Cadwalader, Wickersham & Taft was socked with a $17.2 million damages bill this week, after a judge refused to toss legal malpractice claims brought by Washington Redskins owner Daniel Snyder. But Cadwalader’s lawyers at Cravath, Swaine & Moore immediately lodged an appeal, signaling that the 3-year-old case may be far from over.
In a final judgment issued on Monday, New York Supreme Court Justice Melvin Schweitzer in Manhattan awarded Snyder’s investment company Red Zone LLC $12.7 million in damages plus $4.5 million in interest. Cadwalader’s outside attorneys at Cravath filed a notice of appeal the same day.
The case arises out of a proxy battle that Red Zone waged for the theme park company Six Flags Inc. in 2005. An affiliate of UBS AG served as Red Zone’s financial advisor, and Cadwalader partner Dennis Block drafted Red Zone’s agreement to retain the bank.
After Red Zone emerged a winner in the proxy fight, UBS, represented by O’Melveny & Myers, won a ruling in 2011 that it’s owed about $8 million in transaction fees from Red Zone, which was represented by Quinn Emanuel Urquhart & Sullivan.
Red Zone responded with a malpractice suit against Cadwalader in February 2011, alleging that Block botched a side letter intended to memorialize an oral agreement to cap Red Zone’s liability to UBS. Red Zone sought to recover from Cadwalader the $8 million it paid to UBS, plus the money it spent on Quinn Emanuel in the UBS litigation.
Schweitzer granted summary judgment to Red Zone in September 2013, finding that Block failed to professionally prepare the side letter agreement, causing Red Zone to lose the UBS litigation. (Block left Cadwalader in September 2011 for Greenberg Traurig.)
Cadwalader immediately appealed the summary judgment order, but the case remained open before Schweitzer while the parties calculated interest and costs.
Red Zone is represented Manhattan solo practitioner Jeffrey Jannuzzo. David Marriott of Cravath represents Cadwalader.
Correction: An earlier version of this story incorrectly identified O’Melveny & Myers as counsel to Red Zone. The story has been corrected to reflect that O’Melveny represented UBS. We regret the error.