(CN) - A former partner of Gutride Safier waited too long to accuse the firm of conspiring to force him out and breaching their partnership agreement, a federal judge ruled.
Gutride Safier, a San Francisco-based class action and patent litigation firm, filed suit in February against former partner New York-based partner Michael Reese and the law firm where he currently practices, Reese Richman, alleging "that the Reese parties have failed to comply with the terms of an agreement which governs the withdrawal of Mr. Reese from Gutride Safier," the ruling states.
Reese filed counterclaims against Gutride Safier and two of its partners, Adam Gutride and Seth Safier, alleging civil conspiracy, breach of contract and tortious interference with a business relationship.
In February 2008, Gutride Safier received payment on two settled cases that Reese had worked. Reese claimed he deserved a share of the payments under the addendum to his partnership agreement.
He said Gutride and Safier invited him to California under the pretense of celebrating the recent settlements but that meeting was actually designed to force Reese out of the firm and breach the addendum by giving Gutride and Safier more than their shares.
Gutride and Safier allegedly threatened Reese with bankruptcy if he did not leave the firm.
Reese said he would have been paid more than $750,000 if he had not been coerced into the withdrawal agreement.
Though the lawyer fought to apply New York law, and its six-year statute of limitations, U.S. District Judge Edward Chen found that California applies because the "alleged wrongdoing took place within this forum."
"Taking into account all of these facts, the Court concludes that, while New York may have some interest in having its law applied, California's interests would be more substantially impaired if its own law were not applied," Chen wrote.
California has a four-year limitation, making Reese's claims barred.
"Reese has never disputed that he signed the withdrawal agreement and accepted the cash pay-out under the Withdrawal Agreement (more than $300,000), which effectively establishes that he abandoned the partnership agreement/addendum," the judge added.
Chen also nixed Reese's counterclaim for civil conspiracy since, under both California and New York law, "one cannot conspire to breach a contract to which he or she is a party."
Reese can, however, amend his counterclaim for tortious interference with a business relationship.
"Reese has claimed an actual injury, but the problem is that he has done so in a conclusory fashion only," Chen wrote. "For example, he alleges in his counterclaims that his ability to represent his father's interests in the Ticketmaster litigation has been 'severely compromised and negatively impacted due to the fact that defendants GS LLP, as directed by defendants Gutride and Safier, filed the above-captioned lawsuit against [him],' ... but he does not explain how." (Emphasis in original.)
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