Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_14-cv-01955/USCOURTS-alnd-2_14-cv-01955-0/pdf.json

Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 28:1332 Diversity-Personal Injury

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

THOMAS O’SHEA, as Trustee of the

Trust of Thomas and Ann O'Shea;

THOMAS O’SHEA,

Plaintiffs,

vs.

LEADER BULSO & NOLAN, PLC;

EUGENE N. BULSO,

Defendants.

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CASE NO. 2:14-CV-1955-SLB

EUGENE N. BULSO; LEADER BULSO

& NOLAN, PLC.,

Counter Claimants,

vs.

THOMAS O’SHEA; THOMAS O’SHEA,

as Trustee ofthe Trust of Thomas and Ann

O'Shea,

Counter Defendants.

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MEMORANDUM OPINION

This case is presently pending before the court on defendants’ Motion to Dismiss for Failure

to State a Claim. (Doc. 7.)

1 Plaintiffs have sued defendants alleging elder abuse in violation of

California law. Defendants ask the court to dismiss plaintiffs’ Complaint “because the sole claim

1Reference to a document number, [“Doc. ___”], refers to the number assigned to each

document as it is filed in the court’s record.

FILED

 2015 Sep-28 PM 04:54

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:14-cv-01955-KOB Document 16 Filed 09/28/15 Page 1 of 11
asserted therein, a claim under a California statute titled ‘Elder Abuse and Dependent Adult Civil

Protection Act,’ is barred by the Alabama Legal Services Liability Act (the ‘ALSLA’), Ala. Code

§ 6-5-570 et seq.” (Id. at 1.) Upon consideration of the record, the submissions of the parties, the

arguments of counsel, and the relevant law, the court is of the opinion that defendants’ Motion to

Dismiss for Failure to State a Claim, (doc. 7), is due to be granted in part and denied in part.

I. MOTION TO DISMISS STANDARD

Defendants has moved to dismiss plaintiffs’ Complaint for failure to state a claim upon which

relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). Rule 12(b) provides: “Every defense to

a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But

a party may assert the [defense of failure to state a claimupon which relief can be granted] by motion

. . . . A motion asserting [this] defense[ ] must be made before pleading if a responsive pleading is

allowed.” Fed. R. Civ. P. 12(b). The defense of “[f]ailure to state a claimupon which relief can be

granted . . . may be raised: (A) in any pleading allowed or ordered under Rule 7(a); (B) by a motion

under Rule 12(c); or (C) at trial.” Fed. R. Civ. P. 12(h)(2). Because this Motion to Dismiss was

filed after defendants filed their Answer, it is not a Motion to Dismiss pursuant to Rule 12(b); rather,

it is properly considered a Motion for Judgment on the Pleadings pursuant to Fed. R. Civ. P. 12(c).

Rule 12(c) provides, “After the pleadings are closed – but early enough not to delay trial –

a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). “Judgment on the

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Case 2:14-cv-01955-KOB Document 16 Filed 09/28/15 Page 2 of 11
pleadings is appropriate where there are no material facts in dispute and the moving party is entitled

to judgment as a matter of law. In determining whether a party is entitled to judgment on the

pleadings,[the court must] accept as true allmaterialfacts alleged in the non-moving party’s pleading,

and [it must] view those facts in the light most favorable to the non-moving party.” Perez v. Wells

Fargo N.A., No. 13-13853, 2014 WL 7229271, *4 (11th Cir. Dec. 18, 2014)(quoting Cannon

v. City of W. Palm Beach, 250 F.3d 1299, 1301 (11th Cir. 2001)(citing Hawthorne v. Mac

Adjustment, Inc., 140 F.3d 1367, 1370 (11th Cir. 1998)))(internal quotations and citations

omitted). “Judgment on the pleadings is proper when no issues of materialfact exist, and the moving

party is entitled to judgment as a matter of law based on the substance of the pleadings and any

judicially noticed facts.” Interline Brands, Inc. v. Chartis Specialty Ins. Co., 749 F.3d 962, 965

(11th Cir. 2014)(internal citations and quotations omitted).

II. STATEMENT OF FACTS

Plaintiffs’ Complaint contains the following allegations of fact, which the court has accepted

as true for purposes of deciding defendants’ Motion to Dismiss/Motion for Judgment on the

Pleadings:

6. [Defendants] represented Plaintiffs and other entities and persons with

whom Plaintiff was associated and/or related. Due to the trust and confidence

afforded [Defendants] by the Plaintiffs and at the recommendation of [Defendants],

the representation was general and resulted in litigation in courts in Alabama, Hawaii

andCalifornia, including: San Francisco Residence Club et al. v. Baswell-Guthrie,

et al., United States District Court, Northern District of Alabama, Case Number:

5:09-cv-00421-CLS; San Francisco Residence Club, Inc. et al v. Park Tower,

LLC, United States Case District Court, Northern District of Alabama, Case

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Number: 5:08-cv-01423-AKK; Kennedy Funding, Inc. v. White Sands Estates,

LLC et al, U.S. District Court; District of Hawaii, Case Number:

1:09-cv-00191-JMS-BMK; San Francisco Residence Club, Inc. et al v. Amado,

et al., United States District Court, Northern District of California, Case Number:

3:09-cv-02054-RS, and litigation in the Superior Court of California, Contra Costa

County.

7. During the [course] of the representation, [Defendants] intentionally and

without authority diverted funds that were paid in settlement for the benefit of

Plaintiffs, and others, in direct contradiction of Plaintiff's instructions and wrongfully

took those funds, which were in part Plaintiffs’, for the improper benefit of

[Defendants]. Plaintiffs, and the other associated . . . clients [of defendants],

negotiated with Coldwell Banker, a defendant in the cases, and on or about May 24,

2011, instructed Coldwell Banker that the Coldwell Banker settlement money should

be paid by check and sent to Plaintiffs and related individuals and entities in the

Alabama cases, including Plaintiffs herein.

8. Without authorization, [Defendants] then represented to Coldwell Banker

that the Coldwell Banker Settlement money should be wired to the ... Law Firm’s

trust fund in Tennessee. As a result of Defendants’ wrongful instruction to Coldwell

Banker, Coldwell Banker wired the settlement funds to [Defendants] on or about

June 8, 2011. [Defendants] managed to obtain the Coldwell Banker Settlement

money before the settlement agreement with Coldwell Banker was executed. Faced

with this fait accompli, on or about June 12, 2011, Plaintiffs’ representative instructed

that the money should be retained in the . . . Law Firm’s trust account while the

dispute was resolved. [Defendants] ignored that instruction and unilaterally withdrew

money from the . . . Law Firmtrust account or failed to deposit the funds into the trust

account and applied it against moneys [Defendants] claimed [were] owed by Plaintiffs

and others, including application to those sums that are the subject of the allegations

herein regarding overbilling.

9. During the course of [Defendants’] representation of Plaintiffs,

[Defendants] overcharged Plaintiff, and the other associated . . . clients [of

Defendants],for services and, upon information and belief, billed Plaintiff for time that

was not reasonable, necessary and/or authorized. Within approximately a

twenty-four month period, Bulso and one associate charged Plaintiffs, and the other

associated . . . clients [of Defendants] nearly $2,000,000 (some minor charges were

allegedly incurred by a few other lawyers or staff). [Defendants] represented to

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Case 2:14-cv-01955-KOB Document 16 Filed 09/28/15 Page 4 of 11
Plaintiffs,that Plaintiff[s’] claims were worth the funds charged, plus millions, yet after

millions of dollars were billed and paid to [Defendants], [Defendants] abandoned

Plaintiffs and recommended Plaintiffs, and the other associated . . . clients [of

Defendants], settle for “whatever amount they could get,” even suggesting Plaintiff,

and the other associated . . . clients [of Defendants], accept $150,000 from Wilmer

& Lee in full and finalsettlement.

10. [Defendants] also has improperly placed a lien on money rightfully due

Plaintiffs. On or about [October] 28, 2011, [Defendants] filed a notice of attorney's

lien in the Alabama cases.

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[Defendants have] placed a lien on funds that belong to

Plaintiffs for amounts allegedly due by other individuals and entities.

11. Plaintiff Thomas O’Shea, individually and as Trustee, is, and at all

relevant times was an elder, over the age of 65. [Defendants were] aware that

Thomas O’Shea was an elder as is evidenced by, among other things, [Defendants’]

pursuit of Thomas O’Shea’s elder abuse claims against the defendants in the

underlying cases.

. . .

14. Defendants and each of them, took, hid, appropriated, obtained, retained

and/or assisted in taking, hiding, appropriating and retaining, Plaintiff’s personal

property and/or the Trust property as alleged hereinabove for a wrongful use and/or

with the intent to defraud.

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See San Francisco Residence Club v. Baswell-Guthrie, Case No. 5:09-CV-0421-CLS,

doc. 177; San Francisco Residence Club, Inc. v. Park Tower, Case No. 5:08-CV-1423-AKK,

doc. 292.

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Case 2:14-cv-01955-KOB Document 16 Filed 09/28/15 Page 5 of 11
(Doc. 1 ¶¶ 6-11, 14 [footnote added].) Plaintiffs allege that defendants’ alleged wrongdoing

constitutes “financial abuse of an elder” pursuant to Cal. Welfare & Inst. Code §§ 15610.07(a),3and

15610.30.

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III. DISCUSSION

Defendants argue, “Because this action arises out of defendants’ legal representation of

Plaintiffs in Alabama, Plaintiffs’ sole and exclusive claim against defendants is under the Alabama

LegalServices Liability Act [ALSLA]. Plaintiffs may not assert a claimagainst defendants under the

California Elder Abuse and Dependent Adult Civil Protection Act for representation defendants

provided in Alabama.” (Doc. 7 ¶ 5.) Plaintiffs contend their “claims include claims relating to

services rendered to Plaintiffs’ outside of Alabama and cannot be subject to the [ALSLA]. Plaintiffs’

3Section 15610.07(a) defines “abuse of an elder or a dependent adult” to include “financial

abuse.” Cal. Welfare & Inst. Code § 15610.07(a).

4According to § 15610.30 –

(a) “Financial abuse” of an elder or dependent adult occurs when a person or entity

does any of the following:

(1) Takes, secretes, appropriates, obtains, or retains real or personal property of an

elder or dependent adult for a wrongful use or with intent to defraud, or both.

(2) Assists in taking, secreting, appropriating, obtaining, or retaining real or personal

property of an elder or dependent adult for a wrongful use or with intent to defraud,

or both.

Cal. Welfare & Inst. Code § 15610.30 (a).

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claims also involve conversion and breaches of duties outside of any legal services rendered in

Alabama.” (Doc. 10 ¶ 3.)

Section 6-5-573, Ala. Code 1975, [ALSLA] provides: “There shall be only one

form and cause of action against legal service providers in courts in the State of

Alabama and it shall be known as the legalservice liability action and shall have the

meaning as defined herein.”

Section 6-5-572(2), Ala. Code 1975, defines a “legalservice provider” as

“[a]nyone licensed to practice law by the State of Alabama or engaged in the

practice of law in the State of Alabama. The term legal service provider

includes professional corporations, associations, and partnerships and

members of such professional corporations, associations, and partnerships

and the persons, firms, or corporations either employed by or performing

work or services for the benefit of such professional corporations,

associations, and partnerships including, without limitation, law clerks, legal

assistants, legalsecretaries, investigators, paralegals, and couriers.”

Section 6-5-572(1), Ala. Code 1975, defines “legal service liability action”

as

“[a]ny action against a legal service provider in which it is alleged that some

injury or damage was caused in whole or in part by the legal service

provider's violation of the standard of care applicable to a legal service

provider. A legal service liability action embraces all claims for injuries or

damage[ ] or wrongful death whether in contract or in tort and whether based

on an intentional or unintentional act or omission. A legal services liability

action embraces any form of action in which a litigant may seek legal redress

for a wrong or an injury and every legal theory of recovery, whether common

law or statutory, available to a litigant in a court in the State of Alabama now

or in the future.”

Roberts v. Lanier, 72 So. 3d 1174, 1180-81 (Ala. 2011).

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“The [ALSLA] is very broad. It creates one form of action against any ‘legal service

provider’ and exclusively governs any and all actions brought against a legal service provider for

damages. The ALSLA embraces all claims, based on either contract or tort, and supersedes any

inconsistent provisions of the law.” Mississippi Valley Title Ins. Co. v. Hooper, 707 So. 2d 209,

217 (Ala. 1997)(Bryan, Special Justice, concurring in the result). However, the definition of legal

services provider is limited. The Alabama Supreme Court has held, “The plain language of § 6-5-

572(2), as well as that of the other portions of the ALSLA, clearly indicates that the Legislature

intended for the ALSLA to apply only to lawyers and to entities that are composed of members who

are licensed to practice law within the State of Alabama.” Alabama Educ. Ass'n v. Nelson, 770

So. 2d 1057, 1059 (Ala. 2000). Also, an attorney not licensed to practice law in Alabama, but

associated with an Alabama attorney, may “meet[ ] that part of the definition of a ‘legal service

provider’ that includes ‘the persons, firms, or corporations either employed by or performing work

or services for the benefit of such professional corporations, associations, and partnerships . . . ,”

if the relationship between the foreign attorney or firm and the Alabama attorney or firm constitutes

a joint venture. Wachovia Bank, N.A. v. Jones, Morrison & Womack, P.C., 42 So. 3d 667, 678

(Ala. 2009)(citing 46 Am. Jur. 2d Joint Ventures § 50 (2006))(emphasis in Wachovia Bank ).

Moreover, the ALSLA covers claims encompassing legal services provided by an attorney while

admitted pro hac vice. See Lanier, 72 So. 3d at 1183 n.6 (“It seems clear that, after he obtained

pro hac vice status, [defendant, an attorney not licensed to practice law in Alabama,] qualified as a

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‘legal-service provider’ under the ALSLA.”) Alabama has not decided whether “claims aris[ing] out

of alleged misconduct that is said to have occurred before [an attorney not licensed to practice law

in Alabama] obtained [pro hac vice] status,” are subject to the ALSLA. Id. The court has found

no case discussing the applicability of the ALSLA to a legal-services liability action based on a

breach of the standard of care arising after a foreign legalservices provider has withdrawn from his

representation in an Alabama proceeding in which they were granted pro hac vice status. Given the

Alabama courts’ holding limiting the application of the ALSLA with regard to foreign attorneys, the

court finds that the ALSLA does not apply to claims against a foreign attorney, who is not working

with a licensed Alabama attorney, based on acts or omissions occurring before or after the foreign

attorney’s pro hac vice representation of plaintiff in an Alabama proceeding.

Defendant Bulso is an attorney licensed to practice law in Tennessee. He and Steven Nieters,

both attorneys with defendant Leader, Bulso & Nolan, were admitted pro hac vice on February 24,

2009, in the Park Tower litigation. See Park Tower, Case No. 5:08-CV-1423-AKK, doc. 43.

On October 28, 2011, Bulso and Nieters moved to withdraw from both the Park Tower and the

Baswell-Guthrie cases; their motions were granted on November 3, 2011. See Park Tower, Case

No. 5:08-CV-1423-AKK, doc. 291 and stamp ruling of November 3, 2011; Baswell-Guthrie,

Case No. 5:09-CV-0421-CLS, doc. 177 and stamp ruling of November 3, 2011.

Therefore, the court finds that defendants’ Motion to Dismiss is due to be denied as to

plaintiffs’ elder-abuse claims based on defendants’ alleged wrongdoing arising out of the

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attorney/client relationship that occurred before or after defendants’ appearance pro hac vice in either

the Baswell-Guthrie or Park Tower cases in this court and granted as to any claim of wrongdoing

arising out of the attorney/client relationship that occurred during defendants’ appearance pro hac

vice in either the Baswell-Guthrie or Park Tower cases in this court,

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including claims based upon

defendants’ diversion and retention of the Coldwell Banker settlement proceeds.

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In this case, plaintiffs have alleged that defendants over-billed plaintiffs, misrepresented the

value of plaintiffs’ claims, abandoned plaintiffs’ during the litigations, and filed an attorneys’ lien in the

Alabama cases. The court finds that plaintiffs have not alleged sufficiently specific facts to allow the

court to determine based only on the pleadings whether this alleged misconduct occurred during the

time defendants’ were appearing pro hac vice in the Alabama cases and, if so, to what extent the

claims relate to the provision of legal services in the Alabama cases. Therefore, the court cannot

determine if these allegations of wrongdoing are subject to the ALSLA or actionable under the

California elder abuse statute.

5All claims based upon the defendants’ representation of plaintiffs in the Park Tower litigation

are pending in San Francisco Residence Club v. Leader Bulso & Nolan, Case No.

2:14-CV-01953-SLB. All claims based upon the defendants’ representation of plaintiffs in the

Baswell-Guthrie litigation are pending in San Francisco Residence Club v. Leader Bulso &

Nolan, Case No. 2:14-CV-01954-SLB.

6Plaintiffs – along with San Francisco Residence Club, Inc.; Anne O’Shea as Trustee of the

Trust of Thomas and Anne O’Shea; Kate Larkin Donahue, TAK Tech Point; and KKA CAS – have

alleged identical claims of wrongdoing regarding the Coldwell Banker settlement proceeds in Case

No. 2:14-CV-1954-SLB, doc. 1 ¶¶ 12, 33.

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The court will order plaintiffs to file an amended Complaint setting forth only those claims of

wrongdoing occurring before defendants were admitted pro hac vice in the Baswell-Guthrie and

Park Tower cases or after defendants withdrew from the Alabama cases, and plaintiffs shall not

include any claim of wrongdoing based on conduct related to or encompassing legal services

provided in either of Alabama actions. Such Amended Complaint shall specify the time and place

of each alleged wrongful act or omission to the extent possible.

DONE this 28th day of September, 2015.

SHARON LOVELACE BLACKBURN

SENIOR UNITED STATES DISTRICT JUDGE

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