COSTA MESA, Calif.--(BUSINESS WIRE)--Pinnacle Surety Services today announced its four-year-old breach of fiduciary duty case in federal court against Rex H. Elliott of Cooper & Elliott LLC and G. Bruce Stigger of Manion Stigger LLP is moving forward with a court settlement conference on September 17.
Further, if that conference proves unsuccessful, it should bring the unusual case forward to set a long-awaited trial date.
“Who would imagine your own attorneys would represent you and oppose you at the same time?” says Pinnacle Founder and President Eric Lowey. “It’s ironic that Manion Stigger presented, “Lawyers, Lawyers, Lawyers, Traps and Stunts” at the Evansville Country Club last year,” Lowey says.
According to Court documents filed in U.S. District Court, Western District of Kentucky,1 “Defendants are Pinnacle’s former legal counsel, but while still representing Pinnacle’s interests and owing it the highest fiduciary duties, Defendants, among other improper acts, acted directly and materially adverse to Pinnacle by sending a demand letter on behalf of Pinnacle’s employees (Todd Loehnert and Brian Ayres) threatening suit, suing Pinnacle, and even encouraging and assisting those same employees to breach an employment agreement with Pinnacle, leave Pinnacle, and prepare, form, organize and start a competing business [L.A. Surety] directly against Pinnacle.”
The “assisting” referenced in the Court filing includes actively helping Pinnacle’s employees “prepare, form, organize, start and even act on behalf of – all to the great determine of Pinnacle.” In addition, Stigger signed and filed with the Kentucky Secretary of State L.A. Surety’s Articles of Organization and is even listed as a registered agent for L.A. Surety.”2
“Organizations like the Association of General Contractors, the Associated Builders & Contractors, the American Institute of Architects, the Kentucky Society of Engineers and other construction related organizations in Kentucky, Indiana, Carolinas, Ohio and other states insist on high ethics. “It’s shocking and alarming an attorney who works in the construction industry could simultaneously disregard this principle,” says Lowey.
According to the Seyfarth Shaw legal blog on non-compete issues, “The Pinnacle case is somewhat of an outlier because the defendants represented both the employer and the employees at one time or another. Had the defendants only represented the employees, their conduct would likely have been protected by the attorney-client privilege.”3
Stigger and Elliot’s conduct was reported to the Kentucky and Ohio Bar Associations, which is withholding taking any action pending the outcome of the U.S. District Court case against them.
Discovery cutoff is scheduled for October 24, 2019.
1 Pinnacle Response in Opposition to Motion to Dismiss, U.S. District Court, Western District of Kentucky, Civil Action No. 3:15-CV-364-DJH Document 64
filed September 30, 2016, page 1
2. First Amended Complaint, Case 3:15-cv-00364 Document 53 filed 07/20/16 pages 5 and 6 of 24 page ID#:355