A litigation funding dispute over the allegation that a solo practitioner failed to distribute settlement proceeds to the lending company has spread to the well-known personal injury and products liability law firm Feldman & Pinto. But the firm is pushing back.

On Monday, attorneys with Feldman & Pinto, which is known for its leading work in several consolidated pharmaceutical litigations, asked the Philadelphia Court of Common Pleas to dismiss the lawsuit Thrivest Legal Funding v. Arnold.

The lawsuit had initially only been filed against solo practitioner Louis Jay Arnold over a loan he allegedly failed to repay following a personal injury settlement involving his client, Allegra King. But early last month, the court ordered that Feldman & Pinto attorneys Rosemary Pinto and Laura Feldman be joined as defendants in the litigation. The attorneys filed preliminary objections Monday contending that the plaintiff's pleadings failed to show they had any role in the agreement or the alleged failure to distribute the funds.

“In fact, in a sworn affidavit supporting plaintiff's motion for summary judgment by plaintiff's CEO Joseph Greco it was admitted that Thrivest did not tell Feldman & Pinto prior to the settlement that it held a lien on the Allegra King case,” Feldman & Pinto attorney J. Bradley McDermott said in the filing. “Thrivest relied on Arnold's statement on March 28, 2018, that he would keep them (Thrivest) posted on the statute of the case.”

According to court papers, King first hired Arnold to represent her in a personal injury case, and then the attorneys agreed that Feldman & Pinto would join Arnold as counsel.

Thrivest's first complaint contended that Arnold “aggressively sought funding” from it to “keep the King case alive.” King and Thrivest entered into a cash advance agreement in May 2016 for more than $19,500, the complaint said. Thrivest said the money went toward King's rent, food, medical and other expenses that allowed the case to “get to the finish line.”

King's underlying case eventually settled for $350,000, with $140,000 going to attorney fees, including $45,000 for Arnold. The money, according to Thrivest, was then distributed to King and the attorneys.

However, according to Thrivest, the funding agreement had said that Thrivest had to be paid in full before any money was distributed to the client. The agreement also said Arnold was also supposed to place a lien and security interest against any future settlement proceeds, but he never did that either, Thrivest said.

According to Thrivest, $34,782 was due on the funding agreement as of December. The lawsuit, however, seeks more than $50,000, including punitive damages.

On Jan. 4, Philadelphia Court of Common Pleas Judge Ramy Djerassi ordered that Thrivest join Pinto and Feldman as “indispensable parties” in the case, saying in a footnote that their “interests are affected by this case because of the legal duties they owe as Ms. King's attorneys.” Djerassi made that ruling without having the issue raised by the parties first.

In the subsequent complaint filed in late January, Thrivest contended that Pinto and Feldman replaced Arnold as the lead attorney for King, and therefore stood “in the shoes of Arnold and have the contractual obligations to protect plaintiff's interests.”

“Pinto and Feldman disregarded plaintiff's interest in the proceeds,” Thrivest said in its Jan. 24 complaint. “Pinto and Feldman failed to distribute any funds to plaintiff. Pinto and Feldman did not provide plaintiff notice that a distribution would occur and did not provide plaintiff notice that the proceeds had been distributed.”

Pinto and Feldman, however, contended they were never a party to the agreement, that they had never been told about the loan or any of the details regarding how it was supposed to be repaid.

“Arnold did not request Feldman & Pinto to recognize Thrivest's lien and security interest,” the firm said. “Had Arnold provided that information to Feldman & Pinto prior to the distribution, a proper distribution would have been made to Thrivest.”

Astor Weiss Kaplan Mandel attorney William Mullineaux, who is representing Thrivest, declined to comment Tuesday morning. Aaron Moore of Marshall Dennehey Warner Coleman & Goggin, who is representing Arnold, declined to comment and McDermott did not return a call for comment.