Miller Law Firm, PC v. Carney Williams Bates Bozeman & Pulliman, PLLC et al
ORDER denying defendants' Motion to Dismiss 6 and granting the parties Motion to Compel Arbitration 3 , 4 Signed by District Judge George Caram Steeh. (MBea)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
THE MILLER LAW FIRM, P.C.,
CASE NO. 12-14951
HON. GEORGE CARAM STEEH
CARNEY WILLIAM BATES
BOZEMAN & PULLIAM, PLLC;
and GOLOMB & HONIK, P.C.,
ORDER DENYING DEFENDANTS’ MOTION TO DISMISS (DOC. # 6) AND
GRANTING THE PARTIES’ MOTIONS TO COMPEL ARBITRATION (DOCS. ## 3, 4)
In this case plaintiff alleges that the two defendant law firms breached a CoCounsel Agreement, under which a number of law firms agreed to collaborate on
“payment protection plan” litigation against issuers of credit cards. That Agreement
contained an arbitration provision. Defendants have moved to dismiss and to compel
arbitration. Plaintiff has also moved to compel arbitration. A hearing was conducted on
February 25, 2013. At the hearing the court indicated it would deny the motion to
dismiss but grant the motions to compel arbitration. The court’s reasoning follows.
The following factual background is alleged in plaintiff’s complaint. Plaintiff, the
Miller Law Firm (“Miller”) in Rochester, Michigan, and the two defendant law firms
(located in Little Rock, AR and Philadelphia, PA, respectively), among others, initially
executed a “Co-Counsel Agreement” (“Agreement”) in September 2010. Under that
Agreement the parties agreed to jointly prosecute putative class action lawsuits
involving credit card payment protection insurance. An amended agreement containing
an arbitration provision was executed in early 2011.
Miller states that it filed one such action in the Eastern District of Michigan on
behalf of one of its clients asserting various payment protection claims. Defendants are
alleged to have filed a number of similar cases, including one against JPMorgan Chase.
Miller states that the Chase lawsuit was “part of the parties’ joint venture, was not
excluded by the Co-Counsel Agreement, and was expressly discussed on conference
calls among the parties to the Co-Counsel Agreement.” Miller asserts that it contributed
$10,000 to a litigation fund for the undertaking contemplated by the Agreement and that
it took on all the work assignments it was asked to perform. Miller further alleges that it
“repeatedly” asked the defendant law firms about additional work assignments.
Miller alleges that it performed work on a number of payment protection plan
cases, and that all such work was “done for the benefit of all joint venture cases,” and
that “all fees received by any of the parties to the Co-Counsel Agreement in any of the
cases were to be allocated among all the parties regardless of which case they were
awarded in.” Complaint at ¶ 12.
The complaint further asserts that defendants later “falsely” claimed that the
venture was unsuccessful, and gave Miller only $5,000 for its “contribution to the joint
effort,” on top of a refund of Miller’s initial $10,000 litigation fund investment.
Subsequently, Miller discovered that the Chase lawsuit had settled, netting over $3.5
million in fees for the defendants.
Despite the existence of an arbitration provision in the Agreement, Miller filed suit
in November 2012, alleging breach of contract and breach of fiduciary duty, and
requesting relief in the form of disgorgement of the monies received by defendants as a
result of the Chase settlement. The matter was jointly removed by defendants from
Wayne County Circuit Court on the basis of diversity. In the notice of removal,
defendants noted that they did not consent to personal jurisdiction in the State of
Now before the court are three pending motions: (1) Defendants’ Motion to
Dismiss; (2) Defendants’ Motion to Compel Arbitration; and (3) Plaintiff’s Motion to
Compel Arbitration, discussed below.
Defendants’ Motion to Dismiss
Defendants urge the court to dismiss Miller’s complaint for failure to state a claim
of breach of contract or breach of fiduciary duty. Defendants first assert that Miller’s
failure to attach the allegedly breached contract violates Michigan procedural rules, and
because this action was first filed in Michigan state court, requires dismissal of those
claims. Defendants also point out that Miller repeatedly cites to a “September 20, 2010
Agreement,” when that Agreement was superseded by an agreement signed and dated
January 27, 2011 (which, unlike the September Agreement, contained an arbitration
Next, defendants contend that Miller has failed to provide sufficient factual
support for its claims. Specifically, defendants point to Miller’s allegation that it
deserved to share in the proceeds resulting from the Chase lawsuit’s settlement without
any citation to a provision in either of the agreements that would govern such allocation.
Defendants also highlight the fact that Miller does not allege that it actually performed
work on the Chase lawsuit. Defendants quote from the January Agreement, providing
that defendants would serve as lead counsel in several “payment protection plan”
lawsuits filed around the country. The January Agreement then provided that Miller,
along with other law firms around the country, would contribute various resources to the
litigation and undertake case assignments made by defendants. It further provided that
if the efforts proved successful, defendants would distribute fees based on factors
including time records, lodestar, value added, risk undertaken, benefits achieved,
complexity of issues, effort, leadership, case development, and the like. Defendants
assert that Miller has not alleged satisfaction of a single factor and that dismissal is
appropriate on this basis.1
The court will not dismiss the case on the basis that Miller failed to attach the
Agreement in violation of applicable Michigan procedural rules at the time of filing the
complaint in state court.2 Furthermore, it appears to the court that the Agreement may
support a more global interpretation than that of defendants; additionally, the court
notes that plaintiff alleges failure to share work and fees for cases generally, not only
Defendants also convincingly assert that an agreement to share revenue does not
create a fiduciary relationship and that Miller has failed to state a claim of breach of
For the reason that the Co-Counsel Agreement is central to the plaintiff’s claims,
and referred to throughout the complaint, the court finds no need to convert this motion to
one for summary judgment. See Rondigo, L.L.C. v. Twp. of Richmond, 641 F.3d 673, 68081 (6th Cir. 2011) (citing Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th
the Chase litigation.3 Moreover, defendants appear to concede that such fees may be
forthcoming in other cases. Dismissal on the grounds argued by defendants is not
Motions to Compel Arbitration
Both Miller and the defendant law firms have filed motions to compel arbitration.
The defendant law firms’ motion simply asserts that Miller’s complaint should be
dismissed and this court should order arbitration of the dispute. Miller, now
acknowledging the arbitration provision in the 2011 Agreement, requests arbitration
along with specific implementation procedures.
The Agreement’s arbitration provision states, in pertinent part:
If, after good-faith efforts, Counsel are unable to resolve their dispute
informally or through mediation, the dispute will be settled by binding
arbitration, whose decision shall be final and binding. Counsel agree to
jointly share the cost of any dispute resolution proceedings.
Co-Counsel Agreement at ¶ 14. In Miller’s motion, it states that it has attempted to
come to an agreement with defendants on the procedures (venue, selection of
arbitrator, etc.) for arbitration without success. Miller points to § 5 of the Federal
Arbitration Act, which addresses the role of the court in such a dispute:
If in the agreement provision be made for a method of naming or
appointing an arbitrator or arbitrators or an umpire, such method shall be
followed; but if no method be provided therein, or if a method be provided
and any party thereto shall fail to avail himself of such method, or if for any
The court notes defendants’ statement that Miller “did not perform any work on
behalf of the Chase class or otherwise attributable to that settlement. Plaintiff Miller has
subsequently presented billable hours to Lead Counsel related to the Payment Protection
Litigation, and indeed there are cases remaining against four defendant credit card issuers
for which fees are expected (or potentially available) in the future.”
other reason there shall be a lapse in the naming of an arbitrator or
arbitrators or umpire, or in filling a vacancy, then upon the application of
either party to the controversy the court shall designate and appoint an
arbitrator or arbitrators or umpire, as the case may require, who shall act
under the said agreement with the same force and effect as if he or they
had been specifically named therein; and unless otherwise provided in the
agreement the arbitration shall be by a single arbitrator.
9 U.S.C. § 5.
Miller next contends that the arbitration should take place in Michigan pursuant to
§ 4 of the Federal Arbitration Act. This section of the Act states that “[t]he hearing and
proceedings, under such [agreement to arbitrate], shall be within the district in which the
petition for an order directing such arbitration is filed.” 9 U.S.C. § 4.4 Miller also points
to Sixth Circuit precedent holding that “the Federal Arbitration Act prevents federal
courts from compelling arbitration outside of their own district.” Inland Bulk Transfer Co.
v. Cummins Engine Co., 332 F.3d 1007, 1018 (6th Cir. 2003). Miller further asserts that
a stay of the action pending arbitration is proper here, where no arbitration rules or
procedures were set forth in the Agreement. That way, Miller states, the court will have
jurisdiction to enforce subpoenas under § 7 of the FAA, or enforce other FAA
procedures during the pendency of the arbitration. Finally, Miller requests that the court
Miller contends, apparently in response to the defendants’ statement on their
removal notice concerning personal jurisdiction, that this court has personal jurisdiction
over the Arkansas and Pennsylvania law firms. Miller states it was solicited by the
defendants to join the venture in Michigan. Miller also points out that the defendants
directed it to file a lawsuit in this district (Driscol v. Citigroup, Inc., Case No. 10-13205), that
the Agreement contemplated that the defendant law firms would be admitted pro hac vice
in that case, and that the defendant law firms corresponded in writing, email, and over the
telephone with Miller in connection with the “joint venture cases.” Finally, Miller points to
several other cases and instances where the defendant law firms have appeared in this
district and/or Michigan state court. As Miller contends, personal jurisdiction does not seem
to be an issue here, and defendants have not seriously pursued an argument that it is
appoint an arbitrator with class action experience. Finding the bulk of Miller’s requests
to be appropriate here, the court will grant the motions to compel as set forth below.
As stated above and on the record, the defendants’ motion to dismiss the
complaint is DENIED. The parties’ motions to compel arbitration are GRANTED. The
court is in agreement with Miller that arbitration should occur in this district, where both
parties filed their petitions to compel arbitration. The parties have two weeks from the
date of this order to agree on an arbitrator or submit a list of proposed arbitrators, and
the court will consider those proposals in making its decision on an appointment. The
case shall be stayed and administratively CLOSED upon the court’s appointment of an
arbitrator; however, the parties hereto may request that the court reopen the matter as
necessary without the payment of any additional fees or costs.
IT IS SO ORDERED.
Dated: February 26, 2013
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
February 26, 2013, by electronic and/or ordinary mail.
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