PHILADELPHIA – A high-profile family feud has come to Pennsylvania federal court, and a both local law firm and one of its attorneys now find themselves accused of ethical misconduct by one of its participants.
Anna K. Nupson of Philadelphia filed suit in the U.S. District Court for the Eastern District of Pennsylvania on June 15 versus Schnader Harrison Segal & Lewis and attorney Bruce A. Rosenfield, both of Philadelphia.
Prior to this case and subsequent to a proceeding in Montgomery County Orphans’ Court in February, Nupson, the sister of Philadelphia Phillies co-owner, John Middleton, received $22 million in an out-of-court settlement with her brother approved in April – representing a piece of the family’s tobacco fortune.
As an additional condition of the settlement, Nupson agreed that Middleton was not party to fraud or conspiracy when he assumed ownership of the family’s tobacco company 15 years ago, and pledged to avoid future litigation with Middleton in connection with financial transactions involving the family trust accounts.
Initially, Nupson had accused Middleton of fraud, falsifying evidence and cheating her, their mother Frances Middleton and sister Lucia Hughes, when he bought out their stakes in the family’s tobacco company, John Middleton, Inc., for $200 million in 2003 – then going on to flip the company to Altria, Inc. (a.k.a. Philip Morris), for a huge windfall of $2.9 billion in 2007.
Middleton categorically denied the accusations, and has been quoted as saying “greed” is at the core of Nupson’s legal motivations.
Now, Nupson is accusing the defendants, who represented her in the above inheritance battle, of violating federal and state law related to ethical legal practices and conflicts of interest, plus Pennsylvania Rules of Civil Procedure – all in an alleged attempt to court the favor and business of her brother, Middleton.
“The defendants violated numerous United States and Pennsylvania statutes, standards for ethical practice imposed by the Pennsylvania Rules of Professional Conduct and the common law, and their own procedures for addressing conflicts of interest so consistently and for so long as to describe serial and intentional misconduct,” the lawsuit reads.
The suit goes on to detail the alleged conflicts of interest, supposedly involving Middleton, which Nupson indicates was supposedly covered up by the defendants through a scheme of manipulation.
“For a period of several years, the defendants were secretly paid by a wealthy corporate client to represent Ms. Nupson in various capacities. The defendants failed to disclose that and other serious conflicts of interest, lied in response to Ms. Nupson’s inquiries about such conflicts, exploited their understanding of her vulnerabilities, and applied their sophistication with trust and estate law, corporate mergers and acquisitions, and related tax shelters in order to bait, pressure, and mislead her into making decisions that irreparably harmed her while benefiting their corporate patron, its chief executive, and his children,” the suit states.
As part of accumulated damages in response to those charges, Nupson wants to secure compensatory and exemplary amounts “sufficient to deter Rosenfield, the Schnader Firm, and any similarly situated Pennsylvania attorneys from reducing the practice of law to a cynical game of privilege and patronage, driven by ambition and avarice.”
A managing partner for Schnader Harrison Segal & Lewis, Nicholas LePore III, issued a response to Nupson’s complaint:
“We were officially served in this matter on Monday. We will file a comprehensive response in court. This complaint involves an old family dispute from many years ago. The allegations in the complaint are inaccurate and misleading. Schnader intends to vigorously defend against this meritless action. We are confident Mr. Rosenfield and the firm provided representation that was professional, competent, and ethical,” LePore said.
For legal malpractice, the plaintiff is seeking, jointly and severally, compensatory, exemplary and punitive damages in separate amounts to be determined at trial, plus costs of suit and any other relief as the Court deems just and proper.
The plaintiff is represented by Joel Matthew Young in Bernalillo, N.M.
The defendants have not yet secured legal counsel in this case.
U.S. District Court for the Eastern District of Pennsylvania case 2:18-cv-02505
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at firstname.lastname@example.org