Big Fees in a Divorce Get No Help from the Supreme Court

A divorcing husband who claimed his wife’s law firm ran up its legal bills with excessive discovery and unreasonable legal claims won’t be able to pursue his lawsuit alleging fraud and breach of fiduciary duty.

The Vermont Supreme Court upheld dismissal of the suit in an October 16 opinion, the Legal Profession Blog reports:

The husband, Kenneth Felis, alleged the litigation strategy of his wife’s law firm was to “build its fees and harass and injure” him by “pursuing unreasonable legal positions, demanding extensive and unnecessary discovery, promoting and claiming outrageous asset valuations, raising claims without proper foundation … and billing excessive time.”

The law firm, Downs Rachlin Martin of Burlington, Vermont, had billed $800,000 in legal fees in a contentious, multi-year divorce involving a marital estate worth up to $15 million, though the family court awarded a substantially lower sum from the marital estate, according to the opinion. Felis alleged the law firm required his wife to agree to use divorce proceeds to make up the difference. The agreement, he contended, demonstrated that the law firm had an improper motive to engage in protracted and vexatious litigation to build fees that would be paid through the marital estate.

The supreme court said Felis failed to establish two required elements of a fraud claim. One was the requirement that the alleged fraud not be open to the defrauded party. Felis’ allegation that “the red fee-building flag went up early” in the case showed he was aware of discovery practices he targeted in his suit, the court said.

 

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