Monday, October 19, 2015

Suit Against Opposing Counsel Fails

The Vermont Supreme Court has affirmed dismissal of claims brought by a divorcing husband against the law firm ("GFC") that represented his ex-wife and a company retained by the law firm for financial evaluations. ("DRM").

 Plaintiff’s complaint alleges the following, as relevant to this appeal. In January 2007, plaintiff commenced a contentious, multi-year, high-asset divorce proceeding against Ms. Felis. At the time of filing, the parties to the divorce had a minor child and a marital estate worth approximately twelve to fifteen million U.S. dollars in cash, assets, real property, and business interests. Both parties were represented by counsel throughout the duration of the proceeding. In February 2008, Ms. Felis hired DRM, a Vermont-based law firm, to represent her in the divorce; this representation continued until May 2011. DRM subsequently retained the services of GFC to appraise plaintiff’s interest in several business enterprises.

 Plaintiff alleges that early on in the litigation "[t]he red fee-building flag went up . . . in DRM’s handling of the case" when DRM twice asked the court for large distributions from the marital estate to pay legal fees and expenses, both of which the court granted. According to plaintiff, DRM’s litigation strategy was to "build its fees and harass and injure" plaintiff by "pursuing unreasonable legal positions, demanding extensive and unnecessary discovery, promoting and claiming outrageous asset valuations, raising claims without proper foundation . . . and billing excessive time."

 ...At the close of the divorce proceeding, DRM billed Ms. Felis over $800,000 in attorney’s fees, and GFC billed roughly $248,000 for its services. The family court found the fees unreasonable and awarded a substantially lower sum from the marital estate. Plaintiff alleges that DRM required Ms. Felis to sign an "Acknowledgment" agreeing to pay DRM any money distributed to her in the divorce order until DRM’s bill was satisfied in full. Under the agreement, if those funds were insufficient, Ms. Felis was obligated to liquidate real estate and other assets awarded by the court in order to pay the bill. Plaintiff contends that this "Acknowledgment" "demonstrates improper motive on the part of DRM to engage in protracted and vexatious litigation against [plaintiff] in order to build fees that would be paid through the marital estate."

 The court affirmed the dismissal of fraud and breach of fiduciary duty claims. (Mike Frisch)

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