The Oakland Press - August 18, 2001
Southfield lawyer Geoffrey Fieger has handled countless lawsuits - but rarely as the defendant. This week, a Las Vegas company that advanced one of Fieger's clients $106,250 for living expenses sued the celebrity lawyer and former gubernatorial candidate for $1.2 million. Resolution Settlement Corp. claims it is entitled to the money under a deal Fieger negotiated for Mary Curry, a Farmington Hills woman badly injured in a car accident.
"He had irrevocable instructions from his client to pay this," said Greg Hanley, a Royal Oak lawyer who filed the suit in U.S. District Court in Detroit for Resolution Settlement Corp.
"He was fully aware that she was signing the deal. He was provided copies of all the paperwork. We're perplexed by it."
But Fieger said he never approved the deal, which he considers illegal.
A copy of the agreement filed with the lawsuit lacks Fieger's signature.
"I had nothing to do with this," Fieger said. "I told them I would not sign it. It would be unethical for me to sign it."
Fieger said the almost 1,200 percent return for the company appears illegal.
"These people are the equivalent of loan sharks," Fieger said. "They prey on people. Even a loan shark wouldn't charge this much."
The courts have not specifically addressed the legality of this type of business in Michigan, so the lawsuit could potentially set a precedent in Michigan, said Larry Dubin, professor at the University of Detroit/Mercy Law School.
"The $1.2 million is certainly worth spending a few dollars in litigation over," Dubin said. "The potential precedent could help their business."
A Michigan Bar ethics committee reviewed a similar agreement in June 2000. The opinion didn't specifically say the agreements are unethical, but said they create a host of ethical problems for lawyers representing personal injury victims.
"The committee concludes that agreements such as those presented to the committee create an impermissible conflict of interest," the opinion said.
Among the problems created by such agreements are:
Control of the litigation is transferred to the venture capital corporation because the lawyer is permanently appointed to the case.
The client can't fire the original lawyer without permission from the venture capital firm.
Privileged materials may be disclosed to the venture capital firm, in violation of state ethics rules.
The agreement between Curry and Resolution Settlement specifically states that the money in question "is not a loan, because the obligation to repay is not absolute, but rather contingent upon the occurrence of events over which Resolution Settlement Corp., has no control."
The filing also claims Fieger's firm knew of the agreement.
"The law firm had notice of the lien and acknowledged its validity," the suit says. "Nonetheless, the law firm has misappropriated and converted all of the funds to its own use and has failed to pay Resolution Settlement Corp. the substantial monies to which it is entitled despite its repeated demands."
Fieger said the filings are "false and fraudulent" and could lead to legal action against the firm that filed them.
"I can't wait to get in front of (a federal judge) on this one," Fieger said.
Curry was badly burned Nov. 7, 1994, when she stopped in traffic on Interstate 75 near Flint to allow President Bill Clinton's motorcade to pass. Trucker Daniel Westerby slammed his rig into several cars stopped there, killing three people. Curry's car burst into flames.
She sued Westerby and the trucking firm, Commercial Carriers. The case originally settled for $20 million, but that amount later was reduced to $4.7 million.
The Resolution Settlement Corp. suit is not the first time Fieger has been sued over the proceeds of the case. Another lawyer, Harvey Chayet, sued Fieger earlier this year over a share of Fieger's legal fees.
Chayet filed the case originally for Curry, but she later fired him and hired Fieger. Chayet insists he is entitled to a third of Fieger's fee plus costs associated with the original work he did on the case.
That case is pending.