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A Florida businessman has accused South Carolina-based Nelson, Mullins, Riley & Scarborough and Glenn W. Sturm, an Atlanta partner with the firm, of malpractice and fraud. It’s a case of an attorney “wearing too many hats,” says Bernard H. Dempsey Jr. of Orlando’s Dempsey & Sasso. Dempsey represents John P. Kelly, former chief executive officer of Florida-based M2Direct, who filed suit against Nelson Mullins and Sturm in a federal court in Tampa, Fla., in June. The case stems from Sturm’s involvement as M2Direct board vice chairman, corporate secretary and investor at the same time he represented Kelly on personal matters and served as the company’s outside counsel, according to the complaint. Dempsey says Sturm should have recognized that his representation of Kelly could conflict with his personal stake in the company. M2Direct, a Tampa, Fla., marketing firm, filed for Chapter 11 protection from creditors under the federal bankruptcy code in April 2000. Kelly alleges that Sturm orchestrated his ouster as CEO in a board meeting on June 21, 1999, at the offices of the law firm. The complaint accuses Sturm of making negligent misrepresentations of fact and committing legal malpractice and fraud. Kelly v. Nelson, Mullins, No. 01-CV-1176 (M.D. Fla. June 20, 2001). Dempsey says he’ll ask for damages of more than $25 million. Sturm heads Nelson Mullins’ 65-lawyer corporate group and is a member of its five-partner executive committee. Sturm’s lawyer, Guy M. Burns of Tampa’s Johnson, Blakely, Pope, Bokor, Ruppel & Burns, denies his client had any role in the dismissal of Kelly as CEO. He says Sturm rendered adequate legal services and that the dispute is the result of Kelly’s unhappiness over the company’s financial problems. In September, Nelson Mullins and Sturm filed motions to dismiss the case for lack of personal jurisdiction and failure to state a cause of action. The parties are waiting on U.S. District Judge James D. Whittemore of the Middle District of Florida to rule on those motions.

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