir. 1990). However,
the court need not treat all of the plaintiff's allegations as
true. United States v. Philip Morris Inc., 116 F. Supp. 2d 116,
120 n. 4 (D.D.C. 2000); GTE New Media Servs. v. BellSouth Corp.,
199 F.3d 1343, 1349 (D.C. Cir. 2000) (stating that courts should not
accept bare allegations and conclusory statements). Moreover, the
court "may receive and weigh affidavits and any other relevant
matter to assist ...