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A judge from Philadelphia’s Commerce Court has ruled in favor of a Center City commercial litigator in a fees dispute action filed by his former client, a Haverford businessman who several years ago unsuccessfully sought control of a local air freight company. Judge Howland W. Abramson has ordered Aaron Wyatt to pay Ira Silverstein – currently a partner at Thorp Reed & Armstrong – and his former law firm nearly $170,000 for past legal services. Abramson also ruled in Wyatt v. Silverstein that Silverstein and Silverstein & Bellin should not have to pay back to Wyatt the $695,000 success fee generated in early 2003 when Wyatt sold his interests in Lima-based Pilot Air Freight to partner Richard Phillips, according to Abramson’s opinion. Court documents in related litigation indicate that Wyatt and Phillips were until early 2003 50-50 owners of the transportation company. Phillips is Pilot’s current president and CEO. Following a complex series of buy-out bids that began in 2001, a Philadelphia Commerce Court judge ruled in 2004 that Phillips had legally purchased Wyatt’s interest in Pilot Air Freight. According to Abramson’s opinion, the $695,000 success fee Wyatt paid to Silverstein & Bellin amounted to 10 percent of the purchase price. Wyatt first became a client of Silverstein’s in the mid-1990s, when the attorney worked at Fox Rothschild. By late 2000, according to the opinion, Wyatt and Silverstein & Bellin had reached a $20,000 monthly retainer agreement, in addition to promising the firm the 10 percent success fee on the Pilot ownership interest sale – regardless of whether Phillips bought Wyatt out, or vice versa. By early 2003, Wyatt and the firm entered into a new fee agreement, Abramson wrote. The $20,000-a-month retainer remained in place, but this time, the firm was guaranteed a success fee totaling 25 percent of any potential recovery stemming from Silverstein & Bellin’s legal representation in specific, planned civil lawsuits. Among the several possible litigations being considered at the time of the agreement were actions against Phillips and the law firm Schnader Harrison Segal & Lewis that related to Wyatt’s involvement with Pilot Air Freight, Abramson wrote. Wyatt and the firm also agreed that Silverstein & Bellin would handle other assignments at no additional charge. Silverstein and his former firm would ultimately claim that Wyatt failed to pay them a quantum meruit value for hundreds of thousands of dollars in billable hours spent working on Wyatt’s cases against Phillips and Schnader Harrison, as well as other putative lawsuits contemplated in the 2003 fee agreement. But Wyatt believed Silverstein and the firm owed him money, and not the other way around. In addition to claiming that Silverstein & Bellin had failed to earn the $695,000 success fee, Wyatt further asserted that the firm should have returned a $100,000 fee that he authorized in December 2003 pursuant to Silverstein’s “work being done on [a] case seeking to obtain ownership of Pilot Air Freight,” Abramson wrote, quoting an October 2003 letter from Silverstein. In mid-December 2003, according to the opinion, Wyatt authorized his accountant to make that payment. But several days into 2004, Wyatt contacted his accountant and told him not to send Silverstein the $100,000 advance “as I am still not sold on this concept,” Abramson wrote, quoting an e-mail from Wyatt to his accountant. By the end of January 2004, Wyatt had fired Silverstein & Bellin and demanded return of the $100,000 payment. Abramson found that the defendants are entitled to the $100,000; he rejected the argument that Wyatt had actually been loaning that amount to the firm. He also ruled that the $695,000 success fee was proper, given his fellow Commerce Court judge’s previous ruling that Phillips had legally purchased Wyatt’s interest in Pilot Air Freight. And Abramson concluded that Silverstein & Bellin had engaged in hundreds of thousands of dollars worth of work on Wyatt’s behalf in conjunction with litigations referred to in the 2003 fee agreement. The bulk of that work – nearly $390,000 worth – had been devoted to the Phillips litigation, according to the opinion. After crediting Wyatt for the relevant monthly retainer payments and the one-time $100,000 payment, Abramson ordered Wyatt to pay his former counsel $169,617.50. Wyatt’s attorney in the case, Jeffrey Zucker of Fisher Zucker in Philadelphia, said he plans to file a motion for reconsideration that he hopes will zero out any damages recoverable by Silverstein and his former firm. Zucker said that the nearly $390,000 worth of work that Silverstein & Bellin performed for the case against Phillips involved an equity action. Because Wyatt and the firm’s 2003 fee agreement discussed the payment of fees for work performed on actions filed in pursuit of monetary damages, Wyatt should not have been charged for that work, Zucker said. Silverstein and his former firm have been represented in the matter by William Hangley of Hangley Aronchick Segal & Pudlin in Philadelphia. When asked about Zucker’s point on the equitable nature of the Phillips litigation for which Wyatt has been charged, Hangley said that Zucker “already had an opportunity to make that argument, and lost.” “Basically, this is a client who doesn’t want to pay his bills,” Hangley said of the Wyatt case. (Copies of the 12-page opinion in Wyatt v. Silverstein , PICS No. 07-0099, are available from The Legal Intelligencer . Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information. Some cases are not available until 1 p.m.)

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