Joel R. Brandes, P.C. v. Zingmond
| Decision Date | 10 July 1991 |
| Citation | 151 Misc.2d 671,573 N.Y.S.2d 579 |
| Court | New York Supreme Court |
| Parties | JOEL R. BRANDES, P.C. and Brandes & Stamler, Esqs., Plaintiffs, v. Susan ZINGMOND, Defendant. |
Weidman & Spatz, New York City, for plaintiffs.
Scott Yale Auster, New York City, for defendant.
M. HALLSTED CHRIST, Judge.
The central issue herein is whether a nonrefundable matrimonial agreement entered into between defendant client and Joel R. Brandes on behalf of plaintiff Joel R. Brandes, P.C. is valid and enforceable.
The agreement, in pertinent part, provides:
Mr. Brandes concedes that the defendant reconciled with her husband, declined to prosecute the action to dissolve her marriage and discharged counsel within a relatively short period of time subsequent to the execution of the subject agreement.
As evidenced by plaintiff's billing records, a total of five hours of counsel's time was expended on behalf of the defendant herein with the aggregate sum of $1,305.00 deducted from the $15,000.00 deposited on the execution of the agreement.
Viewed from several separate perspectives, the subject retainer agreement is unenforceable.
Contrary to the conclusion drawn by the movant, the ruling in Jacobson v. Sassower, 66 N.Y.2d 991, 499 N.Y.S.2d 381, 489 N.E.2d 1283, did not turn on the general efficacy of non-refundable retainer agreements.
The plaintiff, in his column Law and The Family, appearing in the New York Law Journal, July 31, 1990, made reference to the determination of the New York State Bar Association Ethics Committee relating to non-refundable retainer agreements.
He noted therein that the Ethics Committee did not find such agreements presumptively violative of the Code of Professional Responsibility. However, the following three caveats were expressed in mandatory terms:
"The specified minimum must not be excessive or unconscionable under the circumstances of the particular matter; non-refundability must be expressly conditioned on the absence of lawyer default; and the agreement must clearly and unambiguously explain in language that is 'fully known and understood by the client' the grounds that would entitle the client to a refund of the otherwise non-refundable fee." (New York State Bar Association Opinion # 599)
This Court opines that the subject agreement fails to pass muster with respect to each of the above-noted caveats.
Not only does the subject agreement fail to provide expressly or otherwise that non-refundability is conditioned upon the absence of attorney default, but also fails to recite any ground upon which the client would be entitled to a refund.
On the contrary, it is beyond cavil that the plaintiff, in drafting the subject agreement, sought to eliminate any possibility of a refund, so as to insure the payment of his fee, and initiated the underlying declaratory judgment action as a pre-emptive strike to forestall the filing of a complaint or grievance against counsel. (See, paragraph 9 of plaintiff's supporting affirmation)
Not only does the subject agreement fail to provide any basis on which the fee tendered could be refunded thereby contravening the latter two caveats expressed above, but it also runs afoul of the initial proscription in that the "minimum fee" of $15,000.00 is both grossly excessive and shocking to the Court's conscience.
As Justice Fredman noted in a different but related context, abuses of the nature and kind herein noted, if endemic to the matrimonial bar, may occasion "[t]he control that will be placed on them, in the same fashion that so long ago the Appellate Divisions took over the setting of the fee entitlements of the negligence bar ...".
As noted in the preamble to the American Bar Association Model Rules of Professional Conduct at 01:102,
"In assessing legal fees there are certain factors to be considered such as the time and labor required, the difficulty of the questions presented, the skill required to perform the services including the lawyer's experience, ability and reputation, the amount involved and benefit resulting to the client from the services (Matter of Freeman, supra)." (Cass & Sons, Inc., v. Stag's Fuel Oil Co., Inc., 148 Misc.2d 640, 642, 561 N.Y.S.2d 519, 521).
A review of the time sheets submitted by the plaintiff reveals the expenditure of five (5) hours of time with respect to the defendant's matter, prior to counsel's discharge.
Of the time claimed, 8/10 of one hour was expended prior to the execution of the retainer agreement by the defendant!
Of the remaining 4.2 hours, 1.8 hours was expressly expended in conversations, of which .4 hours was expended in telephonic communication with an attorney. (Presumably counsel for the defendant's husband.)
The bulk of the remaining time claimed is divided between telephone conversations with the defendant, a conference, a discussion and a review of information provided by or on behalf of the defendant.
It merits mention that not one document was generated during the tenure of the agreement. Not one pleading or letter was prepared by counsel. No appearance in court was made. No conference among counsel was scheduled, nor does it appear from the time sheets submitted that the plaintiff was involved in negotiating a settlement with adverse counsel during the pendency of the attorney-client relationship.
Thus, to permit counsel to retain what he characterizes as the minimum fee would be to lend judicial approval to an hourly rate of $3,571.43 ($15,000 / 4.2 hours) and sanction the violation of DR 2-106, the disciplinary rule that prohibits a lawyer from charging or collecting a clearly excessive fee.
"As an attorney he ... [has] to demonstrate that such fee was fair and reasonable ... Inasmuch as attorneys are held to the highest standards when dealing with clients over fee matters, ..." (Matter of Jackson, 120 A.D.2d 309, 316, 508 N.Y.S.2d 671 [3rd Dept.] leave to appeal denied 69 N.Y.2d 608, 514 N.Y.S.2d 1026, 507 N.E.2d 322); inasmuch as the benefit or value received by the client is "[s]o completely out of proportion to the value of the attorney's services ... it would be unconscionable as matter of law to permit him to enforce his contract." (Ward v. Orsini, 243 N.Y. 123, 128, 152 N.E. 696).
As noted in American Bar Association Formal Opinion # 250, "[O]urs is a learned profession, not a mere money-getting trade ...".
Therefore, whether viewed from the perspective related to the criteria associated with non-refundable fee agreements, as espoused by the New York State Bar Association Ethics Committee, and referred to by the plaintiff in his column, Law and The Family: The Ethics of Getting Paid (NYLJ, July 31, 1990, at 3) or from the perspective of DR 2-106, the subject retainer agreement is unenforceable.
Moreover, the agreement as written is fatally flawed from alternate perspectives.
As written, paragraphs 1 and 3 of the subject agreement most closely resemble liquidated damage provisions.
In commercial settings, liquidated damage clauses will not be enforced unless the amount set bears a reasonable proportion to the probable loss, and actual losses would be difficult to calculate or defy precise estimation. (See, City of Rye v. Public Service Mutual Insurance Company, 34 N.Y.2d 470, 358 N.Y.S.2d 391, 315 N.E.2d 458).
"If the sum agreed upon ... is so large as to be out of all proportion to the probable or presumptive loss, and is therefore not a fair measure of the damage actually sustained, it will generally be regarded as a penalty ... and the recovery will be limited to the actual damages sustained." (36 NYJur2d, Damages § 161)
Factors to be considered in determining whether one contracting party extracted an unconscionable penalty from the other include the level of sophistication of the parties, and whether one or both parties were either members of the bar or represented by able counsel during negotiation and execution of the parties' agreement. (See, Boyle v. Petrie Stores Corporation, 136 Misc.2d 380, 518 N.Y.S.2d 854).
There is nothing in the record that would lead this Court to conclude that the defendant was possessed of any certain level of...
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Kelly v. Md Buyline, Inc.
...of law, under contract principles. In support of this contention, defendants principally rely on Joel R. Brandes, P.C. v. Zingmond, 573 N.Y.S.2d 579, 586, 151 Misc.2d 671 (Sup.Ct. 1991). In Brandes, the court held that a nonrefundable matrimonial retainer agreement was not enforceable. Id. ......
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Attorney Grievance Comm. for the First Judicial Dep't v. Ziankovich (In re Ziankovich)
...and keep this "minimum fee" as the clients did not expressly indicate they were discharging him for cause (see Joel R. Brandes, P.C. v. Zingmond, 151 Misc.2d 671, 573 N.Y.S.2d 579 [Sup. Ct., Nassau County 1991] ); his fees were neither unreasonable nor excessive as he did a substantial amou......