Angelos' lawyers see letter as key

They contend it backs him in dispute with state over tobacco fee

April 29, 2000|By Scott Shane | Scott Shane,SUN STAFF

Lawyers for Peter G. Angelos said yesterday that they have discovered documents they believe will force the state to pay him at least $600 million for handling the state's tobacco lawsuit.

One of the lawyers, William F. Gately, said the documents show that Maryland Attorney General J. Joseph Curran Jr. proposed such a fee -- 12.5 percent of the state's $4.6 billion tobacco settlement -- to the state Board of Public Works in November 1998.

Another document indicates that the board, in voting to accept the tobacco settlement, also approved the 12.5 percent fee without attaching any conditions, Gately said.

"This fact has been hidden from Peter Angelos and from the public," Gately said. He said the documents "raise profound questions" about the state's lawsuit against Angelos and Curran's statements on the case.

Deputy Attorney General Carmen M. Shepard said Curran would respond in court to the allegations. But she said she does not believe the documents undermine the state's case.

Curran filed suit against Angelos on behalf of the state in December after the millionaire attorney and Orioles owner refused to apply to have his legal fee paid by the tobacco industry. The provision for industry-paid fees was intended to preserve the states' settlement money for public purposes, and attorneys in at least two dozen states have accepted such fees.

But to collect from the industry, Angelos would have to apply to an arbitration panel. He decided last year that such a panel would not give him a fair award and tried instead to collect on his original contract, which granted him 25 percent of any money the state received.

Gately said the newly uncovered documents were among 20,000 pages provided by Curran's office in mid-March in response to disclosure requests in the fee dispute. He said the attorney general's office attempted unsuccessfully this week to retrieve Curran's letter to the state Board of Public Works, which is marked "Confidential Attorney-Client Communication," saying it should not have been released.

Gately said he intends to question Curran about the documents during a nine-hour deposition scheduled to begin Tuesday morning. He told Baltimore Circuit Judge Clifton J. Gordy yesterday during a hearing that shortly after the deposition, he expects to ask for dismissal of the state's lawsuit against Angelos over his legal fee.

Curran's November 1998 letter to the Board of Public Works officially proposed that Maryland join the national tobacco settlement. In the letter, Curran appeared to state without reservation that Maryland was legally obligated to pay Angelos 12.5 percent of the state's money.

"Under Maryland law, the Angelos Law Firm is entitled to 12.5 percent of any payment received by Maryland," the letter says. It adds that the national settlement "does not (and could not) affect the rights and obligations of the Law Firm and the State unless the Law Firm and the State agree to any modification."

Shepard, who drafted the letter for Curran's signature, said it does not change the state's view that Angelos had an obligation to take his fee from the tobacco industry, as the settlement permits.

"I never intended it to change our position," she said. "Obviously I could have been more artful in phrasing it."

The second document mentioned by Gately is the agenda for the Public Works Board for Nov. 24, 1998, which indicates that the tobacco settlement was approved after discussion. In summarizing the settlement, the agenda states that "the fee for the state's outside counsel is 12.5 percent."

One member of the Board of Public Works, State Treasurer Richard N. Dixon, said last night that he doesn't recall the November 1998 action in detail.

"We have a lot of items come before us, and that's two years ago," he said, adding: "I'm going to remain silent on this while it's in the courts."

In suing Angelos, Curran maintained that Angelos was obligated to collect as much money as possible from the tobacco industry before dipping into the state's settlement for his fee.

He noted that the General Assembly passed legislation reducing Angelos' fee to 12.5 percent -- a move Angelos claims was invalid. But even a 12.5 percent fee, the attorney general said in the suit, should be paid only if judged to be "reasonable" in light of the work the Angelos firm performed.

This month, Curran dropped his bid to force Angelos to apply for a fee. Shifting tactics, he decided the state will give Angelos a token payment and then apply itself to an arbitration panel for money with which to pay Angelos.

Curran's November 1998 letter appears to strengthen Angelos' claim that he is under no obligation to collect his fee from the industry, since it refers to the possibility that Angelos might "elect" to collect his fee from the state.

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