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Some Fee Discovery to Remain Public in Fee Dispute Case

September 21, 2016 | Posted in : Fee Agreement, Fee Allocation / Fee Apportionment, Fee Discovery / Fee Disclosure, Fee Dispute, Fee Dispute Litigation / ADR

A recent Legal Intelligencer story, “In Offit Kurman Fee Dispute, Some Discovery to Remain Public,” reports that, in a fee dispute involving a Philadelphia lawyer it dismissed in 2012, Offit Kurman has been allowed to file certain information regarding the firm under seal, but was not granted the blanket seal on discovery materials it sought.  The firm is facing allegations that it failed to comply with its promise to pay origination fees to an attorney after he left the firm.

Attorney Kevon Glickman filed a lawsuit against Offit Kurman earlier this year in the Philadelphia Court of Common Pleas alleging conversion and breach of contract, among other claims.  As the result of an order entered Sept. 14, future filings in the case relating to trade secrets and internal communication at Offit Kurman will be sealed.  But the firm's motion for a protective order was not granted in full.

Glickman, who is representing himself, has said that when he was fired from Offit Kurman in 2012, the firm promised him a 25 percent origination fee on any future revenue the firm received from clients Glickman brought in.  But, his complaint alleges, the firm failed to live up to that agreement by avoiding payment of the fees from client Joan Pendergrass.  Glickman began representing Pendergrass, the widow and estate administrator of deceased R&B singer Teddy Pendergrass, in 2010 in a will contest against Teddy Pendergrass' son.

Offit Kurman has contended that its origination fee agreement with Glickman was not in effect until July 2015.  And since the complaint was filed, Offit Kurman has completed its payment of the full 25 percent fee, the firm said.

Glickman has acknowledged that he received payments from the firm, but said he continues to seek damages based on his claims.  His complaint also alleged that he was underpaid.

According to a memo Glickman filed, he joined Offit Kurman in 2010, and the 25 percent origination fee was included in his incentive package.  According to the filing, when Glickman was fired in October 2012, the firm said in a letter that it would continue to pay Glickman 25 percent of billings on clients he originated, including fees collected after he left the firm.

According to the complaint, managing partner Theodore Offit presented Glickman with an agreement on his last day at the firm, which said Glickman would receive 25 percent billing for clients he originated.  Glickman signed the agreement that day, the complaint said, but did not begin getting payments until nearly three years later.

He pressed the firm a number of times for payment, the complaint alleged.  First, the firm said it would pay him monthly, then it said he would be paid quarterly, the complaint said. Glickman contends Joan Pendergrass was paying Offit Kurman a fixed fee each month after Glickman left the firm, but he received none of that money either monthly or quarterly until late 2015.

In February 2015, the complaint said, the firm told Glickman that they reviewed his file and found he had no right to post-employment fees.  Glickman then threatened to sue, the complaint said, and Offit allegedly said he reviewed the file again and found an agreement to share fees.  After that, the two signed another agreement, which Glickman said was the fourth he signed, and Offit informed Glickman that Pendergrass, as the client, would also have to consent to the agreement in writing, according to court documents.

"In September of 2015, after being forced to incur legal fees as well as enduring embarrassment and humiliation before Pendergrass and [Pendergrass' attorney Helen] McCrary to enforce the agreement, Glickman finally received a payment," the complaint said.

Glickman alleged conversion, breach of fiduciary duty, fraud, misrepresentation and promissory estoppel by Offit Kurman.

In response, the firm filed preliminary objections, calling Glickman's complaint "grossly over-pleaded."  Two counts of the amended complaint were dismissed as a result.

In a memorandum supporting the preliminary objections, the firm said the agreement was not executed until June 2015.  It required the client's consent in order to comply with the fee-sharing agreement, the memo said, and that was not given until July 2015.

"This is a classic example of attempting to transform a breach of contract action into a tort action in an effort to pursue additional damages, such as emotional distress, punitive damages and unspecified sanctions," the memo said.