United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
RONNIE L. WHITE, District Judge.
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.
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 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 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.
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. (Judgment, ECF No. 31) The court explicitly declined to rule on any other 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 ...