United States District Court, E.D. Louisiana
MICHAEL G. STAG, ET AL.
STUART H. SMITH, LLC, ET AL.
ORDER AND REASONS
following motions are before the Court: Motion for Judgment
on the Pleadings of Count I (Rec. Doc. 157) and Motion for
Judgment on the Pleadings of Count II (Rec.Doc. 158), both
filed by third-party defendant Ashley M. Liuzza. Third-party
plaintiffs Stuart H. Smith, LLC and Stuart H. Smith oppose
the motions. The motions, submitted for consideration on
October 22, 2019, are before the Court on the briefs without
and Defendants in the main demand are former law partners of
Smith Stag, LLC. In 2015, Stuart H. Smith withdrew from the
firm due to a serious illness. The terms of the withdrawal
were governed both by the firm's Operating Agreement and
by a negotiated Separation Agreement between Michael Stag and
Stuart H. Smith. (Rec. Doc. 1-1). Smith's withdrawal was
effected pursuant to the Preferred Withdrawal provision of
the Operating Agreement, as opposed to the less financially
attractive Nonpreferred Withdrawal provision. Preferred
Withdrawal means “the Disability” of a member.
(Id. at 19). Pursuant to the express terms of the
agreement, the disability need not be permanent but rather
means “the inability, due to sickness or accident of a
Member to perform the substantial and material duties of the
Member's profession for more than (90) days.
(Id. at 17) (emphasis added). Smith's position
is that when he withdrew from the firm his prognosis was so
grave that he did not envision being healthy enough to return
to the practice of law. Paragraph 12 of the Separation
Agreement states: “Name. “[Stuart H. Smith] and
Stag agree that [Smith Stag, LLC] may continue to use the
name ‘Smith' in the name of the [firm].”
(Rec. Doc. 1-1 at 8).
to Smith he did not engage in the full-time or substantive
practice of law for over three years due to his illness.
Following medical treatment, Smith's condition improved
and in 2018 he advised Stag that he would return to the
practice of law. Although Louisiana Rule of Professional
Responsibility 7.10(g) allows a law firm to continue to
include in its name a retired member of the firm, once Smith
returned to the practice of law Smith Stag, LLC was forced to
remove Smith from the name. The firm is now called Stag
Liuzza, LLC. Stag contends that continued use of
“Smith” in the firm name was a primary cause for
his willingness to allow Smith to withdraw from the firm on
such favorable terms. Stag claims a litany of economic damage
associated with having to rename the firm. According to
Smith, Stag unilaterally started withholding fees that Smith
was owed pursuant to the Separation Agreement. In his
counter-claim Smith alleges a host of acts committed by Stag
and members of his firm allegedly for the purpose of
motions sub judice were filed by Ashley Liuzza, who is the
sole named defendant on a third-party demand that Smith
included in his responsive pleading. (Rec. Doc. 122). Ms.
Liuzza, whose relationship to Stag and the law firm are not
identified in the third-party demand, has been sued by Smith
for intentional infliction of emotional distress (Count I)
and commingling (Count II), the latter of which is not a
cause of action recognizable to the Court. The Court presumes
Ms. Liuzza to be an attorney with the Stag Liuzza firm but
Smith's third-party demand contains no factual
allegations whatsoever to support any claim in tort against
Ms. Liuzza. Ms. Liuzza's motions will be granted
solely as to this basis for relief.
Court notes that Smith has pending before the magistrate
judge a motion to amend his counterclaim and third-party
demand (Rec. Doc. 180), which was filed after Ms. Liuzza
filed her motions for judgment on the pleadings. That motion
is scheduled for submission on November 13, 2019. Because the
Court dismisses Count I and Count II of the third-party
demand based solely on facial deficiencies and not on the
legal arguments included in the motions for judgment on the
pleadings-the Court has not considered the substantive legal
arguments-the dismissal of Counts I and II today shall have
no collateral effect on whether Smith should be granted leave
to amend his pleading. If leave to amend is granted then Ms.
Liuzza can certainly re-raise her legal arguments, whether
under Rule 12(b)(6) or otherwise, in response to that new
ORDERED that the Motion for Judgment on the Pleadings of
Count I (Rec. Doc. 157) and Motion for Judgment on the
Pleadings of Count II (Rec.Doc. 158), both filed by
third-party defendant Ashley M. Liuzza are GRANTED as
explained above. All claims against third-party defendant
Ashley Liuzza are dismissed at this time.
 Moreover, the Court is at a loss to
understand why Ms. Liuzza was brought in as a party pursuant
to third-party practice. Ms. Liuzza is not alleged to be
liable to Smith for any party of the claim against him. Fed.
R. Civ. Pro. 14(a)(1). Presumably Smith was attempting to
bring claims against Ms. Liuzza personally for taking part in
the allegedly harassing conduct that Smith alleges against
Stag in the counterclaim. If this is ...