After several sessions before a court-appointed mediator, battling law partners Ross M. Cellino Jr. and Stephen E. Barnes have made no progress toward patching up their differences, sources on both sides of the case told The Buffalo News.
Attorneys for Cellino and Barnes were scheduled to appear in court Monday to give a progress report to State Supreme Court Justice Deborah A. Chimes, who sent the case to mediation last month in hopes that the legal dispute could be settled amicably.
Despite several meetings before a highly-respected expert in dispute resolution – retired Appellate Division Justice Jerome C. Gorski – "no progress has been made," said a source who supports Cellino and is aware of the proceedings.
That is true, confirmed another source who supports Barnes and also is aware of the proceedings.
"The two sides are just too far apart," said the Cellino backer.
The lack of a mediated settlement – if none can be reached – would be very unsettling news for the approximately 300 people who work for Cellino & Barnes, one of the largest, busiest and most high-profile personal injury law firms in New York State.
Cellino shocked the legal community in early May when he filed a lawsuit seeking to dissolve the partnership between him and Barnes. While Justice Chimes has kept all court papers in the case secret from public view, sources close to the case told The News that Cellino filed the lawsuit because he was upset over the way the law firm was being managed, the direction the law firm was heading in and some of the Buffalo-based firm's business practices, which Cellino has alleged are overly aggressive.
While not commenting directly on the Cellino-Barnes dispute, William F. Savino, one of Buffalo's top business attorneys, discussed what can happen when two business partners have a dispute that cannot be ironed out in mediation.
"I am not commenting on Cellino and Barnes because I do not know what is happening between them," Savino said. "But I have been involved in cases where two 50-50 partners have a disagreement, and one of them files a dissolution lawsuit, and they cannot reach a mediation settlement. If there is an impasse that cannot be resolved, the judge could wind up hiring a broker or an auctioneer, and just sell off all the assets of the company. I've seen that happen in two local business cases in the past 18 months."
That kind of result can cause "a lot of disarray" for a company, its owners, its customers and employees, Savino said.
Richard F. Griffin, a longtime Buffalo attorney who has served as a court-appointed mediator for the past 12 years, said he has mediated about 150 business disputes.
"In about two-thirds of the cases, you're ultimately able to reach some kind of agreement," Griffin said, "even in cases where people have been at their throats, and things have become really heated. Quite often, you're able to find some kind of way."
Griffin said he has "great respect" for Gorski, who is known in the legal community as a man who can bring warring factions together. But when asked if he thinks there will be a settlement in the Cellino-Barnes dispute, Griffin said: "I just don’t know enough about the innards of that situation to make a prediction."
Although Cellino and Barnes are known for their very high-profile commercials, both have declined comment on their dispute since Cellino filed his legal action last month. Their attorneys – Terrence M. Connors for Cellino and Gregory P. Photiadis for Barnes – could not be reached on Friday. Robert J. Schreck, managing partner for the law firm, said he could not comment on the situation.
It is not known whether Chimes will address issues involving the secrecy of the case when she meets with the parties on Monday. Attorneys for The Buffalo News and two New York City newspapers have filed a legal action asking Chimes to unseal court papers that she has sealed and kept secret.
“We are asking to intervene because it is newsworthy, a matter of public importance and the judge has ignored our requests to give the supporting legal foundation for sealing of the matter,” said Joseph T. Giglia II, vice president and general counsel for The News.
Buffalo business attorneys have told The News it is highly unusual for a judge to seal documents in a business dispute such as the Cellino & Barnes matter. So far, Chimes has given no public explanation for sealing the case.
Griffin told The News that when he is trying to mediate a dispute between two angry parties, he tells them that a mediated settlement is usually much less stressful than fighting it out in court.
"One of the things I tell the parties is that, if we settle this here, you will not have this hanging over the heads of you, your families or your employees for years on end," Griffin said. "You get closure."