Michael Ehrenstein, left, opposed attempts by Robert Charbonneau, right. and two other partners to dissolve their firm. Courtesy photos.

After a four-day bench trial, Miami-Dade Circuit Judge William Thomas has attempted to settle a messy squabble among former partners at defunct Miami bankruptcy and litigation firm Ehrenstein Charbonneau Calderin.

Three out of four partners, Robert Charbonneau, Jacqueline Calderin and Christopher Spuches, had moved to dissolve the firm after 11 years in business so that they could start practicing together—without their partner Michael Ehrenstein, who fought the dissolution.

But Ehrenstein is now on the hook for attorney fees, as Thomas found that dissolution was the right move.

Ehrenstein had answered the complaint for dissolution with a counterclaim, alleging his partners breached the firm's operating agreement by winding down the practice without his consent.

And he had a point, according to Thomas, because the agreement meant the partners needed unanimous consent before billing work in process, collecting on the firm's accounts receivable and gathering assets to pay obligations and make distributions to members. Without that consent, Charbonneanu, Calderin and Spuches needed the court's approval, for which they hadn't waited.

"In other words, the unified members invoked the court's jurisdiction on one hand, and then ignored the court's authority over substantial disbursements on the other hand," Thomas wrote.

That said, the judge didn't find Ehrenstein had been damaged by the violation, because the partners' dissolution efforts were reasonable and free of bad faith, wrongful conduct or improper distribution.

In fact, Thomas found Ehrenstein had benefited personally from the payments to which he'd objected.

The first was a $54,862 payment for tail insurance that covered malpractice claims for two years, the second was $42,000 in bonuses to attorneys for their work in 2017, and the third a $275,000 payment that settled the firm's $3.6 million liability under its lease agreement.

Ehrenstein argued the firm might have needed that money for potential liabilities, but Thomas pointed out that the payments allowed the firm to pay creditors, insurance, bonuses and give each member $111,500 — Ehrenstein included.

But the dispute isn't over yet, as Ehrenstein has moved for a rehearing.

Irreconcilable differences

The partners went their separate ways in February 2018.

Charbonneau, Calderin and Spuches created Agentis in Coral Gables, which focuses on bankruptcy, restructuring and dispute resolution for businesses, while Ehrenstein built Ehrenstein Sager in Coral Gables, which represents businesses in the aerospace, health care, real estate and construction sectors.

Matthew Leto of Hall, Lamb, Hall & Leto in Miami represents Ehrenstein, whom he said was "blindsided" by the departure of his partners.

"This is not something Mr. Ehrenstein wanted to do," Leto said. "The biggest issue that he has is they were spending money, which was essentially his money, without his authority. And that clearly violated the agreement they had when they started the firm."

Leto said his client is happy that the judge recognized the breach of agreement but believes he's entitled to damages.

Ehrenstein had believed he was working harder than his fellow partners and that "the firm's fundamental premise of hard work may have changed," according to the court order, which said the other partners decided to leave because of "what they perceived as Ehrenstein's perennial criticism and disappointment."

That was a fight into which the court declined to wade.

"Whether Ehrenstein, or the unified members, or both were right or wrong concerning whether the relationship was irretrievably broken is irrelevant to this court's final conclusion, because it is clear that the members were done working together by January 2018," Thomas wrote, later adding, "The level of internal discord and dissension is so palpable that the stated purpose of the firm can no longer be achieved."

Burden lifted?

Calderin said she decided to leave the firm in December 2017 due to "a culmination of issues," including a divergence in values, and Charbonneau and Spuches decided to follow her. She said she's pleased with the ruling.

"I think it was appropriate for the judge to award us fees," Calderin said. "He found that our actions, although technically a breach because our operating agreement required unanimous consent, actually benefited Mr. Ehrenstein and benefited the firm."

The bench trial and the year of litigation that lead up to it wasn't easy, according to Calderin, who stressed that no one disputed breaching the operating agreement.

"A burden has been lifted," she said. "Although we were confident that we had not done anything wrong or self-dealing, nevertheless, it's like any divorce. It's emotional and distracting."

The litigation has been a "massive waste of time, effort and resources" the way Charbonneau sees it.

"It should have been a simple dissolution at a law firm, where three partners wanted to do one thing and one partner wanted to do another," Charbonneau said.

Spuches shared a similar sentiment.

"It was difficult but I think we're all ready to move on with our new practices, which we're excited about," he said.

Ehrenstein had also brought other claims against his ex-partners, which he voluntarily dismissed without prejudice.

Read the ruling:

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