That’s one way to lose millions of dollars:

Disbarred lawyer Kenneth Heller’s refusal to turn over files in a matter that ultimately was resolved with a $3.7 million settlement was "symptomatic" of a 24-year record of "utter contempt for the judicial system," Southern District Bankruptcy Judge Stuart M. Bernstein wrote, quoting from an opinion of the appeals court in Manhattan that disbarred Heller in 2004.

Bernstein’s ruling in In re Ruby G. Emanuel, 97-44969, denied Heller any share in the $1.2 million the judge had awarded to the law firm of Jacoby & Meyers, which took over from Heller the wrongful death case of James Emanuel, a stevedore who was fatally injured in a 1992 accident at the Brooklyn Navy Yard.

Following Heller’s disbarment [for misconduct in an unrelated case], Ms. Emanuel retained Jacoby & Meyers to handle the retrial in state court.

The law firm asked Heller to forward his files in the matter, but Heller refused, even though, Judge Bernstein noted, "terminated lawyers normally send their files promptly to new counsel to be sure that the interests of the client are protected."

In resisting the surrender of his files, Bernstein recounted, Heller provided different estimates of the value of his work for Ms. Emanuel.

During Jacoby & Meyers’ 2 1/2 year quest to secure the files, Heller offered various explanations as to what had happened to them — lost in a house upstate, damaged by a flood, discarded by workers — as the case was passed among five judges in Manhattan and the Bronx.

Eventually, the court declared Heller in contempt and issued sanctions, causing Heller to flee, after which deputies raided his office looking for the files, to no avail.

$3.7 million doesn’t come close to the actual damages. The decedent was paralyzed from the neck down after a 45-foot fall and spent 20 months in the hospital before he died. In the original trial (in which Heller represented the plaintiff), a jury unsurprisingly awarded $25 million.

But because Heller didn’t turn over the file to the new lawyer:

Jacoby & Meyers only had the record on appeal to work with in negotiating a settlement, Michael S. Feldman, the firm’s lead attorney on the case, said in an interview.

Heller’s files consisted of 43 boxes of material, while the record on appeal filled only two boxes, Feldman said. The defendant’s records in the underlying death case had been destroyed in the Sept. 11 attack on the World Trade Center where its law firm, Hill Betts & Nash, had its offices, Feldman added.

"We had to proceed without videos and photographs of Mr. Emanuel" who was paralyzed from the neck down as a result of a 45-foot fall as he was repairing a barge, Feldman said.

Switching attorneys in the middle of contingent fee litigation can cause a dicey situation. It is never easy for the exiting attorney — after pouring years of blood, sweat, tears and money into the case — to set the file down and walk away without securing a fee, as they would before voluntarily referring a case to another attorney.

But walk away they must. An attorney can’t dangle the client’s case over the new counsel’s head as a negotiation tool.

The flip side is that, if the lawyer does the right thing and ensures the timely transfer of representation, the law will protect them. At the resolution of a case, prior personal injury lawyers are generally entitled to recoup their reasonable costs and the quantum meruit — the fair value — of the work they did.

Except, however, where the attorney has breached their fiduciary duties to the client, in which case most states will deny the award of fees. Indeed, the issue isn’t just a concern for contingent fee attorneys: in some states, if a professional breaches their fiduciary duties, the court can order the disgorgement of any fees previously paid.

Some people need to learn lessons the hard way. For the rest of us, take note: there’s millions of reasons not to play games with client’s files.