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Monday, February 17, 2020

New York law firm loses appeal over $4.2 million contingency fee

State Court

By Marian Johns | Oct 10, 2019


PALM BEACH — The Florida District Court of Appeal Fourth District struck down a New York law firm's claim that a trial court should have awarded it a more than $4 million contingency fee in a tobacco litigation case rather than the $93,000 in fees and costs based on "quantum meruit," considered a reasonable sum when an amount is not stipulated in a contract. 

According to the Oct. 2 appeal court ruling, Parker Waichman LLP filed an appeal of a Palm Beach County Circuit Court's discharging its "charging lien" in a case involving the R.J. Reynolds Tobacco Company and Linda Purdo, individually and as personal representative of the estate of Thomas Purdo.  

The appeal stems from one of the firm's attorneys, Jordan Chaikin, who left the firm but continued to represent Purdo in the R.J. Reynolds case. The trial court rendered a $33.5 million verdict, which according to the appeal court's filing, would have entitled Chaikin to a contingency fee of $4,223,700. The trial court awarded the firm $75,400 "based on quantum meruit" and costs of $17,803.88. 

" … for the purposes of dividing the contingency fee in a case involving the departure of a limited partner from a firm, the framework should mirror the one used when an associate attorney leaves a firm rather than when a general partner, equity holding attorney, or shareholder departs," Judge Mark Klingensmith wrote in the appeal court's decision.

"Here, Parker Waichman argues the trial court failed to apply the correct standard for the fee award as provided in Buckley Towers Condo Inc. v. Katzman Garfinkel Rosenbaum, LLP, 519 Fed. Appx. 657, 661 (11th Cir. 2013) and Frates v. Nichols, 167 So. 2d 77, 82 (Fla. 3d DCA 1964), We disagree."

Klingensmith stated the lower court's award "was supported by the evidence and within the proper exercise of the trial court’s discretion."

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