Crowder bumps up Godfrey attorney's take in class action fee fight

Steve Korris Sep. 27, 2007, 8:00am

Judge Crowder

Madison County Circuit Judge Barbara Crowder granted a big victory in a fee fight from a class action the Lakin Law Firm of Wood River filed with Freed and Weiss of Chicago, but she didn't grant it to either firm.

She ordered the Lakins, Freed and Weiss and the Chicago firm of Diab and Bock to pay $78,892.79 to attorney Tim Campbell of Godfrey.

She ruled that by paying Campbell 10 percent of a settlement fee when they should have paid 15 percent, the firms overpaid themselves.

The Lakins and Diab and Bock had already agreed to hike Campbell's fee but Freed and Weiss refused, according to a motion Campbell filed.

Freed and Weiss argued that Campbell collected more than his share of a $1.6 million fee that Homecomings Financial Network paid last December.

Freed and Weiss's attorney, Richard Burke of St. Louis, told Crowder that Campbell should have received five percent and not 10 percent.

Burke wanted repayment from Campbell but Crowder shot that down.

She raised Campbell's fee from $157,785.58 to $236,678.37.

She ordered the firms "…to pay to Mr. Campbell their proportionate shares of the overpayment so that he receives the total fee of 15 percent…"

The way things stand between the Lakins and Freed and Weiss, they may sue each other over how to split the cost of Crowder's order.

Campbell has worked on Madison County class actions since the Lakins started filing them with Freed and Weiss eight years ago.

Five years ago Campbell signed up for five percent of all fees in class actions over fees that lenders charged when closing mortgages.

Alton attorney Emert Wyss signed up for 10 percent, to find plaintiffs.

Wyss owned a title company, Centerre Title, next to his law office.

In Centerre Title files he found fees that borrowers might challenge.

He called borrowers to his office and about 25 of them retained him, Campbell, the Lakins and Freed and Weiss.

Campbell sent Brad Lakin and Paul Weiss a letter to confirm that he would get five percent and Wyss would get 10, but Lakin and Weiss simplified it.

They wrote back that, "As we agreed upon, your firms will receive a total of 15 percent of the net attorneys' fees…"

That freed Wyss and Campbell to split their share on their own terms.

As it turns out, Campbell collects 15 percent because Wyss gets zero.

Wyss renounced all fees in the mortgage suits after a defendant pleaded that if anything went wrong at a loan closing Wyss should have caught it.

Circuit Judge Philip Kardis sealed Wyss's letter of renunciation.

By then Diab and Bock had signed on as class counsel in the mortgage suits, though court records do not lay out their fee.

In the Homecomings suit, Centerre Title client Angela Knight claimed she paid an improper $25 expedited statement fee.

Circuit Judge Andy Matoesian ordered mediation.

Last year retired judge Thomas Rakowski of Chicago guided the parties to an agreement calling for $16 refunds.

Homecomings would send 650,000 claim forms to borrowers and post the settlement twice in USA Today.

Borrowers who returned forms would receive refunds.

Homecomings would set aside more than $10 million, in case every borrower submitted a claim.

Homecomings would pay $1.6 million in legal fees.

Richard Burke of the Lakin firm presented the settlement to Matoesian at a Dec. 22 hearing.

Burke said attorneys cut the refund from $25 to $16 to account for $5 in actual cost and $4 in litigation risk.

Burke never appeared for the Lakins again. He started his own practice in St. Louis, teamed with Freed and Weiss, and sued the Lakins.

In April, Campbell moved to enforce the Homecomings fee agreement against Lakin Law Firm, Diab and Bock, and Freed and Weiss.

He wrote, "LLF and DB agree to pay over to CM their proportionate shares of the overpayment but FW refuses to pay its share."

On May 4 Burke filed a cross motion against Campbell.

Burke quoted the letter from Campbell to Brad Lakin and Paul Weiss, putting him in line for five percent and Wyss for 10 percent.

By Burke's reckoning, everyone but Campbell would have divided the 10 percent that Wyss renounced.

That day, Matoesian recused himself.

The decision fell to Crowder, who held in August that the letter from Lakin and Weiss to Campbell's rejected his letter to them.

She wrote that Campbell accepted the letter from Lakin and Weiss, making it the contract she must enforce.

"Since Mr. Wyss has forfeited any interest in the 15 percent, the plain language of the letter awards 15 percent of the net attorneys' fees (fees less expenses) to Mr. Campbell," Crowder wrote.

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