Judge Rules Big Trump Supporter Owes Nixon Peabody $5.7M in Fees

Ron Gidwitz. (Photo: Seth Perlman/AP)

Ronald Gidwitz, a businessman who has unsuccessfully run for governor of Illinois, hired in 2005 what was then called Ungaretti & Harris to advise him on legal issues related to a troubled government subsidized housing project that the Gidwitz family owned in the Chicago suburb of Joliet, Illinois. Nixon Peabody acquired Ungaretti & Harris, a midsize Chicago firm, in 2015.

Ungaretti & Harris defended Gidwitz and his family’s business in an attempt by Joliet to force the sale of Evergreen Terrace, which was plagued by security and safety issues while owned by the Gidwitz family.

A federal judge ruled against the Gidwitz family in that long-running case that involved a 95-day trial, forcing the sale of the property. Ungaretti & Harris successfully petitioned a federal judge in 2013 to withdraw from that case, stating it was owed $5 million in unpaid fees.

Ungaretti & Harris then sued Gidwitz, a number of his family members and business entities they controlled. The firm alleged that Gidwitz stopped paying his legal bills around 2012 and through the 2014 trial. The fees he incurred allegedly reached more than $6.2 million.

During a two-week bench trial over the fees in Illinois state court last month, Gidwitz contended he had reached an agreement to pay a fixed-fee of $1.2 million for Ungaretti & Harris’ trial work.

A Chicago judge ruled that Gidwitz breached his contract with the firm and also ruled in Ungaretti & Harris’ favor on Gidwitz’s counterclaims of legal malpractice.

“Defendants did not meet their burden of proof that an alternative fee arrangement was agreed upon or that the (plaintiffs) agreed to a fixed fee arrangement,” Judge Patrick Foran Lustig wrote in his seven-page decision. “The Court finds that the original contract remained in force throughout the engagement.”

Ungaretti & Harris was represented by Hinshaw & Culbertson civil litigation partner Thomas McGarry and high-profile Chicago plaintiff’s lawyer Joseph Power Jr. of Power Rogers & Smith.

“The Ungaretti lawyers were superb in this long battle to save affordable housing in Joliet,” McGarry said in a statement. “We are very pleased with the outcome of this long battle. As lawyers who represented their client in a vigorous and professional manner, our client was rightfully vindicated.”

A spokesman for the Gidwitz family, Steve Patterson, suggested in a written statement that the family would appeal the damages ruling and disputed the judge’s finding that Ungaretti & Harris’ lawyers properly billed their client.

“The underlying facts show that a law firm, which no longer exists, overbilled its clients—both in time and unreasonable fees—by millions of dollars more than their commitments and estimates,” the statement said. “While the court found some of their fees unreasonable, we look forward to a further review of those remaining fees in the appeal process.”

The judge held that about $500,000 in fees billed by Ungaretti & Harris were not sufficiently detailed—most were labeled as “trial preparation”—to warrant payment.

Gidwitz told the Chicago Tribune in November that he was a lead organizer for a Trump fundraiser around Halloween at the Trump International Hotel and Tower in Chicago. Trump received tepid backing from Republicans in Illinois during the presidential campaign.

“I was pretty much like the Lone Ranger out there,” Gidwitz told the Tribune at the time.

Power, a well-regarded trial lawyer in Chicago and longtime Democratic fundraiser who donated to Hillary Clinton’s presidential campaign, compared Gidwitz’s failure to pay his lawyers to his handling of the Joliet subsidized housing property.

“He’s just an utter and complete miser, in my opinion, in addition to being, according to the federal judge in the Northern District of Illinois, a slum landlord,” Power said. “It’s no accident that he’s a major supporter of Donald Trump.”