Morrson & Foerster (Photo: Jason Doiy/ALM)MoFo Settles Texas Suit Over Billing Practices
The plaintiff companies alleged in a Texas lawsuit that 34 different timekeepers at Morrison & Foerster billed 669 hours over two months at a cost of $484,321.
May 13, 2019 at 04:45 PM
3 minute read
The original version of this story was published on Texas Lawyer
Morrison & Foerster has settled a lawsuit in Texas state court filed by a group of former clients who alleged the firm engaged in “egregious overbilling.”
Houston lawyer Peter Taaffe, who represents the plaintiffs, confirmed Monday that his clients, who sought more than $1.5 million in damages, came to an agreement with Morrison & Foerster in mediation. Terms of the settlement in Synergies v. Morrison & Foerster were not disclosed.
“The parties have come to a mutual settlement and the terms of the settlement are confidential. The plaintiff parties also add that 'Morrison & Foerster provided plaintiffs with valuable legal work, and plaintiffs appreciate its counsel,'” Taaffe, of counsel at The Buzbee Law Firm, said in a written statement.
On May 9, the plaintiffs filed a notice of nonsuit with prejudice as to all of the plaintiffs' claims against Morrison & Foerster.
Tom O'Brien, a partner at Baker Botts in Dallas who represents Morrison & Foerster, did not immediately respond to a request for comment. Neither did a spokesman for the firm, which has 17 offices in the U.S., Asia and Europe.
The plaintiffs, including Firestar Diamond International and its owner, jewelry designer Nirav Modi, initially filed a complaint Feb. 13 in U.S. District Court for the Western District of Texas. Before Morrison & Foerster filed a response, the plaintiffs voluntarily dismissed that complaint. They refiled it on Feb. 26 in state district court in Travis County.
In the Travis County petition, the plaintiffs alleged they hired the firm to assist them in winding down companies, but instead of doing the work efficiently and promptly and keeping them informed, the firm concentrated on liquidating assets and transferring money to the firm's client trust account.
“MoFo then expended an exorbitant and excessive amount of time, primarily on matters that had little to do with winding down the entities. In the course of two months, MoFo had 34 different timekeepers bill 669 hours at a cost of $485,321,” the plaintiffs alleged in the petition.
They further alleged that they paid the firm $30,000 in retainers, and the lawyers collected $625,319 that was deposited in the firm's trust account, for a total of $655,319. However, the plaintiffs alleged, the firm “unilaterally decided to pay itself from these funds” leaving only $170,998 in the trust, and it ultimately only returned $117,305 to them.
The plaintiffs, which include Firestar and related companies, maintain a principal place of business in Austin, according to the petition. They also include Synergies Corp., AVD Trading and Firestar Group.
Plaintiff Modi is facing allegations by India's Punjab National Bank of engaging in a bank fraud scheme, reportedly involving at least $1.8 billion, according to news reports.
The plaintiffs brought breach of fiduciary duty, negligence, fraud, breach of contract and theft causes of action against Morrison & Foerster.
Morrison & Foerster had not filed an answer but filed a motion to dismiss on forum non conveniens grounds, arguing that the litigation should be resolved in New York because lawyers in the firm's New York office did the work for the plaintiffs.
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MoFo Hit With Texas Lawsuit Alleging 'Egregious Overbilling'
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