PHILADELPHIA — A federal judge is again considering whether the case of a former partner of Nelson Levine de Luca & Hamilton LLC, who wants mediation over money he claims the dissolved firm owes him, should continue or go into arbitration, according to recent court documents.
Earlier this month, Michael R. Nelson, former Nelson Levin chairman and now a partner at Eversheds Sutherland in New York, filed a motion in U.S. District Court for Pennsylvania's Eastern District to compel arbitration and for a stay in the case pending arbitration. District Court Judge John R. Padova has not yet ruled on the motion, which does not mark the first time in the case that Nelson has attempted to force arbitration.
Nelson has been trying to force arbitration with his former colleagues, who he says took with them more money and less debt than they should have when the firm dissolved. The Pennsylvania Bar Association has also called for arbitration in the case.
The former firm's Operating and Buy-Sell Agreement says that "any and all claims, controversies and disputes" should be taken into mediation as provided for in the Pennsylvania Bar Association's Lawyer Dispute Resolution Program Rules. That program is referred to in court documents as the "PBA Program" and, in a memorandum issued earlier this year, Padova said defendants in the case had received demands for arbitration from Nelson and the state bar.
"On Jan. 23, 2017, [Nelson] invoked the mediation and arbitration process under the PBA Program by sending a notice to the PBA and defendants of the existence of disputes among members of the firm that require resolution," Padova said in his memorandum issued in April. "On Feb. 6, 2017, the PBA sent a letter to defendants notifying them of the request for dispute resolution under the PBA Program and asking that they sign a standard mediation agreement and pay the required fee."
Nelson filed his initial complaint last July and amended it in November. Defendants in the case are David Brown, Daniel de Luca, Kenneth Levine, John Clark, Michael Hamilton, William Krekstein, Claudia McCarron and John Mullen.
Defendants have resisted mediation and arbitration. Instead, most of the defendants asked Padova to throw out the case, which Padova, in his April memorandum, refused to do.
Early last month, Nelson filed a motion to compel arbitration, referring to the operating and buy-sell agreements, and arguing all parties in the case are contractually bound to seek alternative dispute resolution.
"The two questions for this court to decide are whether there exists an agreement to arbitrate, and whether the claims at issue fall within the scope of that agreement," Nelson said in that motion. "In our case, it is clear the answer to both questions is yes."
Late last month, Nelson filed a 29-page memorandum in opposition to a cross-motion filed by one defendant, Michael Hamilton, on the pleadings for summary judgment. Hamilton, in his motion, claims Nelson provided insufficient notice to the PBA Program, said the dissolved lawsuit "is an indispensable party," and said that Nelson's claims "are insufficiently specific and that Hamilton is entitled to discovery.
Nelson, in his own motion, disagreed with Hamilton's claims, saying he already answered much of Hamilton's arguments in previous motions.
"Those issues have also been previously ruled upon by the court, against defendants, in the court's opinion denying the motions to dismiss the amended complaint," Nelson said in his motion. "Hamilton's cross-motion fails to point to any new facts or new law that would compel this court to reconsider its prior rulings on those issues."