MEMORANDUM OPINION AND ORDER When Plaintiff Benedict P. Morelli and Defendant Jeremy Alters met, each believed the other to be an incredibly successful class action lawyer. Morelli agreed to loan Alters millions of dollars in exchange for tens of millions of dollars in fees that Alters allegedly represented to Morelli that he was due because of his work on various class action cases. And eventually, the pair agreed to become partners, with Alters receiving a multi-million dollar salary from Morelli, again backed by Alters’ expected fees. The two executed three contracts that formalized this arrangement individually and on behalf of their respective law firms. But these agreements, and Morelli’s and Alters’ erstwhile friendship, were allegedly founded on lies. Plaintiffs allege that Alters had already promised the fees that he was due from the class action cases to other parties, so Morelli could never have collected what Alters promised to pay him. Thus, Plaintiffs filed this action alleging that Alters defrauded them. Because a motion to dismiss for lack of subject matter jurisdiction is not a proper method to enforce an agreement to arbitrate, Alters’ motion to dismiss for lack of subject matter jurisdiction is DENIED. However, the Court concludes that the 2015 agreement between the parties contains a valid agreement to arbitrate disputes between Morelli and Alters. Because Alters has not petitioned to compel arbitration, the Court will not compel arbitration of Morelli’s claims at this time. Because the 2018 agreement between Morelli and Alters does not contain an arbitration provision, Alters’ motion to dismiss Plaintiffs’ claim arising under that agreement is DENIED. And Alters’ motion to dismiss based on improper venue and his motion to strike are likewise DENIED. I. BACKGROUND A. Facts1 Morelli is the founding partner of Morelli Law. Compl. 19. In 2011, Morelli met Defendant Jeremy Alters, who was “then a well-known South Florida class action litigator.” Id. 20. Alters allegedly told Morelli that “he was in need of financing” because he had not yet received fees he had earned by representing plaintiffs in certain class action cases. Id. Therefore, Alters and Morelli agreed that Morelli would extend Alters a loan, which Alters would repay when he received fees due him from the proceeds of certain class action settlements. Id. 21. At the same time, Plaintiffs allege that Alters was being investigated by the Florida State Bar (“FSB”) “in connection with Alters’ improper and unethical use of client funds in Alters’ firm’s escrow account.” Id. 22. However, Alters did not disclose “the FSB’s investigation to Morelli while they were fashioning their original 2011 financing deal.” Id. When Morelli learned of this investigation in 2013, Alters allegedly “falsely assured Morelli that there was no truth to the allegations of Alters’ unethical conduct.” Id. 24. Because Morelli believed these denials, he “paid the bills for Alters’ personal counsel in the FSB investigation” as “Alters said he did not then have the funds to pay for those fees.” Id. In 2014, Morelli and Alters decided to found a New York law firm together called Morelli Alters Ratner LLP. Id. 25. The complaint alleges that “[t]o induce Morelli into a ‘partnership’ relationship, Alters consistently promised Morelli” both orally and in writing “that Alters had already earned and would receive through judicially-approved settlement fees of tens of millions of dollars in” class actions and other cases “and that Alters would share fifty percent of those already earned legal fees with Morelli[.]” Id.
26-27. In exchange for a portion of the class action fees that Alters allegedly represented he would soon receive, “Morelli agreed to provide Alters with a salary and to pick up other costs and expenses to fund Alters’ practice[.]” Id. 27. In 2015, the FSB investigation became more widely known. Id. 28. As a result, Morelli expressed concern to Alters that the investigation might adversely affect Morelli’s share of the class action attorneys’ fees that Alters had promised Morrelli. Id. “Alters again falsely represented to Morelli that there was no basis for the FSB’s investigation into Alters and that he would be cleared of all charges.” Id. However, Morrelli Alters Ratner LLP had trouble “securing financing because lenders regarded Alters as a significant credit risk for the repayment of loans to the New York firm.” Id. 30. Consequently, in March 2015, Alters allegedly agreed in writing to relinquish his partnership interest in Morelli Alters Ratner LLP and “continue working for the firm strictly as a salaried employee[.]” Id. 31. 1. The 2015 Agreement In August 2015, Alters orally “represented to Morelli that Alters had earned and was entitled to receive at least $20 million dollars in counsel fees in multidistrict litigations of Chinese-manufactured drywall products (the ‘Chinese Drywall Cases’) and at least another $20 million in fees from cases against Bank of America arising from improprieties regarding its checking account overdraft fees (the ‘Bank Overdraft Cases’)” in addition to other fees. Id.
