Mello v. Hare, Wynn, Newell & Newton et al

Filing 18

MEMORANDUM OPINION. Signed by Judge William M Acker, Jr on 1/14/13. (KGE, )

FILED
2013 Jan-14 AM 10:43
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
RALPH W. MELLO,

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}
Plaintiff,
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v.
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HARE, WYNN, NEWELL & NEWTON, }
et. al.,
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}
Defendants.
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CIVIL ACTION NO.
CV-12-3552-S

MEMORANDUM OPINION
The above-entitled case was transferred to this court on
October 9, 2012, by order of the United States District Court for
the Middle District of Tennessee (Nashville Division) in response
to the alternative motion of defendants, Hare, Wynn, Newell &
Newton, and Larry Crain (“defendants”), to dismiss or to transfer.
Defendants’ motion to dismiss was denied by the transferor court
without prejudice, and is automatically reinstated in this court.
The memorandum opinion of the Middle District of Tennessee that
accompanied the order of transfer contained the following pregnant
language:
The Bankruptcy Court plainly has extensive familiarity
with the nature of the parties’ fee dispute, with respect
to which the Bankruptcy Court has held several hearings,
considered multiple rounds of briefing from the parties,
and issued several orders, including an order dismissing
the substantially identical Mello II dispute with
prejudice. Furthermore, the Bankruptcy Court will be in
the best position to determine whether its prior orders
have partial or complete preclusive effect on Mello’s
claims asserted in this case, which (a) overlap
substantially with the Mello II allegations that the
Bankruptcy Court previously considered, dismissed with

prejudice and warned Mello not to refile; (b) appear, as
to compensatory damages, to have been satisfied/precluded
by the Bankruptcy Court’s May 1, 2012 Order awarding
disbursement of Mello’s 7.5% share of Pogue’s recovery
from final settlement of the qui tam action; and
(c)appear, as to punitive damages, to be without merit,
given that the Bankruptcy Court has apparently found that
Hare Wynn’s transfer of the entire qui tam action
proceeds to the liquidation trust account was proper in
the first place. It also appears that several orders in
the Bankruptcy Proceeding have been appealed to the
District Court for the Northern District of Alabama, some
of which the district court has ruled on, and at least
one of which relates to the contingency fee dispute and
remains pending. Plainly, the Bankruptcy Court and the
District Court for the Northern District of Alabama are
in the best position to determine the preclusive effect
of their own orders, which may dispose of this case in
whole or in part.
Taking judicial notice of the opinion being contemporaneously
entered by

this

court

in

five

consolidated

appeals

from the

Bankruptcy Court for the Northern District of Alabama (Case Nos.
2:12-CV-1781-WMA, 2:12-CV-1782-WMA, 2:12-CV-1783-WMA, 2:12-CV-2200WMA, 2:12-CV-2480-WMA), all of which opinion is hereby INCORPORATED
in this opinion, and because this court agrees with the Middle
District of Tennessee that this court is “in the best position to
determine the preclusive effect of [its] own orders,” this court
will proceed to rule on defendants’ motion to dismiss.
Plaintiff, Ralph W. Mello (“Mello”), seeks to recover damages
from defendants, claiming that when they, as lawyers for the
relator, settled a qui tam case pending in the Middle District of
Tennessee, they wrongfully interfered with his entitlement to a
portion

of

the

contingent

fee

2

owed

by

the

relator,

because

defendants transmitted Mello’s fee to the trustee in the relator’s
Chapter 11 proceeding then pending in the Northern District of
Alabama instead of directly to Mello.
Mello subsequently received from the relator’s bankruptcy
proceeding his claimed percentage of the contingent fee.

It is

true that he has spent time and effort in attempting to obtain his
fee, time and effort that he would not have spent if his fee had
been paid directly to him from the qui tam settlement.

This court

can understand his impatience, but once the relator, who was the
entity obligated for the contingent fee, was in bankruptcy, the
bankruptcy proceeding subsumed everything related to it, and the
orders entered

in

the

bankruptcy

court, which

have

now been

affirmed by this court, and which were not appealed by Mello, are
preclusive of Mello’s claim in the above-entitled case.

For this

reason, for the reasons stated by the Middle District of Tennessee
before transfer, and for the reasons stated by this court in the
appeals from the bankruptcy court, the above-entitled action will
be dismissed with prejudice.
DONE this 14th day of January, 2013.

_____________________________
WILLIAM M. ACKER, JR.
UNITED STATES DISTRICT JUDGE

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