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Al Jazeera International v. Dow Lohnes PLLC

United States District Court, D. Maryland

December 21, 2016



          DEBORAH K. CHASANOW United States District Judge.

         Presently pending and ready for resolution in this attorney malpractice case is a motion for summary judgment filed by Defendants Dow Lohnes PLLC and Leslie H. Wiesenfelder (“Defendants”). (ECF No. 91). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motion for summary judgment will be granted in part and denied in part.

         I. Background[1]

         A. The Facts of the Underlying Litigation

         This attorney malpractice case stems from Defendants' representation of Plaintiff Al Jazeera International (“Plaintiff”) in a contract dispute with Winmar, Inc. In 2005, Plaintiff entered into a construction contract with Winmar, Inc. to build a television studio and offices in Washington, D.C. (the “Contract”). (ECF No. 99, at 7). Janson Design Group (the “Architect”) was the architect for the project. (Id.). The Contract established a payment process under which Winmar would submit periodic invoices (“Payment Applications”) for review by the Architect as Plaintiff's agent; if the Architect was satisfied, it would certify these Payment Applications to be paid by Plaintiff. (Id. at 8).

         Between October and December 2005, Winmar submitted four Payment Applications totaling $1, 838, 140, and the Architect certified all four of them. (Id.). Concerned that Winmar had not completed all of the work for which it was seeking payment, Plaintiff paid only one of the invoices, in the amount of $474, 677. (Id. at 9). Winmar sent Plaintiff a notice of default on December 22, asserting that it was in breach of the Contract and directing it to cure the breach by paying the remaining certified amounts. (Id.). Defendants advised Plaintiff that even if Winmar had not completed the appropriate amount of work, the contract language was such that non-payment could be considered a breach by a reviewing court. (Id. at 9-10). Given the billing dispute, Plaintiff engaged a construction manager to review the state of the project. (ECF No. 50 ¶ 22). He concluded that Winmar had overbilled Plaintiff, and, consequently, Plaintiff made no further payments. (Id.).

         On January 5, 2006, the Architect sent a letter to Winmar, rescinding its certification for the three unpaid invoices, declaring that the certifications had been made in error and were withdrawn on account of “a number of discrepancies in the . . . Application documents, as well as the lack of appropriate supporting documentation.” (ECF No. 99, at 10).[2] The Architect asked Winmar for additional documents supporting the invoices, which Winmar refused to provide. (Id. at 10-11). Plaintiff then terminated the Contract for convenience. (Id. at 12). Plaintiff soon after sent a letter to Winmar and the Architect pursuant to the Contract's process for resolving billing disputes. Winmar, Inc. v. Al Jazeera Int'l, 741 F.Supp.2d 165, 177 (D.D.C. 2010). The letter stated that, according to Plaintiff's calculations, it had overpaid Winmar by approximately $200, 000. Id.

         Meanwhile, apparently in response to Plaintiff's attempt to confirm the status of the single payment it had made, Plaintiff's bank, Qatar National Bank (“QNB”), erroneously transferred the $474, 677 payment a second time. Id. at 176. Instead of returning the money to QNB, Winmar construed this as a payment for one of the other certified Payment Applications and returned the difference between the payment and Application amount, an extra $119, 380, directly to Plaintiff. Id. at 177. Plaintiff evidently considered this payment to be a response to its $200, 000 demand, so, at that point in March of 2006, Plaintiff believed it was owed roughly $80, 000. Given the amount in dispute, Plaintiff decided that it would not make economic sense to file suit against Winmar to recover that amount. (ECF No. 99, at 27).

         On July 24, 2006, QNB filed suit against Winmar in the United States District Court for the District of Columbia to recover the $474, 677 duplicate payment. (Id. at 13). Winmar then filed a third-party complaint against Plaintiff, alleging that Plaintiff had breached the Contract by not making payments pursuant to the Architect's certifications. Plaintiff retained Defendants to represent it and filed a counterclaim against Winmar, denying any liability and asserting that Plaintiff had overpaid Winmar pursuant to the termination for convenience provisions of the Contract. In its answer, Winmar alleged that, prior to the time Plaintiff terminated the Contract for convenience, Plaintiff had materially breached the Contract and, therefore, Winmar was entitled to the full amount of every invoice certified by the Architect, more than $1.7 million. Winmar, 741 F.Supp.2d at 177-78.

         B. The Instant Malpractice Claims

         Plaintiff now alleges that Winmar's suit raised a substantial issue regarding the accuracy of the Architect's certification, but that Defendants failed to investigate the Architect's role in the events, including whether the Architect breached its duty of care. (ECF No. 50 ¶ 29). It argues that Defendants' failure to investigate the Architect left Plaintiff with no factual defense to Winmar's principal claim: i.e., that the certifications were prima facie evidence of the amount Plaintiff owed Winmar. (Id. ¶ 31). Consequently, when Winmar raised the certifications at trial, Defendants offered no rebuttal, leaving Plaintiff greatly exposed. (Id. ¶ 34).

         On September 29, 2010, Judge Gladys Kessler of the United States District Court for the District of Columbia issued a memorandum opinion and order, granting judgment in favor of Winmar and against Plaintiff. Winmar, 741 F.Supp.2d at 196. The court found that “Al Jazeera offered no evidence at trial showing how the Architect arrived at the decision to certify the Payment Applications. . . . In the absence of any evidence from Al Jazeera that the Architect neglected its duties under the Contract in making the certification decisions, the certified Payment Applications are the most reliable evidence of the services performed by Winmar in the periods covered.” Id. at 182-183. Judge Kessler gave little weight to the subsequent rescissions, which were based “in large part on [the Architect's] conclusion that Winmar is required to provide supporting documentation, ” a justification she found was not valid under the Contract. Id. at 182. She also stated that she “has never been able to understand why neither party ever called the Architect to testify.” Id. at 182 n.17. Judgment was granted in favor of Winmar for a total of $1, 472, 625.50. Id. at 196. Although Plaintiff appealed the judgment to the United States Court of Appeals for the District of Columbia Circuit, it decided to settle the dispute for $2, 000, 000 while that appeal was pending rather than run the risk of an unfavorable outcome on appeal.[3]

         On September 19, 2013, Plaintiff filed a complaint in this court for legal malpractice, citing diversity jurisdiction. (ECF No. 1).[4] Plaintiff alleges that Defendants, as its attorneys during the Winmar litigation, owed it a duty of care to conduct a thorough and competent investigation of the facts and circumstances surrounding Plaintiff's dispute with Winmar and to exercise sound and reasonable judgment in planning and executing a defense to Winmar's claims against Plaintiff. According to Plaintiff, Defendants breached this duty by failing to depose the Architect or calling the Architect as a witness at trial. Plaintiff contends that but for Defendants' failure to depose or call the Architect as a witness, Plaintiff would have prevailed in the Winmar litigation. In the alternative, Plaintiff maintains that Defendants breached the duty of care by failing to advise Plaintiff to file suit against the Architect or to join the Architect as a defendant in the Winmar litigation.

         After the court denied Defendants' motion to dismiss (ECF No. 15), the parties engaged in discovery. Defendants submitted the instant motion for summary judgment on April 16, 2016. (ECF No. 91). Plaintiff responded (ECF No. 99), and Defendants replied (ECF No. 102).

         II. Standard of Review

         A motion for summary judgment will be granted only if there exists no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008). A dispute about a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Liberty Lobby, 477 U.S. at 249. In undertaking this inquiry, a court must view the facts and the reasonable inferences drawn therefrom “in the light most favorable to the party opposing the motion, ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); see also EEOC v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th Cir. 2005), but a “party cannot create a genuine dispute of material fact through mere speculation or compilation of inferences.” Shin v. Shalala, 166 F.Supp.2d 373, 375 (D.Md. 2001) (citation omitted).

         To prevail on a motion for summary judgment, the moving party generally bears the burden of showing that there is no genuine dispute as to any material fact. No genuine dispute of material fact exists, however, if the nonmoving party fails to make a sufficient showing on an essential element of his case as to which he or she would have the burden of proof. Celotex, 477 U.S. at 322-23. Therefore, on those issues on which the nonmoving party has the burden of proof, it is his responsibility to confront the summary judgment motion with an “affidavit or other evidentiary showing” demonstrating that there is a genuine issue for trial. See Ross v. Early, 899 F.Supp.2d 415, 420 (D.Md. 2012), aff'd, 746 F.3d 546 (4th Cir. 2014).

         III. Analysis

         To succeed on a legal malpractice claim under District of Columbia law, a plaintiff must show that: (1) the defendant was employed as the plaintiff's attorney; (2) the defendant breached a reasonable duty; and (3) that breach resulted in, and was the proximate cause of, the plaintiff's loss or damages. Martin v. Ross, 6 A.3d 860, 862 (D.C. 2010) (citing Niosi v. Aiello, 69 A.2d 57, 60 (D.C. 1949)).[5] “Unless a party has a good cause of action against the party proposed to be sued, the first party loses nothing by the conduct of his attorney even though the latter were guilty of gross negligence.” Niosi, 69, A.2d at 60. “[I]f, notwithstanding the negligence, the client had no cause of ...

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