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Annie Sloan Interiors, Ltd. v. Kappel

United States District Court, E.D. Louisiana

June 13, 2019

ANNIE SLOAN INTERIORS, LTD.
v.
TIMOTHY R.W. KAPPEL, ET AL

         SECTION: "S" (1)

          ORDER AND REASONS

          MARY ANN VIAL LEMMON UNITED WES DISTRICT JUDGE.

         IT IS HEREBY ORDERED that defendants' Motion to Dismiss for Failure to State a Claim (Rec. Doc. 8) is DENIED.

         FACTUAL BACKGROUND

         This matter presents another conflict related to Annie Sloan Interiors, Ltd. v. Jolie Design & Decor, Inc., 17-CV-11767 (E.D. La.). In the instant suit, Annie Sloan Interiors, Ltd. ("ASI") is suing its former attorney, his firm, and his insurance company, for breach of fiduciary duty and malpractice. Briefly, in this case, ASI contends that attorney Timothy Kappel breached his duty to it by representing Jolie Design & Decor, Inc. ("JDD") and Jolie Home, LLC ("Jolie Home") in an attack on the CHALK PAINT® trademark (based on genericness), when he had previously represented ASI in registering and defending the trademark. ASI also alleges that Kappel committed malpractice by "breach[ing] the fiduciary duties of care, communication, and loyalty owed ASI." Cmplt. ¶ 62. Specifically, the Complaint references the following Louisiana Rules of Professional Conduct ("RPC"): RPC 1.4 (duty to communicate); RPC 1.6 (lawyer shall not reveal information relating to the representation of the client); RPC 1.8 (b) (lawyer shall not use information from one client to the disadvantage of another); RPC 1.9 (lawyer shall not represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of a former client, absent consent).

         Defendants oppose, arguing that ASI has failed to state a claim because it has not adequately alleged an existing attorney-client relationship, breach of an applicable standard of care for the rendition of legal services, or that ASI suffered recoverable damages as a result of Kappel's provision of legal services.[1]

         BACKGROUND

         ASI's complaint alleges, inter alia, that:

From 2011 to 2018, attorney Timothy R.W. Kappel acted as U.S. trademark counsel for ASI, a United Kingdom-based decorative paint company. As trademark counsel, Kappel assisted ASI with its U.S. trademark applications and helped defend ASI's trademarks against third-party infringers. Even before ending his relationship with ASI, however, Kappel began attacking ASI's valid trademarks on behalf of a different client. In so doing, Kappel breached his fiduciary and professional duties of loyalty to ASI. These breaches have caused ASI to suffer significant damages and have allowed Kappel and his law firm Farmer Purcell to enrich themselves unjustly.

Cmplt., ¶ 1.

         Legal Standard

         Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a motion to dismiss a complaint for failure to state a claim upon which relief can be granted. "To survive a Rule 12(b)(6) motion to dismiss, 'enough facts to state a claim for relief that is plausible on its face' must be pleaded." In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atl. v. Twombly, 550 U.S. 544 (2007). A claim is plausible on its face when the plaintiff pleads facts from which the court can “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Twombly, 550 U.S. 544, 555 (citations omitted). The court “must accept all well-pleaded facts as true and view them in the light most favorable to the non-moving party.” In re S. Scrap Material Co., LLC, 541 F.3d 584, 587 (5th Cir. 2008). However, the court need not accept legal conclusions couched as factual allegations as true. Iqbal, 556 U.S. at 678.

         I. Breach of Fiduciary Duty

         The elements of a breach of fiduciary duty claim under Louisiana law, [2] are: "(1) the existence of a fiduciary duty on the part of the defendant; (2) an action taken by the defendant in violation of that duty; and (3) damages to the plaintiff as a result of that action." Hall v. Habul, 2014 WL 2441177, at *2 (M.D. La. May 30, 2014). "The relationship between an attorney and his client is frequently characterized as a fiduciary relationship." Schlesinger v. Herzog, 672 So.2d 701, 712 (La. Ct. App. 1996), writ denied, 679 So.2d 1381 (La. 1996) (citing Plaquemines Parish Com. Council v. Delta Development Co., Inc., 502 So.2d 1034, 1040 (La.1987)(other citations omitted). “A claim for breach of fiduciary duty is separate and apart from a claim of legal malpractice....” In re Queyrouze, 580 B.R. 671, 678 (E.D. La. 2017)(citing Hiern v. Sarpy, 1995 WL 640528, at *13 (E.D. La. 1995); see also Gerdes v. Cush, 953 F.2d 201, 204-06 (5th Cir. 1992); Newsome v. Mendler, 2015 WL 5012310, at *4 n.1 ...


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