Ormsby v. Imhoff & Assocs., P.C.

PATSY ORMSBY, JEREMY GILMORE, Plaintiff, v. IMHOFF & ASSOCIATES, P.C.;CHRISTOPHER R. WILLIAMS; PAL A LENGYEL-LEAHU Defendant.

Case No. 14-2039-RDR

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

August 22, 2014

MEMORANDUM AND ORDER

This is a diversity action brought by Jeremy Gilmore and his grandmother, Patsy Ormsby, against Gilmore's former attorneys in a criminal case. Gilmore and Ormsby assert claims of legal malpractice, breach of contract, negligent misrepresentation, fraud and violations of the Kansas Consumer Protection Act (KCPA) against Imhoff & Associates, PC; Pal A. Lengyel-Leahu; and Christopher R. Williams. This matter is presently before the court upon (1) defendants' motion to dismiss for failure to state a claim upon which relief can be granted under Fed.R.Civ.P. 12(b)(6)¹; and (2) plaintiffs' motion to strike new arguments in defendants' reply.

I.

The court shall first consider the plaintiffs' motion to strike new arguments in the defendants' reply brief. Plaintiffs contend that the following arguments raised in the reply should be stricken: (1) plaintiffs' malpractice claim fails to allege causation; (2) Gilmore cannot claim damages due to malpractice; (3) Ormsby lacks standing to bring the malpractice claims; and (4) Gilmore lacks standing to bring a KCPA violation.

A party is not entitled to raise new arguments in a reply brief. See, e.g., U.S. Fire Ins. Co. v. Bunge N. Am., Inc., 2008 WL 3077074 at *9 n.7 (D.Kan. Aug. 4, 2008) (citing Minshall v. McGraw Hill Broadcasting Co., 323 F.3d 1273, 1288 (10^th Cir. 2003)). But, "if the court relies on new materials or new arguments in a reply brief, it may not forbid the nonmovant from responding to those new materials." Pippin v. Burlington Res. Oil & Gas Co., 440 F.3d 1186, 1192 (10^th Cir. 2006).

The court agrees with the plaintiffs that these arguments were essentially newly raised in the defendants' reply brief. There are some vague references to some of these arguments in the defendants' memorandum in support of its motion to dismiss, but there was no actual notice to the plaintiffs that these arguments were being seriously asserted. Accordingly, the courtshall not consider any of these arguments in deciding the defendants' motion to dismiss.

To the extent that the defendants have asked that they be allowed to file a sur-reply to raise some of these arguments, this request shall be denied. Sur-replies are typically not allowed, but may be permitted in rare circumstances. The court sees no need to allow a sur-reply here.

II.

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "[T]he mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims." Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10^th Cir. 2007). "The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted." Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10^thCir. 2003).

In determining whether a claim is facially plausible, the court must draw on its judicial experience and common sense. Iqbal, 556 U.S. at 679. All well pleaded facts in the complaint are assumed to be true and are viewed in the light most favorable to the plaintiff. See Zinermon v. Burch, 494 U.S. 113, 118 (1990); Swanson v. Bixler, 750 F.2d 810, 813 (10^th Cir. 1984). Allegations that merely state legal conclusions, however, need not be accepted as true. See Hall v. Bellmon, 935 F.2d 1106, 1110 (10^th Cir. 1991).

III.

The amended complaint in this case makes the following allegations. On May 26, 2009, Gilmore was convicted of conspiracy to distribute and possess with the intent to distribute more than 50 grams of methamphetamine in the United States District Court for the District of Kansas. As a result of his conviction, Gilmore faced a mandatory sentence of life imprisonment. Following the conviction, Ormsby and Lois Gilmore, Gilmore's mother, began looking at the internet to find attorneys to handle his post-conviction motions, sentencing and appeal. They found defendant Imhoff & Associate's website which advertised that it: (1) was a national law firm; (2) had won the reversal of many cases; (3) had "qualified and aggressive"attorneys who "dont (sic) give up easily"; (4) had "the most competent, experienced and effective attorney[s] available"; and (5) had "aggressive and resourceful criminal defense attorney[s]" who were "intimately familiar with all facets of criminal defense. " The website also indicated the following: "When it comes to criminal law cases, an experienced and effective criminal defense attorney can mean the difference between a prison sentence and reduced or dismissed charges."

After reading the website, Lois Gilmore called the law firm and talked to a "non-attorney case manager" who told her: (1) the law firm was actually the former Johnny Cochran Law Firm; (2) the firm had defended O.J. Simpson; (3) "You probably remember the catchy phrase"; and (4) if Gilmore's family wanted to hire Imhoff, they needed to act quickly and wire money to the firm. Lois Gilmore relayed this information to Ormsby and discussed their financial situation with other family members.

An aunt of Jeremy Gilmore provided money to pay the fees requested by Imhoff & Associates. On May 29, 2009, Ormsby retained Imhoff & Associates to represent Gilmore. Under the retainer agreement, Imhoff & Associates agreed to (1) file a motion for new trial, (2) advocate for Gilmore during the sentencing phase of his trial, and (3) pursue the direct appeal of Gilmore's conviction. For these services, Ormsby paid Imhoff& Associates a non-refundable, flat-fee of $49,250 via a wire transfer on May 29, 2009. Ormsby also opened a trust account with Imhoff & Associates into which she paid an additional $5,000.

Imhoff & Associates assigned two attorneys to represent Gilmore: Lengyel-Leahu and Williams. Lengyel-Leahu met with family members on June 8, 2009. During that meeting, she made the following statements: (1) the government could not legally charge Gilmore with the crime he was convicted of, and she would "show the judge"; (2) she would have Gilmore home "in a year"; (3) Ormsby was "lucky" that she represented Gilmore; (4) Ormsby could not trust the "po-dunk" attorneys in Kansas to defend Gilmore; (5) Gilmore's defense required someone with more knowledge than the "po-dunk" lawyers in Kansas; (6) she would show the judge that Gilmore's conviction did not require a life sentence; (7) she had convinced many judges in California to throw out similar cases; (8) she predicted that it would take a year, but Gilmore's sentence would be reduced or completely thrown out; (9) she opined that the conviction could be overturned because the district court had not instructed the jury on measurements, quantities, or amounts; and (10) Imhoff & Associates only used "the best attorneys."

At the time of the meeting, Lengyel-Leahu had (1) only beenhandling federal drug cases for less than two years; (2) never litigated a federal drug sentencing; and (3) never handled a federal drug case that carried a mandatory life sentence. In addition, at the time of the meeting, Williams had never handled a federal drug case.

Though Imhoff & Associates had promised to file a motion for new trial, Gilmore's trial counsel filed such a motion on June 1, 2009. Neither Lengyel-Leahu nor Williams filed a motion to supplement the motion for new trial. Following the filing of a response by the government, neither Lengyel-Leahu nor Williams filed a reply to the response. Judge Lungstrum overruled the motion on July 10, 2009.

On August 14, 2009, the probation office submitted its presentence investigation report. Neither Lengyel-Leahu nor Williams filed an objection to the report, even though it erroneously indicated that Gilmore possessed a firearm during the commission of the crime. Neither Lengyel-Leahu nor Williams filed a sentencing memorandum on Gilmore's behalf. At the sentencing hearing, Lengyel-Leahu appeared on Gilmore's behalf. Lengyel-Leahu's performance at the hearing drew criticism from Judge Lungstrum. Gilmore was sentenced to life imprisonment.

On October 29, 2009, a notice of appeal was filed. Williams handled the appeal. After a number of procedural mis-steps with the Tenth Circuit, Williams filed a brief on June 11, 2010. The Tenth Circuit also rejected his initial brief as deficient. He filed a corrected brief two weeks later. Following the filing of a response brief, Williams did not file a reply brief. On January 20, 2011, Williams argued the case to the Tenth Circuit. The Tenth Circuit dismissed the claims he had raised in an unpublished opinion on August 23, 2011. Williams did not file a petition of certiorari with the United States Supreme Court.

Gilmore then filed a pro se motion to vacate his sentence under 28 U.S.C. § 2255. The court took it under advisement and set it for an evidentiary hearing on Gilmore's claim that his trial counsel was deficient because "his counsel failed to advise him sufficiently concerning whether to plead guilty instead of proceeding to trial." The court appointed counsel to represent Gilmore at the evidentiary hearing.

Following the evidentiary hearing, the court found that Gilmore "received constitutionally deficient representation in each of the [claimed] respects and that such representation undoubtedly prejudiced the outcome of the case." As a remedy, Gilmore entered into a Sentencing...