United States District Court, D. South Carolina, Charleston Division
C. NORTON UNITED STATES DISTRICT JUDGE
matter comes before the court on defendant Colucci &
Gallaher, PC's (“Colucci”) motion to dismiss
and plaintiff Gracious Living Corporation's
(“Gracious Living”) motion to remand. For the
reasons set forth below, the court denies Colucci's
motion to dismiss for lack of personal jurisdiction and
denies Gracious Living's motion to remand.
legal malpractice action Gracious Living, a Canadian company,
seeks to recover against Colucci, a New York law firm and
professional corporation. The complaint alleges that Colucci
appeared through its then-employee John Keenan
(“Keenan”) in South Carolina courts on behalf of
the plaintiff, even though no lawyers at Colucci were
licensed in South Carolina. ECF No. 1, Ex. 1 ¶ 4.
Living initially retained Colucci in 2012 to represent it in
a claim against Joseph Juscik (“Juscik”) related
to a commercial dispute. ECF No. 1, Ex. 1 ¶ 6. This 2012
action was filed in the U.S. District Court for the Western
District of Michigan, Southern Division, and was eventually
resolved pursuant to a settlement agreement between the
parties. ECF No. 4-2. Juscik, who retained a residence in Mt.
Pleasant, South Carolina, defaulted on the payment of the
settlement agreement for the Michigan case in September 2013.
Id. Keenan left Colucci in January
2014. ECF No. 1, Ex. 1 ¶ 14. Without
seeking Gracious Living's consent, Colluci transferred
the Gracious Living file to Keenan. Id. ¶ 16.
March 2014, South Carolina Federal Credit Union
(“SCFCU”) filed a foreclosure lawsuit against
Juscik on the mortgage that it held on his home in Charleston
County. Id. ¶ 17. Colucci was the statutory
agent of service for this action, id. ¶ 12, and
an Affidavit of Service as to Gracious Living Corporation was
filed with the Clerk of Court for Charleston County. Gracious
Living was entitled to the payment of the surplus from the
foreclosure auction to satisfy its Confession of Judgment.
in November 2014, employees at Gracious Living began to
correspond with Keenan about SCFCU's foreclose action
against Juscik. ECF No. 1, Ex. 1 at 32-40. Numerous emails
from Gracious Living to Keenan asked about submitting
documents to the Clerk of Court to ensure that Gracious
Living would be able to collect on the $65, 391.63 in surplus
funds from the Juscik foreclosure. Neither Keenan, who by
this time was no longer employed at Colucci, nor any other
lawyer at Colucci, responded in a timely fashion and, as a
result, Juscik was able to claim Gracious Living's share
of the surplus funds. ECF No. 1, Ex. 1 ¶ 31-34.
Living alleges that Colucci committed legal malpractice
because the law firm knew that none of the lawyers it
employed were licensed to practice law in South Carolina, yet
failed to advise Gracious Living to hire counsel in South
Carolina, that (1) Colucci engaged in the unauthorized
practice of law when Keenan prepared and filed the judgment
for the settlement of the 2012 Michigan lawsuit under the
supervision of senior Colucci attorneys, (2) Colucci failed
to seek Gracious Living's consent to transfer its file to
Keenan and failed to take steps to withdraw as counsel of
record, (3) Colucci failed to properly supervise Keenan, and
(4) neither Keenan nor Colucci took adequate steps to protect
the interests of Gracious Living in the divvying up of
surplus funds in the Juscik foreclosure matter. ECF No. 1,
Ex. 1 ¶ 42.
instant suit was initially filed in the Court of Common Pleas
for Charleston County, South Carolina on May 25, 2016. ECF
No.1-1. Colucci removed the case to federal court on June 30,
2016. Id. On July 7, 2016, Colucci moved to dismiss
on the grounds that this court lacks personal jurisdiction
over it. ECF No. 4-1. On July 24, 2016, Gracious Living filed
a motion to remand to state court. ECF No. 10-1. The motions
have been fully briefed and are ripe for this court's
Motion to Dismiss for Lack of Personal Jurisdiction
the defendant challenges personal jurisdiction, the plaintiff
has the burden of showing that jurisdiction exists. See
In re Celotex Corp., 124 F.3d 619, 628 (4th Cir. 1997).
When the court decides a personal jurisdiction challenge
without an evidentiary hearing, the plaintiff must prove a
prima facie case of personal jurisdiction. See Mylan
Labs, Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993).
“In considering the challenge on such a record, the
court must construe all relevant pleading allegations in the
light most favorable to the plaintiff, assume credibility,
and draw the most favorable inferences for the existence of
jurisdiction.” In re Celotex Corp., 234 F.3d
at 628 (quoting Combs v. Bakker, 886 F.2d 673, 676
(4th Cir. 1989)). However, the court need not “credit
conclusory allegations or draw farfetched inferences.”
Masselli & Lane, PC v. Miller & Schuh, PA,
2000 WL 691100, at *1 (4th Cir. May 30, 2000) (quoting
Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201,
203 (1st Cir.1994)).
Motion to Remand
federal jurisdiction is doubtful, remand is necessary.
Mulcahey v. Columbia Organic Chems. Co., 29 F.3d
148, 151 (4th Cir. 1994); Pohto v. Allstate Ins.
Co., No. 10-2654, 2011 WL 2670000, at *1 (D.S.C. July 7,
2011) (“Because federal courts are forums of limited
jurisdiction, any doubt as to whether a case ...