LOUISVILLE, Ky. (Legal Newsline) - A personal injury law firm that is being sued by a former partner over its diversion of fees wants the lawsuit, originally filed in a Kentucky state court, to be moved to a federal court and dismissed.
Schiller Kessler & Gomez PLLC argues in a Jan. 8 filing in the U.S. District Court for the Western District of Kentucky, Louisville Division, that the plaintiff, Alan Lani, a former managing partner at the firm’s Kentucky office, is no longer an employee.
The firm, which is headquartered in Louisville but has an office in Fort Lauderdale, Fla., mostly handles personal injury and wrongful death cases, including car, truck and motorcycle accidents, slip and fall, medical malpractice and animal attacks.
According to the firm’s notice of removal, Lani tendered his resignation, via email, on Nov. 18 to be effective Nov. 30. He filed his shareholder derivative lawsuit in Jefferson Circuit Court Dec. 1.
The named defendants include Schiller Kessler & Gomez PLLC in Florida and partners Marc Schiller, Andrew Kessler and Marcelo Gomez.
Lani, who mostly litigates personal injury and civil cases, alleges in his Dec. 1 complaint filed in state court that on or about March 1, 2012 his former partners “intentionally” began directing the firm’s Kentucky litigation co-counsel to send fees generated as part of that office’s co-counsel litigation arrangements to the Florida office.
“At the time of the diversion of such fees by the defendants, the defendants were not party to any fee sharing arrangement, bore no personal or professional responsibility for the handling of the Kentucky cases, and were not entitled to any portion of the fees generated by the join representation of SKG Kentucky and litigation co-counsel,” Lani wrote in his eight-page complaint.
He contends his former partners later offered him, in August 2014, a membership interest in the Kentucky office. Doing so would allow the defendants to continue to operate in Kentucky, Lani explained.
Lani argues that during negotiations it was represented to him that all fees generated by the Kentucky office would be received by it. At no time, he states, did his former partners reveal that the fees would be diverted to the Florida office.
“Prior to and during their negotiations with Alan Lani, the defendants Marc Schiller, Andrew Kessler and Marcelo Gomez conspired against Alan Lani to deprive him of his percentage of the net profits of SKG Kentucky by diverting fees properly payable to SKG Kentucky to SKG Florida,” Lani wrote in his complaint.
He contends the diversion of fees not only deprived him, but also the Kentucky office of operating capital and negatively affected its net profits, which, in turn, has reduced the amount of funds available for distribution to its members.
In particular, because of the defendants’ actions, the Kentucky office has lost nearly $400,000 in fees payable, Lani alleges.
The defendants, in their removal notice, argue that the federal court should consider Lani individually as the plaintiff since he is no longer a member of the LLC.
The case, they contend, belongs in the federal court because complete diversity exists -- Lani is a citizen of Kentucky, while they reside in Florida.
They also argue, in a separate motion to dismiss filed the same day as the removal notice, that because Lani is no longer a member of the company, he lacks standing to bring his lawsuit on its behalf.
“As articulated more fully below, the Court should dismiss this unauthorized litigation in its entirety because: (a) Lani lacked authority as a non-member of the Company to initiate a derivative action on the Company’s behalf; (b) even if he was a member of the Company, Lani failed to comply with the statutory prerequisites for filing a derivative action, namely his failure to make a demand on the Company or his failure to plead with specificity why such a demand would be futile; and (c) Lani is pursuing this lawsuit in the guise of benefiting the Company; however, he is improperly using the derivative action lawsuit as leverage to pressure a settlement that will benefit Lani personally,” the defendants wrote.
According to the defendants’ memorandum in support of the motion, Lani wrote in his Nov. 18 email to Schiller, Kessler and Gomez -- entitled “My departure” -- the following:
“My offer to avoid litigation between us is to pay me the 5833 we already discussed and I’ll process any existing settlements over the next two weeks without a personal claim for payment. Any cases referred for litigation between 8/11/14 and 11/18/15 can be handled according to the terms of the existing operating agreement, and I will waive any interest in cases referred out after 11/19/15. I do not dispute that any SKG clients who may choose to follow me will have a lien associated with their file on behalf of SKG.”
Lani’s former partners argue that he is not looking out for the interests of the company at all.
“He is trying to get ‘net profits of SKG Kentucky’ to which he believes (erroneously) that he is entitled,” they wrote. “That is not a proper purpose for a derivative lawsuit.”
In a motion to intervene also filed Jan. 8, the company itself asks the federal court to allow it to intervene in the action in its own right because it has not been named as a nominal defendant in the derivative action -- “an action that is not in the best interest of the company,” it noted.
The company asks the court to further re-align the parties such that the company is a defendant in the action, with its own counsel to represent its own interests.
The case has been assigned to Judge David J. Hale.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.