Litigation surrounding the dissolution of 12-attorney Arkin Kaplan Rice turned vitriolic this week, with accusations made in court papers that one partner left a threatening voicemail and another was involved in a “fists up physical altercation.”
Veteran litigator Stanley Arkin and his partner Lisa Solbakken brought suit this month on behalf of Arkin Kaplan Rice against Howard Kaplan and Michelle Rice and their new firm, Kaplan Rice. The Arkin firm, now in dissolution, claims Kaplan and Rice are occupying the dissolved firm’s office space without paying rent and have refused to report hours they billed at the former firm.
Complicating matters is the fact that Arkin Kaplan, which was founded by Arkin in 1968, did not have a formal partnership agreement, leading to unresolved issues of who has a majority share of the partnership, how to distribute assets of the dissolved firm and who is responsible for office rent and expenses.
Arkin and Solbakken have started a new firm in their own names. All four former partners are sharing space at 590 Madison Ave. as they continue to litigate Arkin Kaplan Rice v. Howard Kaplan, Michelle Rice and Kaplan Rice, 652316-2012.
The conflict goes back to at least 2008, after Arkin turned 70, when partners began discussing the firm’s transition, Kaplan said in an affidavit. He said the majority of the discussions centered on Arkin’s “expectations for a significant financial package and continuing control of the firm.”
Rice, in an affidavit, said that in late 2010 she received a voicemail from Arkin in which he said, “If you and Howard are thinking you can betray me after what I’ve done for you and for him, you’ll, you’ll understand just how destructive I can be if I have to be… Every case you have is mine and believe me, I’m going to show no mercy. You better straighten out sweetheart.”
Rice also said Arkin left another message on her home answering machine, and “the gist of that message was that he would destroy Mr. Kaplan and I if we start our own firm.”
Rice responded in an email to Arkin that she found his comments “offensive and utterly disrespectful,” according to her affidavit.
The Arkin firm replied in court papers that Kaplan and Rice are “attempting to confuse the issue by littering their papers with irrelevant, inflammatory and demonstrably false allegations.”
The Arkin firm is represented by David Eiseman, a partner at Golenbock Eiseman Assor Bell & Peskoe.
Arkin, in court papers, addresses the voicemail, saying that news that Kaplan and Rice planned to decrease his compensation, oust him from the partnership and form a new firm greatly upset him and he immediately called Rice.
“I was unable to reach her, and therefore, left her a voicemail message conveying my anger and sense of betrayal,” Arkin said. “I rarely lose my temper… Her retention of this voicemail was an effort to embarrass me if the firm broke up and went to litigation and demonstrates a sly and hypocritical course of conduct.”
Arkin also said in his reply that his relationship with Kaplan began to deteriorate in 2010 and he accused Kaplan of having animosity toward a partner Arkin recruited, whom he does not name.
“Kaplan’s relationship with this partner was so contentious that it manifested in a fists up physical altercation between he and that partner in June 2010,” Arkin writes, adding that Kaplan claimed the other partner had interrupted him in a meeting with the Securities and Exchange Commission.
“Although Mr. Kaplan and Ms. Rice lace their papers with non-subtle suggestions that my age somehow justifies their conduct, I feel strong in mind and heart and love the practice,” he writes.
The parties are expected at a hearing tomorrow before Manhattan Supreme Court Justice O. Peter Sherwood on the Arkin firm’s motion for a preliminary injunction, which seeks to require Kaplan and Rice to provide the dissolved law firm with time and billing information and seeks to direct them to pay for their use of the office space.
In response, Kaplan and Rice, who are represented by Arthur Ciampi, argue in court papers that Arkin and Solbakken have declared themselves “successor” to the dissolved firm and are thus “direct obligors” under the sublease.
They also argue that Arkin and Solbakken’s firm is not entitled to money the dissolved firm received before its dissolution to pay future rent.
“Since the firm is essentially wound up, there is no basis to require any additional rent payment,” Kaplan and Rice argue.
They add that their own firm will “eventually” leave the office space and they offer to pay their firm’s share of rent to Arkin Solbakken in the meantime, however the amount of that share is in dispute.
Addressing the allegations that Kaplan, Rice and their associates haven’t submitted billing information, Kaplan and Rice argue that their firm and Arkin Solbakken should have begun separate billings by March 29.
Although Arkin claims he and Solbakken together have a majority of the partnership, Kaplan and Rice say that in the absence of a partnership agreement, all partners have an equal say in partnership matters.
In the Arkin firm’s reply filed yesterday, it claims the dissolved firm is obligated to pay rent and that Arkin and Solbakken in their new firm are not liable for the dissolved firm’s obligations; their new firm is not the successor to Arkin Kaplan Rice; and Kaplan Rice LLP must compensate the dissolved firm for its use of office space.
Arkin said in a statement yesterday that “break ups of law firms are always an unhappy event.”
“In this instance, we have a different vision than Mr. Kaplan and Ms. Rice as to how to run a law firm in the present environment and how to best serve clients, be fair and dependable to your colleagues and at the same time prosper,” Arkin said.
Ciampi, who represents Kaplan Rice, said yesterday in a statement, “In lawsuits of this kind, no one wins. While there are a number of headline-grabbing mythical allegations asserted by Mr. Arkin, given their irrelevance, he will never be called upon to prove them. We do not intend to engage in a point-by-point refutation, but suffice it to say that Mr. Arkin’s assertion of a physical altercation is fanciful at best. We hope to resolve these issues swiftly through an accounting proceeding, which we will file later today. We would urge Mr. Arkin to also seek a swift resolution of this unfortunate dispute.”
@| Christine Simmons can be contacted at firstname.lastname@example.org.