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Smith v. Nugent

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

March 8, 2018

Samuel Leroy Smith and Sarah Ann Phillips Smith, Plaintiffs,
v.
Kenneth S. Nugent, P.C., Defendant.

          REPORT OF MAGISTRATE JUDGE

          Kevin F. McDonald United States Magistrate Judge

         This matter is before the court upon the motion for summary judgment by defendant Kenneth S. Nugent, P.C. (doc. 33). The plaintiffs in this action are proceeding pro se. Pursuant to the provisions of Title 28, United States Code, Section 636(b)(1)(A) and Local Civil Rule 73.02(B)(2)(e) (D.S.C.), all pretrial matters in cases involving pro se litigants are referred to a United States Magistrate Judge for consideration.

         BACKGROUND

         On July 19, 2014, plaintiffs Samuel Leroy Smith and his wife Sarah Ann Phillips Smith of Gloverville, South Carolina, each entered into a contingency contract with the law firm of Kenneth S. Nugent, P.C., of Augusta, Georgia, for representation following an automobile accident in South Carolina five days earlier. Each “Client Contract” contains a clause that reads:

I understand that KENNETH S. NUGENT, P.C., can withdraw as my counsel at any time. Said withdrawal by KENNETH S. NUGENT, P.C., shall be in writing and will be sent via certified mail to the client's address listed on the information sheet filled out by client at the time of this contract, or at an address provided in writing to the attorney sent subsequent tot he signing of the contract. If KENNETH S. NUGENT, P.C., withdraws from representation of the client, based on the firm's initiation, the client is not responsible for any attorney's fees.

(Doc. 33-2 at 2-5). Attorney James Kasprzycki was primarily responsible for the Smiths' case on behalf of the law firm and made a demand on an insurance company to resolve their claims (doc. 33-3, Kasprzycki aff. ¶¶ 2-4). Mr. Kasprzycki states he was authorized to make the demand and that the insurer accepted it, but Mr. Smith then became uncooperative and failed to honor the demand by attempting to add terms to the agreement after acceptance (id. ¶¶ 4-6). Thereafter, on April 22, 2015, Mr. Kasprzycki sent certified letters to both Mr. and Mrs. Smith, withdrawing as their counsel (id. ¶¶ 6-7, 10-11). The delivery receipts for both certified letters show that Mr. Smith signed for them (id. ¶¶ 9, 12 & ex. 1, 2). In addition to the notice of withdrawal, each letter advised the plaintiffs of the date the applicable statute of limitations would expire, July 13, 2017 (id. ¶¶ 7-12; docs. 33-4, 33-5).

         On July 6, 2017 (one week before the expiration of the statute of limitations), the Smiths filed a pro se case in this court relating to the automobile accident (C/A 1:17-cv-1767-HMH). By order dated October 16, 2017, the Honorable Henry M. Herlong, Jr., Senior United States District Judge, dismissed the case for lack of subject matter jurisdiction.[1]

         On July 10, 2017, the Smiths filed this action against the law firm for breach of contract, alleging that the law firm dropped their case without cause and requesting $100, 000.00 each, along with punitive damages and fees and costs (doc. 1, comp. at 2). On October 15, 2017, the defendant law firm filed an answer (doc. 23) denying the allegations, and on January 30, 2018, the defendant moved for summary judgment (doc. 33). In its motion, the defendant argues that it withdrew representation pursuant to the terms of the respective contracts and did so after Mr. Smith disagreed with Mr. Kasprzycki's negotiations with the insurance company.

         On January 30, 2018, pursuant to Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975), the plaintiffs were advised of the summary judgment procedure and the possible consequences if they failed to respond adequately to the motion (doc. 34). The Smiths filed a response in opposition to the defendant's motion for summary judgment on February 28, 2018 (doc. 36). They argue that the law firm's motion contains “prefabricated accusations” and is frivolous, and that the law firm acted in bad faith, dropping their case without an order from a judge (id. at 3-5).

         APPLICABLE LAW AND ANALYSIS

         Federal Rule of Civil Procedure 56 states, as to a party who has moved for summary judgment: “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). As to the first of these determinations, a fact is deemed “material” if proof of its existence or nonexistence would affect the disposition of the case under the applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of material fact is “genuine” if the evidence offered is such that a reasonable jury might return a verdict for the non-movant. Id. at 257. In determining whether a genuine issue has been raised, the court must construe all inferences and ambiguities against the movant and in favor of the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).

         The party seeking summary judgment shoulders the initial burden of demonstrating to the district court that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the movant has made this threshold demonstration, the non-moving party, to survive the motion for summary judgment, may not rest on the allegations averred in his pleadings; rather, he must demonstrate that specific, material facts exist that give rise to a genuine issue. Id. at 324. Under this standard, the existence of a mere scintilla of evidence in support of the plaintiff's position is insufficient to withstand the summary judgment motion. Anderson, 477 U.S. at 252. Likewise, conclusory allegations or denials, without more, are insufficient to preclude the granting of the summary judgment motion. Id. at 248. “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” Id.

         To recover for breach of contract, a plaintiff must establish the following three elements: (1) a binding contract entered into by the parties; (2) breach or unjustifiable failure to perform the contract; and (3) damages suffered by the plaintiff as a direct and proximate cause of the breach. Tidewater Supply Co. v. Industrial Elec. Co., 171 S.E.2d 607, 608 (S.C. 1969).

         While the plaintiffs have shown that they each had a binding contract with the law firm, they have failed to show that the law firm breached those contracts. Withdrawal of representation is an express term of each contract, and the conditions of withdrawal are clearly set forth on the first page: the withdrawal shall be in writing and will be sent via certified mail to the client's listed address (doc. 33-2 at 2, 4). The law firm has provided copies of the letters and certified mail receipts (doc. 33-3, Kasprzycki aff. ¶¶ 7, 9, 10, 12 & ex. 1, 2; docs. 33-3, 33-4), showing that it complied with the withdrawal terms of the contract, and the plaintiffs do not appear to contest or contradict this evidence. Rather, they argue that the law firm's withdrawal was “for bad cause and bad faith and the lack of communication” (doc. 36 at 2). However, the law firm has demonstrated that it communicated its withdrawal exactly as the parties' contracts required, and “cause” is not a set forth in the contracts as a pre-condition for withdrawal. To the extent the plaintiffs are asserting that an implied covenant of good faith exists and that the law firm breached it, this argument fails. The plaintiffs have presented nothing to support the theory that the law firm acted in bad faith during their brief contractual relationship, only that the parties disagreed on settlement negotiations with an insurance company. While the plaintiffs suggest that the law firm acted in bad faith by withdrawing without a court order, this contention is ...


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