United States District Court, D. Nevada
HAROLD A. GUSTAFSON, Plaintiff,
MICHAEL SCHWARZ et al., Defendants.
ROBERT C. JONES, District Judge.
Defendants each filed a Motion to Dismiss (ECF Nos. 14, 16) Plaintiff's Complaint (ECF No. 1), which includes claims related to Defendant Schwarz's legal representation of Plaintiff. For the reasons contained herein, the Court grants Defendants' motions with leave for Plaintiff to amend his Complaint against Defendant Schwarz.
In November 2008, Plaintiff was a convicted prisoner of Minnesota being housed in a prison located in Nevada as part of an interstate compact. (Compl. 4, ECF No. 1). Plaintiff retained Defendant Schwarz as legal counsel during that time to file a habeas petition in this Court challenging his Minnesota conviction. ( Id. ). Defendant Heubner worked as a paralegal in Defendant Schwarz's law office and assisted Defendant Schwarz throughout Plaintiff's case. ( Id. ). In the habeas case, Defendant Schwarz initially named the Minnesota Attorney General as the defendant despite Plaintiff's insistence that the warden of the Nevada prison be the named party. ( Id. ). Once the petition was filed, the defendant moved to transfer the case to the District of Minnesota. ( Id. ). Plaintiff responded to this motion by personally drafting a twenty-eight page opposition, which he gave to Defendant Schwarz to be filed. ( Id. ). Defendant Schwarz, instead of simply filing the memorandum, reviewed what Plaintiff had written and "chopped" it down to five pages. ( Id. ). Over Plaintiff's protests, this revised version is what Defendant Schwarz submitted in opposition to the defendant's motion to transfer venue. ( Id. ). This Court granted the motion on May 10, 2010, and Plaintiff's habeas case was transferred to the District of Minnesota. ( Id. ).
Defendant Schwarz did not receive notification of the transfer until July 16, 2010, when the District of Minnesota contacted him requesting a notice of appearance. ( Id. ). Because of the lapse in time, Plaintiff was denied the opportunity to file an interlocutory appeal of the transfer order. ( Id. ). A writ of mandamus was, however, submitted to the Ninth Circuit Court of Appeals on Plaintiff's behalf, which that court denied. ( Id. ). Defendant Schwarz then told Plaintiff that nothing more could be done to get Plaintiff's habeas case back to Nevada. ( Id. 4-A). Plaintiff urged Defendant Schwarz to challenge the denied writ by filing for a rehearing en banc. ( Id. ). At first Defendant Schwarz claimed it was too late to make the filing, but then agreed to do so if Plaintiff paid more money. ( Id. ). The complaint does not indicate whether Plaintiff paid an additional retainer amount. Regardless, Defendant Schwarz took no further action relating to Plaintiff's Ninth Circuit writ or the habeas case in Minnesota. ( Id. ).
II. LEGAL STANDARDS
When considering a Rule 12(b)(6) motion to dismiss for failure to state a claim, the court must accept as true all factual allegations in the complaint as well as all reasonable inferences that may be drawn from such allegations. LSO, Ltd. v. Stroh, 205 F.3d 1146, 1150 n.2 (9th Cir. 2000). The allegations must be construed in the light most favorable to the nonmoving party. Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000). In general, the court should look only to the contents of the complaint during its review of a Rule 12(b)(6) motion to dismiss. However, the court may consider documents attached to the complaint or referred to in the complaint whose authenticity no party questions. Id .; see also Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987).
The purpose of a Rule 12(b)(6) motion to dismiss for failure to state a claim is to test the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The issue is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims. Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (quotations omitted). To avoid a Rule 12(b)(6) dismissal, a complaint does not need detailed factual allegations, but it must plead "enough facts to state a claim to relief that is plausible on its face." Clemens v. Daimler Chrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (stating 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"). Even though a complaint does not need "detailed factual allegations" to pass Rule 12(b)(6) muster, the factual allegations "must be enough to raise a right to relief above the speculative level... on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly, 550 U.S. at 555. "A pleading that offers labels and conclusions' or a formulaic recitation of the elements of a cause of action will not do." Iqbal, 556 U.S. at 678. "Nor does a complaint suffice if it tenders naked assertion[s]' devoid of further factual enhancements.'" Id. (quoting Twombly, 550 U.S. at 557).
If the court grants a motion to dismiss a complaint, it must then decide whether to grant leave to amend. The court should "freely give" leave to amend when there is no "undue delay, bad faith or dilatory motive on the part of the movant... undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment." Fed.R.Civ.P. 15(a)(2); Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is denied only when it is clear that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).
The Court understands Plaintiff to present two major claims in his Complaint. Plaintiff first contends that Defendants engaged in legal malpractice. (Compl. 4-A). In addition to malpractice, Plaintiff asserts that Defendants breached a contract with Plaintiff to provide certain legal services. ( Id. at 5).
A. Legal Malpractice
Under Nevada law, "legal malpractice is premised upon an attorney-client relationship, a duty owed to the client by the attorney, breach of that duty, and the breach as proximate cause of the client's damages." Semenza v. Nev. Med. Liab. Ins. Co., 765 P.2d 184, 185 (Nev. 1988). The duty relevant to a legal malpractice inquiry is "the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise." Sorenson v. Pavlikowski, 581 P.2d 851, 853 (Nev. 1978). Also material to a malpractice claim are "those facts that pertain to the presence and causation of damages on which the action is premised." Brady, Vorwerck, Ryder & Caspino v. New Albertson's, Inc., No. 61767, 2014 WL 3881169, at *7 (Nev. Aug. 7, 2014). The plaintiff carries the burden to demonstrate actual loss or damage resulting from the attorney's alleged misconduct. See Day v. Zubel, 922 P.2d 536, 538 (Nev. 1996).
Plaintiff retained Defendant Schwarz to be his attorney and represent him in filing the 2008 habeas petition. There was undoubtedly an attorney-client relationship between the two, which means that Defendant Schwarz owed certain duties to Plaintiff including competent and diligent representation. See Nev. Rules of Prof'l Conduct 1.1, 1.3 (2014). Plaintiff alleges that Defendant Schwarz breached those duties by naming the wrong defendant in the original habeas petition, reducing Plaintiff's initial draft in opposition to the Minnesota District Attorney's motion to transfer, failing to check this Court's website frequently enough to ...