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[T] Joachim v. Flanzig11/6/2003
This opinion is uncorrected and will not be published in the printed Official Reports.
Digest-Index Classification: Partnership--Dissolution
ORDER
The following papers were read on Edward Joachim's motion to interpret the February __, 2003 Agreement:
Letter of Stephen G. Frommer, Esq. dated October 2, 2003; and
Letter of David Bolton, Esq. dated October 10, 2003.
BACKGROUND
This proceeding arises from the dissolution of a law firm in which Edward Joachim ("Joachim") and Sheldon Flanzig ("Flanzig") were partners Joachim & Flanzig ("Partnership" or "J & F"). The Partnership primarily represented Plaintiffs' in personal injury actions. Almost all of the Partnership's clients had retained the Partnership pursuant to the terms of contingent fee retainers. Thus, J & F's income was derived almost exclusively from the proceeds to which it was entitled to receive pursuant to the terms of the retainers from the settlements or judgments it obtained on behalf of its clients.
By agreement of the parties, May 10, 2002 was established as the date of the dissolution of the Partnership.
Two firms arose from the dissolved partnership; to wit: Joachim, Frommer, Cerrato & Levine, LLP and Flanzig and Flanzig, LLP (collectively "Successor Firms"). These new firms adopted a procedure for notifying the J & F clients so as to enable them to choose which successor firm would represent them thereafter.
By Stipulation and Order dated February __, 2003, the Successor Firms agreed to a formula for allocating the legal fees earned on cases in which J & F had been the attorney of record prior to May 10, 2002. The J & F cases were divided into four categories:
(1) Case in which a Note of Issue had been filed prior to May 10, 2002;
(2) Cases in which a Note of Issue had not been filed prior to May 10, 2002;
(3) Cases involving uninsured or underinsured motorist arbitrations; and
(4) Cases which had been resolved by settlement or judgment prior to May 10, 2002 for which the settlement funds or judgment proceeds had not yet been received or distributed.
After reimbursement for disbursements, payment to the client of the client's share and payment of co-counsel fees, if any, the successor firm which worked on and maintained the file after the agreed dissolution date received a percentage of the net earned legal fee and the balance was to be paid to the Partnership. In all cases, except for cases in Category 1, the Partnership's share of the fee was to be divided with 45% being paid to Joachim, 45% being paid to Flanzig and 10% being deposited into an escrow account.
The Stipulation established two methods for paying out legal fees for Category 1 cases. The Successor Firm representing the client at the time the action was resolved would prepare a Closing Statement and provide it to the other Successor Firm. The firm receiving the Closing Statement would then have 30 days to object to the proposed distribution. If an objection was not received, the funds would be distributed as follows:
a. reimbursement of disbursements incurred by the Partnership to be distributed as follows: 45% to Joachim, 45% to Flanzig and 10% in escrow;
b. reimbursement of disbursements incurred by the Successor Firm which represented the client when the action when the action was resolved;
c. client's share;
d. co-counsel fee;
e. the legal fee would be paid as follows: 50% to the firm which represented the client when the action was resolved and 50% to th
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