A recent Texas Lawyer story, “$350K in Attorney Fees Awarded in Stock Suit” reports that a Montgomery County, PA judge has awarded roughly $350,000 to counsel representing a defendant accused of breach of contract in a case relating to stock purchases.

The plaintiff, Hiren Patel, sued Timothy A. Mann, owner of Philadelphia Franchise Development Corp., for dissolving the company and not furnishing Patel with stock certificates after Patel bought the majority of the shares of the company, according to his complaint.  Patel sought to recover $450,000 he paid to Mann.  The defendant claimed Patel's case was meritless and that he and his lawyer were responsible for prolonging "vexatious" litigation.  The jury found in favor of Mann.

Additionally, Mann filed a breach of contract counterclaim.  The jury found that Patel was liable for breach of contract and awarded Mann $40,000 in damages, prior to the award of attorney fees.  Anthony Gallia and Luke McLoughlin of Duane Morris were counsel for Mann.

Mann claimed in his memorandum of law asking the court to award fees that Patel and his attorney prolonged a meritless case—even after being warned by Montgomery County Court of Common Pleas Judge Carolyn Carluccio—resulting in great expense to Mann and to the court system over the nearly four-year life span of the case.

"Patel and his counsel were given every opportunity to cease their improper actions and change course.  Instead, they ignored numerous warnings and 'doubled down' on their tactics, continuing to this very day to improperly multiply these proceedings.  The bill for that type of behavior is now due," court papers said.  "Because Patel and his counsel engaged in textbook arbitrary, vexatious, and obdurate conduct, and acted in bad faith in both bringing this suit against Mr. Mann and continuing to aggressively pursue the litigation on the basis of false statements, this court should award Mr. Mann his reasonable attorneys' fees."

The defendant's papers said Patel made false statements and had an absolute lack of evidence to support his case while repeatedly changing tactics during the length of the litigation.

"Patel's trial presentation was representative of his actions throughout the entire ­history of this case. ... In an attempt to extract money from Mr. Mann," court papers said, "Patel and his counsel engaged in a constant shell game, advancing a new theory of the case every time his prior theory was proven false.  And at each turn, Mr. Mann was forced to expend his own resources to defend against Patel's shifting attacks.  In the end, the jury unanimously confirmed what Mr. Mann and his counsel always cautioned Patel would be the outcome.  It is now time to finally balance the scales and hold Patel and his counsel accountable for their improper actions."

In his answer to the defendant's memorandum of law in support of attorney fees, Patel claimed he pursued the lawsuit in good faith from beginning to end.  He claimed that Mann orally agreed to repay $450,000 to Patel, and that his claim was supported by circumstantial evidence of Mann making incremental payments to Patel in the amount of roughly $126,000.

"It is inconceivable that a case which is based on facts and law which successfully resisted the multiple dispositive filings by Mann, could be considered as arbitrary, dilatory, vexatious or in bad faith at any time, from filing, through trial, and even to this date," Patel's papers said.  "Mann's conclusory invectives about alleged misconduct by Patel are intended to divert the court from seeing clearly that Mann's counsel's conduct likely caused the jury to rule against Patel."