Hermine Hanlin v. Marvin M. Mitchelson

Rule of Law:

Courts should liberally grant leave to amend a complaint under Fed.R.Civ.P. 15(a), especially for pro se litigants, unless there is clear evidence of undue delay, bad faith, or undue prejudice, and the status and scope of an attorney-client relationship's termination are unresolved questions of fact precluding summary judgment on related malpractice claims.

Facts:

• In December 1976, Hermine Hanlin entered into a written partnership agreement with the four members of “The Manhattans” singing group, making her an equal business partner and manager, entitled to profits and commissions.
• In 1981, after the Manhattans received a Grammy award, a falling out occurred between Hanlin and the group.
• The dispute proceeded to arbitration according to the partnership agreement, and Hanlin retained California attorney Marvin Mitchelson, paying him a $25,000 flat fee with a verbal agreement he would handle the case “as far as it has to go.”
• During arbitration hearings, Hanlin was questioned about withdrawing $26,700 from a joint account she shared with group member Kenneth Kelley; Mitchelson, who was not previously informed, learned of the withdrawal during testimony, and Kelley asserted a formal counterclaim for the amount.
• On December 23, 1982, the arbitral award directed The Manhattans to pay Hanlin $20,620 and Hanlin to pay Kelley $26,750, and also declared Hanlin’s percentage interests in certain contracts, directing assignments to be executed.
• Hanlin, unhappy with the award, repeatedly urged Mitchelson to appeal it or persuade the panel to correct alleged errors, which he declined, stating the award was “final and … not appealable.”
• On March 28, 1983, Hanlin asked Mitchelson to return her $25,000 fee; Mitchelson responded on April 21, 1983, stating Hanlin was not entitled to a refund and owed his office $6,500 in costs, while also offering to seek to reopen the arbitration.
• On May 24, 1983, New York attorney Neal Rosenberg wrote to Mitchelson, stating he had been retained by Hanlin concerning the appeal, disagreeing with Mitchelson’s assessment, and noting that the deadline for seeking to vacate or modify the award had passed.

Procedural Posture:

• Hermine Hanlin filed a diversity action against Marvin Mitchelson in the United States District Court for the Southern District of New York, alleging “intimidation,” negligence, defamation, and malpractice.
• Mitchelson filed a counterclaim against Hanlin for $6,500 in costs and expenses.
• Mitchelson filed a single motion seeking either dismissal of the complaint under Fed.R.Civ.P. 12(b)(6) or summary judgment under Fed.R.Civ.P. 56.
• Judge Edelstein dismissed Hanlin’s claims for intimidation and defamation and granted partial summary judgment to Mitchelson on the negligence and malpractice claims, preserving only Hanlin’s claim that Mitchelson had improperly failed to object to the arbitral panel’s consideration of the $26,700 Kelley counterclaim.
• Hanlin obtained some discovery, and subsequently moved the district court for an order compelling a continuation of Mitchelson's deposition.
• Mitchelson cross-moved for summary judgment on the remainder of Hanlin’s complaint.
• Hanlin then moved for leave to amend her complaint to add claims under contract and negligence theories based on Mitchelson’s alleged failure to confirm the arbitral award within the one-year limitations period.
• In an opinion by Judge Leisure, to whom the case had been reassigned, the court denied Hanlin’s motion to compel discovery, denied leave to amend, and granted summary judgment to Mitchelson, dismissing Hanlin’s complaint.
• Hanlin, acting pro se, appealed from the judgment entered December 12, 1985, to the United States Court of Appeals for the Second Circuit; Mitchelson’s counsel formally withdrew his counterclaim during oral argument before the appellate court to cure a jurisdictional defect.