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Conner v. Duncan

United States District Court, M.D. North Carolina

March 31, 2015

RICHIE H. CONNER, Plaintiff,
v.
MARK J. DUNCAN, TRIAL AND ERRORS, INC., and WESTERN FINANCIAL SERVICES, INC., Defendants.

MEMORANDUM OPINION, ORDER AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

JOI ELIZABETH PEAKE, Magistrate Judge.

This civil action for fraud comes before the Court on Defendants' Motion to Dismiss [Doc. #43] pursuant to Federal Rule of Civil Procedure 12(b)(1), Plaintiff's Motion for Partial Summary Judgment [Doc. #50], and Plaintiff's Motion for Entry of Default [Doc. #53]. For the reasons set out below, the Court recommends that Western Financial Services, Inc. be dropped as a party, and that Plaintiff's claims for mail fraud, wire fraud, and unauthorized practice of law under 28 U.S.C. § 1654 be dismissed, but that Defendants' Motion to Dismiss otherwise be denied. The Court further recommends that Plaintiff's Motion for Partial Summary Judgment and Motion for Entry of Default be denied. Finally, the Court will extend the discovery period in this case through May 29, 2015, and will direct that this matter be set on a trial calendar.

I. FACTS, CLAIMS, AND PROCEDURAL HISTORY

Plaintiff Conner, proceeding pro se, alleges in his Amended Complaint that he is a Virginia resident but presently incarcerated in Pennsylvania due to a federal criminal conviction. (Am. Compl. [Doc. #28] ¶ 8.) He alleges that Defendant Duncan held himself out as a licensed attorney specializing in post-conviction matters when, in fact, Defendant Duncan was not a licensed attorney. Plaintiff alleges that Defendant Duncan operated through two business, Trial and Errors Inc. and Western Financial Services, Inc., and that the Defendants collectively defrauded Plaintiff in connection with court filings and other communications made on his behalf from 2009 until 2011. Plaintiff alleges that he caused approximately $16, 400 to be transferred to Defendants in payment for fraudulent "legal services."

Plaintiff raises the following claims in his Amended Complaint: Count 1, common law fraud; Count 2, mail fraud; Count 3, wire fraud; Count 4, engaging in the practice of law under N.C. Gen. Stat. § 84-2.1; Count 5, engaging in the unauthorized practice of law under N.C. Gen. Stat. § 84-4; Count 6, unauthorized practice of law under 28 U.S.C. § 1654; Count 7, unjust enrichment; and Count 8, ghostwriting.

Plaintiff alleges that Defendant Duncan is a citizen of North Carolina, that Defendant Trial and Errors, Inc. is an entity located at the same address as Defendant Duncan and is solely controlled by him, and that Defendant Western Financial Services, Inc. is also located at the same address as Defendant Duncan and solely controlled by him. Plaintiff claims that this Court may exercise jurisdiction through either diversity jurisdiction or federal question jurisdiction pursuant to the federal statutes he alleges Defendants have violated.

According to Plaintiff, in January 2008 Defendant Duncan revived a scheme he had previously engaged in to obtain money from individuals for legal services by making numerous misrepresentations. Defendant Duncan focused on state and federal inmates by sending business cards and flyers to prisons and using the internet-linked, prison email system as well as the United States mail. Plaintiff contends that Defendant Duncan misrepresented that he held a J.D. degree or was an attorney and that he was an expert or specialist in post-conviction relief.

Plaintiff was convicted and sentenced to 130 months in prison in May 2008. In July 2008, Plaintiff was housed in Ohio and talked to another prisoner about obtaining counsel to assist in post-conviction matters. Plaintiff decided to retain Defendants and instructed his common-law wife, Ms. Montgomery, to make the arrangements. She contacted Defendant Duncan and conveyed Plaintiff's intention of retaining Defendants in connection with the filing of a Motion to Vacate Sentence pursuant to 28 U.S.C. § 2255. Defendant Duncan allegedly quoted a retainer fee in the amount of $2000.00. Thereafter, Ms. Montgomery transferred cash to accounts specified by Defendant Duncan. Beginning in October 2009 and ending in May 2011, Ms. Montgomery made approximately 13 deposits to these accounts totaling $16, 400.00. (Am. Compl. [Doc. #28] at 7-10.)

Plaintiff states that Defendants prepared and in some cases filed various legal documents on his behalf. These documents included a section 2255 motion, an appeal of the denial of that motion, a petition for writ of certiorari from the denial of the appeal of that motion, two civil rights complaints pursuant to 42 U.S.C. § 1983 (2012), an appeal and petition for writ of certiorari from the denial of section 1983 relief, as well as various correspondence with the Bureau of Alcohol, Tobacco, and Firearms and the Federal Bureau of Prisons. (Id. at 11-12.)

Plaintiff alleges that Defendant Duncan lacks any formal training in the law. Plaintiff also claims that Defendant Duncan signed Plaintiff's signature to numerous court filings without Plaintiff's consent. Plaintiff says that Defendants have victimized many inmates throughout the United States by use of this scheme. One such inmate, William C. Davis, has filed a very similar Complaint against Defendant Duncan and Defendant Trial and Errors, Inc. in this Court [No. 1:12CV262]. These two actions have been consolidated for purposes of discovery and pretrial matters only.

Plaintiff alleges that Defendant Duncan pleaded guilty to multiple counts of mail fraud in 1997. He began his supervised release in 2002, but was sentenced again in 2005 upon a supervised release violation to 11 months in prison. Defendant Duncan completed his lengthened term of supervised release in 2008, according to Plaintiff.

Defendant Duncan concedes in his Answer that he was convicted of mail and wire fraud. He contends that he obtained a J.D. degree from Cambridge State University in 2009. He states that he opened Trial & Errors, Inc. in 2005 to assist inmates in filing suits to attack their convictions. The Virginia State Bar advised him that he could not practice law while he was still in law school. Thereafter, Defendant Duncan moved to North Carolina. Defendant Duncan admits that he assisted pro se federal inmates, but claims that they knew he was "non-licensed counsel" and about his prior conviction. (Answer [Doc. #39] at 3.)

In an earlier Order [Doc. #65], the Court resolved several pending motions and discussed Defendants' Motion to Dismiss. The Court found that Plaintiff has not alleged any basis for federal question jurisdiction. He has alleged potential state law claims for fraud and unjust enrichment. However, federal jurisdiction for those claims must be based upon diversity jurisdiction. The Court noted that Defendant Duncan had made inconsistent statements regarding the status of Defendant Western Financial Services, Inc. ("Defendant Western"), which affected its citizenship for diversity purposes. Therefore, the Court ordered Defendant Duncan to submit to the Court documents showing whether Defendant Western was incorporated and if so, the state in which it was incorporated.

Defendant Duncan filed a response to the Court's Order, but failed to submit any documents that shed light on the citizenship of Defendant Western. Defendant Duncan states in his response that Defendant Western was incorporated as a "Sub Chapter S Corporation in Richmond Virginia around September of 2007." (Response [Doc. #66] at 2.) He also says that it "became insolvent around 2007, " and that the "State Corporation Commission had ordered the Corporation as invalid and non-existent." (Id.) Plaintiff responded to Defendant Duncan's submission [Doc. #67] arguing that Defendant Western was likely in existence well before 2007, but that the records of the Virginia State Corporation ...


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