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Day v. Robbins

United States District Court, D. Maryland

April 15, 2016

GARY W. DAY, Plaintiff
SETH A. ROBBINS, et al., Defendants



Gary W. Day (“Plaintiff”) brought a single-count action for legal malpractice, sounding in diversity, against Attorney Seth A. Robbins (“Robbins”) and a law firm variously known as Quagliano & Seeger, P.C.; Seeger Faughnan Mendicino, P.C.; and Seeger, P.C. (collectively, “Seeger”). (ECF No. 1.)[1] Thereafter, Seeger brought a Cross-Claim against Robbins for indemnity and contribution. (ECF No. 22.)

Now pending before the Court is Robbins’s Motion to Dismiss Cross-Claim, filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 29.) The issues have been briefed (ECF Nos. 29-1, 30 & 31), and no hearing is required, see Local Rule 105.6 (D. Md. 2014). For the reasons explained below, Robbins’s motion will be DENIED.

I. Background [2]

Robbins was a partner and/or corporate officer at Seeger and an attorney for Plaintiff. (ECF No. 1 ¶¶ 4, 6.) In fall of 2011, Robbins allegedly contacted Plaintiff and advised him about a financial opportunity whereby Plaintiff could receive a commission in exchange for serving as an additional indemnitor on a general indemnity agreement (“GIA”) maintained between a construction firm called Persaud Companies, Inc. (“PCI”) and Hudson Insurance Company (“Hudson”). (Id. ¶ 7.) Robbins advised Plaintiff that PCI and its owner, Andy Persaud, were “extremely strong financially” and that Plaintiff would be “completely protected” from any loss. (Id. ¶¶ 8, 12.) Relying on Robbins’s advice, Plaintiff agreed to the deal-and he signed the GIA without reading it first. (Id. ¶ 25.)

Robbins had represented to Plaintiff that Plaintiff would have an opportunity to review PCI’s proposed projects and would be given the “express right” to approve or disapprove indemnity before any bonds were issued. (Id. ¶ 17.) Nevertheless, “without [Plaintiff’s] knowledge or approval, Hudson issued payment and performance bonds on eleven projects, ” and “[w]ithout talking to [Plaintiff], Robbins approved the issuance of each of the bonds.” (Id. ¶ 27.)

In July 2012, Plaintiff received a letter from Hudson’s attorney, advising him that PCI was in default and demanding exoneration. (Id. ¶ 30.) Thereafter, in January 2013, Hudson sued Plaintiff in the United States District Court for the Eastern District of Virginia. (Id. ¶ 32.) During the course of litigation, Plaintiff learned that (1) despite Robbins’s assurances, PCI was actually in “financial ruin”; (2) an escrow company controlled by Robbins had served as funds control agent for PCI and had made substantial loans to PCI; and (3) Robbins had personally provided about $350, 000 in an effort to keep PCI afloat. (Id. ¶¶ 34, 37.) Plaintiff eventually settled Hudson’s claim against him for $1.7 million. (Id. ¶ 36.)

Plaintiff sued Robbins and Seeger for legal malpractice on July 10, 2015, accusing them of “breach[ing] the duties that they owed to their client . . . in violation of the standards reasonably to be expected of a reasonably competent practitioner.” (Id. ¶ 40.) Robbins answered Plaintiff’s Complaint, denying liability (ECF No. 27); Seeger also answered (ECF No. 21), and it separately pleaded a Cross-Claim against Robbins. (ECF No. 22.) In the Cross-Claim-which incorporates the allegations of the Complaint by reference-Seeger surmises that Plaintiff “seeks to impose liability upon Seeger based upon the alleged wrongful acts of Robbins and under respondeat superior and/or agency principles.” (Id. ¶ 5.) However, Seeger “denies any and all liability or wrongdoing” and avers that Robbins’s actions were “undertaken for [his] personal gain, were not among the services provided by Seeger, and were performed without the knowledge, information or consent of Seeger.” (Id. ¶¶ 6-7.) Seeger therefore concludes that Robbins’s actions were “outside of the scope of his employment or agency with Seeger.” (Id. ¶ 7.) Nevertheless, if and to the extent that Seeger is found liable to Plaintiff, Seeger claims that Robbins should indemnify it (Cross-Claim Count I) or contribute to the damages (Cross-Claim Count II).

Robbins moved to dismiss Seeger’s Cross-Claim on January 28, 2016. (ECF No. 29.) Seeger opposed Robbins’s motion (ECF No. 30), and Robbins replied (ECF No. 31). The matter is ripe for adjudication.

II. Standard of Review

“Under Federal Rule of Civil Procedure 12(b)(6), a cross-claim defendant may move the court to dismiss a cross-claim for ‘failure to state a claim upon which relief can be granted.’” Williams ex rel. Estate of Williams v. United States, 469 F.Supp.2d 339, 341 (E.D. Va. 2007). In analyzing a Rule 12(b)(6) motion, the Court views all well-pleaded allegations in the light most favorable to the cross-claimant. Id.; cf. Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). “[A] well-pleaded [cross-claim] may proceed even if it strikes a savvy judge that actual proof of those facts is improbable[.]” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). Even so, “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. at 555. “A [cross-claim] that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’ Nor does a [cross-claim] suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555, 557).

III. Analysis

A. The Law of Tort Indemnity and Contribution

Seeger has cross-claimed against Robbins for indemnity or, in the alternative, for contribution. Such a cross-claim is authorized by Rule 13(g) of the Federal Rules of Civil Procedure, which provides that a pleading may “state as a cross[-]claim any claim by one party against a coparty if the claim arises out of the transaction or occurrence that is the subject matter of the original action” and that such a cross-claim may “include a claim that the coparty is or may be ...

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