Breaking Up Is Hard to Do, But Clients Still Owe Unpaid Legal Fees - U.S. Second Circuit
U.S. Second Circuit - The FindLaw 2nd Circuit Court of Appeals Opinion Summaries Blog

Breaking Up Is Hard to Do, But Clients Still Owe Unpaid Legal Fees

Richard Levitt received quite the valentine from the Second Circuit Court of Appeals today.

Instead of chocolates, flowers, or greeting cards, the Second Circuit announced that Levitt is entitled to over $200,000 in unpaid legal fees from his former client, David F. Brooks, reports The Wall Street Journal.

Sweet.

Brooks, the former chief executive and chairman of DHB Industries, was convicted on insider trading and securities fraud charges in 2010. Brooks engaged in what prosecutors described as corporate looting and stock-trading schemes that yielded over $190 million for DHB Industries, which produced bullet-resistant vests and other body armor used by the military in Iraq and Afghanistan, reports The New York Times.

Brooks initially hired Levitt to represent him during his eight-month jury trial. According to Levitt, Brooks stopped paying his legal bills prior to the close of trial, racking up $224,956.16 in unpaid legal fees.

After Brooks was convicted, he moved for the release of certain restrained assets that the government contended were subject to forfeiture. Brooks claimed that he had "depleted all funds available to pay for his ongoing defense," that he had "outstanding bills of approximately $1.5 million," (including over $200,000 owed to Levitt), and that he anticipated significant costs for the post-trial forfeiture hearing and other proceedings.

Levitt submitted an affidavit alleging that when he informed Brooks that he would move to withdraw if Brooks did not pay the outstanding fee, Brooks became "belligerent," and "hissed or spit at [Levitt] and screamed" a vulgar remark. The district court denied Brooks' motion, and that pretty much ended Brooks and Levitt's attorney-client relationship. Brooks hired new attorneys for his post-trial defense, and Levitt moved to withdraw and compel payment.

The court ordered Brooks to pay up.

Brooks appealed, arguing that the district court erred when it exercised ancillary jurisdiction over the fee dispute, failed to abide by the Federal Rules of Civil Procedure, violated his due process rights by not holding an evidentiary hearing or trial, and deprived him of his right to a jury trial.

The Second Circuit Court of Appeals found that the district court's exercise of ancillary jurisdiction was proper, that Brooks waived his claims regarding the Federal Rules of Civil Procedure by not raising those issues when contesting Levitt's motion, and that his Due Process and jury trial claims were without merit.

David H. Brooks owes Richard Levitt over $200,000 in unpaid legal fees this Valentine's Day. There aren't many words that can warm attorneys' hearts, but "you're getting paid," will certainly help thaw the chill.

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