PITTSBURGH – An attorney who resigned from a local law firm at the end of 2021 and brought action on claims that the firm unfairly denied him compensation, has tentatively settled those same claims.
Christopher J. Regan first filed suit in the U.S. District Court for the Western District of Pennsylvania on May 16 versus Bordas & Bordas, PLLC, Bordas Mineral Management, LLC and Wheelhouse Creative, LLC, all of Wheeling, W.Va.
“At times relevant to the allegations set forth in this complaint, Regan was a member of Bordas & Bordas, Bordas Mineral and Wheelhouse, with a percentage ownership interest in each entity. As to Bordas & Bordas, Regan’s percentage ownership interest was eighteen percent (18%). As to Bordas Mineral, Regan’s percentage ownership interest was ten percent (10%). As to Wheelhouse, Regan’s percentage ownership interest was eighteen percent (18%),” the suit said.
“At times relevant to the allegations set forth in this complaint, a written agreement entitled ‘Professional Limited Liability Operating Agreement of Bordas & Bordas, PLLC’, governed the affairs of Bordas & Bordas, the conduct of its business and relations among its members. When the Bordas & Bordas operating agreement was entered into on or about July 18, 2018, its members included Regan, James G. Bordas, Jr., Linda M. Bordas, Scott S. Blass, James G. Bordas, III and Geoffrey C. Brown. James G. Bordas, Jr. and Linda M. Bordas were designated as ‘Founding Members,’ having founded the predecessor of Bordas & Bordas.”
The suit continued that with respect to non-founding members such as Regan, the Bordas & Bordas operating agreement provides, in part, that any member who withdraws by voluntarily leaving Bordas & Bordas “shall be entitled to distribution of the balance of his or her capital account” and “shall not be entitled to any other form of compensation and shall have no further interest in [Bordas & Bordas] or any of its assets and/or income.”
Furthermore, the suit said that in contrast to Bordas & Bordas, there is no operating agreement or other agreement regulating and governing both the affairs of Bordas Mineral and Wheelhouse, the conduct of its business or relations among its members – and as such, there is no agreement addressing the distributional interest or other compensation to which a member of Bordas Mineral is entitled upon withdrawal by voluntarily leaving the company.
“In the absence of an agreement addressing compensation due a member upon his withdrawal and dissociation from an at-will West Virginia limited liability company such as Bordas Mineral and Wheelhouse, West Virginia Code Section 31B-7-701(a)(1) requires such company to purchase the member’s distributional interest ‘for its fair value determined as of the date of the member’s dissociation if the member’s dissociation does not result in a dissolution and winding up of the company’s business.’ In 2021, Regan rightfully gave notice of his express will and intent to withdraw and dissociate from Bordas & Bordas, Bordas Mineral and Wheelhouse, effective on a date to be determined. After discussion, Bordas & Bordas, Bordas Mineral and Wheelhouse preferred, and the parties ultimately agreed, that Regan’s withdrawal and dissociation would be effective Dec. 31, 2021,” the suit stated.
“Notwithstanding Regan’s withdrawal and dissociation, Bordas & Bordas, Bordas Mineral and Wheelhouse have all continued to operate, with none of these entities dissolving or winding up its business. Notwithstanding the disputes described herein, Bordas & Bordas, Bordas Mineral and Wheelhouse have each refused to disclose to Regan full and complete documentation from which the distributional interests or other compensation to which Regan is entitled may be calculated in accordance with generally accepted accounting principles. The claims set forth hereafter arise out of a disagreement between Regan and the defendants resulting from Regan’s withdrawal and dissociation and each defendant’s failure to pay Regan the distributional interest to which he is entitled.”
On Aug. 17, Bordas & Bordas answered the complaint and denied Regan’s claims. The firm countered that the plaintiff was offered the amount contained in his respective capital accounts.
“Plaintiff’s allegations fail to state any cause of action upon which relief may be granted. To the contrary, the amounts contained in Regan’s capital accounts were disclosed and offered to Regan. Per the operating agreements of the defendants, Regan was offered distribution of his capital accounts. Contrary to the allegations in the complaint, Regan was offered all distributions that he is entitled to pursuant to the companies’ operating agreements. It is denied that plaintiff’s capital accounts included, or should have included any additional amounts than those offered to plaintiff. It is further denied that Bordas & Bordas breached the operating agreement in any way or that plaintiff has suffered any injury or damages,” the answer stated, in part.
“Plaintiff has failed to mitigate damages. Defendant pleads waiver, estoppel, justification and laches as affirmative defenses to the claims alleged by the plaintiff. Defendants offered payment of all amounts due and owing to plaintiff under the terms of the operating agreements between the parties. Plaintiff refused to accept payment of the amounts contained in his capital accounts. Plaintiff’s complaint is completely without merit. Accordingly, any action by plaintiff or his attorneys to proceed with the case would be without foundation, in bad faith, frivolous and unreasonable. For these reasons, defendants are entitled to attorney fees, costs and expenses.”
UPDATE
After a December mediation session, U.S. District Court for the Western District of Pennsylvania Judge Robert J. Colville noted in a Jan. 12 order that the case had tentatively been settled and should be administratively closed. Terms of the prospective settlement were not revealed.
“The Court having been advised that the above-captioned case has been resolved and that the only matters remaining to be completed are the payment of the settlement proceeds, if any, and the submission of a stipulation for dismissal under Federal Rule of Civil Procedure 41(a), and, it appearing that there is no further action required by the Court at this time; it is hereby ordered that the Clerk mark the above-captioned case closed; that nothing contained in this order shall be considered a dismissal or disposition of this action, and, that should further proceedings therein become necessary or desirable, either party may initiate them in the same manner as if this order had not been entered,” Colville said.
“It is further ordered that the Court expressly retains jurisdiction in this matter to consider any issue arising during the period when settlement is being finalized, including, but not limited to, enforcing settlement.”
The plaintiff was represented by Avrum Levicoff and Robert L. Hogan of The Levicoff Law Firm, in Pittsburgh.
The defendants were represented by Thomas B. Anderson of Bordas & Bordas, also in Pittsburgh.
U.S. District Court for the Western District of Pennsylvania case 2:23-cv-00822
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com