A legal battle has erupted between two Bergen County personal injury firms over the alleged breach of an agreement to pay referral fees for cases that were shared.
The Fort Lee firm headed by Jae Lee claims in a lawsuit that it had a written agreement in 2010 with the Ridgewood firm now known as Seigel Law for referral of personal injury cases. The terms call for the Seigel firm to pay Lee’s firm up to 30 percent of its fees from cases it received, the suit claims.
What’s more, the agreement stated that if the Seigel firm were discharged or if any file were transferred to another firm, Lee was to be apprised of the change and Seigel would advise any superseding lawyer of the financial obligation to Lee, the suit claims. Lee also provided the Seigel firm a list of all cases that were subject to the agreement.
But Seigel allegedly charged inflated or improper expenses in some cases referred by the Lee firm, reducing the legal fee owed, the suit claims. And the Seigel firm notified Lee’s firm that one referred case was dismissed, but failed to disclose that the case was taken over by another lawyer. The new lawyer obtained a favorable result and billed roughly $140,000 for the case.
Seigel allegedly breached the referral contract by failing to advise superseding counsel of the Lee firm’s contractual right to a 20 percent lien on the fee collected in that case, the lawsuit claims.
That case was brought on behalf of Kevin Killeen, a Newark firefighter who was awarded $2.3 million in a suit against a property owner in connection to an on-the-job injury.
In addition, many of the cases covered by the agreement are auto injury cases, which were settled. A significant number of those cases resulted in subsequent claims for uninsured or underinsured defendants, which caused the defendants to receive additional fees following their resolution. But Lee’s firm has not received its share of the additional fees from those cases despite various requests, the lawsuit claims.
The suit brings claims for breach of contract, breach of fiduciary duty, fraud, breach of the covenant of good faith, breach of implied and express contract, conversion, unjust enrichment and promissory estoppel. The lawsuit seeks an accounting of all files that Lee referred to the Seigel firm under the parties’ agreement and appointment of a fiscal agent to review the defendant’s books and records. The suit seeks an order that defendants pay the cost of the fiscal agent, as well as damages and attorney fees and costs.
Lee filed the suit on Nov. 5 in Bergen County Superior Court. Seigel Law and Jan Seigel, its managing partner, are the defendants.
The agreement between the firms was reached after attorney Edward Capozzi, who once practiced at Lee’s firm, left to join Seigel’s firm, taking roughly 100 files with him. When Capozzi made that move, his new firm changed its name from Seigel & Seigel to Seigel Capozzi.
Seigel and Lee held a meeting in August 2010 to discuss the transfer of Capozzi’s personal injury cases to Seigel. After the meeting, Lee sent Seigel a letter to memorialize the terms agreed to, according to the lawsuit. Seigel sent a confirmation letter on receiving Lee’s letter, the suit said. The Seigel firm has periodically made payments to Lee’s firm over the years.
Capozzi left Seigel’s firm with three other attorneys in July 2016 to join Brach Eichler in Roseland.
Capozzi declined to comment on the dispute other than to say he was not involved in administration of the fee-sharing deal.
Barry Epstein of the Epstein Law Firm in Rochelle Park, who represents Lee, declined to comment on the case when reached Monday. Seigel did not return a call requesting comment.
Lee’s firm lists five attorneys on its website. Seigel’s firm lists 10 attorneys.