Law firm and doctor disagree over venue in arbitration award dispute

A law firm practicing in Chicago and headquartered in Milwaukee has removed an arbitration dispute with a California doctor over legal fees to federal court and now the doctor is seeking to remand the matter back to Cook County's circuit court.

Quarles & Brady LLP filed a motion Jan. 15 in Chicago's federal court to remove the action David Conney, who is listed in public records as a psychiatrist in Los Angeles, brought against the firm from Cook County Circuit Court to U.S. District Court for the Northern District of Illinois.

In its removal notice, Quarles & Brady noted, among other factors, that the dispute belongs in federal court because it involves citizens from different jurisdictions, specifically that it is based in Wisconsin and the plaintiff lives in California.

Conney, however, filed a motion on Jan. 21 in an attempt to remand the matter back to circuit court. A hearing over his motion is scheduled to take place today before U.S. District Judge Joan Lefkow.

The dispute centers on a nearly $686,000 arbitration award granted to Conney on Dec. 22, 2013.

The award was the result of a protracted legal battle between the doctor and Quarles & Brady that dated back to a case, originally filed in 2003, in which the firm represented Conney.

In that case, Conney, through his attorneys at Quarles & Brady, sued Northern Trust Co. unsuccessfully in Wisconsin's courts, arguing that Northern Trust had imprudently invested his money.

Between 2003 and 2006, a dispute arose between Conney and the law firm over legal fees Conney had paid and had been billed in the matter. In total, Conney paid the firm $786,000 and had been billed an additional $326,000.

The two parties agreed in 2006 to allow arbitrators to decide the case. However, by 2010, the matter had not been resolved, and Conney filed suit against the firm in federal court in Milwaukee and a federal judge agreed to compel arbitration.

An arbitrator in Cook County heard the case in October 2013, and rendered his decision in December, agreeing that $685,403 of the fees paid by Conney to Quarles & Brady was unreasonable, as were the fees  Conney had been billed, but had not yet paid.

Conney then filed a petition on Dec. 23 in Cook County Circuit Court to confirm the arbitration award. In his action, Conney argued that the matter should be heard in Cook County's circuit court because the arbitrator rendered his decision in that county..

Quarles & Brady, however, argued the diversity of the citizens involved in the dispute justifies its notice to remove the case to federal court.

In response to the law firm’s removal notice, Conney filed a motion to remand the case back to the circuit court, arguing that Quarles & Brady maintains an office in Chicago, which, according to the firm’s website, includes at least 50 partners with offices there.

Since the citizenship of a limited liability partnership is legally determined by the citizenship of its individual partners, and not its principal place of business, Cooney argues that if even one of the firm's partners is a citizen of Illinois, then the diversity cited by Quarles & Brady in its removal notice may not actually exist.

And since the firm did not provide statements listing the citizenship of each of its partners, Conney claims it did not meet the burden necessary to remove the case to federal court, as “at least some, if not all of those partners (based in Chicago) must be citizens of Illinois.”

Conney is represented in the action by Chicago attorneys Edward T. Joyce and Robert D. Carroll. Quarles & Brady is represented by Daniel P. Duffy and Terry E. Johnson of Peterson, Johnson & Murray.