Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes


News Blog

Law Firm Denied Quick Win in Legal Bill Dispute

September 14, 2020 | Posted in : Fee Dispute, Fee Dispute Litigation / ADR, Legal Bills / Legal Costs, Legal Malpractice, Unpaid Fees

A recent Law 360 story by Emma Cueto, “Vedder Price Denied Quick Win in $800K Legal Bills, Suit,” reports that a New York federal court has declined to grant a quick win to Vedder Price PC in a dispute with an investment bank client over $800,000 in allegedly unpaid fees, saying that the firm failed to account for the bank's counterclaims for fraud in their arguments.  U.S. District Judge J. Paul Oetken said that even though Vedder Price had a reasonable argument on each of the key considerations of the state law claim at issue in its motion for summary judgment, the firm could not prevail without also answering for allegations by defendants U.S. Capital Partners LLC and related entity U.S. Capital Partners Inc. that the firm's representation of Breakwater Capital Investment Group LLC was a conflict of interest.

U.S. Capital claims that if it had known Vedder Price represented its former shareholder Breakwater in its attempt to sever ties with the company, U.S. Capital would have cut its own ties to the firm.  Because the "account stated" claim at issue included a fraud exception to its usual standard threshold for success, Vedder Price could not prevail without directly addressing these counterclaims, Judge Oetken said.

"In the two cursory paragraphs it spends dismissing the salience of the counterclaims, Vedder Price maintains that defendants fail to address 'how such counterclaims are in any way a valid defense' to an account stated claim," Judge Oetken wrote, quoting Vedder Price's filings.  "But it is at least possible that Vedder Price's alleged representation of Breakwater could count as fraud, misrepresentation, or some other equitable consideration."  The motion for summary judgment was denied without prejudice.

The account stated claim was one of 14 counts Vedder Price filed against U.S. Capital and two of its executives, alleging that the investment bank racked up about $1,822,000 in legal fees between 2011 and 2016, but paid only $1,010,000, leaving about $800,000 in unpaid invoices.

According to court documents, during that time the firm helped to recover "significant" money that was due to U.S. Capital and defended it and its executives against allegations of improper business practices, including violations of the Racketeer Influenced and Corrupt Organizations Act.  U.S. Capital responded to the suit by denying all allegations and hitting back with seven counterclaims, including breach of contract, legal malpractice and fraudulent representation.