Some of the most complex and hotly-contested business divorce litigation arises from the dissolution of law firms. Perhaps law firm dissolutions are prone to litigation because many are organized as partnerships or LLPs, and New York’s Partnership Law, which governs those entities, is far more archaic (and less intuitive) than the regulatory regimes governing other forms of business association. Perhaps it is because lawyers ironically are unlikely to properly document the intricacies of their own partnership agreements. Or perhaps lawyers simply are more litigious than other business owners.
Whatever the reason, the dissolution of a law firm implicates a host of issues not ordinarily present in most other businesses. Lawyers’ ethical obligations, confidential files, and clients’ unfettered ability to choose their counsel all add to the complexity of the dissolution process, particularly when the process devolves into litigation.
The litigation between Samuel Capizzi (“Capizzi”) and his former law firm, Brown Chiari LLP (“BCLLP”) has already made its mark on business divorce jurisprudence with keystone decisions concerning collateral estoppel and judicial estoppel (discussed in this post). As it approaches its sixth birthday, the case continues to deliver, with Erie County Commercial Division Justice Timothy J. Walker recently authoring two notable decisions concerning Capizzi’s interest in some 1,600 contingency fee cases held by BCLLP at the time of its dissolution.