Paulsen v. Halpin

• Decision Date: 28 March 1980
• Citation: 74 A.D.2d 990,427 N.Y.S.2d 333
• Parties: Mark E. PAULSEN, Appellant, v. Theodore W. HALPIN and John F. Halpin and Sons, Inc., Defendants. Bond, McDonald and Toole, Respondents.
• Court: New York Supreme Court — Appellate Division

Page 333

427 N.Y.S.2d 333

74 A.D.2d 990

Mark E. PAULSEN, Appellant, v. Theodore W. HALPIN and John F. Halpin and Sons, Inc., Defendants Bond, McDonald and Toole, Respondents.

Supreme Court, Appellate Division, Fourth Department.

March 28, 1980.

Merkel & Mittleman, Rochester, by Charles A. Hall, Rochester, for appellant.

Bond, McDonald & Toole, Geneva, pro se, and by William J. McDonald, Geneva, for respondents.

Before SIMONS, J. P., and SCHNEPP, CALLAHAN, WITMER, and MOULE, JJ.

MEMORANDUM:

In this personal injury negligence action plaintiff appeals from that part of an order directing a substitution of attorneys which fixed the compensation of Bond, McDonald and Toole ("respondents"), the outgoing attorneys, for their legal services to plaintiff "upon a contingent fee quantum meruit basis on the gross amount received by plaintiff". Plaintiff sustained severe and permanent injuries as a result of an automobile accident which rendered him unconscious for five weeks and required extensive hospitalization and intensive rehabilitation therapy. While the plaintiff was still comatose, his father entered into an oral retainer agreement with respondents which provided for a contingent fee of 25% if the case was settled. The respondents' principal contact was with plaintiff's father, although respondents conferred with plaintiff a few times before he discharged them. Plaintiff's new attorney has apparently settled the case.

At Special Term respondents voiced their election "to be compensated on a quantum meruit contingent fee to be determined by the Court upon the final completion of the plaintiffs' (sic) cause of action". Respondents on this appeal make no claim for legal fees and disbursements in excess of the amount of the fees established by the retainer agreement between plaintiff and the incoming attorneys and urge that their services should be evaluated in relationship to the total legal services rendered by both the respondents and the incoming attorneys. They claim that the appeal should be dismissed, as plaintiff is not an aggrieved party, or, in the alternative, that the order appealed from should be affirmed. Plaintiff contends that he made the motion for an order of substitution of attorneys and a determination of respondents' fees because respondents refused to turn over the litigation file. Plaintiff argues that he is liable to respondents at the most for the reasonable value of their services rendered before their discharge. Special Term summarily determined the issues prior to the recovery in the underlying action.

The right of an attorney to recover for professional services must rest on an express or implied contract (Judiciary Law, § 474; Lynn v. Agnew, 179 App.Div. 305, 166 N.Y.S. 274). The burden of establishing the existence of a contract, with full knowledge by the client of all material circumstances, is on the attorney (Matter of Howell, 215 N.Y. 466, 109 N.E. 572; Matter of Vaupel, 37 N.Y.S.2d 853, affd. 266 App.Div. 723, 40 N.Y.S.2d 956; Kiser v. Bailey, 92 Misc.2d 435, 400 N.Y.S.2d 312; see also Whitehead v. Kennedy, 69 N.Y. 462). Yet, when a person has knowledge that legal services were performed for him, a promise to pay their reasonable value may be implied (see generally, Annotation, 78 A.L.R.2d 318).

Whether the contract be express or implied, however, a client may discharge an attorney at any time, even without cause, in which event the discharged attorney is entitled to be paid a fixed sum on a quantum meruit basis (Matter of Krooks, 257 N.Y. 329, 178 N.E. 548; Martin v. Kamp, 219 N.Y. 170, 114 N.E. 46; see, also, Code of Professional Responsibility, DR2-106; Matter of Freeman's Estate, 34 N.Y.2d 1, 355 N.Y.S.2d 336, 311 N.E.2d 480).

If it is found that a contingent contract exists, then a different rule may apply. After dismissal of the attorney the cancelled contract no longer serves "to establish the sole standard for the attorney's compensation. Together with other elements (it) may, however, be taken into consideration as a guide for ascertaining quantum meruit. . . . The amount of lien must, therefore, be fixed not alone upon the basis of a rescinded contingent contract but also upon a foundation built of the volume and quality of the professional services actually and necessarily performed" (Matter of Tillman, 259 N.Y. 133, 135-136, 181 N.E. 75). Thus, "the terms of the retainer contract, now at an end, may be taken into consideration in fixing the value of the lawyer's services" (Martucci v. Brooklyn Children's Aide Society, 284 N.Y. 408, 409, 31 N.E.2d 506, 507; see generally, Matter of Montgomery, 272 N.Y. 323, 6 N.E.2d 40).

Upon the termination of the contract of retainer, a cause of action for the reasonable value of the services performed immediately accrues to the attorney and he need not be compelled to wait the outcome of the...