Now in Legal Rebels:
Posted Apr 27, 2007 12:37 pm CDT
New York’s highest court has ordered a real-estate investment company to pay the $1.4 million outstanding balance of a “success fee” charged by Davis Polk & Wardwell.
The New York Court of Appeals (PDF) said the law firm did not commit malpractice in its representation of AmBase Corp. in a tax case and was entitled to the fee, according to the New York Law Journal.
In the initial case, the Greenwich, Conn., company won a judgment that it did not have to pay $20 million in disputed taxes. AmBase filed a legal malpractice claim after Davis Polk & Wardwell submitted its bill for $1.4 million in outstanding fees. The retainer agreement had called for a success fee, calculated at 150 percent of billed time and capped at $2 million.
AmBase argued the New York-based law firm should have told the company success was likely in the tax suit, so it would not have had to put aside so much money in case of an adverse judgment.