A commercial fisherman has sued Duane Morris and former partner Zhaoyang “Paul” Li claiming that Li inserted himself as a partner in a seafood export business and cut the fisherman out of the deal.
Gerard “Jerry” Wetle, a commercial fisherman, boat owner and wholesaler now based in Oregon, claims in a complaint filed Monday in federal court in the Northern District of California that Li convinced him he didn’t need his own lawyer when setting up a business with a partner to catch squid and export them for sale in China. Wetle, who previously was based in Salinas, California, claims he fired his own lawyer upon Li’s advise. He further alleges that he signed on to a $2.6 million purchase agreement for a boat named “Pamela Rose” to benefit the export business, spent nearly six months in Mexico refitting it, and traveled to China to negotiate with vendors, only to be cut out of the export business.
“Li never informed Wetle, in writing or otherwise, that Wetle should seek the advice of independent counsel before going into business with Li or at any time while Li was working with Wetle or representing to others that he was working with Wetle in fishing businesses,” wrote Wetle’s current lawyer, Mark Choate of the Choate Law Firm in Juneau, Alaska. The complaint claims that Li encouraged Wetle to fire his personal attorney and “did not advise Wetle to consult with independent counsel because Li intended to use his stature as a partner in a large national law firm, legal knowledge, and role as an attorney, to take advantage of and defraud Wetle.”
The suit brings claims of fraud, legal malpractice and breach of fiduciary duty against both Li, who is now a partner in the intellectual property practice at Taylor English Duma in San Francisco, and his former firm Duane Morris. The complaint claims that Li worked on the export business from Duane Morris’ San Francisco office, used his firm email account, stationary and resources on the underlying deals—including meetings held at Duane Morris—and got assistance from Duane Morris personnel. ”Li thus acted within his actual or apparent authority as a Duane Morris partner in defrauding Wetle,” the complaint says.
Reached by phone Tuesday, Choate said that it was a “fairly extraordinary” situation to see a big-firm attorney provide advice on deals while holding a significant stake and conflicting loyalties.
“Li created this series of different businesses all to capitalize on Wetle’s knowledge and connections in the industry and ultimately left Wetle wondering what in the world happened,” Choate said. “It’s not something you see with big firms and their lawyers. Big firms tend to be aware of their conflicts.”
“We don’t know why Li left the firm, but it’s conduct that’s very, very unusual. You just don’t see it and the California rules are pretty straightforward you can’t do this without taking the necessary steps to inform” your client about potential conflicts, Choate said.
Duane Morris did not immediately respond to a request for comment.
Reached at his Taylor English email address, Li asked that all correspondence be directed to his private email address. He did not respond to further request for comment.
Read the complaint: