Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-02363/USCOURTS-azd-2_11-cv-02363-0/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1441 Petition for Removal- Fraud

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Charles M. Brewer Limited Restated

Pension Plan; Charles M. Brewer Limited

Profit Sharing Plan and Trust; Charles M.

Brewer Limited Money Purchase Pension

Plan; Charles M. Brewer Limited; Charles

M. Brewer, 

Plaintiffs, 

vs.

Reish Luftman McDaniel & Reicher PC;

Reish Luftman Reicher & Cohen PC;

Reish & Reicher PC; Drinker Biddle &

Reath LLP; C. Frederick Reish, Jr.;

Unknown Reish; Bruce L. Ashton;

Unknown Ashton; Martin H. Heming;

Unknown Heming; Joseph C. Faucher;

Unknown Faucher; Michael A. Vanic;

Unknown Vanic; Nicholas J. White;

Unknown White; Nicolas Waddles;

Unknown Waddles, 

Defendants. 

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

CV 11-02363-PHX-FJM

ORDER

The court has before it defendants Reish Luftman McDaniel & Reicher, P.C., Reish

Luftman Reicher & Cohen, P.C., Reish & Reicher, P.C., Drinker Biddle & Reath LLP, C.

Frederick Reish Jr., Bruce L. Ashton, and Joseph C. Faucher's (defendants) motion to dismiss

Case 2:11-cv-02363-FJM Document 14 Filed 01/17/12 Page 1 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

Defendants Martin H. Heming, Michael A. Vanic, Nicholas J. White, and Nicolas

Waddles are California lawyers who allegedly worked at some of the defendant entities.

They have not appeared in this action. 

2

Defendants Reish Luftman Reicher & Cohen and Reish & Reicher are successor

firms to the Reish firm. The Reish firm and its successors are collectively referred to as the

Reish firm. 

3

 These defendants are now affiliated with defendant Drinker Biddle & Reath LLC.

- 2 -

and compel arbitration (doc. 11).1

 Plaintiffs did not file a response, and the time for

responding has expired.

This action arises out of plaintiffs' retention of defendant Reish Luftman McDaniel

& Reicher ("Reish firm"), a California law firm, to defend against pension benefit claims

asserted by a former employee of the Charles M. Brewer law firm.2

 Plaintiff Brewer signed

a fee agreement with the Reish firm. Attached to the fee agreement was an arbitration clause,

stating that "[i]n the event of a dispute arising from this Agreement, including, without

limitation, the interpretation hereof and the performance hereunder" the parties "agree to

submit to resolution by binding arbitration in accordance with the Commercial Arbitration

Rules of the American Arbitration Association." Mot. to Dismiss, ex. 1 at ¶ 13. 

In 2002, the former Charles M. Brewer firm employee filed an action relating to the

pension benefits dispute. Defendants C. Frederick Reish Jr., Bruce Ashton, and Joseph

Faucher are California licensed lawyers who defended plaintiffs in the pension benefits

litigation.3

 The asset transfers among the pension plans relevant to that litigation were

performed pursuant to advice from CBIZ, a third party administrator. Plaintiffs allege that

on July 8, 2009, in the course of a separate action they commenced against CBIZ, they

learned that defendant lawyers discovered in August 2001 that CBIZ had violated its legal

and contractual duties to plaintiffs, but failed to notify plaintiffs of this misconduct. 

Plaintiffs originally filed this action in the Superior Court of Arizona in Maricopa

County on July 11, 2011 alleging four counts: (1) breach of fiduciary duty; (2) professional

negligence; (3) constructive fraud; and (4) fraudulent concealment. Defendants timely

Case 2:11-cv-02363-FJM Document 14 Filed 01/17/12 Page 2 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 -

removed. Defendants seek dismissal of the action without prejudice and an order compelling

arbitration. Alternatively, defendants request a stay of the action pending arbitration, or

dismissal with prejudice because plaintiffs' claims are barred under the applicable statute of

limitations. 

The Federal Arbitration Act ("FAA") governs arbitration clauses in contracts that

involve interstate commerce. 9 U.S.C. § 1. Here, plaintiffs and the Reish firm entered an

agreement for Reish, a California law firm, to provide legal services to Arizona plaintiffs.

The parties agreed to resolve disputes over how the Reish firm performed these services by

arbitration. Under the FAA, "an agreement in writing to submit to arbitration an existing

controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable,

and enforceable, save upon such grounds as exist at law or in equity for the revocation of any

contract." Id. § 2. Enforcement is mandatory. AT&T Mobility LLC v. Concepcion, __ U.S.

__, __, 131 S. Ct. 1740, 1745 (2011); Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218,

105 S. Ct. 1238, 1241 (1985). 

Because we may only order parties to arbitrate under the terms of their agreement, we

(1) determine whether there is a valid arbitration agreement, and (2) determine whether the

agreement covers the instant dispute. If the answer to both inquiries is yes, we must enforce

the agreement. Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir.

2004). Here, plaintiffs and the Reish firm expressly agreed to the arbitration provision in the

fee agreement by signing the agreement and initialing each page of the exhibit containing the

arbitration provision. The provision expressly states that the parties agree to arbitrate

disputes "including, without limitation, the interpretation of and the performance hereunder."

Mot. to Dismiss, ex. 1 at ¶ 13. Plaintiffs' allegations address the performance of defendants'

legal services, and thus are covered by the agreement. Plaintiffs have not argued that the

agreement is unenforceable or revocable. Thus, under the FAA, our enforcement of the

arbitration agreement is mandatory. Although the FAA states that an action should be stayed

pending arbitration, 9 U.S.C. § 3, we have discretion to dismiss rather than stay claims.

Sparling v. Hoffman Constr. Co., Inc., 864 F.2d 635, 638 (9th Cir. 1988). We exercise that

Case 2:11-cv-02363-FJM Document 14 Filed 01/17/12 Page 3 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4 -

discretion in the interest of judicial economy.

Alternatively, because plaintiffs failed to respond to the motion, we construe the lack

of a response as a concession and grant the motion to dismiss and compel arbitration

summarily. See LRCiv 7.2(i) ("if. . . counsel does not serve and file the required answering

memoranda. . . such non-compliance may be deemed a consent to the denial or granting of

the motion and the Court may dispose of the motion summarily").

Defendants Martin H. Heming, Michael A. Vanic, Nicholas J. White, and Nicolas

Waddles have not yet appeared in this action. Plaintiffs allege that they were members of

the Reish entities, and as such they would also be subject to the arbitration provision. It is

unclear whether these defendants have been served. Nevertheless, the legal result as to these

defendants is the same. See Abagninin v. AMVAC Chem. Corp., 545 F.3d 733, 742-43 (9th

Cir. 2008). 

Accordingly, IT IS ORDERED GRANTING defendants' motion to dismiss the

complaint and compel arbitration (doc. 11). The parties are ORDERED to proceed to

arbitration pursuant to their agreement. 

IT IS ORDERED DENYING defendants' motions in the alternative to stay the

proceeding pending arbitration and dismiss for violation of statute of limitations on grounds

of mootness (doc. 11). 

This action is dismissed without prejudice. 

DATED this 17th day of January, 2012.

 

Case 2:11-cv-02363-FJM Document 14 Filed 01/17/12 Page 4 of 4