Nina Stillman Mandel and David S. Mandel (J. Albert Diaz)
Miami attorneys David and Nina Mandel may have won a $67 million verdict for their client, Coquina Investments Inc., more than two years ago, but Mandel & Mandel has been only partially paid.
The Mandels, who represented the Texas-based investment company in its lawsuit against TD Bank, have devised a plan to land their contingency fee. They filed a charging lien against Coquina in Bankruptcy Court and asked a judge to award $2.5 million from Coquina’s settlement money with the Rothstein Rosenfeldt Adler liquidating trustee.
Coquina is vehemently fighting the Mandels’ request and wants U.S. Bankruptcy Judge Raymond Ray in Fort Lauderdale to refer the matter to arbitration. An evidentiary hearing is scheduled March 20.
“It’s unfortunate we are having this dispute, but we’re glad we have a hearing to resolve it, and we expect it to be resolved at that time,” said Miami attorney Charles Throckmorton of Kozyak Tropin & Throckmorton, who represents the Mandels. “We think the fees are fairly payable from the bankruptcy distribution, which is why we brought the motion in Bankruptcy Court, and we look forward to resolving it.”
In January 2012, jurors awarded Coquina a $67 million verdict following a 2½-month trial against TD Bank in Miami federal court. The bank was the primary bank for Ponzi schemer Scott Rothstein and was accused in the civil suit of aiding and abetting his $1.2 billion Ponzi scheme.
Rothstein is serving a 50-year prison sentence for masterminding the settlement financing fraud as chairman of his former Fort Lauderdale law firm, Rothstein Rosenfeldt Adler.
Coquina was the only investment group to go to trial. Several others sued and received settlements from TD Bank.
The bank appealed the Coquina verdict, and oral arguments were heard Thursday by the U.S. Court of Appeals for the Eleventh Circuit.
Coquina’s motion said the Mandels already have received $1.1 million in hourly compensation for their work in the case. If the verdict is upheld on appeal, Mandel is due to receive a “substantial contingent fee.”
However, since Coquina was awarded $12.5 million by the RRA bankruptcy liquidating trustee, the Mandels say their contingency fee should come from those monies.
Coquina has received more than $9 million in distributions from trustee Michael Goldberg and is due for a final distribution of $2.5 million—the sum the Mandels want to collect.
In their motion to enforce a charging lien filed in December, the Mandels cite their contingency fee agreement with the Coquina dated April 28, 2011.
“The firm is entitled to a percentage of any recovery as well as reimbursement of any outstanding costs,” the Mandels’ motion said. “Specifically, if ‘a recovery is obtained by way of settlement, final judgment, restitution or otherwise, regardless of the source, the law firm will receive as its fee 20 percent of the net recovery.”
Coquina strongly disagrees. In objections filed Jan. 13 by Coquina attorney Jerry Markowitz of Markowitz, Ringel, Trusty & Hartog of Miami, the company maintains it does not have to pay the Mandels out of its RRA settlement.
Coquina argues the Bankruptcy Court lacks jurisdiction and, even if it didn’t, Ray would have to send the dispute to arbitration through the American Arbitration Association.
Coquina also asserts the Mandels are not entitled to the money because they never represented the company in bankruptcy proceedings.
Goldberg is taking no stand on the issue.
“The estate will pay the money to whoever the judge tells us to pay the money to,” he said. “I’m going to hold the money in trust pending resolution and settlement of the issue.”
Perhaps acting in the Mandels’ favor is the fact that another lawyer persuaded Ray to enforce a charging lien for his legal fees in a Rothstein-related case. Fort Lauderdale attorney William Scherer asked for fees for his representation of Miami Beach investor Ira Sochet. Ray awarded Scherer a $6 million charging lien, representing 30 percent of Sochet’s $20 million settlement.
Scherer supports Mandel’s motion.
“I like the Coquina people, but I don’t like what they’re doing to David Mandel,” he said. “David and Nina were as responsible as anyone else for the fabulous results that all the victims got in the Rothstein Ponzi scheme. It was a David and Goliath case. The Mandels are entitled to the contingent fee and should share in it. I’m surprised the Coquina people are doing this. It doesn’t seem fair.”
Markowitz did not return calls or emails for comment by deadline. Mandel declined comment.