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Cellino & Barnes divorce papers unsealed, describe 'internal dissension'

"Internal dissension" between Ross M. Cellino Jr. and his longtime law partner Stephen E. Barnes prompted Cellino to ask for dissolution of their law firm, according to a document released Tuesday.

According to Cellino, the two men have been battling for a long time about at least 16 different issues, including clients that the law firm takes from other attorneys, expansion of law firm offices and compensation of attorneys who work for the firm.

Cellino also cited hiring policies, including those involving "family and personal relationships."

Cellino said he and Barnes have fought over marketing and advertising issues, and over the time and energy the firm devotes to running its California offices – which are owned almost entirely by Barnes.

The disagreements between him and Barnes had become so unpleasant that it was "hindering the proper management of the firm," Cellino wrote in a six-page petition made public by State Supreme Court Judge Deborah A. Chimes.

The document offers the first public airing of Cellino's reasons for wanting to break up one of the nation's largest personal injury law firms, which, according to one knowledgable source, is worth "at least $200 million."

Cellino and Barnes own equal shares and are the firm's only stockholders. Barnes, according to court papers, serves as the firm's president and treasurer, while Cellino serves as vice president and secretary.

According to Cellino, the relationship between the two men has grown so ugly that there appears to be no way to repair it.

"On each of these issues, petitioner Cellino and respondent Barnes have taken essentially opposite positions, resulting in a deadlock … Attempts by petitioner Cellino and respondent Barnes to resolve the deadlock have been unsuccessful," wrote Cellino's attorney, Terrence M. Connors. "As a result, the Board of Directors of Cellino & Barnes has effectively ceased to function."

[READ: The Cellino & Barnes petition]

Chimes agreed to unseal the document at the request of The Buffalo News, the New York Daily News and the New York Post. Attorneys for the newspapers, including Karim A. Abdulla, filed a complaint alleging that Chimes illegally sealed the court papers last month.

Touting itself on commercials on television, radio, newspaper pages, billboards and other media, Cellino & Barnes grew into what legal experts say is one of the largest injury law firms in the nation, with about 300 employees and more than 10,000 clients.

Cellino and Barnes have been law partners for more than 25 years. Their firm is an offshoot of one that Cellino's father, Ross M. Cellino Sr., started many years earlier.

There was no public indication that the two partners were feuding until May 10, when Cellino Jr. filed a State Supreme Court complaint seeking to break up the partnership.

Sources: Barnes' refusal to hire Cellino's daughter sparked rift

Sources close to both Cellino and Barnes have spoken to The News about the case, but anonymously, because of concern that the judge would be upset if they were making public comments about the case.

Cellino feels that the law firm has made a bad name for itself by aggressively trying to "steal" clients – some of them with potential million-dollar cases – from other Buffalo-area lawyers, said a Cellino supporter. The supporter said Cellino also is upset about some of the other business practices of the firm.

Cellino wants to walk away and start his own law firm, operated in the way that he wants to run it, another Cellino supporter said.

Supporters of Barnes deny that the law firm does anything improper or unethical to woo clients of other firms. These supporters also feel that – for the past few years – Cellino has left most of the law firm's tough decisions for Barnes, while Cellino concentrated on running an Orchard Park golf course he owns, building a mansion for his family and other endeavors.

"Ross has been like a 'Rip Van Winkle' for years. Now, he wakes up and starts complaining about decisions that were made while he was leaving things in Steve Barnes' hands," said one source who is sympathetic to Barnes. "The business practices that Ross is now complaining about have made both of these guys very, very wealthy men. For years, there were no complaints from Ross about all the money he was making."

That is unfair and untrue, said one of the Cellino supporters. "Ross is in the office more than Steve is. Ross wants to be more involved in the decisions that are made, but he's been rebuffed, foreclosed and excluded when he tried to get more involved," the supporter said.

"When Steve is not there, he is in contact with the office every day, and totally involved with what is going on," the Barnes supporter said in response.

Although family issues are only mentioned briefly in Cellino's complaint, the Barnes supporter said he believes that Barnes' reluctance to hire Cellino's five sons and daughters who are attorneys is a "major" bone of contention between the two men.

Lawyers on both sides of the case told Judge Chimes on Monday that they will continue trying to reach a settlement in talks with a court-appointed mediator, retired State Appellate Judge Jerome C. Gorski.

But sources on both sides of the case told The News last week that the settlement talks have had little success so far.

And when Cellino spoke to reporters outside Chimes' courtroom on Monday, he seemed to give little hope that the battling parties will ever patch up their differences.

"Steve and I have been partners for 25 years. We've had some amazing results for our clients," Cellino said. "But there have been serious disagreements that have occurred between Steve and I ... There's a time and a place for everything, and sometimes there is a time to move on from your partnership."

A Buffalo attorney who is close to many who work at Cellino & Barnes said he worries about the future for dozens of secretaries and clerical workers who do not make the kind of money earned by the two millionaire law partners.

"There are people there who work day to day, paycheck to paycheck," the lawyer said, "and many of them are walking around and worrying, 'Am I going to have a job when all this is over?'"


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