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The lawyer for a now-defunct Santa Monica, Calif., firm says partners have every right to expect a $32 million payday from a pair of former colleagues who left the partnership for Brobeck, Phleger & Harrison seven years ago. Attorney Brian Lysaght on Monday opened the first phase of a trial over the defection of Debra Pole and William Fitzgerald from Dickson, Carlson & Campillo to Brobeck with a defense of Dickson Carlson’s actions immediately after the departures. At issue is whether Dickson Carlson partners had the right to dissolve their firm after the pair resigned — and then immediately reconstitute the firm in order to capture revenue from the two departed partners. Brobeck and its attorneys argue that once ties with an old firm are severed, partners aren’t obligated to share their earnings and Dickson Carlson’s dissolution was merely a ploy to try to get around that fact. Lysaght, of Santa Monica’s O’Neill, Lysaght & Sun, said the dissolution was legitimate and Pole and Fitzgerald had taken unfinished client work with them. That entitled Dickson Carlson partners to a piece of the action — whether the work was done at Brobeck or at their own firm. Dickson Carlson is seeking $32 million for the work the two partners did. “There is no such thing as a sham dissolution,” Lysaght said, responding to defendants’ arguments that the dissolution was illegitimate. “Pole and Fitzgerald demanded that they receive their entitlement as a result of the firm’s dissolution, which amounted to about $1 million.” Two Dickson Carlson partners were on hand for the opening day of proceedings in the case, as were Pole and Fitzgerald. The trial is being conducted in Los Angeles County Superior Court’s Malibu courthouse before Judge Cesar Sarmiento. Pole’s departure was a critical moment for Dickson Carlson. She was the national coordinating counsel for Baxter Healthcare Corp.’s breast-implant litigation, which generated $1 million per month for the firm, or 60 percent of the firm’s revenues. The specific issue in the case is whether the former Dickson Carlson partners can apply a 1984 state appellate decision to their situation. The court of appeal ruled in Jewel v. Boxer, 156 Cal.App.3d 171, 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. The partners at Dickson Carlson dissolved their firm a few weeks after Pole and Fitzgerald resigned and reformed the firm the following day with the same name. The firm disbanded for good in 1997. In his opening statement, Lysaght said the Dickson Carlson partnership agreement did not have a provision against a Jewel dissolution or mention unfinished business. In fact, the agreement preceded the decision in Jewel — it was taken directly from the partnership agreement language at the firm that spawned Dickson Carlson: Haight, Dickson, Brown & Bonesteel. He also dismissed the claims of Pole, Fitzgerald and Brobeck that the former Dickson Carlson partners should be precluded from using Jewel because they didn’t keep Baxter as a client and complete their own unfinished business. “There are a number of reasons for this,” Lysaght said. Baxter wasn’t paying its bills, he contends, and the firm wanted to pursue breast-implant litigation work from other clients. If Pole and Fitzgerald were taking 90 percent of Baxter’s business, they shouldn’t “hobble [Dickson Carlson] from taking other clients,” he said. Lysaght said Baxter’s involvement in the dispute was irrelevant — “a red herring” being raised by the defense. He requested that Sarmiento focus exclusively on the net profits from the unfinished business that Pole and Fitzgerald took to Brobeck and how much the former Dickson Carlson partners are entitled to. Elliot Peters, a partner at San Francisco’s Keker & Van Nest, began his opening statement on behalf of Pole and Fitzgerald late in the afternoon. He said Brobeck should not be a party to the suit, since there is no precedent for bringing a third party into a Jewel case. Peters also said Jewel “imposes reciprocal duties on partners” and that the Dickson Carlson partners had a duty to complete unfinished business. “ Jewel does not permit them to say ‘pay us for unfinished business. But we’re not going to do Baxter work.’ We’ll get this huge windfall by not doing work.” The cases are Campillo v. Pole, SC039135 and SC039264.

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