Bankers Federal Sav. Bank FSB v. Off West Broadway Developers

• Decision Date: 29 February 1996
• Citation: 224 A.D.2d 376,638 N.Y.S.2d 72
• Parties: BANKERS FEDERAL SAVINGS BANK FSB, Plaintiff-Respondent, v. OFF WEST BROADWAY DEVELOPERS, et al., Defendants-Respondents, and "John Doe", et al., Defendants, and Julius Wasserstein, Receiver-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 72

638 N.Y.S.2d 72

224 A.D.2d 376

BANKERS FEDERAL SAVINGS BANK FSB, Plaintiff-Respondent, v. OFF WEST BROADWAY DEVELOPERS, et al., Defendants-Respondents, and "John Doe", et al., Defendants,

and

Julius Wasserstein, Receiver-Appellant.

Supreme Court, Appellate Division,

First Department.

Feb. 29, 1996.

R. Jankell, for Julius Wasserstein.

Before SULLIVAN, J.P., and MILONAS, ELLERIN, RUBIN, and KUPFERMAN, JJ.

MEMORANDUM DECISION.

Order of the Supreme Court, New York County (Edward H. Lehner, J.), entered January 10, 1995, which settled the final accounting of appellant Julius Wasserstein, receiver of rents, and fixed compensation for the receiver's attorney in the amount of $3,000, unanimously modified, on the law, to the extent of vacating the award of counsel fees and remanding the matter to Supreme Court for a hearing to determine the amount of said fees and, except as so modified, affirmed, without costs. Order of the same court and Justice, entered December 13, 1995, which awarded additional attorney's fees in the amount of the balance remaining in the receiver's account, unanimously reversed, on the law, without costs, the award vacated, and the matter remanded to Supreme Court for a hearing on the amount of additional legal fees, in conformance with this Court's decision.

This appeal raises two issues with respect to the award of legal fees: 1) whether the court was justified in setting the amount of the fee payable to the receiver's attorney without consideration of counsel's affirmation of services rendered and, 2) whether the court was justified in limiting the amount for additional legal services rendered to the balance remaining in the receiver's account without consideration of counsel's affirmation.

This action to foreclose a mortgage on a building known as 38-40 Grand Street was settled by stipulation of the parties on April 28, 1994. Counsel for the receiver submitted a motion, returnable September 23, 1994, to settle the receiver's account. The motion contained a request for $3,000 for legal services. The application was opposed by defendants, who comprise a partnership in default on a mortgage on the subject premises held by plaintiff Bankers Federal Savings Bank. Appellant receiver alleges that counsel spent some 26 hours reviewing the receiver's files and files maintained by the Office of the Register of the City of New York, inspecting the premises, researching the law, preparing a reply and making court appearances. Counsel was not afforded the opportunity to submit an affirmation of these additional services and, by order entered January 10, 1995, the court set his fee at $3,000, as requested in the papers originally submitted on the motion to settle the account.

Subsequent to submission of the motion of September 23, 1994, defendants moved for leave to sue the receiver, which motion was ultimately denied. A motion by counsel for the receiver for additional services rendered since that time was opposed by plaintiff, resulting in the order entered December 13, 1995. The court held that the fee for all services rendered prior to November 28, 1995 had previously been fixed and that the balance remaining in the receiver's account was sufficient to compensate counsel for any additional work.

As this Court stated in Morgan & Finnegan v. Howe Chem. Co., 210 A.D.2d 62, 63, 619 N.Y.S.2d 719, "The reasonableness of [counsel's] fees can be determined only after consideration of the difficulty of the issues and the skill required to resolve them; the lawyers' experience, ability and reputation; the time and labor required; the amount involved and benefit resulting to the client from the services; the customary fee charged for similar services; the contingency or certainty of compensation; the results obtained and the responsibility involved (Matter of Freeman, 34 NY2d 1, 9 [355 N.Y.S.2d 336, 311 N.E.2d 480]; Marshall v. New York City Health & Hosps. Corp., 186 AD2d 542, 543 ; Gutin v. Gutin, 155 AD2d 586, 587 ; cf., Kramer, Levin, Nessen, Kamin & Frankel v. Aronoff, 638 F Supp 714)." In this regard, it is settled that the award of fees must be predicated upon a "proper and sufficient affidavit of services" (Matter of Ronan Paint Corp., 98 A.D.2d 413, 419, 469 N.Y.S.2d 931).

While it is not necessary to conduct a hearing in all circumstances in order to afford due process, the court must possess sufficient information upon which to make an...