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Firm Can Arbitrate After Partner Litigation

Posted Oct 17, 2007 11:46 AM CDT
By Martha Neil

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A New York law firm can still enforce an arbitration clause in its partnership agreement, even after it litigates other issues on an emergency basis, a state appellate court has decided.

Overruling a lower court ruling that said contract partner Linda Stark could have her day in court concerning breach of contract and sex discrimination claims she made against Molod Spitz DeSantis & Stark, the New York Court of Appeals enforced the arbitration clause in a 2000 contract partnership agreement signed by Stark and the firm. Stark and the firm had earlier litigated in court and settled a suit that she filed in early 2003 concerning compensation and control of clients and files, notes New York Lawyer (reg. req.), in a reprint of a New York Law Journal article.

"As a practical matter, if the firm had insisted upon arbitration in response to plaintiff's application to Supreme Court in June 2003 to secure files and consents to change attorneys, postpone payment of disbursements and the like, neither plaintiff's nor her client's interests would have been well served by the inevitable attendant delay," a unanimous appellate panel said in its written opinion.

Because this earlier limited litigation was prompted by "urgent need," it didn't waive the firm's contractual right to arbitrate Stark's subsequent breach of contract and employment discrimination claims, the appeals court explained.

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