Houston trial firm Caddell & Chapman is seeking a declaratory judgment that a fee dispute with former associate Craig Marchiando should be decided through the Houston Bar Association arbitration process.
In a petition filed Nov. 8 in state district court in Harris County, Caddell & Chapman alleges that it offered Marchiando, who left the firm in 2015 and now lives in Virginia, five percent of the net attorneys fees received from the settlement of litigation filed against Sirius XM Radio. Marchiando asserts he is entitled to a 15 percent interest in the fees.
Caddell & Chapman also alleges that Marchiando has “denied the applicability” of his September 2005 employment agreement with the firm, which calls for arbitration of any disputes or unresolved issues including his interest in any cases unresolved after Marchiando left the firm.
In a telephone interview, Caddell & Chapman founder Michael Caddell declined to say how much his firm received in fees from the settlement. “It’s really not anybody’s business,” Caddell said. The fee award in the settlement was $12.25 million, according to information on the firm’s website. Caddell said his firm was lead on the litigation, but other firms also represented plaintiffs.
Caddell said Marchiando is a “really good guy,” but they have a difference of opinion about his share of the fee.
“We think he’s a good lawyer and he was a good employee,” Caddell said.
Marchiando, now an associate at Consumer Litigation Associates in Virginia, did not immediately respond to a request for comment.
Caddell & Chapman alleges in the petition that in July 2014, it was lead counsel in the Hooker v. Sirius XM Radio Inc. litigation, a national consumer class-action asserting claims under the Telephone Consumer Protection Act against Sirius XM Radio. The firm alleges Marchiando was initially assigned primary day-to-day responsibility for the litigation, and was assigned a 15 percent “presumptive” interest in the net attorneys fees recovered by the firm.
The firm alleges that three months later, Caddell took over the primary day-to-day responsibility for prosecuting the lawsuit at the request of plaintiff Hooker’s initiating and referring counsel.
In May 2015, Marchiando advised Caddell & Chapman that he intended to terminate his employment with the firm and relocate to Virginia with his family, according to the petition. His last involvement in the litigation was in late May or early June 2015, it said.
The firm and its co-counsel settled the litigation with Sirius XM in an agreement calling for Sirius XM to provide class members three months of free radio service, or a pro rata payment from a $35 million settlement fund, after fees and expenses. After an appeal, the fees were distributed in September, according to the petition.
Caddell & Chapman alleges it offered Marchiando five percent of the firm’s net fee from the litigation, after considering the defendant’s lodestar, the work of other attorneys at the firm, Marchiando’s work on the litigation and his employment agreement.
However, as the firm alleged in the petition, Marchiando maintains that the only agreement he has with the firm on the litigation provides him with a 15 percent interest irrespective of his role in the litigation.
Caddell & Chapman is seeking a declaratory judgment ruling that Marchiando’s 2005 employment agreement is in force, and the dispute is subject to the binding arbitration provision of the employment agreement. The firm also is seeking reasonable and necessary attorneys fees and court costs.