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REVSON v. CINQUE & CINQUE

November 22, 1999

ROMMY REVSON, PLAINTIFF,
v.
CINQUE & CINQUE, P.C., DEFENDANT.



The opinion of the court was delivered by: Chin, District Judge.

OPINION

This case presents the question of when a lawyer crosses the line from zealously representing a client to abusing the legal process. The Second Circuit recently observed that "determining whether a case or conduct falls beyond the pale is perhaps one of the most difficult and unenviable tasks for a court." Schlaifer Nance & Co. v. Estate of Warhol, 194 F.3d 323, 340 (2d Cir. 1999). Here, the conduct of Judd Burstein, Esq., counsel for plaintiff Rommy Revson, was clearly and unmistakably "beyond the pale." Burstein engaged in a pattern of offensive and overly aggressive conduct that multiplied these proceedings and caused significant harm to Robert W. Cinque, Esq., and his law firm, defendant Cinque & Cinque, P.C. (the "Firm").

Those tactics included the following:

  • writing a letter to Cinque threatening to "tarnish"
    his reputation and subject him to the "legal
    equivalent of a proctology exam";
  • making a sham offer to settle by setting an
    unreasonable deadline for Cinque to respond and
    then immediately filing suit even though Cinque met
    that deadline by indicating a desire to discuss
    settlement;
  • publicly accusing Cinque of fraud without any
    concrete evidence to support the claim;
  • threatening to interfere with the Firm's other
    clients, including (i) conducting an investigation
    to identify those clients, (ii) contacting one or
    more of the Firm's former clients, and (iii)
    seeking permission to send a letter to all the
    Firm's clients to inquire as to "experiences, good
    or bad," with the Firm's billing practices;
  • serving overly broad subpoenas, including a
    subpoena for all the Firm's banking records and
    even a subpoena seeking records from the golf
    course where Cinque played golf;

• threatening to add a RICO claim;

  • threatening to sue Cinque individually and to seek
    discovery of Cinque's personal finances;
  • threatening to send a letter to the Court accusing
    Cinque of criminal conduct if he did not capitulate
    to Revson's demands;
  • making good on his threat to "tarnish" Cinque's
    reputation by contacting a reporter some weeks
    before trial, explaining that Revson had sued
    Cinque for fraudulent billing, and giving the
    reporter documents as well as names of former
    clients;
  • engaging in unfair tactics at trial, including
    cross-examining Cinque in an unfair manner; and
  • repeatedly attacking Cinque in an offensive and
    demeaning fashion, including calling Cinque "a
    lawyer who . . . has acted in a manner that shames
    all of us in the profession," "a disgrace to the
    legal profession," and an example of "why lawyers
    are sometimes referred to as snakes," and accusing
    Cinque of "engag[ing] in the type of mail fraud
    that has led to the criminal conviction of other
    attorneys," being so "desperate for money he
    resorted to . . . extortion," and being "slimy."

Burstein's tactics turned what should have been a simple dispute between a client and her attorney over the amount of a fee into a difficult, unseemly litigation that was intended from the outset to damage Cinque's reputation.

Burstein defends his actions by arguing that he was only doing his duty, that he was only doing his best to represent Revson zealously and aggressively, and that he always acted in good faith and in an objectively reasonable manner.

I am not persuaded. A lawyer's duty to represent his client zealously does not permit him to treat his adversary or parties in an offensive and demeaning manner or to engage in a course of conduct intended to coerce a settlement through improper threats and harassment. Although a lawyer must represent his client zealously, he must do so within the bounds of the law. An attorney is a professional and an officer of the court, not a hired gun or mercenary whose sole motivation is to win or an attack dog whose sole purpose is to destroy.

Burstein did not act within the bounds of the law here. Rather, he acted in bad faith and with reckless and utter disregard for the harm that Cinque and the Firm would suffer as a result of his "Rambo" tactics.

Consequently, sanctions will be imposed against him. For the reasons set forth below, sanctions will not be imposed against Revson, although she will be assessed costs pursuant to 28 U.S.C. § 1920.

The following constitute my findings of fact and conclusions of law.

FINDINGS OF FACT

A. Revson's Relationship with the Firm

Revson is the inventor of the "scunci," sometimes referred to as a "scrunchy," a cloth-covered, elasticized hairband that women typically wear around ponytails. Millions of dollars worth of scuncis are sold every year, and as the patent holder, Revson is often in litigation to enforce patent and licensing rights.

In February or March of 1993, Revson was involved in an arbitration in Philadelphia with L & N Sales & Marketing, Inc. ("L & N"). She was unhappy with her then-attorneys, and replaced them with Cinque and the Firm.

By retainer agreement dated March 24, 1993 and executed by her on March 25, 1993, Revson retained the Firm to represent her as "litigation counsel" in connection with a dispute with L & N and "generally" in connection with her activities as "creative artist, inventor and patent holder." (PX 1).*fn1 The agreement, which was signed by Cinque, advised Revson that Cinque's "customary" hourly billing rate was $325 and that his brother, James Cinque, billed at the rate of $300 per hour. The agreement further provided:

    While we keep daily records of the time we spent
  [sic], in fairness to you in this matter involving
  the many issues which arise from the current dispute
  with L & N our billing will take into account not
  only the amount of time spent, but also the result
  achieved.
    Of necessity, a fair amount of duplication of
  attorney effort and time must take place, and I do
  not believe it appropriate to charge you the full
  rate for this. At the same time, if we are able to
  achieve an outstanding result or substantial benefit
  for you, then our billing would be adjusted
  accordingly following consultation with you.

(PX 1).*fn2

For almost five years, Revson and Cinque enjoyed an excellent relationship. The Firm represented Revson on a number of patent and licensing matters. Revson became perhaps the Firm's most important client and over the course of nearly five years she paid the Firm almost $400,000 in fees. The Firm never raised its hourly rates and often charged Revson less than the amount of the time calculated at the usual rates; the Firm reduced its bills by some $50,000 over the course of 1996 and 1997. (Trial Tr. at 467-68, 667 (Cinque testifying that he told Revson about reductions), 693-700; see, e.g., DX D, PP; but see Trial Tr. at 246-47). On at least one occasion, after Cinque negotiated a $300,000 licensing fee for Revson, he billed her on a percentage basis — five percent of the $300,000 fee. (DX C & Trial Tr. at 463-65).

Throughout the representation, the Firm provided bills and other billing information to Revson. Many if not all of these bills were also sent to Revson's accountants for their review. (See, e.g., PX 2-4, 9-10, 13, 16, 18-19, 21-24; DX I, J; see also Trial Tr. at 516-17, 690). At times, the Firm provided Revson with detailed narrative descriptions and at times it sent her the actual time sheets. (See, e.g., DX F, G, I; PX 2-11, 13, 14, 15, 16-24). In or about May 1997, Revson informed Cinque that it was "not necessary" to send the time sheets; Cinque confirmed this in a letter dated May 8, 1997, and advised Revson that the time sheets would be available for her to review at any time at her request. (DX EE).

The relationship between Revson and Cinque became more than just a business relationship. As Revson described it:

  He [Cinque] was like a brother that I didn't really
  have. He was a friend. He and Jane [referring to Jane
  Klein, Cinque's companion] were both friends. We had
  a lot of fun times together.

(Trial Tr. at 62-63). At one point, Cinque and Klein visited with Revson and her son and his girlfriend for ten days at a house Revson had rented in Sun Valley. (Id. at 184, 465).

In or about February 1997, Cinque and Klein visited Revson at her home in Florida for a working vacation. They were there for several days and Cinque spent some portion of the time working with Revson to prepare for the L & N arbitration. (Id. at 65-66, 516, 518-19). After Cinque and Klein left, Revson wrote Cinque a note, which read as follows:

Dear Bob & Jane,

    Sadness, tears, love, emptiness, and yet,
  happiness, belonging and a strong sense of friendship
  and family fill my heart as your little white car is
  pulling away from my happy little orange cottage
  (that you got me from Riviera).
    Time flies when we are together. My happiest
  moments are probably dinner, cocktails, and morning
  greetings when you both are near. . . .
    In my life, very few people have believed in me and
  supported me and took the time out to understand me,
  Both of you did! For this, I love both of you. .
    One night at dinner, I had mentioned that I would
  give you 10% (ten percent) of whatever you recover
  for me from L & N. I want to unequivocally state
  that is exactly what "the deal" is. You stood by me
  and deserve it!

(DX E) (emphasis in original).

Revson was so pleased with the Firm's services that in early October 1997, she presented Cinque with a Mercedes-Benz, adorned with a red ribbon, as a gift. She did this in recognition of his efforts in representing her, particularly with respect to the licensing matter referred to in Revson's note as "Riviera." After considering the propriety of accepting the car, Cinque decided he had to decline it and he did so. (Trial Tr. at 526-29).

B. The Relationship Ends

In the fall of 1997, Cinque negotiated, on behalf of Revson, what the parties have referred to as the second Riviera agreement. On December 4, 1997, the deal closed and the agreement was executed at the Carlyle Hotel. The agreement provided for Riviera to pay $2.4 million to Revson — $1.5 million was paid to her at the closing and remaining $900,000 was to be paid over three years. At the closing, Revson gave gifts to Cinque and Riviera's attorney, Michael Weiss. (Trial Tr. at 502-03; see also id. at 90-93).

The next morning, Cinque telephoned Revson, in part to discuss whether she would be attending the deposition of a witness for a pending matter involving L & N. During the conversation, he raised the subject of the Firm's fee for its work with respect to the second Riviera agreement. He referred to the ten percent "deal" that Revson had agreed to with respect to L & N and suggested that the Firm deserved a fee of a "little more" than ten percent of the amounts to be paid under the second Riviera agreement. Revson became upset and said she wanted to think about it. (Trial Tr. at 505-07; see also id. at 93-96).

Cinque took the deposition in the L & N matter that day and Revson attended. Cinque did not hear from Revson again until December 10, 1997, when Revson called him together with Chuck Woolston, her accountant. They discussed matters relating to Riviera, but did not discuss the fee issue. (Trial Tr. at 507-08).

The next morning, Cinque saw a fax from Riviera's attorney, Michael Weiss, together with a copy of a modification agreement. The fax was a letter from Weiss to Ronald Witkowski, a different attorney whom Revson apparently consulted about the second Riviera agreement, unbeknownst to Cinque. The fax noted that it and the modification agreement were being sent to Witkowski for his review at Revson's direction; no indication was given that a copy was being sent to Cinque. (DX L).

Although Cinque had negotiated the second Riviera agreement, he was unaware of the proposed modification agreement, and Revson and Woolston had not mentioned it in the telephone conversation the evening before. (Trial Tr. at 508). Cinque was upset by this turn of events, both because he felt the proposed modifications were unfavorable to Revson and because he believed Revson had gone behind his back. (Trial Tr. at 509-10).

Cinque and Revson spoke at approximately 5:45 p.m. on December 11th. Cinque told Revson he believed she was giving away the rights to Canada for "nothing." They also discussed the issue of the Firm's fees for the second Riviera agreement, and the conversation became heated. Revson finally said to Cinque, "that's it, you are fired," and hung up the telephone. (Trial Tr. at 509-10). Within a minute, a fax arrived at Cinque's office; it was a letter from Revson terminating the relationship. The letter stated in part as follows:

    I write to inform you that I have decided to
  discharge you and your firm as my counsel for all
  purposes (including the L & N arbitration), and
  replace you with Judd Burstein and the firm of
  Burstein & Fass LLP. . . .
    Upon presentation of the detailed billing statement
  that I have been requesting for months, I will of
  course promptly pay all time charges and
  disbursements due and owing to your firm.

(DX M) (emphasis added).

C. The Filing of this Action

The termination letter was drafted by Burstein, who had been consulted by Revson a few days earlier. Burstein was on trial at the time in St. Louis, but spoke to Revson by telephone several times. On Friday, December 12, 1997, Cinque spoke briefly with Burstein's colleague, Laurie McPherson. Cinque concluded that he would have to speak with Burstein himself, and McPherson told him that Burstein would communicate with Cinque at his earliest convenience. (Cinque Decl. ¶ 3).*fn3

On Monday morning, December 15, 1997, Cinque arrived at his office and was greeted by a letter from Burstein dated December 14, 1997. (Id. ¶ 4). In the letter, Burstein threatened to "tarnish" Cinque's reputation and to subject him to the "legal equivalent of a proctology exam":

    I am writing to you in one last effort to avoid
  litigation that will inevitably tarnish your
  reputation and, perhaps, reduce the size of your
  wallet. I am therefore enclosing a copy of a
  complaint, still being proofread and finalized, that
  will be filed at Noon on December 15, 1997 unless we
  can reach an agreement with respect to the release of
  Ms. Revson's files and your claims for fees. . . .
    I apologize in advance for the harshness of this
  letter. I have no desire to fan the flames of an
  emotional dispute. Nor do I have the desire to
  conduct the legal equivalent of a proctology exam on
  your finances and billing practices. Yet, I will not
  hesitate to do so unless you begin to act in a
  responsible manner.

(Burstein 7/15/99 Decl., Ex. U). Burstein wrote this letter without ever having spoken to Cinque.

Within hours, Cinque responded, faxing a detailed, four-page letter to Burstein at noon on December 15th, the deadline set by Burstein. (Cinque Decl. ¶ 7). Cinque's letter sought to accomplish several goals. First, it sought to admonish Burstein for the "inflammatory remarks" and "reckless"language he used in his December 14th letter. Second, it sought to persuade Burstein that the proposed complaint contained material misstatements and omissions, in violation of Rule 11, and allegations that lacked merit. Third, the letter sought to convey the message that Cinque still cared for Revson and that he wanted to resolve the dispute without litigation. The letter provided:

    As I told Ms. McPherson when we spoke Friday
  morning . . . I had a completely open mind as to how
  best to resolve this disagreement while at the same
  time avoiding unnecessary burdens and unpleasantness
  for Ms. Revson.
    It is a big mistake for Rommy through you to
  inflame this already sensitive situation especially
  where, as here, you recklessly make misstatements of
  fact which cry out for a public response from me in
  order to preserve my reputation which you threaten to
  tarnish.
    While Rommy might find this difficult to believe at
  this moment, I am still one of her strongest
  supporters and I truly regret that we had this
  breakdown in communication at what should have been
  one of the happiest times of our professional
  relationship. . . .
    In closing, let me say that while I find the
  tactics in which you have engaged as offensive as
  they are precipitous, and while I am prepared to
  litigate these horrendous accusations vigorously, I
  still have enough feeling for Rommy that under
  appropriate circumstances I would be prepared to talk
  with her to try and resolve a disagreement which
  should never have escalated to this point. . . .
    If Rommy wants to put all of this behind her
  quickly and as painlessly as possible, I am prepared
  to work with her so that we can do it. All she has to
  do is call me.
    On the other hand if she and you opt for litigation
  calculated to tarnish my reputation, then you and she
  should carefully consider the nature, basis and
  accuracy of each of the accusations you make against
  me — something that neither of you has done thus far
  as I assure you I shall vigorously defend myself
  against this outrageous conduct.

(Burstein 7/15/99 Decl., Ex. V).

Despite Cinque's expression of a willingness and desire to discuss resolving the dispute with Revson, neither Burstein nor Revson called him. (Cinque Decl. ¶ 9). Instead, the very next day, this action was filed.

D. The Allegations Against Cinque

On December 19, 1997, Revson submitted an affidavit in support of a motion for a preliminary injunction requiring the Firm to turn over her files. (Cinque Decl., Ex. C). The affidavit contained numerous inaccuracies. For example, the affidavit incorrectly alleged that the Firm had refused, despite Revson's requests, to provide time records or an "intelligible breakdown" of bills. (Id., Ex. C, ¶¶ 1, 5). In fact, as the correspondence shows, the Firm had provided Revson with contemporaneous time sheets as well as detailed bills over the years. (See, e.g., DX C, F, G, I; PX 2-11, 13, 14, 16-24). The affidavit incorrectly alleged that the Firm had started representing her in 1994 and that she had "no written retainer agreement," when in fact the Firm had started representing her in February or March of 1993 and she had signed a retainer agreement on March 25, 1993. (Cinque Decl., Ex. C, ¶ 2 & PX 1). The affidavit also suggested that the Firm overbilled her because, as "a two lawyer firm," it could not have billed "almost $400,000 in legal fees" over the prior "three years" or "more than $150,000 in legal fees" over the prior eight months. (Cinque Decl., Ex. C, ¶ 3).*fn4

Burstein did not know that Revson's statements were false when they were submitted to the Court and he was entitled to rely on Revson's statements to him.

On December 22, 1997, the parties appeared before Judge Rakoff by order to show cause. The dispute over the release of the files was resolved; Revson agreed to deposit certain funds in escrow, and the Firm agreed to release the files to her new attorneys. (Trial Tr. at 512-13).

On January 5, 1998, Revson filed an amended complaint. (DX U). The amended complaint dropped the false allegations that the Firm had refused to provide Revson with time records, but significantly it added a claim of fraud, alleging, "on information and belief," that the Firm's bills were "based upon fraudulently over-inflated time charges." (Id. ¶ 1; see Cinque Decl., Ex. D). The amended complaint also alleged "on information and belief that [the Firm] has been sending, and [Revson] has been paying, fraudulent time charge bills since sometime in 1994." (Cinque Decl., Ex. D, ¶ 19). Finally, the amended complaint also alleged that the Firm breached its fiduciary duties to Revson by "submitting fraudulent bills" to her. (Id. ¶ 28).

On January 9, 1998, unaware that Revson had filed an amended complaint, the Firm filed an "Answer, Counterclaim and Supplemental Notice of FRCP 11 Violations" in response to the original complaint. (Cinque Decl., Ex. B). The answer set forth in detail Cinque's version of the events in question. The Firm counterclaimed for the fair and reasonable value of its services and also sought sanctions against Revson and her counsel. The Firm later filed an answer to the amended complaint, with a counterclaim and notice of Rule 11 violations. (DX V).

E. The Conduct of the Litigation

I conferenced the case on January 9, 1998. Cinque brought the "proctology" letter to my attention. Burstein was not present, but I expressed to his partner Robert Fass my unhappiness with the letter. I did not impose any sanctions; I merely conveyed my view that the language of the letter was inappropriate.

Burstein responded with a letter to the Court that read in part as follows:

  Mr. Fass alerted me to Your Honor's concerns about my
  letter to Mr. Cinque, dated December 14, 1997. I want
  to assure Your Honor that I understand and respect
  your views concerning the manner in which counsel
  should communicate with opposing counsel and Your
  Honor's views about aggressive hyperbole. While I
  respectfully disagree with Your Honor on the issue of
  attorney conduct, I nonetheless recognize Your
  Honor's right to insist upon lawyers acting in
  accordance with the Court's views on the issue. My
  letter to Mr. Cinque, which I respectfully believe
  was proper, was written before Your Honor was
  assigned to the case. Had I known that Your Honor
  would be the Judge in this case, I surely would have
  toned down the language of my letter, as I would
  never intentionally act in a manner contrary to the
  Court's views on attorney conduct. The fact that I
  respectfully disagree with Your Honor is irrelevant.

(Cinque Decl., Ex. F) (emphasis added). Burstein enclosed a copy of a letter of apology that he had sent to Cinque and concluded his letter to the Court as follows:

    Again, I want to make clear that I in no way meant
  any disrespect to the Court. Nor did I believe that
  my letter would cause Mr. Cinque any real distress.
  However, as expressed in my letter to Mr. Cinque, I
  do apologize for any pain that I may have caused.

(Id.). Burstein's letter of apology to Cinque read as follows:

    Recognizing and respecting Judge Chin's views as to
  how counsel should interact with each other, I write
  to apologize for any pain or upset I may have caused
  by some of the harsher provisions of my letter to you
  dated December 14, 1998. Although we may have great
  differences, it is my hope that we can move past what
  some may consider overly aggressive behavior on my
  part, and conduct this case in the manner desired by
  Judge Chin. I, therefore, want you to know that I see
  no reason why we cannot deal civilly with each other,
  and invite communication from you on the issue of
  settlement.

(Cinque Decl., Ex. G).

Within a few days, Burstein made clear his intent to probe Revson's allegation of fraudulent billing. On January ...


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