A unanimous Appellate Division, First Department, panel affirmed a $17 million award Thursday in favor of a former Cadwalader, Wickersham & Taft client that sued the firm for malpractice.
Justices Peter Tom, Karla Moskowitz, Leland DeGrasse, Sallie Manzanet-Daniels and Darcel Clark sat on the panel in Red Zone v. Cadwalader, 650318/11.
The client, Red Zone, an investment vehicle run by Washington Redskins owner Daniel Snyder, hired Cadwalader as counsel in a potential deal with Six Flags in 2005. Red Zone also hired UBS Securities LLC as financial advisor. Red Zone alleged that Cadwalader was negligent in drafting a side agreement that was supposed to limit UBS’s fees to $2 million, and that as a result UBS ended up winning a $10 million judgment against Red Zone for fees.
Last August, Acting Supreme Court Justice Melvin Schweitzer granted summary judgment to Red Zone, and in December, he awarded Red Zone $16.7 million. The amount is now more than $17 million with interest.
The First Department agreed with Schweitzer that Red Zone was entitled to summary judgment because it was undisputed that the side agreement was supposed to limit UBS’s fees to $2 million and failed to do so.
The panel also rejected Cadwalader’s argument that the suit was time-barred, finding that the statute of limitations was tolled because Cadwalader worked for Red Zone continuously from 2007 to 2010.
“Cadwalader blew every settlement chance for four years,” said Jeffrey Jannuzzo, Red Zone’s attorney, in an email. “Now they’ve lost it all, plus $4.33 million in interest.”
David Marriott, a partner at Cravath, Swaine & Moore, represents Cadwalader. A firm spokeswoman said Cadwalader would seek leave to appeal.