Dissolved Firm Is Found Liable for Partner's Subsequent Malpractice
A Newark law firm that closed up shop four years ago has been hit with a judgment over malpractice committed by a former partner after he took a major litigation client elsewhere.
A Bergen County jury on Monday found now-defunct Robertson Freilich Bruno & Cohen liable for $50,185 and also found it not entitled to millions in additional fees sought from the former client under a partial contingency retainer arrangement in a coverage suit.
The client, Atlantic Research Corp. of Gainesville, Va., a manufacturer of rocket engines for the military, was seeking to recover from its liability carriers millions of dollars it had paid to investigate and remediate contaminated sites around the country.
The retainer provided that fees would be paid to the Robertson firm at graduated percentages of its regular hourly rates, which started at 25 percent for the first $300,000 and rose in $300,0000 increments to 75 percent for billings above $900,000.
In addition, the firm was entitled to 25 percent of any recovery.
Name partner Jeffrey A. Cohen led a team of lawyers who collectively billed hundreds of hours per month on the case from 2006 to 2009.
But in late 2009, the Robertson firm dissolved, and early the next year Cohen took the file with him to Anderson Kill & Olick in Newark.
The Robertson firm had been paid more than $700,000 in fees and expenses, but no recovery had been obtained that would trigger added contingency amounts, Atlantic Research claimed.
It also alleged a new retainer agreement was supposed to be signed with Anderson Kill but never was, and the firm was never substituted as counsel.
At Anderson Kill, Cohen worked on the case virtually alone and the time billed dropped precipitously.
The malpractice case alleged Cohen botched the response to a motion to compel disclosure of documents withheld on the basis of privilege, a motion served while he still was at the Robertson firm.
Atlantic Research contends Cohen took months to respond and, hampered by the absence of the lawyers who had prepared the privilege log, handed the insurers "effectively a complete victory."
Under a "claw back" deal he proposed, he turned over almost every disputed document for the carriers to review and if they wanted to keep one and Cohen did not agree, a special discovery master would decide whether privilege applied, Atlantic Research says.
Cohen also allegedly failed to keep general counsel Steven Lowson apprised on discovery, in part because he used an incorrect email address and did not call Lowson when he got no reply.
In mid-2010, Lowson replaced Cohen with New York's Saretsky Katz Dranoff & Glass and Hackensack's Pashman Stein. They negotiated settlements totaling more than $11 million from 15 insurers.
Anderson Kill, which was paid less than $70,000 on the case, did not assert a charging lien on the recovery but the Robertson firm did, seeking more than $2 million under the contingency arrangement or, alternatively, more than $1 million for the unpaid portion of its billings on a quantum meruit theory.
In Atlantic Research Corp. v. Robertson Freilich Bruno & Cohen, the company asked for a declaratory judgment that the firm was not entitled to any additional money and asserted a malpractice claim for its transfer of the file to Cohen without doing anything more.
It asked for about $42,000 in damages for discovery sanctions imposed in the coverage litigation.
Pashman Stein's Samuel Samaro, who tried the case before Superior Court Judge Rachelle Harz, says he does not know how the jury calculated the $50,185 award. "The case demonstrates that a dissolving law firm cannot simply pass a file on to a departing partner and forget it," Samaro says. "You have to arrange for a soft landing for the file, and that did not happen here."
Kevin Bruno, another Robertson name partner, now with Blank Rome in New York, says there will likely be a motion to set aside the verdict and, if that is denied, an appeal. He is not sure whether the firm, which he says is still in dissolution, has sufficient assets to pay.
Cohen, who no longer works at Anderson Kill, could not be reached.
Not returning calls were James Scarpone and Bruce Vargo of Newark's Scarpone & Vargo, who represent the Robertson firm; name partner Irvin Freilich, now with Gibbons in Newark; and Steven Pudell, managing shareholder of Anderson Kill in Newark.