Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes

The NALFA

News Blog

Fee Allocation Dispute in Toyota’s Defective Accelerator Settlement

February 5, 2018 | Posted in : Fee Allocation / Splitting, Fee Dispute

A recent Star Tribune story by Randy Furst, “Lawyers in Minnesota Toyota Case Battle Over Legal Fees,” reports that three years after a Minneapolis jury awarded $11 million in a suit against Toyota over a high-speed crash that led to three deaths, the lawyers for some of the victims are in a bitter dispute over the spoils.

More than $1 million in legal fees is at stake, and law firms continue to battle over who gets what, with some accusing others of exaggerating their roles in winning the hefty verdict and appeals.  A jury found that a 1996 Toyota Camry’s accelerator was defective.

“These money disputes between and among lawyers often bring out the worst in lawyers,” says Joseph Daly, emeritus professor of law at Mitchell Hamline College of Law. “It fits the stereotype of lawyers not pursuing justice but pursuing money.”

One firm, Napoli Shkolnik, based in New York, is accused by other lawyers of having so botched its role it should get no payout at all.

“What cannot be disputed is that the Napoli firm’s conduct was grossly negligent, in reckless disregard of their duties as lead counsel and harmful to plaintiffs,” wrote attorney W.B. Markovits of Cincinnati in a court document filed on Jan. 5.

The Napoli firm’s response is sealed. But in an earlier brief, Napoli’s Nicholas Farnolo argued that Napoli’s lawyers did not conduct themselves “in bad faith” and that “no actual fraud was conducted and the firm deserves to be paid for its work.”

It’s all in the hands of U.S. District Judge Ann Montgomery, who presided at the February 2015 trial where lawyers for Koua Fong Lee of St. Paul convinced a jury that the fatal 2006 crash was caused by an accelerator that became stuck, increasing speed even as he applied the brakes.

Three people died and several others were seriously injured.

Neither Lee nor his attorneys, headed by Texas lawyer Bob Hilliard, are involved in the post-trial dust-up over fees, though Hilliard was the lead attorney and most responsible for the victory at trial.

The dispute instead largely involves the lawyers who represented the people who were riding in the Oldsmobile Ciera that Lee’s Camry struck, along with their surviving families.

Killed in the crash were Javis Trice-Adams, Sr., 33, and Javis Trice-Adams Jr., 10, both of whom died instantly, and Devyn Bolton, 6 at the time of the accident, who died a year later after being rendered quadriplegic.

In the civil verdict against Toyota, the main payouts went to Bolton’s mother, Beatrice Trice ($5.5 million); Lee ($785,000); his wife, Panghoua Moua ($884,000); Bolton’s grandfather Quincy Adams ($1.7 million); and Trice-Adams Sr.’s daughter Jassmine Adams ($3 million).

The Trice family went through several attorneys.

The victims in the Ciara first retained attorney Michael Padden of Lake Elmo. Padden sought the assistance of lawyer Kenneth R. White of Mankato.

White and Padden brought in the firm of Waite Schneider Bayless & Chesley of Cincinnati. But a key lawyer in that firm was accused of wrongdoing in an unrelated case and recommended he withdraw, to be replaced by the Napoli firm.

In 2014, Trice learned the Napoli firm made a pretrial offer to Toyota — to settle for $5 million — without consulting her or her attorneys, White and Padden. Toyota then broke off settlement talks because the “demands were too high to lead to productive negotiations,” according to documents.

Trice fired Napoli and retained the law firm of Markovits, Stock & DeMarco. “This conduct breached your fiduciary duty with me and is totally unacceptable,” she wrote Napoli. Padden also wrote Napoli that “the whole scenario is unconscionable and incomprehensible to me and Mr. White.”

The other lawyers also accused the Napoli firm of failing to disclose all the medical bills in time for trial, costing Trice $500,000 that the jury might have awarded, and $250,000 in prejudgment interest. “Under the facts and law presented herein, the Napoli firm has forfeited any right to attorney’s fees arising out of this case,” Markovits wrote.

Farnolo of the Napoli firm wrote that not communicating with his clients “was a harmless error” and that the demand was similar to the award ultimately gained through the trial. He said attorney White shares the blame because he did not disclose the additional medical bills, either.

Markovits also said that while Padden was supposed to get 30 percent of the fees and White 15 percent, it should be reversed. “The evidence does not support that the service performed by Mr. Padden warrants 30 percent of the fee,” firm representatives wrote. “He has no time records supporting work performed, and the record shows that his substantive involvement was minimal.”

Padden’s response is redacted but he includes among his exhibits an affidavit from former St. Paul Pioneer Press reporter Emily Gurnon in which she said Padden was her “main source” for articles on the case and his work was “very important.”

“While publicity may have helped Mr. Padden,” Markovits wrote in response, “Mr. Padden cannot be suggesting that the jury verdict or the post-trial or appellate decisions in this case were due to his public relations efforts. This was not significant, nor time-consuming, substantive work.”

Daly, the professor, said if Montgomery does not decide the matter herself, she will order the law firms to hire a mediator.

If she decides the case, Daly said, “In all likelihood she’ll consider three things: the quality of work, the amount of time and effort put in by each law firm, and the degree of negligence, if any, by the lawyers handling the case.”