A judge tossed out a suit brought by Phillies owner’s estranged sister, who claimed she was cheated by legal malpractice

A federal judge tossed out a case brought by John Middleton’s estranged sister, Anna K. Nupson, claiming that the law firm Schnader, Harrison, Segal & Lewis and one of its top attorneys, Bruce A. Rosenfield, failed to represent her fairly and cost her hundreds of millions of dollars in inheritance that went instead to the Phillies chief executive and part owner Middleton.

Nupson’s case has been grinding on for four years in Philadelphia federal court, delayed by the pandemic and a swarm of motions over documents and depositions.

Nupson, who lives in New Mexico, said in court documents that she believed she was cheated out of her share of the fount of the family’s wealth, a cigar company, after patriarch Herbert Middleton died of a heart attack at a Rotary Club meeting in June 1998.

U.S District Judge Nitza I. Quiñones Alejandro in Philadelphia ruled Friday that the statute of limitations had run out on Nupson’s claims of legal malpractice and breach of fiduciary duty.

Nupson would have known about the law firm and attorney’s actions in 2014 or, at the latest, by June 2015, and she had two years to file the suit, the judge said in a motion dismissing the case. Nupson’s attorneys filed the suit in June 2018 — a year too late.

“Schnader is confident that it would have prevailed even if [the case] had gone to trial. But because they ruled that the claims were untimely, we will never get to that point,” Lawrence McMichael, the attorney with Dilworth Paxson who represents Schnader and Rosenfield, said Monday. He added that “Schnader is very pleased with the judge’s decision.”

Rosenfield, who is a member and former head of Schnader’s tax and wealth management department, “is greatly relieved to have this behind him,” McMichael said. Rosenfield was the Middleton family’s attorney for years.

In the suit, Nupson claimed that the Schnader firm and Rosenfield favored John Middleton in their dealings — even though the firm and Rosenfield represented her — because of the potential for future legal work with her brother.

McMichael said that Nupson was seeking $300 million.

Nupson’s attorney, Ben Davis in Albuquerque, N.M., had no comment.

Under Herbert Middleton, the suburban Philadelphia cigar company called John Middleton Co. developed a process to roll pipe tobacco into popular small cigars sold in convenience stores under the brands Black & Mild, Gold & Mild, Middleton’s Cherry Blend, and Prince Albert’s.

Court documents show that the Middleton family struggled with its estate planning after Herbert’s death. John Middleton, the family’s only son and a Harvard Business School graduate, eventually bought Anna, another sister, Lucia Hughes, and their mother out of the cigar company and other assets for about $200 million in 2003.

Middleton sold the cigar company in 2007 for $2.9 billion — at an exponential profit. He now owns about half of the Phillies and is the team’s CEO and managing partner.

Middleton was not a defendant in Nupson’s federal suit and has said he did nothing wrong as his sisters wanted to cash out the cigar company because of potential liability. But the case is part of a yearslong legal feud between the brother and sister still playing out in the Philadelphia-area courts.

In February 2018, Middleton agreed to pay Nupson $22 million after she dropped accusations that she had been shortchanged. That deal was reached in Montgomery County Orphans Court, where the Middleton family trusts are administered.

Middleton faced demands of more than $1 billion — along with years of costly litigation — if a trial had gone against him.

In the settlement, Nupson agreed that Middleton did not engage in fraud or conspiracy when he consolidated ownership of the family’s cigar company in 2003. She also agreed not to sue Middleton in the future over the financial dealings related to the family’s trusts.

Several months later, in June 2018, Nupson filed the federal suit against the Philly law firm and attorney.