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Arunachalam v. Pazuniak

United States District Court, D. Delaware

September 25, 2018

GEORGE PAZUNIAK, et al., Defendants.

          Dr. Lakshmi Arunachalam, Menlo Park, California. Pro Se Plaintiff.

          George Pazuniak, Esquire, Pazuniak Law Office LLC, Wilmington, Delaware. Counsel for Defendants George Pazuniak and Pazuniak Law Office LLC.

          Sean T. O'Kelly, Esquire, and Ryan M. Ernst, Esquire, O'Kelly Ernst & Joyce, LLC, Wilmington, Delaware. Counsel for Defendant O'Kelly, Ernst & Bielli, LLC.



         Plaintiff Dr. Lakshmi Arunachalam, who appears pro se and has paid the filing fee, filed this action on November 14, 2014, in the United States District Court for the Northern District of California. (D.I. 1). The matter was transferred to this Court on March 25, 2015. (D.I. 99, 100). On February 24, 2016, the Court granted in part and denied in part Defendants' motions to dismiss the First Amended Complaint and on September 11, 2017, granted in part and denied in part Defendants' motion dismiss the Second Amended Complaint. (D.I. 125, 186). Plaintiff was given limited leave to amend.[1] (D.I. 186 at ¶ 3). The Fourth Amended Complaint (D.I. 189)[2] asserts jurisdiction pursuant to: (1) 28 U.S.C. § 1331 by reason of a federal question; (2) 28 U.S.C. § 1337(a) by reason of a federal statute regulating commerce; (3) 28 U.S.C. § 1338 by reason of patents, copyrights, and trademarks; and (4) 28 U.S.C. § 1332 by reason of diversity of citizenship.[3] (D.I. 189 at ¶ 10). Defendants George Pazuniak, Pazuniak Law Office LLC, and O'Kelly Ernst & Joyce, LLC, formerly OKelly Ernst & Bielli, LLC, [4] jointly move for dismissal pursuant to Fed.R.Civ.P. 12(b)(6). (D.I. 190). Plaintiff opposes. Briefing on the matter has been completed. (D.I. 191, 192, 195, 196, 197, 198, 199).


         Plaintiff, a California resident, is an inventor and assignee of a portfolio of dozens of patents. (D.I. 189 at¶¶ 3, 11). She founded three start-up companies in Silicon Valley: Pi-Net International Inc., WebXchange, Inc., and e-point, Inc. (Id. at¶ 11). George Pazuniak[5] is an attorney licensed to practice law in Delaware with an office in Wilmington, Delaware, and George Pazuniak Law Office, LLC, "was a law firm duly organized and existing under the laws of the State of Delaware with its principal place of business in Wilmington, DE."[6] (Id. at ¶¶ 4-5). O'Kelly Ernst & Joyce, LLC[7] is "a law firm duly organized and existing under the laws of the State of Delaware with its principal place of business in . . . Wilmington, DE and in Philadelphia, PA." (Id. at ¶ 6). Plaintiff hired Pazuniak "for her patent cases . . . against many infringers in 2011, 2012 and 2013, based upon his representation that he is a 'Patent Litigator' and would provide 'Competent Counsel' to competently conduct [her] patent cases." (Id. at ¶ 12).[8] Plaintiff alleges that Pazuniak "(as Agent) joined Counsel's Principal during the course of patent litigation [Contrary to the 'Agreement'] by not informing Client; de facto, and Counsel and Counsel's Principal became Client's attorneys in her patent cases, as evidenced by Counsel's signature on each of the briefs filed that Counsel was from Counsel's Principal." (Id. at ¶ 12). With the assistance of Defendants, Plaintiff sued a number of corporations for patent infringement. The claims in this action all arise out of Defendants' representation in those patent infringement proceedings.

         In the Court's ruling on Defendants' motion to dismiss the Second Amended Complaint, the allegations of intentional infliction of emotional distress survived the motion, and Plaintiff was given one final opportunity to file a motion to amend the legal malpractice and tortious interference with contract claims. (D.I. 186). Plaintiff filed a motion to amend on October 13, 2017, and attached the Fourth Amended Complaint and a red-line version of the Fourth Amended Complaint to it. (D.I. 189 & 189-1).

         The Fourth Amended Complaint contains three counts. Count One, against Counsel, Counsel's Law Firm, and Counsel's Principal for tortious interference with a contract (D.I. 189 at ¶¶ 20-44, 140-44); Count Two, against Pazuniak and Defendants for intentional infliction of emotional distress (the claim that survived dismissal in the Second Amended Complaint) (id. at ¶¶ 45-48, 145-47); and Count Three, against Counsel and Defendants for legal malpractice/negligence/failure to provide competent representation/failure to follow client instructions/professional misconduct (id. at ¶¶ 49- 56, 148-51). In addition, the Fourth Amended Complaint contains two sections that are not specifically directed to the three counts and that are found after Count Three. The two sections are the More Facts Chronological Synopsis (D.I. 189 at ¶¶ 57-82) and the Statement (and Significance) of this Case (id. at ¶¶ 83-139). Much of the information in these two sections is devoted to the parties' litigation in Delaware Superior Court.

         Defendants move for dismissal pursuant to Rule 12(b)(6) for failure to state claims upon which relief may be granted. (D.I. 190, D.I. 191). Defendants refer to Plaintiff's failed attempts to state a claim and contend that: (1) Plaintiff filed a new complaint, but ignored the Court's prior rulings and instructions; (2) Plaintiff failed to plead any cause of action; (3) Plaintiff removed from the Fourth Amended Complaint all allegations upon which the Court relied in allowing the intentional infliction of emotional distress claim to proceed; and (4) no claims are stated against the O'Kelly Law Firm.

         Plaintiff responds, "The Complaint itself states the causes of action and remedy warranting in no uncertain terms, namely: a) Infliction of emotional distress, b) Legal malpractice, c) Intentional interference with contract." (D.I. 195 at p.1).


         Defendants seek dismissal pursuant 12(b)(6) of the Federal Rules of Civil Procedure and have submitted matters of public record as well as documents referred to in the Fourth Amended Complaint in support of their motion.

In deciding motions to dismiss pursuant to Rule 12(b)(6), courts generally consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim. A document forms the basis of a claim if the document is 'integral to or explicitly relied upon in the complaint.' The purpose of this rule is to avoid the situation where a plaintiff with a legally deficient claim that is based on a particular document can avoid dismissal of that claim by failing to attach the relied upon document. Further, considering such a document is not unfair to a plaintiff because, by relying on the document, the plaintiff is on notice that the document will be considered.

Lum v. Bank of Am., 361 F.3d 217, 221-22 n.3 (3d Cir. 2004) (internal citations omitted).

         The documents submitted to the Court that are matters of public record and that are referred to by Plaintiff in the Fourth Amended Complaint may properly be considered in ruling on Defendants' motion to dismiss.

         In reviewing a motion filed under Fed.R.Civ.P. 12(b)(6), the court must accept all factual allegations in a complaint as true and take them in the light most favorable to plaintiff. See Erickson v. Pardus, 551 U.S. 89, 94 (2007). Because Plaintiff proceeds pro se, her pleading is liberally construed and her Fourth Amended Complaint, "however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers." Erickson, 551 U.S. at 94.

         Rule 8 requires a complainant to provide "a short and plain statement of the claim showing that the pleader is entitled to relief. . . ." Fed.R.Civ.P. 8(a)(2). Rule 12(b)(6) allows the accused party to bring a motion to dismiss the claim for failing to meet this standard. A Rule 12(b)(6) motion may be granted only if, accepting the well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the complainant, a court concludes that those allegations "could not raise a claim of entitlement to relief." Bell Ml. Corp. v. Twombly, 550 U.S. 544, 558 (2007).

         "Though 'detailed factual allegations' are not required, a complaint must do more than simply provide 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action.'" Davis v. Abington Metn'l Hosp., 765 F.3d 236, 241 (3d Cir. 2014) (quoting Twombly, 550 U.S. at 555). I am "not required to credit bald assertions or legal conclusions improperly alleged in the complaint." In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 216 (3d Cir. 2002). A complaint may not be dismissed, however, "for imperfect statement of the legal theory supporting the claim asserted." Johnson v. City of Shelby, 135 S.Ct. 346, 346 (2014).

         A complainant must plead facts sufficient to show that a claim has "substantive plausibility." Id. at 347. That plausibility must be found on the face of the complaint. Ashcroft v. Iqbal,556 U.S. 662, 678 (2009). "A claim has facial plausibility when the [complainant] pleads factual content that allows the court to draw the reasonable inference that the [accused] is liable for the misconduct alleged." Id. Deciding whether a claim is plausible will be a "context-specific ...

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