Petition for Writ of Certiorari — International Consulting Services, Inc. v. Gilbert

WOSEPH F. ae ANIO

CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1990

International Consulting Services, Inc.

Petitioner

Richard K. Gilbert, Esquire

Respondent

Petition for Writ of Certiorari

To the United States Court of Appeals

For the District of Columbia Circuit

PETITION FOR WRIT OF CERTIORARI

JAY L. COHEN, P.C.

3 Bethesda Metro Cente!

Suite 750

Bethesda, Maryland 20814

(301) 961-1920

(202) 785-4650

QUESTIONS PRESENTED

Protect the Integrity of The Supreme Court Bar:

Should the United States Supreme Court take special

notice of, and rev.w, a case which involves allegations

of conduct unbecoming a member of its own Bar --

including, but not limited to : conversion, theft, using

stolen material (such material being the property of

Plaintiff) in two cases before the United States Court of

Appeals for the D.C. Circuit and in one case before the

U.S. District Court for the District of Columbia, and

refusing to pay amounts admittedly due under contract.

Violation of Right to Trial by Jury: In a diversity

action, where a Plaintiff has plead three alternative causes

of action (Breach of Contract, Quantum Meruit, and

Conversion), and exercised its right to a Jury Trial -- May

$a

ee ee ee NY

the District Court Judge, without the benefit of a jury,

dismiss the entire case for lack of minimum jurisdictional

amount under its Count 1 (Breach of Contract) where:

(a) the compensatory damages under Count 2 (Quantum

Meruit) exceeded the jurisdictional minimum, (b) the

compensatory damages under Count 3 (Conversion)

exceeded the jurisdictional minimum, (c) the punitive

damages sought in the case exceeded the jurisdictional

minimum, (d) the punitive damages claim and the

conversion claim each involve demands for unliquidated

damages under which the "minimum jurisdictional amount"

issue is inextricable bound up with the merits of the

controversy, one (e) the case involves the allegedly

tortious and criminal conduct of an attorney/Defendant

who is a member of the bars of the District of Columbia

and of the United States Supreme Court.

ee

TABLE OF CONTENTS

QUESTIONS PRESENTED ..............

TABLE OF CONTENTS ................ iii

INDEX TO APPENDICES .............. iV

TABLE OF AUTHORITIES CITED ....... V

OPINIONS BELOW .................... 2

JURISDICTION ...................... 2

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED .............. 3

STATEMENT OF THE CASE............ 3

REASONS FOR GRANTING THE WRIT ... 17

BREACH OF CONTRACT ............ 22

QUANTUM MERUIT ............... 23

COINVEERGION ok 6 cae ees snes snnuan 26

PUNITIVE DAMAGES .............. 28

SPLIT BETWEEN THE CIRCUITS ...... 36

ill

INDEX TO APPENDICES

Court of Appeals Order granting Summary

Affirmance (3/9/90)

District Court Opinion dismissing Action (5/18/89)

District Court Opinion denying Reconsideration

(6/16/89)

Court of Appeals Order denying Reconsideration

(5/3/90)

Text of Constitutional And Statutory Provisions

Involved

Amended Complaint

Excerpts, Plaintiffs Answers to Defendant’s

Interrogatories

IV

TABLE OF AUTHORITIES CITED

CASES:

Aiken v. United Broadcasting Co.,

238 A. 2d 588, 590 (D.C. 1968) ............ 24

Arnold v. Troccoli,

344 F. 842 (2nd Cir ere aera 37

Attorney Grievance Commission v. Silk.

369 A.2d 70 (Ct App. Me 1977).......... 35, %

Barry v. Edmunds,

ers 37

Beacon Theatres, Inc. v. Hon. Harry C.

Westover, 359 U.S. 500, (1959) ............ 20

Bell v. Preferred Life Assur. Soc. of

Montgomery Alabama, 320 U.S. 238 (1943) .. 36, 37

Brown v. Coates,

102 U.S. App. D.C. 300, 253 F.2d 36 (1958) 29, 30, 34

Brown v. Donielson,

334 F.Supp. 294 (S. D. Iowa, 1971).......... 39

Browning-Ferris Industries of Vermont Inc.

v. Kelco Disposal, Inc, 109 S. Ct. 2909

i nr, os

Central Armature Works Inc. v. American

Motorists Insurance Company, 520 F.2d 283

[REN ED seb bh eee Oh bb ew wk dew ens 30, 34

Chauffeurs, Teamsters and Helpers Local

No. 391 v. Terry, No 88-1719 ( U.S. Supreme

OM CUI cbc Seu cscuceucnenceccckn 20

Cohen v. Hurley,

300 US. 117 (1961) .. 0... ccc . 18

Deutsch v. Hewes Street Realty Corp.,

359 F.2d 96 (2nd Cir., 1966) ........ Tree

Dimick v. Schiedt,

293 U.S. 474 (1935) ........ eee . 20

Financial General Bankshares Inc.

v. Metzger, 523 F. Supp. 744 (D.D.C. 1981) .. 30, 34

Fireman’s Fund Ins. Co. v. Railway Express

Agency, 253 F. 2d 780 (6th Cir, 1958) ....... 4]

Horne v. Francis I DuPont & Co,

428 F. Supp. 1271, 1275 (D.D.C. 1977) ....... 27

479 A.2d 1256 (D.C. App. 1984) ........... 24

In re Gilbert,

276 U.S. 294 CO ee eee 18

vl

In re Snyder,

Wie Wes O90 (ISES) oc wc ccc ccc ccee . 19

Jones v. Landry,

387 F.2d 102 (Sth Cir 1967) ............. 39, 42

Kahal v. J. W. Wilson & Associates, Inc.

218 U.S. App. D.C. 156, 673 F. 2d 547 (1982) .. 3

Lee v. Foote,

481 A.2d 484 (D.C. App. 1984) ...... % 24

Leehans v. American Employers Ins. Co.,

273 F.2d 72 (5 Cir. 1959) ...........005.. 42

Marbury v. Madison,

1 Cranch 137, 2 L. Ed. 60 (1803) ....... . 17, 39

Matter of Franklin,

365 A. 2d 1361 (Sup Ct. N.J. 1976) ..... 36

Menchaca v. Chrysler Credit Corp.,

613 F.2d 507 (5 Cir., 1980) ............ | 39

Michael Del Balso, Inc. v. Carozza,

78 U.S. App. D.C. 56, 136 F.2d 280 (1943) .... 23

Middlesex County Ethics Committee v.

Garden State Bar Association,

457 U.S. 423 sc cc cece 19

Nat. Semiconductor v. Com’] Lovelace Motor

Freight, 560 F.Supp. 908 (N. D. Ill., 1983) ..... 39

V1i

Nelson v. Keefer,

45 F.a6 Zep (S00 Cir., 1971) 2. wc ccc 4]

North American Graphite Corporation v. Allan,

184 F.2d 387, 389 (D.C. Cir. 1950) ........ 23, 24

NTA National Incorporated v. DNC Services

Corporation, 511 F. Supp. 210 (D.D.C. 1981) ... 23

Parker v. Stein,

357 A.2d 1319 (D.C., 1989) ............. 27, 28

R. A Weaver & Associates Inc. v. Hass

& Haynie Corporation, 213 U.S. App. D.C. 404,

663 F.2d 168 (1980) .................. 26, 27

Sansone v. Ocean Accident and Guarantee

Corp.,228 F. Supp. 554 (E. D. Louisiana, 1964) . 41

Sere v. Group Hospitalization Inc..

co Oe «a 29

Shaffer v. Coty. Inc..

183 F.Supp. 662 (S.D. Calif.. 1960) .......... 40

St. Paul Mercury Indemnity Co. v. Red Cab,

303 US. 283 (1938) 2... cc ccc ee eee 36

Sterling v. Marshall,

54 A.2d 353, 356 ins EOD ok ea ce ees 24

Vill

Turner v. Wilson Line,

242 F.2d 414 (ist Cir.1947) ............00, 42

IVL Associates v. A. & M. Construction Corp.,

474 A.2d 156, 159 (D.C. 1984) ............. 24

Wade v. Rogala,

are wane gee (ove Cir. 1959) ... 0... cc ccccce 4]

Washington v. Group Hospitalization Inc.,

585 F. Supp. 517 (D.D.C. 1984) ....... 30, 34, 35

Webster v. Doe,

pum ay GA, Ze7 (G/1S/SB) .. ww cc cee 4]

Zacharia v. Harbor Island Spa, Inc.,

oe Be +) 37, 38, 42

STATUTES, RULES AND CONSTITUTIONAL

PROVISIONS:

ME es ae es ova cusescevecc 2

A l, 3, 6, 9

D.C. Code Section 22-3801 ............... 29

D.C. Code Section 22-3811 ............. 29, 33

D.C. Code Section 22-3812 ............... 29

Federal Rules of Civil Procedure,

ele SD hig a eee 24, 26

Federal Rules of Civil Procedure,

> th re renee ro, 36

Rules of the Supreme Court,

oe Se a ee + GBH

United States Constitution.

Article Three, Section Two ........... 3, 17. 18

United States Constitution.

rifth Amendment .............cccccc., 3, 2]

United States Constitution.

Seventh Amendment .................... 21

OTHER AUTHORITIES:

Code of Professional Responsibility, Canon 1 35

Code of Professional Responsibility, EC 1-5 . . . 35

Code of Professiona] Responsibility.

DR 1-102(A)(4) ....... 35

Corbin, Contracts.

Sections 1106 & 1107 1964 . 24

Dobbs, Handbook on the Law of Remedies.

4.2 (1973 eee a ee

Restatement (Second’ of Contracts,

OOUTIDE DIP CHPOE) 6 ces idn ces ivctine

The Federalist No. 22, Alexander Hamilton .. .

The Federalist No. 78, Alexander Hamilton . .

The Federalist No. 80, Alexander Hamilton . .

The Federalist No. 83, Alexander Hamilton . .

Williston, Contracts, section 1454 (1970) ...

X]

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1990

International Consulting Services, Inc. _ )

Petitioner )

)

VS. ) No. |

\

J

Richard K. Gilbert, Esquire )

Respondent )

Petition for Writ of Certiorari

Now Comes Petitioner, International Consulting

Services, Inc., and respectfully prays that a writ of

certiorari issue to review the order of the United States

Court of Appeals summarily affirming a United States

District Court dismissal under 28 U.S.C. 1332(a).

ee eS ee

OPINIONS BELOW

The Unpublished Order of the Court of Appeals

appears in Appendix A to this Petition. The Unpublished

Opinions of the United States District Court For The

District Of Columbia appear in Appendix B and

Appendix C to this Petition.

JURISDICTION

The Court of Appeals’ Order in this matter was

filed on March 9, 1990. A timely Petition for Rehearing

was filed on April 5, 1990. The Court of Appeals’ denial

of the Petition for Rehearing was issued on May 3, 1990

and is set forth in Appendix D. This Court’s jurisdiction

is invoked under Title 28. U.S.C. 1254(1).

bo

CONSTITUTIONAL AND

STATUTORY PROVISIONS INVOLVED

The Seventh and Fifth Amendements to the United

States Constitution and 28 USC 1332 are fully set forth

in Appendix E.

STATEMENT OF THE CASE

This case involves a dispute between International

Consulting Services, Inc., ("Plaintiff") a small corporation

offering to its clients the expert (disability) consulting

services of Mr. Abraham Mazur' and Richard Gilbert,

Esq.’ ("Defendant"). In December 1983 the Plaintiff and

Mr. Mazur had been employed from 1948-1976 with the

Social Security Administration as (successively) a Claims Examiner,

a Claims Reviewer, a Disability Examiner, a Disability

Reconsideration Examiner and a Disability Legal Assistant [Plaintiffs

Answer to Defendant’s Interrogatory 10).

* Until commencement of his relationship with Mr. Mazur,

Mr. Gilbert had "concentrated his practice in the area of criminal

defense work" and had “received no income" from handling any

Social Security, personal injury or other disability cases [Defendant's

Answers to Plaintiff's Interrogatory 3 & 4}.

*

4

~

the Defendant placed a yellow pages ad_ including

specialties in specialties in "social security", "personal

injury accidents" and "workman’s compensation" and

stating "Expert Consultant Available". Plaintiff was to

provide all disability consulting services and other legal

support services under any matters attracted by this ad -

- and was to be paid 50% of all fees generated by these

matters. [Plaintiff's Answer to Defendant’s Interrogatory

11). This relationship continued for about a year, and

attracted a number of disability cases. In December 1984

the Defendant secretly changed his yellow pages

advertising for the following year -- keeping the disability

specialty claims but deleting the "Expert Consultant

Available" language [Plaintiff's Answer to Defendant’s

Interrogatory 47]. At the same time as he was deleting

this yellow pages reference, the Defendant was giving

Plaintiff various assurances and encouragement to

continue working on a number of "large fee" cases

[Plaintiff's Answer to Defendant’s Interrogatories 47].

In January 1985, the Defendant breached his agreement

with the Plaintiff and "terminated" their relationship.

[Plaintiff's Answer to Defendant’s Interrogatory 48-50].

Plaintiff thereupon, in an effect to mitigate damages,

instructed Defendant to return, and make no further use

of, Plaintiffs workproduct [Plaintiff's Answer to

Defendant’s Interrogatory 54].

This Action was originally filed pro se in the

United States District Court for the District of Columbia

in January 1988. Plaintiff's original Counsel entered the

case in February 1988 and filed an Amended Complaint.

From that time until the close of discovery on March 31,

1989, the parties engaged in a discovery process which

could only have been described as comprehensive and

exhaustive. At the close of discovery Defendant filed a

Motion To Dismiss For Lack Of Jurisdiction Under 28

U.S.C. 1332(a).

The Amended Complaint filed by Plaintiffs original

counsel in February, 1988 stated three causes of action

(Breach of Contract, Quantum Meruit, and Conversion),

and demanded a Trial by Jury.

Compensatory Damages were plead in the

Amended Complaint, as follows:

Breach of Contract $ 14,162.55

Quantum Meruit $ 12,750.00

Conversion $ 100,000.00

Punitive Damages were plead in the Amended

Complaint at One Hundred Thousand Dollars ($100,000).

6

When discovery closed on March 31, 1989, the

record indicated (through sworn answers to interrogatories

and documentary evidence provided in response to

Defendant’s discovery requests) that Plaintiff's quantum

meruit compensatory damages actually totalled Fourteen

Thousand Nine Hundred Eighty-Seven Dollars and Fifty

Cents ($ 14,062.50) as follows:

Interrogatory

Number Matter Hours

24 Ransom Webb 5.58

25 Muriel Brewster 6.42

26 Mary Sweeney 6.00

27 Jane Morris 90.00

28 Edna Sykes-Smith’? 19.75

29 Ralph Ferraiuolo 16.50

Defendant is entitled to a credit of $375.00 on the matter

[see Plaintiffs Answer to Defendant’s Interrogatory 41].

7

30 Roland Outlaw 137.00

TOTAL 281.25

x $50/hr

$ 14,062.50

Plaintiff's estimates of his "conversion damages"

and of reasonable punitive damages remained unchanged.

Immediately following the close of discovery, the

Defendant filed a Motion to Dismiss alleging that

Plaintiffs "breach of contract damages" were under

$10,000.00 -- and thus that the Court lacked jurisdiction

pursuant to 28 U.S.C. 1332(a).

Defendant’s argument was that the Roland Cutlaw

Case "had been lost", and that since $7.421.06 of the

Plaintiff's $14,162.55 Breach of Contract damages were

8

attributable to the Roland Outlaw Case, Plaintiff's "Breach

of Contract case" did not meet. the $10,000.00

jurisdictional minimum.

Plaintiff both disputed the Defendant’s

interpretation of the facts, and pointed out that (even if

the Defendant’s interpretation were adopted by the

Court) the Plaintiff's quantum meruit damages, conversion

damages, and punitive damages each exceeded $10,000.00.

After the Defendant (with tortious and criminal

intent) breached his contract with the Plaintiff and

thereby effectively prevented Plaintiff's further

periormance thereunder, the Defendant did, in fact. "lose"

the Roland Outlaw case before the United States Court

of Appeals. The Roland Outlaw case. however, was not

Q

“over".‘

With the help of the Plaintiff and another attorney,

the Roland Outlaw case was revived before the Social

Security Administration based on arguments originally

formulated by the Plaintiff, and rejected by the

Defendant. The Roland Outlaw case remains pending

before a Social Security Administration Administrative

Law Judge -- a final determination not yet having been

rendered.

* The contract between the Plaintiff and the Defendant herein

Stipulated that Plaintiff's performance was to commence with the

acceptance of a case, and was to continue through its "final legal

adjudication’.

The Plaintiff was to provide disability consulting

services On all matters generated by Defendant’s new

yellow pages ad and other efforts at marketing this

new specialty. Once a case was accepted, work

under that case was to continue until its final legal

adjudication. [Plaintiffs Answer to Defendant's

Interrogatory 12].

10

ti,

Additionally, Plaintiff argued that the Defendant’s

position that the Roland Outlaw case "had been lost" was:

(1) irrelevant to Plaintiffs claim of entitlement to

quantum meruit damages due to the willful criminal

prevention of his performance by the Defendant, (2)

irrelevant to Plaintiff's claim of entitlement to conversion

damages, and (3) irrelevant to Plaintiff's claim for punitive

damages.

On May 18, 1989 District Court dismissed this case

for lack of the jurisdictional minimum, Stating that

Plaintiff and his original attorney knew or should have

known that the Outlaw case had been "lost" and that

therefore, their breach of contract action damages could

not have exceeded $10,000.00.

In footnote 1 of his decision, the District Court

simply, and without discussion, refused to consider any

1]

possibility that the Plaintiff could have proven quantum

meruit or conversion at trial.

Finally, on page 4 of its opinion, the District Court

concluded that "punitive damages clearly are not available

in this case" based on his reading of "the undisputed facts

presented to the Court". The Order, however, did not

detail these allegedly "undisputed facts". Furthermore,

the record was filled with facts and factual allegations

which could have supported a punitive damage claim

depending upon the judgment of the jury. Examples of

such allegations (as set forth in Plaintiff's pleadings and

answers to discovery) are as follows:

l. Plaintiffs fee under the subject contract was

to be calculated and paid after each matter’s "final legal

adjudication". Similarly, to ensure that each matter was

pursued in a manner which would best serve the disabled

client, the parties agreed that the Defendant would

continue to solicit and rely upon Plaintiff's expertise

through the legal end of each client matter undertaken by

them.

ys Plaintiff was the disability expert under the

subject agreement. Conversely, the Defendant had

absolutely no disability experience -- but rather had

concentrated his practice primarily in the area of criminal

law and relied completely on Plaintiff in these disability

matters.

a Under the arrangement between the parties,

Plaintiff screened all potential disability cases, examined

the entire record, and gave the Defendant his expert

opinion regarding: the merits of the case, the likelihood

of success, and the likelihood of receiving an attorneys fee

award. Additionally, the Plaintiff provided the Defendant

with ongoing advice and guidance, both orally and in

writing, throughout the pendency of the action.

4. While accepting the benefits of Plaintiff's

efforts and experience, Defendant has flagrantly refused

to pay Plaintiff even the amounts admittedly owed by

him. Portions of this amount have been owed (in

liquidated sums) since 1984/85.

> For most of the matters which the parties

worked together, the Defendant failed to make

accountings to the Plaintiff of fees collected pursuant to

their agreement, and failed to pay Plaintiff his share of

those fees which were received.

6. While at the same time the Defendant was

advising Plaintiff that their relationship would continue,

he secretly placed a new "yellow pages" ad which excluded

all references to the Plaintiff.

14

¥e In an effort to exclude the Plaintiff from a

very substantial anticipated recovery in the Outlaw,

Morris, Sykes-Smith, and Ferraiuolo cases, Defendant

deliberately made impossible time demands, deliberately

prevented Plaintiff's performance, and then used Plaintiff's

inability to meet those demands as a pretext for

terminating their relationship.

8. Defendant acted with tortious and criminal

intent when he continued to use Plaintiff's workproduct

after the Defendant acknowledges receiving Plaintiff's

January 17, 1985 telegram forbidding its further use. |

Plaintiff's telegram followed Defendant’s willful breach of

contract severing his ongoing relationship with the

Plaintiff.

Nonetheless, the District Court granted the

Defendant’s Motion to Dismiss, and the Court of Appeals

summarily affirmed the dismissal.

This dismissal violates the Piaintiff’s constitutional

right to a trial by jury and his constitutional right to due

process. Furthermore, since the Defendant in this case

is a member of this Court’s Bar, this Court ought to

examine this matter with special scrutiny (C.f. Rule 8,

United States Supreme Court).

16

REASONS FOR GRANTING THE WRIT

A Writ of Certiorari should be granted in this case

because the actions of the courts below have so far

departed from the accepted and usual course of judicial

procedures as to call for an exercise of this Court’s power

of supervision.

While the both District Court’s Orders and the

Appeals Court’s Orders fail to squarely address these

important issues,’ the effect of those Orders is to deny

Plaintiff his Due Process, to deny Plaintiff his right to a

Jury Trial, and to conflict with various decisions from

other Circuits on these issues.

* Article III Section 2(2) provides that the Supreme Court

has appellate jurisdiction as to both law and the facts. See also:

Marbury v. Madison, 1 Cranch 137, 2 L. Ed. 60 (1803) ("The judicial

power of the United States is extended to all cases arising under the

constitution").

17

This case ought to be heard by the Supreme Court

for the following reasons:

1. _ This case ought to be heard by the Supreme

Court so to resolve various serious allegations against the

integrity and conduct of a member of the Supreme Court

Bar -- allegations of matters which would tend to bring

the legal profession into disrepute.*

2. This case ought to be heard by the Supreme

Court in order to settle a conflict between the various

Circuits concerning when it may be proper for a Court

may dismiss a jury action for lack of the minimum

jurisdictional amount.

° Plaintiff further contends that due to the seriousness of

these matters, this Court should exercise its equitable and general

Supervisory powers to order that the Defendant appear and answer

(under oath) the charges made against him. [Article III, Section

2(1)(a); Federalist Nos. 80 and 83, Hamilton].

See also: In re Gilbert, 276 U.S. 294 (1928). C.f. Cohen v.

Hurley, 366 U.S. 117 (1961).

18

3. "The judiciary as well as the public is dependent

upon professionally ethical conduct of attorneys and thus

has a significant interest in assuring and maintaining high

standards of conduct of attorneys engaged in practice."

The “inherent power" of the Courts to supervise, suspend

or debar lawyers "derives from the lawyer’s role as an

officer of the court which granted admission".’

4. "Maintenance of the jury as a fact-finding

body is of such importance and occupies so firm a place

in our history and jurisprudence that any seeming

curtailment of the right to a jury trial should be

’ Middlesex County Ethics Committee v. Garden State Bar

Association, 457 U.S. 423, 434 (1982).

. In re: Snyder, 472 U.S. 642, 644 (1985).

19

scrutinized with the utmost care."

By its orders of May 18, 1989 and June 16, 1989

the District Court effectively precluded the jury from

deciding the following matters which should have been left

to their judgment:

Factual decisions and inferences relating to

whether or not the Defendant prevented the Plaintiff's

contract performance in a manner which would permit

quantum meruit damages in accordance with applicable

D.C. precedent.

- Factual decisions and inferences relating to

the Defendant’s motivation and intent, and especially

concerning his allegedly tortious and criminal behavior

° Beacon Theatres, Inc. v. Hon. Harry C. Westover, 359 U.S.

500, 501 (1959) quoting Dimick v. Schiedt, 293 U.S 474, 486 (1935).

C.f. Chauffeurs, Teamsters and Helpers Local No. 391 v. Terry, No

88-1719 (3/20/90)(Opinion of Justice Brennan at page 7) ("If in the

rare Case a tiebreaker is needed, let us break the tie in favor of jury

trial")

20

--- CC Cer oo LC O[-VvYvOv'''°8—--—-—--— -OODU’ CO OO +

and intent.

the appropriate measure of punitive damages in this case.

Factual decisions and inferences relating to

The Plaintiff herein asserts that the Defendant has

violated not only the Canons of Ethics applicable to his

profession, but also the strong public policy that a

member of this Court’s Bar must be honest, must not be

deceitful and must keep his word and honor his contracts.

As such, the District Court’s decision to keep the

issues of breach of contract, quantum meruit, conversion

and punitive damages from the jury violated Plaintiff's

Seventh Amendment right to a Trial by Jury and

Plaintiff's Fifth Amendment right to Due Process.

Breach of Contract

It is true that if one were to measure the Plaintiff's

breach of contract damages by what the "contract price"

would have been if the Defendant had not breached the

contract, then the Plaintiff's breach of contract damages

would not have exceeded ten thousand dollars. But that

is not what happended in this case.

In this case, the amount of money which the

Plaintiff was to receive under the contract was dependant

upon the profitability of his undertakings with the

Defendant. In such cases in the District of Columbia, the

rule is clear -- a Defendant who breaches the contract,

and prevents the further performance of the Plaintiff,

cannot escape his wrongdoing by arguing that the contract

turned out not to be profitable. Instead, in the District

of Columbia, the Defendant must pay the Plaintiff "breach

99

a

of contract damages" which are equal to the amount

which the Plaintiff would have received in quantum

meruit. See e.g. NTA National Incorporated v. DNC

Services Corporation, 511 F. Supp. 210,223 (D.D.C. 1981)

and Michael Del Balso, Inc. v. Carozza 78 U.S. App. D.C.

56, 136 F.2d 280 (1943).

In any case, the precise measure of the Plaintiff's

damages is a matter for a jury to decide after hearing all

the evidence, and not a matter to be pre-empted by a

judge who might personally favor one damage approach

over one another.

Quantum Meruit

In the District of Columbia (as elsewhere) actions

lor breach of contract and quantum meruit may

appropriately be pursued in the same lawsuit. See e.g.

North American Graphite Corporation v. Allan, 184 F.2d

ho

U2

eS Sn SSS SSNS Ahh smi > ie theese

387, 389 (D.C. Cir. 1950). Cf, Federal Rules of Civil

Proceedure, Rule 8(e)(2) permitting (and indeed

encouraging) the pleading of alternative counts.

Furthermore, in the District of Columbia, where a

Defendant wrongfully terminates a contract, and usual

breach damages are not sufficient to equitably compensate

the Plaintiff, quantum meruit or ("restitution") relief may

be awarded by the Judge or Jury hearing the merits.

See _e.g. Lee v. Foote, 481 A.2d 484, 485 (D.C. App.

1984) and the authorities cited therein”.

Even without these special circumstances, a clear

case of "unjust enrichment" could certainly be supported

. Inber_v. Ross, 479 A.2d 1256, 1263 (D.C. 1984); TVL

Associates v. A. & M. Construction Corp., 474 A.2d 156, 159 (D.C.

~ 1984); Aiken v. United Broadcasting Co., 238 A. 2d 588, 590 (D.C.

1968); Sterling v. Marshall, 54 A.2d 353, 356 (D.C. 1947); 12

Williston On Contracts 1454 at page 14 (1970); D. Dobbs

Handbook on the Law of Remedies at section 4.2 (1973); 5 Corbin

On Contracts at sections 1106 & 1107 (1964); and Restatement

(Second) of Contracts section 373 (1981).

24

——— a a ee ee

——_- <=

here where the Defendant: (a) collected fees on matters

where Plaintiff acted as his consultant, (bh) admittedly

owes Plaintiff at least half of said collected fees, (c) has

steadfastly refused to pay said fees to Plaintiff in violation

of their agreement, and (d) now attempts to unilaterally

disavow his contract and all his contractual obligations

with Plaintiff.

Finally, in closing, one additional jurisdictional fact

which was totally overlooked by the District Court in its

Opinion was the fact that the Defendant’s Answer

attacked the viability of the instant contract" -- leaving

quantum meruit as a potentially necessary remedy for the

'' Two defenses alleged by the Defendant in this case were

"Lack of Privity of Contract" (third affirmative defense) and "Statue

of Frauds" (fifth affirmative defense).

If either of these defenses were accepted, there would be

no contract to breach and enforce -- and the Plaintiffs action would

necessarily be in quantum meruit.

25

plaintiff in this case.

Conversion

As with alternative actions claiming breach of contract

or quantum meruit, alternative actions claiming breach or

conversion are encouraged by the the caselaw and rules.

See Federal Rules of Civil Procedure, Rule 8(e)(2). See

also: R. A Weaver & Associates Inc. y. Hass & Haynie

Corporation, 213 U.S. App. D.C. 404, 663 F.2d 168, 173

and at footnote 43 (1980)("A plaintiff need only aver title

or ownership in himself to support a cause of action for

conversion....If the question of ownership is disputed, it

becomes a jury question").

Indeed in R.A. Weaver, supra, the D.C. Court

specifically sanctioned a finding and award of both

compensatory and punitive damages under "conversion"

26

even though the defendant argued that it had simply

"breached" its contract to pay for the property in question.

Conversion lies where the Defendant rightfully obtains

possession of the subject property, and then wrongfully

refuses to return said property upon demand. Id. This is

true even where the Defendant originally took possesion

of the property pursuant to the contract. See also Horne

v. Francis 1 DuPont & Co, 428 F. Supp. 1271, 1275

(D.D.C. 1977).

Finally punitive damages in the District of

Columbia are available for such a refusal where the facts

show a willful disregard of the Plaintiff's rights. See R.A.

Weaver, supra and Parker v. Stein, 557 A.2d 1319 (D.C.

1989).

Punitive Damages

With respect to the punitive damages being sought,

the following special circumstances were alleged and

required rulings which only the jury could render

regarding the following:

. The conversion of Plaintiff's work product

"

was cone in a manner which showed a willful

disregard of plaintiffs rights or other circumstances

tending to aggravate the injury" See e.g. Parker v. Stein,

557 A.2d 1319 (D.C., 1989).

- By the tortious and criminal intent of the

Defendant as shown by his continued unauthorized use of

Plaintiff's workproduct and continued refusal to pay even

sums which were admittedly due and owing, the

Defendant’s "breach of contract" in this case "merges with

and assumes the character of a willful tort"[See e.g.

28

Brown v. Coates, 102 U.S. App. D.C. 300, 303, 253 F.2d

36, (1958) and Sere v. Group Hospitalization Inc., 443

A.2d 33 (D.C., 1982)], and indeed allegedly violated

Sections 22-3801, 22-3811 and 22-3812 of the DC Code

(Theft).”

12

See Opinion of Justice O’Conner in Browning-Ferris

Industries of Vermont Inc. v. Kelco Disposal, Inc, 109 S. Ct. 2909

at 2924 (June 26, 1989):

"Third, because punitive damages are penal in

nature, the court should compare the civil and

criminal penalties imposed .. the court should

consider not only the possible monetary sanctions,

but also any possible prison term."

29

ooo nt ee a — RE a AN te RR Ne

- The gross violation of the Defendant’s own

higher standard of professional ethics’ demands due

consideration of a punitive judgement award. See Brown

v. Coats, 102 U.S. App. D.C. 300, 303, 253 F.2d 36

(1958), Central Armature Works Inc. v. American

Motorists Insurance Company, 520 F.2d 283, 292 (D.D.C.

1980), Financial General Bankshares Inc. v. Metzger, 523

F. Supp. 744 (D.D.C. 1981) and Washington v. Group

Hospitalization Inc., 585 F. Supp. 517 (D.D.C. 1984).

This Court has a Special interest in insuring the ethics of

the members of its bar (Rule 8, Rules of the Supreme Court).

The record below contains serious allegations regarding the

conduct and ethics of a member of this Court’s bar.

These allegations of conversion and theft, if proven in a

court of law, would not only violate the Code of Professional

Responsibility, but would also constitute violations of the criminal

law.

Such conduct should not be sanctioned either explicitly or

implicitly by the judiciary.

30

Instead, the District Court took it upon itself to dismiss

the action without an evidentiary hearing -- and in its

Order did not address any of the special circumstances

alleged by the Plaintiff.

In doing so, the Court relied heavily on the

decision of the U. S. Court of Appeals for the District of

Columbia in Kahal v. J. W. Wilson & Associates, Inc. 218

U.S. App. D.C. 156, 673 F. 2d 547 (1982) which held that

punitive dmages would not be available in a breach of

contrqact case where the only thing that the plaintiff had

plead was the defendant’s "bad faith". That case is

distinguishable, however, from this case in that (a) this

case involves a breach which has taken the "the character

of wilful tort" (i.e. conversion), and (b) this case involves

a defendant who must be held to a higher standard than

the routine defendant.

31

In that regard, perhaps the most important reason

for the possible imposition of punitive damages in this

case is the fact that the Defendant’s alleged conduct was

(if found as fact by the jury) utterly reprehensible for a

member of this bar. As such, this Court has a particular

institutional interest in protecting the integrity of its own

bar.

Furthermore, in the District of Columbia Circuit,

punitive damage awards have been permitted to stand

where they serve one of the following three goals: to

further redress the defendant’s wrongs, to punish the

defendant’s wrongful conduct, or to deter“ others from

engaging in such wrongful behavior.

‘The importance of awarding punitive damages both as a

punishment of the defendant ané as a future deterrent to others was

receatly reiterated by the Supreme Court in Browning-Ferris

Industries of Vermont Inc. v. Kelco Disposal, Inc, 109 S. Ct. 2909

(June 26, 1989). Indeed, as evidenced by that opinion, this

doctrine is as old as the common law and as current as this past

Supreme Court term.

"Damages are designed not only as a satisfaction to the

injured person, but likewise as a punishment to the guilty,

to deter from any such proceeding for the future and as

proof of the detestation of the jury to the action itself.

Wilkes v. Wood, Lofft. 1, 18-19, 98 Eng. Rep. 489, 498-499

(K-B.).". Browning Ferris, at p. 2920 ftnte 20.

"The wrongdoer could also be made to pay an additional

sum ’on the ground that every evil deed inflicts a wrong on

society in general’ W. McKechie, Magna Carta 284-285

(1958)" Browning Ferris, at Opinion of Justice O’Conner, at

p 2927. -

In this case, the Defendant (a member of the bar charged

with maintaining a high standard of ethics and honesty) has allegedly

engaged in conduct which could well be viewed as a violation of DC

Code 22-3811 when he wrongfully, knowingly and intentionally made

"an unauthorized use" of ICS’s property. Such a theft by an attorney

is clearly a "harm to society” as well as to the Plaintiff hereunder.

The imposition of punitive damages in a civil case does not depend

upon the filing of a criminal complaint -- but rather can

independently be effectuated as a civil punishment and deterrence of

such wrongful behavior.

33

Accordingly, in cases where, as here, the defendant

has a special relationship with the plaintiff’ or where the

defendant is bound to a higher standard of professional

- ethics to protect and ensure the public’s utmost trust,”

juries have special latitude to consider and award punitive

damages. See e.g. Brown v. Coats, 102 U.S. App. D.C.

300, 303, 253 F.2d 36 (1958) (real estate agent), Central

Armature Works Inc. v. American Motorists Insurance

Company, 520 F.2d 283, 292 (D.D.C. 1980) (insurance

agent), Financial General Bankshares Inc. v. Metzger, 523

F. Supp. 744 (D.D.C. 1981) (attorney). See Also:

Washington v. Group Hospitalization Inc., 585 F. Supp.

517 (D.D.C. 1984), where the District Court quite

properly refused to grant summary judgement against a

In this case the plaintiff and the defendant were partners

with a 50-50 fee sharing arrangement. %

© In this case the defendant was an attorney -- and a member

of this Court’s bar.

34

punitive damage claim declaring:

Defendants argue that punitive damages

are inappropriate here because their conduct

did not rise to the level of oppressive,

willful, and wanton conduct as that of the

insurer in Central Armature Works Inc. v.

American Motorists Insurance Company, 520

F. Supp 283 (D.D.C. 1980). However, the

Central Armature Works facts do not

exhaust the types of fact situations in which

punitive damages may be awarded by a jury.

(Id. at page 522).

Defendant’s arguments below that the plaintiff was

not a client of his and that therefore exemplary damages

should not lie, ignore the seriousness of the allegations

made against the Defendant -- and the fact that an

attorney’s duty to act in accordance with his/her ethics

transcends the attorney-client relationship. See e.g. Canon

1, EC 1-5, and DR 1-102(A)(4). See Also: Attorney

Grievance Commission v. Silk, 369 A.2d 70 (Ct App. Md

1977) (Disbarred Attorney for misappropriation of club

“

35

funds ($4,621.77) when he was not acting as its lawyer,

but rather as its treasurer and president) and Matter of

Franklin, 365 A. 2d 1361 (Sup Ct. N.J. 1976) (Suspended

Attorney for submitting false expense reports to his

employer when he was not acting as its lawyer, but rather

as its president).

Split Between The Circuits

Dismissals under Rule 12(b)(1) may only be

ordered when it appears "to a legal certainty" that the

jurisdictional minimum cannot be met. See e.g. St. Paul

Mercury Indemnity Co. v. Red Cab, 303 U.S. 283, 288-

289 (1938).

In determining whether or not that jurisdictional

minimum cannot be met, both compensatory and punitive

damages must be considered by the court. See e.g. Bell

36

320 U.S. 238, 240 (1943).

When punitive damages are involved, a case can

only be dismissed for lack of jurisdictional amount if a

verdict in excess of the jurisdictional minimum "would be

excessive and set aside for that reason". Beil, supra. at

243 quoting Barry v. Edmunds, 116 U.S. 550, 565 (1886).

Nonetheless, the Courts must be careful not to use

this jurisdictional process as a means of disposing of cases

which they otherwise disfavor:

And of course it would be improper for the judge

to dismiss a case merely because he would not

allow that amount were he to be the sole trier of

the facts or because he would not permit a jury

verdict in that amount to stand. Arnold v.

Troccoli, 344 F. 842, 846 (2nd Cir 1965).

We have not, however, held that defenses asserted

on the merits may be considered and adjudicated

on jurisdictional motions. Were the law otherwise,

the orderly progress of litigation would be

37

disrupted ... Issues going to a federal court’s power

to decide would be hopelessly confused with the

merits themselves. Constitutional questions as to

the right to have a jury determine factual issues

would lurk in every jurisdictional motion. Zacharia

v. Harbor Island Spa, Inc., 684 F.2d 199, 202 (2nd

Cir., 1982).

In the years since St. Paul, supra numerous District

and Appeals Courts have struggled trying to find a

consistent rule for determining when a dismissal would be

Justifjed where punitive damages are being sought, o1

where the amount in dispute may depend upon which

version of the facts (and inferences and conclusions drawn

therefrom) which one may accept as being true. This

topic has been hotly debated over an e»tended period of

time, and many rather scholarly opinions have grappled

es ES I

= = ED —— -_- --— — --

with its nuances”

These courts, and others, have all been faced with

the rather inconsistent state of the law among the lower

courts” -concerning exactly how to treat a case in this

pc ysture.

see e.g. Menchaca v. Chrysler Credit Corp., 613 F.2d 507,

516-518 (dissent of J. Garza) (5 Cir., 1980), Nat. Semiconductor v

Com'l Lovelace Motor Freight, 560 F.Supp. 908, 910-911 (N. D

Illinois, 1983), Brown v. Donielson 334 F.Supp. 294, 299-300 (S. D

lowa, 1971), and Jones v. Landry, 387 F.2d 102, (5 Cir., 1967)

Such inconsistencies in matters as basic as how and when

a Federal Court may decide whether or not it has jurisdiction should

not be tolerated.

To avoid an arbitrary discretion in the Courts, it is

indispensable that they should be bound down by strict rules

and precedents, which serve to define and point out their

duty in every particular case that comes before them

Federalist, No. 78 (Hamilton).

sce also, Federalist, No. 22 ("To produce uniformity in these

determinations, they ought to be submitted in the last resort, to one

Supreme Court"). The Supreme Court, in turn, has the duty to

resolve these doubts, and "to Say what the law is". C.i, Marbury v.

Madison, 1 Cranch 137, 2 L. Ed. 60 (1803) ("It is emphatically the

province and duty of the judicial department to say what the law is”)

Some courts have suggested that the right to a jury

trial requires that such challenges to the jurisdictional

amount must be resolved by the jury:

[T]o allow a district court judge to value a

plaintiff's claim in a case which involves a demand

for unliquidated damages and in which the

jurisdictional issue is inextricable bound up with the

merits of the controversy is tantamount to

depriving the plaintiff of his present. statutory right

to a jury trial. Deutsch v. Hewes Street Reaity

Corp., 359 F.2d 96, 100 (2nd Cir., 1966).

[I]n actions at law where trial by jury is a matter

of right, a challenge to the jurisdictional amount

may not be adjudicated summarily in the face of

timely objection by a party, but must be tried

plenarily and submitted for jury determination.

Shaffer v. Coty, Inc., 183 F.Supp. 662, 667 (S.D.

Calif., 1960).

Other courts have gone to the other extreme and

ruled that there is simply no right to a trial by jury for

such "jurisdictional" issues:

We are not persuaded by the argument that a

40

termination prior to trial deprives a "plaintiff of his

present statutory right to a jury trial." See Deutsch

v. Hewes Street Realty Corp, supra, 359 F.2d at

100. Nelson v. Keefer, 451 F.2d 289. 293 (3rd

Cir., 1971).

Since this determination is one of jurisdictional fact,

there is no right to have it tried before a jury.

Sansone v. Ocean Accident and Guarantee Corp..

228 F. Supp. 554, 558 at ftnte 5 (E. D. Louisiana,

1964).

Still other courts have expressed a deep concern

when weighing these issues whenever ‘the issue of

jurisdictional amount ... is so closely tied to the merits of

the cause"... [for otherwise] ... lest under the guise of

determining jurisdiction, the merits of the controversy

between the parties be summarily decided without the

ordinary incidents of a trial, including the right to a jury’

Wade v. Rogala, 270 F.2d 280, 285 (3rd Cir. 1959) and

Fireman’s Fund Ins. Co. v. Railway Express Agency, 253

f 2d 780. 783 (6th Cir.. 1958)

;

Some courts have suggested that District Courts

have the power to value a plaintiff's unliquidated claim

and/or claim for punitive damages, and to dismiss such

cases (before empaneling a jury) if it appears to the judge

that the jurisdictional minimum cannot be met. [See e.g.

Turner _v. Wilson Line, 242 F.2d 414 (1 Cir.1947) and

Leehans v. American Employers Ins. Co.. 273 F.2d 72 (5

Cir. 1959))}.

On the other hand, other courts have refused to

dismiss for lack of jurisdictional amount unless the

Plaintiff's allegations were "alleged in bad faith solely to

invoke federal jurisdiction, ... [or] were inflated solely to

create diversity jurisdiction". Zacharia v. Harbor Island

Spa, Inc., 684 F.2d 199, 202 ftnte 2 (2nd Cir., 1982).

See also: Jones v. Landry, 387 F.2d 102. 105 (Sth Cir

1967) ("The strictness with which the "legal certainty" test

is applied by the Supreme Court is illustrated by the case

of Bell v. Preferred Life Assur. Society, 1943, 320 USS.

238, 64 S.Ct. 5, 88 L.Ed. 15. There, the complaint alleged

that the plaintiff had been induced to purchase a

certificate of insurance through fraudulent

misrepresentations by the defendant’s agent as to its

value, and claimed $200,000.00 as actual and punitive

damages. The record showed that the plaintiff had paid

$202.35 on the certificate and that the certificate. up

death or final surrender, had a maximum potential va

of $1,000.00. Nonetheless, the court held that it was 1

apparent to a legal certainty that the plaintiff «

recover in addition sufficient punitive damages to make

up the then requisite $3,000.00, and that it was no a

to contend that a verdict, if rendered for that an

+}

would be excessive and set aside for that re

>

CONCLUSION

For the reasons set forth above. a writ of certiorari

should issue to review the judgment and opinion of the

Court of Appeals in this matte!

DATED: July 30, 1990

Respec tlully Submitted

IAY L. COHEN, P.t

By ZZ. . CH

a :

4 Fe Cohen

Three Bethesda Metro Cente!

suite 750

Bethesda, Maryland 20814

(301) 961-1920

(202) 785-4650

ATTORNEY FOR PETITIONER