Law firm suit seeks pay disgorgement and punitives, alleges ex-partners conspired to form new firm
A Southern California law firm has sued four former partners, contending that they spent nearly 18 months planning to launch a competing worker’s compensation practice before Adelson, Testan, Brundo, Novell & Jimenez learned of the plan and fired them on April 4.
Asserting claims including breach of contract, breach of fiduciary duty and misappropriation of trade secrets against the four, the firm seeks an accounting; restitution; compensatory and punitive damages; disgorgement of all of the partners’ pay and benefits while the claimed conspiracy was ongoing; and attorneys’ fees and costs.
The Recorder (sub. req.) provides a copy of the complaint (PDF), which was filed last week in Orange County Superior Court.
It estimates that defendants Matthew Koller, Michael Misa, Martin Stefen and Teresa Ward got salaries and benefits worth $282,000, $399,000, $379,000 and $356,000, respectively, while allegedly planning their exit from their now-former firm and launch Misa Stefen Koller Ward. Misa was co-managing partner of the Adelson firm’s 18-attorney Long Beach office.
The four defendants had intended to stay at the Adelson firm until August, the complaint says, while “using plaintiff’s computer systems, mining plaintiff’s client lists, marketing to plaintiff’s clients at plaintiff’s expense, all while collecting paychecks from plaintiff.”
A forensic exam of the Adelson firm’s computer, phones and other equipment revealed a detailed list of clients, a lease and other material concerning their new firm, the suit alleges. Emails concerning the planned new firm allegedly date back as far as November 2014.
“In anticipation of launching their new firm, the defendants also took copies of client contact lists, forms and exemplars, and other confidential and proprietary information by sending files to their personal email accounts throughout January, February and March of 2016,” the complaint says. On April 1 the group applied for a business license.
However, attorney Daniel O’Rielly of O’Rielly and Roche, who represents the four former Adelson partners, said the suit is “baseless and clearly vindictive.”
The four “were highly productive at their former firm, and they decided to leave that firm in full compliance with all legal and ethical rules,” O’Rielly told the Recorder in an email. “There was nothing inappropriate in the way they departed, or in the way they have conducted business since they left.”
