Teras et al v. Wilde et al
Filing
79
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 2/27/2017. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
CHRISTOPHER A. TERAS, et al.
:
v.
:
Civil Action No. DKC 14-0244
:
JINHEE KIM WILDE, et al.
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this breach
of settlement agreement case are a motion for partial summary
judgment filed by Plaintiffs Christopher A. Teras (“Mr. Teras”),
Christopher A. Teras, P.C. (“CATPC”), and Worldwide Personnel,
Inc. (“Worldwide”) (collectively, “Plaintiffs”) (ECF No. 72); a
motion for partial summary judgment filed by Defendants Jinhee
Kim Wilde (“Ms. Wilde”) and Wilde and Associates, LLC (“W&A”)
(collectively,
strike
“Defendants”)
documents
attached
Plaintiffs (ECF No. 75).
(ECF
to
No.
73);
Defendants’
and
a
motion
to
motion,
filed
by
The issues have been fully briefed,
and the court now rules, no hearing being deemed necessary.
Local Rule 105.6.
For the following reasons, both motions for
summary judgment will be granted in part and denied in part, and
Plaintiffs’ motion to strike will be denied.
I.
Background1
Mr. Teras and Ms. Wilde are both lawyers who specialize in
immigration law.
In 2004, they formed a partnership to practice
law, which they organized as Teras & Wilde, PLLC (“T&W”).
No. 73-4, at 5).
assisting
foreign
(ECF
A substantial part of T&W’s practice involved
individuals
going
through
the
immigration
process to become workers for Case Farms, a poultry processing
company operating in Morganton, North Carolina (“CFM”) and Ohio
(“CFO”).
(ECF Nos. 72-1, at 11; 73-4, at 5).
The process in
which foreign workers immigrated to the United States to fill
unskilled
labor
positions
through
the
EB3-Other
Workers
immigrant visa category was commonly referred to as “EW” visa
program work.
Although
(ECF Nos. 72-1, at 11; 72-3 ¶ 4).
T&W
was
assisting
Case
Farms
with
filling
positions, Case Farms did not pay T&W for these services.
its
(ECF
No. 72-3 ¶ 18).
Rather, T&W collected its fees from foreign
recruiters,
apparently
who
collected
the
fees
from
the
immigrants who sought to move to the United States for these
jobs.
(Id.).
T&W
worked
primarily
with
three
foreign
recruiters for the Case Farms positions: Edith Lai, David Chang,
and Gregory Evans.
(Id. ¶ 7).
Because the process of being
granted an EW visa can take years and there is no certainty that
1
Unless otherwise noted, the facts outlined here are
undisputed. Additional facts will be provided in the analysis.
2
a visa will be granted until the end of the process, T&W charged
its fees incrementally.
A client would usually pay a smaller
flat fee at each of two or three stages earlier in the process,
and then a much larger final payment upon the issuance of a
visa.
(Id. ¶ 18).
Mr. Teras has been doing EW work since at least 1989.
¶ 4).
In 1995, Mr. Teras incorporated Worldwide as a business
overseeing
both
the
legal
and
recruiting foreign workers.
non-legal
work
involved
(ECF No. 73-10, at 6).
is the sole owner and shareholder of Worldwide.
¶ 3).
(Id.
in
Mr. Teras
(ECF No. 72-3
Ms. Wilde did not learn of the existence of Worldwide
until after she joined T&W.
(ECF No. 73-4, at 4).
During their
partnership, Ms. Wilde and Mr. Teras had disagreements about
Worldwide’s role because Ms. Wilde believed that Worldwide was
simply a “pass-through company that didn’t do anything other
than what Teras & Wilde did.”
(Id. at 6-7).
In spite of these
disputes, all of T&W’s EW visa work for CFM and CFO recruits was
invoiced to Worldwide rather than any employer, recruiter, or
foreign worker.
(ECF Nos. 72-3 ¶ 17; 73-4 at 5).
In late 2008, Mr. Teras and Ms. Wilde sought to dissolve
their partnership.
(ECF No. 73-4).
On March 18, 2009, Ms.
Wilde filed a lawsuit against Mr. Teras concerning the fair
dissolution
of
the
partnership
(the
“Dissolution
Case”);
Mr.
Teras and Worldwide filed counterclaims against Ms. Wilde in
3
that
suit.
(ECF
investigating
her
No.
72-3
claims
in
¶
the
21).
In
Dissolution
the
process
Case,
Ms.
of
Wilde
began talking to employees at Case Farms about what relationship
Case Farms had with Mr. Teras and with Worldwide.
14, at 2; 73-4, at 8).
Farms
Director
apparently
(ECF Nos. 72-
After speaking with Ms. Wilde, Case
of
Corporate
Human
became
concerned
that
Resources
Mr.
Armando
Campos
was
telling
Teras
recruiters that Worldwide had a relationship with Case Farms
that Mr. Campos did not believe it had.
(ECF No. 72-11).
As of
February 2009, Case Farms began working exclusively with Ms.
Wilde and sent a letter to foreign recruiters stating that Case
Farms had never worked with Worldwide.
at 10).
(ECF Nos. 72-11; 73-4,
In the week before the parties agreed to settle their
dispute, Ms. Wilde spoke with Mike Popowycz, the Chief Financial
Officer at Case Farms.
(ECF No. 73-8, at 7, 20).
Mr. Popowycz
told Ms. Wilde on July 12, 2010, that he had no knowledge of a
relationship between Case Farms and Worldwide, and he confirmed
on July 14, that another Case Farms Human Resources Director,
Ken Wilson, had also never heard of Worldwide.
73-8, at 20).
(ECF Nos. 72-14;
When Ms. Wilde confronted Mr. Teras with the
information from Mr. Campos, Mr. Teras told her that these Case
Farms employees were mistaken.
(ECF No. 73-2 ¶ 13).
Despite the information from Case Farms, Ms. Wilde agreed
to a settlement (the “Settlement”) with Plaintiffs on July 20,
4
2010.
(ECF No. 72-15).
The Settlement identifies the CFO and
CFM recruits who T&W had been assisting, lays out a plan for how
the remaining work on these recruits’ cases would be done, and
specifies
how
the
payments
from
received and distributed.
(Id.).
hiring
to
“Selected
Counsel”
these
recruits
should
be
Worldwide is responsible for
do
“Additional
Work,”
which
is
defined as “all additional legal work concerning the immigrant
visa
issuance.”
(Id.
at
5,
7).
Although
the
Settlement
provides that Selected Counsel should be chosen from a list
created by the parties, it also states that “Teras and Wilde
each acknowledge that each [CFO or CFM] Recruit shall have the
unimpeded right to retain an independent attorney of his/her
choosing and at his/her own cost.”
(Id.).
After the remaining
work is completed, “[a]ll fees, payments, receivables and other
funds received by any Party . . . with respect to a recruit
identified” are to be delivered to Worldwide.
(Id. at 4, 6).
Worldwide
for
then
distributes
the
keeps
a
portion
remaining
funds
of
the
to
funds
Mr.
Teras
and
according to specific allocations in the Settlement.
itself
Ms.
and
Wilde
(Id.).
In 2013, W&A received payment from Ms. Lai for EW services
related
to
one
of
represented by T&W.
the
CFM
recruits
who
had
(ECF No. 72-21, at 2).
previously
been
On September 10,
2013, Defendants’ attorney sent a letter to Mr. Teras explaining
that Ms. Lai and the recruit had chosen to have Ms. Wilde do the
5
remaining legal work and had made a total payment in the amount
of $22,000 for the services received since beginning the process
(ECF No. 72-22, at 2).2
with T&W.
Mr.
Teras
and
Worldwide
should
By Defendants’ calculations,
have
received,
at
most,
a
combined $10,500 of that payment under the Settlement, and they
therefore enclosed a check for $11,000 to Mr. Teras. (Id.).
discussed
further
below,
Plaintiffs
believed
this
As
payment
breached the Settlement in a number of ways, and they filed this
action on January 27, 2014.
Plaintiffs’
(ECF No. 1).
complaint
contains
claims
for
declaratory
relief (Count I), breach of contract (Count II), interference
with
contractual
with
Economic
relationships
Relationships
(Count
(Count
III),
IV).
and
(Id.)
motion to dismiss was denied on February 26, 2015.
14; 15).
Interference
Defendants’
(ECF Nos. 6;
Defendants then filed an answer and two counterclaims,
alleging fraud (Count I) and breach of contract (Count II), and
seeking
declaratory
and
monetary
relief.
(ECF
No.
19).
Plaintiffs moved to dismiss Defendants’ counterclaims, but this
motion
was
also
denied.
(ECF
Nos.
24;
55;
56).
After
proceeding with discovery, Plaintiffs filed the pending motion
for partial summary judgment on May 13, 2016.
2
(ECF No. 72).
Defendants challenge the admissibility of the letter and
check because it was sent “for purposes of settlement only.”
(ECF No. 72-22, at 2). Defendants have not cited to any of the
rules of evidence or explained why they believe it is
inadmissible for the purposes used by Plaintiffs here.
6
Defendants responded and filed their motion for partial summary
judgment on May 31.
(ECF No. 73.).
Plaintiffs responded to
Defendants’ motion (ECF No. 74) and filed a motion to strike
certain
motion
documents
(ECF
No.
attached
75).
to
Defendants’
Defendants
replied
summary
to
the
judgment
motion
for
summary judgment (ECF No. 77) and responded to the motion to
strike
(ECF
strike.
II.
No.
76).
Plaintiffs
replied
to
the
motion
to
(ECF No. 78).
Plaintiffs’ Motion to Strike
Plaintiffs move to strike Defendants’ Exhibits 38 (ECF No.
73-23), 43 (ECF No. 73-28), and 48 (ECF No. 73-33).
75).
The
motion
to
strike
must
be
resolved
(ECF No.
first
because
Defendants rely on the evidence that Plaintiffs seek to strike
in
connection
with
their
motion
for
summary
judgment.
See
Stanley Martin Cos. v. Universal Forest Prods. Shoffner LLC, 396
F.Supp.2d 606, 611 (D.Md. 2005) (stating that prior to reviewing
a
motion
for
summary
judgment,
the
court
must
evaluate
the
admissibility of the evidence relied on to support or oppose the
motion).
In reaching the decision below, however, Defendants’
Exhibits 38 and 43 were not considered material.
Therefore,
Plaintiffs’ motion will be denied as moot with regard to these
exhibits.
See Wheeler v. Leonard, No. DKC-2008-0774, 2010 WL
1141199, at *5 n.2 (D.Md. Mar. 22, 2010); L.M.P. Serv., Inc. v.
Shell Oil Co., 116 F.Supp.2d 645, 648 (D.Md. 2000).
7
Defendants’ Exhibit 48 is a letter from the District of
Columbia Bar Counsel to former T&W recruiter Mr. Evans providing
the results of Bar Counsel’s investigation into Mr. Teras after
Mr.
Evans
filed
a
complaint.
(ECF
No.
73-33).
Although
Plaintiffs object because Defendants did not produce this letter
in
discovery,
it
appears
produced the document.
that
Plaintiffs
also
should
have
Defendants requested “All communications
between you and Bar Counsel . . . and all documents received by
you from Bar Counsel . . . concerning [Ms.] Wilde.”
76-1,
at
5-6).
Plaintiffs
argue
that
the
(ECF No.
document
did
not
“concern” Ms. Wilde, but it references her possession of certain
case files, her continued representation of former T&W clients,
and a proposed settlement between Ms. Wilde, Mr. Teras, and
Worldwide.
(ECF No. 73-33, at 2).
It thus appears that both
sides should have produced the document during discovery, and,
given that both Plaintiffs and Defendants seem to have possessed
the letter, neither side can claim to be prejudiced by its nondisclosure.
Furthermore, as discussed below, the exhibit is
insufficient
to
create
a
dispute
of
fact
that
Mr.
disclosed the Settlement, and therefore is harmless here.
Teras
See
Clark v. Creative Hairdressers, Inc., No. DKC-2005-0103, 2005 WL
3008511, at *7 (D.Md. Nov. 9, 2005) (denying a motion to strike
where the evidence would help rather than harm the party moving
8
to strike).
Accordingly, Plaintiffs’ motion to strike will be
denied.
III. Motions for Summary Judgment
A.
Standard of Review
A motion for summary judgment will be granted only if there
exists no genuine dispute as to any material fact and the moving
party
is
entitled
to
judgment
as
a
matter
of
law.
See
Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986);
Anderson
v.
Liberty
Lobby,
Inc.,
477
U.S.
242,
250
(1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008).
Summary judgment is inappropriate if any material factual issue
“may reasonably be resolved in favor of either party.”
Lobby,
477
U.S.
at
250;
JKC
Holding
Co.
v.
Wash.
Liberty
Sports
Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001).
The moving party bears the burden of showing that there is
no genuine dispute as to any material fact.
If the nonmoving
party fails to make a sufficient showing on an essential element
of his or her case as to which he or she would have the burden
of proof, however, then there is no genuine dispute of material
fact.
Celotex, 477 U.S. at 322–23.
Therefore, on those issues
on which the nonmoving party has the burden of proof, it is his
or her responsibility to confront the summary judgment motion
with an “affidavit or other evidentiary showing” demonstrating
that there is a genuine issue for trial.
9
See Ross v. Early, 899
F.Supp.2d 415, 420 (D.Md. 2012), aff’d, 746 F.3d 546 (4th Cir.
2014).
“A mere scintilla of proof . . . will not suffice to
prevent summary judgment.”
(4th Cir. 2003).
significantly
Peters v. Jenney, 327 F.3d 307, 314
“If the evidence is merely colorable, or is not
probative,
summary
judgment
may
be
Liberty Lobby, 477 U.S. at 249–50 (citations omitted).
granted.”
In other
words, a “party cannot create a genuine dispute of material fact
through mere speculation or compilation of inferences.”
Shin v.
Shalala, 166 F.Supp.2d 373, 375 (D.Md. 2001) (citation omitted);
see Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514,
522 (4th
Cir. 2003).
Indeed, this court has an affirmative
obligation to prevent factually unsupported claims and defenses
from going to trial.
(4th Cir. 1993).
See Drewitt v. Pratt, 999 F.2d 774, 778–79
At the same time, the court must construe the
facts that are presented in the light most favorable to the
party opposing the motion.
Scott v. Harris, 550 U.S. 372, 378
(2007); Emmett, 532 F.3d at 297.
“When
cross-motions
for
summary
judgment
are
before
a
court, the court examines each motion separately, employing the
familiar standard under Rule 56 of the Federal Rules of Civil
Procedure.”
Desmond v. PNGI Charles Town Gaming, LLC, 630 F.3d
351, 354 (4th Cir. 2011).
The court must deny both motions if it
finds there is a genuine dispute of material fact, “[b]ut if
there is no genuine issue and one or the other party is entitled
10
to prevail as a matter of law, the court will render judgment.”
10A Charles A. Wright, et al., Federal Practice & Procedure §
2720 (3d ed. 1998).
B.
Applicable Law
In diversity actions, the choice of law rules of the state
in
which
the
district
substantive law.
court
sits
determine
the
applicable
Padco Advisors, Inc. v. Omdahl, 179 F.Supp.2d
600 (D.Md. 2002) (citing Erie R. Co. v. Tompkins, 304 U.S. 64,
(1938)).
Maryland
courts
honor
choice
of
law
contracts.
Marine Midland Bank v. Kilbane, 573 F.Supp. 469, 471
(D.Md. 1983), aff’d, 739 F.2d 958 (4th Cir. 1984).
clauses
in
Under the
terms of the Settlement, the Settlement and “any issues arising
under, resulting from or relating to [it] shall be governed by
and construed in all respects in accordance with the laws of the
District of Columbia.”
District
of
Columbia
law
applies
complaint
Plaintiffs’
and
Counts
counterclaim.
contractual
economic
(ECF No. 72-15, at 15).
to
I
Counts
and
II
I
of
Therefore,
and
II
of
Defendants’
Because Plaintiffs’ claims for interference with
relationships
relationships
(Count
(Count
III)
IV)
do
and
not
interference
arise
under
with
the
Settlement, Maryland law applies to those claims.
C.
Plaintiffs’ Claims
Defendants move for summary judgment on all of Plaintiffs’
claims.
(ECF
No.
73,
at
1).
11
Plaintiffs
move
for
summary
judgment on their declaratory judgment claim, and for partial
summary judgment on their claims for breach of contract and
interference with economic relationships.
(ECF No. 72-1, at
10).
1.
Declaratory Relief
In
Count
I,
Plaintiffs
seek
a
declaration
that
the
Settlement requires Defendants to deliver all payments for the
named CFO and CFM recruits to Worldwide for redistribution of
the funds according to the allocated amounts in the Settlement.
(ECF
No.
1,
counterclaims,
“portions
of
at
13).
Defendants
the
As
part
also
Settlement
of
seek
[]
the
a
remedy
for
declaration
providing
for
their
that
payments
the
to
Worldwide are not enforceable and that Worldwide is not entitled
to any future payments under the Settlement.”
11).
(ECF No. 19, at
In their opposition to the motion for partial summary
judgment,
Defendants
now
argue
that
Plaintiffs’
declaratory
relief action is merely a reformulation of Count II, Plaintiffs’
breach of contract claim.
(ECF No. 73-1, at 44).3
Plaintiffs
counter that a court “may declare the rights and other legal
relations
of
any
interested
party
3
seeking
such
declaration,
Defendants also argue that CATPC should be dismissed from
the action because Plaintiffs have not alleged that CATPC has
been harmed in any way. (ECF No. 73-1, at 19). Because CATPC
is a party to the Settlement that will be interpreted in the
declaratory relief claim, and because the enforceability of the
Settlement is challenged by various other claims, CATPC remains
a necessary party.
12
whether or not further relief is or could be sought.”
74, at 51 (citing 28 U.S.C. § 2201(a)).
(ECF No.
They also point out
that many CFO and CFM recruits still have not obtained immigrant
visas, and the parties to this litigation and third parties
including Case Farms and the recruiters would benefit from the
guidance that declaratory judgment would provide.
(Id. at 52).
The United States Court of Appeals for the Fourth Circuit
has
explained
jurisdiction
criteria
over
are
controversy
that
met:
between
a
federal
declaratory
“(1)
the
court
may
judgment
the
complaint
parties
of
properly
actions
where
alleges
sufficient
exercise
three
an
actual
immediacy
and
reality to warrant issuance of a declaratory judgment; (2) the
court possesses an independent basis for the jurisdiction over
the parties (e.g., federal question or diversity jurisdiction);
and (3) the court does not abuse its discretion in its exercise
of jurisdiction.”
Volvo Constr. Equip. N. Am., Inc. v. CLM
Equip. Co., Inc., 386 F.3d 581, 592 (4th Cir. 2004) (citing 28
U.S.C. § 2201; Cont’l Cas. Co. v. Fuscardo, 35 F.3d 963, 965 (4th
Cir. 1994)).4
It is well established that a federal district
court has “some measure of discretion” in deciding whether or
not to entertain a declaratory judgment action.
4
Nautilus Ins.
“Federal standards guide the inquiry as to the propriety
of declaratory relief in federal courts, even when the case is
under the court’s diversity jurisdiction.” White v. Nat’l Union
Fire Ins. Co., 913 F.2d 165, 167 (4th Cir. 1990).
13
Co. v. Winchester Homes, Inc., 15 F.3d 371, 375 (4th Cir. 1994);
Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 324 (4th Cir.
1937).
The Fourth Circuit has held that “a federal district
court should normally entertain a declaratory judgment action
within
its
jurisdiction
when
it
finds
that
the
declaratory
relief sought (i) will serve a useful purpose in clarifying and
settling the legal relations in issue, and (ii) will terminate
and
afford
relief
from
the
uncertainty,
controversy giving rise to the proceeding.”
at
375
(internal
quotations
and
insecurity,
and
Nautilus, 15 F.3d
citations
omitted).5
Accordingly, declaratory relief is appropriate here.
a.
Interpreting the Contract
District
of
Columbia
courts
apply
“an
objective
law
of
contracts, meaning that the written language embodying the terms
of an agreement will govern the rights and liabilities of the
parties regardless of the intent of the parties at the time they
entered
the
susceptible
District
of
contract,
of
a
clear
Columbia,
unless
and
70
the
written
definite
A.3d
213,
language
meaning.”
218–19
is
Aziken
(D.C.
not
v.
2013).
Generally, the courts will “determine what a reasonable person
5
Parts of Nautilus involving the appellate standards of
review were overruled by the Supreme Court in Wilton v. Seven
Falls Co., 515 U.S. 277 (1995).
“However, the factors
articulated which guide the district court’s exercise of
discretion in a declaratory judgment action remain applicable.”
Minn. Lawyers Mut. Ins. Co. v. Antonelli, Terry, Stout & Kraus,
LLP, 355 F.App’x 698, 699 n.1 (4th Cir. 2009).
14
in the position of the parties would have thought the disputed
language
meant.”
Travelers
Indem.
Co.
v.
United
Food
&
Commercial Workers Int’l Union, 770 A.2d 978, 986 (D.C. 2001).
“Where the contract language is not susceptible of a clear and
definite meaning — i.e., where the contract is determined by the
court to be ambiguous — external evidence may be admitted to
explain
the
surrounding
circumstances
and
the
positions
actions of the parties at the time of contracting.”
A.3d at 219.
correct
and
Aziken, 70
If the provisions at issue remain ambiguous, “the
interpretation
becomes
a
question
for
a
factfinder.”
Debnam v. Crane Co., 976 A.2d 193, 197-98 (D.C. 2009).
However,
“a contract is not ambiguous merely because the parties do not
agree over its meaning, and courts are enjoined not to create
ambiguity where none exists.”
Tillery v. D.C. Contract Appeals
Bd., 912 A.2d 1169, 1177 (D.C. 2006).
The
parties’
Settlement
Sections
centers
4.a.
and
dispute
as
around
a
5.a.,
to
few
the
the
key
interpretation
provisions.
Settlement
states,
of
First,
“All
the
in
fees,
payments, receivables and other funds received by any Party on
or after December 1, 2009, with respect to a recruit identified
on [attached spreadsheets naming CFO and CFM recruits at the
time
of
the
Settlement]
immediately upon receipt.”
shall
be
delivered
to
[Worldwide]
(ECF No. 72-15, at 4, 6).
The rest
of each Section lays out how the funds received by Worldwide
15
would be distributed among the parties.
(Id.).
Second, in
Sections 4.c. and 5.c., sections titled “Management of Further
Legal
Work,”
the
Settlement
provides
that
Worldwide
responsible for engaging and paying “Selected Counsel.”
5, 7).
will
be
(Id. at
Selected Counsel are attorneys engaged by Worldwide to
perform “Additional Work,” which is defined as “all additional
legal
work
concerning
the
immigrant
visa
issuance,
including
without limitation all correspondence with the U.S.”
(Id.).
Those sections also note that “Teras and Wilde each acknowledge
that each [CFO or CFM] Recruit shall have the unimpeded right to
retain
an
independent
his/her own cost.”
attorney
of
his/her
choosing
and
at
(Id.).
The term “Additional Work” is susceptible to two meanings.
“Additional Work” might mean any and all work yet to be done for
the identified recruits, or it might mean any work outside of
what
Worldwide
or
T&W
had
already
agreed
recruits when they began work on their cases.
to
do
for
these
A contract “must
be interpreted as a whole, giving a reasonable, lawful, and
effective meaning to all its terms, and ascertaining the meaning
in light of all the circumstances surrounding the parties at the
time the contract was made.”
Debnam, 976 A.2d at 197.
The rest
of the Settlement indicates that the former reading is correct.
The
Settlement
talks
extensively
about
the
parties
choosing
Selected Counsel to do Additional Work (ECF No. 72-15 §§ 4.c.,
16
5.c.), providing Selected Counsel with case files (id. § 12.d.),
and assisting Selected Counsel with appearing on behalf of the
recruits before withdrawing from representation (id.), but it
makes no arrangements at all as to whether Mr. Teras, Ms. Wilde,
or any entity other than Selected Counsel would complete any
remaining work that was already agreed to for the recruits.
Therefore, “Additional Work” must refer to all remaining work to
be done on the CFO and CFM cases.
Under this interpretation,
the Settlement dictates that Worldwide will (1) engage Selected
Counsel
to
complete
any
remaining
work,
(2)
pay
them
accordingly, (3) receive all outstanding fees, and (4) allocate
them according to the specific distribution provisions of the
Settlement.
The
recruits’
“unimpeded
right
to
retain
an
independent attorney . . . at his/her own cost” accounts for the
fact that some recruits might not want Worldwide selecting new
counsel for them when they had originally expected Mr. Teras,
Ms. Wilde, or T&W to do their legal work.
The parties next dispute whether Ms. Wilde or W&A have the
right
to
fill
that
“independent
attorney”
role
and
to
what
effect.
Defendants argue that Ms. Wilde “was free to compete
for
business
the
of
the
recruits,”
and
that
independently as counsel for these recruits.
35, 37).
she
was
hired
(ECF No. 73-1, at
They maintain they have a right to receive legal fees
from the recruiters on behalf of the CFO and CFM recruits for
17
work
done
exclusively
by
signed by the recruiters.
them
under
the
engagement
letters
(Id. at 36).
Plaintiffs concede that if the recruits or recruiters chose
independently to hire Defendants, they may have a right to an
additional amount of money that Worldwide would have willingly
paid any other Selected Counsel for such work.
14).
(ECF No. 74, at
Plaintiffs dispute whether Defendants can bill in a manner
that causes a conflict with the incremental payments that would
normally be due to Worldwide.
If, as Defendants argue, the
recruiters and recruits essentially fired Worldwide and hired
Defendants,
Ms.
Wilde
has
violated
Section
11.b.v.
of
the
Settlement, which provides that:
[n]either Wilde nor any agent or affiliate
of Wilde has agreed, negotiated or discussed
or will agree, negotiate or discuss any
arrangement with any recruiter, with any CFO
Recruit or with any CFM Recruit, that would
or could result in (A) any payment to
[Worldwide] of less than the amounts set
forth herein by or on behalf of any recruit,
(B) any payment being made to Wilde or any
agent or affiliate of Wilde that otherwise
would
be
payable
or
deliverable
to
[Worldwide] under this Agreement, or (C) any
CFO Recruit or any CFM Recruit dropping out
of the CFO Recruit program or CFM Recruit
program.
(ECF No. 72-15, at 12).
Another provision prohibits Ms. Wilde
from interfering “in any way [] with [Worldwide’s] efforts to
complete
work
on
all
pending
Recruit, and [other] matters.”
[Worldwide],
(Id. at 13).
18
CFO
Recruit,
CFM
Defendants contend that they can charge whatever legal fees
they see fit for the services they provide to these recruits.
“If recruits, recruiters, or anyone else owe Worldwide fees they
are refusing to pay,” Defendents argue that “it is up to Teras
to pursue collection of those fees” from those debtors.
No. 77, at 15).
(ECF
According to Plaintiffs, “[i]f Worldwide’s fees
were reduced because a third party legally took the business
that
would
expressly
be
one
agreed
situation;
that
she
Wilde,
would
however,
deliver
any
uniquely
and
payments
she
received (regardless of whether for ‘her fees’ or ‘Worldwide’s
fees’) to Worldwide.”
Defendants’
(ECF No. 74, at 16).
argument
clearly
obligations under the Settlement.
misreads
Ms.
Wilde’s
Unlike any other potential
“independent attorney,” Ms. Wilde is subject to the provisions
of
the
Settlement,
which
prohibit
amounts get paid to Worldwide.
her
from
decreasing
what
Thus, Defendants may not charge,
for example, a second visa issuance fee in amounts that parallel
Worldwide’s visa issuance fees and reasonably expect not to run
afoul of the provisions prohibiting her from infringing on the
amounts payable to Worldwide.
As Plaintiffs point out, “Wilde’s
contention that her receipt of fees for the exact same services
would not reduce or replace Worldwide’s fees . . . simply defies
common sense.”
(Id. at 15).
19
Defendants incorrectly argue that this interpretation of
the Settlement would impermissibly “prohibit those clients from
choosing
Wilde
Plaintiffs’
as
their
reading
of
lawyer.”
the
clients’ actions at all.
(ECF
Settlement
No.
does
not
77,
at
14).
restrict
the
It does not, as Defendants argue,
dictate that “they are not permitted to pay [the attorney of
their choosing] if they choose Wilde.”
contract
imposes
duties
on
Ms.
(Id.).
Wilde,
Rather, the
specifically,
the
unextraordinary duty to share with a former business partner
funds earned in a new practice that relate in some way to the
earlier
business
enterprise.
Thus,
the
Settlement
requires
that, where Defendants perform Additional Work, they may not
charge fees other those that Worldwide would pay to Selected
Counsel.
If
the
fees
Defendants
charge
lead
any
client
to
withhold from Worldwide any fees that were previously due to it,
Ms. Wilde has breached her obligations under the Settlement.
discussed
in
the
context
of
the
breach
of
contract
As
claim,
Defendants may not direct these clients to pay W&A, and if any
such payments are remitted to Defendants, they should deliver
them in full to Worldwide.
b.
Enforceability
Defendants next argue that the Settlement’s allocation of
fees is unenforceable because it constitutes the splitting of
legal
fees
in
violation
of
District
20
of
Columbia
Rule
of
Professional Conduct 5.4(a), which states that a “lawyer or law
firm shall not share legal fees with a nonlawyer.”
1, at 38).
(ECF No. 73-
Defendants maintain that Worldwide is not a lawyer
or law firm and therefore sharing the fees they receive with
Worldwide would violate the Rule.
(Id.).
Plaintiffs contend that Defendants’ reading of Rule 5.4(a)
is overly rigid, given that Mr. Teras is a lawyer and he is
Worldwide’s only employee.
(ECF No. 72-1, at 46).
Plaintiffs
argue that, even if the distributions laid out in the Settlement
would constitute improper fee-sharing, Defendants cannot use the
Rules
of
Professional
obligations.
Conduct
(Id. at 42).
to
avoid
their
contractual
They cite to Landise v. Mauro, 725
A.2d 445, 451 (D.C. 1998), in which the District of Columbia
Court of Appeals held that distributions due under a partnership
agreement were enforceable even though one partner was engaged
in the unauthorized practice of law.
partnership
practice,
agreement
the
court
in
some
found
ways
that
Although enforcing the
condoned
not
the
enforcing
unauthorized
the
agreement
“would be overly simplistic as it would bestow a windfall, at
the expense of another and without significant public benefit,
on
a
party
who
participated
unauthorized practice.”
in
and
benefitted
from
the
Id. at 451-52.
Defendants point out that in Landise, the court enforced a
contract (a partnership agreement) that did not itself violate
21
the
Rules.
Rather,
it
was
one
partner
trying
to
avoid
enforcement of the partnership agreement because the other had
independently
court
to
violated
enforce
the
Rules.
affirmatively
arguably would violate the Rules.
this
distinction,
Here,
they
argue
a
Plaintiffs
fee-sharing
ask
scheme
(ECF No. 73-1, at 40).
that
there
is
no
the
that
Given
District
of
Columbia case on point and suggest that a Maryland case, Son v.
Margolius, Mallios, Davis, Rider & Thomar, 349 Md. 441 (1998),
provides persuasive authority for the proposition that a feesplitting agreement with a non-lawyer is unenforceable.
No. 77, at 16).
(ECF
Defendants misread Son; there, the Court of
Appeals of Maryland relied heavily on Post v. Bregman, 349 Md.
142, 168 (1998), which held that “enforcement of [the Rules] is
not
limited
to
disciplinary
proceedings
[and]
may
extend
to
holding fee-sharing agreements in clear and flagrant violation
of [the Rules] unenforceable.”
461.
per
Id.; see also Son, 349 Md. at
The Court of Appeals emphasized that the Rules are “not a
se
defense,
rendering
invalid
or
unenforceable
otherwise
valid fee-sharing agreements because of rule violations that are
merely technical, incidental, or insubstantial or when it would
be
manifestly
agreement.”
unfair
and
inequitable
not
to
enforce
Post, 349 Md. at 168; Son, 349 Md. at 461.
the
Because
the Rules “are not designed to be a basis for civil liability[,]
the purpose of the Rules can be subverted when they are invoked
22
by
opposing
Maryland
parties
Attorneys’
as
procedural
Rules
of
weapons.”
Prof’l
Conduct,
Id.
(citing
Preamble
n.20).
The Court of Appeals held that courts should “look to all the
circumstances” when determining whether to enforce an agreement,
“including, among other things, the nature of the violation, how
it came about, the extent to which the parties acted in good
faith,
whether
importance,
and
the
violation
whether
the
has
client,
harmed by enforcing the agreement.”
Post, 349 Md. at 169-170).
approach.
some
in
particular
particular,
public
would
be
Son, 349 Md. at 461 (citing
The court in Landise took a similar
See Landise, 725 A.2d at 451-52 and nn.14-15.
Plaintiffs
argue
interest
that
would be served by rendering the Settlement unenforceable.
(ECF
No. 72-1, at 44).
that
there
is
no
public
This is not a case where an attorney is
violating the Rules at the expense of a client, but rather an
agreement
reached
by
sophisticated
parties
-
lawyers
with
further representation - and designed to end pending litigation.
(Id. at 45-46).
Rule
5.4
by
Defendants contend that if parties could avoid
simply
signing
a
contract
agreeing
to
the
fee-
sharing, the ethical prohibition would be vitiated (ECF No. 731, at 40), but this argument ignores the primary enforcement
mechanism for violations of the Rules, disciplinary proceedings
by Bar Counsel.
23
Defendants assert that the situation here is different from
Landise and other cases because declining to enforce the feesplitting
agreements
in
those
cases
unjust enrichment to the lawyer.
would
have
resulted
(ECF No. 73-1, at 41).
in
They
say Wordwide has not and will not provide any services to these
clients, and therefore it does not warrant any fees.
Plaintiffs
argue
that
Ms.
Wilde
would
be
unjustly
(Id.).
enriched,
allowing her to collect fees that would be paid to Worldwide
even though Worldwide gave notable consideration for these fees,
including releasing its counterclaims against her and agreeing
to
manage,
discharge,
liabilities.
emphasize
that
(ECF
the
No.
and
indemnify
72-15,
at
3,
allocation
of
Ms.
Wilde
9).
funds
for
T&W’s
Plaintiffs
laid
out
in
also
the
Settlement was based on the longstanding relationship between
Worldwide, Mr. Teras, Ms. Wilde, and T&W.
43).
(ECF No. 72-1, at
In their reply, Defendants seem to admit that some fees
should be shared with Worldwide “for work already done.”
No. 77, at 17).
(ECF
Thus, they appear to take issue with the split
of some specific fees received by W&A, not with fee-splitting
generally.
Declaring
the
Settlement’s
allocation
of
funding
to
Worldwide unenforceable would disrupt the intent of the parties
at the time the Settlement was signed and result in a windfall
for Ms. Wilde.
Preventing enforcement would affect only the
24
parties involved and serve no purpose to any clients or the
public.
Accordingly, Plaintiffs’ motion for summary judgment on
their claim for declaratory relief will be granted in accordance
with the interpretation of the contract described above.
2.
Plaintiffs’ Breach of Contract Claim
Plaintiffs seek summary judgment as to liability based on
three breaches of the Settlement.
Plaintiffs contend that Ms.
Wilde violated: (1) Section 5.a. by failing to deliver payments
for services on behalf of CFO and CFM recruits to Worldwide for
redistribution among the parties and by attempting to distribute
to
Mr.
Teras
and
Worldwide
amounts
differing
from
the
allocations outlined in the Settlement; (2) Section 11.b.v.(B)
by instructing recruiters to pay W&A directly rather than to
submit
payments
to
Worldwide;
and
(3)
Section
11.b.v.(A)
by
entering into arrangements that led to Worldwide being paid less
than the amounts set forth in the Settlement.
(ECF No. 72-1, at
51-53).
Section 5.a. of the Settlement requires that “All fees,
payments, receivables and other funds received by any Party on
or after December 1, 2009, with respect to a recruit . . . shall
be delivered to [Worldwide] immediately upon receipt.”
72-15, at 6).
(ECF No.
Section 11.b.v.(B) requires that “[n]either Wilde
nor any agent or affiliate of Wilde . . . will agree, negotiate
or discuss any arrangement with any recruiter . . . that would
25
or could result in . . .
(B) any payment being made to Wilde or
any agent or affiliate of Wilde that otherwise would be payable
or deliverable to [Worldwide] under this Agreement.”
12).
(Id. at
Plaintiffs have shown that Defendants breached Sections
5.a. and 11.b.v.(B) when Defendants received payment for work
done for one of the CFM recruits from Ms. Lai in 2013.
72-21, at 2).
(ECF No.
Defendants admit that they did not deliver all
funds from this payment to Worldwide.
Nor is there a dispute
that their invoice directed Ms. Lai to “make checks payable to
‘Wilde and Associates, LLC’” for a payment for work done for a
CFM recruit.
sections
of
(Id.).
the
Defendants’ actions thus breached these
Settlement,
and
Plaintiffs
are
entitled
to
summary judgment as to liability for these breaches.
Section 11.b.v.(A) requires that “[n]either Wilde nor any
agent or affiliate of Wilde . . . will agree, negotiate or
discuss any arrangement with any recruiter . . . that would or
could result in . . . any payment to [Worldwide] of less than
the amounts set forth [in the Settlement] by or on behalf of any
recruit.”
(ECF No. 72-15, at 12).
The amount for which W&A
invoiced Ms. Lai, $22,000, is less than the anticipated $27,000
total payment set forth in the Settlement for a CFM recruit (ECF
No. 7, at 5), but it is unclear whether this amount was intended
to supplant all the fees due to Worldwide.
26
Accordingly, both
motions
for
summary
judgment
will
be
denied
based
on
this
purported breach.
3.
Interference Claims
Both parties also seek summary judgment as to Plaintiffs’
claims for wrongful interference.
Because these claims do not
relate to the Settlement, Maryland law applies to them here.
noted
in
this
recognizes
the
contractual
or
court’s
tort
prior
action
business
memorandum
for
opinion,
wrongful
relationships
in
“Maryland
interference
two
As
general
with
forms:
inducing the breach of an existing contract and, more broadly,
maliciously
or
relationships.”
wrongfully
interfering
with
economic
Alexander & Alexander Inc. v. B. Dixon Evander
& Assocs., Inc., 336 Md. 635, 650 (1994).
Plaintiffs allege
both types of interference in this action.
a.
Count
Interference with Contractual Relationships
III
of
Plaintiffs’
complaint
interference with contractual relationships.
62).
is
a
claim
(ECF No. 1 ¶¶ 54-
To establish such a claim, a plaintiff must demonstrate:
(1) [t]he existence of a contract or a
legally
protected
interest
between
the
plaintiff and a third party; (2) the
defendant’s knowledge of the contract; (3)
the defendant’s intentional inducement of
the third party to breach or otherwise
render impossible the performance of the
contract; (4) without justification on the
part of the defendant; (5) the subsequent
breach by the third party; and (6) damages
to the plaintiff resulting therefrom.
27
for
Blondell v. Littlepage, 185 Md.App. 123, 153-54 (2009), aff’d,
413 Md. 96 (2010).
III
because
Defendants seek summary judgment as to Count
Plaintiffs
have
not
produced
any
evidence
of
a
contractual relationship with Case Farms or the recruiters with
which Ms. Wilde could have interfered.
Plaintiffs
motion.
do
not
dispute
this
in
(ECF No. 73-1, at 29).
their
opposition
to
the
Therefore, Defendants are entitled to summary judgment
on this claim.
4.
Interference with Economic Relationships
In
Count
IV
of
Plaintiffs’
complaint,
interference with economic relationships.
they
allege
(ECF No. 1 ¶¶ 63-70).
To establish such a claim, a plaintiff must demonstrate “(1)
intentional and willful acts; (2) calculated to cause damage to
the
plaintiffs
in
their
lawful
business;
(3)
done
with
the
unlawful purpose to cause such damage and loss, without right or
justifiable
cause
on
the
part
of
the
defendants
(which
constitutes malice); and (4) actual damage and loss resulting.”
Alexander & Alexander, 336 Md. at 652 (internal quotation marks
omitted).
In
clarified
what
Alexander
conduct
&
Alexander,
the
Court
may
constitute
wrongful
of
or
conduct:
[W]e have made clear in our cases that
acting
to
pursue
one’s
own
business
interests at the expense of others is not,
in itself, tortious.
28
Appeals
malicious
. . . .
. . .
[T]ortious intent alone, defined as
an intent to harm the plaintiff or to
benefit the defendant at the expense of the
plaintiff, [is] not sufficient to turn
deliberate interference into a tort, [] the
defendant must interfere through improper or
wrongful means.
Therefore,
wrongful
or
malicious
interference with economic relations is
interference
by
conduct
that
is
independently wrongful or unlawful, quite
apart from its effect on the plaintiff’s
business relationships. Wrongful or unlawful
acts include common law torts and violence
or
intimidation,
defamation,
injurious
falsehood or other fraud, violation of
criminal law, and the institution or threat
of
groundless
civil
suits
or
criminal
prosecutions in bad faith.
336 Md. at 653-57.
with
their
Plaintiffs assert that Ms. Wilde interfered
relationships
with
Case
Farms
and
with
foreign
recruiters, including Ms. Lai, Mr. Chang, and Mr. Evans.
(ECF
No. 1 ¶ 66).
a.
Interference with Plaintiffs’ Relationship with Case
Farms
Plaintiffs
assert
that
they
are
entitled
to
summary
judgment on this claim because Ms. Wilde intentionally sought to
take Case Farms’ business from Worldwide during and after the
dissolution of T&W.
Wilde’s
conduct
was
(ECF No. 72-1, at 54).
intended
to
harm
They argue that Ms.
Plaintiffs’
business
relationships and that her actions satisfy the third element’s
29
“wrongfulness” requirement because she breached her duties under
the Maryland Lawyers’ Rules of Professional Conduct.
55).
Specifically,
information
Plaintiffs
relating
to
the
contend
that
representation
Ms.
of
(Id. at
Wilde
used
Worldwide,
a
former client, to the disadvantage of that client, in violation
of
Rule
1.8.
usurpation
of
(Id.).
business
They
from
further
argue
Worldwide
duties as its former attorney and agent.
that
violated
Ms.
her
Wilde’s
fiduciary
(Id. at 56).
Defendants continue to dispute whether Worldwide had any
relationship with Case Farms with which to interfere.
73-1, at 29).
(ECF No.
Defendants argue that, even if it did, Plaintiffs
released these claims in the Settlement.
6
(Id. at 28).6
In the
Plaintiffs contend that Defendants may not rely on the
affirmative defense of release because they did not assert it in
their answer to Plaintiffs’ complaint.
(ECF No. 74, at 45).
Although
a
defendant
“generally
bears
the
burden
of
affirmatively pleading” the existence of affirmative defenses,
Eriline Co. S.A. v. Johnson, 440 F.3d 648, 653 (4th Cir. 2006),
“it is well established that an affirmative defense is not
waived absent unfair surprise or prejudice.”
Patten Grading &
Paving, Inc. v. Skanska USA Bldg., Inc., 380 F.3d 200, 205 n.3;
Brinkley v. Harbour Recreation Club, 180 F.3d 598, 612-13 (4th
Cir. 1999).
Given that Defendants made release arguments in
their motion to dismiss, Plaintiffs were aware of Defendants’
release defense prior to their answer.
Plaintiffs assert that
they are prejudiced by not being able to take discovery related
to this defense, but it is unclear what additional information
they could seek.
(ECF No. 74, at 45-46).
Plaintiffs raised
their own release defense to Defendants’ fraud claim based on
the same provision and have obtained testimony and documents
from Ms. Wilde, Case Farms officials, and the foreign recruiters
on the topic of interference before and after the signing of the
Settlement.
(Id. at 36, 38).
Plaintiffs also had ample
opportunity to present arguments about this defense, and did so,
30
Settlement,
Plaintiffs
released
“any
and
all
claims
.
.
.
resulting from, arising out of, taking place or relating to any
act or omission occurring prior to the Effective Date of this
Agreement.”
(ECF No. 72-15, at 3).7
In their motion to dismiss,
Defendants argued that Plaintiffs had released their claims for
interference because they matched the same allegations Mr. Teras
had
made
Plaintiffs’
in
the
claim
Dissolution
survived
Case.
Defendants’
(ECF
No.
motion
6,
at
because
alleged certain conduct occurring after the Settlement.
No. 14, at 22).
8).
they
(ECF
The evidence now shows that Case Farms chose to
work “solely” with Ms. Wilde as of February 1, 2009, and made
clear prior to the Settlement that it no longer would be working
with Mr. Teras or any other of Mr. Teras’s companies.
72-11, at 2).
showing
(ECF No.
Thus, Plaintiffs’ have not presented any evidence
“actual
damage
and
loss
resulting”
from
Ms.
Wilde’s
conduct after the Settlement.8
in their response. (Id. at 38). Therefore, Plaintiffs have not
been prejudiced by Defendants’ use of the release defense here.
7
Plaintiffs also contend that they released only Ms. Wilde
and not Wilde & Associates in the Settlement. (ECF No. 74, at
46-47). Wilde & Associates qualifies under the Settlement as an
“Affiliate” because it is a beneficiary, successor, or assign of
Ms. Wilde’s business with Case Farms and the recruiters here.
8
Plaintiffs make a passing argument that “if the Court
accepts Wilde’s claim that intentional torts cannot, as a matter
of law, be released, then the release would not bar liability
for Wilde’s intentional tortious interference.” (ECF No. 74, at
45).
This argument is based on Defendants’ response to
31
b.
Interference with Plaintiffs’ Relationships with
Foreign Recruiters
Plaintiffs next argue that they are entitled to summary
judgment on their interference with economic relationships claim
based on Defendants’ interference with Plaintiffs’ relationships
with foreign recruiters.
Ms.
Wilde
after
the
They point to several actions taken by
Settlement
that
allegedly
constitute
interference, including: (1) an email from Ms. Wilde to Mr.
Chang in which she threatens to revoke Case Farms’ business with
him if he continues to “deal with Teras in the future” (ECF No.
72-20,
at
2-3),
and
(2)
involvement
in
an
email
from
Mr.
Popowycz to recruiters stating, “If Mr. Teras and his company
[Worldwide]
continue
relationship
with
any
with
Case
their
[statements]
company,
we
will
about
be
their
forced
to
terminate relationships with anyone who continues to work with
or have dealings with Mr. Teras” (ECF No. 72-19, at 2).
Plaintiffs’ contention that Defendants released their fraud
claim in the Settlement, an issue not reached for reasons stated
below.
The cases cited by Defendants support the limited
proposition that a release induced by fraud does not release the
corresponding fraud claim.
See, e.g., Wells v. Allstate Ins.
Co., No. Civ.A. 00-0760-LFO, at *6 (D.Md. Jan. 24, 2006) (“It is
indeed important for parties to be able to rely on the explicit
language of an agreed-upon release.
An essential predicate to
reaching agreement, however, is the assumption that one party
has not willfully misled the other. Absent that predicate, the
agreement is not enforceable by the misleading party.”). To the
degree that Plaintiffs incorporate Defendants’ arguments on this
point, they are inapplicable.
32
Plaintiffs
resulting”
from
again
cannot
these
show
purported
“actual
damage
actions.
Both
and
loss
situations
involve Mr. Teras’s continued involvement with the Case Farms
recruits.
in
the
Ms. Wilde’s threat to stop working with Mr. Chang is
context
Farms] cases.”
of
“dealing
(Id.).
with
[Mr.
Chang]
on
these
[Case
Moreover, Plaintiffs have not produced
evidence of any business lost from these recruiters other than
the Case Farms business.
(See ECF No. 72-1, at 57).
Rather,
both Mr. Chang and Ms. Lai have specifically stated that they
would be willing to work with Mr. Teras on other projects.
Nos. 73-6, at 15, 29; 73-7, at 56-57).
(ECF
The record does not show
the existence of a genuine dispute of fact as to Defendants’
alleged
interference
recruiters.
with
Plaintiffs’
relationships
with
Accordingly, as to all of Count IV, Plaintiffs’
motion will be denied and judgment will be entered in favor of
Defendants.
D.
Defendants’ Counterclaims
Defendants’ counterclaims assert fraud (Count I) and breach
of contract (Count II) claims.
of
contract
breached
the
counterclaim,
Settlement
by
(ECF No. 19).
Defendants
allege
disclosing
the
In their breach
that
Plaintiffs
Settlement
and
by
voluntarily assisting Bar Counsel in a legal proceeding against
Ms.
Wilde.
Plaintiffs
seek
summary
judgment
in
full
as
to
Defendants’ fraud claim and as to the disclosure arguments under
33
their breach of contract claim.
summary
judgment
limiting
Plaintiffs also seek partial
Defendants’
to
nominal
damages
for
their breach of contract claims based on assistance of counsel.
Defendants
seek
summary
judgment
as
to
liability
on
both
counterclaims.
1.
Fraud
In the District of Columbia, the general three-year statute
of limitations applies to fraud claims.
Sandza v. Barclays Bank
PLLC, 151 F.Supp.3d 94, 110 (D.D.C. 2015) (applying D.C. Code §
12-301(8)).
For
statute
of
limitations
purposes,
a
usually accrues at the time the alleged injury occurs.
claim
Sandza,
151 F.Supp.3d at 111 (citing Diamond v. Davis, 680 A.2d 364, 389
(D.C.
1996)).
District
of
Columbia
courts
apply
the
more
forgiving “discovery rule” where “the relationship between the
fact of injury and the alleged tortious conduct is obscure when
the injury occurs.”
Id. (quoting Bussineau v. President & Dirs.
of Georgetown Coll., 518 A.2d 423, 425 (D.C. 1986)).
Under the
discovery rule, a claim accrues when a plaintiff has “actual or
inquiry notice of (1) the existence of the alleged injury, (2)
its cause in fact, and (3) some evidence of wrongdoing.”
(quoting
Drake
v.
McNair,
993
A.2d
607,
617
(D.C.
Id.
2010)).
Inquiry notice requires only that a plaintiff know enough to
give rise to a duty to inquire further.
Id. at 112.
Therefore,
even if a plaintiff does not know everything about her potential
34
claim,
the
limitations
period
will
begin
to
run
when
“a
potential plaintiff, in the exercise of reasonable diligence,
could learn enough to justify filing suit.”
Id.
“The critical
question in assessing the existence vel non of inquiry notice is
whether the plaintiff exercised reasonable diligence under the
circumstances
in
acting
or
failing
information was available to [her].”
to
act
on
whatever
Ray v. Queen, 747 A.2d
1137, 1141-42 (D.C. 2000).
In fraud cases, the statute of limitations usually will not
begin
to
run
“until
the
date
the
fraud
reasonably should have been discovered.”
617.
is
discovered,
or
Drake, 993 A.2d at
If the defrauding party affirmatively acts to conceal the
existence
of
a
claim
or
the
facts
limitations period will be tolled.
underlying
a
claim,
the
Id.; William J. Davis, Inc.
v. Young, 412 A2d 1187, 1192 (D.C. 1980) (“[A]ffirmative efforts
to divert or prevent discovery of the original fraud give a
continuing character to the original act which deprives it of
statute of limitations protection until discovery.”).
On the
other hand, if a party has suspicions of wrongdoing, she has an
“obligation to move promptly and with reasonable diligence to
inquire further into the matter,” Drake, 993 A.2d at 619 (citing
In re Estate of Delaney, 819 A.2d 968, 982 (D.C. 2003)), and it
is not reasonable to rely on the representation “if the party
had
an
adequate
opportunity
35
to
conduct
an
independent
investigation and the party making the representation did not
have exclusive access to such information,” id. at 621 (citing
In re Estate of McKenney, 953 A.2d 336, 343 (D.C. 2008).
In
evaluating the reasonableness of a plaintiff’s diligence, courts
also consider the relationship between the plaintiff and the
defendant; “in a close, confidential relationship, the degree of
reasonable
reliance
is
likely
to
be
much
greater
-
and
the
reasonable diligence . . . much less – than would exist where
the parties had been in an adversary relationship.”
(citing Diamond, 680 A.2d at 376, 378).
Id. at 620
Whether a party acted
reasonably under the circumstances is thus a “highly factual
analysis,
which
takes
into
account
the
conduct
and
misrepresentations of the defendant . . . and the reasonableness
of
the
plaintiff’s
misrepresentations.”
reliance
on
the
defendant’s
conduct
and
Id. at 617.
Defendants allege that Mr. Teras fraudulently induced Ms.
Wilde
to
agree
to
the
Settlement
by
misrepresenting
relationship between Worldwide and Case Farms.
at 20).
the
(ECF No. 73-1,
Their evidence of this fraud consists primarily of
statements from Case Farms officials, specifically Mr. Popowycz
and Joseph Carney, the assistant secretary and outside general
counsel for Case Farms.
(Id. at 8).
At his deposition, Mr.
Popowycz testified that Worldwide had not represented Case Farms
or overseen its process for recruiting foreign workers.
36
(EF No.
73-8, at 23, 31).
Mr. Carney testified that he was tasked with
resolving the question of whether or not Worldwide ever had a
contract with Case Farms (ECF No. 73-9, at 7), and he conducted
an investigation into the relationship between the two companies
(id. at 9).
After investigating the matter and talking with
various Case Farms personnel, Mr. Carney concluded that Case
Farms had never worked with Worldwide, and he wrote a letter
explaining as much to Mr. Teras in March 2013.
Mr. Teras never responded to that letter.
23).
(ECF No. 73-29).
(ECF No. 73-9, at
Defendants assert that, for purposes of the statute of
limitations, they did not discover the fraud, until Mr. Carney
concluded his investigation of the matter in March 2013.
(Id.
at 25).
Defendants’ position that Ms. Wilde had not discovered the
alleged fraud until 2013 is belied by the evidence.
Ms. Wilde
testified that she was suspicious of Worldwide even before the
dissolution of T&W in 2008.
(ECF No. 73-4, at 6-7).
In March
2009, Case Farms’ Director of Corporate Human Resources sent a
letter
to
recruiters
stating,
“we
have
never
worked
with
Worldwide Personnel or any other company that Mr. Teras may
have.
PLLC.”
We have only worked with the law firm of Teras & Wilde,
(ECF No. 72-11, at 2).
Ms. Wilde admits she was aware
of this letter; in fact, she forwarded it directly to Ms. Lai on
March 18, 2009.
(ECF No. 72-12).
37
In November 2009, Mr. Evans
testified
at
a
deposition
for
the
Dissolution
Case
believed Worldwide was “formed as a tax shelter.”
5, at 5, 7).
that
he
(ECF No. 73-
In July 2010, Mr. Popowycz told Ms. Wilde that he
personally had no knowledge of Worldwide and that a previous
Case
Farms
Human
Resources
director,
Ken
Wilson,
neither heard of nor made a contract with Worldwide.
had
also
(ECF Nos.
72-7, at 7; 72-14, at 2).
It
is
unclear
why
Defendants
contend
that
the
prior
statements made both in response to Ms. Wilde’s inquiries and
sent along to the third-party recruiter were inconclusive, but
Mr. Carney’s determination was sufficient.
Teras
disputed
the
earlier
They argue that Mr.
statements,
but
similarly to refute Mr. Carney’s findings now.
he
continues
Ms. Wilde also
stated in an email to Mr. Chang on July 26, 2012, that, “I even
settled the lawsuit with him . . . only to learn . . . that
TERAS committed fraud because WWP was NEVER hired by Case Farm.”
(ECF No. 72-20, at 2).
This email shows that she believed Mr.
Teras had committed fraud well before Mr. Carney’s letter.
Moreover,
the
discovery
rule
in
this
require conclusive proof of wrongdoing.
context
does
not
See Bradley v. Nat’l
Ass’n of Secs. Dealers Dispute Resolution, Inc., 433 F.3d 846,
849 (D.C. Cir. 2005) (“A plaintiff is on such ‘inquiry notice’
of wrongdoing when the plaintiff has reason to suspect that the
defendant
did
some
wrong,
even
38
if
the
full
extent
of
the
wrongdoing is not yet known.”); Morton v. Nat’l Med. Enters.,
Inc., 725 A.2d 462, 469 (D.C. 1999) (noting that District of
Columbia
courts
discovery
rule
had
means
specifically
that
a
claim
rejected
the
does
accrue
not
notion
the
“until
a
claimant has had a reasonable opportunity to discover all of the
essential
elements
of
a
possible
cause
of
action”).
Just
because Ms. Wilde continued investigating does not mean she was
not aware of the injury, cause, and wrongdoing so as to trigger
discovery.
The duty to investigate requires diligence and a corollary
duty to act reasonably to protect her own interests.
A party
cannot simply “initiate an investigation,” but simultaneously
continue
“clos[ing]
his
eyes
and
blindly
rely[ing]
upon
the
assurances of another [party] absent some fiduciary relationship
or emergency.”
Hercules & Co. v. Shama Restaurant Group, 613,
A.2d 916, 934 (D.C. 1992).
If the investigation yields results
that would cause her to question the veracity of Mr. Teras’s
representations – and the evidence available to Ms. Wilde in
2010 here did – she had a duty to investigate fully at that time
and should not have agreed to the Settlement.
See Drake, 993
A.2d at 625 (“If [the plaintiff] had any suspicions . . . she
should not have signed the Settlement Agreement in the first
place; rather, she should have taken affirmative steps at that
time to investigate any possible fraud.”).
39
Defendants’ fraud
claims
thus
accrued
on
or
before
July
14,
2010,
and
her
counterclaim for fraud in this case is untimely.9
Plaintiffs’
motion
Defendants’
for
summary
judgment
will
be
granted
and
motion will be denied.
For similar reasons, Defendants cannot successfully assert
fraud as a defense to Plaintiffs’ breach of contract claim.
Although
the
statute
of
limitations
does
not
apply
to
affirmative defenses, Plaintiffs contend that they are entitled
to
summary
judgment
because
any
reliance
on
Mr.
purportedly fraudulent statements was unreasonable.
Teras’s
(ECF No.
72-1, at 33-36).10
9
Defendants also claim that there was no injury prior to
2013 when Worldwide and Mr. Teras demanded that the Settlement
be enforced as to the payment Defendants received from Ms. Lai.
(ECF No. 73-1, at 25).
Plaintiffs argue that damages accrued
much earlier because Ms. Wilde has claimed that she “acquiesced
to hundreds of thousands of dollars of additional payments going
to Teras, under the auspices of Worldwide [and] would not have
agreed to those additional payments had she known Teras’s
representations about Worldwide were false.”
(ECF No. 19, at
10).
These monetary losses constituted harms that would have
been readily apparent to Ms. Wilde. Alternatively, Ms. Wilde’s
release of her claims against Mr. Teras in the Dissolution Case
by way of the Settlement would also constitute harm as of the
signing of that agreement. In the Settlement, Ms. Wilde agreed
to end her suit against Plaintiffs; if she was fraudulently
induced to settle, accepting that agreement would clearly
constitute harm.
10
Even if Defendants’ counterclaim for fraud is barred by
the statute of limitations, they may assert it as an affirmative
defense to Plaintiffs’ breach of contract claim.
Although
Defendants did not plead fraud as an affirmative defense in the
answer portion of their Answer and Counterclaim, Defendants now
argue that they should prevail on Plaintiffs breach of contract
40
“The
essential
elements
of
fraud
are:
(1)
a
false
representation, (2) concerning a material fact, (3) made with
knowledge of its falsity, (4) with the intent to deceive, and
(5) upon which reliance is placed.”
875,
876
repeatedly
(D.C.
1984).
“imposed
a
District
‘very
high
Higgs v. Higgs, 472 A.2d
of
Columbia
standard’
on
courts
have
sophisticated
business entities claiming fraudulent inducement in arms-length
transactions.”
Washington Inv. Partners of Deleware, LLC. v.
Securities House, K.S.C.C., 28 A.3d 566, 575-76 (D.C. 2011); see
also id. at 575 n.8. (identifying a party who, inter alia, holds
claim because Plaintiffs fraudulently induced Ms. Wilde to agree
to the Settlement. (ECF No. 73-1, at 34). Fed.R.Civ.P. 8(c)(2)
states, “If a party mistakenly designates a defense as a
counterclaim[,] the court must, if justice requires, treat the
pleading as though it were correctly designated.”
See also
Re/Max v. Underwood, No. WDQ-10-2367, 2011 WL 2118911, at *4
(D.Md. May 25, 2011). “This flexibility in the rules ‘reflects
the conscious attempt . . . to ignore pleading technicalities’
and ‘promotes the liberality with which courts generally
construe pleadings under the federal rules.’”
Fluxo-Cane
Overseas, Ltd. V. E.D. & F. Man Sugar, Inc., No. WDQ-08-0356,
2010 WL 4285005, at *2 n.3 (D.Md. Oct. 29, 2010) (quoting 5
Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1275 (3d ed. 2004)). These considerations have led
at least one other court to consider a defendant’s counterclaim
for fraudulent misrepresentation sufficient to assert fraud as
both a counterclaim and an affirmative defense in spite of the
requirement in Rule 8(c)(1) that affirmative defenses be
included in the answer.
Dubied Machinery Co. v. Vt. Knitting
Co., 739 F.Supp. 867, 871 (S.D.N.Y. 1990) (“Where a plaintiff
has been made aware of the defendant’s theory of the case, as
plaintiff was here, it would be counter to the language and
spirit of Rule 8(c) to fail to recognize an affirmative defense
simply because it was labeled solely as a counterclaim.”). The
merits of Defendants’ fraud allegations as a defense to
Plaintiffs’ breach of contract claim are therefore considered.
41
a law degree as a sophisticated party).
Such a party “must
establish by clear and convincing evidence that . . . [its]
reliance
on
the
reasonable.”
alleged
material
misrepresentations
was
Id. at 576; see also Railan v. Katyal, 766 A.2d
998, 1009 (D.C. 2001) (citing Hercules & Co., 613 A.2d at 923);
cf. Wells v. Liddy, 186 F.3d 505, 520 (4th Cir. 1999) (“When [a]
party must produce clear and convincing evidence to support its
claim, that higher evidentiary burden is considered as part of
the summary judgment calculus.”).
Defendants argue that Ms. Wilde’s reliance was reasonable
because her investigation was “inconclusive” at the time of the
Settlement.
(ECF
No.
Plaintiffs’
position
77,
would
at
10).
have
They
required
maintain
Ms.
Wilde
that
to
“investigate[ until she could] prove the falsity of a fact which
Teras
insists
is
true.”
(Id.).
Defendants
conflate
the
reasonableness of Ms. Wilde’s beliefs with the reasonableness of
her affirmative reliance.
The question in a reasonable reliance
inquiry is not whether Ms. Wilde was able to obtain conclusive
proof that Mr. Teras had made a misrepresentation at the time,
but, rather, whether a reasonable person would have taken Mr.
Teras’s statements at face value and chosen to move forward with
the
Settlement
in
reliance
on
those
statements,
evidence she had already received from Case Farms.
42
given
the
In a similar situation, the District of Columbia Court of
Appeals found that statements like Mr. Teras’s are “not the type
on which she was entitled to place dispositive reliance” because
Ms. Wilde had “an adequate opportunity to conduct an independent
investigation”
into
the
matter
and
Mr.
exclusive access to such information.”
Bank, 432 A.2d 701, 707 (D.C. 1981).
Teras
“did
not
have
Howard v. Riggs Nat’l
Although Defendants cite
the good faith requirement in McKenney, they ignore that, in
that case, unlike here, the defrauding party had “prevent[ed
the] plaintiff from making a reasonable inquiry.”
McKenney, 953
A.2d at 343 (citing FS Photo, Inc. v. PictureVision, Inc., 61
F.Supp.2d
473,
483
(E.D.Va.
1999)).11
There,
the
court
emphasized that the fraud plaintiff’s reliance was reasonable
where the defrauding party “pressed McKenney vigorously for an
11
Defendants cite McKenney for the proposition that a
party’s “fault in not knowing or discovering the facts before
making the contract does not make his reliance [upon a
misrepresentation] unjustified unless it amounts to a failure to
act in good faith and in accordance with reasonable standards of
fair dealing.” McKenney, 953 A.2d at 343. This language comes
directly from the Restatement (Second) of Contracts § 172, and
the illustrations and cases cited by the Restatement make clear
that the limitations on investigation are for fraud plaintiffs
without any knowledge or reason to suspect the falsity of the
alleged misrepresentation.
The Restatement also notes that
“[i]n determining whether the recipient of a misrepresentation
has conformed to the standard of good faith and fair dealing,
account is taken of his peculiar qualities and characteristics,
including his credulity and gullibility, and the circumstances
of the particular case,” and that a party “is expected to use
his senses and not rely blindly on the maker’s assertion.”
Restatement (Second) of Contracts § 172, cmt. b.
43
immediate decision in the face of the impending demolition [of
the house on the property in question].”
Id. at 343.
Ms. Wilde
has not argued that there were any time constraints requiring
her either to accept or reject the Settlement terms on July 20,
2010, or any other date.
Here, where all of the Case Farms
officials she had talked to up to that point had told her they
had not heard of Worldwide – including Mr. Popowycz just days
earlier - a reasonable person would not have trusted Mr. Teras
and would have delayed the Settlement to investigate further.
“The presence of a fraudulent misrepresentation does not excuse
the
injured
interests.”
therefore
party
from
acting
reasonably
Drake, 993 A.2d at 620.
also
fails
as
it
relates
to
protect
her
Defendants’ fraud defense
to
Plaintffs’
breach
of
contract claims.
2.
Defendants’ Breach of Contract Counterclaim
Defendants
also
claim
that
Mr.
Teras
breached
the
Settlement by disclosing it to the District of Columbia Office
of Bar Counsel (“Bar Counsel”) and assisting with Bar Counsel’s
investigation of Ms. Wilde.
(ECF No. 19, at 11).
Defendants
seek summary judgment as to liability and declaratory relief on
this
claim.
(ECF
No.
73,
at
1).
Plaintiffs
seek
summary
judgment on Defendants’ disclosure arguments and partial summary
judgment limiting the claim to nominal damages as it relates to
assisting Bar Counsel.
(ECF No. 72-1, at 10).
44
The confidentiality provision of the Settlement requires
that
each
shall
not
individual,
party
“shall
disclose
keep
any
association,
other entity.”
this
terms
Agreement
of
this
corporation,
confidential
Agreement
government
(ECF No. 72-15, at 14).
to
agency,
and
any
or
Defendants argue that
Mr. Teras disclosed the terms of the Settlement to Bar Counsel
based on a 2012 letter from Bar Counsel to Mr. Evans regarding
an investigation into Mr. Teras based on a complaint by Mr.
Evans.
(ECF No. 73-33).
In the letter, Bar Counsel makes
several findings related to “the proposed settlement agreement”
between Mr. Teras and Ms. Wilde and the effect of that agreement
on former T&W clients.
(Id. at 2).
Defendants argue that Mr.
Teras must have disclosed the Settlement in order to defend
himself against the complaint, or that he must have disclosed it
to a third party who shared it with Bar Counsel, since Ms. Wilde
has not disclosed it herself.
(ECF No. 73-1, at 45).
Mr. Teras has stated in an affidavit that he has “never
disclosed the Settlement Agreement to D.C. Office of Bar Counsel
or any other person.”
references
in
Bar
(ECF No. 72-3 ¶ 35).
Counsel’s
letter
are
to
Moreover, the
“the
proposed
settlement agreement,” as opposed to any completed settlement.
Plaintiffs argue that the proposed agreement referenced is the
one that Mr. Evans attached to his Bar Counsel complaint, which
is
dated
June
30,
2009,
well
45
before
the
signing
of
the
Settlement.
(ECF No. 74-4, at 29-34).
Defendants attempt to
overcome this evidence by pointing out that Mr. Evans produced
two
different
proposed
settlements
with
his
Bar
Counsel
complaint, but Bar Counsel only referenced one of them.
No. 77, at 19).
(ECF
This argument – that, where there are two
attachments and Bar Counsel does not reference both, it must be
referencing
a
third
–
is
nonsensical.
Defendants’
counter-
intuitive inference is insufficient to create a genuine dispute
of fact, and Plaintiffs are entitled to summary judgment as to
Defendants’ disclosure claim.
Defendants
also
allege
that
Mr.
Teras
breached
the
Settlement by assisting Bar Counsel in its investigation of Ms.
Wilde.
The
parties
agreed
in
the
Settlement
not
to
“affirmatively voluntarily encourage, cooperate with, or assist
in any way in the prosecution of any case (civil or criminal) or
proceeding against any other Party, including without limitation
any pending Bar complaints.”
(ECF No. 72-15, at 14).
The
Settlement creates an exception to this rule for, inter alia,
“responding
to
lawful
requests
from
any
government
official
including, without limitation, Bar counsel” or for “complying
with the rules of professional conduct applicable to lawyers in
any
jurisdiction
(Id.).
where
such
Party
is
licensed
to
practice.”
Defendants have produced numerous emails between Mr.
Teras and Bar Counsel showing that he assisted in Bar Counsel’s
46
investigation and prosecution of Ms. Wilde.
73-14;
73-15;
73-16;
73-17;
73-18;
73-19;
(ECF Nos. 73-13;
73-20).
At
his
deposition, Mr. Teras also admitted that he cooperated with Bar
Counsel
attorney
Julia
Porter
emails with her over the years.
Plaintiffs
have
not
and
exchanged
“several
dozen”
(ECF No. 73-10, at 41, 45).12
produced
any
evidence
disputing
fact that Mr. Teras cooperated with Bar Counsel.
the
Rather, they
contend that Mr. Teras’s cooperation was required by the rules
of professional conduct and that he was “responding to lawful
requests from . . . Bar counsel or its agents.”
25).
(ECF No. 74, at
Plaintiffs cite to Rule 8.1, which prohibits a lawyer from
“knowingly failing to respond reasonably to a lawful demand for
information from a . . . disciplinary authority.”
The emails
between Mr. Teras and Ms. Porter, however, quite clearly do not
constitute “demands” for the information he provided.
(ECF No.
77).
12
Although Defendants argue that Mr. Teras assisted “both
Maryland and D.C. Bar Counsel in their proceedings against
Wilde” (ECF No. 73-1, at 46), all of the evidence they refer to
in their motion papers relates to Mr. Teras’s cooperation with
D.C. Bar Counsel (see ECF Nos. 73-13; 73-14; 73-15; 73-16; 7317; 73-18; 73-19; 73-20).
In the cited portions of his
deposition, Mr. Teras states only that he received a subpoena to
testify at Ms. Wilde’s trial in front of the Maryland Attorney
Grievance Commission and did so in March 2011.
(ECF No. 73-10
at 44).
Defendants therefore have not shown they are entitled
to summary judgment as to liability for claims of assistance to
Maryland Bar Counsel.
47
It is less clear that Mr. Teras was not “responding to
lawful requests.”
Defendants maintain that responding to Bar
Counsel subpoenas is the type of cooperation that the Settlement
allows, (ECF No. 73-1, at 47), but, as Plaintiffs rightly point
out, if response to a subpoena was the only thing covered by the
“responding
to
lawful
requests”
provision,
it
would
be
duplicative of an earlier provision making an exception to the
cooperation clause for “taking any actions required by law, such
as responding to any court or administrative subpoenas or other
process,” (see ECF No. 72-15, at 14).
Conversely, Defendants
argue that if reviewing draft documents for typos and analyzing
Ms. Wilde’s legal arguments qualifies as responding to a lawful
request, then it is difficult to imagine a scenario in which a
party
has
cooperated
or
assisted
with
a
Bar
Counsel
investigation without doing so in response to a lawful request.
(ECF No. 77).
Wherever the exact line between responding to
lawful requests and voluntarily encouraging and assisting in a
prosecution lies, Mr. Teras crossed it here.
In his December
17, 2010 email, Mr. Teras tells Ms. Porter, “[I]f you want me to
review [a draft of the charges] prior to filing for factual
accuracy, I will be glad to do so.”
(ECF No. 73-20, at 1).
On
January 16, 2012, Mr. Teras provided considerable feedback on
one of Ms. Wilde’s briefs in the proceeding in response to an
email from Ms. Porter where the only potential “lawful request”
48
was Ms. Porter stating, “Let me know if you have any questions
or comments.”
provided
(ECF No. 73-13, at 2).
edits
to
a
draft
from
Ms.
In July 2015, Mr. Teras
Porter
in
two
separate
emails, in response to her saying, “Let me know if you have any
questions.”
(ECF
No.
73-16,
at
1-2).
Plaintiffs
point
to
nothing in the record that contradicts what appears on its face
to be voluntary assistance.
Given the evidence presented, there
is no factual dispute that Mr. Teras voluntarily did more than
what Ms. Porter requested in her emails.
Defendants’ motion
will therefore be granted as to the Mr. Teras’s liability for
breaching these provisions.
Plaintiffs next argue that Defendants are entitled only to
nominal
damages
for
these
breaches
because
the
disciplinary
proceedings with which Mr. Teras assisted were under way prior
to the Settlement going into effect.
her
deposition,
Ms.
Wilde
(ECF No. 72-1, at 39).
acknowledged
that
Bar
In
Counsel
generally could have obtained any substantive information Mr.
Teras gave them through formal subpoenas.
25).
(ECF No. 73-4, at 24-
Thus, Plaintiffs argue, Defendants have not provided any
evidence showing that Mr. Teras’s cooperation caused any harm to
Ms.
Wilde
that
would
not
have
occurred
on
Counsel’s investigation absent his assistance.
at 40).
49
account
of
Bar
(ECF No. 72-1,
Defendants
argue
“unnecessarily
only
prolonged
that
Mr.
proceedings”
Teras’s
against
have not provided any evidence to support this.
at 47; 77, at 20).13
assistance
Ms.
Wilde,
but
(ECF Nos. 73-1,
The only specific allegation Defendants
make is that Mr. Teras accompanied a witness to court in Korea,
which
led
respond.
to
additional
(Id.).
material
to
which
Ms.
Wilde
had
to
Defendants seem to insinuate that Bar Counsel
might not have obtained that witness’s testimony without Mr.
Teras’s
assistance,
“accompanying”
difference.
Plaintiffs’
a
but
they
fail
to
to
court
led
witness
Because
motion
Defendants
will
cannot
therefore
be
explain
to
show
how
merely
this
purported
actual
damages,
granted
as
to
nominal
damages on this counterclaim.
IV.
Conclusion
For the foregoing reasons, the motion for partial summary
judgment filed by Plaintiffs will be granted in part and denied
in
part;
Defendants
the
motion
will
be
for
granted
partial
in
summary
part
13
and
judgment
denied
in
filed
part;
by
and
Although Plaintiffs noted in their response that
Defendants had not cited any evidence that supports the
contention that Mr. Teras’s actions prolonged the proceedings
(ECF No. 74, at 28), in Defendants’ reply, they again failed to
cite to the record, instead simply stating that “Wilde has
provided evidence that Teras’s effort prolonged proceedings”
(ECF No. 77, at 20).
50
Plaintiffs’
motion
to
strike
exhibits
will
be
denied.
separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
51
A
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