Lawyer sues brother, former partners after ouster from 3 firms

Joel S. Finkelstein said he received an invitation this summer from his fellow equity partners to attend a meeting on the financial condition of the three personal injury firms they controlled.

He showed up for the June 10 meeting "in good faith and fully prepared to discuss the financial issues and problems of the law firms," Finkelstein said in court papers. But when he got there, his key card did not open one of the doors at Finkelstein & Partners' Newburgh, N.Y., offices. Finkelstein said he asked his younger brother, Andrew, for an explanation.

It was at that point that Joel said Andrew, the managing partner of all three firms, handed him his walking papers.

In a suit filed by Joel Finkelstein last week in Manhattan Supreme Court, he claims he had been duped into attending a "sham" meeting where he learned that his partners, "without prior notice or warning and without any substantive basis, had removed him without cause as a partner" from Finkelstein & Partners and two other firms, Jacoby & Meyers Law Offices and Fine, Olin & Anderman.

Andrew Finkelstein disputes his brother's version of events. He said in an interview that Joel called the meeting and after some discussion, the other partners voted unanimously, and in his presence, to oust him for cause.

"It is terribly sad that my brother didn't live up to the standards and contributions we expect from all partners," Andrew said.

Finkelstein & Partners was founded in 1959 by Howard S. Finkelstein. The Newburgh-based firm has multiple offices in New York, New Jersey and Connecticut, with nearly 70 attorneys and more than 220 support staff.

According to Fine Olin's website, that firm was founded in 1963 and counts more than 100 attorneys.

The 38-year-old Jacoby & Meyers is the best known of the three firms. It is widely recognized as a pioneer in law firm TV advertising. Joel and Andrew formed a relationship with the firm in 1999.

Joel graduated from Boston University School of Law and was admitted in 1986. Andrew earned his J.D. in 1992 from Brooklyn Law School, his father's alma mater.

According to his lawsuit, Joel was assigned an interest of 38.3 percent in Finkelstein & Partners, 38.3 percent in Fine Olin and 25.5 percent in Jacoby & Meyers.

Now, Joel is demanding more than $7 million for breach of contract, anticipatory breach and breach of fiduciary duty against the three personal injury firms, his brother Andrew, Kenneth L. Oliver and the estate of Gail Koff, an early partner of Jacoby & Meyers who died on Aug. 31.

Joel claims that from the moment of his ouster "for absolutely no valid reason," he "was not permitted to reenter the offices of the Defendant Law Firms and was immediately barred from all of its offices and from its email server and was deprived of all client contact."

He maintains that he was let go because he was trying to "correct some of the failing policies implemented by his brother in his role as managing partner," including the "incurring of substantial and ongoing debt for the partnerships."

His former partners disagree.

"It's unfortunate that Joel has chosen to proceed in this direction. The firms have tried to treat him fairly, generously and appropriately, and he's chosen to take a different path," said Jeffrey Carton, an attorney for all of the defendants except the estate of Koff.

Andrew said that the partners were prepared to deal with Joel as even-handedly as they had dealt with other departing partners in the past, including their father, Howard, who has retired and is now listed as a senior partner at Finkelstein & Partners. Howard Finkelstein declined to comment.

Carton, of Meiselman, Denlea, Packman, Carton & Eberz, said in an interview that the law and the facts "are squarely" on his clients' side.

"While the firms would have hoped that this could have been resolved amicably and not in the public eye, [Joel's] now left them with no choice but to litigate," he added.

Under the firms' partnership agreements, a partner who withdraws either voluntarily or involuntarily is entitled to his capital account, including undistributed income, his share of accounts receivable of settled cases and three years' prior earnings.

However, the provision does not apply to partners whose removal was for cause. The defendants say that was the case here.

Carton said that "a very unflattering picture" of Joel will emerge as the litigation unfolds.

Arthur J. Ciampi of Ciampi LLC, Joel's attorney, said that the firms have taken the position that they owe Joel significantly less than $7 million, but will not commit to a figure. They "refuse to be definite about anything," Ciampi said.

He said the firms have rebuffed every attempt to settle the dispute, including an offer to take the matter to arbitration or mediation.

Ciampi said his client had been trying to improve the administration and bottom line of the firms. He declined to discuss details about the firms' financial condition, saying it was tangential to the lawsuit.

Carton took issue with Joel's contention that the firms had taken a financial hit.

"Each of these firms enjoy stellar reputations that are well-deserved and the product of many years of a successful track record and of service to many clients. And they continue to do well financially," he said in an interview.

Andrew said that all three firms had "exceptional years" in 2009, and it looks like this year's figures will be even better.

Of Joel's suit, he said, "He's my brother, and in no way am I seeking to embarrass him. But he has elected to bring a personal matter public."

(Published by Law.com - October 4, 2010)