Personal Injury Client Wins Malpractice Award Against Holocaust Victims' Lawyer
A lawyer well known for his role in Holocaust recovery cases is facing a $3.2 million legal malpractice judgment for suing the wrong party in a personal injury case and failing to oppose its dismissal.
Attorney Edward D. Fagan rose to fame as one of the attorneys suing Swiss banks and German corporations for profiting from Holocaust victims' assets and forced labor. The banks and corporations settled the suits for more than $6 billion.
But a former client, Allen C. Tavel, claimed in a 2001 suit that Fagan's involvement in the Holocaust cases led him to neglect a case against Honda Motor Corp. and the manufacturer of a seat belt that allegedly failed.
He hired Fagan to represent him after a 1994 car accident.
At the time, Tavel earned a living primarily as a musician. He was driving his Honda Civic in upstate New York when he collided with another car head-on. He suffered multiple fractures and damage to major organs. He has since undergone numerous reconstructive surgeries and is unable to work or care for himself, according to a referee's report.
Honda recalled the seat belts the year after the accident, he said.
Fagan did not contest Tavel's malpractice suit, which resulted in a default judgment. In May, Justice Shirley Kornreich of Manhattan Supreme Court awarded Tavel $1.2 million for his economic losses and $2 million for pain and suffering.
Tavel's lawyer, Mark Schwartz of Siller Wilk, said he is moving to enforce the judgment. Fagan received about $5 million for his work in the Holocaust cases. Schwartz said he is worried about collecting.
"He's a sophisticated international attorney," Schwartz said of Fagan, "and I'm concerned about our ability to enforce the judgment and his ability to place his assets beyond the reach of the New York courts."
Following the Holocaust cases, Fagan has gone on to sue corporations that he alleges profited from apartheid in South Africa and slavery in pre-Civil War America. In June, he announced he was filing a suit asking for $18 billion from the German government over artwork stolen from Holocaust victims.
Tavel hired Fagan in 1995, a year before Fagan sued the Swiss banks. Over the next four years, Tavel claims, he assisted Fagan in the Holocaust recovery case by filing papers and serving summonses.
Fagan initially sued the wrong seat belt manufacturer, which moved for summary judgment, according to Tavel. He then failed to contest Honda's motion for summary judgment on the ground that Fagan had not complied with discovery orders.
The case was dismissed in September 1998. Tavel claimed in his malpractice suit that Fagan continued to assure him the case was progressing and would go to trial in 2000. It was not until December 1999 that Tavel went to the courthouse and found out his case was dismissed, he said.
Although Fagan did not respond to Tavel's suit, resulting in the default judgment, he tried last year to have it removed on the ground that he was not properly served. But Kornreich denied his motion and assigned the case to a referee to determine damages.
In opposing the default, Fagan was represented by Hal Lieberman of Hinshaw & Culbertson. Lieberman said Tuesday he no longer represented Fagan.
Fagan, who formerly maintained offices in Manhattan but now works primarily out of his office in Livingston, N.J., did not return a call seeking comment.
Fagan's neglect of his personal injury clients following the start of the Holocaust litigation was the subject of a joint investigation in 2000 by the New York Times and the "20/20" television news program. In an interview with the Times, Fagan acknowledged he had not withdrawn from suits that he did not pursue.
"I was in over my head a lot of the time," he told the newspaper.
At the time, another client had won a $167,000 default judgment against Fagan. Other suits by former clients are pending.
Fagan's role in the Holocaust recovery cases have also generated controversy. Other lawyers in the cases have criticized the large fees awarded him, claiming he acted mostly as a publicist rather than an attorney.