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Chase v. Lop Capital, LLC

United States District Court, D. South Carolina, Charleston Division

October 2, 2014

Nelson S. Chase, Esq., Plaintiff,
v.
LOP Capital, LLC, Strategic Lending Solutions, LLC, Brian Knight, and Michael Loprieno, Defendants.

OPINION AND ORDER

BRUCE HOWE HENDRICKS, District Judge.

This matter is before the Court on the Report and Recommendation (ECF No. 116) of United States Magistrate Judge Kevin F. McDonald recommending that the plaintiff's second motion for partial summary judgment on the defendant's counterclaims (ECF No. 89) be denied. After carefully reviewing the Report and Recommendation and the plaintiff's objections thereto (ECF No. 117), the Court adopts the Report and Recommendation in full.

BACKGROUND

The plaintiff, Nelson S. Chase ("Chase"), is a licenced South Carolina attorney, but because he is representing himself, the action is considered pro se and was automatically referred to a United States Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(A) and Local Civil Rule 73.02(B)(2)(e). The "Facts Presented" section of the Report and Recommendation thoroughly sets forth the facts and procedural history of this matter and is incorporated by reference and summarized in relevant part below.

Chase, an attorney from Mount Pleasant, filed this action in state court against his former clients, LOP Capital, LLC ("LOP Capital"), Strategic Lending Solutions, LLC ("Strategic"), Brian Knight ("Knight"), and Michael Loprieno ("Loprieno") (collectively the "LOP Defendants"). The LOP Defendants removed the case to this Court on January 15, 2013, on the basis of diversity jurisdiction. (ECF No. 1.) Chase's second amended complaint (ECF No. 48), which is the operative complaint in this action, alleges that the LOP Defendants owe him $272, 431.31 for his representation of them in several South Carolina lawsuits.

Defendants LOP Capital, Knight, and Loprieno filed C.A. No. 2009-CP-42-6973 (the "2009 Civil Action") in the Spartanburg County Court of Common Pleas seeking to satisfy a Georgia deficiency judgment against a real estate developer who had defaulted on a loan from the LOP Defendants. The 2009 Civil Action was dismissed without prejudice because, according to the Master-in-Equity, LOP Capital, Knight, and Loprieno had failed to respond to counterclaims filed in that action and had failed to join an indispensable party (Strategic). LOP Capital, Knight, and Loprieno, with Chase acting as their attorney, appealed the dismissal of the 2009 Civil Action. The LOP Defendants allege that shortly thereafter, without their knowledge and without their informed consent, Chase filed C.A. No. 2011-CP-42-4876 (the "2011 Civil Action) on their behalf, which was nearly identical to the 2009 Civil Action, but added Strategic as an additional plaintiff and added an additional cause of action. The LOP Defendants allege that as a result of Chase's decision to file the 2011 Civil Action, the appeal of the 2009 Civil Action was dismissed as moot.

While these cases were pending, a dispute arose between the parties regarding the fees owed to Chase. While Chase obviously claims that the LOP Defendants failed to pay him for his services, Loprieno allegedly believed that Chase was representing the LOP Defendants pursuant to a flat fee agreement and was shocked to receive a bill for $81, 526.37 for services rendered in a period of over two years between August of 2008 and February of 2011. (ECF No 96-2 and ECF No. 96-3.) Loprieno further attests that Chase never provided a written fee agreement. (ECF No. 96-2.)

While the 2009 Civil Action was pending, Chase also filed a legal malpractice action on behalf of LOP against one of its former attorneys, F. Scott Pfeiffer ("Pfeiffer").[1] The action (the "Pfeiffer Matter") alleged that the loan documents Pfeiffer had drafted for LOP were defective and advanced claims for legal malpractice, breach of fiduciary duty, and several fraud and conspiracy claims. The legal malpractice and breach of fiduciary duty claims (the "Pfeiffer Malpractice Claims") were dismissed for failure to submit the affidavit of merit that is required to be provided alongside the complaint in malpractice actions under South Carolina Code § 15-36-100. The Pfeiffer Malpractice Claims were dismissed without prejudice, but because LOP had delayed filing the Pfeiffer Matter until the statute of limitations had almost expired, the dismissal effectively foreclosed LOP's ability to pursue the Pfeiffer Malpractice Claims, [2] and LOP ultimately dismissed the remaining causes of action against Pfeiffer. Chase has alleged that it was LOP's decision not to submit the affidavit and has provided emails from Loprieno, the principal of LOP, acknowledging as much. Loprieno, however, contends that Chase never advised him that an expert affidavit was required by statute. (ECF No. 96-2.)

After the 2011 Civil Action was removed to federal court, and Chase was discharged as the LOP Defendants' counsel, Chase sued the LOP Defendants to recover fees he alleges he is owed for his services. After removing the case to this Court, the LOP Defendants answered and asserted counterclaims against Chase for legal malpractice. The LOP Defendants also contend that Chase improperly interfered with proceedings and settlement negotiations in the 2011 Civil Action in an effort to ensure that his bills were paid.

On April 9, 2014, Chase filed a timely objection to the Report and Recommendation (ECF No. 117), which this Court will review. Chase also filed a "Supplemental Memorandum for Partial Summary Judgment" (ECF No. 144) on September 2, 2014. The supplemental memorandum is not a timely response to the Report and Recommendation and will not be considered by the Court.

STANDARD OF REVIEW

The Magistrate Judge makes only a recommendation to this court. The recommendation has no presumptive weight. The responsibility for making a final determination remains with this court. Mathews v. Weber, 423 U.S. 261, 270 (1976). Parties are allowed to make a written objection to a Magistrate Judge's report within fourteen days after being served a copy of the Report. 28 U.S.C. § 636(b)(1). The court may accept, reject, or modify, in whole or in part, the recommendation made by the Magistrate Judge or may recommit the matter to the Magistrate Judge with instructions. See 28 U.S.C. § 636(b)(1).

DISCUSSION

Chase's first objection is a "general objection" to the Report and Recommendation as a whole, which Chase states is made "in an effort to avoid waiver of the right to appeal from a judgment of the District Court based up the Recommendation." The Court is obligated to conduct a de novo review of every portion of the Report to which specific objections have been filed. Mathews, 423 U.S. at 270-71. However, the Court need not conduct a de novo review when a party makes only "general and conclusory objections that do not direct the court to a specific error in the magistrate's proposed findings and recommendations." Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir.1982) ("[ D ] e novo review [is] unnecessary in... situations when a party makes general and conclusory objections that do not direct the court to a specific error in the magistrate's proposed findings and recommendation."). In the absence of a timely filed, specific objection, the Magistrate Judge's conclusions are ...


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