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Dominic Novak, et al v. Douglas A. Lines

February 14, 2012

DOMINIC NOVAK, ET AL., PLAINTIFFS,
v.
DOUGLAS A. LINES, P.C., ET AL., DEFENDANTS.



The opinion of the court was delivered by: John M. Facciola United States Magistrate Judge

MEMORANDUM OPINION

Pending before me and ready for resolution is Defendant's Motion to Dismiss for Lack of Subject Matter Jurisdiction, or, in the Alternative, to Abstain. [#24]. For the following reasons, defendant's motions is granted in part and denied in part as moot.

Background

This case stems for the representation of plaintiff Dominic Novak in a lawsuit he brought against the owners of Zei Nightclub, outside of which he was brutally assaulted in 2000. See Novak v. Capital Mgmt & Development Corp., 570 F.3d 305 (D.C. Cir. 2009).

On January 6, 2001, Novak retained Wayne Powell to represent him agreeing to pay a one third contingency fee. [#24-2] at 19. On the next day, January 7, 2001, Wayne Powell associated the law of offices of Douglas A. Lines ("Lines") to work on Novak's case, agreeing that the Lines firm would receive one third of the fees that would be recovered. [#24-2] at 18. More than a year later, Powell and Lines, having secured Novak's consent, agreed that (1) Jonathan Halperin would be associated with them in representation of Novak; and (2) Lines would only get 5% of the gross recovery as his fee. [#24-2] at 20.

On May 28, 2003 Powell sent Lines a letter indicating that he had Novak's consent to propose a new fee arrangement among counsel. [#24-2] at 21. Halperin, a member of the firm then known as Regan, Halperin & Long, would receive 43.75 % of the 40% of his recovery that Novak agreed to, Powell would also receive 43,75%, but Lines would get 12.5% of the recovery up to a maximum of $75,000. Id. Lines, however, refused to sign that agreement and the case proceeded to trial.

Novak ultimately secured an award of $4,111,772. [#24-1] at 3. Patrick Regan, now practicing in the firm Regan, Zambri & Long ("RZL"), then took $69,000 held in a trust account for Novak and put it in escrow to satisfy any claim Lines could make, quantum meruit, for the services rendered. Complaint, ¶ 33. This deduction was taken from the amount otherwise due Novak and will be returned to him if Lines is ultimately determined not to receive any money. If Lines is awarded less than the $69,000 held in escrow, the remainder of the amount held will be disbursed to Novak.

On August 24, 2010, Douglas A. Lines, P.C. now doing business as a Virginia professional corporation and Douglas Lines sued Regan, Regan, Zambri and Long, P.L.LC., Powell, Powell and Parish, P.C., and Halperin in the Circuit Court of the County of Chesterfield, Virginia, claiming (inter alia) that the defendants (1) breached the contract entitling him to 5% of the gross fee recovery or $207, 624.10; or (2) in the alternative, the one third agreed to initially and (3) that Regan breached his professional duty to segregate and hold in escrow an amount equal to Lines' entitlement but instead disbursed the judgment funds to himself, Powell and Novak without paying him anything. [#24-2] passim.

Regan and Novak then brought the instant action claiming that Lines violated his professional responsibilities to Novak. Complaint [#1]. Specifically, the complaint alleges that

(1) the lawsuit that Lines has filed is a breach of fiduciary, contractual and ethical duties that Lines owed to Novak; [#1] ¶ 31; (2) committed malpractice in the representation of Novak by failing to represent him in this Court with the required diligence, legal knowledge and skill; [#1] ¶¶ 37-40 and (3) breached the contract with Novak to provide him with legal representation. [#1] ¶¶ 41-48. In the alternative, Novak demands, that if Lines is nevertheless found to be entitled to some fee that it be limited quantum meruit to the services Lines actually performed.

Analysis

The complaint is deficient as to all parties as it fails to allege facts sufficient to assert standing. First, Novak is not threatened by any cognizable harm since he is not a defendant in the action Lines brought in Virgina. As such, Novak lacks standing as he cannot possibly have been harmed nor will be harmed by anything Lines has or failed to do or by the resolution of the Virginia action.

Regan, on the other hand, is only complaining that as a result of Lines' lawsuit in Virginia Novak has been deprived of the use of the money that Regan took from the judgment funds that would otherwise go to Novak and put them to escrow even though Lines is not seeking any thing from Novak in the Virginia. Thus, the inability to use the escrow amount and its potential loss can only harm Novak and Regan cannot possibly claim any harm to himself because of the escrow Regan created. Thus, in my view, neither defendant is threatened with any cognizable harm that justifies the continued consideration of their complaint because they lack standing to assert the harms about which they complain.

A plaintiff seeking relief in a federal court must first establish that he "personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant." Valley Forge Christian College v. Americans United for Separation of ...


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