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Kent v. Hennelly

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

November 12, 2019

MARTIN L. KENT, Plaintiff,
v.
KEVIN N. HENNELLY, Defendant.

          ORDER

          DAVID C. NORTON UNITED STATES DISTRICT JUDGE

         The following matter is before the court on defendant Kevin N. Hennelly's (“Hennelly”) motion to stay and award fees, ECF No. 9, and motion to dismiss, ECF No. 18. For the reasons set forth below, the court denies the motion to stay and to award attorney's fees and grants in part and denies in part the motion to dismiss. In addition, the court orders counsel for plaintiff Martin L. Kent (“Kent”) to show cause as to why the original filing of Kent's complaint does not violate Rule 11(b) within 30 days of this order.

         I. BACKGROUND

         This matter arises from an action of alleged defamation and false light invasion of privacy brought by Kent against Hennelly. The court draws these allegations from Kent's amended complaint, the operative complaint in this action. Kent is the president and CEO of The United Company, which is the parent company of Scratch Golf, LLC. Hennelly lives in Beaufort County, South Carolina. Scratch Golf owns the Hilton Head National Golf Course (the “Property”) in Beaufort County, South Carolina. In July 2016, Scratch Golf submitted an application to Beaufort County to amend the rezoning of the Property (“Rezoning Application”). On May 22, 2017, the Beaufort County Council denied the Rezoning Application.

         Kent alleges that Hennelly made a post on Facebook and a comment on the website of the Island Packet, a local newspaper, that contained various defamatory statements about him, in an effort to imply that Kent is corrupt or may have committed crimes. Kent attached images of those statements to his amended complaint, but he only references the allegedly defamatory portions in his amended complaint. Those posts and their statements are below.

Comment 1
May 14, 2017 comment on the online version of a May 12 article from The Island Packet newspaper (“Island Packet Article”), ECF No. 22-1, “Hilton Head National developers: Why golf lost its swing there and what the future holds” (“Island Packet Comment”)
Statement: It looks like they left out a few pertinent facts. The most glaring is the corrupt people involved. This guy Kent was Chief of Staff to the corrupt Governor of Virginia. He has never built a swing set never mind a 300m dollar City!!! James Woodrow McGlothlin gave the corrupt Governor McDonald of Virginia wife a “no show” job. The McDonalds never reported income, $36, 000. These guys . . . will break every rule in the book to get a government favor or handout.
Comment 2
Portion of May 23, 2017 post by Kent on his own Facebook Page, ECF No. 22-2 (“May 23 Facebook Post”)
Statement: The Island Packet gets an “incomplete” grade on their coverage of the issue. For some reason they refused to print the documented corruption of the owners of the United Company. Martin Kent and James McGlothlin were up to their eyeballs in the recent scandals in Virginia with the Governor and his wife.

         As a result of these comments, Kent filed suit against Hennelly on May 10, 2019 bringing causes of action for defamation per se, defamation per quod, and false light invasion of privacy. Kent seeks both damages and injunctive relief.

         Hennelly first filed a motion to stay and award fees on June 4, 2019. ECF No. 9. Kent responded on July 5, 2019, ECF No. 19, and Hennelly replied on July 12, 2019. ECF No. 21. Then Hennelly filed a motion to dismiss on July 3, 2019. ECF No. 18. Kent filed an amended complaint on July 14, 2019, ECF No. 22, and responded to the motion to dismiss on July 16, 2019, ECF No. 23. Hennelly replied on July 22, 2019. ECF No. 24. The court held a hearing on the motions on September 30, 2019.[1] Both motions are now ripe for review.

         II. STANDARD

         A. Motion to Stay and Award Fees

         Under Federal Rule of Civil Procedure 41(d), “[i]f a plaintiff who previously dismissed an action in any court files an action based on or including the same claim against the same defendant, the court: (1) may order the plaintiff to pay all or part of the costs of that previous action; and (2) may stay the proceedings until the plaintiff has complied.”

         B. Motion to Dismiss

         A Rule 12(b)(6) motion for failure to state a claim upon which relief can be granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (“A motion to dismiss under Rule 12(b)(6) . . . does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.”). To be legally sufficient, a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A Rule 12(b)(6) motion should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support his claim and would entitle him to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When considering a Rule 12(b)(6) motion, the court should accept all well-pleaded allegations as true and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir.1999); Mylan Labs., Inc., 7 F.3d at 1134. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         III. DISCUSSION

         A. Motion to Stay and Award Fees

         In Hennelly's motion to stay, he argues that, pursuant to Rule 41(d) of the Federal Rules of Civil Procedure, the court should award Hennelly $9, 052 in attorney's fees and stay this action until Kent pays the fees. Hennelly argues this is warranted based on the history of the cases in which Hennelly has been sued by Kent and James McGlothlin (“McGlothlin”), who has made similar allegations regarding Hennelly's online posts in another case before this court, McGlothlin v. Hennelly, No. 18-cv-246 (“McGlothlin case”). Important to Hennelly's argument is the fact that Kent and McGlothlin are represented by the same attorney. The history of the litigation is as follows. First, McGlothlin sued Hennelly in federal court in the Middle District of Florida. As such, Hennelly had to hire Florida counsel. That case was dismissed for lack of personal jurisdiction, but the court gave McGlothlin two weeks to amend his complaint to sufficiently allege the facts necessary for the court to establish personal jurisdiction over Hennelly. Instead, McGlothlin voluntarily dismissed the Florida action and refiled it in this court, where personal jurisdiction over Hennelly exists. As mentioned above, that action is currently pending before this court.

         Kent first brought suit against Hennelly in federal court in the Eastern District of Tennessee. Hennelly had to retain counsel in Tennessee, and like the Florida action, the Tennessee action was dismissed for lack of personal jurisdiction over Hennelly. However, instead of immediately re-filing in South Carolina like McGlothlin did, Kent instead appealed the district court's order on personal jurisdiction to the Sixth Circuit Court of Appeals. Throughout the appeal, Hennelly's counsel suggested that Kent dismiss the appeal and re-file in South Carolina, but Kent's counsel did not do so. As such, Hennelly briefed the issues on appeal, participated in mediation in good faith, and prepared for oral argument that was scheduled for March 21, 2019. Then on March 15, 2019, Kent's counsel sent Hennelly's counsel an email indicating that Kent wanted to dismiss the appeal. Hennelly's counsel objected due to the time and resources that they had already spent on the appeal, but Kent filed a motion to voluntarily dismiss the appeal, and the Sixth Circuit granted it. On May 10, 2019, Kent filed this action. Kent included allegations in his original complaint that had already been found by this court to be unactionable in the McGlothlin case.

         Hennelly argues that this behavior warrants an award of attorney's fees for the litigation of the Tennessee case pursuant to Rule 41(d). Under Rule 41(d), a defendant may obtain attorney's fees from a plaintiff “[i]f a plaintiff who previously dismissed an action in any court files an action based on or including the same claim against the same defendant.” The Fourth Circuit has established that when a statute does not provide for attorney's fees, “a district court may award attorneys' fees when the opposing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” Andrews v. America's Living Ctrs., LLC, 827 F.3d 306, 311 (4th Cir. 2016) (internal quotes omitted). The Fourth Circuit relies on the Black's Law definition of vexatious, which is “without reasonable or probable cause or excuse.” Id. (citing Vexatious, Black's Law Dictionary (7th ed. 1999)). There is generally no vexation when there has been no discovery, no substantial motion practice, and dismissal occurs shortly after the case had been filed. Id. at 313. Most courts that have found vexatious behavior have done so when a plaintiff voluntarily dismisses his case in one court and then refiles a virtually identical complaint in another court. See Robinson v. Bank of Am., N.A., 553 Fed.Appx. 648, 652 (8th Cir. 2014) (holding that the district court did not abuse its discretion by awarding attorney's fees when the plaintiff dismissed his case in federal court and brought the same action in state court); Kent v. Bank of Am., N.A., 518 Fed.Appx. 514, 517 (8th Cir. 2013) (holding that attorney's fees award under Rule 41(d) was appropriate because the plaintiff dismissed his case and immediately refiled it with only “incidental” changes to the complaint).

         Hennelly acknowledges that the court denied a similar Rule 41(d) motion in the McGlothlin case. In its order in the McGlothlin case, the court explained that McGlothlin had a reasonable basis to bring suit in Florida based on his personal jurisdiction arguments about Hennelly's posts being on the internet, and while a Florida court ultimately found him to be incorrect, McGlothlin's actions did not amount to bad faith. Hennelly argues that a different result here is warranted because of (1) the additional fact of Kent appealed the Tennessee district court's order and then subsequently dismissed his Sixth Circuit appeal and (2) Kent's filing of a complaint ...


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