New Jersey-based law firm Cooper Levenson has been served with a motion seeking more than $100,000 in sanctions in connection with what the opposing party calls a "frivolous" legal malpractice lawsuit.

The motion was filed by Irvine, California-based Troutman Amin, LLP, which characterizes the malpractice complaint — filed by Cooper Levenson Partner Rona Kaplan — as both "objectively frivolous" and brought in "bad faith." Sanctions motions of this type are a recognized procedural tool used to deter filings courts may deem meritless, and New Jersey's rules provide parties with mechanisms to seek monetary penalties and attorney's fees when litigation is found to have been pursued without a proper factual or legal basis.

The malpractice suit alleges that Troutman Amin, LLP billed over $200,000 to defend a matter that could have been settled for $80,000. However, according to the sanctions motion, the $80,000 settlement demand referenced in the complaint was rejected by different counsel more than a year before Troutman Amin, LLP became involved in the case.

"The $80k demand referenced in the complaint was rejected by different counsel over a year before Troutman Amin, LLP was even involved. We had nothing to do with turning down that offer," Troutman says. "Cooper Levenson knew that but still filed a deceptive lawsuit suggesting otherwise in an effort to trick people and the court. Just absurd behavior and highly sanctionable."

Context of the Underlying Litigation

The sanctions motion explains that by the time Troutman Amin, LLP was retained, the client was facing hundreds of millions of dollars in potential exposure in a putative class action and was subject to a class discovery order requiring the production of millions of records.

"By the time we got involved the $80 demand was long off the table and class counsel wanted only a multi-million dollar classwide settlement the client could never afford," Troutman says. "We had our work cut out for us if we were going to save this small business — but we turned the case around and delivered a tremendous result in an incredibly short amount of time."

According to the motion, despite a "firestorm of discovery disputes," Troutman Amin, LLP guided the client through the court-ordered discovery process, including data identification, extraction, and review. The firm helped identify proper custodians, data sets, data repositories, and third parties in possession of key records. It established a phased production schedule designed to keep opposing counsel and the court satisfied with progress.

Simultaneously, the firm pursued affirmative discovery against the plaintiff and developed a defense strategy aimed at defeating class certification and creating leverage for an individual settlement with affordable payment terms.

Within 60 days of Troutman Amin, LLP entering the defense, the opposing side returned to the negotiating table and produced an individual settlement demand that was actually lower than the original pre-suit $80,000 figure, according to the sanctions motion.

Fee Dispute and Alleged "Bad Faith" Filing

Despite the outcome, the former client refused to pay the legal fees — even after Troutman Amin, LLP agreed to accept payment over time at a reduced rate. The sanctions motion alleges that the malpractice complaint was then filed in an effort to pressure the firm into abandoning its collection efforts. Fee collection disputes between law firms and former clients not infrequently give rise to malpractice counterclaims, and courts have at times viewed such counterclaims as litigation leverage rather than bona fide grievances.

"These guys were facing enough exposure to bankrupt them 100 times over. They begged us to take the case to save them. We come into the case and work our tails off for them and literally save their business. We even agreed to represent them at a reduced fee and accept payment over time to help save a small business," Troutman says. "But then they stiff us on the bill and hire Cooper Levenson to file a frivolous lawsuit when we try to collect in the hopes we would just 'walk away' from the invoice. This is truly worst of the worst type stuff. And obviously it was never going to work."

Additional Disputed Allegations

The sanctions motion also challenges other claims in the complaint. Specifically, the complaint alleges that Troutman Amin, LLP continued working on the case for months after being instructed to stop. The sanctions motion counters that the client instructed the firm to resume work within approximately 24 hours of the stop request.

"The part about us ignoring a stop work request really irks me," Troutman says. "Cooper Levenson knew the client had instructed us to get back to work after only about a 24 hour pause. But they make it seem like we were some kind of out-of-control freight train that refused a client instruction and kept working the case for weeks after being told to stop. This is highly defamatory and obviously totally false."

Next Steps

Under applicable procedural rules, Cooper Levenson has up to 28 days to withdraw the complaint to avoid the sanctions motion. Troutman indicated, however, that the sanctions motion is only the beginning of the firm's response.

"I've told Cooper Levenson to put their carrier on notice and made a policy-limits demand here," Troutman says. "There's no way a law firm should be allowed to operate this way and they aren't just going to walk away from this as if nothing happened. They've caused real damage with their frivolous filing and they are going to have to answer for that."

Troutman Amin, LLP is a nationally recognized complex litigation defense and privacy and telecommunications consulting law firm based in Irvine, California. More information is available at TroutmanAmin.com.

Media Contact: Eric Troutman, Troutman Amin, LLP, www.TroutmanAmin.com