Payouts involving law firm that paid referral fee were handled properly, Feuer says

Los Angeles City Atty. Mike Feuer said Thursday he has completed an internal review of legal settlements involving a law firm that provided income last year to one of his top lawyers — and concluded that each of those payouts was handled properly.

Feuer’s team examined nine settlements paid by the city in cases involving Panish Shea & Boyle since 2014, as well as a 10th settlement that has been proposed but not yet approved, said Rob Wilcox, the city attorney’s spokesman.

The Panish firm provided between $10,000 and $100,000 in referral fee income to Thomas Peters, who was until recently Feuer’s chief assistant city attorney, according to his 2018 financial disclosure report. Peters submitted his resignation March 22 after The Times inquired about his outside income.

At the time, Wilcox said in a statement: “When [The Times] raised these issues ... I brought them to Mr. Feuer’s attention who had not been previously apprised of them. Mr. Peters has resigned. This is now a personnel matter and I cannot discuss it further.”

Since 2014, the year Peters was hired, the City Council has approved more than $19 million in settlements stemming from eight cases involving the Panish firm, which represented the plaintiffs, according to the city’s online council file system. In a ninth case examined by Feuer, the settlement paid by the city did not result in a payment to Panish, according to the firm.

Feuer said his team looked at each settlement, examining such issues as whether a plaintiff in a case experienced pain and suffering, lost wages or sizable medical expenses, and determined that the public was “well served” in each case.

“I’m very confident in the analysis we’ve gone through,” he said.

Hours after Feuer made his remarks, the Panish firm issued a statement saying its lawyers were pleased that Feuer’s review reaffirmed its reputation as a “successful and ethical” law office.

“Every case we have had against the city of Los Angeles … resulted favorably to our clients because we worked hard to prove that our clients suffered tremendously and that the city was clearly at fault,” the statement said. “We obtained these results because we are good lawyers with good clients. Not because we paid a referral fee to former Assistant City Attorney Thomas Peters on an unrelated matter.”

Peters, who was chief of the civil litigation branch in Feuer’s office, could not be reached for comment. Feuer said his office is continuing to examine settlement proposals that were handled by Peters that have not yet been approved by the city’s claims board or the council.

That review should be completed within two weeks, Feuer said.

Referral fees are typically paid to a lawyer who passes a case on to another attorney and may be paid years after a referral is made. Neither Feuer nor lawyers with the Panish firm would say how much the referral fee was or which case it involved.

In their statement, lawyers from the Panish firm said Peters referred one case to the firm that was “between private parties” and had nothing to do with the city. “After the case was resolved, Mr. Peters informed us that under the city attorney’s office rules, he was allowed to accept a referral fee,” the firm said.

Payment of such fees, the firm said, are “expressly authorized by the rules of professional conduct.”

Wilcox said city lawyers are now developing “an explicit policy” on such income. The issue of referral fees in Feuer’s office, he said, “never came up before this incident.”

Feuer’s handling of the matter has drawn concern in recent days from several members of the City Council, who prepared a motion Wednesday calling on the city attorney’s office to report its findings.

“The lack of oversight that allowed this to happen in the first place is unacceptable,” said Councilman Joe Buscaino. “I am not comfortable signing off on any city business that the city attorney’s office has either approved or vetted until the investigation into this matter is completed.”

The council approved more than $4 million in payouts on Wednesday, settling five cases, none of which involved Panish. Buscaino asked to be counted as a “no” vote in all five.

In his disclosure forms, Peters reported that he received more than $100,000 in referral income in 2017 from the law office of Anthony M. DeMarco. The following year, he reported receiving between $10,000 and $100,000 in referral fees from both the DeMarco firm and the Panish firm.

Wilcox said the city has not identified any cases involving DeMarco from the period when Peters was in Feuer’s office.

Since 2014, the Panish firm has handled 17 cases that involved the city, a majority of them resulting in settlements, Wilcox said.

The largest of those payouts stemmed from a lawsuit filed by Peter Godefroy, who suffered severe injuries in 2015 after his bicycle hit a pothole in Sherman Oaks. The council voted two years later to pay $6.5 million to resolve his case, spreading the payments over two years.

A year later, the council agreed to spend $6 million in another case handled by Panish, one involving a traffic death in Highland Park. In that case, a 17-year-old boy was struck and killed by a city truck driven by a city worker.

Times staff writer Emily Alpert Reyes contributed to this report.

david.zahniser@latimes.com

Twitter: @DavidZahniser