DETROIT – When someone has a legal dispute, they usually hire a lawyer. But what happens when the dispute is with their lawyer?
The Local 4 Defenders have uncovered an unusual case in which a Metro Detroit businessman went to court to sue his own attorney. He won, and it resulted in one of the largest payouts in such a case in Michigan history.
Investor Ed Chung thought he was out $1 million until he decided to sue his attorney for malpractice. Now he's feeling much better after cashing two checks for $13.1 million.
"I have come to understand and believe not everything my lawyers should have told me, they told me," Chung said.
Chung owns the patent on a product that extends laptop battery life. Large computer companies were using the product without paying for it. Chung testified that he was told by a professional evaluator that his case was worth millions.
"The mediator, Judge Tyne, indicated to me she could settle the case for $65 million," Chung said.
According to sworn depositions, Chung met with Bloomfield Hills attorney Terry Rader, who told him he could get a whole lot more.
"What Terry Rader said it was worth was initially $500 million," said Norman Yatooma, Chung's attorney. "Then, ultimately, said it's worth $1.3 billion."
When Rader failed to deliver, Chung hired Yatooma to sue his former attorney for malpractice.
"That patent was infringed on by every massive company who's generating laptops," Yatooma said. "Like I said, Microsoft, Toshiba, Samsung and others."
According to court records, Chung paid Rader's firm $8 million in fees, and when Rader wanted more money, the two went their separate ways.
Chung hired a Chicago company to finish suing the computer companies and was awarded $19 million. The problem was that Chung spent $20 million in legal fees on the two firms hired to collect.
"It should have been a billion-dollar gain, but instead, it was a million-dollar loss," Yatooma said.
That might have been the end of the story, but according to court files, when Chung was paid out, Rader came back and sued Chung, saying he was still owed $3 million in fees. Chung countersued for malpractice, and it was Rader on the witness stand.
Evidence was presented suggesting Rader's firm missed deadlines and failed to keep Chung's protected documents private.
"This discovery opened up much, much more than that, to include the principal lawyer on the case divulging attorney-client privilege documents," Yatooma said.
Before a trial even started, a case evaluation recommended Rader's firm withdraw its claim that it was owed money and agree to pay Chung. The two sides agreed and checks were drawn up for a total of $13.1 million. A judgment was entered.
"My client feels good about it," Yatooma said. "He's been vindicated."
Rader retired from the firm and moved to Atlanta. His attorney, Michael Ashcraft, said the firm to which the matter referred no longer exists. Nobody with the new firm had anything to do with the Chung case.
Rader agreed to surrender his license to practice law to avoid a hearing with the Attorney Grievance Board. He's now a private consultant in Atlanta.
Local 4 tried to contact Rader by email and over the phone, but he has not returned messages. His former law firm had no comment on his departure or the case.