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The Connecticut Appellate Court last week threw out a $152,710 jury award to the Stamford intellectual property boutique of St. Onge, Steward, Johnston & Reens for legal fees it claims Stamford-based Media Group Inc. owes it for trademark and patent work. Ruling on an issue of first impression in Connecticut, the appeals court refused Media Group’s bid for it to declare the necessity of expert testimony on the reasonableness of legal fees in all such collection cases, regardless of the circumstances. The lack of such testimony in the matter at hand, however, could not be overlooked, the court said. The issues at the heart of the case “were beyond the reach of the ordinary knowledge of a lay jury,” wrote former Supreme Court Chief Justice Ellen Peters, now on senior status, to the concurrence of Appellate Court Judges Barry R. Schaller and Thomas A. Bishop. In the spring of 1999, the St. Onge firm began seeing to the protection of Media Group’s patent and trademark interests, and continued to do so through March 2001, even though the company, which markets housewares and automotive products through infomercials, never paid the firm its $50,000 retainer request. Though Media Group was billed on a monthly basis, it only made “some partial payments,” Peters said. After settlement efforts failed, the St. Onge firm sued Media Group for breach of implied contract, breach of express contract and unjust enrichment, seeking payment of $169,678 in legal fees. Finding for the plaintiff firm on just the breach of implied contract count, a jury awarded the IP boutique $152,710. On the eve of trial, Media Group’s attorney, Alexander H. Schwartz of Southport, had filed a motion to preclude the law firm from presenting expert testimony on the value of the services it rendered or the reasonableness of its fees. Getting no objection from St. Onge, Steward, Superior Court Judge Edward R. Karazin Jr. granted the motion. Karazin, however, denied Media Group’s subsequent bid for a directed verdict — due to the lack of expert testimony — filed after the St. Onge firm finished presenting its case. Though it stopped short of imposing a blanket rule in such disputes, the appeals court determined Karazin should have granted the motion for a directed verdict. It remanded the case with a direction to render judgment for the defendant. The court agreed with Schwartz’s claim that expert testimony was required because of the factual complexities at issue. “[T]he plaintiff’s own witnesses irrefutably documented the complexity of patent and trademark practice. Indeed, the plaintiff’s own witnesses acknowledged that these issues are not normally within the realm of legal knowledge attained by most lawyers,” Peters wrote. The plaintiff’s case, she added, was based entirely on the testimony of two fact witnesses, attorneys Stephen P. McNamara and Daniel Coughlin, each of whom had provided legal services to Media Group at various junctions. McNamara is a past president of the Connecticut Patent Law Association. In a footnote, Peters mentioned that Coughlin devoted a substantial part of his testimony to how much work he did on Media Group’s behalf. But the 27 boxes of materials he said he created at the defendant’s request were never admitted into evidence and fail to permit an interference “that this investment of time and energy was necessary,” she noted. Judith Ellenthal, an associate at Cacace, Tusch & Santagata in Stamford, represented St. Onge Steward. In an interview, McNamara said the decision is a “remarkable score. We are disappointed that the court made new law,” said McNamara, the firm’s managing partner. “They held that there is a requirement of expert testimony in a routine collection case. The decision seems to apply to all sort of providers and collection cases … where juries may not have expertise in the field, including advertising agencies, business consultants and commercial litigators,” he said. “Professionals will be forced to defend their fees as if they were malpractice cases.” The firm, he added, is “considering the implications and may seek review in the Connecticut Supreme Court.” The decision comes at a good time for Media Group. It filed for Chapter 11 bankruptcy protection on July 9. “It helps,” Schwartz said, “because during the proceedings the plaintiff attained a prejudgment remedy of $175,000 cash that was taken from my client’s bank account. It can really help their reorganization.”

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