Originally published at The NY Post by Isabel Vincent, Melissa Klein and Susan Edelman on 11/16/14
In a greedy grab for blood money, a law firm representing sick and dying Ground Zero workers overbilled its legal partner by $36 million in expenses, newly released court papers allege.
The shocking charges call into question the estimated $50 million in additional legal expenses billed to 10,000 firefighters, police officers, construction workers and others who received more than $700 million in settlements for 9/11-related ailments.
An advocate for ill responders — John Feal, a Ground Zero demolition supervisor — demanded Napoli Bern be investigated by authorities.
“It’s outrageous and disgusting,” said Feal, claiming the majority of complaints he hears about legal representation relate to Napoli Bern.
The once-prestigious personal-injury law firm has been rocked by infighting over allegations of sexual improprieties and financial misconduct.
Napoli Bern has also been battling its partner law firm, Worby Groner, since 2012 over legal fees they shared in the 9/11 litigation. The two firms teamed up in 2004 to represent Ground Zero workers afflicted with cancer and other ailments.
The total settlements with the city and other defendants came to about $725 million. Before the 9/11 workers got their checks, though, various costs were deducted. The law firms then got a 25 percent cut of the remainder.
Napoli Bern and Worby Groner were to split the proceeds after they calculated their internal expenses. By the end of 2012, the gross fees amounted to $152 million and Napoli Bern said it was entitled to $69.6 million off the top in expenses.
Worby Groner disputed the expenses and took the case to an arbitration panel, which sided with it.
The panel found that Napoli Bern was not entitled to include $3.6 million in rent, $2.7 in malpractice insurance, professional fees of $376,489 and legal library costs of $344,954, among other expenses.
Napoli Bern wanted to be reimbursed for $24.6 million in payroll costs, but the panel found that it failed to maintain records showing the “actual amount of time spent on 9/11 litigations.”
“Mr. Napoli’s estimates are not sufficient,” according to the panel’s decision, which was revealed for the first time in court papers unsealed Friday.
The panel ruled only half of the payroll costs were related to the 9/11 litigation.
In total, the arbitration panel rejected $36 million in Napoli Bern’s purported expenses. It ruled that Worby Groner was entitled to only $17 million more than it had already received.
The arbitrators’ decision is now before state Supreme Court Justice Eileen Bransten, who will rule on whether to accept it. Napoli Bern disputes the arbitration panel’s conclusions.
But one of the firm’s own founding partners, Marc Bern, cast doubt on the firm’s handling of the fee dispute when he discovered — after Paul Napoli got sick with leukemia in May — that Napoli had played fast and loose with the practice’s finances.
Napoli, who was responsible for the firm’s operations, was “misleading” the outside law firm representing Napoli Bern in the dispute “by providing them with incorrect and false information,” court papers allege.
“The story is far from over,” Napoli told The Post on Saturday, saying the arbitrators “wanted additional proofs on certain items to allow reimbursement . . . and we believe most if not all of those expenses that were initially disallowed will be reimbursed.”
For years, many 9/11 responders who had been represented by Napoli Bern suspected they were being overbilled for expenses. The settlement was doled out under the supervision of a court-appointed Ohio-based firm.