Federal court in Delaware orders transfer of suit alleging lawyer malpractice to Missouri

By John Breslin | Jun 12, 2018

A federal court in Delaware recently ordered the transfer to Missouri of a case involving a trio of investors claiming malpractice by attorneys they retained to represent them in an unsuccessful suit against an un-named corporation.

The U.S. District Court for the District of Delaware's May 22 order said any further arguments in the case of Marshall T. Simpson et al. v. William Dirks Dameron LLC et al. should be heard in the U.S. District Court for the Western District of Missouri, where all the parties are based.

This order follows a motion by the defendants, the investors' previous lawyers, to transfer the case to Missouri.

The Delaware court had earlier dismissed a suit by the three investors from Kansas against "a Delaware entity," court documents said.

"The Kansas investors retained the Missouri lawyers to challenge certain decisions of a Delaware entity first in a Missouri federal court but later transferred to this district," the Delaware court order said. "After oral argument, we dismissed the investors' complaint for failing to state a claim. We held the investors' fraud and negligent misrepresentation claims were barred by the statute of limitations and the investors had not met their burden for equitable tolling."

Equitable tolling is the legal principle that allows a plaintiff to continue an action beyond the statute of limitations if he or she did not discover the injury until after the limitations date.

"The investors elected not to amend their complaint to cure deficiencies," the Delaware court order pointed out. "During oral argument, the investors' counsel (the present defendants] candidly conceded he knew of no additional facts to plead."

The Delaware court order continued, "The investors admit wanting discovery to see if they can find fraud. Given (our present defendants') candor and professionalism, we find no basis to allow yet another time period to find facts they admit are not available to them. "

The investors initially appealed, but later abandoned the appeal. They then hired new attorneys, who filed the malpractice claim against the previous counsel.

The investors are claiming malpractice "in drafting a complaint; effecting service ... suing in Missouri; failing to learn the legal precedent; failing to seek entry of default; failing to disclose a defendant had been served; failing to attempt to amend the complaint; being unprepared for our pretrial conference; and, failing to regularly communicate or ask questions with the investors," the ruling said

The investors asked the Delaware court to look at the "alleged negligence" because it dismissed the underlying case.

"After considering our limited role in the underlying case, the Missouri lawyers met their burden of transferring venue to the Western District of Missouri," the Delaware court ruled.

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U.S. District Court for the District of Delaware U.S. District Court for the Western District of Missouri

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