Brothers Sue Law Firm for $20M Over Botched Arbitration

In a significant legal development, two brothers have initiated legal action against Bradley Arant Boult Cummings LLP, a prominent law firm, and its former partner, S. David Smith. The lawsuits, filed today in Eureka, California federal court, allege mishandling of a 2018 arbitration proceeding, resulting in substantial financial losses for the plaintiffs.

Daniel Koetting and Mark Koetting are seeking damages exceeding $20 million from the 650-lawyer firm and Smith, who departed from Bradley Arant approximately 2 years and 4 months ago. The brothers claim that the firm's representation in a contract dispute with Native American tribal lenders was grossly inadequate, leading to an "unmitigated disaster" during the arbitration process.

The lawsuits outline several alleged errors committed by Bradley Arant and Smith during their representation. One of the most critical claims is that the firm advised the Koettings to reject a proposed $2.5 million settlement offer from the lenders just weeks before the arbitration. This decision, according to the plaintiffs, proved to be detrimental to their interests.

Furthermore, the brothers assert that Bradley Arant failed to adequately prepare for the arbitration. They allege that the firm made no effort to secure expert witnesses or conduct depositions, both of which are often crucial in complex arbitration proceedings. The lack of preparation extended to the Koettings themselves, who claim they received minimal guidance for their questioning during the arbitration.

The consequences of this alleged mishandling were severe. About 5 years and 8 months ago, in December 2018, the arbitrator ordered the Koettings and their consulting firms to pay more than $13.1 million in damages and attorney fees.

It's worth noting that legal malpractice claims of this magnitude are relatively uncommon. In 2022, the median award in legal malpractice cases was approximately $1.2 million, making the Koettings' $20 million claim particularly significant.

Bradley Arant Boult Cummings LLP, founded in 1870 in Birmingham, Alabama, is a well-established firm with over 600 attorneys across 10 U.S. offices. The firm has not yet responded to requests for comment on the lawsuits. Similarly, S. David Smith, now an associate general counsel at Sunnova Energy, has not provided any statement regarding the allegations.

This case highlights the complexities of arbitration in contract disputes, especially those involving Native American tribal lenders operating under tribal sovereignty. It also underscores the importance of thorough preparation and expert testimony in such proceedings.

As this legal battle unfolds, it serves as a reminder of the potential consequences of alleged legal malpractice and the significant financial stakes involved in high-profile arbitration cases. The outcome of these lawsuits could have far-reaching implications for both the legal profession and the arbitration process.