Nearly $2M in fees flow from family dispute

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As three brothers feud in the Nassau County courts over control of their lucrative family business, court records show there’s a separate battle playing out over nearly $2 million in fees claimed by attorneys the judge in the case picked to be temporary stewards of the company.

The fee dispute started after Justice Timothy S. Driscoll in January 2013 appointed a receiver to oversee Laffey Fine Homes, a Long Island firm that specializes in selling luxury houses.

From a pool of more than 500 candidates approved to work as receivers in Nassau County, Driscoll selected attorney James Leonard to handle the business’ affairs while the brothers fight over the company.

According to state court records, it was the first such appointment for Leonard, who works for two organizations tied to Steven Schlesinger, the counsel for the Nassau County Democratic Party: Garden City law firm Jaspan Schlesinger and Shelter Rock Strategies, a lobbying firm. Court records show Leonard is seeking a total of nearly $1.5 million in fees for himself and other Jaspan Schlesinger attorneys, including $43,400 in fees to Schlesinger for nearly 70 hours of work.

Schlesinger himself was not available for a court appointment on the Laffey case because judges had awarded him more than $75,000 from appointments in 2012. If an individual’s awards exceed the $75,000 mark in a calendar year, state court rules bar them from appointments the next year.

Driscoll also appointed one of Schlesinger’s allies, Ronald Rosenberg, to serve as Leonard’s counsel on the Laffey case. Rosenberg, who is the personal attorney of Oheka Castle owner Gary Melius, has worked with Schlesinger on numerous cases. As Newsday reported in October, Melius, Rosenberg and Schlesinger were part of a network of receivers and property managers that had collected unreported fees from two Suffolk County justices.

Fees questioned

The bulk of Driscoll’s awards to Leonard and Rosenberg, Newsday found, had also not been reported. Driscoll made one award totaling $400,000 orally from the bench, leaving no record of the payments in the court file.

Following questions from Newsday, Driscoll, who assumed his judgeship in 2008 after being elected with Democratic Party backing, ordered a transcript of the hearing and this month began the process to comply with state court rules and properly report the fee awards.

The plaintiffs’ attorney, William Garry, has questioned whether a receiver is needed in the case, let alone an additional attorney.

“Most of the legal work performed by the receiver was duplicative of the work performed by his counsel, or vice versa,” Garry wrote in a court filing.

Gary Lewi, a spokesman for Rosenberg, said his client has earned his fees and, in response to Newsday’s questions, had filed a report with the court documenting his work on Leonard’s behalf. Rosenberg is seeking a total of $471,000 in fees in the case.

According to the plaintiffs’ side in the case, which includes two of the three brothers, the fees Leonard and Rosenberg have claimed are unjustified.

Since the money paid to receivers comes from income generated by the business, Garry has tried to get Leonard removed. A court filing shows Garry complained to Driscoll that Leonard was charging $615 an hour, saying it was a lot for an attorney admitted to practice only in 2009.

Awards called ‘a waste’

The plaintiffs also retained Tom Suozzi, an attorney and the former Nassau County executive, to assess the impact of Driscoll’s awards to Leonard and Rosenberg. In an affidavit, Suozzi described the nearly $600,000 in awards so far as “a waste of corporate assets.”

David Mejias, a former Nassau legislator representing the brother who is the defendant, disputed Suozzi’s assessment of the fees.

“If not for the receiver, the plaintiffs would have destroyed the business,” Mejias said.

Though he has no formal role in the case, Schlesinger has appeared multiple times in Driscoll’s courtroom when awards were discussed, including at a September hearing where the judge decided whether to keep Leonard on as receiver.

Driscoll ruled that Leonard had performed with “diligence, care and grace” and that he would remain as receiver until the end of the year. Driscoll has yet to decide the amount of additional fee awards.