Verner v. Andrews

Background

Paul W. Verner and Verner Simon, Inc. brought claims for breach of contract, breach of the duty of good faith and fair dealing, fraud, unjust enrichment, and account stated. The claims concerned defendants’ alleged failure to pay bills for legal services provided over approximately six years. The complaint alleged that the unpaid bills totaled approximately $700,000.

Peter J. Andrews and numerous defendant entities allegedly under his ownership and control moved for four forms of relief: dismissal based on insufficient service, an order requiring arbitration, dismissal based on an alleged violation of a settlement agreement from an earlier related proceeding, and consolidation with that earlier proceeding.

Rulings on Service and Arbitration

During a telephone conference, defendants agreed to withdraw their motion challenging the corporate defendants’ waiver of service of the summons and complaint.

The defendants also argued that mandatory arbitration clauses in the retainer agreements required dismissal or arbitration of plaintiffs’ claims. The parties acknowledged that all but one of the retainer agreements contained arbitration provisions, but that approximately $550,000 of the approximately $700,000 claimed arose from the one agreement without an arbitration provision. Neither party expressed interest in pursuing arbitration instead of settlement discussions or mediation. The court therefore denied the motion to compel arbitration without prejudice.

Settlement-Agreement Motion

Defendants argued that plaintiffs violated a settlement agreement by filing the complaint without first providing Andrews with a draft and discussing the forum and possible mediation. The court denied this motion. It stated that the alleged breach was immaterial and that the issue was moot because Andrews later received a copy of the complaint. The court also noted that the parties could still engage in settlement discussions or mediation.

Consolidation

Defendants moved under Federal Rule of Civil Procedure 42(a) to consolidate this case with the earlier related proceeding. The court denied the motion. It explained that a pending case cannot be consolidated with a closed action and that the two cases did not satisfy the relatedness requirements of the court’s local rule.

Disposition

The court stated that the remaining motions were denied, with the arbitration motion denied without prejudice. It directed the Clerk of Court to close the motions pending at ECF Nos. 84, 90, 91, 94, 103, and 108. Judge Naomi Reice Buchwald did not decide the underlying claims for unpaid legal fees in this order.