ESE Electronics v. Kaplan CA2/8
This attorney/client dispute began when the client, E.S.E. Electronics (ESE), suffered a loss due to employee theft. Specifically, one of ESE’s agents redirected a shipment of goods away from ESE for the agent’s own benefit. ESE then found itself embroiled in two disputes: (1) a lawsuit brought by the supplier, who sought payment for the goods it had sent to ESE; and (2) ESE’s action against its insurer, who refused to pay on ESE’s theft claim. ESE retained defendant Kaplan, Kenegos and Kadin (the Firm) to defend the first action and prosecute the second. The terms of the retainer were subject to dispute at trial. Both matters settled. As to the supplier’s suit, ESE agreed to pay the supplier a certain sum, including the first $80,000 that ESE might recover from the insurer. Eventually, the insurer agreed to pay ESE $135,000. Deducting the $80,000 owed the supplier left $55,000, almost all of which the Firm claimed as its fees and costs.
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