Greenberg Traurig must face a $1.3 million lawsuit by a construction executive-turned-producer of the poorly received ”Gotti” biopic about mobster John Gotti starring John Travolta, a New York state appeals court ruled.
A panel of New York’s Appellate Division, First Department concluded the trial court judge erred in dismissing Thomas P. Devlin’s suit against the international law firm, finding Greenberg was responsible for looking out for Devlin’s interests, not just those of production company Fiore Films.
Devlin alleged Greenberg represented Fiore and 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.
Devlin and his attorney Michael Froch repeatedly questioned Beer and Greenberg Traurig about the propriety of the arrangement before agreeing to the transaction, the complaint said.
While Devlin was on a flight to Zurich to close the financing agreement, Treasures emptied out the escrow account without permission, the civil complaint said.
A criminal complaint filed in New York federal court in 2015 indicated the figure behind Treasures FZE was actually Scarsdale, New York, resident Sal Carpanzano, who pleaded guilty to an eight-count information in 2015 involving the “Gotti” fraud and several others.
The terms of his sentence, which was scheduled for September 2018, were sealed, but they include over $10 million in restitution.
“Gotti” was finally made, but Devlin said Greenberg’s failure to protect Fiore from being duped ultimately cost him and the company $10 million.
A trial court judge dismissed the suit last July, finding that because Devlin acknowledged Fiore retained Greenberg, the law 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.
New York attorney Gerard McCabe, who represents Devlin, and Steptoe & Johnson’s Justin Yu, who represents Greenberg, had no response by deadline on Tuesday’s decision.
“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 spokesperson for the law firm later added.