EDWARDSVILLE – Lawyer David Cates claims a $10 million lawsuit filed by former partner Ryan Mahoney belongs in arbitration rather than Madison County circuit court.
Cates filed a motion on Jan. 27 to enforce an arbitration provision in an operating agreement he and Mahoney signed in 2013.
Cates’s counsel John Kurowski of O’Fallon wrote, “A trial court’s decision to compel arbitration is not discretionary.”
Circuit Judge Sarah Smith set a hearing for March 23.
An operating agreement assigned 60% ownership to Cates and 40% to Mahoney.
They ended their partnership last May and signed a separation agreement in August.
Mahoney sued Cates in November, claiming Cates concealed fees from two settlements he negotiated between May and August.
Mahoney’s counsel, Thomas Rosenfeld of Edwardsville, claimed Mahoney suffered damage in releasing his interest in those cases for less than it was worth.
Rosenfeld alleged trickery and secret dealing in violation of fiduciary duty.
He claimed Cates’s actions warranted forfeiture of all compensation Cates received and an award of punitive damages.
Kurowski stated in his arbitration motion that Mahoney relied on the agreement from 2013 but didn’t attach it to his complaint.
Kurowski claimed it stated, “Any controversy arising out of or relating to this agreement shall be submitted to arbitration, and not any court or other adjudicating body.”
He claimed the separation agreement didn’t modify or amend the operating agreement.
The separation agreement allegedly stated, “Except as herein specifically amended, the operating agreement for the firm is affirmed and declared in full force.”
Cates practices in Swansea and Mahoney practices in Glen Carbon.