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Law Firm Breakup Brings Defamation Charges

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  • | 6:00 p.m. July 1, 2005
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Law Firm Breakup Brings Defamation Charges

Attorney Kendrick J. Blackwell is suing his former partners over his forced ouster as managing partner of Tampa's Adams, Blackwell & Diaco PA, alleging he has been denied access to his files and client information.

Plus, Blackwell alleges in the Pinellas-Pasco lawsuit that one of his partners has been "misrepresenting to professionals that Blackwell has misappropriated funds."

In turn, his former partners - Robert D. Adams, Stephen Diaco and Joseph Diaco Jr. - filed a lawsuit in Hillsborough Circuit Court against Blackwell.

St. Petersburg attorney Michael J. Keane, who represents Blackwell, was not available for comment.

In Blackwell's complaint, he says he was summoned to a June 10 meeting and given written notice that his position as vice president and managing partner was terminated, according to the June 21 complaint. A security guard was also at the meeting.

Blackwell & Diaco PA, now with about 10 lawyers, was formed in 1997, according to state records. Blackwell, Joseph Diaco Jr., Stephen Diaco and Adams are listed as partners. According to the lawsuit, each owns 25% of the firm's stock.

Blackwell, a co-founder, is asking the court for dissolution of the firm. He contends "the assets of the law firm are being misapplied and wasted causing material injury" to the firm. He says the firm illegally owns a Miami residential condominium on which it makes mortgage payments on debt of $600,000.

Blackwell also accuses his partners of breaching their fiduciary duties by terminating his employment on false pretenses, precluding access to files and records, conducting improper shareholder or director meetings without notice and interfering with the relationship that Blackwell enjoyed with his clients.

Blackwell is suing only Stephen C. Diaco on count three - defamation.

He says Stephen Diaco has told other Tampa Bay area legal professionals that Blackwell "misappropriated funds." Blackwell says that's not true.

"Defendant, Steve Diaco, made this false statement, solely to gratify his ill will, hostility and intent to harm Blackwell. ... Blackwell has been damaged by the false statement. He has sustained injury to his reputation, shame, humiliation, mental anguish and hurt feelings."

In the Hillsborough lawsuit, filed by attorney Gregory A. Hearing of Thompson, Sizemore & Gonzalez PA on behalf of Adams and the Diaco brothers, Blackwell is accused of misuing his position "by converting funds belonging to the law firm, without the consent of any of the plaintiffs, for his personal, non-business purposes."

They accuse Blackwell of tapping out the firm's Bank of America $250,000 line of credit and then denying it.

"Blackwell advanced himself $20,000 from a firm bank account, which sum he then booked as a 'bank error.' After being confronted, Blackwell repaid the money and promised not to advance himself any more firm funds, but then secretly proceeded to give himself a further $10,000," according to the complaint.

The lawsuit also alleges Blackwell is responsible, at least in part, for the firm's most recent annual net loss of $168,000.

The three lawyers say they didn't discover Blackwell's duplicity until the bank informed them the firm's line of credit was exhausted.

In addition, Stephen Diaco accuses Blackwell of threatening to kill him during two telephone conversations on June 16. The three lawyers are asking the court to enjoin Blackwell from engaging in communications unrelated to firm business with them.

- Janet Leiser


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