Capitol Hill Group, Inc. v. Pillsbury, Winthrop, Shaw, Pittman, Llc,

569 F.3d 485 (D.C. Cir. 2009)


P filed for bankruptcy in February 2002. P's primary asset, commercial property in the District of Columbia, was embroiled in a zoning dispute about parking spaces. The issue continued during bankruptcy proceedings. D, P’s court-approved bankruptcy counsel represented P during the zoning process. On February 24, 2004, the Zoning Administrator finally settled on a total of 177 spaces, an announcement it made orally. The ruling was not issued in written form until September 9, 2004, at which time it was transmitted D, but not to P itself. In the interim the bankruptcy court granted D's request to terminate its court-approved representation of P. D returned its zoning-related files to P but did not tell the zoning administrator it had stopped representing P. As a courtesy, D informed P of the decision to reconsider its favorable January ruling at a hearing to take place on February 24--information a D's attorney gleaned while present at the board on other business. P first complained that D's fees were unreasonable. The bankruptcy judge made oral findings that D's services were professional and that D deserved to be compensated for those services. The district court affirmed the bankruptcy court's decision. Fee disputes continued. On April 12, 2006, the parties made one final appearance before the bankruptcy court, after D filed a motion to compel because it feared P was withholding further claims. The bankruptcy court specifically asked P whether it had any other claims against the firm. P's counsel stated 'there are concerns that P has about the representation that D provided during its representation. But nothing's been filed.' P also represented it 'had no outstanding claims against D arising out of the bankruptcy proceedings.' The bankruptcy court noted that P could have pursued malpractice claims against D regarding the adequacy of its representation,' in addition to claims P had made about excessive fees and related professional misconduct, 'but that it had failed to do so and would, therefore, be barred from later asserting such claims by the doctrine of res judicata.' P now contends in this suit that D committed malpractice by failing to notify P when the board issued the September 2004 order, and by failing to make a particular legal argument to the board. D removed the case to federal court. The district court concluded it had jurisdiction, and granted summary judgment for D because P's claims are barred by res judicata. P appealed.