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A Manhattan federal judge has thrown out a lawsuit brought by two attorneys who alleged a New York litigation boutique, Simon & Partners, induced them to join the firm based on false promises and then wrongly obtained more than $700,000 in profits from their legal work.

Attorneys Brian Brook and Matthew Peed, now partners at their own boutique, Clinton Brook & Peed, had alleged a host of claims against 10-attorney Simon & Partners and its founder, Bradley Simon, including fraud, unjust enrichment and quantum merit and breach of contract.

U.S. District Judge George B. Daniels of the Southern District of New York, in dismissing each of the claims in a May 14 ruling, concluded the plaintiffs failed to allege damages and failed to allege Simon's representations were actually false.

According to the decision, Brook, formerly an associate at Greenberg Traurig, first contacted Simon about joining his firm in 2011, telling Simon that he would be representing an executive in the appeal of a criminal conviction and he expected that matter to consume all of his time.

While the matter is not named in Brook and Peed's 2017 complaint, Brook at the time was representing former Duane Reade CEO Anthony Cuti, who was appealing his 2010 conviction on securities fraud and other charges.

Simon offered Brook a base salary of $150,000, bonuses tied to Brook's billings on the executive's case and an unspecified percentage of “origination credit” for the amounts that other lawyers billed on the matter. He was offered the title of senior associate.

Peed was a former associate at Williams & Connolly whom the boutique agreed to pay $125 an hour to help on the executive's case in 2011. Simon had informed Peed, if the executive's employer paid the full amount charged for Peed's time, his pay would increase significantly, according to Brook and Peed's lawsuit.

It was in early 2012 when the relationship between the boutique and the attorneys broke down, amid discussions among the attorneys to adjust their payment arrangements. In February that year, Simon informed Brook that the firm would stop paying him a base salary and instead pay Brook 100 percent of what he billed to the executive's case.  Within a few months, Brook learned that Simon had decided to classify him as an independent contractor, rather than an employee, and Simon had instructed Brook to vacate his office.

In June 2012, Simon & Partners informed Brook that the executive's employer had paid more than $500,000 in outstanding bills, and offered Brook a percentage of the amount paid if he signed a full release of any claims Brook may have against Simon & Partners. Brook rejected the offer.

As for Peed, Simon did not initially inform Peed that the employer had paid the first invoice reflecting Peed's work on the case, according to the complaint. After Peed requested a pay increase, his bio was removed from the firm's website, according to Brook and Peed's lawsuit.

In his decision, Daniels said the allegations in the complaint indicate the amount of Brook's bonuses and origination credit were not left open for negotiations. They were to be determined by Simon, who would calculate them based on what Simon thought was “fair,” Daniels said, adding the complaint does not allege that Simon had any obligation to adjust the origination credit based on their discussion.

The judge said Brook had a valid employment agreement with the firm and this “precludes Brook from asserting quasi-contract claims for the services he performed” under the agreement.

The allegations in the complaint also establish that Peed had a valid agreement with Simon & Partners, Daniels said. Even assuming that his contract was terminated in December 2011, Peed has failed to state a quantum meruit claim, the judge said. Though the complaint asserted that Peed was entitled to “$450 per hour, as billed to the employer,” Peed provided no explanation as to why such a rate would be reasonable, Daniels said.

In an alternative breach of contract claim, Peed alleged Simon and the firm were obligated to inform Peed if and when the executive's employer paid fees for his time. But Daniels said whether the parties would have reached an agreement as to Peed's compensation and the terms they would have agreed upon “are matters of pure speculation and, as such, do not provide a basis for damages.”

Turning to their fraud claims, Brook alleged that Simon made representations regarding the “prospect of partnership in the future” and Simon's “then-existing intention to pay Brook compensation that was fair.”

But the judge said Simon's statements were not of objective fact; they were predictions regarding a “future event that might never come to fruition.” And because a determination of whether his compensation was “fair” is inherently subjective, Brook cannot plausibly allege that Simon's representation was objectively false, the judge said.

Meanwhile, Daniels said Peed's fraud claims also fails because he did not adequately plead that he suffered damages.

Simon & Partners' defense attorney, Kenneth Murphy, a partner at Rivkin Radler, called the decision sound and correct. “The law is very clear that discretionary bonuses for an at-will employee are just that: discretionary bonuses at the prerogative of the employer.”

For his part, Brook, represented by attorney Rhett O. Millsaps in the lawsuit, said he was reviewing the decision and he expects to file an amended complaint.

Brook said he was not a traditional associate at Simon & Partners. “I'm not aware of any circumstance where an associate has left a Big Law firm with a multimillion-dollar client, in terms of potential fees, and taken that to another law firm,” Brook said.