KELLY LAW FIRM, PC v. AN ATTORNEY FOR YOU

679 F.Supp.2d 755

The KELLY LAW FIRM, P.C., a Texas Professional Corporation; A. Daniel Woska & Associates, P.C., an Oklahoma Professional Corporation; and the Law Offices of Robert H. Weiss, PLLC, a District of Columbia Professional Limited Liability Company, Plaintiffs, v. AN ATTORNEY FOR YOU, Calliope Media, L.P., and Calliope Media, Inc., Defendants.

Civil Action No. H-09-3352.

United States District Court, S.D. Texas, Houston Division.

December 16, 2009.

Michael Robert Latimer, Harkins Latimer Dahl PC, San Antonio, TX, Robert H. Weiss, Stephen D. Murakami, Zachary Cohen, Law Offices of Robert H. Weiss, PLLC, Jericho, NY, for Plaintiffs.

Michael Robert Latimer, Harkins Latimer Dahl PC, San Antonio, TX, Steele N. Gillaspey, Gillaspey and Gillespey, San Diego, CA, for Defendants.

MEMORANDUM OPINION AND ORDER

SIM LAKE, District Judge.

Plaintiffs, The Kelly Law Firm, P.C. ("Kelly"), A. Daniel Woska & Associates, P.C. ("Woska"), and The Law Offices of Robert H. Weiss, PLLC ("Weiss"), filed this action alleging fraud, breach of contract, unjust enrichment, and violation of the Texas Deceptive Trade Practices Act ("TDTPA") against defendants, An Attorney for You, Calliope Media, L.P., and Calliope Media, Inc. (collectively, "Calliope"), regarding internet marketing services the defendants provided to the plaintiffs. Pending before the court is Defendants' Motion to Dismiss, or, in the Alternative, to Transfer to the Southern District of California (Docket Entry No. 9). Defendants argue that this action should be dismissed for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) or, alternatively, for failure to state a claim under Rule 12(b)(6). For the reasons explained below, the court will deny the defendants' motion, but will order the plaintiffs to replead their fraud allegations.

I. Factual and Procedural Background

This action concerns a dispute over Internet marketing services that the defendants provided to the plaintiffs, a group of plaintiff's law firms that contracted with the defendants to provide leads on clients for mesothelioma and birth-injury lawsuits. Plaintiff Kelly is a Texas Professional Corporation with its principal place of business in Houston, Texas.¹ Plaintiff Woska is an Oklahoma Professional Corporation with its principal place of business in Oklahoma City, Oklahoma.² Plaintiff Weiss is a District of Columbia law firm incorporated pursuant to the laws of the District of Columbia, with branch offices in Jericho, New York, and Atlanta, Georgia.³ Defendant An Attorney for You is not a legal entity, but is a name used by Calliope Media, Inc., a California Corporation doing business in La Jolla, California.⁴ Defendant Calliope Media, L.P., is an inactive California limited partnership that merged into Calliope Media, Inc., prior to the filing of this action.⁵ Since Calliope Media, Inc., is the only active legal entity that is a defendant in this action, the court will refer to the three named defendants as "Calliope."

The parties disagree about several aspects of the factual background to this action. What is not in dispute is that in mid-2007 and early 2008 Kelly and Calliope entered into two agreements ("the personal injury agreements") under which Kelly paid Calliope for referrals of potential personal injury plaintiffs from its website, anattorneyforyou.com.⁶ Kelly and Calliope entered into two additional agreements ("the mesothelioma and birth injury agreements") in July of 2008 under which Calliope agreed to refer potential mesothelioma and birth injury plaintiffs from its websites to Kelly, Weiss, and Woska in exchange for payment.⁷ It is not disputed that the contracts were negotiated and executed between Calliope and Kelly.⁸ At some point Kelly brought in the Woska and Weiss firms to share in the costs and the administrative requirements of the marketing campaigns. The parties dispute precisely when Woska and Weiss became involved in the transaction and what roles they played in it. The parties also disagree as to who initiated the contract negotiations, where the work under the contract was performed, and whether the leads provided by Calliope fulfilled Calliope's contractual obligations.

A. The Plaintiffs' Account

The plaintiffs have provided a sworn declaration from Todd Kelly, the owner of The Kelly Law Firm, describing the events leading up to the litigation:⁹

2. Prior to Plaintiffs and Defendants entering into the Mesothelioma and Birth Injury Agreements at issue herein, the Defendants first targeted the Kelly Law Firm ... in or about late June or early July 2007, an office-mate of mine was directly sent an email at their shared offices in Houston, Texas which appeared to be from a prospective client in need of legal services and caused me to respond thinking that I was contacting someone looking for an attorney. To my surprise, I was informed by one of Defendants' representatives, that they (Calliope Media) in fact had sent the e-mail message. I was then informed of Defendants' identity and of the fact that they could provide similar such leads and referrals to my law firm from the visitors to its website, anattorneyforyou.com, in the areas of law that are of specific interest to my firm. After considering the possibilities of the types of services Defendants claimed it could provide, Defendants and I negotiated and then entered into two contracts, which are similar to the Agreements at issue herein, whereby Defendants would provide their services to our firm in Texas ... I never left Texas for any purpose related to these contracts.

3. On or about July 2008, Defendants once again approached Kelly, and offered its lead referral service to the firm. Plaintiff Kelly and Defendants exclusively negotiated the terms and then Kelly contracted solely with Defendants on two additional Agreements, which are the subject of this current dispute, whereby Defendants overstated and/or consciously disregarded their capabilities to generate Qualified Mesothelioma and Birth Injury Leads. Defendants promised to provide, on an `exclusive' basis, 60-120 Qualified and Targeted Mesothelioma Leads, which Defendants guaranteed would result in a minimum of 10 Cases with a minimum settlement value of $1,000,000 (One Million Dollars), within 6 months. Defendants further promised to deliver XXXX-XXXX Qualified and Targeted Birth Injury Leads ...

4. In my later discussions with Thomas Arthur, the cofounder and CEO of Defendant Calliope Media, Inc. and Simone Vasquez, Senior Business Advisor for Defendant Calliope Media, Inc., I informed them that A. Daniel Woska & Associates, P.C., (hereinafter "WOSKA"), The Estefan Firm (hereinafter "ESTEFAN"), and The Law Offices of Robert H. Weiss, PLLC, (hereafter "WEISS") intended to join this venture, and that along with me, Plaintiffs Woska, Estefan, and Weiss would provide the necessary payments to Defendants for both Agreements. However, as the sole contracting party, these leads were sent only to me at my Houston, Texas office for a period of approximately six weeks before Plaintiff Woska of Oklahoma and Weiss of New York, having joined this venture, began to receive these leads jointly with The Kelly Law Firm, at each of their firms' offices. The leads provided by Defendants were never exclusively sent to New York as claimed by Defendants.

5. While Plaintiff Weiss had the infrastructure in New York and operated the "call center" and periodically reported to Defendants about the quality of the leads that were being referred, Plaintiff Weiss and its offices in Jericho, N.Y. was never selected as the Joint Venture Management/Operations Center, as claimed by Defendants.... Every lead that was referred by Defendants pursuant to the Mesothelioma and Birth Injury Agreements were at all times purposefully directed by email, through use of its attorneyforyou.com website, to my offices in Texas, as well as the Weiss and Woska offices. My firm (along with Woska and Weiss) reviewed all leads received from Defendants and was prepared to pursue any actionable claim on behalf of those referred leads ...¹⁰

In support of Kelly's Declaration, plaintiffs provide a July 3, 2007, e-mail from Calliope's Simone Vazquez containing the initial personal injury agreement between Kelly and Calliope.¹¹ The agreement contains an invoice stating, "Membership Listings Purchased ... Personal Injury (Subcategories include: Medical Malpractice, Nursing Home Negligence, Birth Injury, Brain Injury, Vehicle Accidents, Aviation, Toxic Mold, Transportation, Lasik, Construction Law and Admiralty Law): Texas."¹² Plaintiffs also provide a January 21, 2008, e-mail from Vazquez containing the second personal injury agreement stating, "Calliope Media guarantees that An Attorney for You directory will provide e-mail leads for the duration of the contract and that Todd Kelly will be receiving e-mail referrals for Personal Injury for the entire state of Texas."¹³

In addition to the Declaration, plaintiffs have provided a screenshot of the Internet page for anattorneyforyou.com with the title "Texas, General Practice Attorneys."¹⁴ The page provides an information entry form for prospective legal clients. It states, "An Attorney For You can assist with locating and contacting an attorney, should legal representation be necessary, by providing free access to lawyers and attorneys in the state of Texas."¹⁵ The page also states, "The An Attorney for You Legal Network contains lawyers, attorneys, and law firms that serve the following counties in Texas," and lists all 254 Texas counties.¹⁶

B. Calliope's Account

Calliope disputes the plaintiffs' account of who initiated the contract negotiations and whether Calliope's efforts were directed at the state of Texas. Calliope has provided a declaration by Thomas Arthur, an officer and director of Calliope.¹⁷ Arthur's declaration states:

3. The Kelly Law Firm of Texas approached Calliope Media, Inc., a California

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