11th Circuit Court of Appeals (Jason Bennitt)
The U.S. Court of Appeals for the Eleventh Circuit affirmed a district court ruling that a Boca Raton attorney waived his claim to $300,000 in legal fees.
Byron G. Petersen, who represented a startup cigarette company, tried to put a charging lien on his former client, Plantation-based Aldar Tobacco Group LLC. He represented Aldar in a lawsuit in 2009 against American Cigarette Co. Inc., a cigarette maker also based in Broward County.
Aldar held intellectual property rights to two cigarette brands—Bravado and Victory.
Aldar claimed it paid ACC $870,188 to manufacture a shipment of cigarettes. Instead, ACC allegedly used the money to pay off old debts and committed other fraudulent acts.
Aldar’s causes of action against ACC included breaches of the manufacturing agreement, copyright and trademark infringement, unfair competition, unjust enrichment, trade libel and slander of title.
Petersen asked to withdraw from the lawsuit in June 2011, claiming “irreconcilable and irreparable differences.” The judge granted the motion, citing a state bar complaint against Petersen as cause for withdrawal.
His replacement reached a settlement in April 2012, according to the opinion.
In his motion for a charging lien, Petersen claimed he had a verbal agreement with Aldar to bill by the hour.
Aldar insisted it had a contingency fee agreement with Petersen, and he waived his right to fees by withdrawing before the settlement was reached.
U.S. District Judge William Dimitrouleas in Fort Lauderdale agreed, and the Eleventh Circuit affirmed Thursday.
The appellate court in an unsigned opinion noted Petersen failed to produce evidence of billing statements, timesheets or any other supporting documentation demonstrating the parties agreed to deferred hourly billing.
Petersen contended on appeal that he was denied due process because he wasn’t given fair warning that a federal magistrate’s hearing would be an evidentiary hearing. He claimed he arrived unprepared through no fault of his own.
The Eleventh Circuit disagreed, noting the court gave two notices almost two months apart in 2012.
“These orders clearly set forth the nature of the evidentiary hearing,” the court said.
Testimony by Petersen’s former paralegal fed the magistrate’s finding that he was hired on a contingency basis.
Judges William Pryor, Beverly Martin and Joel Dubina were on the appellate panel hearing the case.
Petersen said there already was a binding state court judgment on legal fees in his firm’s favor against Robert Gielchinsky, a relative of Bravado copyright owner David Gielchinsky, and that judgment was affirmed by the Third District Court of Appeal.
“The trial court held that my law firm had a fully enforceable attorney’s fee lien in all revenues from the sale of Bronco tobacco products,” Petersen said. The award was 15 percent of Bronco revenues, capped at $5 million, he said.
The Eleventh Circuit decision doesn’t affect the charging lien enforced by Miami-Dade Circuit Judge Ellen Venzer because it only addresses the Bravado brand, Petersen said.
“The amount of the Bravado lien … significantly pales in comparison to the Bronco lien,” Petersen said.
Petersen had a solo practice in Fort Lauderdale. He now works in Boca Raton.
In his Florida Bar disciplinary case, Petersen was reprimanded in 2010 following a guilty plea to three misdemeanor counts after he was charged with stalking his former partner after they dissolved their partnership. Adjudication of guilt was withheld in the criminal case. He was sentenced to three years of probation and ordered to enter a domestic intervention and anger management programs.