The ex-chairman of the now dissolved Pennsylvania-based firm Nelson Brown & Co., formerly known as Nelson Levine de Luca & Hamilton, wants to take his former partners to arbitration. For what exactly is still unclear.
Michael Nelson, now a partner at Eversheds Sutherland in New York, sued his former partners in July seeking to arbitrate claims arising from the dissolution and liquidation of the firm, the duty to contribute capital, the allocation of profit and loss, withdrawal of shareholders and duty to indemnify. All of the matters stem from the former partners’ operating agreement and buy-sell agreement, according to a bare-bones complaint filed in U.S. district court in Philadelphia.
But the eight defendants want more information, as evidenced by a series of answers and dismissal papers filed this month.
As defendants Daniel de Luca and Kenneth Levine put it in their motion to dismiss, Nelson’s complaint “is devoid of any of the ‘who, what, when, where, how, or why’ behind any purported claims or disputes.”
Nelson declined to comment on the pending litigation. His lawyer, Michael LiPuma, did not return a call seeking comment.
Also named in the complaint are David Brown, John Clark, Michael Hamilton, William Krekstein, Claudia McCarron and John Mullen.
Most of the defendant lawyers are representing themselves in the litigation. Brown, Levine, Clark, Hamilton, Krekstein and McCarron did not return calls seeking comment on the case. Neither did Nicholas Jajko of Mullen Coughlin, who is representing Mullen, or Michael Savett of Clark & Fox, who is representing Clark.
Reached Tuesday, de Luca declined to comment beyond his motion to dismiss.
A Contentious Breakup
Nelson was the last remaining name partner at Nelson Brown until he left in June 2015.
The firm’s breakup has been the subject of litigation before. In August 2014, just after partners de Luca and Levine left Nelson Levine to start their own shop, the firm sued the former partners. The complaint, which was later dismissed, alleged that they surreptitiously took steps to start their own firm and failed to give adequate notice of their departure.
The same two partners faced a suit in 2015 alleging they discriminated against female attorneys. That case settled within a few months.
The former partners have also faced litigation in New York brought by the firm’s former landlord. Nelson filed cross-claims against his former partners in that case, according to Clark’s motion for summary judgment. Then in April of this year, Nelson asked to move the New York case into arbitration, but a New York judge denied his request, saying it had come too late.
According to court documents, Nelson attempted to initiate an arbitration or mediation in January by sending notice to the Pennsylvania Bar Association’s program administrator.
“Plaintiff’s complaint, however, fails to aver any material facts from which it may be concluded that an arbitrable ‘claim, controversy or dispute’ exists that arises under the agreements,” McCarron and Mullen’s motion to dismiss said. “The complaint lacks any facts shedding light on the alleged disputes to be arbitrated.”
The defendants also argued that any right to arbitrate claims belonged to the former law firm, rather than to Nelson himself, because a corporation or limited liability company owner lacks standing to sue for an injury to a corporation.
According to a motion for summary judgment, filed by defendant Clark, the former partners asked what Nelson’s claims were.
In response, according to Clark’s motion, Nelson said, “‘It is the firm’s position and my position that the shareholders of the firm breached the terms of the shareholder agreement and that breach has caused damages and will require the shareholders to make the firm whole.’”
Lizzy McLellan writes about the Pennsylvania legal community and the business of law at firms of all sizes. Contact her at email@example.com. On Twitter: @LizzyMcLellTLI