Judge Tosses Lawyer’s Challenge of Fee Agreement With Prior Partner
A judge has tossed a declaratory judgment suit over legal fees filed by a lawyer who left a law firm and took a case with him.
The case highlights the issue of fees that can be paid to retiring partners, the New Jersey Law Journal reports.
Judge Peter Doyne of New Jersey dismissed the case on a motion for summary judgment, ruling there was no ethical problem that barred departing lawyer Nathan Wolf from sharing contingency fees with Edward Rosenblum, a lawyer from his former firm, the story says. Wolf had contended that Rosenblum had withdrawn from the firm, making the agreement unethical, but Doyne found in an Aug. 15 opinion (PDF) that Rosenblum remained with the firm for the time in question.
But the judge refused to impose sanctions on Wolf for giving his lawyer erroneous information about Rosenblum’s work at the firm after 2000, the story says. Wolf had argued the information was so obviously incorrect that he was mistaken rather than lying. Doyne called the claim a “perverse contention” but said legal issues to be resolved meant Wolf’s suit was not frivolous.
The case, a tax appeal for a casino, settled for $2.6 million in February 2007. Wolf paid half the fees to Rosenblum and then filed suit for a declaratory judgment challenging the need to make the payment.
The suit said that a 2002 agreement to pay fees to Rosenblum was invalid because it would violate an ethics rule against fee-splitting by lawyers who are not in the same firm. The agreement made Rosenblum a law firm consultant, but said he was due half the fees in the tax case. It specified that Wolf and another lawyer were to buy out Rosenblum in 2007, but that never occurred.
Rosenblum contended he never withdrew from the law firm and that he continued to work on the tax case. Doyne agreed that Rosenblum never withdrew and found there was no ethical bar to receiving the fees.
