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Lawsuit of the Day: A Super-Salacious Suit Against A ‘Legend’ of the Bar

If you’re looking to catch up on your reading of classic novels, I’d recommend Tess of the d’Urbervilles (affiliate link) — or, to use its complete title, “Tess of the d’Urbervilles: A Pure Woman Faithfully Presented.” It tells the story of a virtuous but destitute young woman who takes a job working for the wealthy d’Urberville family. While working for them, she receives unwanted advances from a libertine son, who develops an obsession with her. Complications ensue.

I was reminded of Tess of the d’Urbervilles upon reading a complaint that was just filed in federal district court here in New York. The complaint tells the story of a virtuous but debt-saddled young woman who takes a job working for a boutique law firm. While working for them, she receives unwanted advances from a libertine partner, who develops an obsession with her. Complications ensue.

Multiple sources brought the lawsuit to our attention. The complaint is going viral over email — partly because the allegations are shocking (and very sad if true), and partly because they’re being made against a prominent New York lawyer.

Let’s check out the complaint. At 24 pages, it’s much shorter than Tess of the d’Urbervilles….

The plaintiff is Alexandra Marchuk, a 2011 graduate of Vanderbilt Law School. Marchuk is suing Faruqi & Faruqi LLP, a plaintiff-side litigation boutique with about 40 lawyers, and Juan E. Monteverde, a partner at the firm and chair of its shareholder merger and transactional litigation department.

Juan Monteverde

According to one of my sources, a litigation partner at another firm, Juan Monteverde is “something of a legend in M&A shareholder litigation.” Some refer to him by the colorful nickname of “Don Juan Monteverde.”

Okay, back to Marchuk’s lawsuit. If her allegations are true, then Monteverde’s “Don Juan” nickname is most unfortunate.

This summary of events is based on Marchuk’s complaint, filed today in the Southern District of New York by Harry Lipman and Thomas Chase of Rottenberg Lipman Rich. Please note, of course, that Marchuk’s claims are mere allegations at this time — allegations that the firm denies.

“These claims are completely without merit, brought by a disgruntled former employee,” said Lubna M. Faruqi, managing partner of Faruqi & Faruqi LLP, in a statement to Above the Law. “We look forward to aggressively defending our reputation in court and have every confidence we will be vindicated.”

Now, on to the complaint. In 2010, Marchuk worked as a summer associate at Faruqi & Faruqi (“F&F”). When they worked together, “Mr. Monteverde was very friendly and flirtatious with Ms. Marchuk and from time to time made inappropriate, sexually charged comments in Ms. Marchuk’s presence.” How inappropriate?

12. Mr. Monteverde drank heavily at [a post-happy-hour] dinner and, seeing that Ms. Marchuk had drunk only a half glass of wine, urged her to drink more, which she did not do. Mr. Monteverde further commented that Ms. Marchuk was an “expensive date” and that she was “lucky” that he was married because he otherwise would expect a “blow job” for the expensive meal that he had purchased for her.

Not a good sign. But this was 2010, a time when the job market was not so good, in case you did not know. So, hoping that the comment “was an isolated incident,” Marchuk joined Faruqi & Faruqi after graduating from Vanderbilt in 2011. Her starting salary was $75,000 — not exactly Biglaw big bucks, but at least right around the mean salary for class of 2011 members. And Marchuk was told that she could receive a “significant year-end bonus[],” subject to performance.

According to Marchuk’s allegations, Juan Monteverde started sexually harassing her pretty much after she walked through the door at the Faruqi firm. When she joined the firm on September 6, 2011, “she was surprised to learn from Mr. Monteverde that he had arranged for her to work exclusively for him.” He asked her to attend a hearing in Delaware on September 8. After the hearing, they went out for drinks:

18. After several more drinks at Lex Bar, Mr. Monteverde aggressively grabbed and kissed Ms. Marchuk and attempted to fondle her breasts. Ms. Marchuk physically rebuffed Mr. Monteverde’s advances. Mr. Monteverde then asked Ms. Marchuk to go back to F&F’s offices with him to have sex. Ms. Marchuk rejected the offer and went home. She had no romantic interest in Mr. Monteverde and was greatly troubled that her sole supervising attorney was making wildly inappropriate sexual advances to her on only her third day of full time employment at F&F.

Alas, that wasn’t the end of it, at least according to the complaint:

19. On Ms. Marchuk’s fourth day of employment at F&F, Mr. Monteverde’s advances continued. He took Ms. Marchuk to lunch and told her that he wanted her to be his mistress. As a married man, Mr. Monteverde attempted to justify his actions by explaining that his father has “a wife, a girlfriend, and a mistress.” Mr. Monteverde further explained that he married his wife only to obtain a United States green card.

A wife, a girlfriend, and a mistress — “Don Juan” indeed. So why didn’t Marchuk complain to the firm?

22. Mr. Monteverde’s inappropriate comments and touching were wholly unsolicited and unwelcomed by Ms. Marchuk. She had no interest in Mr. Monteverde and found his unwanted advances to be offensive, demeaning and entirely inappropriate in a professional environment. Ms. Marchuk, however, had (and still has) crushing student loans, and was reluctant to be seen as overly resistant, or a troublemaker, by immediately accusing one of F&F’s most important partners of sexual harassment during her first week of employment at the Firm.

This could be viewed as a much more extreme, awful version of a young associate’s plight: do you want to be screwed by a partner, or by your student loans?

Monteverde made additional attempts to ask out Marchuk, which Marchuk rejected, and then this allegedly happened:

25. On or about September 15,2011 (Ms. Marchuk’s eighth day of employment at F&F), Mr. Monteverde told Ms. Marchuk that she again needed to accompany him to a class-action settlement-confirmation hearing before Vice Chancellor Travis Laster of the Delaware Chancery Court on Tuesday, September 20, 2011. Mr. Monteverde explained that Judge Laster was partial to good-looking female lawyers, but F&F’s female local counsel was ugly; so Mr. Monteverde wanted Ms. Marchuk to appear with him because her good looks would influence the judge in favor of F&F. Mr. Monteverde told Ms. Marchuk to wear her hair down, wear a low-cut shirt, and to try to look as alluring as possible during the hearing.

Alexandra Marchuk

I guess I can see why Monteverde wanted some help — or at least something to distract the judge — when appearing before Vice Chancellor Laster. One of my sources, who is not a Monteverde fan, shared with me a transcript of a Delaware Chancery Court hearing in which Monteverde participated. On page 6 of the transcript, Vice Chancellor Laster tells Monteverde, “I actually don’t understand anything you just said. You said a lot of words, but none of them actually cohere into something I could comprehend.” Ouch.

(By the way, I’m sure Vice Chancellor Laster will be thrilled to learn about Monteverde’s alleged comments about him and how he can be influenced, as described in this complaint.)

This next allegation is quite interesting:

26. When another associate commented that Ms. Marchuk would be attending her second hearing in Delaware in two weeks, while other associates had not attended any, Mr. Monteverde crassly commented that if other associates were as attractive as Ms. Marchuk they might get to attend hearings as well.

So, if Marchuk’s allegation is accurate, this won’t just be a case of “he said, she said.” There should be witnesses who can confirm (or deny) her claims, such as anyone who heard this alleged exchange.

And Marchuk also claims that she eventually did speak about Monteverde to another partner of the firm, Emily Komlossy:

28. Ms. Komlossy expressed sympathy for Ms. Marchuk’s situation and indicated that it was well known in the Firm that Mr. Monteverde behaved inappropriately. Ms. Komlossy further agreed that, given Mr. Monteverde’s standing in the firm, it was not a good idea for Ms. Marchuk to complain about him to other senior partners in the Firm, including Mr. Faruqi and his sister, Lubna Faruqi (the other name partner).

We reached out to Komlossy through her Faruqi & Faruqi email address but did not receive a response. It appears she may no longer be at the firm. According to her LinkedIn profile, Emily Komlossy left the firm just last month; it’s not clear where she now works.

The complaint goes on to make numerous allegations of inappropriate statements or actions by Juan Monteverde. I printed out the complaint in hard copy and started underlining the salacious bits, but stopped after realizing I was underlining everything. Some highlights:

  • “On the return train ride back from the September 20 hearing Mr. Monteverde again drank heavily. He acted annoyed with Ms. Marchuk and stated that he knew that Ms. Marchuk would not go out with him when they reached New York. As if to show that he did not care that Ms. Marchuk had spumed him, Mr. Monteverde bragged that he liked a good hearing even more than he liked sex.” (¶ 31)

Given the frequent allegations in the complaint about Monteverde’s drinking, one wonders whether he might have an alcohol problem. Many incidents in which partners behave inappropriately towards associates involve excessive drinking.

  • “Mr. Monteverde learned that Ms. Marchuk shared a small apartment with her cousin and had lost a coin toss to determine who got the larger bedroom. Mr. Monteverde joked that if Ms. Marchuk had told him about her situation he would have chipped in some extra money so that he could start sleeping at her apartment. He joked that $50 per month should secure him a night or two with Ms. Marchuk each week.” (¶ 33)

Plaintiff-side employment lawyers, take note: this is a nice detail in the complaint. The fact that Marchuk “shared a small apartment with her cousin and had lost a coin toss to determine who got the larger bedroom” emphasizes her financial predicament and explains why she might have stayed at F&F for a time despite Monteverde’s alleged misdeeds (although, as we shall see, she did not stay that long).

  • “Mr. Monteverde also lewdly commented on Ms. Marchuk’s body in front of other F&F attorneys. When Mr. Monteverde offered Ms. Marchuk a binder from within his office, another F&F associate asked one as well. Mr. Monteverde crassly joked that the other associate might get better office supplies if his body looked like Ms. Marchuk’s body.” (¶ 37)

Two reactions. First, only at a law firm would bestowal of a binder be considered a flirtatious act. Second, I reiterate my earlier point: this other F&F associate might be a witness if this case makes it to discovery or trial.

  • “A male attorney once referred to a case involving the company BJ’ s Wholesale. In front of Ms. Marchuk, Mr. Monteverde responded that he did not know anything about “BJs” other than he really liked getting them. When the other male attorney looked uncomfortable with the comment, Mr. Monteverde smugly assured him that it was not a problem because Mr. Monteverde could say whatever he wanted around Ms. Marchuk, suggesting she enjoyed this type of banter, or worse.” (¶ 39)

Again, another potential witness. It’s hard to believe that a law firm partner — a presumably intelligent person, with a knowledge of the law — would be this brazen. But given the craziness we’ve chronicled in these pages over the years — see, e.g., here, here, and here, just from the first quarter of 2013 — I don’t rule anything out.

I could go on, but the allegations get repetitive. Flip to the next page if you’d like to read the complaint in full.

Over time, after finding he was getting nowhere with Marchuk, Monteverde allegedly started mistreating her with respect to her work: he would “communicat[e] with Mr. Marchuk in a brusque and peremptory manor, often berating her over entirely insignificant issues,” and force her to work over the weekend, only to “ignore[] her work product for several days to underscore its true lack of urgency.”

Making an associate work over the weekend, and then ignoring her work product for several days? Partners do that all the time. But let’s hope that what Alexandra Marchuk next alleges never, ever happens.

The F&F holiday party took place on December 15, 2011. At the party, Marchuk chatted with Monteverde about the firm’s performance, hoping to get a sense of whether she might receive a year-end bonus. These next few paragraphs from the complaint read like a Victorian novel (except they sadly appear in a legal complaint, not a work of fiction):

60. …. Mr. Monteverde told Ms. Marchuk that he did not think he could recommend her for a year-end bonus. He said that he was concerned that if he recommended Ms. Marchuk for a bonus it might raise concerns that he improperly favored Ms. Marchuk. Ms. Marchuk believed that Mr. Monteverde’s comment was meant to chastise her for complaining about him, by suggesting that her complaint now limited his ability to pay her a deserved bonus. Moreover, the news that Mr. Monteverde had decided that she would not receive a year-end bonus was extremely upsetting to Ms. Marchuk, as she had been counting on at least a small bonus to cover necessary expenses.

61. Finally, Mr. Monteverde established his power as Ms. Marchuk’ s employer, capable of deciding whether she would continue working at the firm or not. He unexpectedly commented that he was surprised Ms. Marchuk was so interested in F&F when she probably would not be there much longer. Mr. Monteverde’s comment shocked Ms. Marchuk. His comment suggested either that F&F was planning on terminating Ms. Marchuk or that Mr. Monteverde felt that Ms. Marchuk was not interested in continuing to work at F&F long-term.

62. When Ms. Marchuk asked Mr. Monteverde what he meant by his comment, he explained that since she had started working at F&F he had been testing Ms. Marchuk’ s loyalty and toughness, and that she was failing miserably. He expressed disappointment in Ms. Marchuk for “betraying” him by complaining to Ms. Komlossy about his behavior towards her. Mr. Monteverde suggested that Ms. Marchuk was not committed to working at the Firm and that she did not have the toughness to be a lawyer at F&F, or maybe anywhere.

63. Ms. Marchuk was devastated by Mr. Monteverde’s comments. From a financial perspective, she was distraught to learn both that she would not receive a bonus and that she soon might not have a job at all. From a professional perspective, she was leveled by the suggestion that she might not have the talent or commitment required to be a lawyer. While Ms. Marchuk had no romantic interest in Mr. Monteverde and was offended by his sexist behavior, she admired him professionally for his success and highly valued his opinion of her legal ability.

Marchuk then claims that, in her vulnerable state, Monteverde took advantage of her in a most terrible way:

64. By this time, most or all of the other F&F attorneys had left the bar and Mr. Monteverde started suggesting that Ms. Marchuk accompany him to F&F’s office, which was only a short walk away. Under the influence of alcohol, and desperate to repair what Mr. Monteverde said was her tattered standing at F&F, Ms. Marchuk acceded to Mr. Monteverde’s pleas and walked back to F&F’s offices with him.

65. After entering his office, Mr. Monteverde pushed Ms. Marchuk to the floor and quickly, forcefully, and painfully had sex with her. Suffering discomfort and not wanting to continue having sex with him, Ms. Marchuk implored Mr. Monteverde to stop, but he disregarded her pleas and continued having sex with her. After he finished, Ms. Marchuk had left a large bloodstain on Mr. Monteverde’s carpet. Seeing that Ms. Marchuk was emotionally and physically traumatized by his aggressive conduct, Mr. Monteverde immediately directed her not to tell anyone what he had done. He then quickly escorted Ms. Marchuk from F&F’s office and down to the street, obviously concerned that they might be discovered by other F&F employees. Mr. Monteverde advised Ms. Marchuk to forget what had just happened. Ms. Marchuk walked to the nearest train station and took the subway home alone.

The complaint doesn’t use the r-word, but that’s very close to what Marchuk is alleging — that Monteverde “forcefully” had sex with her, even though she “implored [him] to stop.” As for her response to this event, here’s what she claims:

66. Ms. Marchuk was shattered by Mr. Monteverde’s abusive and manipulative treatment of her and immediately sought professional help. Concerned that Mr. Monteverde’s rough and unprotected sex may have physically harmed her, she visited her gynecologist the following Monday. Knowing that Defendants’ actions had egregiously violated her legal rights, Ms. Marchuk immediately met with an employment attorney on December 20, 2011.

Again, such communications and meetings could be corroborated by third parties. But note that Monteverde and Faruqi & Faruqi, if they fight this case “aggressively,” as Lubna Faruqi has promised, might ask why Marchuk didn’t try to have criminal charges filed. Perhaps they will claim that there is some ambiguity, as there was in Tess of the d’Urbervilles, over whether this was rape or seduction.

Marchuk quit the firm on December 22, 2011, less than four months after her September 6 start date. She alleges that “[d]espite abruptly resigning after consulting with an employment attorney, and without replacement employment in a terrible job market, nobody from F&F ever contacted Ms. Marchuk to determine the reason for her resignation.” And she further claims that others at the firm knew of Monteverde’s alleged misdeeds:

71. Indeed, Mr. Monteverde’s inappropriate office behavior was, and may still be, a running joke within F&F (although it was no laughing matter for Ms. Marchuk)…. [O]n one occasion when Mr. Monteverde complained that F&F should have paid him more on a case, [co-founder and managing partner Nadeem] Faruqi jokingly replied by looking approvingly at Ms. Marchuk and protesting, “I gave you Alexandra.”

…. Mr. Faruqi even told other F&F attorneys that he was concerned that someday Mr. Monteverde’s inappropriate behavior would cost the Firm a lot of money.

“Someday” could come, well, some day. Marchuk is suing F&F under New York City and New York State civil rights laws, alleging that she was subjected to a hostile work environment and illegally discriminated against on account of her gender, and seeking millions in damages.

Why is this case, involving New York statutes, in federal court? Marchuk is invoking diversity jurisdiction because she is now a citizen of Nebraska:

77. [Almost a year after leaving F&F], in November 2012, Ms. Marchuk was offered a legal job overseeing a foreclosure docket at an insurance company in Omaha, Nebraska. Her new job has a significantly lower salary than did her position at F&F, and represents a material and less remunerative change in career path. Ms. Marchuk relocated, at her own expense, to Omaha and started her new job on November 23, 2012.

As for the amount in controversy, Marchuk seeks compensatory damages that she believes to exceed $2 million and punitive damages that she believes to be at least $5 million. In addition to the claimed damage to her career path and earning potential, Marchuk claims that after leaving F&F, she “suffered from continuing bouts of depression, anxiety, anger and guilt,” with a diagnosis of post-traumatic stress disorder.

As noted earlier, the firm describes Marchuk’s claims as “completely without merit” and “look[s] forward to aggressively defending [its] reputation in court.” If this matter does get litigated rather than settled, we will be there to cover every development in this page-turner of a lawsuit.

UPDATE (3/14/2013, 5 PM): For additional coverage, including background on Juan Monteverde’s practice, see this DealBook write-up, by Peter Lattman, and this Forbes story, by Daniel Fisher.

If you’d like to read the complete complaint — as noted, I’ve just given you excerpts — please flip to the next page to view it or download a copy….

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