A Tallahassee litigator feuding with an investor over a planned hotel refurbishment has been handed a setback in a Palm Beach County courtroom.

Palm Beach Circuit Judge Lisa Small granted a motion to withhold prospective attorney fees in a dozen tobacco cases involving attorney Phillip Tim Howard.

The motion to preclude Howard from accessing the fees was filed by litigators Steven Katzman and Charles Bennardini, partners with South Florida law firm Katzman, Wasserman Bennardini & Rubinstein, on behalf of their client BWCI Pension Trustees Ltd.

“The Florida Bar Trust Accounting Rule … requires that when in the course of representation a lawyer is in possession of property in which two or more persons, one of whom may be a lawyer, claim an interest, the property must be treated by the lawyer as trust property and the portion in dispute shall be kept separate by the lawyer until the dispute is resolved,” the order held.

Small ordered Howard to transfer any attorney fees received in the cases listed in the motion to a trust account at a Miami firm.

“In the future, any attorneys' fees originating from these matters and paid to Howard and/or Howard & Associates shall be transferred to the separate trust account of Levine Kellogg within five business days of receipt and held in that same trust account until further order of the court,” Small wrote. “No monies are to be disbursed from that trust account without further order of this court.”

Bennardini told the Daily Business Review BWCI  filed suit against Howard in April 2018 for purportedly failing to pay back an equity investment of $640,000 and a $1 million bonus that had been agreed upon in January 2018.

Read the order:

“Howard, through some of his entities, was going to buy a half-completed Jacksonville condominium and hotel project,” Bennardini said. The building, located in downtown Jacksonville along Bay Street, required $26 million to purchase. Although Howard was able to obtain a loan to take ownership of the property, he needed a $640,000 insurance policy to secure the loan outright.

The parties worked out an agreement for Howard to deliver $1.64 million to BWCI on Jan. 19. When he failed to do so, the plaintiff entered a complaint against the attorney for breach of equity and guaranty agreements.

Bennardini said as long as Howard owes his clients money, they have a vested interested in any attorney fees he might earn.

“Those fees have to be paid in a separate trust account until the court resolves that dispute,” he said, noting the cases listed in their motion are ones “in which Howard has an expectation to receive attorney's fees.” Bennardini added the defendant “put up his interest” in the fees.

A motion filed on Howard's behalf by Levine Kellogg Lehman Schneider & Grossman attorney Stephanie Traband argued the plaintiff's request ought to be rejected, as they “continue to have the adequate remedy sought by its complaint, namely a money judgment against various parties.”

Traband did not respond to requests for comment by press time. Her co-counsel, Tampa-McElroy, Deutsch, Mulvaney & Carpenter attorney James Myers, referred the Daily Business Review to his colleague John Leonard for inquiries regarding the case. Leonard did not respond to email and phone inquiries by deadline, and neither did Howard.

Bennardini said Small did the right thing through her order, citing the investigation Howard is currently facing from the Florida Bar for purportedly misappropriating trust account funds.

“The court required that these monies be placed in the trust account at Levine Kellogg and not at Howard & Associates after I mentioned to the court about the present bar complaint [against Howard],” he said. “I wanted to make sure the court knew that before she left a fox guarding the hen house.”

The defendant is also locked in litigation with Miami attorney J.B. Harris over Howard's purported failure to finance tobacco cases the pair had intended to litigate together.

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