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Beach TV Properties Inc. v. Soloman

United States District Court, District of Columbia

April 22, 2019

BEACH TV PROPERTIES INC., et al., Plaintiffs,
v.
HENRY A. SOLOMON, et al., Defendants.

         Re Document No.: 102

          MEMORANDUM OPINION GRANTING IN PART AND DENYING IN PART DEFENDANT HENRY A. SOLOMON'S MOTION TO DISMISS CROSSCLAIM

          RUDOLPH CONTRERAS, United States District Judge.

         I. INTRODUCTION

         In 1999, Defendant Henry Solomon submitted an incomplete form to the Federal Communications Commission (“FCC”) on behalf of his then-client, Plaintiff the Atlanta Channel, Inc. (“ACI”). The incomplete form resulted in ACI being denied a valuable license for one of its TV channels, a decision that was upheld on review and on reconsideration by the FCC over a decade later. ACI filed suit against Solomon for legal malpractice in 2015. In 2017, ACI added to its complaint malpractice claims against Defendants Melodie Virtue and her law firm Garvey, Schubert & Barer. P.C. (together, the “Garvey Defendants”), who took over the FCC licensing dispute from Solomon when he retired in 2010 and who ACI alleges failed to disclose that Solomon's retirement could start the limitations clock on any malpractice claims against him. In their answer to ACI's complaint, the Garvey Defendants brought a crossclaim against Solomon for equitable indemnification or contribution. Solomon now moves to dismiss that crossclaim, arguing that it is barred under D.C. law. The Court grants the motion to dismiss the crossclaim for contribution but denies the motion as to indemnification.

         II. FACTUAL BACKGROUND[1]

         This Court has already discussed the factual background for this case in detail in prior opinions. See, e.g., Beach TV Props., Inc. v. Solomon, 324 F.Supp.3d 115, 118-21 (D.D.C. 2018); Beach TV Props., Inc. v. Solomon, 306 F.Supp.3d 70, 76-81 (D.D.C. 2018). The Court assumes familiarity with its prior opinions and confines its discussion to the facts most relevant to the present motion.

         ACI is a broadcast television company that operates the low power television station WTHC-LD in Atlanta. Second Am. Compl. ¶ 15, ECF No. 69. Following the passage of the Community Broadcasters Protection Act of 1999, Pub. L. No. 106-113, 113 Stat. 1501, 1501A- 594, ACI determined that it would need to obtain a Class A license in order to keep WTHC-LD on the air. Second Am. Compl. ¶¶ 17-23. ACI sought the services of Solomon, an attorney specializing in FCC law and procedure, id. ¶ 5, to submit a statement of eligibility for a Class A license for WTHC-LD with the FCC, id. ¶ 25. Solomon filed the statement of eligibility on December 29, 1999. Id. ¶¶ 27. However, the statement was defective and the FCC denied ACI the license. Id. ¶¶ 28, 33. Through Solomon, ACI applied for review of the denial on December 29, 2000. Id. ¶¶ 36-37. The FCC affirmed its denial of the license in 2012, and denied reconsideration of that decision in 2014. Id. ¶ 37.

         In 2000, Solomon joined the law firm of Garvey Schubert Barer, P.C. Garvey Defs.' Answer 2, ECF No. 99. Melodie Virtue, a lawyer at the firm, worked with Solomon on ACI matters while he was employed at Garvey Schubert Barer. Id. at 2-3. After Solomon left the firm in 2010, Virtue took over the ACI licensing matter, reviewing the pending FCC application for review starting in early 2012 and representing ACI in its petition for reconsideration after the FCC's affirmance of the denial. Id. at 6-7. ACI contends that Virtue failed to make a number of required disclosures to ACI upon assuming responsibility for the FCC proceedings relating to the license, including warning ACI about Solomon's malpractice and the resulting conflict of interests between Solomon and the Garvey Defendants, and advising ACI to retain independent counsel. Second Am. Compl. ¶¶ 59-61. According to ACI, Virtue's work on the FCC proceedings “lulled [it] into inaction in filing its malpractice claim against . . . Solomon.” Id. ¶ 57.

         ACI initially filed suit on October 26, 2015. See Compl., ECF No. 1. After extensive litigation and the dismissal of most of the claims in ACI's first amended complaint, see Beach TV, Props., Inc. v. Solomon, No. 15-1823, 2016 WL 6068806 (D.D.C. Oct. 14, 2016), ACI filed its Second Amended Complaint on June 1, 2017. See Second Am. Compl. Count one of the Second Amended Complaint is a legal malpractice claim against Solomon for $25, 000, 000, which ACI alleges is the loss in value to WTHC-LD resulting from the denial of the Class A license. Id. ¶¶ 70, 73-75.[2] In the alternative, counts three and four are legal malpractice claims for the same amount against Virtue and, under respondeat superior, Garvey Schubert Barer. Id. ¶¶ 80-87. In these two claims, which are conditioned on ACI's malpractice claim against Solomon being barred by the statute of limitations, id. ¶ 83, ACI alleges that Virtue's failure to make the required disclosures “adversely affected ACI's malpractice claims against . . . Solomon, ” id. ¶ 82.

         After the Court denied their motion to dismiss counts three and four, the Garvey Defendants filed an Answer and Crossclaim against Solomon on September 21, 2018, Garvey Defs.' Answer 1. In the Crossclaim, the Garvey Defendants allege that they are entitled to “equitable indemnification, restitution, reimbursement and/or contribution in whole or in part” from Solomon because he would be unjustly enriched if the Garvey Defendants were the only ones to pay for damages substantially resulting from his malpractice. Id. at 15. Solomon filed a motion to dismiss the Crossclaim on October 12, 2018. Solomon Mot. Dismiss Crossclaim, ECF No. 102. The Garvey Defendants filed their opposition on October 25, 2018, Garvey Defs.' Mem. Opp'n, ECF No. 103, and Solomon filed his reply on November 1, 2018, Solomon Reply, ECF No. 104. The motion is now ripe for review.

         III. LEGAL STANDARD

         To prevail on a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a plaintiff need only provide a “short and plain statement of the claim, ” Fed.R.Civ.P. 8(a)(2), that “give[s] the defendant fair notice of what the . . . claim is and the grounds upon which it rests, ” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (omission in original) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A motion to dismiss under Rule 12(b)(6) does not test a plaintiff's ultimate likelihood of success on the merits; rather, it tests whether a plaintiff has properly stated a claim. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). A court considering such a motion presumes that the complaint's factual allegations are true and construes them liberally in the plaintiff's favor. See, e.g., United States v. Philip Morris, Inc., 116 F.Supp.2d 131, 135 (D.D.C. 2000).

         Nevertheless, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). This means that a plaintiff's factual allegations “must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Twombly, 550 U.S. at 555-56 (citations omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, ” are therefore insufficient to withstand a motion to dismiss. Iqbal, 556 U.S. at 678. A court need not accept a plaintiff's legal conclusions as true, see id., nor must a court presume the veracity of legal conclusions that are couched as factual allegations. See Twombly, 550 U.S. at 555.

         IV. ...


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