-PAL U-Haul Co. of Nevada et al v. Gregory J. Kamer, Ltd. et al, No. 2:2006cv00618 - Document 143 (D. Nev. 2011)
Court Description: ORDER Granting 116 Motion to Remand, 118 Motion for Leave to File a Third-Party Complaint, and Denying 118 Motion to Consolidate. Signed by Chief Judge Robert C. Jones on 12/22/11. (Copies have been distributed pursuant to the NEF; CC: Certified copy of Order and Docket Sheet to State Court - ASB)
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-PAL U-Haul Co. of Nevada et al v. Gregory J. Kamer, Ltd. et al Doc. 143 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF NEVADA 8 9 10 11 12 13 14 15 16 17 U-HAUL CO. OF NEVADA, INC., a Nevada ) corporation; and U-HAUL INTERNATIONAL, ) INC., a Nevada corporation ) ) Plaintiffs, ) ) v. ) ) ) GREGORY J. KAMER, LTD d/b/a KAMER ) ZUCKER & ABBOTT, a Nevada professional ) corporation; DEBRA WILCHER; a Nevada ) resident; NATHAN W. ALBRIGHT, a Virginia ) resident; STEVEN WAMSER, a Nevada ) resident; DOES 1-10; inclusive; and ROE ) CORPORATIONS 1-10, inclusive, ) ) Defendants. ___________________________________ 2:06-cv-618-RCJ-PAL ORDER 18 This case arises from a partial remand from the Ninth Circuit on one of Judge 19 Sandoval’s former cases involving attorney misconduct during proceedings before the National 20 Labor Relations Board (“NLRB”). Pursuant to the Ninth Circuit’s remand instructions, this 21 Court reinstated Plaintiffs U-Haul Company of Nevada, Inc.’s and U-Haul International Inc.’s 22 (“Plaintiffs”) claims against Nathan Albright, Debra Wilcher, and the law firm of Kamer, Zucker, 23 & Abbott (“Kamer” or “Kamer firm”). (See Order (#93)). Currently before the Court is a Motion 24 to Remand (#116).1 The Court heard oral argument on October 21, 2011. BACKGROUND 25 26 In May 2006, the United States filed a petition for removal alleging that an officer of the 27 United States, Steven Wamser, had been named as a defendant in the case. (Pet. for 28 1 Kamer filed a motion to file a third-party complaint and a motion to consolidate in its opposition to the motion to remand. (See Opp’n to Mot. to Remand (#118) at 14, 16). Dockets.Justia.com 1 Removal (#1) at 1-2). The government attached both Plaintiffs’ complaint and a certification 2 for Wamser stating that he was acting within the scope of his employment as an employee of 3 the United States at all relevant times in the complaint. (See Compl. (#1-1) at 2; see 4 Certification of Scope of Emp’t (#1-1) at 25). 5 Plaintiffs complaint alleged the following against Defendants Gregory J Kamer, Ltd. 6 d/b/a Kamer Zucker & Abbott; Debra Wilcher; Nathan W. Albright; and Steven Wamser. 7 (Compl. (#1-1) at 2). Wamser and Albright were employees of the NLRB. (Id. at 3). In 2004, 8 the NLRB initiated proceedings against Plaintiffs and appointed Wamser and Albright to 9 prosecute the action. (Id. at 4). Plaintiffs hired the Kamer firm to provide legal representation 10 during the NLRB proceedings. (Id.). At some time beginning in 2004 through October 2005, 11 Albright and Wilcher, a paralegal employed by the Kamer firm, “conducted and carried on an 12 illicit and clandestine sexual relationship.” (Id. at 5). Albright’s wife, Jennifer Cory, confronted 13 Albright about the affair in February 2005 and threatened to report him to the state bar and the 14 NLRB. (Id.). In March of 2005, Wilcher left the law firm’s employment but then returned to 15 work there in early-May 2005. (Id.). During the course of the affair, Wilcher provided Albright 16 “with confidential information, which was reviewed and utilized by” Albright in the NLRB 17 proceeding. (Id. at 6). The confidential information included a document prepared by the law 18 firm that had provided a critical analysis of the entire proceeding for U-Haul’s in-house 19 counsel. (Id.). Albright and Wilcher had discussed all aspects of the proceeding during their 20 affair. (Id.). Albright had “influenced” Wilcher to provide him with confidential information 21 pertaining to Plaintiffs’ position in the proceeding. (Id.). Wilcher sat in on and participated in 22 witness preparation, served as custodian for the trial record, and was present throughout the 23 proceedings. (Id.). 24 Plaintiffs alleged that Wamser knew of the affair and had used the confidential 25 information obtained by Albright. (Id.). On September 30, 2005, an administrative law judge 26 (“ALJ”) issued a decision that Plaintiffs had violated the National Labor Relations Act (“NLRA”). 27 (Id. at 7). On September 5, 2005, Albright informed the NLRB’s Regional Director of his 28 wrongful behavior and asked Wilcher not to disclose the fact that confidential information had 2 1 been exchanged between them. (Id.). On October 13, 2005, Albright contacted the Kamer 2 firm and requested a meeting with Gregory Kamer. (Id. at 8). Upon learning of Albright’s 3 meeting with Kamer, Wilcher provided Kamer with a one-page summary of her relationship 4 with Albright, orally informed Kamer of the affair, and denied giving any confidential 5 information to Albright. (Id.). On October 15, 2005, Albright told Kamer that he had obtained 6 confidential information, including the aforementioned document, from Wilcher. (Id.). The 7 Kamer firm initiated an investigation and placed Wilcher on administrative leave. (Id.). On 8 October 19, 2005, an NLRB investigator, Terry Morgan, contacted the firm and requested an 9 interview with Wilcher. (Id. at 9). After Morgan interviewed Wilcher on October 20, 2005, 10 Wilcher resigned. (Id.). After meeting with the partners of the law firm that same day, Morgan 11 learned that nobody at the law firm had informed Plaintiffs of Albright’s conduct. (Id.). Morgan 12 told the law firm that she would research whether she had a duty to inform Plaintiffs herself. 13 (Id.). After meeting with Morgan, the partners held a meeting and, as a result, the law firm 14 contacted Plaintiffs’ general counsel and informed him of the affair. (Id.). 15 Plaintiffs alleged sixteen causes of action. (Id. at 10). In the first claim for relief, 16 Plaintiffs alleged conversion against Albright and Wilcher for exerting an act of domain over 17 their confidential communications. (Id.). In the second claim for relief, Plaintiffs alleged fraud 18 against Albright and Wilcher. (Id. at 11). In the third claim for relief, Plaintiffs alleged 19 constructive fraud against Albright and Wilcher. (Id. at 12). In the fourth claim for relief, 20 Plaintiffs alleged civil conspiracy against Albright and Wilcher. (Id. at 13). In the fifth claim for 21 relief, Plaintiffs alleged malpractice and professional misconduct against Albright. (Id.). In the 22 sixth and seventh claims for relief, Plaintiffs alleged negligent supervision, professional 23 misconduct, and acting in concert against Wamser. (Id. at 13-15). 24 In the eighth claim for relief, Plaintiffs alleged legal malpractice against the Kamer firm 25 because the firm breached its duty to use skill, prudence, and diligence in exercising and 26 performing their legal tasks. (Id. at 16). In the ninth claim for relief, Plaintiffs alleged a breach 27 of fiduciary duty against the Kamer firm because of the firm’s conduct before and after the 28 discovery of the affair. (Id. at 17). In the tenth cause of action, Plaintiffs alleged a breach of 3 1 the duty to maintain confidentiality against the Kamer firm. (Id.). In the eleventh cause of 2 action, Plaintiffs alleged negligence against the law firm because it breached the duty of care 3 it owed to Plaintiffs. (Id. at 18). In the twelfth claim for relief, Plaintiffs alleged negligent hiring 4 against the law firm for hiring and then rehiring Wilcher even though the firm “knew, or should 5 have known” of Wilcher’s “unethical and dangerous propensities, including, without limitation, 6 the existence and continuance” of the affair when it rehired Wilcher. (Id. at 19). In the 7 thirteenth claim for relief, Plaintiffs alleged negligent supervision against the Kamer firm for 8 breach of duty to properly supervise its employee, Wilcher. (Id. at 19-20). In the fourteenth 9 claim for relief, Plaintiffs alleged vicarious liability/respondeat superior against the Kamer firm 10 for Wilcher’s acts of conversion and wrongful transfer of confidential information to Albright 11 during the scope of her employment. (Id. at 20). In the fifteenth claim for relief, Plaintiffs 12 alleged constructive fraud against the Kamer firm for breaching its legal and equitable duties 13 by misrepresenting and concealing material facts related to the affair until the NLRB 14 threatened to do it themselves. (Id. at 21). In the sixteenth claim for relief, Plaintiffs alleged 15 unjust enrichment against the Kamer firm because it “unjustly retained the money and property 16 of U-Haul against fundamental principles of justice, equity, and good conscience” and 17 requested that the firm refund the attorneys’ fees that Plaintiffs had paid. (Id. at 22). 18 On August 17, 2006, Albright died. (Notice of Death (#46)). In November 2006, the 19 Court granted Plaintiffs’ Motion for Substitution of Parties and substituted Jennifer Cory, 20 Executrix of the Estate of Nathan Albright, as Defendant in place of Albright. (Order (#56)). 21 In June 2007, Judge Sandoval issued an order granting the government’s certification 22 motion, certified that Wamser had acted within the course and scope of his employment, and 23 substituted the United States in his place. (Order (#68) at 4-6). Although the government did 24 not file a certification for Albright, the Court sua sponte concluded that Albright had also acted 25 within the scope of his employment and substituted the United States in his place. (Id. at 8). 26 After substituting the United States for both Wamser and Albright, the Court granted the 27 government’s motion to dismiss based on lack of subject-matter jurisdiction for failure to 28 exhaust under the Federal Tort Claims Act. (Id. at 8-9). The Court declined to exercise 4 1 jurisdiction over the remaining state law claims and denied Kamer’s outstanding motions as 2 moot. (Id. at 10-11). 3 Plaintiffs appealed to the Ninth Circuit. (See Notice of Appeal (#71)). The Ninth Circuit 4 held that this Court erred by substituting the United States for Albright, but did not err in 5 upholding the Attorney General’s certification of Wamser. (Opinion (#92) at 4). The Ninth 6 Circuit remanded with instructions that this Court “reinstate U-Haul’s claims against Albright 7 . . . [and] reinstate the claims against the other defendants, Debra Wilcher and Kamer Zucker 8 & Abbott, because [this Court] dismissed those claims under the mistaken belief that it lacked 9 subject matter jurisdiction over Albright under the FTCA.” (Id. at 5). The Ninth Circuit stated 10 that, after reinstating those claims, this Court could decide whether to exercise supplemental 11 jurisdiction over the remaining claims. (Id.). 12 In December 2010, this Court reinstated Plaintiffs’ claims against Albright, Wilcher, and 13 Kamer. (Order (#93)). On July 2011, after oral argument, this Court granted Kamer’s motion 14 to reinstate the motions that Judge Sandoval had denied as moot but substantively denied 15 those motions. (See Order (#108) at 7-11). Plaintiffs now file the pending motion to remand 16 to state court. DISCUSSION 17 18 I. Motion to Remand (#116) 19 Plaintiffs file a motion to remand to state court because there is no longer a basis for 20 the Court to exercise original jurisdiction in this case now that the claims against the United 21 States have been dismissed. (Mot. to Remand (#116) at 3-4). Plaintiffs argue that there is 22 no federal question or diversity jurisdiction. (Id. at 4). Plaintiffs argue that the Court should 23 decline to exercise supplemental jurisdiction because the values of economy, convenience, 24 fairness, and comity favor remand. (Id. at 6). 25 In response, Kamer argues that this Court should exercise supplemental jurisdiction 26 over this case because of judicial economy, convenience, fairness, and comity considerations. 27 (Opp’n to Mot. to Remand (#118) at 9). Kamer argues that this Court has invested significant 28 time and resources in developing familiarity with the parties and claims involved in this case 5 1 because the United States removed this case in May 2006. (Id.). Kamer asserts that the 2 motions before this Court and the appeal have narrowed the issues for determination and that 3 remand would result in judicial inefficiency. (Id.). Kamer asserts that it would be more 4 convenient for the parties to remain in federal court because the companion case, 2:08-cv- 5 729-KJD-RJJ,2 derives from a common nucleus of operative facts and the parties anticipate 6 that discovery for both cases will be identical. (Id. at 9-10). Kamer argues that it would be fair 7 to both parties to keep the case in federal court because the parties can avoid paying 8 duplicative fees and expenses in another court. (Id. at 11). Kamer also argues that this Court 9 has already decided to exercise supplemental jurisdiction over this case by reinstating and 10 ruling on the motions that Judge Sandoval had denied as moot. (Id. at 12). 11 Wilcher also files an opposition to Plaintiffs’ motion to remand. (Wilcher Opp’n to Mot. 12 to Remand (#119)). She requests that, if the Court declines to exercise supplemental 13 jurisdiction, that the Court dismiss all claims against Kamer and herself. (Id. at 9). 14 The supplemental jurisdiction statute provides that “in any civil action of which the 15 district courts have original jurisdiction, the district courts shall have supplemental jurisdiction 16 over all other claims that are so related to claims in the action within such original jurisdiction 17 that they form part of the same case or controversy under Article III of the United States 18 Constitution.” 28 U.S.C. § 1367(a). A district court may decline to exercise supplemental 19 jurisdiction over a claim under subsection (a) if the district court has dismissed all claims over 20 which it has original jurisdiction. Id. § 1367(c)(3). 21 In determining whether to exercise supplemental jurisdiction, the Court should consider 22 the values of judicial economy, convenience, fairness, and comity. See Carnegie-Mellon Univ. 23 v. Cohill, 484 U.S. 343, 350, 108 S.Ct. 614, 619, 98 L.Ed.2d 720 (1988). The Ninth Circuit has 24 held that the “decision whether to continue to exercise supplemental jurisdiction over state law 25 claims after all federal claims have been dismissed lies within the district court’s discretion.” 26 Satey v. JP Morgan Chase & Co., 521 F.3d 1087, 1091 (9th Cir. 2008). 27 2 28 In that case, also known as the “Government Case,” Plaintiffs have sued the United States, Nathan Albright, and Steve Wamser under the FTCA. (Id. at 9-10). 6 1 In this case, Plaintiffs are correct that this Court no longer has original jurisdiction in this 2 case because the United States is no longer a party. The Court declines to exercise 3 supplemental jurisdiction in this case. Although this case has been before this Court since 4 2006, the case has not proceeded past the pleading stage. Therefore, after considering 5 judicial economy, convenience, and fairness, the Court declines to exercise supplemental 6 jurisdiction. The Court further notes that, based on comity concerns, the state court should 7 address the state law claims in this case. Accordingly, the Court grants the Motion to Remand 8 (#116). 9 II. Motion for Leave to File Third-Party Complaint & Motion to Consolidate (#118) 10 Kamer also files a motion for leave to file a third party complaint against Steven 11 Wamser/United States. (Opp’n to Mot. to Remand (#118) at 14). Alternatively, Kamer seeks 12 to consolidate this case with the Government Case. (Id. at 16). 13 Because the Court declines to exercise supplemental jurisdiction in this case, the Court 14 denies the motion for leave to file third-party complaint (#118) for lack of jurisdiction. 15 Additionally, based on the proceedings before Judge Dawson in the Government Case, the 16 Court denies the motion to consolidate (#118). CONCLUSION 17 18 19 20 21 22 For the foregoing reasons, IT IS ORDERED that the Motion to Remand (#116) is GRANTED. IT IS FURTHER ORDERED that the Motion for Leave to File a Third-Party Complaint (#118) is DENIED for lack of jurisdiction. IT IS FURTHER ORDERED that the Motion to Consolidate (#118) is DENIED. 23 24 DATED: This 22nd day of December, 2011. _____ day of December 2011. 25 26 _________________________________ United States District Judge 27 28 7
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