The opinion of the court was delivered by: Judge Robert M. Dow, Jr.
MEMORANDUM OPINION AND ORDER
On December 27, 2010, Plaintiff Burke, Warren, Mackay & Serritella, P.C. ("BWMS") filed this lawsuit seeking to collect unpaid attorneys' fees. Defendant Elizabeth Tamposi admits that there is jurisdiction over her in this district and that venue is proper. However, Tamposi asks the Court to transfer this case to Massachusetts where her legal malpractice claim against BWMS is pending. In return, BWMS asks the Court to enjoin Tamposi from proceeding with her legal malpractice claim in any court but this one. Both parties agree that Tamposi's legal malpractice claim is a compulsory counterclaim to BMWS's claim for unpaid fees (and vice versa). For the reasons set forth below, the Court grants Defendant Tamposi's motion to transfer  and denies Plaintiff BWMS's motion for an injunction . The Court directs the Clerk of the Court to transfer this case to the District of Massachusetts so that the Massachusetts court may consider whether to consolidate this action with Elizabeth M. Tamposi v. Stephanie Denby, Esq., et al., Case No. 10 CV 12283 (D. Mass).
Plaintiff Burke, Warren, MacKay, and Serritella ("BWMS") is a Chicago-based law firm located at 330 N. Wabash, 22nd Floor, Chicago, Illinois 60611. Stephanie Denby is a partner with BWMS, whose principal area of practice is estates and trusts. Since 1987, Denby has been personal and professional friends with Julie Shelton("Shelton"), a Chicago-based commercial litigation attorney. Shelton and her friend, Defendant Elizabeth Tamposi, a New Hampshire resident, came to Denby's office in Chicago to discuss various Tamposi trust related matters. Based on these discussions, on May 30, 2007, Tamposi executed an engagement letter dated May 22, 2007, retaining BWMS to represent her "in conjunction with administration of [her] family trusts."
Tamposi was a beneficiary of family trusts (the "Trusts") established by her father, Samuel A Tamposi. The assets of the Trusts varied, but were mostly illiquid interests in family limited partnerships and family limited liability companies holding improved and unimproved real estate, as well as a small interest in N.E.S.V. 1, LLC, which owns the Boston Red Sox (referred to as the "Tamposi Partnerships"). Tamposi's father also gifted Tamposi Partnership interests to Tamposi outright. Two of Tamposi's brothers, Sam Tamposi, Jr. ("Sam, Jr.") and Stephen Tamposi ("Stephen") acted as investment advisors to the Trusts and as managers of the underlying Tamposi Partnerships. As investment advisors and managers, Sam, Jr. and Stephen committed to distributing a small percentage of cash to the Trusts while retaining the remainder of the cash flow in the Tamposi Partnerships.
The immediate reason that Tamposi retained BWMS stemmed from a settlement agreement relating to earlier family litigation. Pursuant to the settlement agreement, Tamposi was permitted to appoint a trustee for the Trusts and the investment advisors agreed to resign as investment advisors with respect to certain liquid assets in the Trusts and Tamposi Partnerships (but they continued to act as managers for such Tamposi Partnerships). The brothers retained control as managers over all of the Tamposi Partnerships, which included the power to sell the underlying assets and determine the amount of distributions from the Tamposi Partnerships to the owners. However, under the settlement agreement, Tamposi now had the right to appoint the trustee who, under the Trust documents, had authority to distribute such amounts of the income and principal of the Trusts as the trustee "considers necessary for the education and maintenance in health and reasonable comfort" for the benefit of Tamposi and her descendants.
According to the declaration of Denby, when Tamposi first discussed the Trusts with Denby, Tamposi told Denby that her interim trustee had been diagnosed with a terminal condition and that she wanted advice regarding selection of a new trustee outside the New Hampshire area. Tamposi stated that Shelton had recommended Denby. Denby arranged for Tamposi to meet with four potential corporate trustees in Chicago (JP Morgan, Goldman Sachs, Northern Trust and US Trust/Bank of America). In advance of those meetings, Denby provided each trust company with copies of the trust documents, the settlement agreement, and financials for the Trusts, Tamposi and her family, and the various Tamposi Partnerships. Denby also discussed with the various potential corporate trustees the current financial needs of Tamposi and her children and the cash flows from the Tamposi Partnerships. After the meetings, each of the potential corporate trustees concluded that they could not accept the business. The potential corporate trustees raised concerns about the illiquidity of the Trusts' assets, the lack of cash flow from the Tamposi Partnerships into the Trusts, Tamposi's personal illiquidity, and Tamposi's and her children's immediate cash needs. In each case, the corporate trustee's fee would have equaled or exceeded the anticipated cash flow to the Trusts. After it became clear that a high end corporate trustee was not a feasible option, Tamposi asked for other alternatives for a trustee, and Denby suggested selecting a lawyer or accountant in New Hampshire. Ultimately, Tamposi offered the position to her long time friend and Chicago attorney, Shelton, who accepted. One of the actions taken by Shelton as Trustee was to change the situs of the Samuel A. Tamposi, Sr. 1992 Trust from New Hampshire to Illinois.
BWMS's work for Tamposi expanded after the initial meeting in May of 2007. Denby attests that she and other members of BWMS worked on various matters for Tamposi, including the following:
Working with the Investment Advisors to secure a $1 million distribution into the Trusts contemplated under the settlement agreement to reimburse Tamposi's legal fees in connection with the first litigation and to increase ongoing cash flow to the Trusts.
Assisting Tamposi in ongoing work related to her pending divorce to protect the Trusts' assets from claims by Tamposi's husband.
Identifying cash sources and methods to cut back on expenses for Tamposi, the Trusts, and her children to address Tamposi and her children's deteriorating financial situation (including sale of the house she was currently residing in, tapping into other family trusts Tamposi had established for her children, locating family funds held by her husband, sale of the house she was in the process of building on Lake Winnipesaukee, sale of the house she was currently occupying, request for distributions from various Tamposi Partnerships with cash on hand securing a construction loan, securing lines of credit, requesting funds from Tamposi's mother, establishing a loan from another brother, seeking student loans for her children and discussions with Tamposi about reentering the job market). Reviewing options to eliminate or reduce expenditures on the construction of the Lake Winnipesaukee house, including reviewing a residential construction contract Tamposi had entered into to build the house to determine the effect of a termination of the contractor on the project, counseling Tamposi on the benefits of selling the house and then working with the contractor to complete the project as quickly and inexpensively as possible.
Assisting Tamposi's counsel in a case in New Hampshire against Sam, Jr. and his wife to secure temporary and permanent orders of protection from stalking based on a police investigation into threatening and harassing phone calls originating from Sam Jr.'s house to Tamposi's residence late at night which resulted in the issuance of temporary orders of protection against both Sam, Jr and his wife and, ultimately, a permanent order of protection being issued against Sam Jr.'s wife. Working with a lawyer for Tamposi's children to intervene in the divorce to attach any funds the husband received in the divorce from Tamposi and to prosecute a separate claim against Tamposi's spouse in connection with funds the husband had misappropriated and to freeze any funds that the husband received in the divorce pending resolution of the children's lawsuit.
Assisting in the collection of various corporate accounts for family businesses owned in part by the children and Tamposi that the husband controlled.
Assisting Boston attorney, Michael Weisman, who had been retained to negotiate with the brothers a sale of Tamposi's, her children's and the Trusts' ...