In an appeal to the Fourth Circuit, Jaime Halscott of Halscott Megaro PA in Orlando said a North Carolina federal judge improperly treated the firm and attorney Patrick Megaro as "one and the same" when the court threw out the firm's fee-focused case last month.
At the same time, the trial judge relied solely on a North Carolina bar ethics case focused on Megaro's work for the two exonerated men, Henry McCollum and Leon Brown, as a basis for the dismissal, Halscott said. The bar investigation resulted in a five-year suspension and a $250,000 restitution order against Megaro.
"Even if this Court is to take the District Court's position that the retainer agreement between Halscott Megaro and [the McCollum and Brown parties] is invalid … that would require it to ignore the facts that neither Halscott Megaro, as a separate entity, nor any of the other partners in the firm were given opportunity to be heard," the firm said.
McCollum and Brown are half-brothers from North Carolina who spent decades behind bars for a brutal rape and murder of an 11-year-old child in 1983. But after a DNA analysis cleared them and implicated someone else in 2014, the brothers were exonerated.
Last summer, a federal jury in Raleigh granted both men $1 million in compensatory damages for each year of their 31 years behind bars, totaling $62 million, and $13 million in punitive damages.
The law firm's case is focused on its representation of the pair between mid-2015 and 2018, before a federal judge removed both Megaro and Halscott following allegations in the media that the brothers had been bilked out of hundreds of thousands of dollars. McCollum and Brown were later represented at trial in the civil rights lawsuit by a pro bono team from Hogan Lovells.
Last year, North Carolina's state bar hit Megaro with the suspension and ordered him to pay $250,000 to Brown and McCollum for charging "irrevocable" or excessive fees and making misrepresentations to his clients and tribunals, among other ethical violations. Megaro still has an active license to practice in Florida and New York.
In a Florida state suit against Brown and McCollum and their guardians, the Halscott Megaro firm said it had successfully secured "actual innocence" pardons for the men as well as a six-figure settlement and other compensation, but was then denied "quantum meruit" fees and other money due under its retainer agreement.
After the defendants successfully had the case removed to North Carolina federal court, a judge there refused the firm's request for his recusal and granted the brothers' bid to have the case dismissed.
In that order, U.S. District Judge Terrence W. Boyle concluded that the bar disciplinary action against Megaro had covered the issue of whether the retainer was enforceable and had concluded that the lawyer had "manipulated, deceived, and exploited" McCollurn and Brown. Judge Boyle also found "no credible argument" that Megaro and the firm bringing the current case were not in privity.
"At bottom, the facts found by the [state bar Disciplinary Hearing Commission] demonstrate that, in light of the conduct of Megaro prior to and throughout his participation in the underlying civil rights action, plaintiff comes to this Court seeking attorney fees and costs arising out of the civil rights action with hands that are far from clean," Judge Boyle said. "An award under a theory of quantum meruit or unjust enrichment would be simply inequitable under these circumstances."
In the appeal, Halscott Megaro argued that the court had erred when it refused the recusal and accepted the transfer. The judge's reasoning that the firm had failed to state a valid claim was also wrong, the firm said.
The circuit "must decide whether Rule 12(b)(6) permits a Federal judge, who is already biased by virtue of his having been exposed to sources that are extra-judicial to this case, to engage in fact-finding and make a determination of fact at the pleading stage," the June 15 filing states. "In this case, the court below did exactly that" without affording the firm a full opportunity to make its case.
Messages left for Halscott, Megaro and a counsel for the McCollum-Brown defendants were not returned on Friday.
Halscott Megaro is represented by its own Jaime Halscott.
The McCollum-Brown parties are represented by Matthew Higgins of Hogan Lovells.
The case is Halscott Megaro PA v. Henry McCollum et al., case number 11-1505, in the U.S. Court of Appeals for the Fourth Circuit.
--Editing by Jill Coffey.
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