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Beit Midrash Series P'ninat Mishpat

Chapter 371

Lawyer’s Rights to Full Fees from Reluctant Client – part IV

The plaintiff (=pl) is a lawyer (/owner of a law firm) who represented the defendant (=def), a wealthy businessman (/businesses he owned) in many matters, including several multimillion-shekel (attempted) purchases. Def paid pl more than 1.6 million shekels over 4 years, but pl claims that he is still owed more than 2 million shekels. Issue #5: During the first year of the relationship, pl oversaw a very large and successful court victory (case #2), and there is a major dispute as to how much money he was due (the payment made was in installments). A few months later there was an undisputed obligation (case #4). Major payments were made over a period of time that could have related to either obligation. Pl claims that all of it related to case #2, and there is still a balance for case #4 (as the first payment relating to #4 was in 5/2007). Def suggests that some of the money given during that time was for case #4 (which fits with his claim that pl’s demand for case #2 is exaggerated).
Various RabbisSivan 28 5776
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(ruling 72060 of the Eretz Hemdah-Gazit Rabbinical Courts)
P'ninat Mishpat (576)
Various Rabbis
370 - The Lawyer’s Rights to Full Fees from Reluctant Client – part II
371 - Lawyer’s Rights to Full Fees from Reluctant Client – part IV
372 - Lawyer’s Rights to Full Fees from Reluctant Client – part V
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Case: The plaintiff (=pl) is a lawyer (/owner of a law firm) who represented the defendant (=def), a wealthy businessman (/businesses he owned) in many matters, including several multimillion-shekel (attempted) purchases. Def paid pl more than 1.6 million shekels over 4 years, but pl claims that he is still owed more than 2 million shekels.
Issue #5: During the first year of the relationship, pl oversaw a very large and successful court victory (case #2), and there is a major dispute as to how much money he was due (the payment made was in installments). A few months later there was an undisputed obligation (case #4). Major payments were made over a period of time that could have related to either obligation. Pl claims that all of it related to case #2, and there is still a balance for case #4 (as the first payment relating to #4 was in 5/2007). Def suggests that some of the money given during that time was for case #4 (which fits with his claim that pl’s demand for case #2 is exaggerated).

Ruling: Issue #5: If def would admit the total amount owed for #2 as well as #4, then pl would be entitled to determine to which obligation to relate each payment, based on the following. The Shulchan Aruch (Choshen Mishpat 83:2) says that if there are two obligations of Reuven to Shimon and payment made does not cover both, the creditor gets to decide to which debt to relate the payment whether the payment was unspecified or the two sides disagreed as to how to relate it. (The difference to the sides can be, for example, if there is a co-signer for one of the debts and not the other.) However, when there is only one known debt and the creditor says he accepted the money for another debt for which he has no proof, the debtor is believed as long as he has witnesses that he made the payment (Shulchan Aruch, CM 58:1-2).
How does our case compare? When payments are made by bank transfer (as was done between pl and def), it is considered like witnesses, because the payment cannot be effectively denied. Def can then argue that some of the payments are like cases where we do not know if there was a second obligation, since obligation #2 may have been finished by the time some of the payments were made. However, since at one time there was an obligation, the creditor is sure he is still owed, and the debtor effectively is unsure whether he paid, we assume that debtor is still obligated (see Shulchan Aruch, CM 75:9).
In the final analysis, beit din relates all payments until Jan. 2007 to case #2. This conclusion is strengthened by the following point. Pl claims that the payment promised for case #2 was $250,000 plus $100,000 if he won the case. The claim presented by def’s attorney is 35,000 shekel, which is not logical for a case of the magnitude involved. In his interrogation, def admitted to have owed $150,000 for it, and this is supported by a key testimony (albeit of a biased witness). While there is insufficient evidence for beit din to obligate $350,000 for case #2, we conclude that at least unspecified payments at that period of time should all be related to that case.




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