Law Times

Law Times • April 29, 2013 Page 3 NEWS Diamond, Bergmanis Preyra lawsuit heads to arbitration Dispute over referral fees centres on lawyer's status at well-known firm BY SHANNON KARI For Law Times A lawsuit seeking $10 million in damages against Jeremy Diamond and a legal assistant is on hold after the highprofile lawyer in the personal injury field agreed to comply with any summons to testify in an arbitration hearing between Bergmanis Preyra LLP and Diamond & Diamond LLP. The parties reached an agreement on April 9 at the Ontario Superior Court to adjourn a motion brought by Diamond to strike the lawsuit filed by Bergmanis Preyra as having no cause of action. The adjournment, approved by Superior Court Justice Patrick Moore, is to remain in place "pending the outcome of the arbitration" between the two firms in a dispute over a referral agreement. Bergmanis Preyra filed the statement of claim at the end of last year against Diamond, his professional corporation, and his assistant Alex Ragozzino. The lawsuit alleges Diamond and Ragozzino breached a contract signed in 2007 that required Diamond & Diamond to refer all inquiries to Bergmanis Preyra in exchange for 30 per cent of the billings of any referred client. "The defendants wilfully solicited other lawyers and law firms to accept referrals of members of the general public that ought to have been properly referred to Bergmanis Preyra LLP and thereafter converted the profits generated from such unlawful activities for their own use," the statement of claim alleges. None of the allegations has been proven in court. And while Diamond has been the public face of Diamond & Diamond for several years in advertisements and on its web site, two of his uncles control the firm. Bergmanis Preyra and the uncles signed the referral agreement that expired earlier this year and is the subject of the arbitration hearing. The precise role Diamond played in the firm is at the heart of the dispute. In the meantime, Superior Court Justice Paul Perell set aside an Anton Piller order obtained last September by Bergmanis Preyra. He found Diamond and Ragozzino couldn't have personally breached a contract they weren't parties to. Perell permitted a brief examination of Diamond on his affidavit. Under questioning by Alan Rachlin, who's representing Bergmanis Preyra, Diamond said he was an "independent contractor" who received $700 per referral from one of his uncles at Diamond & Diamond. The statement of claim alleges Diamond had a fiduciary duty to Bergmanis Preyra regardless of his specific employment status. Instead of filing a statement of defence, Diamond filed the motion to strike in the Superior Court. "Even if Jeremy or Alex was found to be a fiduciary employee, any fiduciary duties would be owed to their employer, Diamond & Diamond," reads the factum filed in support of the motion. During the hearing before Moore on April 9, Linda Rothstein, who's acting for Diamond, questioned the motives behind the statement of claim. "What is really behind this is an attempt to get my client discovered when he was unsuccessful on the Anton Piller order," Rothstein told the court. "The Arbitration Act gives my friend all the rights he needs. He can subpoena my client," said Rothstein of Paliare Roland Rosenberg Rothstein LLP. She described the pleading related to fiduciary duties as "hogwash" and argued that if her client was acting as a "rogue," his uncles could also claim to be victims. "That is a set of facts which is possible," she suggested. Rachlin told the court that unless Diamond is willing to "concede" he acted as a representative of the firm controlled by his uncles, there's no other option but to proceed with the civil action. Bergmanis Preyra also wants to view "thousands of inquiry records" Rachlin said are in the possession of Diamond's lawyers and that were the subject of the Anton Piller motion last year. For his part, Diamond tells Law Times that "confidentiality restrictions" mean he can't comment on the specifics of the ongoing litigation. "We are confident that all issues will be dealt with amicably in the arbitration," says Diamond. Since the legal action began, the referral agreement has expired and there have been changes at Diamond & Diamond. Linda Rothstein, counsel for Jeremy Diamond, described the pleading related to fiduciary duties as 'hogwash' during a recent hearing in court. Until earlier this year, the two lawyers featured on the firm's web site were Jeremy and his uncle, David Diamond. A previous disclaimer noted it primarily referred potential clients to other firms. The three lawyers now listed on the web site are Jeremy Diamond, his wife Sandra Zisckind, and her brother Isaac Zisckind. The new firm overview states that its lawyers are acting in association as individual professional corporations. "Lawyers are not a partnership," it reads. The web site says if the firm is "unable to handle your case personally," it will refer the matter and Jeremy Diamond Professional Corp. may receive a fee at no cost to the client. Diamond stresses the firm "has a team of experienced litigators and support staff that handle as many cases as we can in-house." Any referrals will connect potential clients to counsel who can provide the best representation, he says. "All the firms we refer to are members in good standing with the Law Society of Upper Canada and provide proven results." 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