United States District Court, E.D. Pennsylvania
THOMAS W. SHERIDAN and SHERIDAN AND MURRAY, LLC, Plaintiffs,
THE ROBERTS LAW FIRM, Defendant.
D. WOLSON, J.
a dispute between two law firms about a referral fee.
Plaintiffs Sheridan & Murray, LLC and its named partner
Thomas Sheridan (collectively, “S&M”) move
this Court to dismiss most of the counterclaims against them.
For the reasons that follow, the Court will dismiss the
claims for breach of fiduciary duty (Counterclaim IV) and
conversion (Counterclaim VI). The Court will deny the
remainder of the Motion.
2013, James and Kay Burgess (the “Clients”) hired
The Roberts Law Firm, a Professional Corporation doing
business as Roberts & Roberts (“R&R”), to
represent them in connection with injuries that James Burgess
suffered while working on an oil rig in Pennsylvania. (ECF
No. 20, ¶ 5.) R&R referred the Clients' personal
injury claims to S&M. (Id. ¶ 6.)
September of 2014, R&R, S&M, and the Clients agreed
in writing that R&R would receive 40 percent of the gross
attorney's fee and that S&M would receive the
remaining 60 percent of the fee. (Id., Ex. A.) In
February 2018, Mr. Sheridan called Randell Roberts of R&R
with a pessimistic status update on the case. (Id.
¶ 9.) During that call, Mr. Sheridan asked that R&R
reduce its referral fee to a maximum amount of $320, 000, in
order to maintain an economically viable lawsuit for S&M
to pursue. (Id.) Mr. Roberts agreed to this proposed
revision. (Id. ¶ 10.) Later that year, the case
settled for $44 million. (Id. ¶ 11.)
Parties now have a dispute about the terms of their referral
arrangement. R&R alleges that Mr. Sheridan did not
initially disclose the $44 million settlement amount to Mr.
Roberts. (Id. ¶ 12.) Once R&R learned of
the settlement amount, Mr. Roberts expressed concern to Mr.
Sheridan about Mr. Sheridan's representations that led to
the revision of the original 2014 referral fee agreement.
(Id. ¶ 13.) After some correspondence between
the two individuals, Mr. Sheridan and his firm filed this
lawsuit against R&R. (Id, Ex. B.) R&R, in
turn, asserts the following counterclaims: intentional
misrepresentation (Count I); negligent misrepresentation
(Count II); intentional nondisclosure (Count III); breach of
fiduciary duty (Count IV); constructive fraud (Count V);
conversion (Count VI); breach of contract (Count VII);
promissory estoppel (Count VIII); and unjust enrichment
(Count IX). S&M seeks to dismiss all of R&R's
counterclaims except for the breach of contract claim.
for failure to state a claim pursuant to Fed.R.Civ.P.
12(b)(6) is proper if “the allegations in a complaint,
however true, could not raise a claim of entitlement to
relief.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 558 (2007). In other words, “only a complaint that
states a plausible claim for relief survives a motion to
dismiss.” Ashcroft v. Iqbal, 556 U.S. 662, 679
(2009). In evaluating a 12(b)(6) motion to dismiss, a court
must accept all factual allegations in the complaint as true
and construe the complaint in the light most favorable to the
plaintiff. Fowler v. UPMC Shadyside, 578 F.3d 203,
210 (3d Cir. 2009). While factual allegations need not be
detailed, they “must be enough to raise a right to
relief above the speculative level.” Bell Atl.
at 555; Phillips v. Cty. of Allegheny, 515 F.3d 224,
234 (3d Cir. 2008). However, under Fed.R.Civ.P. 9(b), when a
party alleges fraud or mistake, it “must state with
particularity the circumstances constituting fraud or
mistake.” The Court must disregard legal conclusions,
conclusory statements, and rote recitals of the elements of a
cause of action. James v. City of Wilkes-Barre, 700
F.3d 675, 679 (3d Cir. 2012); Iqbal, 556 U.S. at
Choice Of Law Issues
argues that Pennsylvania law applies here. R&R assumes
Pennsylvania law applies for purposes of this Motion. For the
Court to resolve a choice-of-law issue, it will have to
conduct a fact-intensive analysis that the record before it
does not permit. Therefore, the Court will apply Pennsylvania
law for purposes of this Motion. However, the Court reserves
final judgment on any choice-of-law question until it has a
more fulsome record before it.
conversion claim fails because it has not demonstrated that
S&M has taken anything from it. Instead, R&R's
claim, properly understood, is that S&M has not paid it a
debt. Although money can be the subject of a claim for
conversion, the failure to pay a debt is not conversion.
See Shonberger v. Oswell, 530 A.2d 112, ...