Ghatt v. Seiler et al
MEMORANDUM OPINION Signed by Judge Theodore D. Chuang on 7/20/2017. (c/m 7/20/17 cags, Deputy Clerk)
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
JENEBA JALLOH GHATT,
THOMAS W. SEILER,
ROBINSON, SEILER & ANDERSON, LC,
JAMES C. YATES,
Civil Action No. TDC-16-3445
Plaintiff Jeneba Jalloh Ghatt filed this action alleging state common law claims of
false light, disparagement,
malicious use of process, tortious interference with
contract, and breach of the implied covenant of good faith and fair dealing, all arising out of
proceedings relating to the performance of an escrow agreement for which Ghatt was the escrow
agent. Pending before the Court is the Motion to Dismiss filed by Defendants Thomas W. Seiler
and Robinson, Seiler & Anderson, LC ("RSA") (collectively, "the Seiler Defendants").
reasons set forth below, the Motion is granted.
2014, Ghatt, an attorney,
entered into an escrow agreement
Agreement") with Strategic Capital Enterprises, Inc. ("Strategic Capital") and Grove Plaza, LLC
("Grove Plaza") on behalf of the Ghatt Law Group, which is now defunct.
Agreement, Strategic Capital and Grove Plaza appointed the Ghatt Law Group as the escrow
agent in connection with a joint venture through which Strategic Capital would secure a $5
million loan to Grove Plaza.
Grove Plaza was to deposit $500,000 into an escrow account,
which would then be disbursed to Strategic Capital only after Ghatt Law Group (l) verified that
Strategic Capital, in tum, had deposited $500,000 "into a sub-account at Citi Private Bank in the
name of Grove Plaza, LLC" and (2) delivered a confirmation of deposit letter and a copy of a
letter of authorization
to Grove Plaza, Strategic Capital, and New Freedom Group, LLC.
Agreement ~~ 2.1, 6.4, ECF No. 23-2.
Ghatt alleges that the owners of Grove Plaza had
persuaded Defendant James C. Yates to loan Grove Plaza the $500,000 needed for the escrow
cash deposit in exchange for a $250,000 return on investment after three months and an
ownership interest in Grove Plaza. Under the arrangement, if Grove Plaza was unable to secure
the loan, Yates would be refunded the $500,000.
Yates agreed to the arrangement with the
knowledge that his money would be received by Strategic Capital and used to secure the loan .
. Later that month, Ghatt received verification from Citi Private Bank that the sub-account
had been created, followed the instructions in the Agreement, and disbursed "the bulk of the
$500,000 less fees" to Strategic Capital. Am. Compl. ~ 25. She took no further action, operating
under the belief that the deposit would automatically be refunded to Yates if the loan was not
When the loan was not secured within a three month period and Yates did not
automatically recover his investment, he hired Seiler ofRSA as his attorney.
According to Ghatt, Yates told the Seiler Defendants that he knew that his money would
be promptly disbursed to Strategic Capital. Seiler, however, believed that he was most likely to
be able to recover Yates's investment if he brought suit against Ghatt claiming that she had
breached her duty to Yates and had "purposefully lured Yates to send her money by sending him
a letter of inducement."
Id. ~~ 31-32. Seiler therefore filed a complaint in Utah state court on
behalf of Yates in which, according to Ghatt, Seiler "presented false and misleading claims" and
provided only two pages of the full Agreement in order to create the impression that Ghatt had
cheated Yates out of money. During a February 8, 2016 hearing in that proceeding, Seiler stated
that Ghatt had sent Yates two pages of the Agreement "in order to create a false impression" that
she induced Yates to release the $500,000 to her, before then admitting that she had not sent
Yates any communications, including but not limited to the Agreement. Id. ~~ 40-41. Seiler also
coordinated with two other parties in the Utah proceeding to have them sign and submit an
affidavit with facts that he knew were "misleading and inaccurate."
Id. ~ 63. The Utah state
court ultimately issued an order finding that Ghatt violated the duty of care she owed to Yates,
causing her to have to appeal the order and expend resources to continue to defend herself.
Seiler also filed related claims in Maryland. On March 22,2015, Seiler filed a complaint
with the Attorney Grievance Commission of Maryland that Ghatt asserts to be an attempt to
present Ghatt in "a bad light" and advance his client's case in Utah. Id. ~~ 35, 118. According
to Ghatt, on July 20,2016, Seiler "insinuated" to the Attorney Grievance Commission that Ghatt
had sent Yates two pages of the Agreement in order "to create an impression that she attempted
to swindle Yates out of money."
Id. ~ 44. Then on October 12, 2015, Seiler filed a complaint
with the Client Protection Fund of the Bar of Maryland in which he falsely alleged that Ghatt had
stolen, and breached her duty to protect, Yates's money.
Ghatt filed this action in the Circuit Court for Prince George's County, Maryland.
Seiler Defendants then removed the case to this Court with the consent of Yates. At a November
9,2016 case management conference, the parties agreed that Ghatt, having been informed of the
Seiler Defendants' argument~ for dismissal, would amend the Complaint to address those issues
before the Seiler Defendants filed their motion to dismiss. The Court notified Ghatt that because
she had been given the opportunity to amend, if the Amended Complaint was nevertheless
deficient, the Court would likely dismiss with prejudice without further opportunity to amend.
On November 28, 2016, Ghatt filed her Amended Complaint, alleging that, as a result of
actions in the Utah and Maryland proceedings, she has had to pay legal fees to
defend herself; has suffered extreme and severe emotional distress, anxiety and humiliation; lost
potential work and income; had to close down her firm; and is facing the possible loss of her law
The Seiler Defendants are seeking dismissal of all counts of the Amended Complaint
pursuant to Federal Rule of Civil Procedure 12(b)(6).
They argue that Ghatt's claims for
defamation (Count I) and false light (Count II) are barred by common law privilege and that
Ghatt has not alleged sufficient facts to state a claim for disparagement (Count III), malicious use
of process (Count IV), tortious interference with contract (Count V), or breach of the implied
covenant of good faith and fair dealing (Count VI).
They also argue that Ghatt's claims of
defamation, false light, and disparagement are time-barred.
To defeat a motion to dismiss under Rule 12(b)(6), the complaint must allege enough
facts to state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim is
plausible when the facts pleaded allow "the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged," Id. Legal conclusions or conclusory statements
do not suffice.
Id. The Court must examine the complaint as a whole, consider the factual
allegations in the complaint as true, and construe the factual allegations in the light most
favorable to the plaintiff.
Albright v. Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of
Comm 'rs of Davidson Cty " 407 F.3d 266, 268 (4th Cir. 2005).
The Court notes that while pleadings of self-represented
litigants are to be construed
liberally, Erickson v. Pardus, 551 U.S. 89, 94 (2007), the United States Court of Appeals for the
Fourth Circuit has not yet decided "whether a pro se plaintiff who is also an attorney receives the
benefit of this liberal construction," Willner v. Dimon, 849 F.3d 93, 103 (4th Cir. 2017) (quoting
Kerr v. Marshall Univ. Bd. of Governors, 824 F.3d 62,72 (4th Cir. 2016)). Out of an abundance
of caution, the Court will construe Ghatt's Amended Complaint liberally.
Courts are permitted to consider documents attached to a motion to dismiss "when the
document is integral to and explicitly relied on in the complaint, and when the plaintiffs do not
challenge the document's authenticity."
Zak v. Chelsea Therapeutics Int'!, Ltd., 780 F.3d 597,
606-07 (4th Cir. 20 15) (quoting Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d
212, 234 (4th Cir. 2004)) (internal quotation marks omitted).
Here, Ghatt refers to and relies
upon the Agreement in her Amended Complaint and does not dispute the authenticity of the copy
attached to the Motion.
The Court will therefore consider the Agreement.
affidavits and exhibits attached to Ghatt's Opposition to the Motion, consideration of which the
Seiler Defendants oppose, are not integral to the Amended Complaint and therefore will not be
Defamation, False Light, and Disparagement
Ghatt alleges that Defendants defamed her between March 2015 and July 2016 by
placing "false and misrepresented facts in their complaints and various pleadings" during the
proceedings in Utah and Maryland. Am. CompI. ~~ 121-22. Under Maryland law, to establish a
case of defamation,
a plaintiff must establish that (l) the defendant made a
defamatory statement to a third person (a requirement known as publication); (2) the statement
was false; (3) the defendant was legally at fault in making the statement; and (4) the plaintiff
thereby suffered harm.
Gohari v. Darvish, 767 A.2d 321, 327 (Md. 2001).
Under the first
element, a defamatory statement is one "which tends to expose a person to public scorn, hatred,
contempt or ridicule, thereby discouraging others in the community from having a good opinion
of, or associating with, that person." Id. (quoting Rosenberg v. Helinski, 616 A.2d 866,871 (Md.
1992)). Under the second element, a statement is "false" if it was "not substantially correct."
Piscatelli v. Van Smith, 35 A.3d 1140, 1147 (Md. 2012). Establishing the third element, that a
defendant is legally at fault, requires a showing that, at a minimum, the party making the false
statement acted negligently. Hearst Corp. v. Hughes, 466 A.2d 486, 490-92 (Md. 1983). For the
fourth element, actual harm must generally be established. Id. at 493; Shapiro v. Massengill, 661
A.2d 202, 217-18 (Md. Ct. Spec. App. 1995). Each alleged defamatory statement constitutes a
"separate instance of defamation" that must be specifically alleged. English Boiler & Tube, Inc.
v. We. Rouse & Son, Inc., 172 F.3d 862,1999
WL 89125, at *3 (4th Cir. 1999) (unpublished
decision); see also Doe v. Salisbury Univ., 123 F. Supp. 3d 748, 758 (D. Md. 2015) ("To satisfy
federal pleading standards, a plaintiff must specifically allege each defamatory statement.").
Apart from Ghatt's general allegation that "Defendants'
claims in the public record
before various fact-finding tribunals in Maryland and Utah from March 22, 2015 through July
20, 2016 constitute
[l]ibel per se," her Amended Complaint identifies only three specific
statements that are allegedly defamatory.
Am. CompI. ~ 122. These statements are: (1) in the
October 2015 claim filed with the Client Protection Fund of the Bar of Maryland, Seiler and
Yates "alleged that Plaintiff had committed 'theft' of the $500,000" and that she "breached a
duty to protect Defendant Yates' money"; (2) in a February 8, 2016 hearing in the Utah state
Seiler stated that Ghatt had sent Yates "the two pages of the Escrow
for the purpose of creating "a false impression before a tribunal that [Ghatt]
conducted an overt act to induce [Yates] to release funds to [Ghatt],,; and (3) on July 20, 2016,
Seiler "insinuated again to an Attorney Grievance Commission panel that [Ghatt] 'sent' [Yates]
two pages" of the Agreement, which was "libelous as it was stated to create an impression that
she attempted to swindle Yates out of money." Id. ~~ 37-38, 44, 117, 118.
Even if pleaded with greater specificity, these statements fail to state a plausible claim for
Under Maryland law, attorneys are entitled to an absolute privilege, sometimes
referred to as the "litigation privilege," for statements made in judicial proceedings that "have
some rational relation to the matter at bar."
0 'Brien & Gere Eng'rs v. City of Salisbury, 135
A.3d 473, 483-84 (Md. 2016). This privilege covers both statements made in a courtroom and
statements made in documents filed in a judicial proceeding. Adams v. Peck, 415 A.2d 292, 293
(Md. 1980). "This absolute privilege protects the person publishing the defamatory statement
from liability even if his purpose or motive was malicious, he knew that the statement was false,
or his conduct was otherwise unreasonable."
Here, the statements identified by Ghatt were made by Seiler in filings to or otherwise
during the course of judicial proceedings and "have some rational relation" to the proceeding.
O'Brien & Gere, 135 A.3d at 483-84. First, the Utah state court proceeding clearly constitutes a
judicial proceeding for the purpose of the litigation privilege, the allegation that Ghatt stole
Yates's money and breached her duty to him was made in a court hearing, and it was directly
connected to the breach of contract claim instituted in that court. Second, because the Attorney
acts as a "quasi-judicial
body," charges made by attorneys to the
"initiate a judicial proceeding
grievance procedure" and are thus similarly privileged.
by setting in motion the
Kerpelman v. Bricker, 329 A.2d 423,
425 (Md. Ct. Spec. App. 1974) (stating that an Attorney Grievance Committee "acts as a quasi-
judicial body and is invested with the authority, acting through its executive council, to file
charges against an attorney in the Court of Appeals"), cited with approval by Adams, 415 A.2d at
293. Here, Seiler's assertion to the Attorney Grievance Commission that Ghatt sent documents
to Yates bears a rational relationship to his claim that she acted improperly in executing her
duties as an escrow agent. Thus, that statement is also protected by the litigation privilege.
Although Maryland courts have not reached the issue whether assertions made to the
Client Protection Fund are likewise equivalent to statements made in judicial proceedings, claims
made to the Client Protection Fund must be referred to the Attorney Grievance Commission, see
Md. Rule 19-609; Regulations of the Client Protection Fund of the Bar of Maryland Currently
Effective, Md. Courts, http://www.courts.state.md.us/cpf/pdfs/
regulations.pdf (last visited July
3,2017), and final determinations are subject to judicial review, Md. Rule 19-610 (providing for
judicial review of final decisions by the trustees of the Client Protection Fund).
therefore finds that Seiler's communications to the Client Protection Fund alleging that Ghatt
engaged in theft of Yates's funds, like those made to the Attorney Grievance Commission, are
also protected by the litigation privilege.
The cases cited by Ghatt from other jurisdictions are not only distinguishable but also
undermine her argument in that they reaffirm the basic principle that statements made in judicial
proceedings may not form the basis of a defamation claim. See Simms v. Seaman, 23 A.3d 1, 911 (Conn. App. Ct. 2011) (stating that although absolute immunity applies to allegedly
defamatory statements in judicial proceedings, it does not bar a suit for the tort of vexatious
litigation); Sussman v. Damian, 355 So.2d 809, 811 (Fla. Dist. Ct. App. 1977) ("It is the
established law of this state that defamatory words published by lawyers during the due course of
a judicial procedure are absolutely privileged and cannot form the basis for a defamation action
so long as the statements uttered are connected with, or are relevant or material to the cause at
hand or the subject of inquiry no matter how false or malicious such statements may in fact be.");
Troutman v. Erlandson, 593 P.2d 793, 794 (Or. 1979) ("This court has recognized the absolute
privilege accorded [to] communications
made by attorneys in judicial proceedings.");
Mendel, 507 A.2d 351, 355-56 (Pa. 1986) (declining to apply the absolute privilege to an extrajudicial communication that was "not directly relevant to the court proceedings");
Equip. Corp. v. Condes Corp., 258 N.W.2d 712, 716-17 (Wis. 1977) (finding that the recognized
absolute privilege for "statements made by parties, witnesses and counsel during the course of
judicial or quasi-judicial
did not apply where "none of the recipients" of the
communications were not "an integral part of the judicial proceedings").
Accordingly, the Court
will grant the motion to dismiss as to the defamation claim.
Ghatt's false light claim, based on the same statements identified above, fails to state a
claim for the same reason.
The elements of a false light/invasion
of privacy claim under
Maryland law are: (l) the defendant gave "publicity to a matter concerning another that places
the other before the public in a false light," (2) "the false light in which the other person was
placed would be highly offensive to a reasonable person," and (3) the defendant "had knowledge
of or acted in reckless disregard as to the falsity of the publicized matter and the false light in
which the other would be placed."
Bagwell v. Peninsula Reg'l Med. Ctr., 665 A.2d 297, 318
(Md. Ct. Spec. App. 1995) (quoting Restatement (Second) of Torts ~ 625E (Am. Law Inst.
1977)). Under Maryland law, "[r]egardless of whether a declaration is styled as a defamation
action or an invasion of privacy action, the same considerations and legal standards apply."
AIDS Counseling & Testing Ctrs. v. Group W Television, Inc., 903 F.2d 1000, 1004 n.l (4th Cir.
1990) (alteration in original) (quoting Phillips v. Wash. Magazine, Inc., 472 A.2d 98, 101 n.1
(Md. Ct. Spec. App. 1984)). The absolute privilege for communications made by attorneys in
judicial proceedings therefore also applies to, and bars, Ghatt's false light claim.
See Holt v.
Camus, 128 F. Supp. 2d 812, 816 (D. Md. 1999) (holding that a false light claim based on
statements made in a deposition was barred by the absolute litigation privilege).
cause of action for disparagement
based on the complaints
statements made to the tribunals in Utah and Maryland also fails to state a claim. A claim of
or injurious falsehood, consists of a derogatory statement about property or
business that "resembles that for defamation, but differs from it materially in the greater burden
of proof resting on the plaintiff, and the necessity for special damage in all cases."
McMullen, 291 A.2d 37, 49 (Md. 1972) (quoting William L. Prosser, Law of Torts 919-20 (4th
A plaintiff must not only establish falsity, but also "prove in all cases that the
publication has played a material and substantial part in inducing others not to deal with him, and
that as a result he has suffered special damage."
Id. (quoting William L. Prosser, Law of Torts
919-20 (4th ed. 1971)).
Ghatt's disparagement claim fails for two reasons. First, the absolute privilege that bars
her defamation and false light causes of action also precludes her disparagement claim.
135 A.3d at 483 (noting that the litigation privilege "is not confined in the law of torts
to matters of defamation" (quoting Walker v. D'Alesandro,
Fowler V. Harper et aI., Harper, James and Gray on Torts
129 A.2d 148, 169 (Md. 1957));
S 6.3, at 342
(3d ed. 2006) ("Although
such situations are rarely litigated, it seems clear that persons participating in judicial, legislative,
or executive proceedings enjoy the same privilege in disparagement cases as in defamation."),
cited with approval by O'Brien, 135 A.3d at 410-11. Second, Ghatt does not sufficiently allege
that the publication "played a material and substantial part in inducing others not to deal with
[her]." Beane, 291 A.2d at 49 (quoting William L. Prosser, Law of Torts 919-20 (4th ed. 1971)).
Instead, her Amended Complaint asserts that Ghatt had preemptively "closed down her business
in order to avoid future clients who may conduct a search and discover all of the false
information and claims Defendants made against her law practice in the public record" and that
she "paid legal fees defending against Defendants' words and actions." Am. Compo ~~ 132-133.
Neither of these claims of damages alleges that others, as a consequence of the publication of
defamatory statements, were actually induced to refrain from retaining her as a lawyer or
doing business with her.
Ghatt has failed to state a claim for
Having concluded that Ghatt's defamation, false light, and disparagement claims cannot
proceed, the Court need not address the Seiler Defendants' arguments based on the statute of
limi tati ons.
Malicious Use of Process
Ghatt asserts in Count IV that Seiler engaged in malicious use of process in pursuing the
Utah state court a'?tion as well as in filing the charge with the Attorney Grievance Commission.
Under Maryland law, malicious use of process has five elements:
(l) a civil proceeding
instituted against the plaintiff; (2) without probable cause; (3) with malice; (4) that terminated in
favor of the plaintiff; and (5) that inflicted a special injury upon the plaintiff which would not
necessarily result in all such suits. One Thousand Fleet Ltd. P'ship v. Guerriero, 694 A.2d 952,
956 (Md. 1997).
Regarding the Utah proceeding, Ghatt does not allege that the proceeding
terminated in her favor. To the contrary, she acknowledges that the Utah court "issued an order
declaring that [Ghatt] owed a duty and violated a duty to Defendant Yates," which she "now has
the expense of appealing ... as she continues to defend her rights on other matters in that case."
Am. Compi. ~ 142. Ghatt's allegations therefore suggest not only that the proceeding did not
result in a judgment in her favor, but also that it may not have been terminated at the time she
filed her Amended Complaint.
See One Thousand Fleet Ltd. P'ship, 694 A.2d at 958-59
(holding that the plaintiff could not maintain an action for malicious use of process where the
underlying judgment was pending on appeal at the time of filing).
Moreover, Ghatt fails to
allege that she suffered a special injury that would not ordinarily result.
See id. at 956
(describing the special injury requirement); Bartlett v. Christhilf, 14 A. 518, 521-22 (Md. 1888)
(declining to recognize "injury to the plaintiff s business or good name" as injury sufficient to
state a claim for malicious use of process).
Ghatt's cause of action of malicious use of process claim based on the complaint to the
Attorney Grievance Commission also fails to state a plausible claim for relief. Again, Ghatt does
not allege either that the grievance procedure has terminated in her favor or that special injury
has resulted. Further, because a "disciplinary proceeding for professional misconduct" is neither
"a proceeding of a criminal character" nor a "trial of an action at law," it cannot form the basis of
a malicious use of process claim. Kerpelman, 329 A.2d at 427-28 (declining to consider granting
leave to amend the complaint to add a malicious prosecution claim); see also One Thousand
Fleet Ltd. P'ship, 694 A.2d at 955 ("In Maryland, the term 'malicious use of process' means
malicious prosecution of a civil claim. 'Malicious prosecution' in Maryland applies to criminal
charges, but otherwise shares the same elements as malicious use of process.").
malicious use of process claims are fundamentally flawed, the Court will dismiss Count IV of the
Tortious Interference with Contract
In Count V of her Amended
Ghatt alleges that Defendants
"interfered with the Escrow Agreement" by "attempt(ing] to use the judicial system to create
additional duties owed by Plaintiff and to add new clauses and rights that were not intended" by
Am. CompI. ~ 141. As relevant here, tortious interference with a contract "is
committed when a third party's intentional interference with another in his or her business or
occupation ... induces a breach of an existing contract." Macklin v. Robert Logan Assocs., 639
A.2d 112, 117 (Md. 1994). This tort has five elements:
"(1) existence of a contract between
plaintiff and a third party; (2) defendant's knowledge of that contract; (3) defendant's intentional
interference with that contract; (4) breach of that contract by the third party; and (5) resulting
damages to the plaintiff."
Fowler v. Printers II, Inc., 598 A.2d 794, 802 (Md. Ct. Spec. App.
1991). Ghatt's claim must fail because she does not allege that either Strategic Capital or Grove
Plaza, the third parties with whom Ghatt had entered into a contract, breached the Agreement,
and that such a breach was the result of intentional interference by Defendants.
allegation would be implausible because Defendants had no interest in having Strategic Capital
or Grove Plaza breach the Agreement. Count V of the Amended Complaint will be dismissed.
Breach of the Implied Covenant of Good Faith and Fair Dealing
Lastly, in Count VI, Ghatt alleges that Seiler breached the implied covenant of good faith
and fair dealing when he possessed the full Agreement but referred to it in various proceedings
as an "alleged" agreement and "extracted two pages of an early draft despite having the latest 12page final draft in hand." Id. ~ 146. In Maryland, a contract "gives rise to an implied duty of
good faith and faith dealing" that "concerns the performance and enforcement of the contact
Blondell v. Littlepage, 991 A.2d 80, 90 (Md. 2010).
The duty "does not obligate a
[party] to take affirmative actions that the [party] is clearly not required to take under [the
contract]," but rather "simply prohibits one party to a contract from acting in such a manner as to
prevent the other party from performing his obligations under the contract."
Id. at 90-91
(alterations in original) (quoting E. Shore Mkts., Inc. v. JD. Assocs., Ltd., 213 F.3d 175, 182-84
(4th Cir. 2000)).
Here, the only contract mentioned by Ghatt is the Agreement, which was
signed by Strategic Capital, Grove Plaza, and Ghatt as escrow agent on behalf of the Ghatt Law
Neither Seiler nor Yates signed the Agreement.
There is accordingly no underlying
contract based upon which Seiler would owe Ghatt an implied duty of good faith and fair
dealing. The Court will therefore dismiss Count VI of the Amended Complaint.
For the foregoing reasons, the Motion to Dismiss is GRANTED.
THEODORE D. CH
United States District
A separate Order shall
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?