It took two attempts, but on Feb. 4, Boies, Schiller & Flexner finally withdrew as counsel to Shelby and Leslie Modell—a mother and her daughter, who are embroiled in a long-running dispute with Modell's Sporting Goods scion Mitchell Modell over his leadership of the family's popular East Coast retail chain. The firm said it was impossible to continue representing the women in the tangled litigation as a result of their failure to pay their legal bills.
Six months later, Boies Schiller continues to meet Shelby and Leslie Modell in court, only now, it's in an adversarial role.
Boies Schiller sued the Modells in two separate actions in Manhattan Supreme Court court in late April, claiming it is owed $438,206 by Shelby Modell, Boies Schiller & Flexner v. Shelby Modell (651456/2013) and $156,749 by Leslie Modell for its work on a number of actions stemming from the family feud Boies Schiller & Flexner v. Leslie Modell (651454/2013). The cases are before Acting Justice Anil Singh.
Now represented by Larry Hutcher, a partner with Davidoff Hutcher & Citron, the mother and daughter are putting up a united front in response to the two suits, despite Boies Schiller's insistence that the fee disputes arise from different sets of facts. In identical answers filed in the two cases last month, the Modells deny owing Boies Schiller anything beyond the $2.2 million they have already paid the firm, while asserting in a series of counterclaims that Boies Schiller lawyers "charged them exorbitant fees for legal services that were totally unnecessary and not useful" and insisting that Boies Schiller return what it has been paid so far.
In court papers filed Tuesday, the Modells further argue that Leslie Modell repeatedly opposed Boies Schiller's bills and disagreed with what she and her mother call the firm's "doomed" strategy of adding several weak claims in their dispute with Mitchell Modell in an attempt "to obtain a perceived advantage in settlement negotiations."
The Modells' latest filings come in response to Boies Schiller motions seeking summary judgment and dismissal of the counterclaims filed earlier this month in the Shelby Modell case and similar motions made in late July in the Leslie Modell suit. Boies Schiller argues that the Modells "unequivocally" agreed to pay for its services and that the firm deserves the money it says it is owed.
Boies Schiller's involvement with the Modells dates to March 2011, three months before firm partners Nicholas Gravante Jr., and Karen Dyer, and counsel Richard Bettan filed a shareholder derivative suit against Mitchell Modell—Shelby's son and Leslie's brother—accusing him of diverting company assets for personal use and paying himself an excessive salary.
The family infighting began after the 2008 death of patriarch William Modell, who served as chairman of Modell's Sporting Goods beginning in 1985. The company, founded in 1889 with a single New York outpost by William Modell's grandfather, now boasts some 150 stores, most them in New York, New Jersey and Pennsylvania, and annual revenue of roughly $500 million, according to court filings.
Other assignments Boies Schiller took on for the Modells—in some cases replacing other firms that had initiated the work—include filing a document production suit on Shelby Modell's behalf in New York state court; representing both Shelby and Leslie (who took on Shelby's power of attorney when her mother became ill in recent years) in a New York surrogate court action concerning William Modell's estate; and advising Shelby Modell in a related arbitration where the underlying dispute over Mitchell Modell's stewardship of the company is now playing out.
In April 2012, the firm, citing unpaid bills, requested court approval to withdraw as counsel in the series of cases. By September 2012, however, the firm says it had agreed to reappear for the Modells on the condition that its bills were paid in a timely fashion (Leslie and Shelby contend in filings that they did not ask the firm to continue representing them). Though Shelby Modell paid Boies Schiller $400,000 when it resumed its work, unpaid bills began to accumulate again, Boies Schiller argues. As a result, the firm once again sought to withdraw as counsel earlier this year.
"A condition of our continuing representation was the prompt payment of our firm's invoices," the firm said in an email written by Boies Schiller's Gravante and addressed to the Modells that is included in court filings. "Unfortunately, your failure to abide by that commitment leaves us no choice but to withdraw as counsel."
Boies Schiller says in its summary judgment motion that it charged its clients discounted rates—$891 per hour for Gravante, versus the $1,080 hourly rate he would typically charge new clients, and $781 for Dyer, compared to her normal $980. Reached Tuesday, Gravante and Dyer both said the firm had no comment.
As the fee fight continues, the battle over Mitchell Modell's alleged misdeeds remains unresolved. Two of the state court actions were voluntarily dismissed, court records show, and consolidated into the arbitration. The Modells replaced Boies Schiller in the arbitration with Ira Lee Sorkin, a partner at Lowenstein Sandler who, while at previous firm Dickstein Shapiro, represented convicted swindler Bernard Madoff.
Reached Monday, Sorkin said he and his clients are awaiting the arbitration panel's decision and that he took over as counsel for the Modells in late March.
Richard Edlin, a partner at Greenberg Traurig represents Mitchell Modell in the arbitration, with Mark Zauderer, a partner with Flemming Zulack Williamson Zauderer representing the family's company, Henry Modell & Co., which Leslie and Shelby also named as a defendant in their suits.
In March, Hutcher made news in another fee case. Responding to a suit brought by DLA Piper seeking $679,000 for its work on a bankruptcy matter, Hutcher client Adam Victor publicized a series of emails allegedly sent between DLA Piper lawyers, including one that bragged about the firm's "churn that bill, baby!" culture. DLA Piper denied engaging in overbilling, and the case settled in April for undisclosed terms.
@|Sara Randazzo is a reporter for The AmLaw Daily, an affiliate of the Law Journal. She can be contacted at firstname.lastname@example.org.