Legal Malpractice

It's Not Legal Malpractice, but It's a Big Number

By (Andrew Lavoott Bluestone)

NY Lawyer, via Legal Inteligencer reports on this big number legal fee disgorgement case in Philadelphia.

"A Philadelphia judge has ruled that a Montgomery County law firm should pay $5.2 million, including $1 million in punitive damages, for attorney fees the judge said the firm unlawfully accumulated during its collection of delinquent municipal and school district real estate taxes.

Common Pleas Judge Mark I. Bernstein rendered a verdict Tuesday in the Roethlein v. Portnoff Law Associates Inc. class action against Portnoff Law Associates of Wynnewood. Defendant Michelle R. Portnoff, an attorney, is the president and sole shareholder of the firm, Bernstein said.

Bernstein ruled that the plaintiffs triumphed on an unjust enrichment claim and an Act 6 violation claim because the Portnoff law firm ignored appellate court decisions that municipalities could not add attorney fees to owed tax sums in the hopes that the law of Pennsylvania would change and make those attorney fees legal. Act 6 allows for recovery of charges paid in excess.

Bernstein ordered that the Portnoff firm pay a $5,213,670.08 award, including: $2,654,972.98 in unlawfully received attorney fees; penalty damages of $500,000; $1 million in punitive damages; and $510,855 in unlawfully collected administrative fees and $18,493.55 in interest unlawfully collected on the administrative fees, which were doubled to an award of $1,058,697.10 because, under Act 6, "all sums unlawfully collected as administrative fees and interest on the attorney's fees are doubled"

Full post as published by New York Attorney Malpractice Blog on March 19, 2008 (boomark / email).