LOS ANGELES - A Knight Law Group (KLG) contingency fee agreement in litigation against Chrysler reveals highly favorable terms for the firm, with three ways for it to tap into a client's settlement.
The Feb. 11, 2017 contract with an unknown client came to light as an exhibit in an on-going fee dispute among former legal partners - KLG and Hackler Daghighian Martino & Novak (and others) - who had pursued lemon law litigation together against major auto manufacturers.
In addition to a 25 percent actual damages fee, the contract with a client whose name is blacked out also provides KLG with a 45 percent cut of "additional" damages such as statutory civil penalties or punitive damages. And, it directs all manufacturer fees and costs to the firm.
"If there is a settlement or judgment in your favor following the filing of an action, the Law Firm will negotiate the amount of the Manufacturer-Paid Fees with opposing counsel, and if necessary, bring a motion for a court order determining the amount of attorney's fees and costs due," the contract states.
It also states the firm will receive all manufacturer fees, at rates as high as $1,100 per hour, with none going to the client.
KLG, one of the most prolific filers of lemon lawsuits against auto makers in California, countersued its former partner last October in a dispute involving more than $2 million in attorney fees.
The complaint against Hackler Daghighian Martino & Novak (HDMN), formerly known as the Law Offices of Michael H. Rosenstein, and others, alleges misappropriation of trade secrets, conspiracy, fraud, intentional interference with contractual relations, prospective economic advantage and breach of contract.
Filed in Los Angeles Superior Court, it further claims the defendants stole clients, cases and employees to form a new venture, to the detriment of KLG. The counterclaim was in response to a suit filed by Rosenstein against KLG arguing that payments it was entitled to had stopped despite an oral contract that required a division of fees.
Knight Law Group, owned by attorney Steve Mikhov, has filed more than 4,000 lemon lawsuits under the Song Beverly Warranty Act against automakers in California.
Many of its cases target Ford Motor Co. over allegedly defective transmissions in Fiesta and Focus vehicles and Volkswagen involving clean diesel emissions violations.
The cross-defendants in KLG's suit claim they are owed in excess of $2 million, plus some $125,000 for non-associated cases and $48,000 in unreimbursed costs.
KLG argues it was induced into sharing trade secrets, clients, and valuable cases all while the cross-defendant surreptitiously siphoned off its most valuable contacts in an effort to launch their own separate and competing lemon law firm.
According to the complaint, KLG noticed that Sepehr Dayan Daghighian’s relative, Kevin Yaghoubzadeh – who changed his last name in 2018 to Jacobson and who worked as a lawyer for HDMN in KLG's offices – would linger around the lobby and other areas of the office and try to talk with clients and prospective clients of KLG.
Additionally, KLG claims that Rosenstein’s Law Office intentionally avoided taking KLG's cases to trial in order to avoid referral fees and instead put effort and energy into the cases and leads which were funneled away from KLG.
Judge Maureen Duffy-Lewis presides.