Nolan v. Hemingway Bros. Interstate Trucking Co.

• Decision Date: 21 January 1950
• Docket Number: Civ. No. 49-767.
• Citation: 88 F. Supp. 111
• Parties: NOLAN v. HEMINGWAY BROS. INTERSTATE TRUCKING CO. et al.
• Court: U.S. District Court — Southern District of New York

88 F. Supp. 111

NOLAN v. HEMINGWAY BROS. INTERSTATE TRUCKING CO. et al.

Civ. No. 49-767.

United States District Court S. D. New York.

January 21, 1950.

James A. Corcoran, New York City, of Record, for plaintiff, William J. Corcoran (of Levy, Galotta & Corcoran), New York City, of counsel.

Harrington, Silber & Mulvey, New York City, for plaintiff, John F. Mulvey, New York City, of counsel.

IRVING R. KAUFMAN, District Judge.

Plaintiff seeks an order substituting the firm of Harrington, Silber & Mulvey, in place of her present attorney, James A. Corcoran, in the present action, and for a further order fixing the fee of the retiring attorney.

The dispute has arisen over a difference of opinion as to the conduct of the case between the plaintiff and her present attorney. Plaintiff contends on one hand that her present attorney in this negligence suit has insisted that she accept an offer of $7,000 to settle the case. Plaintiff states that the amount is inadequate and in substantiation thereof points out that her special damages to date amount to more than $4,900 and this without any consideration of such items of damages as pain, suffering, disability and permanency of injuries. Her present attorney justifies his position by stating that in his opinion the case will be lost if it is tried. Since plaintiff firmly believes that her injuries were of such a substantial nature as to warrant a greater recovery than that offered in behalf of the defendant, and since her counsel thought the proposed compensation adequate, and that if the case proceeded to trial plaintiff would lose, plaintiff was compelled to seek retention of substitute counsel.

Both sides are in agreement that the client has the right to discharge an attorney at any stage of litigation. However, the present counsel insists that the discharge and substitution of attorneys is conditioned upon the client paying the outgoing attorney his fees on a quantum meruit basis; that in view of the fact counsel had obtained a firm offer of $7,000, which counsel says was accepted by the plaintiff but which acceptance is denied by her, and which denial seems substantiated by her refusal to sign a general release, his fee should be based upon the retainer arrangement existing between his client and himself, to wit, one-third of any recovery, or, in this instance, one-third of $7,000.

The plaintiff agrees that the fee of the outgoing attorney should be fixed by this Court on a quantum meruit basis but with certain limitations. Plaintiff says that the amount fixed for the fee of the outgoing counsel should be in the form of a lien against any recovery whether by suit or judgment made on behalf of the plaintiff.

The power of the Court to determine and enforce a lien of an attorney is fixed by Section 475 of the Judiciary Law of New York State, Consol.Laws, c. 30. The section is applicable in the Federal Court. Nic Projector Corporation v. Movie-Jecktor Co., D.C.S.D.N.Y.1935, 16 F.Supp. 605; Ingold v. Ingold, D.C.S.D. N.Y.1939, 30 F.Supp. 347. See also Brown et al. v. Gerdes, 1944, 321 U.S. 178, 64 S.Ct. 487, 88 L.Ed. 659. The lien given to the attorney by section 475 is a charging lien. See In re Cooper, 1943, 291 N.Y. 255, 52 N.E.2d 421; Goldman v. Rafel Estates, 1st Dept. 1945, 269 App.Div. 647, 58 N.Y. S.2d 168; Boelsen v. Boelsen, Sup.1944, 51 N.Y.S.2d 867.

However, an attorney has a retaining lien, wholly apart from section 475, upon papers in his possession belonging to the client which came into his possession in the course of his professional employment until he is paid whatever is due him for services rendered. In re Weitling, 1935, 266 N.Y. 184, 194 N.E. 401; Goldman v. Rafel Estates, supra; Application of Korn, 2d Dept. 1938, 255 App.Div. 870, 978, 7 N.Y.S.2d 669; Application of Kellogg, Emery & Innes-Brown, Sup., 1942, 33 N.Y.S.2d 949, affirmed 264 App.Div. 852, 36 N.Y.S.2d 420, reversed on other grounds, 290 N.Y. 468, 49 N.E.2d 718; In re Ackerman's Estate, Sur.1917, 166 N.Y.S. 1080; Harris v. Karavas, Sup.1949, 86 N.Y.S.2d 9; see In re Cooper, 1943, 291 N.Y. 255, 260, 52 N.E.2d 421.

It is apparent, therefore, at the outset, that the problem concerning the liens should be disposed of. If any moneys are due to an attorney for services rendered and he has papers in his possession belonging to his client, these papers may be retained until the moneys due are paid. (See cases cited above.) However, an additional lien is given under section 475. This is the lien known as the charging lien and this attaches to the "verdict, report, determination, decision, judgment or final order in his client's favor, and the proceeds thereof in whatever hands they may come."

The cases cited in the present counsel's memorandum of law all stand for the generally accepted principle that the attorney being discharged need not wait for the outcome of the litigation until the value of his services is fixed; that his cause of action arises upon the discharge. Tillman v. Komar, 1932, 259 N.Y. 133, 181 N.E. 75; Martucci v. Brooklyn Children's Aid Society, 1940, 284 N.Y. 408, 31 N.E.2d 506; In re Ackerson, Sup.1944, 50 N.Y.S. 2d 359.

It should be noted that the attorney's right to a lien presupposes that there was not just cause for his discharge. In the instant case there is an honest dispute between the plaintiff and her attorney — both in good conscience think that they are right. The attorney insists that the plaintiff is making a serious blunder by continuing her litigation. Plaintiff insists that her attorney is guilty of a serious mistake in judgment in urging the acceptance of the amount...