By Jeff Birren, Senior Writer
Jordan M. Cohen has been one of the more active workers’ compensation attorneys representing retired professional athletes in recent years. His name would be instantly recognized by countless workers’ compensation defense firms and insurance companies. He is trusted by the National Football League Players’ Association to represent retired players in both Northern and Southern California. It was thus quite a surprise to read that Cohen had been sued by a former business associate, Dennis Hamm.
Hamm is not a lawyer. He made a number of allegations against Cohen but the most striking was that Cohen agreed in writing to share legal fees earned on workers’ compensation cases with Hamm. That agreement, if true, would violate California Rules of Professional Conduct, Rule 1-320(A) that states: “Neither a member nor a law firm shall directly or indirectly share legal fees with a person who is not a lawyer” and then gives some irrelevant exceptions. Moreover, if the association is viewed as a partnership, then Cohen also violated Rule 1-310 that states that: “A member shall not form a partnership with a person who is not a lawyer if any of the activities of that partnership consist of the practice of law.” Since the purpose of the alleged enterprise was that Hamm would bring clients to Cohen who would practice law for those clients and then share a percentage of the received fees with Hamm, Cohen may have serious difficulties retaining his license to practice law no matter how the case turns out.
Jordan M. Cohen
Cohen attended the University of San Diego School of Law. He graduated in 1993 and was admitted to the California Bar that December. He spent more than four years at a firm and in 1998 he started The Cohen Law Firm. Cohen had offices in Oakland, San Diego, and Santa Ana. He is also an NFL Players’ Association “panel attorney.” In 2013 California amended is workers’ statute to exclude many out -of -state athletes from being able to bring their claims in California. During that period, Cohen was one of the lawyers that the NFLPA recommended to retired players.
Recently Cohen joined the Pro Athlete Law Group, P.C. Although Cohen has practiced workers’ compensation law for decades in California, he is not a State Bar workers’ compensation certified specialist. This has not prevented Cohen from having an active practice.
Cohen’s practice may be an example of there being far more than meets the eye. For example, the 2013 amendment to the state’s workers’ compensation statute was designed to exclude claims from retired players with only a tangential connection to the state, thus ending the days when playing a single game in California anytime during a long career was enough to invoke the state’s jurisdiction and very liberal payouts compared to other states. Yet although Cohen must know this, that is not necessarily reflected on the firm’s website. In the FAQ section, there is the following question:
Q.: CAN I FILE MY CLAIM IN CALIFORNIA EVEN THOUGH I PLAYED FOR A TEAM IN ANOTHER STATE?
A.: That is very likely under the current law. An athlete who is regularly employed in California may file a claim in California. The courts have held that “regular employment” includes an athlete playing for an out-of-state team coming into California to play games.
That may have been the law at one time but California changed that in 2013, as has been recorded in these pages. But ties to the NFLPA and dubious legal advice might not be the only reason that Cohen has gained clients.
Cohen Is Sued
Dennis Hamm sued Cohen on May 1, 2107 in Los Angeles County Superior Court. The defendants originally included Cohen as an individual, Jordan M. Cohen Professional Corporation, dba The Cohen Law Firm and Pro Athletes Law Group, P.C. and Does 1-15 (“Complaint”).
There are seven causes of action. The first cause of action (“COA”) is for reformation of contracts. The Complaint claims that Hamm lent money to Cohen and “both Hamm and Cohen understood that Cohen’s obligations were also obligations of whatever law firm through which he practices law” “Complaint ¶10). He further claims that in “drafting the Agreement and Promissory Note, Cohen acted as Hamm’s legal counsel” (Complaint ¶ 14). Hamm thus seeks to amend the promissory note to include the Pro Athletes Law Group and any subsequent firm Cohen uses (Complaint ¶16).
The second COA is for breach of contract in Cohen’s failure to pay Hamm what he owes “under the Agreement and Promissory Note” (Complaint ¶18). Consistent with California law, Hamm attached the alleged contract as Exhibit 1. That document seems to be a contract entered into on June 1, 2008 between Cohen and Hamm. It is three pages and Cohen signed it on May 30, 2008. Among its provisions Cohen agreed to “retain Hamm as an investigator/marketing development employee” (1).
The eye-popping clause is (4). It states: “Hamm shall be paid 20% of attorneys’ fees earned by Jordan M. Cohen during the Term of this Agreement, subject to (5) below. Hamm is entitled to fees on all cases retained during the Term irrespective of whether the fees are earned after the Term of this Agreement.”
Thus Cohen apparently promised, in writing and in an agreement that he drafted and signed, to share attorney’s fees with a non-lawyer, in violation of Rules of Professional 1-320(A).
As part of the same cause of action, Hamm attached an email sent by Cohen on Jan. 15, 2015, providing an update of cases to which Paragraph 4 of the Agreement applies, which includes pending cases. Exhibit 4 is incomplete because it only listed cases retained during the first two years of the Agreement and not the third year. Exhibit 4 was apparently sent by Cohen to Hamm on Jan. 23, 2014, and contains the following: “Attachments: Hamm cases docx.” It is two pages of cases listed by the player’s first name and first initial of the last name and the defendant’s professional sports team defendant. It lists more than 110 such cases, cases that Cohen referred to as “Hamm cases.” It includes 15 cases against the Arizona Cardinals, 10 against the Chicago Bears, eight against the Dallas Cowboys, seven each against the New England Patriots and Indianapolis Colts, 12 against the San Francisco 49ers and cases brought against five baseball teams.
The third COA is for promissory fraud. In that cause of action, Hamm states that in October, 2014 “Cohen told a third person that Cohen viewed Paragraph 4 of the Agreement as unenforceable as an unlawful agreement by an attorney to pay a referral fee (the Referral Fee Excuse”) Complaint ¶28). The fourth COA is for intentional fraud based on “at least one meeting at Hamm’s residence in Malibu, California, wherein Cohen stated that he could and would make all of the referral fee payments provided for in Paragraphs 4 and 5 of the Agreement (the “Referral Fee Representations”) (Complaint ¶34), and that Cohen “made the Referral Fee Representation with the intent that Hamm rely on such representations” (Complaint ¶37).
The fifth COA is for fraud: suppression of Material fact, that is, in “seeking to persuade Hamm to enter into the Agreement and make the loan evidence by the Promissory Note, Cohen failed to disclose that he believed that he had the legal ability to fail to make payments required to be made pursuant to Paragraphs 4 and 5 of the Agreement based on the Referral Fee Excuse” (Complaint ¶42). The sixth COA is for successor liability against Pro Athlete Law Group based on fraudulent transfer. On July 2, 2017 Hamm dismissed Pro Athletes Law Group, P.C. The seventh COA is for declaratory relief.
The Complaint seeks “reformation of the Agreement and Promissory Note to include the Cohen Firm and PALG as obligors; alternatively, for a determination that PALG is the successor in liability to the Cohen Firm,” actual damages “in an amount of $500,000 or such other sums to be determined at the time of trial” plus punitive damages, fees, costs, prejudgment interest, “a determination as to which of the payments made to Hamm were made on the Agreement and which were made on the Promissory Note” and “any and all such other relief as the Court may deem just” (Complaint at page 12).
Cohen Demurrers to the Complaint
In response to the Complaint, Cohen’s counsel filed a demurrer, California’s analog to the federal court motion to dismiss. Thus, for the purposes of the motion it admitted the allegations.
Cohen’s motion can be reduced to the following: the fee-splitting agreement was illegal under California law and thus is not enforceable by the courts. Both parts of that may be true but it was a bizarre way for an attorney to begin his defense as it will undoubtedly raise more than eyebrows at the State Bar. Yet this simple proposition was poorly argued.
His first authority was McIntosh v. Mills 121 Cal. App. 4th 333 (2004), cited for the proposition that “attorney/non-attorney fee splitting is an issue of law which may be decided on the pleadings,” ignoring that the McIntosh was decided on summary judgment and not a demurrer. Moreover, in McIntosh an attorney negotiated the illegal contract for the plaintiff, which is not present in Hamm, so McIntosh did not help Cohen.
Cohen next cited a case wherein the court refused to consider a breach of contract claim based on the sale of illegal drug paraphernalia (Bovard v. American Horse Enterprises, Inc., 201 Cal. App. 3d 832 (1998)), and then a case dismissed after opening statements because the contract was the result of an illegal agreement between two experienced real estate operators to secretly limit bidding on a property,(Russell v. Soldinger, 59 Cal. App. 3d 633 (1976)). Cohen’s final case was also irrelevant. It involved an illegal agreement between two lawyers to split fees (Chambers v. Kay, 29 Cal. 4th, 142 (2002)). That case was based on a different section of California’s Rules of Professional Conduct, Rule 2-200. Cohen’s defense, if that is what it truly is, is that Section 1-320(A) bars a lawyer from splitting fees with a non-lawyer, and that was not the issue in Bovard, Russell or Chambers. Cohen’s last citation was to Section 1-320 (A). If Hamm is correct, Cohen is guilty of a major ethics infraction.
The rest of the demurrer cites no other authority, but merely states that the First, Second, Third, Fourth, Fifth, and Seventh Causes of Action fail as an “illegal fee sharing agreement.” Hamm filed an Opposition on July 21, 2017 and Cohen Replied on July 28, 2017.
Judge William F. Fahey heard the motion on Aug. 3, 2017. The entire ruling reads as follows:
“DEMURRER OF DEFANDANTS TO THE ENTIRE COMPLAINT
Matter is called for hearing.
Court hears from counsel and rules as follows:
The Demurrer of Defendant’s to the Entire Complaint is overruled.
Defendant is to answer by August 14, 2017.
Counsel for plaintiff is to give notice.”
It is hard to imagine that Cohen was surprised by the result.
Cohen Answers the Complaint, But Not the Remaining Ethical Questions
Cohen answered the complaint on Aug. 10, 2017. Each of the defendants “specifically and generally deny the entire complaint” (Answer at 1). The defendants pled five affirmative defenses.
The first was that the fee-splitting agreement in the complaint is illegal and void as to public policy. The second is that the illegal portion of the agreement “cannot be severed from the legal portion of the agreement and thus, the entire agreement including the promissory note is void as a matter of law.” The third was that the loan referenced in the complaint had been repaid in full. The fourth was that the plaintiff “did not perform his end of the bargain and violated the implied covenant of good faith and fair dealing and is thus barred from enforcing the contract.” Finally, Cohen the lawyer asserted that Hamm “committed fraud in the inducement causing Defendant to enter into the contract ab initio and is therefore barred from enforcing the contract consummated by fraud.” That is the Answer.
The fifth affirmative defense essentially admits the existence of the fraud but shifts the blame from the lawyer who drafted and entered the agreement to the non-lawyer on the other side of the agreement. There is nothing in the Rules of Professional Conduct that excuse a lawyer who enters into a patently illegal fee-splitting agreement because the lawyer relied on the non-lawyer sitting on the other side of the table. It is also unsettling that a lawyer would assert that he entered into an illegal contract with a non-lawyer and thus the non-lawyer cannot enforce it upon the lawyer.
The case now heads to discovery. Cohen is apparently not given to precision and that could be a problem for him. For example, on LinkedIn he put the following:
“Of note, the firm recently represented former San Diego Charger linebacker Steve Foley against the City of Coronado. Mr. Foley was shot by an off-duty City of Coronado police. While he was intoxicated, the case was settled for 5.5 million dollars after three weeks of trial.” https://www.linkedin.com/in/jordan-cohen-77607712
Did Foley really settle the case while he was intoxicated?
Given the serious ethics issues at issue, there is real value to Cohen in settling before he has to testify, given that the California State Bar will be looking over his shoulder. The allegations may not be true but if Hamm did successfully solicit clients for Cohen, that could certainly help explain Cohen’s rise to prominence within California’s workers’ compensation system representing retired athletes.
(Once again, the author thanks David Stern, Esq. for his assistance.)