Boies Schiller Gets Exiled Chinese Billionaire's Malpractice Suit Sent to Arbitration
Guo Wengui's malpractice complaint alleged partner Josh Schiller was unprofessional and that Guo voiced his displeasure to partner David Boies, only to have Schiller continue to work his cases.
May 29, 2019 at 12:24 PM
3 minute read
A $3 million legal malpractice suit that exiled Chinese billionaire Guo Wengui filed against his former lawyers at Boies Schiller Flexner has been sent to arbitration, with a judge calling his arguments “meritless,” “frivolous” and “unavailing.”
Manhattan Supreme Court Justice Joel Cohen said the broad arbitration clause in Guo's 2017 retainer agreement with Boies Schiller applied to his malpractice and breach of fiduciary duty claims, despite the former client's insistence that arbitration would be a “wholly unsuitable forum” to make his case.
“Here, while the specific conduct of which plaintiff complains took place after the attorney-client relationship ended, the claims in this case plainly arise out of and relate to plaintiff's engagement of defendants as his counsel,” the judge wrote in a May 24 decision. “Absent the attorney-client relationship between the parties, plaintiff would have no claim for legal malpractice or breach of fiduciary duty.”
Guo, a prominent businessman who fled China in 2014, has claimed government agents, businessmen and lawyers have threatened his family and his finances in a bid to stop him from airing allegations of corruption. He has been sued at least six times in the United States and filed several lawsuits of his own, with allegations of defamation being lobbed back and forth.
Boies Schiller represented Guo, who also goes by the name Miles Kwok, and his affiliates starting in 2015, according to the complaint. Guo said he was unhappy with partner Joshua Schiller's “unprofessionalism” and voiced his displeasure to partner David Boies, only to have Schiller continue to work his cases.
Guo said he fired Boies Schiller in 2017 and claimed Schiller, son of founder Jonathan Schiller, followed up by threatening reputational harm to Guo's daughter unless her father paid the firm $2 million.
The law firm later sued Guo in 2018 to enforce an arbitration award for more than $600,000 in unpaid fees, costs and interest. Guo didn't contest it, and that award was confirmed as a judgment earlier this year.
After Guo sued Boies Schiller and Schiller himself in late 2018 for legal malpractice, the firm, represented by partner Benjamin Margulis, responded by seeking to send the dispute to arbitration.
Guo, represented in the case by Aaron Mitchell of Lawall & Mitchell in New York, argued that arbitration was inappropriate because the defendants' alleged wrongdoing—including airing portions of Guo's asylum application during the unpaid-fees arbitration—arose outside the scope of their representation. He also argued that the context of the arbitration provision made clear that it only applied to fee disputes.
Cohen rejected those arguments, however. He wrote that the arbitration agreement was “broad” and encompassed Guo's claims, coming down especially hard on the former client's argument that Schiller individually wasn't covered by the arbitration agreement. If that were the case, the judge said, angry clients could simply sue their lawyers individually to evade whatever arbitration agreements might be contained in their retainer with the firm.
Mitchell did not immediately return a message seeking comment. A Boies Schiller spokesman could not immediately comment.
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