SAIPAN - Junior Larry Hillbroom wants to know if his former lawyers Barry Israel and David Lujan received “secret profits that should be disgorged.”
Hillbroom, 35, has sued his former lawyers in federal court and is seeking answers to the following questions:
Whether the 56% retainer, and the approval of such by the Guam Guardianship Court, was the result of extrinsic fraud; whether the defendants engaged in fraudulent activity through (1) misrepresentation or omitted facts; (2) knowledge of that falsity or omission; (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) injury to the plaintiff due to their fraud.
“How much were Lujan and Israel actually paid from the estate and the JLH Trust for fees and for costs?”
Moreover, is Hillbroom “entitled to ‘disgorgement’ of all attorney’s fees and costs paid to Lujan and Israel above and beyond those allowed under the 38 percent contingency fund? Hillbroom asked in court documents.
In a notice of filing of a proposed joint pretrial order, Rachel Dimitruk, Hillbroom’s lawyer in the lawsuit, said these are just some of the issues her client wants the jurors to consider in the trial set for Nov. 19.
Hillbroom is one of the four DNA-proven heirs of DHL Corp. co-founder Larry Lee Hillblom who died in a seaplane crash in 1995 near Saipan, leaving behind an estate estimated at about $600 million.
Israel and Lujan represented Hillbroom when he was a minor in securing $90 million from the Hillblom estate. When he became an adult, he sued his former lawyers for malpractice as well as Keith Waibel, trustee of Hillbroom’s trust, for alleged conspiracy.
According to Dimitruk, “There is a clear dispute about material facts: whether or not the defendants disclosed relevant information to JLH, his guardians and the Guam Guardianship Court when defendants failed to disclose their prior and ongoing self-dealing and failed to account for the same in their calculations of contingency fees to which they claimed they were entitled.”
Dimitruk said the retroactive effect of the 56% retainer allowed Israel and Lujan to receive increased contingency fees on assets already distributed to the JLH Trust from the estate in 1999 when the 38% retainer was in effect.
She said the effect of the “backdating” of the 56% retainer allowed Israel and Lujan to claim a 56% contingency fee on assets that were distributed to the JLH Trust under the terms of the 38% retainer rather than simply being paid their contingency fee under the 38% retainer.
“Were these payments to be considered part of the funds distributed to the plaintiff for the purposes of calculated contingency fees, the attorneys would be receiving contingency funds on fees that defendants Lujan and Israel had already been paid,” Dimitruk said.
A final pretrial conference has been scheduled by the District Court for the Northern Marianas for Nov. 5, 2019 at 9 a.m.
According to the filing of a proposed joint pretrial order, neither Waibel nor Lujan provided any input to the proposed order, despite being provided the proposed order via email.
The joint stipulation was signed by Dimitruk and Barry Israel’s lawyer, Theodore W. Frank, and was filed in federal court on Nov. 1, 2019.