A Washington federal judge has dismissed a lawsuit against Smith, Currie & Hancock over the return of ex-partner capital contributions, instead granting the firm's motion to compel arbitration.
The former partners, Dick Haire and Reginald Jones, along with other members of Atlanta-based Smith Currie's small Washington office, left the firm for Fox Rothschild in August 2011. Besides hiring Smith Currie attorneys and staff, Fox Rothschild also took over the lease of its Washington office.
Haire and Jones, in a complaint filed last April, said that they left Smith Currie over concerns about their compensation. The two claimed that after they left, the firm wrongly refused to return their capital contributions; Haire said he paid $49,981 into his capital account and Jones said he paid $65,852.
According to filings, Smith Currie notified the two lawyers that the firm intended to seek damages against them for alleged violations of the Partnership Agreement and breach of fiduciary duty. In a previous interview, a lead attorney for Haire and Jones, Christopher "Kip" Schwartz of Schwartz & Associates, said they denied any wrongdoing.
Smith Currie filed a motion to dismiss the case or, in the alternative, compel arbitration. Haire and Jones argued that although the Partnership Agreement did include an arbitration provision, they were no longer bound by it as former partners.
In an opinion released February 28, U.S. District Judge John Bates ordered the case to arbitration and dismissed the lawsuit, finding that an arbitrator would have to decide the issue of whether the arbitration provision applied. The plaintiffs' claims challenging the Partnership Agreement and the partnership relationship "likewise belong with the arbitrator," Bates wrote.
Eric Heyer of Schwartz & Associates, also a lead attorney for Haire and Jones, declined to comment. Lead attorney for Smith Currie, Everette Doffermyre of Doffermyre Shields Canfield & Knowles in Atlanta, declined to comment.