Firm demands $4.3M in dispute with Wisconsin client

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By Pat Murphy, BridgeTower Media Newswires

BOSTON — Why did a BigLaw firm in Boston wait nearly five years before suing a client over millions of dollars in unpaid legal bills that piled up in a patent infringement case that settled in April 2019?

That’s just one of the questions surrounding the breach-of-contract complaint filed by Mintz, Levin, Cohn, Ferris, Glovsky & Popeo against CivicSmart in U.S. District Court in Boston on April 16.

“Defendants have failed and refused to pay the amounts it owes Mintz for the legal services, equaling $2,608,232.69 plus interest in the amount of $1,654,835.20 as of April 15, 2024, for a total amount of $4,263,067.89 due as of April 15, 2024,” the complaint states.
Attorneys from Mintz’s Boston office had defended CivicSmart in a patent infringement suit filed by IPS Group in March 2017 in U.S. District Court for the Southern District of California.

According to Mintz’s complaint, CivicSmart is a Wisconsin-based engineering company that develops “Smart Parking” technologies for municipalities. It’s also the parent company of Duncan Parking Technologies. Named as a co-defendant in both the Mintz and IPS Group cases, Wisconsin-based Duncan Parking makes parking meter equipment and technology.

Filed on March 29, 2017, IPS Group v. CivicSmart alleged that the meter sold by Duncan Parking infringed on several patents held by IPS for its “revolutionary” single-space electronic parking meter products that permit payment by cash or credit card while also being wireless and solar-powered.

According to Mintz’s complaint, CivicSmart engaged the firm to represent the company and its subsidiary Duncan Parking in IPS on April 5, 2017.
On April 18, 2019, IPS and CivicSmart with its subsidiary filed a joint stipulation reporting to the court that the parties had reached a settlement resolving all claims and counterclaims in the case. The terms of the settlement were not disclosed.
Meanwhile, between July 2017 and March 2020, Mintz submitted 24 invoices to CivicSmart seeking payment for its work and expenses in the IPS case.

According to Mintz’s complaint, the total amount billed by the firm consists of $3,664,495.43 in legal services and $427,953.82 in “disbursements and expenses.” From those amounts, defendants CivicSmart and Duncan Parking allegedly paid $1,484,216.56, leaving an unpaid principal balance of $2,608,232.69.

“Despite their obligation and agreement to pay the invoices rendered by Mintz, and despite repeated demands to meet its payment obligations — including several written demands — Defendants have failed and/or refused to pay the current principal balance due on the owed invoices,” the complaint states.

In arriving at its $4.3 million demand, the firm tacked on interest that had accrued pursuant to the 1 percent per-month charge on delinquent payments as per the terms of its retainer agreement and prejudgment interest allowed under state law. In addition to the $4.3 million, Mintz is seeking attorneys’ fees.

Boston legal malpractice attorney Charles P. Kazarian says Mintz’s complaint leaves several important questions unanswered, such as why the firm waited so long after settlement of the underlying matter in April 2019 before filing its collection action. Kazarian also wonders whether the client stated any reasons for its refusal to pay the fees and what the terms of the settlement were that was reached on behalf of the client.

“If the firm is charging several million dollars, and if the terms of the settlement aren’t commensurate with that amount of billing, you have to wonder what’s going on [as a client],” Kazarian says.

Another common bone of contention between law firm and client is the concern that billings may be inflated by overstaffing of the legal team, he says.

Kazarian is puzzled by why Mintz allowed CivicSmart to get so far behind in its payments.

“How do you wind up being $2.6 million into a client? How does that happen?” Kazarian asks. “A firm like Mintz doesn’t tell a client, ‘Sure, you can be behind $2.6 million.’

Another number that jumps out at Kazarian is the $428,000 that Mintz billed for expenses.

“Something is strange here,” he says.

Kazarian goes on to wonder if the apparent delay in bringing suit may hurt Mintz’s claim for interest.

“With Mintz waiting four years to seek recovery, have they harmed their right to collect interest?” he asks. “What’s a federal judge going to say about that delay?”

Alan E. Brown, a professional liability attorney at Morrison Mahoney in Boston, questions if the timing of Mintz’s lawsuit has something to do with the three-year statute of limitations for a client to bring a legal malpractice claim and the four-year statute of limitations for bringing unfair trade practices claims under Chapter 93A.

“Any lawyer considering suing a client should be rightfully cautious and before doing so [should] consider what happened during the course of the representation, what results were obtained, and whether or not the client was satisfied or dissatisfied, because there’s always some risk the client is going to be prompted to file a malpractice action if you file suit to collect a fee,” Brown says.

By filing after the running of the statutes of limitations, the client’s recovery would be limited to an offset of the fees claimed by the lawyer, he says.
According to Kazarian, too many lawyers in Massachusetts operate under the false impression that filing a fee claim after the running of the legal malpractice statute of limitations completely insulates them from liability.

“The ‘mythology’ in the bar is that if you want to sue a client, it’s best to wait three years on the mistaken idea that the client has no malpractice case,” Kazarian says.

Mintz is represented in its collection efforts by Brendan J. Lowd, a member at the firm. Lowd did not respond to a request for comment. Nor did defendant CivicSmart.