Chan v. Khermani LLC (2024)

Case details
Full caption
Joseph Wai-Lung CHAN v. KHERMANI LLC and Herman Kariuki
Country
United States
Jurisdiction
Wyoming (WY)
Court
Wyoming Supreme Court
Decided
2024
Disposition
Dismissed
Majority
Lavery (Justice)
Chan v. Khermani LLC, 2024 WL 4924546 (2024) WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.12024 WL 4924546 (Wy. Ch.) (Trial Order)Wyoming Chancery Court.Joseph Wai-Lung CHAN, Plaintiff,v.KHERMANI LLC and Herman Kariuki, Defendants.No. CH-2024-0000022.November 14, 2024.Editor's Note: This document contains discussion of unverified citations, likely generatedby AI tools used by a party or counsel. These citations are not attributable to the Court. Theunverified citations have been preserved as part of the official record, but links are unavailable.Order of DismissalRichard L. Lavery, Judge.*1 [¶1] This court on October 23, 2024, notified plaintiff of its intent to dismiss this case based on lack of subject matterjurisdiction. The court explained that the complaint filed in this action frames a professional malpractice case because itraised the following causes of action: breach of an attorney-client engagement agreement, negligent lawyering, fraudulentmisrepresentation of authority to practice law and impersonation of others through aliases and email addresses, conversion ofclient trust accounts, and intentional infliction of emotional distress resulting from failure to regularly communicate about theclient's case. The complaint also alleges violation of several Wyoming statutes, most of which are found in Article 12 of Title40 and in Titles 6 and 33: the Wyoming Consumer Protection Act, Crimes and Offenses, and Professions and Occupations. Thecomplaint concludes by raising several attorney ethics cases.[¶2] As earlier noted, the chancery court is a specialized court of limited jurisdiction. Wyo. Stat. § 5-13-115. A case in chancerycourt must arise from an enumerated case type. Wyo. Stat. 5-13-115(b); W.R.C.P.Ch.C. 2(b). The court may not hear certaintypes of cases, including professional malpractice claims, cases arising under consumer protection laws, and most criminalmatters. W.R.C.P.Ch.C. 2(e). This case falls under those categories of excluded cases, so the court provided plaintiff 20 daysto show cause why the case should not be dismissed.[¶3] Plaintiff, proceeding pro se, signed and filed on October 30, 2024, a letter of response. The letter highlighted the sameconduct as the complaint but suggested that the lawsuit's “core issues” are breach of contract and fraudulent misrepresentation.The letter included four citations to Wyoming Supreme Court cases. The names of those cases and their citations are as follows:Meyer v. Campbell, 2015 WY 66, 351 P.3d 930; Sullivan v. Johnson, 2006 WY 116, 142 P.3d 369; Smith v. Clark, 2018 WY17, 410 P.3d 125; and Wyoming Trust Company v. First Bank of Wyoming,2010 WY 61, 231 P.3d 257. In the letter, each casereference also included a brief discussion of the case's holding. For example, plaintiff claimed that:In Wyoming Trust Company v. First Bank of Wyoming, 2010 WY 61, 231 P.3d 257, the Wyoming Supreme Court recognizedthe Chancery Court's unique ability to handle complex financial disputes.[¶4] The court is unable to locate any of these cases by either case name or citation reference. As far as the court can tell, theseare fictious cases with bogus summaries. It appears that plaintiff was relying on an artificial intelligence platform to draft hisletter and that references to these cases are “hallucinations.” See, e.g., Kruse v. Karlen, 692 S.W.3d 43, 49 (Mo. Ct. App. 2024),
Chan v. Khermani LLC, 2024 WL 4924546 (2024) WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.2reh'g and/or transfer denied (Apr. 9, 2024).1 This is most clear from the Wyoming Trust Company v. First Bank of Wyomingcase, where the Wyoming Supreme Court in 2010 supposedly opined about the efficiency of a chancery court that would notexist for another decade.*2 [¶5] Pro se filings are subject to Rule 11. WY R CHAN CT RCP Rule 11(a), (b). While Wyoming allows pro se litigations“a certain leniency” in some respects, the law nonetheless requires “reasonable adherence” to all procedural rules. Dewey v.Dewey, 2001 WY 107, 17, 33 P.3d 1143, 1147 (Wyo. 2001). In the context of Rule 11, citating to fictious cases producedby AI hallucinations has been described as an “abuse of the adversary system.” Park v. Kim, 91 F.4th 610, 615 (2d Cir. 2024)(citations omitted) (“A fake opinion is not ‘existing law’ and citation to a fake opinion does not provide a non-frivolous groundfor extending, modifying, or reversing existing law, or for establishing new law. An attempt to persuade a court or oppose anadversary by relying on fake opinions is an abuse of the adversary system.”'). Sanctions under Rule 11 “must be limited towhat suffices to deter repetition of the conduct or comparable conduct by others similarly situated.” WY R CHAN CT RCPRule 11(c)(4).[¶6] The court first notes that it is unpersuaded by plaintiff's attempt to recharacterize the complaint as one for breach contractand fraudulent misrepresentation. Plaintiff's response letter notes that the contract breached was a “attorney-client agreement”and that the fraudulent misrepresentation occurred with defendant “misrepresenting himself as a licensed attorney.” The courtstill views plaintiff's complaint to be in the general class of a professional malpractice case. See In re DSB, 2008 WY 15, 10,176 P.3d 633, 636 (Wyo. 2008) (quoting DF v. MLM (In re MKM), 792 P.2d 1369, 1373 (Wyo.1990) (Subject matter jurisdictionis “the power to hear and determine cases of the general class of which the proceeding belongs.”)). Such a case is excludedfrom this court's jurisdiction.[¶7] The fictitious law presented with plaintiff's letter is sanctionable under Rule 11. The court finds, however, that since thecase will be dismissed for lack of subject matter jurisdiction, a warning of Rule 11 sanctions will suffice. Any future filing byplaintiff that contains fictitious law will be subject to severe penalty.The case is DISMISSED.DATED: 11/4/24/s/ Richard L. LaveryCHANCERY COURT JUDGEFootnotes1“A contextual example of Appellant's reliance on fictitious authority includes:For instance, in Smith v. ABC Corporation, 321 S.W.3d 123 (Mo. App. 2010), the Court of Appeals held that it had the duty to reviewthe grant of judgment as a matter of law de novo, stating that ‘the appellate court should not be bound by the trial court's determinationand must reach its own conclusion based on the record.’Neither the case nor the specific quote it purports to contain exist in reality.”End of Document© 2026 Thomson Reuters. No claim to original U.S. Government Works.
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