Beery v. Chandler et al

Filing 48

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Plaintiffs Motion to Dismiss Counterclaim of Defendant Roper as Claim is Against Public Policy (ECF No. 30) is DENIED. re: 30 MOTION to Dismiss :Counterclaim filed by Defendant Roper filed by Counter Defendant Rhoderick Beery, III. Signed by District Judge Ronnie L. White on 1/20/15. (JWJ)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
RHODERICK BEERY, III,
Plaintiff,
v.
ROBERT CHANDLER, ESQ., JEFFREY
ROPER, ESQ. and BAKER STERCHI
COWDEN & RICE, LLC,
Defendants.

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No. 4:14CV456 RLW

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff’s Motion to Dismiss Counterclaim of
Defendant Roper (ECF No. 30). The motion is fully briefed and ready for disposition. Upon
review of the Motion to Dismiss and responses thereto, the Court will deny Plaintiff’s motion.
I. Background
Plaintiff, Rhoderick Beery, III, filed a Complaint against two attorneys, Robert Chandler
and Jeffrey Roper, as well as the law firm of Baker, Sterchi, Cowden & Rice, LLC, (“Sterchi”)
alleging Intentional Misrepresentation (Fraud) in Count I and Legal Malpractice in Count II.
(First Am. Compl., ECF No. 22) Plaintiff asserts that he hired Defendant Roper, who
represented himself as a Missouri licensed attorney, to represent Plaintiff in a breach of contract
action against National Auto Warranty Services, Inc. (“NAW”). (Id. at ¶¶ 13-14) Although
Plaintiff entered into a contingency fee agreement with Defendant Roper, he was not an actively
licensed attorney at the time the parties executed the contract. (Id. at ¶ 14) Roper was never a
licensed attorney in Missouri, but he was actively licensed in Illinois in 2001 and from April 8,
2008 through January 15, 2010. (Def. Roper’s Answer ¶ 12, ECF No. 28) However, Roper’s

letterhead and the contingency fee reflected that he had a law office in Clayton, Missouri. (First
Am. Compl. at ¶ 16, ECF No. 22) Roper retained the services of Defendant Robert Chandler, an
attorney licensed in Missouri and employed by Defendant Sterchi. (Id. at ¶ 20) According to
Plaintiff, Defendant Roper did not inform Plaintiff of Chandler’s retention, and Chandler filed an
action against NAW on Plaintiff’s behalf without any communication or agreement with
Plaintiff. (Id. at ¶¶ 21-22)
Plaintiff further asserts that Roper advised Plaintiff not to accept a $3,000,000 settlement
offer from NAW and, as a result, Plaintiff was forced to accept a later settlement offer of
$300,000. (Id. at ¶ 25(a)) Plaintiff claims that because he was denied the assistance of a
licensed and experienced Missouri attorney, he was unable to obtain a full recovery of
$15,000,000 damages and that Defendants’ inadequate representation prevented Plaintiff from
obtaining sufficient monetary damages and accepting other business opportunities. (Id. at ¶¶
25(b)-(f), 28-31) Further, after Plaintiff retained new counsel, Roper filed an attorney’s lien
against Plaintiff’s settlement award, which the Circuit Court of St. Charles County dismissed.
(Id. at ¶¶ 25(g)-(h)) Plaintiff seeks $15,000,000 against Defendants, as well as costs and
attorney’s fees.
Defendant Roper filed a counterclaim for Breach of Contract, alleging that Plaintiff and
Roper signed an engagement letter that contained a contingency fee agreement and an agreement
that Plaintiff reimburse Roper’s expenses. (Roper’s Counterclaims ¶¶ 1-5, ECF No. 28) Roper
maintains that Plaintiff received a consent judgment against U.S. Fidelis, Inc. in the amount of
$1,000,000 and collected at least part of that judgment, yet Plaintiff failed to pay any monies
owed to Defendant Roper in breach of the agreement. (Id. at ¶¶ 6-10) Further, Defendant Roper

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contends that he is entitled to payment for the legal services under the theories of Quantum
Meruit and Unjust Enrichment. (Id. at ¶¶ 12-22)
On June 26, 2014, Plaintiff filed a Motion to Dismiss Counterclaim of Defendant Roper
as Against Public Policy. (Mot. to Dismiss, ECF No. 30) Plaintiff claims that Roper’s
counterclaim is barred by collateral estoppel and/or issue preclusion and that the contract is void
as against public policy in Missouri. Defendant Roper argues that the counterclaim is not
collaterally estopped because it involves separate issues from the issues determined in the state
court and that Missouri Rules and public policy allow Roper to collect fees and expenses either
under the contract or under equitable relief theories. Upon thorough review of the motion and
responses thereto, the Court finds that dismissal is not warranted at this time.
II. Standard for Ruling on a Motion to Dismiss
A complaint must be dismissed under Federal Rule 12(b)(6) for failure to state a claim
upon which relief can be granted if the complaint fails to plead “enough facts to state a claim to
relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007)
(abrogating the “no set of facts” standard set forth in Conley v. Gibson, 355 U.S. 41, 45-46
(1957)). While the Court cautioned that the holding does not require a heightened fact pleading
of specifics, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’
requires more than labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do.” Id. at 555. In other words, “[f]actual allegations must be enough to raise
a right to relief above the speculative level . . . .” Id. This standard simply calls for enough facts
to raise a reasonable expectation that discovery will reveal evidence of the claim. Id. at 556.
Courts must liberally construe the complaint in the light most favorable to the plaintiff
and accept the factual allegations as true. See Id. at 555; see also Schaaf v. Residential Funding

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Corp., 517 F.3d 544, 549 (8th Cir. 2008) (stating that in a motion to dismiss, courts accept as
true all factual allegations in the complaint); Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th
Cir. 2008) (explaining that courts should liberally construe the complaint in the light most
favorable to the plaintiff). Further a court should not dismiss the complaint simply because the
court is doubtful that the plaintiff will be able to prove all of the necessary factual allegations.
Twombly, 550 U.S. at 556. However, “[w]here the allegations show on the face of the complaint
there is some insuperable bar to relief, dismissal under Rule 12(b)(6) is appropriate.” Benton v.
Merrill Lynch & Co., 524 F.3d 866, 870 (8th Cir. 2008) (citation omitted). Courts “‘are not
bound to accept as true a legal conclusion couched as a factual allegation.’” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). When considering a motion to
dismiss, a court can “begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.” Id. at 679. Legal conclusions must be
supported by factual allegations to survive a motion to dismiss. Id.
III. Discussion
A. Collateral Estoppel
Plaintiff first contends that Defendant Roper’s counterclaim is barred by collateral
estoppel based upon the ruling by the Circuit Court of St. Charles, Missouri. The state court
determined that Roper could not assert an attorney’s lien against Plaintiff because he was not a
licensed attorney at the time the parties executed the engagement letters setting forth the fee
agreement. 1 (Judgment, ECF No. 31) The court explicitly declined to rule on any other

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While the state court opinion is not part of the Amended Complaint or the Counterclaim in this
matter, the Court may “consider public records or materials that are necessarily embraced by the
pleadings” when ruling on a motion to dismiss under Rule 12(b)(6). Thompson v. Allergan USA,
Inc., 993 F. Supp. 2d 1007, 1011 (E.D. Mo. 2014) (citations omitted). The Court finds that the
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arguments advanced by Plaintiff and instead restricted its holding solely to the finding that
“Roper has no right to pursue an attorney’s lien because he was not licensed at the time he
proffered his ‘Engagement Letters.’” (Id. at p. 3 n.3)
Plaintiff argues that the state court judgment precludes Defendant Roper from advancing
his counterclaim based on collateral estoppel. Under Missouri law, a claim is barred under
collateral estoppel only where the following four elements are satisfied:
(1) the issue decided in the prior adjudication is identical to the issue as to which
collateral estoppel is sought in the present adjudication; (2) the prior adjudication
was a final judgment on the merits; (3) the party against whom collateral estoppel
is asserted was a party or is in privity with a party in the prior adjudication; and
(4) the party against whom collateral estoppel is being asserted had a full and fair
opportunity to litigate the issue in the prior suit.”
Bowers v. Hiland Dairy Co., 188 S.W.3d 79, 86 (Mo. Ct. App. 2006) (citation omitted).
“The doctrine of collateral estoppel prevents the party from litigating an issue which that
party . . . has litigated, and lost.” Id. (citation omitted).
Here, the Court agrees with Defendant Roper that the issues raised in his
counterclaim are not identical to the issue adjudicated in the state court. The issue
adjudicated by the state court pertained solely to whether Roper could pursue an
attorney’s lien claim. The court found that, because Roper was not a licensed attorney at
the time the parties signed the engagement letters, he could not collect under Missouri’s
lien statutes. (Judgment, ECF No. 31)
In the present case, Defendant Roper advances his counterclaim under the theories
of breach of contract, quantum meruit, and unjust enrichment. Thus, the Court finds that
the first element of collateral estoppel, that the issue decided in the previous adjudication

Judgment entered in the underlying state court action is a matter of public record and one
embraced in the pleadings by virtue of Plaintiff’s legal malpractice allegations.
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is identical to the issue as to which Plaintiff seeks collateral estoppel in the present case,
is not satisfied. Indeed, Plaintiff identifies the issue in the state court as the “status of
Defendant Roper’s bar licenses (or lack thereof).” (Mem. in Support of Pl.’s Mot. to
Dismiss p. 4, ECF No. 31) As indicated by the attached Judgment, however, the state
court’s adjudication was on the narrow issue of whether Roper could assert a claim under
Missouri’s attorney lien statutes, and the court expressly declined to adjudicate any other
issues. (Judgment, ECF No. 31) In response to Defendant Roper’s opposition to the
motion to dismiss, Plaintiff does not address Roper’s argument that the state court issue
adjudicated and the issues raised in the counterclaim are not identical. However, based
upon the prior state court Judgment and the standard required for this Court to apply the
doctrine of collateral estoppel, the undersigned finds that Plaintiff has failed to
demonstrate that the issues are identical. Therefore, dismissal is not warranted on
collateral estoppel grounds.
B. Public Policy
Next, Plaintiff argues that Defendant Roper’s counterclaim should be dismissed
as void against public policy. Plaintiff relies solely on Strong v. Gilster Mary Lee Corp.,
23 S.W.3d 234 (Mo. Ct. App. 2000) for the proposition that as an unlicensed Missouri
attorney engaging in the unauthorized practice of law without securing pro hac vice
status, Roper is not entitled to any attorney’s fees or compensation for legal services.
Strong did not set forth such rule. That case found that the unauthorized practice of law
requires dismissal of the underlying cause or treatment of the actions taken by the
representative as a nullity. Id. at 241. The Strong court does not address the issue of
attorney’s fees or dismissal of a claim for fees based on public policy grounds. At this

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stage of the proceedings, the Court finds that Roper has at least stated a claim for which
relief may be granted to survive a motion to dismiss, and Plaintiff has not provided any
specific case law indicating that Missouri law precludes Roper from asserting his claims. 2
The Court also notes that discovery is still ongoing, and the dispositive motion deadline
has not yet passed. Thus, the Court will deny Plaintiff’s motion to dismiss Roper’s
counterclaims on the basis of public policy.
Likewise, the Court will deny the motion to dismiss Roper’s counterclaims for
quantum meruit and unjust enrichment. A party may assert alternative claims for breach
of an express contract and equitable relief. Guarantee Elec. Constr. Co. v. LVC Tech.,
Inc., No. 4:05CV8949 JCH, 2006 WL 950204, at *2 (E.D. Mo. April 10, 2006). Further,
whether a party may plead in the alternative is procedural in nature, and thus the Court
will apply the law of the forum state. See Superior Edge, Inc. v. Monsanto Co., Civil No.
12-2672 (JRT/FLN), 2014 WL 4414764, at *6 (D. Minn. Sept. 8, 2014) (“[T]he Federal
Rules of Civil Procedure explicitly allow parties to include in their pleadings demands for
alterative relief . . .”); Sargent v. Justin Time Transp., L.L.C., No. 4:09CV596 HEA, 2009
WL 4559222, at *2 (E.D. Mo. Nov. 30, 2009) (“Pleading in the alternative is clearly
allowed under Federal Rule of Civil Procedure 8(e).”). Missouri law does not allow
recovery under both an express contract and equitable theories of relief. Level 3

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The Court notes that “Missouri courts have held that no cause of action lies for breach of
contract or other claims seeking to recover on the basis of an unenforceable [fee-splitting]
agreement.” Eng v. Cummings, McClorey, Davis & Acho, PLC, 611 F.3d 428, 436 (8th Cir.
2010). In Eng, the court, on a motion for summary judgment, determined that the defendant law
firm violated Rule 4-1.5(e) of the Missouri Rules of Professional Conduct. Id. at 435. Only after
that determination did the court address whether the defendant could maintain an action for
fraud, misrepresentation, and unjust enrichment. Id. at 435-36. Here, Plaintiff appears to ask the
Court to presume that Roper violated the Missouri Rules of Professional Conduct, a point which
Roper has not conceded, nor the Court yet determined.
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Commc’ns, LLC v. Illinois Bell Tel.Co., No. 4:14-CV-1080 (CEJ), 2014 WL 414908, at
*6 (E.D. Mo. Feb. 4, 2014) (citation omitted). However, a plaintiff may plead alternative
claims for relief in the complaint. Id.; see also Superior Edge, 2014 WL 4414764, at *6
(citations omitted) (“In reliance upon the Rule 8, federal courts in Missouri have
consistently denied motions to dismiss quasi-contract claims even where the pleading
also alleges the existence of an express contract.”); Guarantee Elec. Constr. Co., 2006
WL 950204, at *2 (E.D. Mo. April 10, 2006) (“Because a party may set forth two or
more claims alternatively when it does not know upon which precise theory the evidence
may entitle recovery, it is settled law that joining a count based on an expressed contract
with a count based on quantum meruit does not create an inconsistency.”). Thus, the
Court will allow Defendant Roper’s alternative pleadings for equitable relief and deny
Plaintiff’s Motion to Dismiss Counterclaim in its entirety.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff’s Motion to Dismiss Counterclaim of
Defendant Roper as Claim is Against Public Policy (ECF No. 30) is DENIED.
Dated this 20th Day of January, 2015.

RONNIE L. WHITE
UNITED STATES DISTRICT JUDGE

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