Hodges, LLP v. Gobellan

The Gobellans retained Law Firm to defend them and bring suit. Associate was assigned to the case. Associate later left Law Firm and took several clients, including Gobellans, with him. Law Firm sued Associate over client contingency fees, and later settled. Law Firm also sued Gobellans, and moved to compel the dispute to arbitration pursuant to an arbitration clause in the contingency fee agreement between Law Firm and Gobellans. The trial court and court of appeals denied Law Firm’s motion to compel arbitration, concluding that because Law Firm had litigated the fee issue with Associate, it waived its right to arbitrate claims stemming from its fee agreement with Gobellans. The Supreme Court reversed, holding (1) because Law Firm’s litigation conduct involved suing Associate, with whom it had no arbitration agreement, and filing limited pleadings against Gobellans, the conduct did not substantially invoke the litigation process against Gobellans or prejudice them; and (2) thus, Law Firm did not waive its right to arbitrate its dispute with Gobellans. View "Hodges, LLP v. Gobellan" on Justia Law