Petition of Rosenman & Colin, s. 886

Decision Date20 June 1988
Docket NumberD,1085,Nos. 886,s. 886
Citation850 F.2d 57,11 Fed.R.Serv.3d 595
PartiesIn Matter of Petition of ROSENMAN & COLIN, Appellee-Cross-Appellant, for an Adjudication of its Rights in the Matter of Sherrier v. Richard. ROSENMAN & COLIN, Petitioner-Appellee, Cross-Appellant, Julian Sherrier, Plaintiff, v. Bernice RICHARD, Defendant-Respondent-Appellant, Cross-Appellee. ockets 87-7957, 87-9049.
CourtU.S. Court of Appeals — Second Circuit

Whitney North Seymour, Jr., New York City (Craig A. Landy, Brown & Seymour, New York City, on the brief), for defendant-respondent-appellant, cross-appellee.

J. Kelley Nevling, Jr., New York City (Rosenman & Colin, pro se, New York City, on the brief), for petitioner-appellee, cross-appellant.

Before VAN GRAAFEILAND, NEWMAN and WINTER, Circuit Judges.

JON O. NEWMAN, Circuit Judge:

This appeal concerns primarily a dispute between a law firm and its former client as to the extent of an attorney's lien for unpaid fees. Bernice Richard, the former client, appeals from a judgment of the District Court for the Southern District of New York (Robert W. Sweet, Judge) granting a lien in the amount of nearly $400,000 to the law firm of Rosenman & Colin ("Rosenman"). The lien applies to sums awarded to Richard in litigation against her former lover, Julian Sherrier. Richard contends on appeal that she is entitled to a jury trial, that she is not liable for the fees determined by the Court in view of Rosenman's breach of a retainer agreement, and that the lien should apply at most to the sum of $17,545, which she contends is the affirmative recovery she obtained from Sherrier. Rosenman cross-appeals, contending that the amount of the lien, as determined by the Court, is too low. We agree with the District Court that Richard was not entitled to a jury in this equitable proceeding. However, we agree with Richard that Rosenman's lien is limited to $17,545.


The history of the acrimonious litigation between Richard and Sherrier and Richard's subsequent dispute with Rosenman over legal fees has been graphically described in several opinions of the District Court. See Sherrier v. Richard, 564 F.Supp. 448 (S.D.N.Y.1983); Petition of Rosenman Colin Freund Lewis & Cohen (In re Sherrier v. Richard), 600 F.Supp. 527 (S.D.N.Y.1984); Petition of Rosenman Colin Freund Lewis & Cohen (In re Sherrier v. Richard), 656 F.Supp. 196 (S.D.N.Y.1987). We summarize only those facts necessary for an understanding of this appeal.

Bernice Richard is a wealthy New Yorker and a patron of the arts. Julian Sherrier, a citizen of Great Britain and Pakistan, is a dealer in Gandharan art, an art form that developed in Pakistan in the Second Century B.C. through the Sixth Century A.D. In the fall of 1978, Richard met Sherrier in New York, and a romantic relationship ensued. The couple became involved in a series of financial transactions involving valuable Gandharan sculptures. In July 1979, Sherrier delivered a sculpture called the "Fasting Buddha" to Richard as collateral for a $127,000 loan. In October 1979, Richard purchased from Sherrier for $25,000 a piece called the "Padmapani Bronze." In 1979 and 1980, Richard gave Sherrier approximately $340,000, which he used toward the purchase of four Gandharan sculptures in Pakistan, the "Princely," "Elongated," "Standing," and "Seated" Buddhas, all of which were sent to Richard's townhouse in New York. In 1980, Richard discovered that the Padmapani Bronze had been stolen and that Sherrier had used the insurance proceeds for his own purposes. Following this revelation, the romance deteriorated, and the couple began to disagree as to their respective rights in the five Buddhas located in Richard's townhouse.

Richard turned for legal advice to the Rosenman firm, which had performed legal services for her on several occasions. In October 1980, she signed a retainer agreement to have the firm represent her in the Sherrier matter. The agreement provided that Rosenman "will be paid for our services ... at our normal time charges." Thereafter, Rosenman began doing research in order to advise Richard how best to protect her interests. When the Rosenman partner in charge of the matter sent Richard her first bill in November 1980, he attached a note saying, "I am going to bill you monthly so that you will know at all times exactly how much this matter is costing you."

Sherrier filed suit against Richard in the Southern District of New York on June 7, 1982. He claimed that the Standing, Seated, Princely, and Elongated Buddhas had been acquired in a joint venture and that he was entitled to half of their value in excess of the parties' respective contributions to the purchase price. Additionally, he claimed he was entitled to the Fasting Buddha upon return of the $127,000 loan. Richard, represented by Rosenman, responded that she owned the Standing, Seated, Princely, and Elongated Buddhas outright and that she had a half interest in the Fasting Buddha. In addition, Richard counterclaimed for the insurance proceeds from the Padmapani Bronze. After a bench trial, the District Court awarded Sherrier a half interest in the value (less purchase price) of the Standing, Seated, Princely, and Elongated Buddhas and the right to complete ownership of the Fasting Buddha upon repayment of the loan. The Court also determined that Richard was entitled to insurance proceeds resulting from the theft of the Padmapani Bronze, plus interest, in the total amount of $17,545. Sherrier v. Richard, supra, 564 F.Supp. at 459 (hereinafter "the underlying lawsuit" or "Sherrier "). An elaborate judgment was entered to reflect these determinations. The details of that judgment will be described below in connection with our determination of the amount of "recovery" that is subject to Rosenman's lien.

Following the trial, a dispute arose between Richard and Rosenman over fees incurred in the case. Richard refused to pay a substantial portion of her bill on the ground that Rosenman had overstaffed the underlying lawsuit and had wasted resources pursuing irrelevant matters. Richard also complained that Rosenman had misled her as to the cost of the litigation and had neglected to send her bills on a monthly basis as promised.

In June 1983, Rosenman commenced the present proceeding, seeking an order determining that Richard owed it $304,973.05 in unpaid fees and disbursements and enforcing an attorney's charging lien in that amount upon the judgment awarded Richard in the underlying lawsuit. The District Court denied Richard's motion to dismiss the fee petition, 600 F.Supp. 527 (S.D.N.Y.1984), granted Rosenman's motion to strike Richard's demand for a jury trial, 656 F.Supp. 196 (S.D.N.Y.1987), and, after a bench trial, ruled substantially in favor of Rosenman, 668 F.Supp. 788 (S.D.N.Y.1987). The Court held that although Rosenman had materially breached its contract with Richard by failing to send monthly billing statements, Rosenman was entitled to recover for its services on a quantum meruit theory. The Court awarded Rosenman an attorney's charging lien of $399,841.46, plus costs and post-judgment interest. This amount included approximately $248,000 in unpaid legal fees, approximately $118,000 in prejudgment interest, and $33,351.90 for disbursements.

Both parties appeal from the judgment of the District Court. Richard contends that she was entitled to a jury trial, that Rosenman's breach of the retainer agreement precludes or at least limits the quantum meruit award, and that if she is liable to Rosenman for fees, an attorney's lien is enforceable against her only up to $17,545. Rosenman contends that it did not breach the retainer and that it is entitled to a lien in the full amount of its unpaid fees.

A. Jury Trial

Richard contends that this proceeding is essentially a contractual dispute over an attorney's fee and that she is therefore entitled to a jury. We disagree for substantially the reasons set forth in the District Court's comprehensive opinion granting Rosenman's motion to strike Richard's jury request. 656 F.Supp. 196. This is an action to enforce a lien. See N.Y.Jud.Law Sec. 475 (McKinney 1983). In the context of both attorneys' liens and other liens, such actions have repeatedly been regarded as equitable in nature so that no jury right attaches. See Damsky v. Zavatt, 289 F.2d 46, 53 (2d Cir.1961) (tax lien); Walter E. Heller & Co. v. O/S Sonny V, 595 F.2d 968, 976 n. 7 (5th Cir.1979) (mortgage foreclosure); In re King, 168 N.Y. 53, 58-59, 60 N.E. 1054, 1056 (1901) (attorney's lien); Flores v. Barricella, 123 A.D.2d 600, 600, 506 N.Y.S.2d 885, 886 (2d Dep't 1986) (attorney's lien); In re Britton's Will, 187 Misc. 70, 60 N.Y.S.2d 466, 474 (Monroe Cty.Surr.Ct.1946) (attorney's lien).

Simler v. Conner, 372 U.S. 221, 83 S.Ct. 609, 9 L.Ed.2d 691 (1963), on which Richard relies, is not to the contrary. In that case, the Supreme Court held that the plaintiff was entitled to a jury in a declaratory judgment action he brought to determine the extent of his liability to an attorney under a retainer agreement. Simler followed the long-settled rule that declaratory judgment actions are inherently neither equitable nor legal and that the nature of the underlying dispute determines whether a jury trial is available. See Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959); (American) Lumbermens Mutual Casualty Co. v. Timms & Howard, Inc., 108 F.2d 497, 499 (2d Cir.1939); Owens-Illinois, Inc. v. Lake Shore Land Co., Inc., 610 F.2d 1185, 1189 (3d Cir.1979); Fed.R.Civ.P. 57, 5 Moore's Federal Practice p 38.29 at 38-230 (2d ed. 1987). In contrast to declaratory judgment actions, proceedings to enforce a lien are inherently equitable. No jury is available notwithstanding that traditionally legal issues are raised, such as the contractual liability giving rise to the lien. See Damsky v. Zavatt, supra, 289 F.2d at 53; Walter...

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