Federal Appeals Court rules wrongfully imprisoned NC brothers don’t owe former law firm

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  • Two N.C. brothers who spent 31 years in prison for a rape and murder they didn't commit will not have to pay any more money to their former law firm.
  • The 4th U.S. Circuit Court of Appeals has affirmed a trial court ruling against the firm. The trial judge had ruled that the firm's lead attorney "misled" the brothers and engaged in other unethical conduct.

The 4th U.S. Circuit Court of Appeals has upheld a lower court ruling favoring two wrongfully imprisoned N.C. brothers against their former law firm. The firm had sued the brothers to recover unpaid legal fees and expenses.

In a unanimous opinion released Tuesday, appellate judges agreed with a trial court that the firm’s lead attorney had taken advantage of “intellectually disabled” half-brothers Henry McCollum and Leon Brown. The trial judge rejected the law firm’s pursuit of additional money from the two men.

McCollum and Brown served 31 years in prison for the 1983 rape and murder of an 11-year-old girl in Red Springs. Using DNA evidence, the N.C. Innocence Inquiry Commission helped win the men’s freedom in 2014.

“McCollum and Brown then pursued several legal proceedings based on their wrongful convictions,” according to the 4th Circuit opinion from Judge Marvin Quattlebaum. “They sought and received pardons for their convictions. They also petitioned for monetary awards permitted by North Carolina statute and received the maximum statutory amount. And they sued the Town of Red Springs, Robeson County, and the state of North Carolina for violating their civil rights, ultimately leading to a $75,000,000 jury verdict.”

Carolina Journal reported in March that the 4th Circuit reduced the size of the total award owed to McCollum and Brown. Rather than $111 million, they will be owed $63.5 million to $65 million.

The law firm Halscott Megaro represented McCollum and Brown early in those post-release proceedings. “[I]t claims it expended substantial hours and incurred significant costs
in working that case” before new lawyers replaced the firm.

Halscott Megaro sued McCollum, Brown, and their legal guardians in November 2021. “Halscott Megaro alleged the guardians replaced the firm with new lawyers but failed to pay for any of the work the firm did or the expenses it incurred in the civil rights case,” Quattlebaum wrote.

U.S. District Judge Terrence Boyle dismissed the law firm’s suit in 2022. “In reaching that decision, the district court took judicial notice of a North Carolina State Bar Disciplinary Hearing Commission decision that found the firm’s lead partner misled McCollum and Brown into retaining the firm and engaged in other unethical conduct,” Quattlebaum wrote. “The court then held the firm was precluded from relitigating issues decided by the Commission.”

Court records from the March 2021 disciplinary hearing indicate that attorney Patrick Megaro kept $500,000 from the brothers. That was one-third of the $750,000 they each received from the state of North Carolina after winning official government pardons.

“The Commission noted that ‘[m]inimal research on the cases of McCollum and Brown
would have disclosed their significant intellectual disabilities,’” Quattleabaum wrote. “It added that Megaro entered into the representation agreement with them and their sister Ransom, despite knowledge of the brothers’ diagnoses and low IQ scores. That agreement reflected that Megaro would collect a contingency fee of between 27-33% of any monetary recovery or award, and the Commission determined that it ultimately ‘created an impermissible nonrefundable fee.’”

“Additionally, the Commission found that Megaro ‘performed minimal work on behalf of McCollum and Brown’ to obtain their statutory monetary awards,” Quattlebaum wrote. “Yet,
Megaro took a one-third fee from the awards of both McCollum and Brown, repaid high-
interest loans he facilitated for them and charged other costs, expenses, and repayments.
And with respect to the settlement with the Town of Red Springs, the Commission noted
that Megaro sought even more fees.”

“The Commission explained that, in the district court’s consideration of a motion to approve that settlement, the presiding district court judge in the civil rights action found that McCollum was not competent to manage his own affairs and that Megaro’s ‘representation agreement with McCollum was invalid due to McCollum’s incompetency,’” Quattlebaum added. “The Commission found that ‘McCollum and Brown did not have the capacity to enter into representation agreements with’ Megaro.”

“The Commission determined that by ‘entering into a representation agreement with his clients when he knew they did not have the capacity to understand,’ Megaro’s conduct was deceitful, fraudulent and dishonest and violated the North Carolina Rules of Professional Conduct,” Quattlebaum wrote.

Judges Julius Richardson and Toby Heytens joined Quattlebaum’s decision.

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