Greenberg Traurig sign Photo: Melanie Bell

Greenberg Traurig must face a $1.3 million lawsuit by a construction executive turned producer of the poorly received 2018 biopic about mobster John Gotti, a New York state appeals court ruled Tuesday.

A panel of New York’s Appellate Division, First Department concluded that a trial court judge had erred in dismissing Thomas P. Devlin’s suit against the international law firm, finding that Greenberg was responsible for looking out for Devlin’s interests, not just those of Fiore Films, the company producing the film.

oster for the film Gotti (2018), starring John Travolta. Poster for the film “Gotti” (2018), starring John Travolta. Courtesy of Vertical Entertainment, MoviePass Ventures

According to a 2017 complaint, Devlin was a major investor in Fiore, which secured the film rights for the oft-delayed and ultimately panned John Travolta vehicle “Gotti” in 2010.

Devlin alleged in the complaint that not only did Greenberg represent Fiore, but partner Steven Beer also represented a Dubai-based investment company that was also interested in financing the film.

That client, Treasures FZE, was allegedly willing to put up $200 million in financing for “Gotti” and other film projects, on the condition that Fiore put $1.3 million into an escrow account to account for closing costs for the financing. According to the complaint, Devlin and his attorney, Michael Froch, repeatedly questioned Beer and Greenberg about the propriety of the arrangement before they agreed to complete the transaction.

Then, according to the complaint, while Devlin was on a flight to Zurich to close the financing agreement, Treasures emptied out the escrow account without permission. A criminal complaint filed in New York federal court in 2015 indicates that the figure behind Treasures FZE was actually Scarsdale, New York, resident Sal Carpanzano. Carpanzano eventually pleaded guilty to an eight-count information in 2015 involving the fraud on Fiore and several other frauds.

The terms of his sentence, which was scheduled for September 2018, are under seal, but they include over $10 million in restitution.

While “Gotti” was finally made, Devlin said that Greenberg’s failure to protect Fiore from being duped ultimately cost him and the company $10 million.

A trial court judge dismissed the suit in July 2018, finding that because Devlin acknowledged that Fiore retained Greenberg, the firm did not have a fiduciary relationship to Devlin himself.

However, the appeals court found that the complaint suggested a deeper relationship between the parties.

“Plaintiff alleges that he—as well as Fiore Films LLC—was defendant’s client. He does not base his claim of an attorney-client relationship solely on the fact that he paid the bills that defendant sent to Fiore Films and was a part owner of that entity,” the panel said. The amended complaint alleges that defendant “knew that [plaintiff] was dependent and was relying on [it] … to provide honest and diligent advice with respect to escrow funds.”

The appeals court did side with Greenberg in concluding that Devlin was not entitled to $10 million in alleged damages. The panel said that while the complaint asserted that the firm’s actions tarnished the credibility of Fiore Films, there was no cause of action in the complaint over injuries to Fiore.

Neither New York attorney Gerard McCabe, who represents Devlin, nor Steptoe & Johnson LLP’s Justin Yu, who represents Greenberg, immediately responded to requests for comment Tuesday.

“We are of course disappointed that this claim, which we believe is meritless, has been revived, although correctly limited in amount. We will continue to defend against it,” a Greenberg representative later added.