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Schreiber v. Friedman

Law Firm's, Principals' Improper, Unethical Self-Help Leads to Discharge, Fee's Forfeiture

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MEMORANDUM AND ORDER   Plaintiff Steven Schreiber, together with his father Eugene Schreiber (collectively, the “Schreibers”) and the company in which the two men are partners, plaintiff Two Rivers Coffee, LLC (“TRC”), seek the vacatur of a charging lien that attorneys Jay and Carol Nelkin and their law firm, Nelkin & Nelkin, P.C. (the “Firm” or, collectively with the two attorneys, the “Nelkins”) have asserted against them for their legal work in this action on the ground that they discharged the Nelkins for cause. See Docket Entry (“DE”) 623.1 For the reasons set forth below, I now grant the motion.2 I. Background I assume the reader’s general familiarity with the facts and procedural history of this case but briefly summarize the background that informs the instant motion. In 2011, the Schreibers co-founded TRC, which specialized in the sale and distribution of single-serve coffee pods and related products. They eventually brought in two additional investors as their partners in the company: defendant Emil Friedman (“Friedman”) and non-party Mayer Koenig (“Koenig”). In May 2015, the Schreibers became concerned that Friedman — who by then had amassed a controlling interest in TRC — was misappropriating funds and converting company assets for himself. See DE 623-2 (Declaration of Steven Schreiber) (“S. Schreiber Decl.”)

7-9; DE 629 (Declaration of Carol Nelkin) (“C. Nelkin Decl.”) 40. To protect their interests, the Schreibers engaged the Firm as counsel to represent themselves and, derivatively, TRC. The Schreibers agreed that the Firm would receive “one-third of the total recovery…(including any funds, increased equity or other benefits), by virtue of a settlement or final judgment in the litigation.” DE 623-3 (Engagement Letter) II.A; see S. Schreiber Decl. 12; C. Nelkin Decl.

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