A Philadelphia judge has ordered attorney Thomas F. Reilly to provide Swartz Campbell with a list of contingency-fee and other cases he took with him when he left the firm to join Chartwell Law Offices in 2011, along with a schedule containing the status of those cases and the attorney fees he has received from them.
According to the order, issued September 11 by Philadelphia Court of Common Pleas Judge Patricia A. McInerney, Reilly had until September 16 to hand over the information.
The order pertains to a suit Swartz Campbell filed against Chartwell in September 2012, alleging, among other things, that Reilly had failed to pay fees to Swartz Campbell for contingency-fee cases he continued to handle after he left the firm.
The case is currently stayed until Friday, pursuant to a stipulation entered into by both firms and approved by McInerney on April 1.
In its amended complaint, filed in March, Swartz Campbell alleged that Reilly had entered into a verbal agreement with Jeffrey B. McCarron, chairman of Swartz Campbell's management committee, to pay the firm a pro rata share of the legal fee on each contingency-fee case he started working on at Swartz Campbell and finished at Chartwell.
Under that verbal agreement, Swartz Campbell's cut of the fee was to be based on the total amount of time Reilly spent working on each case while still at the firm. So, for example, if Reilly spent 50 percent of his time working on the case while still at Swartz Campbell, Swartz Campbell would be entitled to 50 percent of the fee derived from that case, according to the amended complaint.
Swartz Campbell alleged in its amended complaint, however, that despite its demands, Reilly never kept Swartz Campbell abreast of the status of any of those cases once he left the firm and has failed to pay Swartz Campbell any fees derived from the cases that have since closed.
Swartz Campbell's amended complaint included a claim of conversion, alleging that Chartwell has kept all of the fees from those cases as revenue for itself.
The amended complaint alleged that Chartwell had "targeted" Reilly as a lateral hire in order to gain "access to confidential business records and client information possessed by Swartz Campbell and additional fee revenue owned by Swartz Campbell."
But in its October 2012 preliminary objections to those allegations in Swartz Campbell's original complaint, Chartwell argued that there was no legal basis for Swartz Campbell's claim that it has a property interest in the attorney fees generated by the contingency-fee cases Reilly took with him.
"In contingent-fee matters, the prior law firm has no legal standing to recover fees from the departing lawyer or the departing lawyer's subsequent law firm," Chartwell said in its preliminary objections.
Chartwell further argued in its preliminary objections that if Swartz Campbell was allowed to proceed with its conversion claim, Reilly would be a necessary and indispensable party to the case and must therefore be named as a defendant.
Chartwell said in its preliminary objections that it has no privity of contract with Swartz Campbell.
McInerney denied those preliminary objections in February, however, and Chartwell has not filed preliminary objections to Swartz Campbell's amended complaint.
Reilly and Chartwell Chief Executive Officer Clifford Goldstein did not return calls seeking comment Thursday.
Chartwell partner Kenneth M. Dubrow, who is representing the firm in the suit, and McCarron also did not return calls seeking comment.
The allegations pertaining to Reilly are part of a larger suit in which Swartz Campbell has accused Chartwell of engaging in the "improper interference with and destruction of" its business interests, client relationships and partnership agreements, largely related to a 2012 lateral move that resulted in the closing of Swartz Campbell's Fort Myers, Fla., office and the opening of a Fort Myers location for Chartwell.
"Chartwell, by and through its agents and employees, has engaged in a pattern of conduct to systematically induce or entice members and employees of Swartz Campbell to leave Swartz Campbell and join Chartwell with the intention or design to interfere with the client relationships of Swartz Campbell, to destroy or usurp the competitive business operations of Swartz Campbell and to convert revenue owed to Swartz Campbell without consent or lawful justification," the amended complaint alleged.