Marks v. Struble

Page 136

347 F.Supp.2d 136

Gerald A. MARKS, Plaintiff, v. Stanley STRUBLE, et. al., Defendants.

Civil Action No. 03-6225(MLC).

United States District Court, D. New Jersey.

November 18, 2004.

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David J. Haber, Esq. & Justin M. Klein, Esq., Red Bank, NJ, for Plaintiff.

James M. McGovern, Jr., Esq., Lomurro, Davison, Eastman & Munoz, PA, Freehold, NJ, for Defendants.

MEMORANDUM OPINION

COOPER, District Judge.

This matter is before the Court on the motion by defendants, Stanley Struble, Snap-on Tools Company, LLC ("Snap-on"), Susan Marrinan, and Tari Williams, pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6) to dismiss the complaint for failure to state a claim upon which relief can be granted. Also before the Court is the defendants' motion pursuant to Rule 72(a) to set aside the Order of the Magistrate Judge granting plaintiff, Gerald A. Marks, leave to file an amended complaint.¹ At issue is an attorney's complaint of tortious interference with contract against a third party who independently settled a dispute with the plaintiff's retainer agreement client. The Court, for the reasons stated herein, will: (1) grant both motions; (2) dismiss the complaint and the amended complaint; and (3) grant plaintiff leave to file a second amended complaint.

BACKGROUND

Plaintiff entered into a partial contingency fee agreement ("Retainer Agreement") with Robert Rinaldi on December 12, 2002. (Compl. at ¶ 4.) Rinaldi was a franchised Snap-on dealer "responsible for a territory within New York State." (Def. Br. in Supp. Mot. to Dismiss ("Def.Br.Mot.Dismiss") at 3.) The Retainer Agreement called for plaintiff to represent Rinaldi in connection with "difficulties and claims" Rinaldi had against Snap-on. (Compl. at ¶ 4.) The Retainer Agreement specifically provided that: (1) plaintiff be paid a partial contingency fee of one-third of the gross amount recovered by Rinaldi, and (2) Rinaldi pay plaintiff a non-refundable retainer of $3,500 upon signing the Agreement. (Marks Aff. at Ex. B.) The Retainer Agreement did not discuss termination of the lawyer-client relationship or what would happen if Rinaldi were to directly settle with the defendants without plaintiff's involvement. (Id.) Defendants and Rinaldi subsequently settled independently without plaintiff's involvement, knowledge, or consent. (Def. Br. Mot. Dismiss at 2.) The settlement was reflected in a settlement agreement signed by Rinaldi. (Marks Aff. at ¶ 22.)

Plaintiff filed a complaint, in New Jersey Superior Court on December 3, 2003, alleging that Struble and Snap-on tortiously interfered with his Retainer Agreement with Rinaldi. (Compl. at ¶ 15.) Struble and Snap-on removed to this Court on December 31, 2003. (Remov. Not.) Defendants then moved to dismiss the complaint for failure to state a claim, pursuant to Rule 12(b)(6), on January 8, 2004. (Not. of Mot.) Struble and Snap-on filed an answer and counterclaim on March 10, 2004. (3-10-04 Ans. & Counterclaim.) The counterclaim alleged that plaintiff tortiously interfered with the settlement agreement between Snap-on and Rinaldi. (Id. at ¶¶ 37-41.)

Plaintiff moved to file an amended complaint on March 29, 2004. Snap-on and Struble opposed, arguing that amending the complaint would be futile because, even if amended, the proposed amended complaint would still fail to state a claim upon which relief could be granted. (Def. Br. in Supp. to Mot. to Set Aside Magistrate Judge's Order ("Def.Br.Am.Compl.") at 2.) The Magistrate Judge rejected this argument and granted plaintiff's motion for leave to file an amended complaint on May 14, 2004. (Id.) Snap-on and Struble filed a notice of motion to set aside the Magistrate Judge's order, pursuant to Rule 72(a) and Local Civil Rule 72.1(c)(1), on May 27, 2004.

Plaintiff, pursuant to the Magistrate Judge's order, filed an amended complaint, on June 2, 2004, asserting a tortious interference claim against Marrinan and Williams, attorneys for Snap-on. (Am. Compl. at ¶¶ 3-4.) Plaintiff, in the amended complaint, specifically alleges that Marrinan and Williams "advised [Struble] to tortiously interfere and either one or both [of the attorneys] prepared the settlement agreement that Rinaldi signed." (Id. at ¶ 11.) Plaintiff, in support of this assertion relies on Struble's testimony that he: (1) was unsure who prepared the settlement agreement; (2) received the agreement from Snap-on; and (3) discussed the agreement with Williams. (Id. at Ex. A, 11-22.)

The Court now considers defendants' motions: (1) to dismiss for failure to state a claim, and (2) to set aside the Magistrate Judge's order granting leave to file an amended complaint.

DISCUSSION

I. Jurisdiction

Subject matter jurisdiction is based on the diversity of the citizenship of the parties and the amount in controversy being greater than $75,000.² 28 U.S.C. § 1332.

II. Choice of Law: Which State's Substantive Law Applies?

A district court sitting in diversity applies the choice-of-law rules of the state in which it sits. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). New Jersey applies the "governmental-interest" choice-of-law test for tort claims, applying the law of "the state with the greatest interest in governing the particular issue" in the underlying litigation. Veazey v. Doremus, 103 N.J. 244, 510 A.2d 1187, 1189 (1989).

The initial step in this analysis considers whether a conflict exists between the laws of the interested jurisdictions. Id. The Court, if an actual conflict exists, must then "identify the governmental policies underlying the law of each state and how those policies are affected by each state's contacts to the litigation and to the parties." Id. The contacts considered by the Court include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the injury occurred,

(c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and

(d) the place where the relationship, if any, between the parties is centered.

Erny v. Estate of Merola, 171 N.J. 86, 792 A.2d 1208, 1217 (2002). If a state's contacts are not related to the policies underlying its law, then that state does not possess an interest in its law applying to the underlying litigation. Veazey, 510 A.2d at 1189. "[T]he qualitative, not the quantitative, nature of a state's contacts ultimately determines whether its law should apply." Id.

There is no conflict here because New Jersey and New York law on tortious interference with an existing contract are in accord. See DiGiorgio Corp. v. Mendez & Co., Inc., 230 F.Supp.2d 552, 557-58 (D.N.J.2002); Hidden Brook Air, Inc. v. Thabet Aviation Int'l, Inc., 241 F.Supp.2d 246, 278 (S.D.N.Y.2002). The Court, however, will nonetheless refer to New York law because neither the parties' nor the Court's research has revealed applicable New Jersey case law that specifically addresses the validity of an attorney's claim against a third party for tortious interference with a retainer agreement. New York law, however, does address the validity of such a claim.

The Court, moreover, finds that New York's contacts with the underlying litigation outweigh New Jersey's contacts. Rinaldi is a citizen of New York and a Snap-on dealer in New York. The Retainer Agreement pertained to litigation arising out of Rinaldi's dealership in New York. This dispute involves that Retainer Agreement. Struble allegedly interfered with plaintiff's Retainer Agreement by going to Rinaldi's home in New York and inducing Rinaldi to sign a settlement agreement. The Court, accordingly, finds that New York has the "greatest interest" in its law applying here.

III. Analysis of Motion to Dismiss

A. Applicable standard of review under Rule 12(b)(6)

A motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted does not attack the merits of the action, but merely tests the legal sufficiency of a complaint. Sturm v. Clark, 835 F.2d 1009, 1011 (3d Cir.1987). A court may grant a motion to dismiss a complaint under Rule 12(b)(6) "only if, accepting all alleged facts as true, the plaintiff is not entitled to relief." Bartholomew v. Fischl, 782 F.2d 1148, 1152 (3d Cir.1986). See also Doe v. Delie, 257 F.3d 309, 313 (3d Cir.2001).

The Court, when considering such a motion, must accept as true all well-pleaded allegations in the complaint and view them in the light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) ("The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims."). A court need not, however, credit "bald assertions" or "legal conclusions," nor should it accept "unwarranted inferences" when deciding a motion to dismiss. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997). "Dismissal of claims [on a motion to dismiss] is appropriate only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim upon which relief may be granted." Jakomas v. McFalls, 229 F.Supp.2d 412, 419 (W.D.Pa.2002).

The Court, when confronted with a Rule 12(b)(6) motion to dismiss, generally only considers the allegations in the complaint, exhibits attached to the complaint, and public records. Beverly Enters., Inc. v. Trump, 182 F.3d 183, 190 n. 3 (3d Cir.1999). We generally cannot "consider matters extraneous to the pleadings." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.1997). We may, however, consider all documents that are "integral to or explicitly relied upon in the complaint." Id. (quotations and citation omitted).

B. Tortious interference with an existing contract claim

Defendants argue that the complaint should be dismissed with prejudice because it does not, and cannot, plead a cause...