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A Los Angeles Superior Court judge ruled Friday that the now-defunct Santa Monica firm, Dickson, Carlson & Campillo, has a right to revenue from “unfinished business” its former partners took with them to Brobeck, Phleger & Harrison. But Judge Cesar Sarmiento found that Dickson, Carlson partners had breached their fiduciary duty by refusing to complete their portion of the work. Specifically, he calculated that the firm turned away 88,000 hours of work for big-ticket client Baxter Healthcare Corp., and he deducted that from the total amount of business Brobeck gained when partners Debra Pole and William Fitzgerald defected from Dickson, Carlson. The judge did not specify how much money — if any — Brobeck owes Dickson, Carlson from the revenues it collected for Baxter work. However, attorneys for both sides claimed the ruling was a victory for their clients. The dispute arose in 1995 when Pole and Fitzgerald jumped to Brobeck, taking Dickson, Carlson’s top client with them. Pole was the national trial counsel and national coordinating counsel for all breast-implant litigation against Baxter. The former Dickson, Carlson partners claim the firm was receiving more than $1 million per month for this work, which represented more than 60 percent of the firm’s revenues. The partners at Dickson, Carlson dissolved their firm a few weeks after Pole and Fitzgerald resigned and reconstituted the firm the following day. The firm disbanded for good in 1997. The partners filed suit against Pole and Fitzgerald and Brobeck, saying they were owed at least $32 million in fees from unfinished Baxter litigation. They invoked a 1984 state appellate decision — Jewel v. Boxer, 156 Cal.App.3d 171 — which found that partners from a dissolved law firm must share profits from the unfinished business of the firm, unless they have an agreement that says otherwise. Sarmiento’s Friday ruling will result in a “$3 million to $5 million swing from us to them,” said Paul Murphy, a partner at Santa Monica’s O’Neill, Lysaght & Sun who represents the former Dickson, Carlson partners. “We think we can get back” as much as $20 million under this analysis. But Elliot Peters, a partner at Keker & Van Nest who represents Pole and Fitzgerald, said the shift of 88,000 hours of unfinished business off Brobeck’s ledger would come out to $10 million to $12 million. In addition, he said, additional money would be shaved from Dickson, Carlson’s claim since the judge more narrowly defined what constituted unfinished business and also found that compensation to Brobeck partners who worked on the Baxter litigation must be deducted from Brobeck’s gross Baxter revenues. “The accounting is either going to lead to a result with the plaintiff owing our client about $1 million or a wash,” Peters said. Appearing before Sarmiento in L.A. County’s Malibu courthouse last month, Keker & Van Nest attorneys argued that the Dickson, Carlson partners had breached their fiduciary duty, dumping several cases without telling Baxter of their intention to do so. Judge Sarmiento cited this evidence in his ruling. Dickson, Carlson Managing Partner Ralph Campillo and the remaining partners “breached their duty to wind up and complete the unfinished business” of the original Dickson, Carlson firm, Sarmiento wrote in his opinion. “The plaintiffs cannot successfully argue then that Pole and Fitzgerald agreed to do a disproportionate share of the work.” The litigation between the two parties is far from over, however. Both sides will present arguments as to the specific amount of money relating to unfinished business. Once the judge makes his final rulings on this matter, the second phase of Campillo v. Pole, 039135 and 039264, will go to a jury trial. In that tort action, the former Dickson, Carlson partners claim Pole and Fitzgerald breached their fiduciary duty by sharing proprietary information with Brobeck that enabled the firm to obtain Baxter’s business. They also claim Brobeck interfered with contractual relations and engaged in unfair competition. This is the second time the case has gone through the courts. L.A. County Superior Court Judge Julius Title ruled in 1998 that Jewel did not apply to the Dickson, Carlson dissolution. Retired L.A. County Superior Court Judge Richard Harris later consolidated the Jewel action with the tort claim and dismissed the case. The appeal court subsequently ruled that the Dickson, Carlson group was free to pursue all of its claims.

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