Celifie v. Clifford A. Ellis, Krandell Beef Co., 2008 NY Slip Op 33069(U) (N.Y. Sup. Ct. 10/29/2008)

• Decision Date: 29 October 2008
• Docket Number: 26331/05
• Citation: 2008 NY Slip Op 33069
• Court: New York Supreme Court
• Parties: GEORGE CELIFIE and MARTHA CELIFIE, Plaintiffs, v. CLIFFORD A. ELLIS, KRANDELL BEEF CO., and JAMES L. ROGERS, JR., Defendants.

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2008 NY Slip Op 33069(U)

GEORGE CELIFIE and MARTHA CELIFIE, Plaintiffs, v. CLIFFORD A. ELLIS, KRANDELL BEEF CO., and JAMES L. ROGERS, JR., Defendants.

26331/05

Supreme Court of the State of New York, Queens County.

October 29, 2008.

Hearing Date: June 13, 2008.

Hearing Date: June 16, 2008.

Final Submission Date: September 19, 2008.

Decision and Order After Hearing

PATRICIA P. SATTERFIELD, Judge.

By order of this Court dated April 28, 2008, this matter was set down for a hearing on May 23, 2008 for a determination of the issues raised on the motion by the law offices of Shaevitz & Shaevitz, Esqs. ("Shaevitz"), the attorney for plaintiffs George Celifie and Martha Celifie ("plaintiffs"), for an order allocating the attorneys' fees between its law firm and the law offices of Katz & Kern, LLP ("Kern"), plaintiffs' former attorney. The hearing was held on June 13, 2008, and continued on June 16, 2008, at which time Shaevitz and Kern were permitted to serve and file posthearing memoranda of law on or before September 2, 2008, which date was extended to September 19, 2008. Pursuant to the Post Hearing Memorandum and Submissions, Kern contends, inter alia, that as it did majority of the work on the case, it is entitled to a large portion of the attorneys' fees.¹ Conversely, in the Post-Attorney's Fee Hearing Brief and Memorandum of Law, Shaevitz contends, from the outset, that Kern is not entitled to any portion of the disputed fees due to its failure to sustain its burden of proof with respect to quantum meruit. Alternatively, Shaevitz asserts that if it is determined by this Court that Kern is entitled to fees on a contingency fee basis, Kern is entitled to one percent of the net fees.

Relevant Facts

The underlying action was commenced on behalf of plaintiffs by Katz, which drafted a summons and complaint, and purchased an index number on December 8, 2005, seeking damages for personal injuries resulting from an automobile accident which occurred on February 1, 2005. Shortly after the filing of the pleadings, plaintiffs retained Shaevitz as their new attorney on December 13, 2005, and subsequent thereto served defendants. On October 3, 2007, Shaevitz negotiated a settlement of the instant lawsuit for $250,000.00, of which, apportionment in the amount of $82,874.63 is sought, which represents attorneys' fees arising from services rendered on behalf of plaintiffs in this matter by the respective law firms.

Discussion

It is well settled that the award of reasonable counsel fees is within the sound discretion of the trial court based upon factors such as the time and labor required, the difficulty of the questions involved, the skill required to handle the matter, and the attorneys' experience, ability, and reputation. See, Lodovico v. Lodovico, 51 A.D.3d 731 (2^nd Dept. 2008); Glick v. Glick, 25 A.D.3d 533 (2^nd Dept. 2006); Palumbo v. Palumbo, 10 A.D.3d 680, 782 N.Y.S.2d 106 (2^nd Dept. 2004); M. Sobol, Inc. v. Wykagyl Pharmacy, Inc., 282 A.D.2d 438 (2^nd Dept. 2001). "The issue of the apportionment of attorneys' fees is controlled by the circumstances and equities of each particular case (citation omitted), and the trial court is in the best position to assess these factors [citation omitted)." Ebrahimian v. Long Island R.R., 269 A.D.2d 488, 489 (2^nd Dept. 2000); see, Mazza v. Marcello, 20 A.D.3d 554 (2^nd Dept. 2005); Juste v. New York City Transit Authority, 5 A.D.3d 736 (2^nd Dept. 2004). Nevertheless, as a preliminary matter, it must first be determined by this Court whether Kern, as the former attorney for plaintiffs, is entitled to attorneys' fees on a quantum meruit or a contingency fee basis.

It is well established that "[] a client has an absolute right, at any time, with or without cause, to terminate the attorney-client relationship by discharging the attorney." Campagnola v. Mulholland, Minion & Roe, 76 N.Y.2d 38, 43 (1990); see, King v. Fox, 7 N.Y.3d 181 (2006); Papadopoulos v. Goldstein, Goldstein & Rikon, P.C., 283 A.D.2d 649 (2^nd Dept. 2001). "An attorney who is discharged without cause before the completion of services may recover the reasonable value of his or her services in quantum meruit (citations omitted). An attorney who is discharged for cause, however, is not entitled to compensation or a lien (citations omitted)." Callaghan v. Callaghan, 48 A.D.3d 500, 500-501 (2^nd Dept. 2008). Since this record is devoid of any allegations that Kern was discharged for cause, and thus is not entitled to fees on that ground, this Court's query is what basis Kern is entitled to compensation.

"As against the client, a discharged attorney may recover the `fair and reasonable value' of the services rendered (citation omitted), determined at the time of discharge and computed on the basis of quantum meruit. Only if the client and attorney agree may the attorney receive a fee based on a percentage of the recovery." Matter of Cohen v. Grainger, Tesoriero & Bell, 81 N.Y.2d 655, 658 (1993). "'But when the dispute is between attorneys, as here, the rules are somewhat different. The discharged attorney may elect to receive compensation immediately based on quantum meruit [for the reasonable value of services rendered] or on a contingent percentage fee based on the proportionate share of the work performed on the entire case'" (citation omitted)." Byrne v. Leblond, 25 A.D.3d 640, 642 (2^nd Dept. 2006); see, Lai Ling Cheng v. Modansky Leasing Co., Inc., 73 N.Y.2d 454, 458 (1989); Russo v. City of New York, 48 A.D.3d 540 (2^nd Dept. 2008); Wingate, Russotti & Shapiro, LLP v. Friedman, Khafif & Associates, 41 A.D.3d 367, 839 N.Y.S.2d 469 (1^st Dept. 2007); Abenante v. Star Gas Corp., 33 A.D.3d 638 (2^nd Dept. 2006); Ocasio v. Schwertz, 284 A.D.2d 443 (2^nd Dept. 2001). Where an election is not made or sought at the time of discharge, it is presumed that the outgoing attorney elected to receive a contingent percentage fee. See, Lai Ling Cheng v. Modansky Leasing Co., supra, 73 N.Y.2d at 458 (1989); Matter of Cohen v. Grainger, Tesoriero & Bell, 81 N.Y.2d 655 (1993).

In the case at bar, by letter dated January 26, 2006, Kern stated, inter alia, that "under the Judiciary Law, this office maintains and your office agrees that attorney's fees will be held in escrow and not be distributed until we agree as to the amounts of said attorney's fee and absent any agreement, a Court of competent jurisdiction shall determine the fees due our respective offices." Thus, it is clear that Kern "elected to receive a contingent percentage fee, as it failed to demand a fixed fee at the time of discharge." Connelly v. Motor Vehicle Accident Indemnification Corp., 292 A.D.2d 332, 333 (2^nd Dept. 2002); see, generally, Tutarashvili v. Barzilay, 39 A.D.3d 851 (2^nd Dept. 2007). Despite the contention to the contrary by Shaevitz, its reliance upon Kern's failure to proffer a retainer agreement at the apportionment hearing as evidence of Kern's compensation being limited to quantum meruit, is misplaced. Although Shaevitz correctly asserts, and this Court determines, that the belated submissions of the three exhibits annexed to Kern's Post Hearing Memorandum and Submissions, including the retainer agreement, which were not proffered as evidence at the hearing will not be considered, such retainer agreement is of no significance on this dispute between counsel. See, Byrne v. Leblond, 25 A.D.3d 640, 642 (2^nd Dept. 2006); Benjamin E. Setareh, P.C. v. Cammarasana & Bilello, Esqs., 35 A.D.3d 600 (2^nd Dept. 2006)[stating "the Supreme Court properly declined to fix the fee on the basis of quantum meruit because the appellant had not elected that manner of compensation when it was discharged."]. Consequently, it is determined by this Court that Kern is entitled to attorneys' fees upon a contingent percentage fee based on the proportionate share of the work performed on the entire case. Thus, the issue now is the reasonableness of attorneys' fees based upon the proportionate share of work done by each attorney.

"In fee-sharing disputes between attorneys, `the courts will not inquire into the precise worth of the services performed by the parties as long as each party actually contributed to the legal work and there is no claim that either refused to contribute more substantially' (citation omitted)." Reich v. Wolf & Fuhrman, P.C., 36 A.D.3d 885 (2^nd Dept. 2007). The Court's role is to "consider 'evidence of the time and skill required in that case, the complexity of the matter, the attorney's experience, ability, and reputation, the client's benefit from the services, and the fee usually charged by other attorneys for similar services (citations omitted).'" Callaghan v. Callaghan, 48 A.D.3d 500 (2^nd Dept. 2008); see, Abenante v. Star Gas Corp., 33 A.D.3d 638 (2^nd Dept. 2006); Byrne v. Leblond, 25 A.D.3d 640 (2^nd Dept. 2006); Malerba v. Clifford, 18 A.D.3d 451 (2^nd Dept. 2005). The reasonableness of a counsel fee request "'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.'" Bankers Federal Sav. Bank FSB v. Off West Broadway Developers, 224 A.D.2d 376, 377 (1^st Dept. 1996); see, Diaz v. Audi of America, Inc., 50 A.D.3d 728 (2^nd Dept. 2008) [stating that "in general, factors to be considered include (1) the time and labor required, the difficulty of the questions involved, and the skill required to handle the problems presented; (2) the lawyer's experience, ability, and reputation; (3) the amount involved and benefit resulting to the client from the services; (4) the customary fee charged for similar services; (5) the contingency or certainty of compensation; (6) the results obtained; and (7)...