Lipton Law Center, P.C. V. Andrus Wagstaff, Pc

Case Background

Lipton Law Center, P.C. filed a breach of contract lawsuit after Andrus Wagstaff, PC failed to honor an agreement regarding attorney fees. The lawsuit alleged unjust enrichment and statutory and common law conversion. The lawsuit was filed in the United States District Court, Michigan Eastern (Detroit). The case was assigned to District Judge Linda V. Parker and referred to Magistrate Judge Kimberly G. Altman. [Case Number: 2:22cv11519]

Cause

Lipton Law, a Michigan corporation, operated in Southfield, Michigan, while Andrus Wagstaff, a Colorado corporation, was based in Denver.  Lipton Law served as local counsel for twenty victims in litigation against Michigan State University, USA Gymnastics, the U.S. Olympic Committee, and Twistars USA (the “Nasser Defendants”).

The two law firms had agreed that Lipton Law would receive 5% of the total attorney fees earned in these cases. Andrus Wagstaff initially paid this percentage when the victims received their first settlement payments. However, after a second round of settlement payments, Andrus Wagstaff refused to pay Lipton Law its share, violating the agreement.

The dispute centered on a written agreement made on May 31, 2018. Andrus Wagstaff, through its partner Kim Dougherty, had retained Lipton Law to act as local counsel for the Nasser victims in Michigan. In return, Lipton Law would receive 5% of the net attorney fees. The firm’s responsibilities included filing lawsuits in Michigan and assisting Dougherty’s admission to practice in the state.

Lipton Law fulfilled its obligations, including filing lawsuits, sponsoring Dougherty’s admission, and providing additional legal services. The firm remained counsel of record until the case was dismissed in 2022. Andrus Wagstaff initially paid this percentage when the victims received their first settlement payments. However, after a second round of settlement payments, Andrus Wagstaff refused to pay Lipton Law its share, violating the agreement. Despite benefiting from these services, Andrus Wagstaff failed to pay the agreed fees and improperly retained funds owed to Lipton Law.

Damages

Lipton Law sought compensation for the damages caused by the breach of contract, statutory penalties, interest, costs, and attorney fees.

Key Arguments and Proceedings

Legal Representation

  • Plaintiff(s): Lipton Law Center, P.C.
    • Counsel for Plaintiff(s): Kyle J. Kelly | Marc L. Newman
  • Defendant(s): Andrus Wagstaff, PC
    • Counsel for Defendant(s): K. Scott Hamilton

Claims

Lipton Law sued Andrus Wagstaff PC for breach of contract, alleging that it provided legal services but did not receive full payment. Lipton Law claimed it was owed a 5% minimum fee and additional compensation.

The Plaintiff also demanded a full accounting of fees Andrus Wagstaff earned from settlements related to the Nasser and Michigan State University cases. It alleged that Andrus Wagstaff withheld financial records necessary to verify payments.

Additionally, Lipton Law accused Andrus Wagstaff of statutory and common law conversion, arguing that the firm wrongfully retained fees owed to Lipton Law. It claimed Andrus Wagstaff refused to return identifiable funds and improperly exercised control over them.

Lastly, Lipton Law asserted unjust enrichment, stating that Andrus Wagstaff benefited from its services but failed to pay.

Defense

Andrus Wagstaff, PC denied breaching its agreement with Lipton Law. It admitted hiring Lipton Law as local counsel in Michigan but argued that Lipton Law had no role in securing a second settlement. The firm claimed it fully paid Lipton Law the agreed 5% fee for Michigan cases and owed nothing more.

Andrus Wagstaff also moved to dismiss the statutory conversion claim, asserting that Lipton Law had no right to additional funds. As defenses, it argued the claim sought excessive fees, involved an unenforceable agreement, and attempted to recover payment for work outside Lipton Law’s licensed jurisdiction.

Jury Verdict

On October 28, 2024, the jury found that Plaintiff did not prove by a preponderance of the evidence that under its contract with Defendant, it was entitled to local counsel fees for settlement proceeds beyond what it has received or that it was entitled to receive a fee award of more than 5%.

Court Documents:

Documents are available for purchase upon request at jurimatic@exlitem.com