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Wade Robertson v. William C. Cartinhour

March 16, 2012


The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge


This case involves parties and events that have been before this and other courts many times. Previously, Wade Robertson sued William Cartinhour in this Court, but the jury found against Robertson and returned a verdict in Cartinhour's favor for $3.5 million in compensatory damages and $3.5 million in punitive damages for breach of fiduciary duties as a partner and as a lawyer and for legal malpractice. Now, Robertson has sued Cartinhour and the lawyers who represented him, as well as several of Cartinhour's Serbian associates. In this new suit, which was originally filed in the Southern District of New York, Robertson recasts as a conspiracy the events underlying the first suit, seeking to recover $3.83 million in damages based on claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962, and for fraud, defamation, and tortious interference. Defendants have filed motions to dismiss all counts which, for the reasons set forth, will be granted.*fn1



A. Factual Background

The facts giving rise to the instant suit have been detailed in a raft of opinions, but most comprehensively in Robertson I, 691 F. Supp. 2d 65, 68 (D.D.C. 2010), and In re W.A.R. LLP, No. 11-cv-1574, 2012 U.S. Dist. LEXIS 9565 (D.D.C. Jan. 27, 2012). *fn2 The long and tortured history of Robertson's relationship with Cartinhour and proceedings in appellate, district, and bankruptcy courts need not be restated at length here, but a summary of the factual and procedural history of Robertson's attempts to stop Cartinhour from recovering his $3.5 million investment in W.A.R., LLP ("WAR") is necessary to address the instant motions.

In September 2004, Robertson, an attorney, and Cartinhour, an 82-year-old retired physician, entered into a partnership, WAR, to invest in class action securities litigation. Robertson I, 691 F. Supp. 2d at 68. From September 2004 to April 2006, Cartinhour contributed a total of $3.5 million. Id. From September 2004 to August 2009, Robertson allegedly contributed legal services, which he values at $3.83 million, almost entirely in the class action securities suit Liu v. Credit Suisse First Boston Corp, No. 04-cv-03757 (S.D.N.Y. 2004). Id. at 68--69. Ultimately, the Liu case was dismissed and, as a result, WAR recovered nothing. Id. at 69; Robertson I, 2012 U.S. Dist. LEXIS 9565, at **9--10.

Even though the Liu litigation was dismissed by the district court in April 2005, Cartinhour contributed his final $1.5 million to WAR in April 2006 and, that same month, by Robertson's request, Cartinhour signed three agreements. Robertson I, 691 F. Supp. 2d at 68--69. The first, the Indemnification Agreement, purported to release Robertson from all claims by Cartinhour for "any future injuries, losses, or damages not known or anticipated" and required Cartinhour to indemnify him for any damages if he filed suit against him. Id. at 68--69.*fn3 The second was an amended partnership agreement giving Robertson "exclusive" control over WAR and allowing partners to take out interest-free loans from WAR without having to repay them until the partnership was liquidated. Id. at 69 n. 5. Third, Cartinhour signed an "Attestation and Certification of No Attorney-Client Relationship with Wade Robertson," which relinquished any claims that Cartinhour may have against Robertson "that could arise from any attorney-client relationship, whether actual or mistakenly assumed, or otherwise." Id. at 70. One month later, the Second Circuit affirmed the district court's dismissal of Liu and the Supreme Court thereafter denied certiorari. Id at 69.

Despite failures in the Liu litigation and unbeknownst to Cartinhour, Robertson borrowed $3.405 million from the partnership via two interest-free loans, the repayment of which was not due until January 2030 and January 2040, respectively. Robertson I, 429 Fed. Appx. at 1. He deposited this money into an account opened in his own name and quickly lost $1.9 million of this money in the stock market. See Robertson I, Preliminary Injunction Hearing Tr. 93:3--6 (D.D.C. Mar. 26, 2010). All of the money for the loans to Robertson came from Cartinhour's investment. Robertson I, 2012 U.S. Dist. LEXIS 9565, at *13.

After the Liu litigation collapsed, Robertson stopped responding to Cartinhour's inquiries about the status of the case and his investment. Robertson I, 691 F. Supp. 2d at 69. Finally, on January 9, 2009, and February 6, 2009, Cartinhour's attorney, Albert Schibani, wrote a letter demanding that Robertson return Cartinhour's money. (Compl. ¶ 72.) When Robertson did not comply, another one of Cartinhour's attorneys, Carlton Obecny of the law firm Selzer Gurvitch Rabin & Obecny ("SGRO"),*fn4 sent two demand letters in August 2009 and threatened to file suit. (Id. ¶ 76.) Robertson still did not return the money. Robertson I, 691 F. Supp. 2d at 69.

B. Robertson I

Instead, on August 28, 2009, Robertson filed suit in this Court, seeking a declaratory judgment that he was not liable for Cartinhour's investment in WAR based on the agreements signed by Cartinhour in April 2006 that supposedly authorized him to take interest-free loans and released him from all liability. SGRO, on Cartinhour's behalf, answered, demanded the return of his investment, and counterclaimed for fraud, breach of fiduciary duty as a partner and lawyer, legal malpractice, and various other torts and equitable causes of action. Robertson I, 429 Fed. Appx. at 1--2.

In response to Cartinhour's counterclaims, Robertson filed an answer and asserted "counter-counter claims" for breach of contract, setoff, quantum meruit, and misrepresentation relating to his contributed legal services to WAR. *fn5 However, since they were improperly asserted in his answer as counter-counterclaims to Cartinhour's counterclaims, they were therefore stricken upon Cartinhour's unopposed motion. At the time, the Court informed Robertson that those claims must be asserted by amending his complaint in accord with Rule 15.*fn6

Nevertheless, he never did so.

As with Robertson's unrelated litigation in California, *fn7 the ensuing litigation here was tumultuous. His incessant filings-described as "vexatious," "meritless," "reckless," and "bad faith"- ultimately elicited warnings and sanctions from this Court, as well as the Court of Appeals, for frustrating proceedings and imposing unnecessary costs on Cartinhour.*fn8

Robertson's litigiousness reached new heights when Cartinhour attempted to preserve the small amount of Cartinhour's $3.5 million that remained. After it became apparent that Cartinhour's investment, $3.405 million of which had been moved by Robertson to his personal accounts though self-authorized loans, had been dissipated and only $700,000 remained in Robertson's personal accounts, the Court froze the accounts. Robertson I, 691 F. Supp. 2d at 70--71. In the midst of this, Robertson showed up at Cartinhour's home, without his attorneys' knowledge or consent, and threatened Cartinhour with "prolonged and costly" litigation if he did not settle. Id. at 72. Cartinhour's attorneys moved to enjoin Robertson from contacting him without counsel present, but the very next day and before this Court could rule, Robertson again went to Cartinhour's apartment and spoke to him through the door since Cartinhour refused to allow Robertson inside. Id. The Court, with the eventual consent of Robertson's counsel, issued a restraining order requiring Robertson to stay away from Cartinhour. See id. at 72. Subsequently on March 26, 2010, the Court entered a second freezing order, which was ultimately upheld on appeal by the D.C. Circuit. Robertson I, 429 Fed. Appx. at 1--2, 4.

Increasingly dissatisfied with the proceedings in this Court, Robertson unleashed a barrage of motions in this Court and the Court of Appeals. In addition, he moved for recusal, arguing that that Court was biased. Robertson I, 691 F. Supp. 2d at 74. When that motion was denied, he again went to the Court of Appeals, but his request for a new judge, his petition for a writ of mandamus ordering recusal, and his many interlocutory appeals were summarily denied.*fn9

Finally, he filed a motion in the Court of Appeals to sanction and disqualify Cartinhour's attorneys in Robertson I, arguing that they had fabricated evidence and had failed to disclose key facts, which was also denied as groundless and unwarranted. Robertson I, Order, 10-7033 (D.C. Cir. Sept. 21, 2010).

C. The Trial

The legal claims and defenses presented in Robertson I were tried to a jury over six days in February 2011. The jury heard evidence relating to the signing of the original WAR partnership agreement, the Indemnification Agreement, and the Attestation of No Attorney-Client Relationship.

At trial, Robertson argued that the WAR partnership agreement and other agreements were valid, knowing, and voluntary.*fn10 He claimed that he was not liable to Cartinhour because he had not been Cartinhour's attorney, Cartinhour understood the agreements he signed, and Cartinhour had been represented by independent attorney, Robert "Larry" Ash, when he signed the partnership agreement.*fn11 Robertson cross-examined both Cartinhour*fn12 and Ash,*fn13 and both testified that Ash had not reviewed any of the agreements Cartinhour signed, consulted with Cartinhour about the agreements, or represented him on the matter.*fn14

On February 18, 2011, after a day of deliberations, the jury returned a $7 million verdict in Cartinhour's favor: $3.5 million in compensatory damages and $3.5 million in punitive damages. In response to Cartinhour's special verdict form, the jury found that an attorney-client relationship existed between Robertson and Cartinhour, that Robertson breached his fiduciary duties to Cartinhour as his business partner and as an attorney, and that Robertson committed legal malpractice. See Robertson I, Verdict Form (Feb. 18, 2011). In addition, the jury found that the Indemnification Agreement was procured by undue influence, was unconscionable, and thus, was unenforceable by Robertson. Id.*fn15

In his appeal, Robertson challenges this verdict and objects to many of the Court's rulings, arguing that the Court should have enforced the partnership and indemnification agreements, and challenging the ruling that any recompense for his services must be asserted as a claim against the partnership rather than Cartinhour. Robertson I, No. 11-7026, Corrected Br. for Appellant at 33, 48 (D.C. Cir. Jan. 4, 2011) ("Robertson I Appeal Br."). Further, he contends that the trial was fundamentally unfair because of the purported misrepresentations by Cartinhour and his attorneys during discovery and pretrial proceedings. Id. at 56.

D. Bankruptcy Proceedings

In an effort to sidetrack the trial in Robertson I and to find a more favorable forum, Robertson filed first for a stay,*fn16 then initiated actions in two other jurisdictions.

First, in the Western District of Tennessee, Robertson sought to stay Robertson I based on bankruptcy proceedings filed against WAR. The Tennessee bankruptcy court, as well as this Court, rejected his attempts to invoke the automatic stay provision of the U.S. Bankruptcy Code, 11 U.S.C. § 362, ruling that "[it] does not stay claims against Robertson because he is not the debtor." See Robertson I, 2012 U.S. Dist. LEXIS 9565, at **6--8.

The Tennessee bankruptcy court transferred the case to the District of Columbia Bankruptcy Court on January 4, 2011, due to the significant adversarial proceedings already underway in the District of Columbia.*fn17 Robertson I, 2012 U.S. Dist. LEXIS 9565, at *9. Finding "no property available for distribution from the estate," the bankruptcy trustee in this Court filed a report of no distribution on March 30, 2011, id. ...

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