A Denver attorney has prevailed against his former law firm in a claim he didn’t receive fair compensation for his work in the Rocky Flats litigation. He and his fellow founding partner brought that litigation to the firm and worked on it for decades but it wrapped up after the founding partners left the firm.
Silver & DeBoskey P.C. founding shareholder Joe Silver — the firm is now known as S&D Law — claimed the firm breached his shareholder agreement by not paying him a share of the contingency fee received by the firm after the Rocky Flats litigation ended in 2017. His fellow founding shareholder Bruce DeBoskey left the firm in 2001, and according to the agreement, the firm had to equalize as much as possible for Silver the benefits DeBoskey received when Silver also eventually left and redeemed his shares. Silver left the firm in 2013.
According to the complaint filed in December 2017, Cook v. Rockwell International Corp. was one of four contingent-fee cases ongoing when DeBoskey left, and the shareholder agreement stated he would receive a percentage of attorney fees recovered as additional compensation.
The firm received $14.6 million in attorney fees from the case. The agreement said DeBoskey would receive 33 percent of the attorney fees awarded to the firm from the case, stated the complaint. However, the firm did not pay out any of the fees according to the agreement. According to the complaint, DeBoskey brought an arbitration action against the firm and later settled for less than 33 percent of the fees. S&D Law took the position Silver was not entitled to any compensation out of the attorney fee award.
“This wasn’t just a typical shareholder payout, because it was linked to such an extraordinary event, this huge payout that came back on the Rocky Flats case,” said Haddon Morgan and Foreman member Tyrone Glover, who represented Silver. The jury awarded Silver $4,541,652 last month.
The nut of the case came down to one particular phrase in the shareholder agreement: the firm’s obligation to “attempt to equalize for Silver the benefits received by DeBoskey.” But Glover said building the case for the jury meant understanding the history of the firm to form a picture of the shareholder agreement’s intent and determine the compensation Silver should receive.
“It really came down to one line in one agreement, but to really understand what that one line meant, you had to look at decades of documents and try to unpack them,” Glover said. He estimated the exhibits alone to the case spanned from the mid-1980s until the present. “It was a really interesting exercise in just trying to understand the overall life and narrative and ebb and flow of this law firm, and how their conduct before and after the agreement informed how the agreement should be interpreted.
“What people say around here about this law firm is we would rather win than sleep, so it was a lot of time just thumbing through documents trying to figure out, what’s the story here?”
Haddon Morgan and Foreman member Ty Gee said the narrative they built their case around had emotional appeal they could sell to the jury because of the years of work DeBoskey and Silver did to bring the Rocky Flats case to the firm and fund it.
“Both of the founders had to fight the firm that they founded, so it was an interesting story.”
An attorney for Davis Graham & Stubbs, which represented the defendants and counterclaimants, was not available for comment on the verdict. Individually named as defendants are S&D Law director and shareholder Steve Kelly, director Gary Blum, and two defendants referred to only as John Does 1 and 2.
Gee said trying the case against Davis Graham & Stubbs was an interesting experience because the firm is much bigger than Haddon Morgan and Foreman and has more resources.
“I think that we probably adjusted very well to where we thought the case was going, and where the evidence was going,” he said.
Because of that emotional appeal, Glover added, the narrative they built was less about examining technical details of the case and more one of fairness in keeping with the shareholder agreement’s spirit.
“There wasn’t, from our end at least, a lot of trying to figure out the technicalities around what stuff meant,” he said. “These guys were best friends, they trusted each other, this was a closely held firm. They had done a lot of stuff on handshakes and good will. … We were able to find the emotional center and the ultimate fairness narrative behind everything that was going on.”
— Julia Cardi