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Miller Legal, LLP v. Miller

United States District Court, District of Columbia

July 19, 2019

Miller Legal, LLP, d/b/a Banner Legal, Plaintiff,
Peter Miller and Miller DellaFera, PLC, Defendants.



         Denying Motion to Compel Arbitration and Dismiss Counterclaim


         Currently before the Court is Plaintiff's motion to dismiss Defendants' counterclaim and compel arbitration. See ECF No. 23. This motion arises from a dispute among attorneys moving among firms. Plaintiff alleges interference with contract by all Defendants and breach of fiduciary duty by Defendant Peter Miller. Despite several attempts to resolve their differences via private mediation, the parties have been unable to reach a settlement agreement on all of the underlying issues. On November 5, 2018, Defendants filled an answer and asserted a counterclaim for breach of contract. See Defs.' Answer and Countercl. (“Defs.' Answer”), ECF No. 20. Plaintiff now moves to dismiss Defendants' counterclaim and compel arbitration, contending that the instant dispute is controlled by an arbitration clause contained in the Banner Legal Partnership Agreement. See Pl.'s Mot. Dismiss and Compel Arbitration (“Pl.'s Mot. Compel”) ¶¶ 21-23, 29-31, ECF No. 23. Because this Court concludes that Plaintiff's litigation conduct has waived the right to invoke arbitration, it will deny Plaintiff's motion.


         Plaintiff Miller Legal, LLP, d/b/a Banner Legal (“Banner Legal”) is a law firm based in Washington, D.C. Banner Legal is led by managing partner Cary McDonald, Compl. ¶¶ 2, 15, ECF No. 1, a non-lawyer who operates alongside the firm's other partner, D.C.-licensed attorney Jeremy Shafer, id. ¶ 21. As of September 2017, in addition to these two partners, the firm included six other “Profit Share Members.” See Pl.'s Mot. Compel, Ex. A, ECF No. 23-2. Defendants are, respectively, an individual attorney, Mr. Miller, and another law firm with which Mr. Miller is associated, Miller DellaFera, PLC (“Miller DellaFera”). Mr. Miller's relationship with Banner Legal soured in early 2018, leading Mr. Miller to declare his intention to leave the firm via an email sent on March 28, 2018. See Compl. ¶ 26; Defs.' Answer ¶ 26.

         The parties dispute the reason for Mr. Miller's departure from Banner Legal. According to Plaintiff's Complaint, Mr. McDonald had funded Banner Legal and lent money to Mr. Miller for use by Miller DellaFera, PLC (“Miller DellaFera”) since 2015. Compl. ¶ 22. Plaintiff contends that Mr. Miller departed the firm because he was unable to “come to an agreement” with Mr. Shafer regarding the settlement of debts that Mr. Miller owed to Banner Legal and to Mr. McDonald. See Id. ¶¶ 21-25. Defendants describe the events differently, asserting that Mr. Shafer and Mr. McDonald forced Mr. Miller out of the partnership through a series of actions taken in fall 2017 and early 2018. See Defs.' Opp'n TRO 6-7, ECF No. 11. Defendants proffer that Mr. Shafer and Mr. McDonald narrowed Mr. Miller's involvement in the firm by redefining his role from “Partner” to “Profit Share Member.” Id. at 6. Defendants further aver that Mr. McDonald “refused to honor the co-counsel agreement between [Banner] Legal and Miller DellaFera, ” id., and under which “[Banner] Legal financed Miller DellaFera's overhead, payroll, litigation and operating expenses” from October 2014 to May 2017, Defs.' Countercl. ¶ 15. After his departure from Banner Legal, Mr. Miller sent letters to clients whom he had represented during his tenure as a litigator at Banner Legal. See Compl. ¶¶ 6-14 (alleging improper and unethical communication with clients); Defs.' Answer ¶¶ 7-8 (discussing letters and arguing that Mr. Miller was professionally obligated to update clients).[1]

         On April 30, 2018, Banner Legal initiated this suit against Mr. Miller and Miller DellaFera. See generally Compl. Plaintiff's complaint alleged interference with contract by both Defendants and breach of fiduciary duty by Defendant Mr. Miller and sought a temporary restraining order and preliminary injunction. Id. After this Court denied Plaintiff's request for a temporary restraining order, see May 3, 2018 Minute Order, and before the scheduled hearing on Plaintiff's request for a preliminary injunction, the parties agreed to private mediation to attempt to resolve their dispute, see June 8, 2018 Minute Order. On July 17, 2018, the parties reported that they had reached a signed settlement agreement on some of the claims and issues and agreed to meet with the private mediator later in the summer to attempt to settle the remaining disputes. See Joint Status Report Regarding Mediation at 1, ECF No. 16. But further mediation did not resolve the case.

         On November 5, 2018, Defendants filed an answer to Plaintiff's complaint along with a series of counterclaims. See Defs.' Answer. Plaintiff responded with a motion to dismiss Defendants' counterclaim for breach of contract and compel arbitration based on the terms of the Banner Legal “Limited Liability Partnership Agreement” (“Partnership Agreement”), which was operative during approximately two years of Mr. Miller's tenure at Banner Legal.[2] See Pl.'s Mot. Dismiss Countercl., Ex. A. This Partnership Agreement contains an arbitration provision stipulating that “any claim or controversy arising out of or relating to this Agreement, or a breach of it, shall, upon the request of any party involved, be submitted to and settled by arbitration.” Id. at 10. The original Partnership Agreement was amended on September 13, 2017, with the “First Amendment to the Limited Liability Partnership Agreement” (“First Amendment to the Partnership Agreement”). See Id. at Ex. B. This document reaffirmed the original agreement, except as “expressly modified.” Id. at ¶ 7. The First Amendment to the Partnership Agreement did not expressly modify the arbitration clause.[3]

         Defendants contest the arbitrability of their counterclaims, which they argue arise out of a different document, the “Agreement Between Miller Legal, LLP, Miller DellaFera PLC, and Peter A. Miller Concerning the Funding of Miller DellaFera PLC, ” which Defendants refer to as the “Co-Counsel Agreement.”[4] Defs.' Opp'n Mot. TRO, Ex. B, ECF No. 11-3. The undated, unsigned Co-Counsel Agreement provides that “[Banner Legal] agrees to fully finance [Miller DellaFera's] overhead, payroll, litigation, and operating expenses in conjunction with the litigation of Mass. Tort Cases” and lays out terms of repayment. Id. at 2. Defendants allege that the parties began operating under an oral version of this same agreement in July 2014 and reduced it to writing in 2016. See Defs' Countercl. ¶ 13; Defs.' Opp'n Mot. Compel Arbitration and Mot. to Dismiss 2 (“Defs.' Opp'n Mot. Compel”), ECF No. 25. Defendants further argue that the counterclaims are not properly subject to arbitration because Defendant Miller DellaFera was not a signatory to the Partnership Agreement and hence is not bound by its arbitration clause. See Defs.' Opp'n Mot. Compel 3-4. Plaintiff contests this version of events, contending that the unsigned Co-Counsel Agreement is not binding and does not “repudiate the [Partnership Agreement's] arbitration clause.” Pl.'s Mot. Compel ¶ 35. This matter is ripe for the Court's consideration.


         The D.C. Circuit has established that a district court is to examine a motion to compel arbitration under “the summary judgment standard of Federal Rule of Civil Procedure 56(c), as if it were a request for ‘summary disposition of the issue of whether or not there had been a meeting of the minds on the agreement to arbitrate.'” Aliron Int'l, Inc. v. Cherokee Nation Indus., Inc., 531 F.3d 863, 865 (D.C. Cir. 2008) (quoting Aliron Int'l, Inc., 2006 WL 1793295, at *1 (internal citations omitted) (D. D.C. June 28, 2006) (citing Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003)). Applying this standard, “summary judgment is appropriate only if ‘there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law.” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986) (quoting Fed.R.Civ.P. 56(c))).

         IV. ANALYSIS

         A. ...

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