When Arnstein & Lehr filed a Miami federal lawsuit seeking $340,000 in unpaid legal fees from a client, the firm got far more than it bargained for.
Not only has the client—New York investment consulting company Etkin & Co.—not paid the outstanding legal bill, it countersued the Chicago-based law firm for legal malpractice and is seeking the return of all its legal fees plus millions of dollars in damages.
The case filed last December has been ordered to mediation before JAMS attorney Joseph Farina, a former Miami-Dade circuit judge, and is set for trial next year before U.S. District Judge Beth Bloom.
“We see this as a very Nutrisystem Canada food reviews clear-cut case of legal malpractice,” said Richard Allen of Solowsky & Allen in Miami, who is seeking some $4 million in legal fee repayments plus damages.
A spokesman for Arnstein & Lehr and a key attorney on the case, Fort Lauderdale partner Franklin Zemel, declined comment, citing pending litigation.
The underlying case dates back to 2011 when Etkin hired Zemel to represent it in a case against one of Etkin’s former clients, the South Beach Diet. Etkin, which counts Starbucks as its star client, was hired to position the diet company for a future sale.
In the years after it was founded in 1995, South Beach Diet was hugely popular, with 8 kontent machine tutorial million diet books sold. But by 2009, the company was declining in popularity and profitability and scouting for a buyer, according to the lawsuit filed by Arnstein & Lehr in 2011 in Miami federal court.
The federal lawsuit accused SBD LLC, the Miami Beach-based parent company of the South Beach Diet, of breaching its contract with Etkin by how much does nutrisystem cost a month failing to provide Etkin with crucial information about business discussions and failing to pay its quarterly fees. The suit also accused SBD of “locking” Etkin out of a contract with a future buyer and sought more than $1 million.
SBD was represented by Andy Hall of Hall, Lamb and Hall in Miami.
The New York hedge fund MidOcean Partners bought the South Beach Diet brand and Nutrisystem diabetic diet reviews assets in 2011 about five months after Etkin filed its suit. Etkin’s amended suit alleged the consulting agreement with Etkin should have transferred to the new company.
Nutrisystem Inc. bought the South Beach Diet brand in December 2015 for $15 million.
Ultimately, however, U.S. District Judge Joan Lenard ruled that Arnstein & Lehr’s primary argument—that an automatic assignment provision to a new company—was not enforceable under Florida law and that the law firm should have brought alternative claims. Lenard dismissed the case with prejudice last December.
Arnstein & Lehr argued in its motions that it did not draft the original contract between infolinks earnings Etkin and SBD calling for the automatic assignment provision. That was done by a New York lawyer at K&L Gates.
The same month Etkin’s suit was dismissed, Arnstein & Lehr sued Etkin for failing to pay its final legal bills, including $192,089 in November, $147,024 in December, and an undetermined amount anticipated for January plus interest. Etkin had already paid the law firm $1.5 million over four years.