Opinion
Civil No. 01-244-HA.
June 13, 2001.
OPINION AND ORDER
I. Introduction and Factual Background.
Plaintiff Robert C. Torre is a resident of Vancouver, Washington, and Defendant Jeffrey J. Rosas is a resident of Lane County, Oregon. Plaintiff alleges that in February 1999, he contacted Defendant Rosas, an Oregon attorney, about filing a possible malpractice action against another attorney, Nickolas Nylander, who represented plaintiff in a criminal action in Coos Bay, Oregon. Plaintiff believed that Nylander had performed poorly at plaintiff's criminal trial and that he had been convicted as a result. Defendant Rosas required plaintiff to pay a $500 retainer and sign a fee agreement that stated, "The client hereby employs the attorney to investigate and pursue a claim against Nickolas Nylander." (Plaintiff's Response to Defendant's Motions to Dismiss and Strike, Ex. 2.) Plaintiff signed the agreement on February 8, 1999. Defendant Rosas also asked plaintiff to send him a copy of the transcript from the criminal trial. After reviewing the transcript, Defendant Rosas sent plaintiff a letter dated March 4, 1999, informing plaintiff that he had determined plaintiff did not have a claim for malpractice against Nylander. (Id., Ex. 1.) Defendant Rosas informed plaintiff that he could not in good faith pursue the claim. (Id.)
In that letter Defendant Rosas detailed the reasons he believed plaintiff did not have a malpractice claim. Plaintiff had told Defendant Rosas that he had been charged with entering onto the property of an elderly woman and throwing dog feces at her home. (Id.) Plaintiff also told Defendant Rosas that Nylander had failed to adduce at trial photographs of the woman's dog on his property without a leash. During his review of the transcript, however, Defendant Rosas discovered that plaintiff had entered onto the elderly woman's home when she was alone and threw dog feces into her house. (Id.) Plaintiff also threatened her life and the life of her dog. (Id.) Upon reviewing the photographs that plaintiff complained had not been adduced at trial, Defendant Rosas found that none of the pictures showed the dog on plaintiff's property as plaintiff contended. Defendant Rosas also noted that plaintiff's admissions during his testimony at trial established all of the elements of the crimes with which plaintiff had been charged. (Id.) As a result, Defendant Rosas declined to pursue the malpractice claim against Nylander and cautioned plaintiff that Nylander might obtain monetary sanctions against plaintiff if a malpractice action were filed. Defendant Rosas charged plaintiff $430 for the 4.3 hours he spent reviewing the file and conferring with plaintiff on the telephone. He refunded $64.60 to plaintiff from the initial retainer.
Plaintiff complains that he has since learned that a case decided by the Oregon Supreme Court, Stevens v. Bispham, 316 Or. 221, 851 P.2d 556 (1993), holds that a criminal defendant cannot bring a malpractice action against his or her attorney unless the conviction is reversed or expunged. He contends that Defendant Rosas withheld knowledge of this case so that he could bill plaintiff for his investigation into plaintiff's claim against Nylander. His complaint alleges the following claims against Defendant Rosas (1) discrimination based on plaintiff's status as a non-attorney; (2) common-law fraud; and (3) professional negligence. Defendant Rosas has moved for dismissal of plaintiff's claims and moved to strike plaintiff's request for damages for emotional distress.
Plaintiff has moved for leave to file an amended complaint, which modifies certain minor aspects of his initial complaint. In the interests of efficacy, the court will deem the amended complaint as having been filed and treat Defendant Rosas's motion to dismiss as seeking to dismiss the amended complaint.
II. Defendant Rosas's Motion to Dismiss and to Strike.
A. Discrimination
Plaintiff argues that his claim for discrimination may be brought pursuant to 42 U.S.C. § 1981 and 1983. 42 U.S.C. § 1983 is a federal statute allowing persons whose federal constitutional rights have been violated by government officials to sue in federal court. Section 1983 does not allow such a claim to be brought against private parties who were not acting under color of state law. West v. Atkins, 487 U.S. 42, 108 S.Ct. 2250 (1988). The Supreme Court has held that private attorneys do not act under color of state law. Polk v. Dodson, 454 U.S. 312, 319 n. 9 (1981). Therefore, plaintiff cannot bring a discrimination claim under§ 1983. Section 1981 provides a cause of action for persons who are discriminated against on the basis of their race in the formation and enforcement of contracts. It provides a cause of action against both private and public actors; however, "section 1981 redresses only discrimination based on race." 775 F.2d 998, 1010 (9th Cir. 1986). Discrimination on other bases, such a gender, does not provide a cause of action under § 1981. Id. Here, plaintiff alleges that he was discriminated against because he was a non-lawyer. Even if true, discrimination on that basis does not provide a cause of action under § 1981. As plaintiff cannot bring a discrimination claim under § 1983 or § 198, his discrimination claim is dismissed.
A court is not required to grant leave to amend a claim brought by a pro se plaintiff where the claim has no legal basis and cannot be saved by amendment. Lopez v. Smith, 203 F.3d 1122, 1129 (9th Cir. 2000); Balisteri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990).
B. Fraud and Professional Negligence
Defendant Rosas seeks to dismiss plaintiff's fraud claim. A viable claim for fraud must allege (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity; (5) the intent that the representation should be acted on by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) reliance on its truth; (8) a right to rely on its truth; and (9) proximate injury. Smallwood v. Fisk, 146 Or. App. 695, 934 P.2d 557 (1997). In addition, the federal rules require that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed.R.Civ.P. 9(b). "The requirements of Rule 9(b) are designed to prohibit a plaintiff from unilaterally imposing upon the court, the parties, and society enormous social and economic costs absent some basis." Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1986). Here, plaintiff has failed to state a claim for fraud. Plaintiff has alleged no facts suggesting that Defendant Rosas knew of the Oregon Supreme Court's decision in Stevens v. Bispham at the time plaintiff sought advice from him.
Moreover, even if Defendant Rosas knew of the Stevens decision, plaintiff's allegations are insufficient to prove fraud. Stevens does not bar lawsuits for professional malpractice against a criminal defense attorney. Stevens merely holds the conviction must be reversed or invalidated before a criminal defendant can sue the defense attorney. 316 Or. at 223. Thus, Defendant Rosas actions in reviewing the transcript of plaintiff's criminal trial in order to determine whether he had a cause of action were consistent with Stevens. In order for plaintiff to sue Nylander, Defendant Rosas needed to determine whether error had been committed in his criminal trial sufficient for his conviction to be reversed or invalidated and whether that error was attributable to Nylander. Even if Defendant Rosas had been aware of Stevens, his investigation of the criminal transcript and evidence was appropriate and does not provide a basis for a fraud claim.
Likewise, plaintiff's allegations do not provide the basis for a professional negligence claim. In order to prove such a claim, plaintiff must prove that Defendant Rosas breached a duty to plaintiff, that harm measurable in legal damages resulted, and that Defendant Rosas caused the harm. Stevens v. Bispham, 316 Or. 221, 227, 851 P.2d 556 (1993). In this case Defendant Rosas did not breach a duty to plaintiff nor did he cause plaintiff harm; he did exactly what plaintiff asked him to do. He determined that in his opinion, plaintiff did not have a claim for malpractice against Nylander. As noted above, in order to sue Nylander, it was necessary for Defendant Rosas to review the transcript of the criminal trial to determine whether grounds existed for the reversal of plaintiff's conviction and to determine whether an error by Nylander had caused the conviction. Plaintiff suffered no legally recognizable injury from Defendant Rosas's professional actions.
C. Alternative Grounds for Dismissal
The court finds that plaintiff's claims should be dismissed for another reason. Defendant Rosas seeks to strike plaintiff's claim for mental trauma and financial loss as a result of the alleged fraud. Oregon law does not allow recovery of these damages. "It is well settled in this state that in an action for fraud, plaintiff's recovery is limited to that measured by the `out of pocket' rule unless the actionable misrepresentation was a warranty of value, in which case plaintiff would recover under the `benefit of the bargain' rule." Staley v. Taylor, 165 Or. App. 256, 264, 994 P.2d 1220 (2000); cf. Farris v. United States Fidelity and Guaranty Corp., 587 P.2d 1015, 1016-17 (1978) (damages for emotional distress are not available for a breach of contract). Because this case does not involve a warranty of value, plaintiff's recovery is limited to his "out of pocket" loses. In this case those losses, at most, are $430. Therefore, his request for damages for emotional distress related to his fraud claim is stricken.
A warranty of value involves the situation where the value of the product or service offered is misrepresented. Pape v. Knoll, 69 Or. App. 372, 385, 687 P.2d 1087 (1984).
In fact, it appears that Defendant Rosas refunded plaintiff's money when plaintiff contacted the Oregon Bar Association complaining about Rosas's handling of his case.
In addition, plaintiff's claim for professional negligence does not support plaintiff's request for damages for emotional distress. For example, in Hilt v. Bernstein, 75 Or. App. 502, 514, 707 P.2d 88 (1985), the Oregon Court of Appeals held that the trial court did not err in striking from a malpractice complaint a request for damages for emotional distress. "Plaintiff's interest invaded is solely an economic one . . . . She can be adequately compensated by damages for the loss of her [legal claim] and related legal fees." Id. At this time, plaintiff has no legal claim for malpractice against Nylander as his conviction has not been overturned and Defendant Rosas action did nothing to jeopardize a malpractice claim in the event plaintiff's conviction is overturned. The legal fees paid to Defendant Rosas amounted to only $430. Thus, plaintiff is limited to recover, at most, $430. His request for damages for emotional distress and for his criminal conviction is stricken.
Because plaintiff's federal claims have been dismissed, in order for diversity jurisdiction to lie in this federal court, the amount in controversy must exceed $75,000. 28 U.S.C. § 1332. Because plaintiff's request for damages for emotional distress has been stricken, plaintiff cannot meet the $75,000 requirement. Pachinger v. MGM Grand Hotel-Las Vegas, Inc., 802 F.3d 362, 363-64 (9th Cir. 1986) (a claim may be dismissed if the court concludes to a legal certainty that the claim does not satisfy the jurisdictional amount). Even if plaintiff's professional negligence or fraud claim were viable, he could recover, at most, $430 as compensatory damages.
IV. Conclusion
Plaintiff's motion to amend his complaint, (doc. 17), is granted. The court deems the amended complaint as having been filed and treats Defendant Rosas's motion to dismiss as seeking to dismiss the amended complaint. Defendant Rosas's motion to dismiss and to strike, (doc. 4), is granted. Plaintiff's motion to strike Defendant Rosas's motion to strike, (doc. 14), is denied. Defendant Rosas's motion to strike plaintiff's reply, (doc. 12), is denied. Plaintiff's complaint is dismissed with prejudice. All other pending motions are denied as moot.
IT IS SO ORDERED.