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Chelsea Merta must pay $776,000 for taking files from firm

A St. Louis County judge on Sept. 23 entered a judgment of $557,292 against attorney Chelsea Merta and her firm, Lotus Law, bringing resolution to a civil dispute with her former employer, the Stange Law Firm.

St. Louis County Judge Kristine Kerr also ordered Merta to pay $218,415 in attorneys’ fees and costs to the Clayton-based Stange firm, which specializes in family law and has more than 40 attorneys in Missouri, Illinois, Kansas and Oklahoma. The combined judgment against Merta comes to $775,707.

RELATED: Chelsea Merta’s exit from Stange leads to jail, labor settlement

Merta admitted in a confession of judgment signed Sept. 20 that prior to her resignation from Stange in February 2018, she took 22,000 files belonging to the firm and its clients. She also “tampered with, deleted and wiped” her firm-provided computer, smart phone and data-storage locations, according to the admission. She further admitted that in the final hour after announcing her resignation, she contacted “a number” of clients to let them know they could transfer their files to her new firm.

After Stange sued Merta, the parties agreed in February 2018 to a consent order that required Merta to give back all of the material and delete her copies. Kerr, however, found Merta in contempt on three separate occasions, and on Aug. 9, ordered her jailed for 48 hours. Merta twice attempted to remove the litigation to bankruptcy court, where she has filed for Chapter 13 relief, but the bankruptcy court twice sent the case back to Kerr.

Timeline of the Merta case

2016 – Chelsea Merta joins Stange Law Firm as an associate

2018 – Feb. 9: Merta leaves Stange

2019 – Jan. 9:  St. Louis County Circuit Judge Kristine A. Kerr issues first order of contempt against Merta

July 9: Kerr issues second order of contempt

Aug. 6: Kerr issues third order of contempt

Aug. 9: Merta testifies in court; judge orders her jailed for 48 hours

Aug. 12: In a separate case, Stange and Merta settle a National Labor Relations Board complaint against Stange over the firm’s non-disparagement clause.

Sept. 23: Kerr enters a judgment of $557,292 against Merta and her firm, Lotus Law

Stange filed a motion to dismiss the bankruptcy case, arguing that she was using it “as a refuge from the consequences of her larcenous and contemptuous conduct,” but on Sept. 5 the motion was denied. Merta’s amended plan to pay her creditors a combined $608 per month for 60 months gained approval on Sept. 12.

“The issue that remains in Ms. Merta’s bankruptcy proceeding is what portion, if any, of the $775,707.07 awarded in the state court judgments will be dischargeable,” said Jeffrey L. Schultz, a partner at Armstrong Teasdale who represented Stange in the civil case. “This case, however, was always about protecting client confidential information first and foremost, not the monetary recovery.”

Merta declined to comment.

A third venue of dispute between the parties was the National Labor Relations Board, where Merta filed a complaint against Stange. She accused Stange of violating Section 7 of the National Labor Relations Act by including in employment agreements a non-disparagement clause. Under that measure, employees agreed that during and after their time at Stange, they would not “criticize, ridicule, disparage, libel, or slander” the firm or its personnel, either orally or in writing.

Schultz said the only version of the non-disparagement clause that was in dispute was a 2015 version, and the firm has agreed in a settlement not to enforce it with respect to any employees who signed it. The NLRB’s regional director has approved the settlement, Schultz said.

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Breach of Contract

Breakdown: $557,292 judgment, $218,415 in attorneys’ fees & costs

Venue: St. Louis County Circuit Court

Case Number/Date: 18SL-CC00540/Sept. 23, 2019

Judge: Kristine Kerr

Caption: Stange Law Firm PC  v. Chelsea Merta and Lotus Law

Plaintiff’s Attorneys: Jeffrey L. Schultz and Eric M. Walter, Armstrong Teasdale, St. Louis

Defendants’ Attorney: Eric F. Kayira, Kayira Law, St. Louis