LOS ANGELES – Two law firms that specialize in filing lemon lawsuits against auto manufacturers are sparring over an alleged breach of contract involving $2 million in attorneys' fees.
The Knight Law Group LLP, which in the last five years has filed more than 4,000 lemon lawsuits (under the Song Beverly Warranty Act) against auto makers in California, filed notice of demurrer last week in response to Law Offices of Michael H. Rosenstein's July 24 lawsuit.
Knight Law is owned by attorney Steve Mikhov, who used to operate O’Connor & Mikhov. Knight's attorney argues in the demurrer - which is a pleading that does not dispute the facts of the case but argues there is no legal claim even if the facts presented by the plaintiff are true - that an alleged oral contract between the parties over the division of fees is not legally enforceable because written disclosure of a fee agreement was not disclosed to their "alleged" clients as required by law.
"A contract that fails to comply with these rules is illegal and unenforceable as a matter of law," Knight's attorney argues. "Because no amendment can cure the deficiency created by LOMR's (Law Office of Michael Rosenstein) admissions, Knight asks the Court to sustain this Demurrer without leave to amend."
Rosenstein’s complaint states that in 2012, the firm “entered into an oral agreement” with Knight's predecessor O'Connor & Mikhov and “continued to work with Knight under the same essential terms that Rosenstein had worked with Knight’s predecessor firm.”
Over approximately six years, Rosenstein claims he associated into more than 200 cases referred by Knight and its predecessor, and provided legal services as counsel on more than 150 non-associated cases.
Rosenstein was compensated according to the following arrangement, as stated in the complaint: “The attorney’s fees and civil penalties generated from the successful prosecution of the cases would be apportioned and paid to Rosenstein promptly after such fees were collected from the defendants in those cases.”
Rosenstein alleges that Knight stopped paying pursuant to the oral contract to divide fees sometime in January and his firm gave Knight notice of its intent to stop handling Knight’s cases in February.
His firm claims it is owed in excess of $2 million, plus approximately $125,000 in connection with non-associated cases as well as approximately $48,000 in unreimbursed costs.
The Knight Law Group has filed at least 4,089 lemon law complaints since 2015, the most out of any other attorney group or law firm in the state of California.
A demurrer is either sustained or overruled by a judge, not jury. Los Angeles Superior Court Judge Maureen Duffy-Lewis presides and will hear the matter Jan. 15, 2020.