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Paul v. Judicial Watch

February 6, 2008

PETER F. PAUL, PLAINTIFF,
v.
JUDICIAL WATCH, INC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Royce C. Lamberth United States District Judge

MEMORANDUM OPINION

This matter comes before the Court on defendants' motion [2] to dismiss, plaintiff's opposition, and the reply thereto. Upon consideration of the filings, the entire record herein, and the relevant law, defendants' motion [2] to dismiss will be GRANTED in part and DENIED in part.

I. BACKGROUND

Defendant Judicial Watch, Inc. ("Judicial Watch"), is a non-profit organization formed under the laws of the District of Columbia. (See Compl. ¶ 8.) Defendant Thomas J. Fitton ("Fitton"), is President of Judicial Watch. (See id. ¶ 9.) Defendant Paul J. Orfanedes ("Orfanedes") is the Secretary and a director of Judicial Watch. (See id. ¶ 10.) This case arises out of defendants' representation of plaintiff Peter F. Paul ("Paul"), in connection with plaintiff's whistle-blowing activities directed at Hillary Rodham Clinton's 2000 Senate campaign. Judicial Watch and Paul entered into a legal representation agreement whereby Judicial Watch agreed to represent him in connection with his whistle-blowing activities. (See id. ¶ 2.) According to Paul's complaint, the representation included providing and/or paying for Paul's legal representation in actions he instituted, and defending him in actions brought against him alleging securities law and related violations of campaign financing laws and civil litigation. (See id.) The complaint further states that in return for providing him representation, Paul authorized Judicial Watch to solicit donations from the public for championing Paul's case, and to seek publicity for Paul in service of the public interest. (See id.) The relationship between the parties ended in early 2005 when defendants allegedly failed to prosecute and defend Paul's claims and interests, attempted to coerce Paul into modifying the contract, and unilaterally and without Paul's consent, withdrew from representing Paul. (See Pl.'s Opp'n at 2.) Plaintiff filed the instant suit on February 6, 2007, alleging claims for breach of contract, breach of fiduciary duty, violations of standards of professional conduct, unjust enrichment, Lanham Act violations, and appropriation of name and likeness.

Defendants subsequently filed a motion to dismiss on March 15, 2007, which was followed by plaintiff's opposition filed on April 16, 2007. Defendants' motion seeks an order from this Court dismissing the following claims: (1) breach of contract by Fitton and Orfanedes; (2) breach of fiduciary duty by Fitton; (3) violations of ethical standards of professional conduct; (4) unjust enrichment; (4) violations of the Lanham Act; and (5) appropriation of name and likeness.

II. DISCUSSION

A. Legal Standard

On a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), this Court will dismiss a claim if the plaintiff fails to plead "enough facts to state a claim for relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007) (abrogating the prior standard which required appearance, beyond a doubt, that plaintiff can prove no set of facts in support of his claim that would entitle him to relief). This Court must construe the allegations and facts in the complaint in the light most favorable to the plaintiff and must grant the plaintiff the benefit of all inferences that can be derived from the facts alleged. Barr v. Clinton, 370 F.3d 1196, 1199 (D.C. Cir. 2004) (citing Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir.1994)). However, the Court need not accept asserted inferences or conclusory allegations that are unsupported by the facts set forth in the complaint. Kowal, 16 F.3d at 1276.

B. Analysis

1. Breach of Contract by Fitton or Orfanedes

In Count 1 of the complaint, plaintiff alleges that defendants breached the agreement with plaintiff when they: (1) withdrew from representing plaintiff in his criminal and civil matters (see Compl. ¶¶ 57, 59); (2) failed and/or refused to pay for plaintiff's legal fees (see id.); and (3) attempted to coerce plaintiff into modifying the agreement (see id. ¶ 58). Defendants argue that Count 1 fails to state a claim for breach of contract by Fitton or Orfanedes because they were not parties to the agreement. (See Defs.' Mot. to Dismiss at 2--3.) Plaintiff contends that since the contract was for legal services, Fitton (a non-lawyer), and Orfanedes (a lawyer), are each liable as individuals for malpractice in tort and in contract. (See Pl.'s Opp'n at 4--5.)

It is a general principle of corporation law that the officers and employees of a corporate entity are its agents. Ridgewells Caterer, Inc. v. Nelson, 688 F. Supp. 760, 762 (D.D.C. 1988) (citing 2 FLETCHER CYC. CORP. § 434 (1982)). Under the law of the District of Columbia, an agent is not personally liable on a contract it executes on behalf of a principal so long as it identifies the principal and discloses the agency relationship. Id. (citing Rittenberg v. Donohoe Constr. Co. Inc., 426 A.2d 338, 341 (D.C. 1981); Resnick v. Abner B. Cohen Advertising, Inc., 104 A.2d 254, 255 (D.C. 1954)). Further, where a principal is disclosed, no liability will fall upon the agent for acts committed by the principal unless he binds himself for same by definite words or stipulation. Rittenberg, 426 A.2d at 341 (citations omitted). Nor does liability attach to an agent of a disclosed principal for his act within the scope of the agency unless he binds himself by definite words or stipulation. Id. (citation omitted). The contract at issue here is clearly between Paul and Judicial Watch. Defendant Fitton signed the agreement in his capacity as President of Judicial Watch but neither he nor Orfanedes are listed as parties to the agreement. Moreover, plaintiff alleges no facts that Fitton or Orfanedes obligated themselves to the terms of the agreement or otherwise gave consent to be personally bound. Nevertheless, plaintiff urges the Court to find that Fitton and Orfanedes were personally bound to the agreement by way of the duty of care implied in every contract for legal services. Plaintiff cites no authority, however, for his proposition that the duty of care owed to clients by all attorneys personally obligates attorneys under the terms of a contract to which they are a nonparty. As such, personal liability for breach of contract may not be imposed upon the corporation's agents under these circumstances. Accordingly, defendants' motion to dismiss Count 1 as to Fitton and Orfanedes shall be GRANTED.

2. Breach of Fiduciary Duty by Fitton

Count 2 of plaintiff's complaint alleges that each of the defendants owed a fiduciary duty to provide faithful, competent, and vigorous legal representation to plaintiff and that they breached that duty when they withdrew ...


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