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Caldwell v. McRight

United States District Court, N.D. Alabama, Southern Division

February 7, 2018

DEMETRIUS D. CALDWELL, et al., Plaintiffs,
v.
EDWARD L. MCRIGHT, JR., Defendant
v.
DENNIS CARLIN, III, et al. Third-Party Defendants.

          MEMORANDUM OPINION [1]

          JOHN H. ENGLAND, III UNITED STATES MAGISTRATE JUDGE

         This is a diversity action alleging various Alabama state law claims against Defendant/Third-Party Plaintiff Edward L. McRight, Jr., (“McRight”), all stemming from a divorce proceeding in which McRight represented Plaintiff Rosemarie Awtrey as counsel. (Doc. 1). On July 13, 2017, McRight answered the complaint and filed a counterclaim against Rosemarie Awtrey and a third-party complaint against the Third-Party Defendants Dennis Carlin, III (“Carlin”) and All Star Land, LLC (“All Star Land”). (Doc. 9). The Third-Party Defendants have moved to dismiss the third-party complaint. (Doc. 16). McRight responded in opposition, (doc. 23), and the Third-Party Defendants replied, (doc. 24). The motion is fully briefed and ripe for review. For the reasons stated more fully below, the motion to dismiss is DENIED.

         I. Standard of Review [2]

         Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” “[T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955 (2007)). Mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action” are insufficient. Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949 (citations and internal quotation marks omitted). “Nor does a complaint suffice if it tenders ‘naked assertions]' devoid of ‘further factual enhancement.'” Id. (citing Bell Atl. Corp., 550 U.S. at 557, 127 S.Ct. 1955). Additionally, “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b).

         Federal Rule of Civil Procedure 12(b)(6) permits dismissal when a complaint fails to state a claim upon which relief can be granted. “To 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.” Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949 (citations and internal quotation marks omitted). A complaint states a facially plausible claim for relief “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted). The complaint must establish “more than a sheer possibility that a defendant has acted unlawfully.” Id.; see also Twombly, 550 U.S. at 555, 127 S.Ct. at 1965 (“Factual allegations must be enough to raise a right to relief above the speculative level.”). Ultimately, this inquiry is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679, 129 S.Ct. at 1950.

         The court accepts all factual allegations as true on a motion to dismiss under Rule 12(b)(6). See, e.g., Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000). However, legal conclusions unsupported by factual allegations are not entitled to that assumption of truth. Iqbal, 556 U.S. at 678, 129 S.Ct. at 1950.

         IT. Background [3]

         McRight, an attorney, represented Rosemarie Awtrey from June 2013 to March 4, 2014 in her divorce from her husband, Al Awtrey. (Doc. 9 at ¶ 76). After the divorce was finalized, Al Awtrey filed post-trial motions, and Rosemarie Awtrey asked McRight to represent her in connection with those motions. (Id. at ¶ 78-79). McRight refused, believing he had conflicts of interest, and Rosemarie Awtrey retained other counsel. (Id. at ¶ 79). In August 2014, Al Awtrey died, and one of his daughters continued to prosecute the post-trial motions on behalf of his estate. (Id. at ¶ 80).

         In December 2015, Rosemarie Awtrey invited McRight to dinner at the Bright Star Restaurant in Bessemer, where she revealed to him that she had been untruthful with him during the divorce proceedings concerning her assets and property interests. (Id. at ¶¶ 81-83). Rosemarie Awtrey had provided false statements in response to Al Awtrey's interrogatories and requests for production, which had been submitted by McRight. (Id. at ¶ 84). Specifically, Rosemarie Awtrey had lied about the amount of debt owed by All Star Land, a land investment. (Id. at ¶ 85). She also admitted All Star Land's financial statement, submitted in response to the requests for production, was fraudulent and that the fraudulent statement had been approved by All Star Land's members, including Carlin (who is Rosemarie Awtrey's son), in order to suppress from McRight, Al Awtrey, and Al Awtrey's lawyer the fact that its debt would be substantially reduced by the time the divorce was complete. (Id. at ¶ 86-87, 93).

         Based on the misrepresentations, McRight's third-party complaint alleges separate counts of fraud against Carlin and All Star Land, as well as a count of civil conspiracy against both Third-Party Defendants. (Id. at ¶¶ 152-171).

         III. Analysis

         The Third-Party Defendants offer-with no citation to any authority-seven bases for dismissal (styled “First Defense, ” “Second Defense, ” and so on).[4] The title of their motion states it seeks dismissal “pursuant to Rule 12 and Rule 9(e) of the Federal Rules of Civil Procedure.” (Doc. 16 at 1). Although they never specify which subparts of Rule 12 they rely on to support dismissal of McRight's third-party complaint, it appears the first, third, and seventh “defenses” seek dismissal for failure to state a claim pursuant to Rule 12(b)(6); the second, fourth, and fifth “defenses” seek dismissal for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1); and the sixth “defense” seeks dismissal pursuant to Rule 9(e). However, the arguments they make do not necessarily line up with these provisions, so the undersigned will address the “defenses” individually (apart from the second and fifth, which are addressed together).[5]

         A. First “Defense”

         The Third-Party Defendants first argue McRight's third-party complaint should be dismissed under Rule 12(b)(6) for failure to state a claim upon which relief can be granted, offering the pronouncement that “[t]here can be no legal basis for the cause of action asserted because no relationships or rights exist to support them [sic].” (Doc. 16 at 3-4). They base this assertion on the fact that All Star Land and Carlin were not parties to the Awtreys' divorce and on an unauthenticated ...


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