Jul 10th, 2014

FKB’s Andrew S. Kowlowitz and Jessica C. Serrano win a Plaintiff’s verdict on behalf of a law firm following a four week jury trial in New York Supreme Court, New York County.

FKB’s client is a law firm, specializing in the practice of matrimonial and family law. The Firm was previously retained by the client/defendant in a contested divorce proceeding. After rendering extensive legal services on behalf of the defendant, the Firm, on consent, withdrew escrow funds to pay a portion of their outstanding legal fees. Defendant later claimed no such consent to withdraw funds from escrow had been given, and sought to terminate the Firm’s services during trial. For this reason, the Firm petitioned the underlying matrimonial court and was then granted permission to withdraw as counsel. Subsequently, the Firm requested payment of invoices, but defendant failed to remit payment. As a result, the Firm brought suit to recover outstanding legal fees. In response to the fee action, the defendant filed counter-claims for legal malpractice and reimbursement of all legal fees paid to date, claiming the Firm improperly diverted escrow funds and that the Firm’s representation was deficient.

Defendant’s legal malpractice counter-claim was dismissed prior to trial. The fee claim and attendant counter-claims for excessive billing and escrow violations proceeded to trial before the Hon. Debra A. James (J.S.C., New York County) on June 16, 2014. At trial, FKB argued that (1) the fees billed were reasonable and appropriate and the Firm was entitled to payment; (2) the Firm had defendant’s express permission to withdraw monies from escrow to pay their duly earned legal fees; and (3) the extensive amount of work performed and services rendered, as well as the fact that defendant never objected to a single bill until the action for legal fees was commenced, entitled the Firm to retain all fees paid to date.

Despite defendant’s arguments and proffer of expert testimony alleging impropriety and irregularities in the firm’s billing practices, on July 10, 2014, the jury rendered a unanimous verdict in favor of the Plaintiff law firm, finding that the Firm had obtained defendant’s permission to apply escrow fund monies to outstanding legal fees and awarding the Firm monies in excess of the amount representing defendant’s outstanding legal fees on the basis of quantum meruit.

If you have any questions concerning this decision, or the representation of law firms in general, please contact Andrew S. Kowlowitz or Jessica C. Serrano.