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Petitioner and Smith agreed to split any fees received in
proportion to the hours they each spent on the case. Petitioner
worked 44.75 percent of the hours on the case, and Smith worked
55.25 percent. Thus, the Anises, Smith, and petitioner agreed to
split any amounts received from the case as follows:
Nick and Patricia Anis 50 percent
Smith 27.625 percent (50% x 55.25%)
Petitioner 22.375 percent (50% x 44.75%)
The Stover case went to trial, and the jury awarded the
Anises damages of $1.2 million in May 1992. Before the judgment
was filed, Stover and his wife filed a petition in bankruptcy.
Shortly thereafter, the parties agreed to reduce the Stovers’
liability to $600,000.
In May 1992, Stover paid $60,000 to the Law Offices of
Steven C. Smith, which Smith deposited in his client trust
account. On August 4, 1992, Smith paid petitioner $15,060, his
22.375-percent share of Stover's initial payment.
Before making any other payments, the Stovers filed a second
petition in bankruptcy on August 30, 1993. On January 21, 1994,
the Anises filed a proof of claim in the Stovers' bankruptcy.
Petitioner was listed as a secured creditor in some of the
bankruptcy pleadings.
5. The Anis Recovery Fund Partnership
In April 1994, Smith, on behalf of himself, the Anises, and
petitioner (the Anis parties), began negotiating a settlement
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