James Chaplin (Photo by Melanie Bell)
Mediation Inc., which billed itself as the oldest mediation service in South Florida, has liquidated after losing seven key mediators and being sued for eviction by two of its landlords.
CEO and founder Jim Chaplin told the Daily Business Review he was forced to liquidate after being sued by a landlord and has reorganized the business as a smaller firm under the name Mediation Firm Inc. He has leased new space at the Bank of America Tower at 401 E. Las Olas Blvd. and temporary suites in both Miami and West Palm Beach.
The original company, which launched in 1986, filed an assignment for the benefit of creditors in August, after being sued for eviction by One Financial Plaza, its Fort Lauderdale landlord.
The firm lists assets of $775,000 and debts of $192,484. The debts don’t include future rent payments owed to landlords in Fort Lauderdale, West Palm Beach and Miami, which could total hundreds of thousands of dollars, Chaplin said.
“When the other mediators decided they wanted to go somewhere else, they left me with hundreds of thousands of dollars in ongoing leases,” Chaplin said. “Without the combined revenue of everyone, you can’t survive.”
Michael Phelan, president of Hollywood receiver Michael Moecker & Associates, was appointed as assignee for the assignment for the benefit of creditors.
The mediators who left Mediation Inc. for Upchurch, Watson, White & Max’s new Plantation office are Judith Bass, Dominic Brandy, Alvin Capp, Samuel Heller, Charles Tetunic, William Zei and Robert Zwicky. According to a former Mediation Inc. mediator, members of the departing group were some of the most long-term and productive mediators at the firm.
But the attorney representing Mediation Inc.’s West Palm Beach landlord, John Reynolds of Reynolds & Reynolds, takes issue with Chaplin’s actions. Reynolds, who represents Tower 1555 LLLP in West Palm Beach, says Chaplin filed the assignment for the benefit of creditors simply to get out of paying his pricey leases.
“He changed the name of the company from Mediation Inc. to Mediation Firm Inc., he moved down the street, he is using the same phone number and the same furniture,” Reynolds said. “That’s called fraud. This whole thing was done in an effort to defraud the creditors.”
Chaplin denied the allegations, saying his office furniture was auctioned off and he bought back some of it “for more than the appraised amount.”
“Mr. Reynolds objects to everything,” he said. “He will get paid a pro rata share of what he is owed. I don’t have any control over it. I went to a lawyer and this is what he said to do.”
Matthew Sackel of Shutts & Bowen, who represents Chaplin’s former Fort Lauderdale landlord at One Financial Plaza, declined comment.
Chaplin said he was disappointed at the defections, particularly the exit of one mediator he knew for 41 years. He also attributes his financial troubles to an increase in competition in the marketplace. A number of new mediation firms have opened offices in South Florida in recent years, including Upchurch Watson and JAMS, luring judges from the bench with hefty salaries.
Daytona Beach-based Upchurch Watson held its grand opening in Plantation last week and recently opened small offices in West Palm Beach and in Miami.
Tetunic, who leads Upchurch Watson’s new Broward office, said he left Mediation Inc. due to “an opportunity to join the preeminent mediation firm in the state. It gave us an opportunity to move to a beautiful suburban setting.”
He also acknowledged having “philosophical differences” with Chaplin, the sole shareholder of Mediation Inc.
“We had differences over the years in terms of the future, technology, advertising and growth,” Tetunic said.
In a notice filed on its former website, the firm announced Nov. 1 that “the mediators who formerly practiced with Mediation Inc. have moved their offices and their scheduled mediation conferences and their mediation practices to two separate mediation firms.”
News of the liquidation of Mediation Inc., the granddaddy of mediation in South Florida, stunned many legal insiders.
“They have a very good reputation,” said Israel Reyes of The Reyes Law Group, a mediation and litigation firm in Miami. “I never heard a bad thing about them. You shocked me. And mediation is very strong right now.”
One former mediator familiar with the situation said losing seven of “its most productive” mediators dealt a devastating blow to the firm.
“I certainly hope they continue to operate in the marketplace in the future,” said Carol Cope, a mediator with JAMS who previously worked at Mediation Inc. for more than a decade. “They have some excellent mediators and a good strong following.”