Trump Org Must Face Claims in Michael Cohen Legal Fees Lawsuit
It's not yet clear how much of Cohen's hefty outstanding legal fees are related to investigations that could be covered by the Trump Organization's alleged commitment to pay his bills.
August 28, 2019 at 07:29 PM
4 minute read
The original version of this story was published on New York Law Journal
Michael Cohen, Donald Trump's incarcerated former attorney, has convinced a judge to allow discovery in part of his lawsuit seeking more than $1 million in legal fees against the president's real estate company.
Cohen sued earlier this year, seeking to make the Trump Organization cover the more than $3.8 million in legal fees and criminal penalties for which Cohen is liable. The Trump Organization said it made no open-ended commitment to pay Cohen's legal bills, however, much less the money he was ordered to pay as part of his convictions for tax, election spending and perjury-type offenses.
In a mixed ruling on a motion to dismiss, Manhattan Supreme Court Justice Joel Cohen on Wednesday agreed that the Trump Organization could not be required to pay Michael Cohen's criminal penalties, which is a position that his lawyers retreated from at oral argument earlier this month. But the judge concluded Cohen's alleged agreement with Trump Organization general counsel Alan Garten to have his lawyers' bills covered "is enforceable to the extent it covers legal proceedings and investigations that were pending in July 2017, when the agreement allegedly was made."
"It is not enforceable, however, with respect to legal proceedings and investigations that began after the agreement was reached," the judge wrote in his decision.
Cohen can now seek evidence to try to prove the Trump Organization understood the scope of the alleged commitment in the same way he did. The judge said in a footnote that "to be enforceable, such an agreement would have to be confirmed by the Trump Organization in writing, or by audio recording, or by the testimony of Trump Organization witnesses."
Justice Cohen noted that by the time July 2017 rolled around, committees of both the U.S. House of Representatives and the Senate had announced probes into Russian interference, Michael Cohen had received a subpoena from one of them, and special counsel Robert Mueller had been appointed. But he expressly ruled that the "criminal case against Cohen related to his alleged misleading congressional investigators" fell outside of that window.
Much of the judge's analysis hinged on the statute of frauds, which requires agreements that can't be performed within a year to be put in writing. He said Garten's alleged oral commitment didn't satisfy that law, nor did Cohen's production of a letter from his lawyer that referred to indemnification for a specific congressional probe, nor did the Trump Organization's payment of some of Cohen's legal bills.
But evidence of a commitment to pay legal bills incurred by the president's "fixer" for matters that were pending at the time of the alleged agreement may exist in the Trump Organization's records, the judge noted.
Cohen said in his complaint that his unpaid legal bills totaled $1.9 million, with more than $1 million owed to McDermott Will & Emery and the balance owed to firms including Petrillo Klein & Boxer, Blakely Law Group, Lanny Davis' law firm Davis Goldberg & Galper and Monico & Spevack.
"We are pleased with the court's decision permitting Mr. Cohen's case to proceed," W. Hunter Winstead, a lawyer at Gilbert who represents Cohen, said in an email. "We intend to pursue the litigation vigorously and to obtain full payment of Mr. Cohen's claims."
"The judge's decision was thoughtful and took a large chunk out of the plaintiff's claims," said Marc Mukasey of Mukasey Frenchman & Sklaroff, who represents the Trump Organization, in an email. "We look forward to doing away with the leftover claims in due course."
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Judge Questions Michael Cohen's Bid for Indemnification From Trump Org
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