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NEW YORK-Laura Balemian, whose husband Edward Mardovich died in the World Trade Center, received one of the largest awards paid out by the September 11th Victim Compensation Fund: $6.7 million. But she in turn paid out what is almost certainly the highest legal fee. While the vast majority of victims were represented before the fund pro bono or for a nominal fee, Balemian paid her lawyer, Thomas Troiano, a one-third contingent fee, or more than $2 million. The propriety of Troiano’s fee is now before the courts. A guardian appointed by the Suffolk County Surrogate’s Court in New York, where Mardovich’s estate is in probate, last year challenged the fee as excessive and not in the best interests of Balemian’s four children. Troiano responded earlier this year by suing Balemian in New York federal court for declaratory judgment approving his fees. The situation is an uncomfortable one for trial lawyers’ groups, which, though normally supportive of contingent fee arrangements, have gone to extraordinary lengths to avoid being seen as profiting from the terrorist attacks. Fee is ‘shocking’ Kenneth Feinberg, the special master who oversaw the fund’s distribution of about $7 billion, submitted an April 21 affidavit in the federal case in which he called Troiano’s fee “shocking and unconscionable” in light of the fund’s purpose and its guidelines recommending that attorney fees be kept under 5%. But Troiano, who declined to comment, said in court documents responding to Feinberg’s affidavit that Balemian’s large award, which was increased from an initial presumptive award of $1.1 million, justified the contingent fee. “Fund statistics show that lesser attorneys-or perhaps those who were marginally incentivized by the meager 5% fee recommended by the Special Master-achieved results that pale in comparison to the award [Troiano] obtained for [Balemian]. “If anything is ‘shocking and unconscionable’ it is that, due to unabashed greed, Defendant now . . . seeks disgorgement of fees earned by Plaintiff from the hard work, at significant personal sacrifice, he rendered for the benefit of Defendant and her children,” the lawyer said. Judge Loretta Preska of the Southern District of New York last month declined to exercise federal jurisdiction over the case under the congressional act that created the fund. Finding that the surrogate’s court was a better forum to consider whether Troiano’s fees were appropriate, the judge stayed the federal suit pending the outcome of the state proceedings. Troiano’s lawyer, Michael Rakower, declined to comment.

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