PHILADELPHIA – A Missouri law firm who filed litigation to pursue more than $3.5 million in outstanding legal bills from a half-dozen defendants spread across the United States and Puerto Rico has settled its case.
Armstrong Teasdale, LLP of St. Louis County, Mo. first filed suit in the U.S. District Court for the Eastern District of Pennsylvania on Aug. 14 versus Matt Martorello, Rebecca Martorello and Justin Martorello of Texas, Gallant Capital, LLC, of Houston, Texas, Liont, LLC of Dorado, Puerto Rico and Eventide Credit Acquisitions, LLC, of Dallas, Texas.
“In October 2018, Matt Martorello engaged Armstrong to represent him in several ongoing lawsuits, under the terms of an Engagement Letter dated Oct. 2, 2018. The October 2018 retention of Armstrong by Matt Martorello followed his earlier engagement in July 2017 of attorneys who later moved to Armstrong in September 2018. At that time, Martorello decided to retain Armstrong and move his files to Armstrong for the litigation described herein,” the suit said.
“On Dec. 13, 2018, Matt Martorello executed an Engagement Letter with Armstrong for its representation of Eventide. On June 6, 2019, Matt Martorello executed an Engagement Letter with Armstrong for its representation of Gallant. Armstrong represented some or all of the defendants in multiple lawsuits before multiple venues nationwide, from October 2018 to October 2020.”
The litigation in question was a series of 11 lawsuits and arbitrations lodged in federal courts across the country, including the Eastern District of Virginia, the Northern District of Georgia, the District of Oregon, the Northern District of California, the District of Massachusetts and the Central District of California.
“Armstrong has also represented some or all of the defendants in various arbitrations before the American Arbitration Association. In accord with the engagement letters, during the engagement, defendants were provided statements for the services Armstrong rendered. From November of 2018 until July of 2019, defendants paid the statements as presented,” the suit stated.
“In September 2020, Armstrong was advised that defendants were retaining new counsel to replace Armstrong as their counsel. Prior to terminating Armstrong as their attorneys, defendants never stated that they would not pay Armstrong’s statement. Defendants have failed to pay outstanding balances for these services, in an amount exceeding $3,500,000.”
According to Armstrong Teasdale’s suit, “the work it performed was necessary, the number of hours spent performing that work was appropriate and the hourly rates charged for that work were fair and reasonable for the specialized, complex, and professional services provided to defendants.”
The instant case was initially filed in a Missouri federal court, but counsel for the defendants there said “virtually all” of Armstrong Teasdale’s services were provided by the firm’s offices in Philadelphia and Virginia, which called into question the St. Louis’ federal court’s jurisdiction over the dispute.
The Martorello defendants filed a motion to dismiss the complaint on Dec. 10, for failure to state a claim.
“Armstrong pleads no allegations as to Rebecca and Justin that would provide Rebecca and Justin with fair notice of plaintiff’s claim as to Rebecca and Justin. Absent from its complaint, as noted above, are well-plead allegations, or any allegations at all, demonstrating that Armstrong represented Rebecca and Justin in multiple lawsuits before multiple venues nationwide; that Armstrong represented Rebecca and Justin in various arbitrations before the American Arbitration Association; that Armstrong provided Rebecca and Justin statements for the services they rendered; that Rebecca and Justin made payments on those statements; that Rebecca and Justin have failed to pay an outstanding balance for legal services to them in an amount exceeding $3,500,000 and that the work performed for Rebecca and Justin was necessary, the hours spent performing work for Rebecca and Justin was appropriate, and the hourly rates charged by Armstrong to Rebecca and Justin were fair and reasonable for the legal services Armstrong provided to each of them,” per the answer.
“Armstrong cannot provide fair notice of its claims as to Rebecca and Justin because it did not engage in these acts or comply with their own Engagement Letters as alleged in its complaint as to Rebecca and Justin. Armstrong’s complaint consists solely of threadbare recitals of a single cause of action collectively clumping Rebecca and Justin with the other named defendants and supported by its mere conclusory statements and, as such, does not meet the threshold test to withstand a motion to dismiss.”
According to the defendants, without “a complete recitation of the services provided and fees requested by Armstrong for those services, one cannot make the perfunctory conclusion that Rebecca and Justin somehow received legal services without making payment for same and engaged in unjust and inequitable activities.”
“Additionally, as to Armstrong’s claims of joint and several liability because the statements are merely conclusions, they are not entitled to an assumption of truth and should disregarded. Armstrong’s cause of action for quantum meruit as to Rebecca and Justin is likewise improper and runs afoul of this pleading requirement,” the motion stated.
On Jan. 4, Armstrong Teasdale filed a motion for leave to file an amended complaint, which it said “provides additional factual allegations and sharpens the legal claims against the defendants, including by withdrawing the suit on account cause of action asserted in the initial complaint filed in the Eastern District of Missouri.”
Additionally, the firm sought in a concurrent motion filed the same day, to introduce exhibits under seal, due to their containing confidential and privileged information. Specifically, the exhibits are engagement letters, invoices to these former clients, a summary of invoiced amounts and payments and summary exhibits that reference and include information from such invoices.
On Feb. 2, defendant Rebecca Martorello filed a motion to dismiss herself from the litigation, arguing the plaintiff had not been able to personally connect her to the outstanding funds being sought.
UPDATE
On March 16, it was noted that the parties in the case had reached a settlement. Terms of the settlement were not disclosed.
“It is hereby stipulated by the parties, through their undersigned counsel, that the above-captioned action hereby is dismissed and that all claims, counterclaims and third-party claims are dismissed with prejudice,” per the stipulation.
U.S. District Court for the Eastern District of Pennsylvania Judge Chad F. Kenney authorized the settlement and the closing of the case on the following day, March 17.
The plaintiff was represented by Carrie S. Love and Michael J. Engle of Armstrong Teasdale, plus John S. Summers and Andrew M. Erdlen of Hangley Aronchick Segal Pudlin & Schiller, all in Philadelphia.
The defendants were represented by George Bochetto and Jeffrey W. Ogren of Bochetto & Lentz, also in Philadelphia, plus Joseph Brophy, Marianne Barth and Cara J. Filippelli of Brophy & Devaney, in Austin, Texas.
U.S. District Court for the Eastern District of Pennsylvania case 2:21-cv-03631
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com