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Gordon & Rees Team Successfully Preserves Defenses Against $2 Million Collection Suit

On February 18, the federal district court in Manhattan handed Gordon & Rees partner Richard Sybert and senior counsel Benni Amato of San Diego a victory in successfully defending against motions to dismiss and to strike the counterclaims and defenses of their client, a mobile advertising company.

The mobile advertising company had retained a boutique law firm in Los Angeles to prosecute various patent litigation cases. Dissatisfied with the boutique firm’s representation, the company replaced it with a national law firm. The boutique firm sued the company for $2 million in attorney’s fees, including stock options. As the retainer agreement allowed for recovery of only 50 percent of billings, the boutique firm asserted its claim under a quantum meruit theory to recover 100 percent of its billings. The company responded with legal malpractice and breach of contract counterclaims and defenses.

While the company could not argue legal malpractice as an affirmative counterclaim, the U.S. District Court in New York ruled that the company could assert legal malpractice as a defense, since New York state law recognized that dismissal for good cause, such as legal malpractice, would prevent the attorneys from collecting any alleged outstanding fees under a quantum meruit theory. The court also allowed the company’s breach of contract counterclaim, which related to the law firm’s alleged overbilling, to continue.

With assistance from Orange County associate Justin Aida, Gordon & Rees also had successfully defended against an earlier motion for summary judgment filed by the boutique law firm.


Yuo-Fong Amato
Richard P. Sybert