NEW YORK, June 28 (Reuters) - An Orange County law firm on Wednesday settled a federal lawsuit accusing it of refusing to meet with a disabled client because she was accompanied by a service dog.

The suit, brought by the Civil Rights Unit of the U.S. Attorney's office for the Southern District of New York, alleged that the firm Larkin Axelrod Ingrassia & Tetenbaum and one of its partners, John Ingrassia, discriminated against Lauren Klejmont on the basis of her disability, a violation of Title III of the Americans with Disabilities Act of 1990.

The firm will pay $20,000 to Klejmont and a $5,000 civil penalty to the U.S. It has also agreed to implement a new policy on service animals, including posting a public sign declaring "Service Animals Welcome," according to the terms of the consent decree. The firm did not admit to violating federal law.

Ingrassia and a representative for the firm did not immediately return requests for comment.

According to the complaint, Klejmont retained Larkin Axelrod in 2007 to represent her in a personal injury lawsuit. Klejmont had previously sustained spinal injuries and a closed-head injury that caused her to have seizures, memory problems and difficulty balancing. The disability, covered under Title III, forced her to rely on the aid of her trained service dog, a German Shepherd named Reicha, to perform tasks such as picking up and carrying things.

In January 2009, Klejmont, accompanied by her dog, arrived at the firm's Newburgh offices to discuss the case with an unnamed partner and associate. The partner that Klejmont was scheduled to meet asked her to leave the dog outside, explaining that he suffered from allergies. He later apologized and offered to make future advance arrangements to accommodate her and her dog.

A year later, in January 2010, an associate attorney at Larkin Axelrod scheduled a meeting with Klejmont but advised her to leave her dog at home, explaining that he suffered from a "dog phobia," according to facts stipulated in the consent decree. He offered to meet her without the dog in the firm's office or in the parking lot if the dog remained in the car, the decree stated.

After the firm's principals learned about what transpired, the associate called Klejmont and offered to meet with her and her dog in the office, the decree stated.

The firm acknowledged in the decree that it did not have a service animal policy in place at the time.

A lawyer for Klejmont did not return a call Thursday evening.

The case is U.S. v. Larkin Axelrod Ingrassia & Tetenbaum and John Ingrassia, in the U.S. District Court for the Southern District of New York, No. 11-8003.

For the U.S.: Michael Byars.

For Larkin Axelrod: James Burke.

(Reporting by Jessica Dye)

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