PHILADELPHIA – A New York City law firm accused of malpractice in a protracted legal battle spanning four years and counting has asked a federal court to dismiss the case filed against it, due to the plaintiffs’ alleged failure to comply with court orders.

Counsel representing Bracewell, LLP (formerly known as Bracewell & Giuliani) filed a motion to dismiss Craig and Mary Jo Sanford’s $12.5 million legal malpractice lawsuit, based on what they felt was the plaintiffs’ repeated refusals to comply with court orders based on arbitration proceedings in the case.

The Sanfords first filed suit against Bracewell in the Bucks County Court of Common Pleas in March 2013, but Bracewell quickly removed the suit to federal court.

According to the litigation, the Sanfords retained Bracewell to pursue recovery of $12.5 million from the sale of their medical waste disposal business, one which they went on to lose to a supposed finance professional named Jamie Smith, who had promised to move their money into “an interest-earning, offshore account.”

The Sanfords claim they hired Bracewell for this purpose on the advice of a partner at the firm named David Stockwell, who was supposedly acquainted with Smith – but that the Bracewell did not perform a proper inquiry into the matter.

Dissatisfied with those results, the couple says they enlisted the services of a new attorney to track down the adviser, but by the time he was found, they were unable to retrieve any of the $12.5 million. The Sanfords claim Bracewell’s allegedly deficient investigation stopped them from getting their money back, but Bracewell responded that the dispute belonged in arbitration.

A point of contention in the resultant litigation was the plaintiffs being having different client connections to Bracewell – Craig Sanford signed a formal engagement letter, while Mary Jo did not. However, she claimed to have reached an “oral agreement” with Bracewell and paid Stockwell a $50,000 retainer check.

U.S. District Court Judge Joel H. Slomsky previously decided that the Sanfords’ claims belonged in arbitration, but the plaintiffs have allegedly failed to participate in the arbitration process and or show proof of their claimed financial hardship.

In February, the case was placed in suspended status, pending an inquiry into the plaintiffs’ ability to pay for their share of the arbitration proceedings.

On April 24, Peter C. Buckley, a member of counsel for Bracewell, filed a motion for dismissal based on the above rationale of non-participation or payment in arbitration proceedings ordered by the Court in March 2014 and September 2015, and for not providing proof of their claimed financial hardship.

“The Sanfords are unwilling, but not unable, to contribute to the cost of the arbitration. Their willful non-payment of arbitration expenses is a strategy to avoid arbitration altogether and a violation of the Court’s earlier orders directing them to arbitrate their claims,” Buckley said in the dismissal motion.

“The Sanfords chose a strategy of willful non-payment and ‘sandbagged’ the arbitration in violation of the arbitration orders. They have the ability to pay but simply chose not to, and then refused to disclose the full extent of their financial means. Arbitration ‘has been had in accordance with the terms of the agreement’, and dismissal is warranted because the Sanfords failed to comply with numerous orders of the Court,” Buckley added.

The defense’s dismissal motion remains pending.

The plaintiffs are represented by Clifford E. Haines and Danielle M. Weiss of Haines & Associates, in Philadelphia.

The defendant is represented by Evan R. Luce, Peter C. Buckley and Steven M. Schneebaum of Fox Rothschild, in both Philadelphia and Washington, D.C.

U.S. District Court for the Eastern District of Pennsylvania case 2:13-cv-01205

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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