Two New Jersey attorneys facing a $1 million litigation funding lawsuit in Houston removed the case from state to federal court Tuesday.

The lawsuit is just the latest example of a nationwide trend in which litigation funders pursue law firms alleging nonpayment of litigation loans.

This time, lender and plaintiff, Series 4—Virage Master, on Oct. 31 sued attorneys John Vlasac Jr. and Boris Shmaruk and their firm, Iselin-based Vlasac & Shmaruk. It seeks to recover more than $1 million.

Virage has filed many similar lawsuits in the past.

According to Vlasac & Shmaruk's website, Shmaruk practices workers' compensation law, while Vlasac handles civil litigation, including personal injury, medical malpractice and work accident cases, and toxic and mass tort matters, among other things.

The law firm, which has offices in New Jersey, New York and Pennsylvania, has been a borrower with Virage since 2018, and borrowed $925,000 in April 2018, the petition said. The firm's two name partners individually guaranteed the loan, which was supposed to be paid back with at least 60% of case proceeds, the suit alleges. But so far, the defendants allegedly have made only two payments totaling $24,226. They've received other case proceeds on eligible cases, but have failed to pay back the loan, the plaintiff also claims. Virage has demanded payments, but the defendants have refused, said the petition.

The loan balance, plus interest, now stands at $1.24 million, the petition said. Virage alleges the defendants breached the contract. It seeks to recover damages, attorney fees and costs.

Plaintiffs attorney Ashish Mahendru of Mahendru in Houston didn't immediately return an email seeking comment.

The defendants removed the case to federal court because, while Virage operates in Harris County, Texas, the defendants live and work in New Jersey, according to a notice of removal.

The defendants' attorney, James W. Walker, managing partner of the Dallas office of Hackensack-based Cole Schotz, declined to comment on specifics of the case, but said he's pleased it was removed to federal court, and that he looks forward to pursuing his clients' rights under the contract and Texas law.

Across the nation, there's been a rise in litigation by big litigation finance companies that allege law firms fail to repay advances. For example, in August, Virage won a $2.4 million judgment against a Missouri law firm for failing to make payments on a $1.4 million litigation loan.

And in October, Virage filed a $5.74 million lawsuit against a Texas attorney who allegedly didn't make any payments on a $3.25 million loan, made in 2015 for business expenses, even though some of the cases that were collateral for the loan have already settled.