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Exhibit “A” in Gary Zimmerman’s federal suit against his attorney, $600-an-hour Greenwich divorce lawyer Gary I. Cohen, is the controversial “success bonus” clause in Cohen’s fee agreement. “In addition to the hourly charges described, we may request an additional reasonable charge for matters of extraordinary difficulty, or which require special expertise or the giving of special priority treatment,” it states. “This additional charge is subject to your approval after discussion with you. It cannot be imposed unless you agree to it.” A federal jury held Cohen to his word. On Feb. 25, it concluded Zimmerman didn’t agree, and that Cohen had to return over $370,000 in bonuses and other payments arising from a pressure-cooker, five-day divorce mediation in Chicago. The jury found no legal malpractice, but determined Cohen breached his fee agreement’s implied covenant of good faith and fair dealing by claiming a $300,000 success bonus. Cohen is now seeking to have the verdict overturned or be granted a new trial. This unfinished tale began on Aug. 4, 2000, when Zimmerman, a Redding real estate developer, switched his ongoing Connecticut divorce to Cohen, with an initial $20,000 payment. “The initial retainer is also a minimum fee,” Cohen’s fee letter asserted. Even if work concluded before the fee was used up on an hourly basis, “the balance shall be retained by us as an additional fee,” it stated. Cohen worked for Zimmerman on his Connecticut divorce, and also represented him, with the assistance of local counsel, in a competing Nevada divorce action filed by Zimmerman’s wife, Joan. Unable to get either of the actions dismissed, Cohen arranged to meet with Joan Zimmerman’s lawyer, David I. Grund of Grund & Leavitt, in Chicago. Gary Zimmerman, now a Nevada resident, contends in court papers he didn’t know his Connecticut divorce had a jurisdictional flaw, or that he could face a far more costly community property asset distribution if he had to litigate in Nevada. The mediation in Chicago lasted from May 21 to May 25, 2001. When it began, Cohen already had earned nearly $150,000 in fees. According to Zimmerman’s pleadings before Senior U.S. District Judge Alfred V. Covello, Cohen demanded an additional $300,000 for both himself and Grund, to be paid from Zimmerman Properties Inc., a subchapter S corporation held by Gary and Joan Zimmerman’s 1982 trust. Gary Zimmerman claims that, when he balked at the high payout, Cohen became angry and abusive, hung up the telephone on him, and threatened to walk out of the meetings and “shelve” the settlement. According to Zimmerman, Cohen and Grund stood over him and forced him to wire $300,000 to each lawyer. In a letter dated May 24, 2001, Cohen wrote, “I make no representations, guarantees, promises or suggestions of any kind regarding the actual or potential adverse tax consequences to you, to the 1982 Trust, or to Zimmerman Properties, Inc. as a result of these proposed transfers.” Zimmerman contends Cohen never worked for Zimmerman Properties Inc., and that Cohen “was clear that the reason Zimmerman Properties, Inc., paid the fees was to make the payment [tax] deductible, not because of any work done for Zimmerman Properties, Inc.” IMPORPER HEARSAY? The trial in the fee dispute was held in New Haven and ended late last month with the jury awarding Zimmerman $370,982. Cohen, represented by Katherine C. Callahan of Hartford’s Updike, Kelly & Spellacy, moved to have the verdict overturned or for a new trial March 7. Gary Zimmerman, the defense maintained, cannot show he was injured in any manner because the funds came from Zimmerman Properties Inc., not Zimmerman himself. Callahan is also arguing that the trial was tainted with improper hearsay. Gary Zimmerman’s lawyer in the fee dispute, Kenneth Votre of New Haven, fired back in a March 15 brief, contending Zimmerman’s estate was clearly reduced $300,000 by the Chicago payment Zimmerman made “under threats, misrepresentations and intimidation …” At the time of the medication, Zimmerman contacted a Chicago lawyer, Andrew Eichner, to represent him in discussions with Cohen, but grew “so fearful of Attorney Cohen’s threats” that he initially would not allow Eichner to step in. Eichner testified that, when he ultimately did speak to Cohen, the Greenwich lawyer said the $600,000 would have to go to Mrs. Zimmerman in any event, if it wasn’t paid to the two lawyers. Cohen’s motion for a new trial argues that “double hearsay” was inadmissible. But Votre, in his motion in opposition, contends that Cohen’s statement should be admissible as evidence of Cohen’s state of mind. Zimmerman is also suing Grund in Illinois in a parallel action to recover the other $300,000. That case has not yet come to trial. It is not clear how the jury came up with its award of $370,982. Zimmerman’s complaint listed an unearned fee of $11,127 as an element of his damages, along with an adverse tax liability of just over $100,000 that Zimmerman Properties had to pay when the corporation liquidated properties to pay Mrs. Zimmerman, and incurred capital gains tax which passed through to the Zimmermans. Normally, property division in a divorce is not treated as income to either spouse. Nationally renowned ethics expert Geoffrey C. Hazard Jr. testified on Zimmerman’s behalf at the trial. He said a bonus of $300,000 in a case of this nature seemed more like contingent-fee litigation, and contingent fees are not permitted in divorce practice. “The only possible justification for the fee was that it was like a contingent fee for negotiating a good result. So the question was, was this really a legitimate success fee or an attempt to get an improper contingent fee. I don’t think it was a legitimate success fee,” said Hazard in an interview. Both Votre and Callahan cited the fact that they have post-trial motions currently pending as a reason to decline comment at this time. Cohen did not return telephone messages by press time.

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