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Marbury Law Group, Pllc v. Bernard J. Carl

August 1, 2011

MARBURY LAW GROUP, PLLC, PLAINTIFF/COUNTER-DEFENDANT,
v.
BERNARD J. CARL, DEFENDANT/COUNTER-PLAINTIFF.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

Before this action began, Plaintiff/Counter-Defendant Marbury Law Group, PLLC ("Marbury") brought suit against Defendant/Counter-Plaintiff Bernard J. Carl ("Carl") in the Fairfax County Circuit Court of the Commonwealth of Virginia seeking to collect unpaid fees for the legal services that it provided to Carl while representing him in connection with two legal actions. When Carl failed to defend against the Virginia action, the Fairfax County Circuit Court entered a default judgment against him. Shortly thereafter, Marbury commenced this action with the aim of registering the default judgment with this Court. Carl appeared pro se,*fn1 answered the

[1] Complaint, and asserted a handful of counterclaims against Marbury.

Subsequently, Marbury realized that this Court lacked jurisdiction to register the default judgment entered by the Fairfax County Circuit Court and moved this Court to dismiss the Complaint. The Court did so, which left only Carl's counterclaims against Marbury as live claims in this action. Thereafter, with the Court's leave, Carl filed a [33] First Amended Counterclaim, in which he narrowed his claims against Marbury to three counterclaims sounding in legal malpractice and breach of fiduciary duty, all of which challenge, in one way or another, the adequacy of Marbury's legal representation of him in connection with the same two legal actions that underlay Marbury's action to collect unpaid fees in the Fairfax County Circuit Court. Now, those three counterclaims are the only claims that remain at issue in this action.

There are presently two motions pending before the Court: Marbury's [35] Motion for Summary Judgment and Carl's [45] Motion for Relief Under Rule 60(b). In the first motion, Marbury seeks the dismissal of Carl's First Amended Counterclaim, contending that Carl's three counterclaims (a) could have and should have been raised in the action before the Fairfax County Circuit Court and are accordingly barred by the doctrine of res judicata, and (b) fail on the merits. In the second motion, Carl petitions this Court for relief from the default judgment entered by the Fairfax County Circuit Court, contending more or less that his failure to defend against the Virginia action was the product of excusable neglect.

Both motions will be denied. Marbury's Motion for Summary Judgment fails to fully account for two important principles that circumscribe the reach of the preclusive effect of the default judgment entered by the Fairfax County Circuit Court-specifically, (a) the general rule that a party failing to assert a permissive counterclaim in a prior action ordinarily will not be barred from bringing a future suit on that claim, and (b) all counterclaims are permissive under Virginia law. Marbury's alternative contention that Carl's counterclaims fail on merits will not be considered because Marbury has failed to comply with the procedural requirements for presenting a motion for summary judgment in this Court. Finally, Carl's Motion for Relief Under Rule 60(b) is fundamentally infirm, as Rule 60(b) does not provide a vehicle for seeking relief from a state-court judgment.

I. BACKGROUND

On March 6, 2009, Marbury brought suit against Carl in the Fairfax County Circuit Court (the "Virginia action"), seeking to collect unpaid fees for the legal services that it provided to Carl in connection with two legal actions. See Compl., ECF No. [1], ¶ 5; Answer, ECF No. [6], ¶ 5. On April 15, 2009, though he was yet to be formally served with a copy of the complaint in the Virginia action, Carl sent Marbury a draft pleading in which he responded to the allegations raised in the complaint and stated counterclaims against Marbury for breach of contract and legal malpractice. See Decl. of John F. Mardula in Supp. of Counter-Def.'s Mot. for Summ. J. ("Mardula Decl."), ECF No. [35-1], ¶ 2 & Ex. A; Compl. ¶ 5; Answer ¶ 5. Despite having sent Marbury this draft and being on notice of the pendency of the Virginia action, Carl never actually filed that document-or, for that matter, any other responsive pleading-with the Fairfax County Circuit Court. See Decl. of Bernard J. Carl in Supp. of Counter-Pl.'s Resp. to Counter-Def.'s Mot. for Summ. J. ("Carl Decl."), ECF No. [40], ¶¶ 110-11; Mardula Decl. ¶ 2. On May 29, 2009, the Fairfax County Circuit Court entered a default judgment in Marbury's favor, awarding Marbury (a) damages in the amount of $134,133.42, (b) post-judgment interest at the rate of 6% per annum from May 14, 2009, and (c) $262.00 in costs. See Order of J. as to Def. Bernard J. Carl, Marbury Law Grp., PLLC v. Carl, Civ. Action No. 2009-3375 (Va. Cir. Ct. May 29, 2009).

Carl did not appeal the default judgment. See Carl Decl. ¶¶ 118-19, 121-22. Much later, Carl filed a motion with the Fairfax County Circuit Court seeking to have the default judgment set aside. See id. ¶¶ 116, 121-22. On February 12, 2010, Carl's motion was denied. See Order, Marbury Law Grp., PLLC v. Carl, Civ. Action No. 2009-3375 (Va. Cir. Ct. Feb. 12, 2010). Carl did not appeal that decision either. See Carl Decl. ¶ 122; Mardula Decl. ¶ 21. To date, Carl has not made any attempt to satisfy the default judgment. See Compl. ¶ 9; Answer ¶ 9.

On July 29, 2009, Marbury commenced this action, seeking to register the default judgment with this Court. On October 15, 2009, Carl filed a responsive pleading, answering the allegations in the Complaint and asserting a total of seven counterclaims sounding in breach of contract, breach of fiduciary duty, and legal malpractice.

On November 2, 2009, Marbury filed a motion to dismiss its own Complaint for lack of subject matter jurisdiction, representing that "[s]ubsequent research [] caused counsel to conclude that . . . subject matter jurisdiction is lacking for this Court to register and enforce the judgment entered against Carl." Counter-Def.'s Mem. in Supp. of Mot. to Dismiss, ECF No. [12-1], at 1-2. Contemporaneously, Marbury moved this Court to dismiss Carl's counterclaims, contending that Carl's claims were either barred by the doctrine of res judicata or failed to state a claim for relief. See Counter-Def.'s Mem. in Supp. of Mot. to Dismiss, ECF No. [13-1]. On December 3, 2009, having received no response from Carl, the Court granted both motions as conceded and dismissed the entire action without prejudice. See Order (Dec. 3, 2009), ECF No. [15]; Mem. Op. (Dec. 3, 2009), ECF No. [16].

However, on July 27, 2010, upon Carl's motion, the Court reconsidered and vacated its prior dismissal order. See Order (July 27, 2010), ECF No. [28]; Mem. Op (July 27, 2010), ECF No. [29]. Then, reaching the merits of the motions, the Court dismissed Marbury's Complaint for lack of subject matter jurisdiction, but held-in-abeyance Marbury's motion to dismiss Carl's counterclaims pending further briefing on the threshold question of whether the Court retained jurisdiction over those claims. See Order (July 27, 2010); Mem. Op (July 27, 2010). On September 9, 2010, upon consideration of the parties' supplemental briefing, the Court agreed with the parties that it retains jurisdiction over Carl's counterclaims in light of the diversity of citizenship between the parties and the amount in controversy. See Order (Sept. 9, 2010), ECF No. [32]. On that same date, the Court further granted Carl leave to file amended counterclaims and denied Marbury's motion to dismiss Carl's counterclaims without prejudice, with leave to refile after tailoring the motion to speak to Carl's amended counterclaims. See id.

On September 9, 2010, Carl filed his First Amended Counterclaim, in which he narrowed his claims against Marbury to a total of three counterclaims-two sounding in legal malpractice and a third sounding in breach of fiduciary duty. See First Am. Countercl., ECF No. [33]. Each of Carl's three counterclaims challenge, in one way or another, the adequacy of Marbury's legal representation of his interests in connection with two legal actions: (a) a civil action in the United States District Court for the Eastern District of Virginia captioned Carl v. BernardJCarl.com, Civ. Action No. 07-1128 (E.D. Va.), which the parties refer to in shorthand as the "website case"; and (b) a bankruptcy proceeding in the United States Bankruptcy Court for the Eastern District of Virginia captioned In re Logan, Case No. 07-12564 (Bankr. E.D. Va.), which the parties refer to as the "bankruptcy case," the "Logan bankruptcy case," or the "Kedleston matter." In his First Counterclaim, Carl claims that Marbury committed legal malpractice in connection with the website case by failing to pursue legal rights on his behalf, failing to undertake necessary legal research, and failing to meet minimum professional standards for legal representation. See First Am. Countercl. ¶¶ 67-69. In his Second Counterclaim, Carl claims that Marbury committed legal malpractice in connection with the bankruptcy case by failing to be adequately prepared for discovery, failing to undertake necessary legal research, failing to file timely motions, and failing to meet minimum professional standards for legal representation. See id. ¶¶ 73-79. In his Third Counterclaim,*fn2 Carl claims that Marbury breached its fiduciary duty to him in connection with the bankruptcy case by failing to be adequately prepared for discovery, failing to undertake necessary legal research, failing to file timely motions, and failing to meet minimum professional standards for legal representation. See id. ¶¶ 80-86.*fn3

On October 1, 2010, Marbury filed the pending Motion for Summary Judgment, in which Marbury argues that Carl's counterclaims should be dismissed because they are barred by the doctrine of res judicata and fail on ...


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