The Fourth District Court of Appeal agreed with Fort Lauderdale lawyer Ira Marcus and his firm Ira Marcus P.A. on Wednesday, finding no foul play in a contingency fee agreement with his close friend turned client — but not before the protracted fight ruined the relationship.

When business owner Stuart Bornstein asked his friend of 30 years to take on a case against the City of Coral Gables, Marcus was reluctant.

“I said, 'I don't want to take it. I don't want to ruin a friendship,' ” Marcus said.

But Marcus eventually agreed. The case had been filed by another lawyer and wasn't going well, according to Marcus. Bornstein and his business partner had taken a $4 million loan from the city for their company Granada LLC to oversee renovations and manage its country club. Renovations cost $2.6 million more than anticipated — money Bornstein and his partner fronted — so they sued to get it back.

Bornstein hired Marcus with a $50,000 retainer, under a 40% contingency fee agreement, promising to refund the retainer if the case succeeded. The city had offered nothing, but after Marcus took over it eventually agreed to a $1.45 million settlement.

That wasn't easy, according to Marcus' attorney, Robert M. Klein of Klein Glasser Park & Lowe in Miami.

“ This case reminds me of the phrase, 'No good deed goes unpunished,' ” Klein said. ”[Marcus] completely turned this case around.”

Under the fee agreement, Marcus' 40%, minus the retainer fee, was $530,000. Bornstein disputed that amount, according to Marcus, claiming it was too much. Marcus agreed to reduce his rate to a flat fee of $450,000 and drew up a new distribution agreement, which said Bornstein's company would net $880,816.

According to Wednesday's court opinion, Bornstein signed that agreement but later complained that his amount was incorrect because it was missing the $50,000 retainer refund promised in the first agreement. The second agreement bore no mention of it

Borstein sued Marcus for civil theft, conversion and breach of contract in 2010. He also filed a complaint against Marcus with the Florida Bar, which ultimately dropped the case. The trial court ruled in Marcus' favor, finding his agreement was clear and acted as a novation — meaning it canceled out the original plan.

Bornstein's lawyers — Xavier A. Franco, George E. McArdle and Michael A. Mullavey of McArdle, Perez & Franco in Coral Gables, and John P. Seiler of Seiler Sautter Zaden Rimes & Wahlbrink in Fort Lauderdale — did not respond to requests for comment.

But Bornstein argued neither party agreed to discard the original retainer refund.

The Fourth DCA gave credence to that, as testimony from both sides suggested they didn't mean to replace the entire agreement, but rather meant to modify it.

“The question then becomes whether the trial court reached the right result on appellants' breach of contract claims, but for the wrong reasons,” the opinion said.

The answer was yes, as the Fourth DCA ruled the parties had modified the agreement but changed both the contingency fee and retainer provision.

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'Be careful'

Marcus' lawyer said he's delighted.

“We felt from day one that the case was crystal clear,” Klein said.

In Klein's view, the case offers an important lesson about representing friends and family: Don't do it.

“Be very careful when you take on cases for friends and family, because often their expectations are incredibly high,” Klein said. “And at the same time, because of their relationships, they often feel that they can really negotiate or reconsider fee agreements that you've reached. … It's probably not worth straining relationships.”

For Marcus, it's been a long nine years.

“I was depressed and I grieved at the loss of the relationship because it was a very important, valuable relationship to me,” Marcus said. “It was horrible that $50,000 would ruin it.”

Marcus said he feels vindicated and could seek more than $1.1 million in attorney fees.

Chief Judge Elizabeth Metzger of the Nineteenth Circuit wrote the opinion sitting by designation, with Fourth DCA Chief Judge Jonathan Gerber and Judge Burton Conner concurring.

Read the full court opinion:

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