SAN JUAN, Puerto Rico - Louisiana lawyers were late to get to court to litigate a fee-splitting agreement that went sideways, their former business partners claim.
Recovery Legal Group and other defendants on June 18 filed a motion to dismiss the lawsuit of Chehardy, Sherman, Williams, Recile & Hayes and The King Firm, both of Louisiana. That suit claimed the two sides agreed to split fees gained from Hurricane Maria claims against insurance companies.
That hurricane rose to Category 5 and killed nearly 3,000 Puerto Ricans. The Chehardy and King firms agreed later in 2017 to provide resources in handling first-party insurance claims while RLG represents property owners in Puerto Rico, where that firm was based.
RLG was to take 35% of all attorney fees, while King and Chehardy took 65% while paying the court costs needed for litigation. Clients included the city of Vega Alta, west of San Juan.
In 2019, RLG asked to revise the terms so it would recover 45% of attorneys fees. King and Chehardy claim RLG had been secretly on the verge of resolving some claims for millions of dollars "when they induced Plaintiffs into agreeing to the revised terms."
King and Chehardy called RLG "evasive" when asking about the fees from those settlements after they learned of them. RLG in March 2020 sent a letter to terminate the partnership while offering $50,000.
King and Chehardy refused that deal and said it spent several years trying to resolve the issue. They spent too much time, RLG claims, citing Puerto Rico's three-year statute of limitations on most of the claims.
"Although the allegations are silent as to the precise or even approximate date the alleged conversion occurred, the last alleged interaction between the parties transpired on March 25, 2020, when the joint venture agreement was terminated and RLG tendered a $50,000 check that the plaintiffs refused," the motion to dismiss says.
"(T)he limitation period to file a claim for tortious conversion elapsed long ago."
The suit was filed March 21, 2024. RLG no longer exists, but King and Chehardy say it lives on in alter ego corporations named as co-defendants.
"Once the three-year period has passed, the possibility of filing new lawsuits against the corporation disappears," RLG said.