Opinion ID: 1692119
Heading Depth: 2
Heading Rank: 3

Heading: Mallory's Practice of Law at Mantiply & Associates

Text: When Mallory returned to Alabama in December 1999, he was unemployed. Mallory worked at Mary Elizabeth's law office of Mantiply & Associates during January 2000, because Mary Elizabeth had asked him to help her with some legal tasks. He stated that he did not necessarily want to work with Mary Elizabeth at the time and that he did not ask to be paid. In the meantime, Mary Elizabeth had encouraged attorney John Sharbrough to hire Mallory, which Sharbrough did in February 2000. Mallory worked for Sharbrough until that relationship ended in October 2001 because of a dispute between Mallory and Sharbrough regarding compensation and an attorney fee on a legal matter. When Mallory left Sharbrough's employment he took a number of case files with him, which, according to Sharbrough, Mallory was not authorized to do. Mallory began practicing law at Mantiply & Associates in November 2001. Mary Elizabeth's practice had a net loss of approximately $30,719 from January 2000 through November 2001. However, from the time Mallory began practicing law at Mantiply & Associates in November 2001 until he stopped working at Mantiply & Associates in April 2003, the practice had a net income of approximately $164,544. Mallory alleges that despite turning Mary Elizabeth's law practice into a profitable one, he was paid only $10,300 by Mary Elizabeth during the period he worked at Mantiply & Associates.
Mary Elizabeth testified that she did not want Mallory practicing law with her at Mantiply & Associates. However, she said that because Mallory had no place else to work she allowed him to work at Mantiply & Associates as an employee at will. Mary Elizabeth stated that she made it clear to Mallory that he was an employee at will, that he did not have any interest in Mantiply & Associates, and that he did not have the authority to write checks on behalf of Mantiply & Associates. She testified that she told Mallory that if he chose to work at Mantiply & Associates she would be in charge of the firm's money and that she would pay him what she thought was fair. Mary Elizabeth testified that Mallory agreed to those terms. Mallory testified that Mary Elizabeth's law practice at Mantiply & Associates was dead when he started practicing law there in November 2001. As mentioned above, Mallory presented evidence indicating that the practice had lost approximately $30,719 from January 2000 through November 2001. Mallory testified that he did not want to practice law with Mary Elizabeth because she does not practice and that during the time he worked at Mantiply & Associates he was the only one practicing law. Mallory testified that Mary Elizabeth wanted him to come to work at Mantiply & Associates and that she told him certain things that induced him to forgo looking for other employment and to work at Mantiply & Associates. Mallory stated that Mary Elizabeth told him she had $100,000 to use to finance the law practice and that she had some matters pending, including several cases that had the potential to generate substantial fees. Mallory testified in his deposition as follows: She told me to come on up there and work. She told me she had $100,000 in the bank. She told me she had things going on. She told me we could make it. She told me to bring the cases up there and we would go from there. I heard those things. I went up there, I sat down, I went to work. Mallory stated that he and Mary Elizabeth did not have a partnership agreement and that they had no written agreement as to compensation. He described the agreement they did have as follows: Q. And what I am asking you for is to tell me what you understood your agreement was in connection with you going to work at [Mantiply & Associates] in November 2001. A. Well, the agreement was that I would come up there and sit down and go to work for the clients and for clients to come and that the money would be run through her business and that I would be treated basically fairly. Mallory stated that he did not have the authority to sign checks for Mantiply & Associates and that he had no control over what was being paid out by Mantiply & Associates. He stated that the only control he had was what was coming into [the law firm] based on how hard [he] was working and the checks [he] was paying into it. Mallory testified that he considered himself self-employed while he worked at Mantiply & Associates.
Mary Elizabeth had maintained an operating account at Compass Bank for her law practice in the name of Mantiply & Associates since 1991. Mary Elizabeth contends that on March 25, 2003, while employed at Mantiply & Associates, Mallory covertly opened a bank account at AmSouth Bank, also in the name of Mantiply & Associates. Mallory's name was the only name on that account. Mary Elizabeth testified that immediately before and after leaving his employment at Mantiply & Associates, Mallory surreptitiously deposited checks made payable to Mantiply & Associates in the account bearing the same name at AmSouth Bank. She stated that Mallory was not authorized to open an account in the name of Mantiply & Associates. On April 1, 2003, Mallory entered the offices of Mantiply & Associates and took files that Mary Elizabeth testified belonged to Mantiply & Associates. Mallory established his own law practice representing the clients whose files Mary Elizabeth stated he had taken from her office without authorization. Mary Elizabeth contends that she requested Mallory give her an accounting of the fees that he had recovered from representing those clients and that he reimburse Mantiply & Associates for the costs it had incurred in representing those clients before Mallory took the files, but that Mallory has refused to do so. Mallory testified that Mary Elizabeth informed him in March 2003 that she was getting out of the practice of law and that he should buy her out. Mallory stated that he and Mary Elizabeth began discussing how to wind things up between us. Additionally, Mallory testified that on March 20, 2003, Mary Elizabeth had refused to pay his secretary with money he had provided her for that purpose and that he was faced with having to pay that overhead expense twice. Mallory stated that at that point he opened the bank account at AmSouth Bank in the name of Mantiply & Associates. He thought at the time that he would be continuing to practice law at the same location using the same telephone numbers and advertising and that Mary Elizabeth would no longer be practicing law. Mallory testified that on April 1, 2003, he delivered a handwritten letter to Mary Elizabeth offering to have a third party settle the issues between them. He stated that he telephoned Mary Elizabeth later that day to see if she was interested in settling the issues between them and that she told him in that conversation to take his files and get out of the office by noon or she was going to change the locks. Mallory stated that he took his files and left the premises. He further testified that he purchased equipment and rented office space and continued to practice law. Mallory stated that he contacted AmSouth Bank and had the name changed on his account from Mantiply & Associates to M. Mallory Mantiply. Mallory testified that he deposited settlement proceeds into the AmSouth Bank account from cases that he handled on behalf of his clients.

Mary Elizabeth testified that during the course of her law practice she had her clients enter into a fee agreement that specifically identified Mantiply & Associates as the attorney employed to represent the client. She stated that Mallory was expected to use this fee agreement while he was working at Mantiply & Associates. However, on a number of occasions Mallory used a fee agreement he had generated, which identified M. Mallory Mantiply as the attorney being employed by the client pursuant to the agreement. Mary Elizabeth testified that Mallory did not request permission nor was he authorized to contract with a client using a fee agreement that identified him, rather than Mantiply & Associates, as the attorney being employed. Mallory testified that when he went to work for Mantiply & Associates, Mary Elizabeth did not have a fee agreement. He stated that he generated a fee agreement for both Mantiply & Associates and M. Mallory Mantiply and that he would use whichever [fee agreement] came up first. Nevertheless, Mallory testified that regardless of which fee agreement he used he would turn over to Mary Elizabeth the proceeds generated from the work he did on the clients' behalf.
Mallory had approached Mary Elizabeth in July 2002 about purchasing an advertisement in the Best Talk telephone book. Mary Elizabeth agreed to purchase an advertisement, and Mallory began putting an advertisement together for Mantiply & Associates. The advertisement that appeared in the Best Talk telephone book contained pictures of Mary Elizabeth and Mallory above the name Mantiply & Associates. Mary Elizabeth, on behalf of Mantiply & Associates, entered into the advertising contract with the company that publishes the book. The cost of the advertisement was $7,344, payable in four installments. Mary Elizabeth testified that she paid the first three installments of the contract; however, she contends that Mallory contacted the company that publishes the telephone book, made the fourth installment payment, and then arranged to have the telephone number referenced in the Best Talk telephone book redirected from Mantiply & Associates to his new law office. Mallory testified that after he left Mantiply & Associates he contacted the publisher of the Best Talk telephone book, who informed him that the bill for the advertisement and telephone-number listing was outstanding. He stated that he was told if he paid the bill he could have the telephone-number listing. Mallory testified that he paid the outstanding bill and had the telephone number in the Best Talk telephone book redirected. He stated that he thought this was fair because the advertisement was his idea; his name and picture were on the advertisement; and Mary Elizabeth still had her original telephone number, which appeared in an advertisement in the Real Yellow Pages telephone book.