HansaWorld USA, Inc. v. Carpenter
Filing
160
ORDER granting Defendant's 133 Motion for Summary Judgment; denying Plaintiff's 112 Motion for Attorney Fees; and denying as moot all other pending motions 127 129 135 141 148 and 159 . Signed by District Judge Keith Starrett on March 8, 2016 (dsl)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
HANSAWORLD USA, INC.
v.
PLAINTIFF
CIVIL ACTION NO. 2:15-CV-73-KS-JCG
DAMON G. CARPENTER
DEFENDANT
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the Motion for Summary Judgment [133] filed by
Defendant Damon G. Carpenter (“Defendant”), the Motion for Partial Summary Judgment [135] and
the Motion for Leave to File Second Amended Complaint (“Motion to Amend”) [129] filed by
Plaintiff HansaWorld USA, Inc. (“Plaintiff”), and the Motion for Attorney’s Fees [112] filed by
Movant Kimberlee Davenport (“Davenport”). After reviewing the submissions of the parties, the
record, and the applicable law, the Court finds the following:
1)
Defendant’s Motion for Summary Judgment [133] is well taken and should be
granted;
2)
Plaintiff’s Motion for Partial Summary Judgment [135] should be denied as moot;
3)
Plaintiff’s Motion to Amend [129] should be denied as moot;
4)
Davenport’s Motion for Attorney’s Fees [112] is not well taken and should be
denied;
5)
All other pending motions in this case should be denied as moot.
I. BACKGROUND
The current action was originally brought in Florida state court on February 3, 2015, and was
removed pursuant to 28 U.S.C. §§ 1332, 1441, and 1446, on March 30, 2015, to the United States
District Court for the Southern District of Florida. On May 7, 2015, the case was transferred to this
Court under 28 U.S.C. § 1404(a).
In its complaint, Plaintiff brings claims of civil conspiracy and violations of Florida’s Civil
Remedies for Criminal Practice Act, FLA. STAT. § 772.101, against Defendant in connection to his
representation of Plaintiff’s former employee, Davenport.
Defendant is a lawyer in Mississippi and was employed as legal counsel by Davenport from
October 17, 2012, to October 31, 2012. All alleged wrongful conduct by Defendant took place
within that relationship. Plaintiff won its Florida lawsuit against Davenport in January 2015, on
claims of unlawful conversion of the car and extortion. Davenport has a separate suit against
Plaintiff pending in this Court, which has been stayed pending appeal in a related state court action.
On June 12, 2015, Defendant filed his Motion to Dismiss [45], arguing the claims against
him should be governed by Mississippi law, which would mean that they were time-barred by their
respective statutes of limitations. On July 20, 2015, Plaintiff filed its Motion to Amend [59], asking
for the Court’s leave to amend its complaint and add a claim under the civil provisions of the
Racketeer Influenced and Corrupt Organizations Act and a claim of malicious interference with
business relations.
On October 1, 2015, this Court denied Plaintiff leave to amend to add the proposed claims,
finding that they were not sufficiently pleaded, and denied as moot Defendant’s Motion to Dismiss
[45]. In doing so, the Court found that Florida law was the appropriate law to apply.
On December 3, 2015, the Court granted Davenport’s Motion to Quash [96] Defendant’s
subpoena, which sought the testimony of Davenport’s current attorney. Davenport has subsequently
filed a Motion for Attorney’s Fees [112] in connection to this motion. On January 20, 2016,
Plaintiff filed its Motion to Amend [129], seeking to attribute additional underlying unlawful acts
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to the alleged conspiracy. On February 1, 2016, Defendant filed his Motion for Summary Judgment
[133], and Plaintiff filed its Motion for Partial Summary Judgment [135].
II. DISCUSSION
A.
Standard of Review
Federal Rule of Civil Procedure 56 provides that “[t]he court shall grant summary judgment
if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “Where the burden of production at trial
ultimately rests on the nonmovant, the movant must merely demonstrate an absence of evidentiary
support in the record for the nonmovant’s case.” Cuadra v. Houston Indep. Sch. Dist., 626 F.3d 808,
812 (5th Cir. 2010) (citation and internal quotation marks omitted). The nonmovant must then
“come forward with specific facts showing that there is a genuine issue for trial.” Id. “An issue is
material if its resolution could affect the outcome of the action.” Sierra Club, Inc. v. Sandy Creek
Energy Assocs., L.P., 627 F.3d 134, 138 (5th Cir. 2010) (quoting Daniels v. City of Arlington, Tex.,
246 F.3d 500, 502 (5th Cir. 2001)). “An issue is ‘genuine’ if the evidence is sufficient for a
reasonable jury to return a verdict for the nonmoving party.” Cuadra, 626 F.3d at 812 (citation
omitted).
The Court is not permitted to make credibility determinations or weigh the evidence. Deville
v. Marcantel, 567 F.3d 156, 164 (5th Cir. 2009) (citing Turner v. Baylor Richardson Med. Ctr., 476
F.3d 337, 343 (5th Cir. 2007)). When deciding whether a genuine fact issue exists, “the court must
view the facts and the inferences to be drawn therefrom in the light most favorable to the nonmoving
party.” Sierra Club, Inc., 627 F.3d at 138. However, “[c]onclusional allegations and denials,
speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not
adequately substitute for specific facts showing a genuine issue for trial.” Oliver v. Scott, 276 F.3d
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736, 744 (5th Cir. 2002) (citation omitted). Summary judgment is mandatory “against a party who
fails to make a showing sufficient to establish the existence of an element essential to that party’s
case, and on which that party will bear the burden of proof at trial.” Brown v. Offshore Specialty
Fabricators, Inc., 663 F.3d 759, 766 (5th Cir. 2011) (quoting Celotex Corp. v. Catrett, 477 U.S. 317,
322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)).
B.
Choice of Law
Parties dispute whether it is proper to apply Mississippi or Florida law to Plaintiff’s claims.
The Court previously ruled that, insomuch that there existed a conflict of laws in this case, Florida
law should be applied. (See Order [73] at pp. 4-7.) The Court finds that it need not reconsider this
ruling, as there has been no substantial change in circumstances that would warrant applying
Mississippi law over Florida law.
C.
Florida’s Civil Remedies for Criminal Practice Act Claim
Defendant argues that Plaintiff has not met its burden in establishing its claim under
Florida’s Civil Remedies for Criminal Practice Act, FLA. STAT. § 772.101 (“Florida RICO”).
Florida RICO is patterned on the federal Racketeer Influenced and Corrupt Organizations Act
(“RICO”), and the analysis applied to a claim under Florida RICO is identical to the analysis under
federal RICO. Jackson v. BellSouth Telcomms., 372 F.3d 1250, 1263-64 (11th Cir. 2004).
“Essential to any successful RICO claim are the basic requirements of establishing a RICO
enterprise and a pattern of racketeering activity” Id. at 1264 (internal quotations omitted). In its
previous ruling, this Court denied Plaintiff leave to amend its complaint to add a claim under federal
RICO, finding that the proposed claim failed to establish a RICO enterprise or a pattern of
racketeering activity. (Order [73] at pp. 7-11.) Specifically, the Court held that there was no
enterprise between Defendant and Davenport because their association had no existence outside the
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alleged wrongful conduct. (Id. at pp. 10-11.) The Court also held that there was no pattern of
racketeering activity because Plaintiff could not establish the continuity of the activity. (Id. at pp. 810.) Plaintiff does not attempt to address these deficiencies with its claim under Florida RICO.
Even if Plaintiff did address these deficiencies, it is indisputable that it cannot establish a
pattern of racketeering activity. To establish this element of its claim, Plaintiff must show that there
is a “threat of continuing racketeering activity.” Jackson, 372 F.3d at 1265 (quoting Jones v.
Childers, 18 F.3d 899, 912 (11th Cir. 1994)) (emphasis in original). Because the professional
relationship between Defendant and Davenport has ended, the only continuity that Plaintiff could
allege is closed-ended continuity. See Jackson, 372 F.3d at 1265 (holding open-ended continuity
to involve a “threat of repetition”). It is well-established that closed-ended continuity requires the
activity to occur over a substantial period of time, which cannot be met with “allegations of schemes
lasting less than a year.” Id. at 1266 (citations omitted). Every wrongful act Plaintiff claims
Defendant committed, disputed or not, occurred between October 15, 2012, and October 31, 2012.
Plaintiff makes a vague allegation that these kinds of wrongful acts are “normal business practice”
for Defendant and his firm, possibly attempting to make out a claim for open-ended continuity, but
no evidence has been put forward to support this allegation. See Jackson, 372 F.3d at 1265 (stating
open-ended continuity can exist if the predicate acts are “part of an ongoing entity’s regular way
of doing business”). Therefore, because Plaintiff has failed to demonstrate a continuing pattern of
racketeering activity, the Court finds that it has not met its burden in proving its Florida RICO claim.
Defendant’s Motion for Summary Judgment [133] will therefore be granted as to this claim.
D.
Civil Conspiracy
Defendant argues, inter alia, that because he was merely an agent of Davenport and had no
personal stake in any underlying wrongful conduct, he cannot be liable for conspiring with his client.
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Under Florida law, if an attorney’s actions are within the scope of his representation and he has no
personal stake in the underlying wrongful acts attributed to the alleged conspiracy, then he cannot
be held liable for conspiring with his client. See Lipsig v. Ramlawi, 760 So.2d 170, 181 (Fla. Dist.
Ct. App. 2000). In Lipsig, the Florida court held that because the attorney’s activities were all
within the scope of his representation and there was no proof that he would personally benefit from
the alleged conspiracy, he was entitled to a directed verdict on the conspiracy charge. Id. In this
case, Defendant has presented evidence that his actions were all in furtherance of his representation
of Davenport. (See Brandon Report [134-24] at p. 10.) Plaintiff has not presented any evidence or
argument to refute this evidence.
Additionally, there is no evidence that Defendant had any personal stake in the matter.
Plaintiff attempts to argue that Defendant’s fee gives him a personal interest in the alleged extortion,
but Defendant’s fee is a fixed-fee arrangement and has never been contingent on the result of the
legal representation. (See Davenport-Carpenter Agreement [134-12].) Any interest Defendant may
have had, then, is indirect at best, and to hold it sufficient for conspiracy liability would be to render
all attorneys potentially liable for conspiracy even if their actions fell entirely within the scope of
their representation. The Court therefore does not find that Defendant had a personal interest in the
alleged conspiracy significant enough to be held liable for civil conspiracy under Florida law.
Plaintiff further argues that the testimony of Defendant’s expert Stephen A. Brandon should
be stricken because he is not “the ultimate trier of fact.” Plaintiff ignores the fact that, under Federal
Rule of Evidence 702, an expert is allowed to given an opinion on an ultimate issue such as this.
Furthermore, Plaintiff has not moved for this testimony to be stricken, nor has it presented the Court
with any evidence to show that it should be stricken or presented any evidence that Defendant did
not act within the scope of his duties as Davenport’s attorney. As it is the Plaintiff that ultimately
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bears the burden of presenting evidence that Defendant exceeded the scope of his representation,
the Court finds that it has failed to establish this element of its claim. As Plaintiff also cannot show
that Defendant had any personal interest in the alleged conspiracy, Defendant is entitled to judgment
on Plaintiff’s civil conspiracy claim as a matter of law. See Lipsig, 760 So.2d at 181. Defendant’s
Motion for Summary Judgment [133] will therefore be granted as to Plaintiff’s civil conspiracy
claim as well.
E.
Other Pending Motions
Because Defendant’s Motion for Summary Judgment [133] is granted in its entirety, the
Court will deny as moot Plaintiff’s Motion for Partial Summary Judgment [135]. Furthermore,
because the proposed amendments in Plaintiff’s Motion to Amend [129] merely seek to add more
underlying wrongs for its civil conspiracy claim and have no impact on the evidentiary deficiencies
of that claim the Court has found, it will also be denied as moot.
The Court further finds Movant Davenport’s Motion for Attorney’s Fees [112] should be
denied. The subpoena issued by Defendant to Davenport’s attorney was “justified to a degree that
could satisfy a reasonable person” and “raised an issue about which there [was] a genuine dispute.”
See Fed. R. Civ. P. 37, Practice Commentary. Because the claims against Defendant deal with his
representation of Davenport, a reasonable person would find subpoenaing the testimony of his
replacement in this representation to be appropriate. Whether this testimony was privileged or not
was a genuine issue of dispute. The Court therefore finds that the subpoena was substantially
justified under Federal Rule of Civil Procedure 37(a)(5)(A)(iii), and an award of attorney’s fees is
not appropriate.
All other pending motions in this case will be denied as moot.
III. CONCLUSION
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IT IS THEREFORE ORDERED AND ADJUDGED that Defendant’s Motion for
Summary Judgment [133] is granted.
IT IS FURTHER ORDERED AND ADJUDGED that Plaintiff’s Motion for Partial
Summary Judgment [135] is denied as moot.
IT IS FURTHER ORDERED AND ADJUDGED that Plaintiff’s Motion to Amend [129]
is denied as moot.
IT IS FURTHER ORDERED AND ADJUDGED that Davenport’s Motion for Attorney’s
Fees [112] is denied.
IT IS FURTHER ORDERED AND ADJUDGED that all other pending motions in this
case are denied as moot.
SO ORDERED AND ADJUDGED this the 8th day of March, 2016.
s/Keith Starrett
UNITED STATES DISTRICT JUDGE
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