United States District Court, District of Columbia
TIMOTHY D. NAEGELE, Plaintiff,
DEANNA J. ALBERS, et al., Defendants
TIMOTHY D. NAEGELE, Plaintiff, Pro se, Mailbu, CA.
DEANNA J. ALBERS, Defendant, Pro se, Thousand Oaks, CA.
RAYMOND H. ALBERS, II, Defendant, Pro se, Thousand Oaks, CA.
LLOYD J. MICHAELSON, Defendant, Pro se, Westlake Village, CA.
ROBERT L. WILKINS, United States District Judge.
MEMORANDUM OPINION AND ORDER TO SHOW CAUSE
For the reasons set forth herein, Plaintiff Timothy D. Naegele (" Plaintiff" or " Naegele" ) is hereby ORDERED TO SHOW CAUSE in writing as to why the Court should not STAY this action in its entirety pending the resolution of parallel and/or overlapping California state court litigation surrounding the same fee dispute at the center of this action. Plaintiff shall also SHOW CAUSE as to why the Court should not find that he " willfully fail[ed] to appear at the arbitration hearing" before the Los Angeles Bar Association's Dispute Resolution Services, within the meaning of California Business and Professions Code § 6204(a).
The Court begins with a brief summary of these proceedings. This lawsuit was filed in December 2003, long before the undersigned took the bench, and, as one might expect, it has a long and gnarled history. For present purposes, however, the Court focuses only on the salient developments.
At its core, this case arises out of a fee dispute between Naegele, an attorney presently litigating pro se, and his former clients, Deanna J. Albers and Raymond H. Albers II (collectively, " the Albers" ), whom Naegele formerly represented in a lawsuit in the United States District Court for the Central District of California and, subsequently, in the ensuing appeal before the United States Court of Appeals for the Ninth Circuit. In this action, Naegele alleges that the Albers breached their fee agreement and failed to pay him for fees earned in connection with the Ninth Circuit appeal, which appear to total $82,000.00. Naegele, who was originally represented by counsel, filed his Complaint on December 8, 2003, asserting eight counts against the Albers and Lloyd J. Michaelson (" Michaelson" )--an attorney who Naegele alleges " advised the Albers to take certain actions" in their fee dispute with Naegele. ( See Dkt. No. 1, Compl.).
Before Naegele filed his lawsuit here in the District of Columbia, however, the Albers, back in California, invoked their statutory right to mandatory fee arbitration pursuant to California's Mandatory Fee Arbitration Act (" MFAA" ), Cal. Bus. & Prof. Code § § 6200, et seq. The Albers were represented by Michaelson in connection
with their fee arbitration, and Michaelson notified Naegele of the Albers' intention to proceed with mandatory arbitration via letter on August 28, 2003. (Dkt. No. 36-1 at ¶ ¶ 2-3). In addition, it appears that the Los Angeles County Bar Association's Dispute Resolution Services--which administers fee arbitrations under the MFAA--forwarded a copy of the Albers' petition for arbitration to Naegele on or around September 22, 2003. ( Id. ). Under the MFAA, the initiation of fee arbitration precludes the concurrent prosecution of any court action surrounding the fee dispute, and any judicial action that was pending prior to the commencement of fee arbitration is " automatically stayed until the award of the arbitrators is issued or the arbitration is otherwise terminated." Cal. Bus. & Prof. Code § 6201(c). Nonetheless, Naegele forged ahead and filed his Complaint with this Court in December 2003, ostensibly relying on a venue selection clause in his fee addendum with the Albers, which stated that " any disputes or litigation arising out of this [fee] agreement shall be in a court of the District of Columbia and/or in the United States District Court for the District of Columbia." ( See Dkt. No. 1-4, at ¶ 3).
Shortly thereafter, on January 5, 2004, the Albers and Michaelson filed and served " Notices of Automatic Stay under California Business and Professions Code § 6201(c)." (Dkt. Nos. 2, 3, 4). Before the Court acted on those filings, however, Naegele filed a First Amended Complaint on April 20, 2004, (Dkt. No. 7), which prompted the Albers and Michaelson to file additional Notices of Stay on May 3, 2004, (Dkt. Nos. 19, 20, 21).  A flurry of filings followed, most of which are not germane to the issues presently before the Court. Ultimately, on January 3, 2005, Judge Ricardo Urbina--who originally presided over this case before it was transferred to the undersigned--issued a Memorandum Opinion and Order that, inter alia, dismissed Michaelson from this action for lack of personal jurisdiction and granted the Albers' request for a stay pending the completion of the California fee arbitration. See Naegele v. Albers, 355 F.Supp.2d 129 (D.D.C. 2005).
Meanwhile, it appears that the fee arbitration in Los Angeles had already proceeded to a hearing on November 17, 2004, although the arbitration panel did not issue its award until January 14, 2005. ( See Dkt. No. 92-3).  In rendering its award, the panel reviewed the reasonableness of both: (1) the amount of attorneys' fees the
Albers had already paid Naegele in connection with their original lawsuit in the Central District of California, totaling a staggering $735,481.32; and (2) the $82,000 promissory note Naegele had secured from the Albers for his anticipated work on the Albers' appeal with the Ninth Circuit. ( Id. ). Based on the evidence presented at the arbitration hearing, the panel issued the following award:
1. The panel finds that the total amount of fees and other costs which should have reasonably and necessary [sic] been charged in this matter ...