ATTORNEY LOSES LICENSE (DISBARRED) FOR STEALING FROM BRAIN-DAMAGED CLIENT
From: New York attorney Gary E. Rosenberg (personal injury and accident attorney and lawyer; serving Brooklyn Queens Bronx; Queens injury lawyer)
Matter of Norman L. Cousins
First Dept.
Admitted to Bar: 1969
Discipline imposed: Disbarment effective on November 18, 2010.
Lawyer Cousins is disbarred for screwing a brain-damaged client, Kevin Veneski. Cousins was hired in 1997 to sue for medical malpractice on Veneski's behalf.
From the very beginning, this lawyer did dirty.
When he was hired, he had his clients (husband and wife) sign a "litigation financing agreement" under which the expenses fronted by Cousins would be charged to the clients at 15% annual interest. While this may, arguably, be ethical, Cousins was dealing with a brain-damaged client who was not in a position to negotiate the terms of Cousins' retainer.
To finance Veneski's case Cousins then borrowed money (hundreds of thousand of dollars) from various litigation funding companies, pledging some of the same collateral to both entities - another no-no.
Cousins does a good job, winning a jury verdict of over $4 Million for his clients.
On February 26, 2000 he has the brain-damaged Mr. Veneski sign an affidavit supporting Cousins in seeking permission from a judge to take an extra attorney fee (extra pay) for his work.
Cousins does nothing at all with this affidavit, not seeking court approval for an attorney fee increase, for six years (until 2006).
The jury verdict not being the end of the case, the malpractice action was settled in November 2002 for $3 Million plus an annuity (future payments) that would give Veneski $750,000 over 20 years.
In December 2002 Cousins tells his client (Veneski) that the settlement money is expected, and calculated his own attorney fee to overpay himself.
The malpractice defendants' main insurance carrier closed and Cousins told the New York State agency that took over the settlement his attorney's fee on the next settlement payment was $212,500. However, in October 2003 Cousins wrote to his client (Mr. Veneski) that he was owed more than $450,000.
After receiving the payment, Mr. Veneski gave Cousins a check for $454,450.55. On the memo line of the check Cousins had Veneski cross out the words "attorneys fees" he had written on the memo line, and substitute the word "gift." At the same meeting, Mr. Veneski signed a gift tax return in blank, which he sent to his accountant to fill in.
When Cousins received the first annuity (settlement) payment of $20,000 in October 2005, he wrote to Mr. Veneski that he was applying it to disbursements and interest.
Meanwhile, in July 2003, lawsuits broke out between the funding companies that lent money to Cousins and/or Veneski. One funding company claimed that when Mr. Veneski signed the February 26, 2000 affidavit supporting a potential application for increased attorney's fees, Cousins was committing fraud to persuade that company to make the loan.
In December 2003 one funding company got the $212,500 fee claimed by Cousins.
Other lawsuits by funding companies were resolved upon Cousin's payment of $340,000.
Finally, on February 1, 2006, Cousins filed a motion in the Veneski action for an increased fee. The Veneskis (with a new attorney) cross-moved for an order finding that Cousins owed them $1,231,061.89.
On January 30, 2007, New York Supreme Court Justice Heitler determined that Cousins had over billed and received an excess fee without court approval. Cousins tried to argue that Veneski had given him the extra money a gift, but the Court pointed out that a brain damaged client should have had an independent attorney to represent him in making such a gift.
On May 21, 2008, Justice Heitler found that Cousins overcharged $56,924.06 in disbursements and ordered him to return that money, plus excessive attorney's fees of $508,229.70, with interest, and judgment was entered against Cousins on January 7, 2009, in the amount of $619,538.25.
In the face of disciplinary charges, Cousins maintained that he accepted a gift given by Mr. Veneski to extricate the Veneskis from a funding company lawsuit and that any claim of duress or undue influence was vitiated by Mr. Veneski reaffirming the gift multiple times over the ensuing years while represented by other counsel.
On November 24, 2009, a court-appointed Referee submitted his report and recommended disbarment. The Referee found "incredible" Cousins' testimony that Mr. Veneski intended to make a gift of $454,000, or that Cousins believed in good faith that it was a gift. In addition to the fact that Justice Heitler had also rejected Cousins' claim as "incredible," the Referee based his conclusion on several factors, including that at the time each installment of the settlement payment was due, Cousins wrote to Mr. Veneski that he was "owed" one-third of the amounts as "attorney's fees"; Mr. Veneski originally wrote "attorneys fees" on the memo line of the $454,000 check and only wrote "gift" at Cousins' request; nothing in the relationship between Mr. Veneski and Cousins would explain a gift of that amount; Cousins did not "take any of the precautions one would expect a lawyer to take when accepting a 'gift' of this magnitude from a client in circumstances such as this"; and Cousins' belated motion for increased legal fees was inconsistent with his claim that he had received such a substantial gift.
The Court holds: Disbarment is the appropriate sanction. Cousins charged a brain-damaged client over $500,000 more than the statutory maximum in attorney's fees. He tried to disguise those fees as a gift, and deceived his client to secure his assistance in the charade. Cousins has yet to satisfy the judgment directing him to return those fees and the over-billed disbursements, and he has a pending petition for Chapter 7 Bankruptcy relief.
The Court points out that: "The Referee, who had an opportunity to observe Cousins, found him to be deficient in honesty, remorse, and insight."
Comment: The Court mentions but does not discuss Cousins' bankruptcy filing. Cousins' bankruptcy means that Veneski is probably not getting back all of the more than $600,000 that Cousins owes him. And with Cousins disbarred, it does not seem likely that he could earn the money to repay Veneski. So I wonder, if Cousins hadn't filed for bankruptcy might the Court have let him keep working so he could pay back Veneski? Or if Cousins had paid the judgment to Veneski right away, might Cousins have been permitted to keep his law license as a sort-of-reward? I wonder.


























