3/1/12 Miami The Greenberg Traurig sign at Miami office.
In a 10-year long case, a Manhattan judge has gutted the potential damages that can be claimed by a former hedge fund manager who is suing Greenberg Traurig and former partner Leslie Corwin for attorney deceit.
James Melcher was seeking about $16.5 million in damages from a Section 487 attorney deceit claim against Greenberg and Corwin. As a result of the ruling by Manhattan Supreme Court Justice O. Peter Sherwood, the total amount of claimed damages, although unclear, would be a fraction of the initial proposed damages.
Melcher's lawyer, Jeffrey Jannuzzo, is now asking to stay the trial, which was scheduled to begin Nov. 27, pending an appeal to the Appellate Division on the issue of damages or a motion for reargument.
That would be at least the third time the Appellate Division, First Department, has seen the case. Greenberg Traurig appealed twice before to the First Department.
In the underlying case, Melcher claimed that as a former member of the Apollo Medical Fund Management hedge fund, he was entitled to profits that were withheld from him. He sued Apollo and its principal, Brandon Fradd, in 2003 seeking those profits.
In January 2004, Melcher said Corwin, who represented Apollo and Fradd, informed him of the 1998 agreement he claimed limited profits Melcher could realize from the hedge fund.
Melcher asked to see the document, and said he was prepared to use forensic testing to verify if it did, in fact, date to 1998.
But he said Corwin told him that Fradd burned the two-page document while making tea.
In 2007, Melcher sued Greenberg Traurig and Corwin alleging attorney deceit under Section 487, contending they tried to help Fradd deceive the court about the document's authenticity and the circumstances of its damage.
In seeking damages against Greenberg, Melcher sought to offer what he might have been able to collect in the Apollo action had he been able to obtain a judgment during the time that Apollo Medical Fund was in better financial health versus the approximately $5 million he obtained in settlement years later, according to court documents.
But Sherwood, in a decision issued last week, said that is entirely speculative.
The Apollo action[,] which was commenced in 2003, involved issues other than those involving the alleged deceits, as the tortured history of that case shows, Sherwood said. After the jury rendered its verdict in the Apollo action in May 2009, the case dragged on for many more years while issues separate and apart from the alleged deceits were litigated, the judge added.