Stratford lawyer Laurence V. Parnoff’s apparent desire to wangle a better deal for himself has proven costly.
He’s involved in a long-running court dispute in which he’s accused of circumventing the state “fee cap statute.” In the same case, he faces possible disbarment for improperly spending more than $300,000 in client funds. And then there’s the most recent mattter — allegedy trying to get free city water for his pet goats.
The summer before last, when workers for the Aquarion Water Co. came to Parnoff’s home in Stratford, they tried to figure out why a nearby fire hydrant was missing its outlet cap. They found it on the ground nearby, a garden faucet welded to it, both of which could be reattached to the hydrant as needed. Parnoff, according to police, was apparently using the hydrant to provide water for his pet goats.
The water workers were in the process of explaining that it is illegal to get water that way for private use, when — according to police and the Connecticut Post — Parnoff became angry and ordered them off of his property.
That wasn’t the end of it.
Parnoff then reportedly threatened to kill the workers, and told them he was going to his house to get his (registered) gun. Parnoff said in an interview he never threatened the workers. “That’s completely false.”
When police arrived, Parnoff was charged with disorderly conduct, interfering with an officer, second-degree threatening, and criminal mischief. He was released after posting a $1,000 bond, and has had his criminal hearing postponed repeatedly, and not yet heard. Parnoff is represented by criminal defense lawyer Robert Gulash. “I’m going to get a trial, and I’m going to prevail,” Parnoff said.
Because the water system is part of the utility infrastructure protected by the Homeland Security Act, Parnoff’s alleged goat-watering has wider implications. He was not charged with a national security violation, but theoretically might have been, according to lawyers involved in the case. The water company is represented by Pullman & Comley lawyer Alex Hernandez.
A local Fairfield County grievance panel has already found probable cause in the goat-watering case to discipline Parnoff for violation of Rule 8.4 of the Rules of Professional Conduct, for committing “a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness….” That matter is currently pending, awaiting the trial of State v. Parnoff in Bridgeport. If Parnoff is convicted of a crime, it may add to the work he’s providing the state disciplinary counsel’s office.
Parnoff is already well known to Chief Disciplinary Counsel Patricia King for a different case, one that began 14 years ago.
In a nutshell, Parnoff, who has been practicing law since 1970, has been attempting — with disastrously bad results — to get around the “fee cap statute.” Connecticut General Statutes 52-251c limits lawyers’ contingency fees to 33 percent or less of the amount awarded to their clients, based on a scale prescribed by the legislature in a mid-1980s tort reform measure.
It all began when Darcy Yuille, a Bridgeport Hospital nurse, was injured on the job. She retained Parnoff in 1998 to represent her in a bad faith claim against the hospital for failure to settle her workers’ compensation claim. Parnoff agreed to represent Yuillle for a 40 percent contingency fee.
Parnoff went before a three-member arbitration panel and ultimately collected nearly $1,098,033 for his client. When Yuille considered the $438,413 — or 40 percent — Parnoff wanted to claim as his fee, she had misgivings. She had since learned about the fee cap law, and, according to court documents, authorized Parnoff to pay himself only $125,000 “until my objection to the 40 percent fee is resolved.”
Parnoff, in turn, sued Yuille for breach of contract. His view is that the bad-faith action in the the workers’ comp case is not covered by the fee cap statute, which is generally applied to personal injury cases. Given that, he says, his contract with the nurse is valid, and denying him his 40 percent fee violates the Contract Clause of the U.S. Constitution.
The nurse countered that the 40 percent fee agreement did, in fact, violate the fee cap statute. In a 2010 trial, Fairfield Judge Trial Referee John P. Maiocco issued instructions that the jury could not exceed the fee cap “ceiling” in its award. With those orders in mind, the jury found that Parnoff was entitled to a total of just $139,405, or just a little over 13 percent of the bad-faith award.
On appeal, an Appellate Court panel, in a November 2012 decision, unanimously found that Parnoff’s 40 percent fee was void, because it ignored the fee cap statute. Yuille’s appellate attorney is Barbara Cox, of the Gallagher Law Firm in New Haven. She said the panel found that “the contingency fee agreement that is described in the statute is the exclusive method for paying the attorney.”
Appellate Judge Thomas Bishop, writing for the unanimous panel, found that Parnoff’s contract was tainted beyond resuscitation. The panel also rejected arguments that Parnoff should earn something extra on the basis of “unjust enrichment,” or quantum meruit, the quasi-contractual equitable remedy that allows courts to award the fair value of work done, without a valid underlying contract. Further, the panel also rejected the idea that the fee cap statute was an unconstitutional violation of the U.S. Constitution’s Contract Clause.
The Appellate Court ruled that even the reduced $139,404 verdict amount “cannot stand” because the contract so greatly violated public policy. Thus, instead of obtaining a fee of over $438,000, Parnoff was left with no legal grounds for collecting anything in this matter.
He is seeking permission to appeal to the state Supreme Court.
But there’s more to the fee dispute. Last month, Chief Discplinary Counsel King filed a presentment for disclipine against Parnoff for mishandling client funds.
In a November 2004 hearing before Bridgeport Superior Court Judge Richard P. Gilardi, nurse Yuille agreed to endorse the $1 million-plus check with the understanding that Parnoff could pay himself $125,000 and that the balance “would be held in escrow pending resolution of the fee dispute,” King’s presentment states.
Parnoff opened an account in his name as trustee for Yuille, made disbursements to her and payments for legal costs, leaving a balance of $313,413 in the escrow account. When the jury in 2010 awarded him about $14,000 more than the original $125,000, Parnoff didn’t wait for the 20-day appeal period. He transferred all the escrow account funds into a personal account he held jointly with his wife, “thereby improperly commingling his client’s funds with his own funds,” King alleges.
Parnoff never provided Yuille with notice of what he was doing or an accounting, and she didn’t learn the funds were gone until eight months later, after Parnoff had spent the money “to pay personal bills,” the presentment states.
A proposed decision by the Statewide Grievance Committee rejects Parnoff’s contention that he was entitled to the entire escrow fund because Yuille did not sue him for the return of her money. “In essence,” wrote attorney Donna Woviotis for the committee, “he claims he is entitled to keep [Yuille's] money that he was holding in trust because she did not sue him for its return and trusted him to act as a fiduciary.”
Alleging a violation of the ethical rule requiring safeguarding a client’s property, King, in her presentment request, seeks an order disbarring Parnoff for 12 years, and the appointment of a trustee to protect Parnoff’s other clients.
In an interview, Parnoff accused King of having a vendetta against him.
The next step is for a court date to be set on the grievance matter. King is requesting a hearing in Bridgeport Superior Court.•