http://docs.justia.com/cases/federal/district-courts/oregon/ordce/1:2008cv03059/88549/179/
Attorney Carton in January 2007 sent a check in the amount of $824,930.80 to Defendant
Macaluso. This represented 20 % of the net proceeds received to date after attorney fees and costs
of the Kylie Bechler Wrongful Death Estate settlement received The check was made out to
Plaintiffs and Macaluso & Associates and was deposited in Defendant Macaluso's trust account.
(Compi. ~~ 73-74.)
On February 12,2007, Defendant Macaluso sent by federal express a trust account check
in the amount of $299,520.78 made out to" Ernie Bechler, Pat Bechler & Mike Bechler" and an
"accounting" in care of their Medford, Oregon, address. (Compi. ~~ 76, 79.)
The "accounting"
listed deductions taken from the $824, 920.80 check from attorney Carton. This included a 40%
attorney fee based on the final net amount expected to be received of $989,904.96, $78,438.04 in
costs and LA Funding Loan Interest of$5l,000. (Am. Compi. Ex. D.) This check was returned
by Defendants' bank as "NSF" and it was not until February 22,2007, that Defendant Macaluso
wired the funds to Plaintiffs' bank account to cover the NSF check. (Compi. ~~ 77-78.)
Plaintiffs
were concerned about the settlement accounting and on March 1, 2007, retained new counsel who
wrote a demand letter to Defendant Macaluso on April 6, 2007, that, in part, terminated Defendant
Macaluso as their attorney. (Compi. ~~ 80-82; Campbell Deci. Re: Apr. 6,2007 Letter at 2; Am.
Compi. Ex. E.) Plaintiffs' new attorney continued to investigate potential claims against
Defendant Macaluso from early March 2007 to late June 2007. (Campbell Deci. Re: Apr. 6,
2007 Letter at 2-10.)
Defendant Macaluso responded to this letter on May 2, 2007, and offered as
an "accommodation" to return certain amounts deducted for outside counsel and travel expenses
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to the east coast and Florida. (Kiefer DecI. Ex. 2; Campbell DecI. Re: Apr. 6,2007 Letter at 5-6.)
Plaintiffs on May 30, 2007, received a check for these expenses in the amount of$ 119,623.39.
(CompI. ~~ 84, 86; Campbell DecI. Re: Apr. 6,2007 Letter at 5-6.) Plaintiffs returned this check
to Defendant Macaluso on May 31,2007. (CompI. ~ 87; Campbell DecI. Re: Apr. 6,2007 Letter
at 8; Macaluso DecI. Ex. 1; Kiefer DecI. Ex. 4.)
Plaintiffs commenced this action by filing a verified complaint on May 27,2008. (Dk
Further, the court rules that even if the Agreement was not voided, the following
sums set forth in the "accounting" from Defendant Macaluso were not properly deducted:
a. Client advancements
b. Goldstein Isaacson, PC
c. Moore, Winter, Skebba &
McLennan, LLP
d. Waldt, Dean (bankruptcy attorney) $34,781.33
e. Washington, Nancy -local counsel NY $ 5,000.00
Defendants have acknowledged that the $20,000 client advancement and $5,000 fee to
Nancy Washington were incurred in other litigation and were inadvertently deducted from the
7 See separate scheduling order.
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Bechler Estate settlement. Defendants further admit the $983.40 paid to Nancy Isaacson was for
"associate counsel" and should not have been deducted from the settlement. The other amounts
are clearly covered by the Agreement provision which provides that, "Associate counsel may be
employed at the discretion of Attorneys at no additional expense to the Client." (Am. CompI. Ex.
A at 2 ~ 5.) The court does not find that Defendants have raised a genuine issue of material fact
by arguing without support that some of these expenses were for "experts" pursuant to the
following provision of the Agreement: "Attorneys may, in their discretion, employ ... experts
whose fees shall be chargeable as advanced costs." (Am. CompI. Ex. A at 2 ~ 5.) The court finds
on this record no ambiguity in the phrase "associate counsel" which clearly covers the law firm
charges at issue. Plaintiffs' motions for summary judgment on these grounds are granted.
So.................it would appear that the "issue" with TM was over fraudulent billing. Wonder if that relates to "where the $275k went" in KC's case. Hmmmmmmmmmmmm