Construction Law

Donald Trump Tells His Lawyers, “You're Fired!” After Claiming They Treated Him Like a “Cash Cow.”

By John P. Ahlers

Real estate developer, Donald Trump, in a legal malpractice case, claims that his Manhattan law firm overcharged him and treated him like a "cash cow" after the lawyers won a construction case on the developer's behalf. 

Trump has filed suit against the New York firm of Morrison Cohen, asserting that the firm did unnecessary work to generate higher bills.  The case involved Trump's national golf club in Briarcliff Manor, NY.  The suit claimed that the excavation and utility contractor overcharged for earth work and then walked off a separate contract for the utility and infrastructure.  Trump prevailed at trial, winning approximately $2 million in damages for breach of the earth-moving contract, but the court awarded Trump only $40,000 for the infrastructure contract.  The judge awarded Trump $1.3 million in attorneys' fees.

Trump, in the malpractice lawsuit against Morrison Cohen, asserts that his lawyers should have advised him against pursuing the infrastructure contract claims because it was foreseeable that the legal costs would far outstrip any recovery.  Undaunted by the result, Trump asserted that the law firm was preoccupied with fees throughout the case, "Ninety percent of the conversations I had with David Scharf (the partner for Morrison Cohen) were about legal fees and not the case."  Stridently, Trump asserted, "We won the case because I am a great witness."  Morrison Cohen asserts that it has a 95% realization rate on its bills, which allows the firm to remain highly profitable while charging hourly rates substantially lower than those of other large firms.  David Scharf said that Mr. Trump appeared to have a sense of entitlement to a discount because of his celebrity.  The firm is seeking $470,000 in unpaid fees.  Trump is asking for $3 million in damages.

This is not the first time Trump has had a dispute with Morrison Cohen.  The firm represented Ivana Trump in her divorce from Donald.  "I beat him too," said Donald Trump, referring to Ivana's Morrison Cohen lawyer who unsuccessfully attempt to circumvent the couple's prenuptial agreement.

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Full post as published by Construction Law Blog on April 13, 2008 (boomark / email).