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Speed Boats of Texas L.P v. David Novoselsky

May 8, 2012

SPEED BOATS OF TEXAS L.P., D/B/A LEGEND MARINE GROUP, ET AL., PLAINTIFFS,
v.
DAVID NOVOSELSKY DEFENDANT.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on Defendant David Novoselsky's (Novoselsky) motion to dismiss and motion to strike. For the reasons stated below, the motion to dismiss and the motion to strike are denied.

BACKGROUND

Plaintiffs Speed Boats of Texas, L.P. d/b/a Legend Marine Group, FNT Financial LLC, and Greg Connell (Connell) allege that Novoselsky is an attorney they retained in November 2009 pursuant to an oral agreement. Plaintiffs allegedly paid Novoselsky a total of $60,000.00 up front (Retainer), to be used toward payment of an agreed upon hourly fee, as bills for legal work were submitted by Novoselsky and approved by Plaintiffs. Any part of the Retainer that was left after Novoselsky's representation of Plaintiffs ended was allegedly to be returned to Plaintiffs. After being retained by Plaintiffs, Novoselsky allegedly advised Plaintiffs to file two lawsuits.

The first lawsuit was allegedly brought against Bank of America (BOA Case). After the BOA Case was filed, a representative from Bank of America allegedly contacted Connell and made a settlement offer that was favorable to Plaintiffs. Plaintiffs allege that Novoselsky advised Plaintiffs not to settle the case and that Plaintiffs rejected the settlement offer based upon Novoselsky's advice. Plaintiffs also allege that Novoselsky failed to conduct any discovery in the BOA Case and informed the Plaintiffs around the time that discovery was set to close that there was no evidence to support Plaintiffs' claims. Bank of America allegedly filed a motion for summary judgment in the BOA Case, at which point Novoselsky allegedly "abandoned the Plaintiffs." (A Compl. Par 11). Plaintiffs allegedly had to hire new counsel to respond to the motion for summary judgment on their behalf. Plaintiffs lost the BOA Case when summary judgment was entered in favor of Bank of America.

The second lawsuit was filed by Novoselsky on behalf of Plaintiffs against GE Commercial (GE Case). While the GE Case was pending, Connell allegedly asked Novoselsky to communicate with GE Commercial regarding the sale of certain boats to third parties at a certain price. Novoselsky allegedly indicated to Connell that he had spoken with a representative of GE Commercial who had agreed to allow Plaintiffs to sell certain boats to the third parties at the price suggested by Plaintiffs. Plaintiffs allege that they sold a boat at or around the price that they believed GE Commercial had agreed to (Sale), based on representations made by Novoselsky, and that they later learned that Novoselsky had not actually spoken to anyone at GE Commercial regarding the proposed pricing. GE Commercial then filed a separate action against Plaintiffs in Texas relating to the Sale (Texas Action), and Plaintiffs were allegedly required to retain other attorneys to defend the Texas Action. In addition, the GE Case was allegedly dismissed at an early stage in the proceedings pursuant to an arbitration clause, and Plaintiffs were allegedly required to pay GE Commercial's attorneys' fees in the GE Case.

In January 2011, Plaintiffs allegedly sent messages to Novoselsky requesting an accounting for any legal work he performed, and Novoselsky allegedly offered various reasons for failing to send Plaintiffs an accounting. After the instant action was initiated by Plaintiffs, Novoselsky allegedly furnished an accounting purporting to reflect time spent on legal matters related to representing Plaintiffs. Plaintiffs include in their amended complaint a legal malpractice claim (Count I) and a conversion claim (Count II). In connection with the conversion claim, Plaintiffs seek punitive damages. Novoselsky has moved to dismiss the claims and to strike the request for punitive damages.

LEGAL STANDARD

In ruling on a motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) (Rule 12(b)(6)), the court must draw all reasonable inferences that favor the plaintiff, construe the allegations of the complaint in the light most favorable to the plaintiff, and accept as true all well-pleaded facts and allegations in the complaint. Appert v. Morgan Stanley Dean Witter, Inc., 673 F.3d 609, 622 (7th Cir. 2012); Thompson v. Ill. Dep't of Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002). A plaintiff is required to include allegations in the complaint that "plausibly suggest that the plaintiff has a right to relief, raising that possibility above a 'speculative level'" and "if they do not, the plaintiff pleads itself out of court."

E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007)(quoting in part Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007)); see also Morgan Stanley Dean Witter, Inc., 673 F.3d at 622 (stating that "[t]o survive a motion to dismiss, the complaint "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face," and that "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged")(quoting Ashcroft v. Iqbal, 556 U.S. 662 (2009))(internal quotations omitted).

DISCUSSION

I. Count I

Novoselsky argues that Plaintiffs have failed to state a legal malpractice claim against him. To establish a legal malpractice claim under Illinois law, a plaintiff must show "(1) the existence of an attorney-client relationship that establishes a duty on the part of the attorney; (2) a negligent act or omission constituting a breach of that duty; (3) proximate cause establishing that 'but for' the attorney's negligence, the plaintiff would have prevailed in the underlying action; and (4) damages." Owens v. McDermott, Will & Emery,736 N.E.2d 145, 155 (Ill. App. Ct. 2000) (citation omitted). Novoselsky contends ...


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