Pinnacle Surety, a professional surety bond agency, announced that a magistrate judge ruled in its favor in a motion against Manion Stigger, LLP, Cooper & Elliott, LLC, G. Bruce Stigger and Rex H. Elliott regarding the bond agencys ongoing breach of fiduciary duty case against the law firms and attorneys. The defendants asserted that documents and emails in and outside the possession of Pinnacle Surety were privileged. The judge ruled against the law firms while noting that the defendants misrepresented precedent to the court. The judge stated the defendants cited a Sixth Circuit opinion which hardly supports their stated proposition and a Fifth Circuit opinion without disclosing that it is vacated. The judge still has not ruled on whether the crime-fraud exception to the privilege rule will enable Pinnacle to gain access to more documents.
According to the original lawsuit filed in 2016, Manion Stigger and a second law firm Cooper & Elliott, LLC secretly assisted two employees against Pinnacle while the bond firm was still represented by the same attorneys.
In 2013, Pinnacle hired Manion Stigger and Cooper & Elliott to represent the company in a civil lawsuit brought by a third party regarding the employment of Todd Loehnert and Brian Ayres. That case was resolved with the third party; Loehnert and Ayres continued working for Pinnacle; and the attorneys were paid by Pinnacle.
The original lawsuit states that clearly during their representation of Pinnacle, defendants acted directly and materially adverse to Pinnacle by encouraging and assisting Pinnacles employees . . . to prematurely breach their three-year employment agreement with Pinnacle.
The lawsuit now seeks damages for breaches of fiduciary duties, aiding and abetting breaches of fiduciary duties, intentional interference with an employment agreement, and civil conspiracy.
In the ruling, Judge Colin H. Lindsay said of the defendants: A dearth of on-point case law is no excuse for misrepresenting precedent to the Court.
The lawsuit seeks damages for lost business, profits and opportunities; damage to Pinnacles reputation; and punitive damages among other damages and costs.
John P. David