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Nirala v. Adhali

United States District Court, D. Maryland

July 31, 2019

MOHAN NIRALA, Plaintiff,
v.
A.J. ADHALI, et al., Defendants.

          MEMORANDUM OPINION

          Paula Xinis United States District Judge

         Plaintiff Mohan Nirala (“Nirala”), proceeding pro se, brings this legal malpractice suit against Defendants A.J. Adhali and Edgar Ndjatou (collectively, “Defendants”). Pending before the Court is Defendants' Motion to Dismiss the Amended Complaint (“Motion to Dismiss”). ECF No. 13. Having reviewed the Motion and the briefs, the Court finds no hearing is necessary. See D. Md. Local R. 105.6. For the reasons stated below, Defendants' Motion to Dismiss is GRANTED IN PART and DENIED IN PART.[1]

         I. Background [2]

         In 2007, Nirala founded Satyaguru Inc., a nonprofit corporation in Maryland, which was later renamed Ambedkar International Center. ECF No. 12 at 15. He secured a personal loan of $80, 000 to contribute to the organization's operations. Id.

         In 2014, Ambedkar International Center and its board of directors (collectively, “AIC”) sued Nirala in the Circuit Court for Prince George's County, Maryland for an array of common law claims, including conversion, quiet title, ejectment, declaratory judgment, constructive trust, breach of contract, unjust enrichment, accounting, injunctive relief, and constructive fraud. ECF No. 13-3. AIC principally alleged that Nirala had been “acting as a rogue alter ego of AIC, ” “mismanaged AIC funds, ” and “transferred AIC property to himself.” Nirala v. Ambedkar Int'l Ctr., Inc., No. 203, Sept. Term, 2016, 2017 WL 2180630, at *1 (Md. Ct. Spec. App. May 18, 2017). Nirala retained Defendants to represent him and filed counterclaims. ECF No. 13-2. After a four-day bench trial, the court awarded judgment in favor of AIC. ECF No. 13-3. The Court of Special Appeals of Maryland affirmed the judgment. Nirala, 2017 WL 2180630, at *1.

         On September 11, 2018, Nirala sued Defendants in the Circuit Court for Prince George's County, Maryland. ECF No. 1-1. Defendants removed the case, invoking this Court's diversity jurisdiction on October 27, 2018. ECF No. 1. Nirala then amended the Complaint on December 4, 2018, ECF No. 12, and Defendants moved to dismiss the Amended Complaint on December 17, 2018, ECF No. 13. Nirala responded on January 2, 2019 to the motion, ECF No. 15, to which Defendants replied, ECF No. 16.

         II. Standard of Review

         A motion to dismiss brought pursuant to Rule 12(b)(6) tests the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (citation and internal quotation marks omitted). A complaint need only satisfy the standard of Rule 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “Rule 8(a)(2) still requires a ‘showing,' rather than a blanket assertion, of entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 n.3 (2007). That showing must consist of more than “a formulaic recitation of the elements of a cause of action” or “naked assertion[s] devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted) (quoting Twombly, 550 U.S. at 555).

         In ruling on a motion to dismiss, a plaintiff's well-pleaded allegations are accepted as true and viewed in the light most favorable to him. Twombly, 550 U.S. at 555. The Court may also consider documents attached to the motion to dismiss when “integral to and explicitly relied on in the complaint, and when the [opposing parties] do not challenge the document[s'] authenticity.” Zak v. Chelsea Therapeutics, Int'l, Ltd., 780 F.3d 597, 606-07 (4th Cir. 2015) (quoting Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004)) (internal quotation marks omitted). However, “[f]actual allegations must be enough to raise a right to relief above a speculative level.” Twombly, 550 U.S. at 555. “[C]onclusory statements or a ‘formulaic recitation of the elements of a cause of action will not [suffice].'” EEOC v. Performance Food Grp., Inc., 16 F.Supp.3d 584, 588 (D. Md. 2014) (quoting Twombly, 550 U.S. at 555). “‘[N]aked assertions of wrongdoing necessitate some ‘factual enhancement' within the complaint to cross ‘the line between possibility and plausibility of entitlement to relief.'” Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 557). Although pro se pleadings are construed liberally to allow for the development of a potentially meritorious case, Hughes v. Rowe, 449 U.S. 5, 9 (1980), courts cannot ignore a clear failure to allege facts setting forth a cognizable claim. See Weller v. Dep't of Soc. Servs., 901 F.2d 387, 391 (4th Cir. 1990) (“The ‘special judicial solicitude' with which a district court should view such pro se complaints does not transform the court into an advocate.”).

         If a complaint allegation sounds in fraud, it must meet the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). See Haley v. Corcoran, 659 F.Supp.2d 714, 721 (D. Md. 2009). The rule requires the plaintiff to “state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). To satisfy this standard, plaintiffs “must, at a minimum, describe the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.” United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 379 (4th Cir. 2008) (quotation marks and citation omitted). Fraud allegations that fail to comply with Rule 9(b) warrant dismissal under Rule 12(b)(6). See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999).

         III. Analysis

         a. The Operative Complaint

         As a preliminary matter, the Court must determine whether the original or Amended Complaint is the operative one. ECF Nos. 1-1, 12. Federal Rule of Civil Procedure 15(a)(1) permits a party to “amend its pleading once as a matter of course” within “21 days after serving it” or, “if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.” Fed.R.Civ.P. 15(a)(1). After this time has elapsed, the plaintiff may amend “only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). Rule 15(a)(2) provides that courts should “freely give leave [to amend] when justice so requires.” Id. Denial of leave to amend should occur only “when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would be futile.” Edwards v. City of Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999) (quoting Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986)).

         Nirala served the original Complaint on Defendants on October 2, 2018, ECF No. 1 ¶ 2, and Defendants served their Motion to Dismiss on November 9, 2018, ECF Nos. 10, 10-1. On December 4, 2018, Nirala filed his Amended Complaint, more than 21 days after both service of the Complaint and the Motion to Dismiss occurred. ECF No. 12.[3] Consequently, amendment is permitted only with Defendants' written consent or leave of court.

         Nirala did not seek this Court's permission to amend. Nor does the Amended Complaint indicate whether Defendants consented to the amendment. However, the Court notes that Defendants moved to dismiss the Amended Complaint not because it is untimely filed, but because it fails to state legally sufficient causes of action. See generally ECF No. 13. The Court also notes that Nirala did not appear to amend in bad faith, and the amendments are not futile modifications. Rather, the proposed amendments clarify the claims and provide additional factual allegations in support. Accordingly, the Court considers the Amended Complaint as the operative complaint.

         The Court now turns to the merits of Defendants' Motion to Dismiss. Because the Court exercises its diversity jurisdiction, Maryland choice-of-law rules apply. See Wells v. Liddy, 186 F.3d 505, 521 (4th Cir. 1999) (“A federal court sitting in diversity must apply the choice-of-law rules from the forum state.”). For causes of action sounding in tort, Maryland adheres to the lex loci delicti rule, applying the substantive law of the state in which the alleged tort took place. Philip Morris Inc. v. Angeletti, 358 Md. 689, 744-45 (2000). Nirala's claims center on Defendants having allegedly committed legal malpractice in representing him before the Circuit Court for Prince George's County. Thus, Maryland law applies to Nirala's claims.

         Broadly stated, Defendants contend that Nirala has failed to plead sufficient facts in the Amended Complaint for any claim to survive challenge.[4] The Court ...


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