Philadelphia defense firm Swartz Campbell has sued Valley Forge, Pa.-based Chartwell Law Offices over what it claims was the “improper interference with and destruction of” its business interests, client relationships and partnership agreements, largely related to a recent lateral move that resulted in the closing of Swartz Campbell’s Fort Myers, Fla., office and the opening of a Fort Myers location for Chartwell.
The 35-page complaint, filed September 10, comes after Swartz Campbell filed a writ of summons in the Philadelphia Court of Common Pleas’ Commerce Court program August 14 and alleges tortious interference with contract, conversion, aiding and abetting breach of fiduciary duty, misappropriation, unfair competition and civil conspiracy.
While Chartwell is the only named defendant in the complaint, the vast majority of the complaint centers on Chartwell’s hiring of James R. Myers, who had been the managing partner of Swartz Campbell’s Fort Myers office, and Jessica A. Teitelbaum, who was previously an associate in Swartz Campbell’s Fort Myers office.
Myers and Teitelbaum had been the only attorneys in Swartz Campbell’s Fort Myers location, which has since closed.
“Chartwell, by and through its agents and employees, has engaged in a pattern of conduct to systematically induce or entice members and employees of Swartz Campbell to leave Swartz Campbell and join Chartwell with the intention or design to interfere with the client relationships of Swartz Campbell, to destroy or usurp the competitive business operations of Swartz Campbell and to convert revenue owed to Swartz Campbell without consent or lawful justification,” the complaint alleges.
According to the complaint, Swartz Campbell maintained a Fort Myers office from June 2001 until July 24 of this year, when Myers and Teitelbaum left.
Prior to their departure, Swartz Campbell had no intention of closing the office, the complaint said.
According to the complaint, Myers submitted his letter of resignation to Swartz Campbell management via email on July 6, informing them that Chartwell was willing to take on Swartz Campbell’s Fort Myers lease and purchase certain office furnishings from Swartz Campbell.
The complaint alleges that Myers violated Swartz Campbell’s limited liability company agreement by becoming affiliated with Chartwell and arranging for the firm to take over the Fort Myers office before withdrawing as a member of Swartz Campbell.
Myers’ resignation letter revealed that he had notified Teitelbaum and paralegal Wendy Pruneda that he was leaving Swartz Campbell and that he had arranged positions for both of them at Chartwell, again violating Swartz Campbell’s LLC agreement, according to the complaint.
“Chartwell enlisted Myers to assist in arranging for Teitelbaum and Pruneda to abandon Swartz Campbell in favor of employment with Chartwell simultaneous with Myers’ departure to assure Swartz Campbell could not continue its operation and business in Florida and transition of the business to Chartwell,” the complaint alleges.
Four days later, on July 10, according to the complaint, Myers wrote to Swartz Campbell management to inform them that he, Teitelbaum and Pruneda intended to leave the firm and join Chartwell on July 16 and would seek to notify clients and obtain letters of instruction by that date unless told otherwise.
According to the complaint, Swartz Campbell’s LLC agreement requires a withdrawing member to wait 10 days between notifying the management committee and communicating his or her withdrawal.
Jeffrey B. McCarron, chair of Swartz Campbell’s management committee, expressly advised Myers via email July 10 not to “send letters or take any action other than in the best interest and in furtherance of the business of Swartz Campbell,” according to the complaint.
On July 11, Clifford A. Goldstein, chief executive officer of Chartwell, allegedly called McCarron, demanding that Swartz Campbell allow Myers to leave the firm earlier than permitted by the LLC agreement, the complaint said.
Goldstein, according to the complaint, indicated to McCarron that Chartwell was interested in obtaining “a ready-made office without the ordinary start-up costs” and that Chartwell “had a use for the lower billable rate attorneys like the other employees and members who had recently left their affiliation with Swartz Campbell to become affiliated with Chartwell.”
Goldstein also allegedly told McCarron during the call that he had advised Myers to disregard Swartz Campbell’s LLC agreement and to terminate his affiliation with Swartz Campbell immediately, according to the complaint.
Later that same day, McCarron wrote to Goldstein informing him that Chartwell would be engaged in tortious interference if Myers followed those instructions, the complaint said.
On July 17, McCarron wrote to Myers to inform him that a Swartz Campbell associate, Candidus Dougherty, would be coming to the Fort Myers office July 26-27 to perform a file review, according to the complaint.
On July 24, the complaint alleges, Myers, Teitelbaum and Pruneda “abandoned” the office.
That day, Dougherty called the office and spoke with Teitelbaum, who informed her that no one planned to appear for work at Swartz Campbell again, but that all the client files remained in the Fort Myers office, according to the complaint.
On July 25, Dougherty emailed Myers and encouraged him to speak with McCarron before the situation worsened, but Kenneth M. Dubrow, a partner in Chartwell’s Philadelphia office, informed Swartz Campbell that he would be handling all communications regarding Myers’ departure, according to the complaint.
When Dougherty arrived at the Fort Myers office, she found that Myers had sent “client authorization letters” to certain clients without Swartz Campbell’s authorization, the complaint alleges.
Meanwhile, unanswered emails, faxes and phone calls about ongoing client matters continued to come into the Fort Myers office, according to the complaint.
“For all intents and purposes, the matters of representation were abandoned by Myers and Teitelbaum since they had no manner through which they could attend to the client matters without access to the files, email, facsimiles and telephone correspondence from clients, counsel and the courts about the matters,” the complaint said.
In an email exchange between Dougherty and Dubrow on July 25, Dubrow said Myers and Teitelbaum had “temporarily vacated the premises as they were unable to reach an agreed upon departure date with your firm despite request,” according to the complaint.
The complaint alleges that Chartwell planned to have Myers and Teitelbaum return to the office once Swartz Campbell relinquished it to Chartwell and that Chartwell continued to refuse to provide specific information about the handling of client matters.
Eventually, according to the complaint, Chartwell provided a list of cases to Swartz Campbell, “which amounted to nothing more than the matters of representation Myers had decided he wanted to transfer to Chartwell.”
“Swartz Campbell was forced to perform an independent review and audit of all client files once the client files were returned to Swartz Campbell at great expense and lost billable hours to Swartz Campbell,” the complaint alleges.
On July 26, Swartz Campbell discovered that Myers had moved all the electronic files from the Swartz Campbell file server to an external hard drive and had taken the hard drive with him, according to the complaint.
Myers and Teitelbaum also refused to return their keys to the Fort Myers office, the complaint alleges.
Swartz Campbell had the locks changed and transferred client files from the Fort Myers office to its Philadelphia office for safe keeping, according to the complaint.
The firm further alleges in its complaint that Myers sent out client selection letters that provided clients no real choice whether to stay with Swartz Campbell or move to Chartwell.
Some of those contacted, according to the complaint, were not Myers’ clients under the LLC agreement.
All the while, according to the complaint, Chartwell benefited from these solicitations.
“By targeting Myers, Chartwell gained a functioning presence in Fort Myers, where it previously lacked a presence, and shut down not only Swartz Campbell’s Fort Myers operation but also Swartz Campbell’s Florida presence,” the complaint alleges.
While the bulk of the complaint focuses on Myers, Teitelbaum and the Fort Myers office, it also alleges that Jesse Endler, a former associate in Swartz Campbell’s Philadelphia office who is now an associate in Chartwell’s Philadelphia office, improperly solicited a Swartz Campbell client after leaving the firm.
In addition, the complaint alleges that Thomas F. Reilly, who joined Chartwell’s Philadelphia office last year after more than a decade at Swartz Campbell, had failed to pay fees to Swartz Campbell for contingency-fee cases he continued to handle after his departure.
Also according to the complaint, Chartwell filed its own suit against Swartz Campbell in Lee County, Fla., upon learning of Swartz Campbell’s August 14 writ of summons.
A search of the Lee County civil docket shows Chartwell filed its suit on August 21. Efforts to obtain a copy of the complaint were unsuccessful as of press time.
Swartz Campbell alleges in its complaint that Chartwell’s suit is part of a “continued effort to drive employees from Swartz Campbell and to interfere with the attorney-client relationship between Swartz Campbell and Dougherty.”
In addition to compensatory and punitive damages, Swartz Campbell is seeking injunctive relief banning Chartwell from contacting Swartz Campbell members and employees and soliciting Swartz Campbell clients.
Swartz Campbell is also seeking an injunction prohibiting Chartwell “from further use of Swartz Campbell trade secret information and confidential business records; and from further interference with the business interests of Swartz Campbell and attorney fees and costs incurred in this action.”
Goldstein, Reilly and Myers could not be reached.
Endler referred comment to Dubrow, who also could not be reached.
Jerome A. Pivnik, the partner in Chartwell’s Miami office who filed the Lee County suit on behalf of the firm and against Swartz Campbell, also referred comment to Dubrow.
McCarron declined to comment on either suit.