A pro se plaintiff's claim for excessive legal fees against three lawyers at a Manhattan law firm who allegedly charged the woman $25,000 to produce a draft complaint, to offset debts owed by other clients, will go forward, a state appeals court has ruled.

In a lawsuit that alleges fee churning, redundant charges and a failure to provide requested billing statements against the three lawyers making up the firm Joshua L. Dratel, P.C., an Appellate Division, First Department panel ruled on Thursday that plaintiff Debra Cascardo's fees claim was “correctly sustained,” meaning not dismissed, by the lower court.

The panel further wrote that Cascardo's legal fees claim “is not duplicative of [her] legal malpractice claim,” which has been dismissed from the suit by Manhattan Supreme Court Justice Eileen Rakower, because Cascardo's “complaints regarding the overbilling were not a direct challenge to the quality of the work but instead a claim that the fee paid bore no rational relationship to the work performed.”

The unanimous panel, in a terse opinion, also noted that Cascardo had “detailed [in allegations] that, in exchange for the $25,000 fee, defendants produced only a draft complaint that was essentially identical to the one that she had presented to them,” citing Johnson v. Proskauer Rose.

On Friday, the lawyer representing the Dratel law firm attorneys, Megan Lawless, said that she and her clients “disagree with the First Department's decision.”

Lawless, a partner at Vigorito, Barker, Patterson, Nichols & Porter on Long Island, also said that she and her clients are in the process of considering litigation options going forward. Otherwise, she declined to comment.

Cascardo's legal action against the three attorneys who appear to make up the general-service firm Joshua L. Dratel, P.C.—Joshua Dratel and associates Lindsay Lewis and Whitney Schlimbach—springs from her retention of the firm in an ERISA suit she'd lodged against a different defendant or defendants, according to Rakower's 2018 decision addressing Cascardo's claims against the Dratel attorneys.

According to Rakower's decision, Cascardo brought numerous claims against the Dratel lawyers after that lawyer-client relationship fell apart, including for malpractice, breach of contract, fraud, excessive legal fees, punitive damages and breach of fiduciary duty.

Rakower's 2018 opinion explains that as part of her malpractice cause of action, Cascardo had alleged that the Dratel lawyers both “lacked the expertise to litigate her ERISA claim” and failed to file her complaint within the statute of limitations, causing her $500,000 in damages, which Rakower indicated was the ERISA claim's value.

Moreover, while alleging legal malpractice, Cascardo had contended that the Dratel attorneys falsified time records; charged her excessive legal fees; refused to provide an itemized bill of costs; failed to return her phone calls; refused to give her information about the case; and violated the retainer agreement by requesting an additional fee amount of $10,000, according to Rakower.

And as part of her legal fees claim, Rakower explained, Cascardo had alleged that once Joshua Dratel received an additional $10,000 payment from her, he dropped her as a client and didn't file the ERISA complaint.

Rakower dismissed or found as moot and duplicative several of Cascardo's claims against the Dratel lawyers, including for malpractice, breach of contract and punitive damages.

But the justice let stand claims that included excessive legal fees, fraud and breach of fiduciary duty.

The First Department panel on Thursday, in addressing an appeal by the Dratel defendants, affirmed Rakower's refusal to dismiss the excessive legal fees claim but reversed her ruling, in certain respects, by dismissing the fraud claim and part or all of the breach of fiduciary duty claim.

Specifically, the panel of Justices Rosalyn Richter, Sallie Manzanet-Daniels, Marcy Kahn, Ellen Gesmer and Jeffrey Oing wrote that Rakower should have dismissed the fraud claim “because [Cascardo's] complaint [against the Dratel lawyers] did not sufficiently plead justifiable reliance upon [Dratel's] claim that it needed an additional $10,000 to continue its work on her lawsuit.”

“In fact, the complaint specifically asserts that [Cascardo] knew the additional $10,000 legal fee demanded by defendant would not be used for her benefit, but he required it because other clients had not paid him,” the justices continued.

“This admission,” they said, “negates an element of the fraud claim, that [Cascardo] justifiably relied on the defendant's alleged misrepresentation that '[defendants] needed $10,000 to continue their work [on her case].'”

In addressing excessive fees claim, the justices wrote in part that Cascardo had alleged that “[her] fee bore no rational relationship to the product delivered,” and that the Dratel lawyers “produced only a draft complaint that was essentially identical to the one that she had presented to them.”

“To the extent that the [Rakower] court read the pro se complaint as alleging a separate cause of action for breach of fiduciary duty, these allegations are subsumed in the cause of action for excessive attorney fees,” the justices also found.

Paul Golden, a partner at Hagan, Coury & Associates, represented Cascardo in the appeal, according to the First Department's decision. He could not be reached on Friday for comment.

When reached Friday by the Law Journal about the lawsuit, Dratel referred all questions to his attorney, Megan Lawless.