A former Zuckerman Spaeder client says that his fee dispute with the firm belongs in arbitration, despite the fact that a federal trial judge determined that he didn’t push for arbitration in his initial answer to the firm’s lawsuit. James Auffenberg Jr., a former Zuckerman client fighting with the firm over $834,000 in allegedly unpaid fees, argues that point in an Oct. 22 brief before the U.S. Court of Appeals for the D.C. Circuit.
The underlying case involves work Zuckerman performed on behalf of Auffenberg, who had hired the firm after he was indicted in 2007 for allegedly dodging millions in federal taxes. After winning an acquittal for Auffenberg last year, Zuckerman filed a suit against him, alleging in its April 27, 2009 complaint that he hadn’t paid $834,000 in legal fees.
Auffenberg has argued throughout the case that Zuckerman told him he would have to pay no more than $1.5 million for the firm to represent him but then sent him a bill for an additional $834,299 after the acquittal.
In January, almost a year into the litigation, Auffenberg, who is being represented by Thomas Duckenfield III and David Holzworth of Adorno & Yoss, moved to stay the case pending arbitration before the D.C. Attorney/Client Arbitration Board. D.C. Bar rules generally require lawyers to arbitrate fee disputes at the client's request.
Judge Reggie Walton of the U.S. District Court for the District of Columbia denied Auffenberg’s motion in a March 18 order, citing “the defendant’s failure to invoke arbitration prior to actively participating in this litigation.” One day later, Auffenberg filed for an interlocutory appeal.
Auffenberg’s brief argues that the trial court erred by denying his motion for arbitration because despite the fact that he did not mention arbitration in his initial answer to Zuckerman’s lawsuit, he “communicated his intention to arbitrate early and often.” He also draws a distinction between the litigation that progressed over his counterclaim of malpractice and the effort to move the case into arbitration.
Auffenberg’s brief argues, “Zuckerman initiated litigation activities targeted at the non-arbitrable malpractice claims. Auffenberg was forced to respond, in part because of the trial court’s failure to timely hear and decide Auffenberg’s motion to stay.” The brief adds, “This case is complicated by the fact that it closely related arbitrable and non-arbitrable claims arising out of the same transaction.”
Zuckerman has until Nov. 22 to file its brief. Zuckerman is being represented by firm partner Francis Carter and associate Douglas Miller.
The fact that the D.C. Circuit has asked the parties to submit briefs in the case comes thanks to an early procedural win for Auffenberg. Last month, the D.C. Circuit denied Zuckerman’s request to decide the dispute without receiving briefs.
The D.C. Circuit said in a Sept. 1 per curium opinion, “The merits of the parties’ position are not so clear as to warrant summary action.”
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