Phillips, Nizer, Benjamin, Krim & Ballon v. Rosenstiel

Decision Date10 December 1973
Docket NumberDocket 73-1568.,No. 59,59
Citation490 F.2d 509
PartiesPHILLIPS, NIZER, BENJAMIN, KRIM & BALLON, Plaintiff-Appellee, v. Lewis S. ROSENSTIEL, Defendant-Appellant.
CourtU.S. Court of Appeals — Second Circuit


Walter S. Beck, New York City (Dinsmore Adams, Janet P. Kane and Phillips, Nizer, Benjamin, Krim & Ballon, New York City, of counsel), for plaintiff-appellee.

Roy M. Cohn, New York City (Saxe, Bacon, Bolan & Manley, New York City, of counsel), for defendant-appellant.

Before WATERMAN, FRIENDLY and TIMBERS, Circuit Judges.

FRIENDLY, Circuit Judge:


After twelve years of litigation, with countless suits in the courts of New York, Connecticut and Florida, the much-publicized marital dispute between Lewis and Susan Rosenstiel has improbably found its way into a federal court of appeals. The original marital dispute is now far behind; what brings the parties here is the mundane subject of attorneys' fees.

The plaintiff, a New York law firm which represented Susan in a variety of matters between 1962 and 1968, brought this suit in the District Court for the Southern District of New York, under 28 U.S.C. § 1332, claiming that under New York law Rosenstiel, then a citizen of Connecticut and later of Florida, was liable for a variety of legal services that the firm had rendered to Susan.

The Rosenstiels were married in New York in 1956.1 By 1961 they had separated, and their legal battles soon began. Lewis initially sought an annulment on the ground that Susan's earlier Mexican divorce was invalid. After a bitter squabble involving allegations of international intrigue and bribery, the New York appellate courts reversed the annulment decree. Rosenstiel v. Rosenstiel, 21 A.D.2d 635, 253 N.Y.S.2d 206 (1st Dep't 1964), rev'g 43 Misc.2d 462, 251 N.Y.S.2d 565 (Sup.Ct.), aff'd, 16 N. Y.2d 64, 262 N.Y.S.2d 86, 209 N.E.2d 709 (1965), cert. denied, 384 U.S. 971, 86 S.Ct. 1861, 16 L.Ed.2d 682 (1966). The parties then returned to the New York State Supreme Court for a determination of the support and maintenance payments due to Susan during the separation, and the counsel fees that should be awarded her lawyers. The state judge granted a sizeable sum on each count, awarding the plaintiff law firm $360,000 for its services and Susan $2400 per month after taxes as alimony. The law firm had sought more than $600,000 in counsel fees for its services in that case and in a variety of other actions in which it had represented Susan, but the court found that the statutory provision allowing a fee award, N. Y. Domestic Relations Law § 237, McKinney's Consol.Laws, c. 19, extended only to services rendered in the marital action and related proceedings. The Appellate Division modified the decree by increasing the alimony payments to Susan but reducing the counsel fees to $282,000. Rosenstiel v. Rosenstiel, 28 A.D.2d 651, 280 N.Y.S.2d 624 (1st Dep't 1967). Both parties appealed, but the Court of Appeals affirmed without opinion, Rosenstiel v. Rosenstiel, 20 N.Y.2d 925, 286 N.Y.S.2d 278, 233 N.E.2d 292 (1967).

Besides the annulment action, the Rosenstiels were involved in a variety of other legal disputes during the same period, in many of which the plaintiff law firm either represented Susan or provided some legal services to her. Among these were an abortive Connecticut annulment action brought by Lewis; a conversion suit brought by Lewis in the New York courts; a replevin action brought by Lewis to recover his furniture and other personal effects that Susan had either retained or sold when the couple separated; a joint action by Susan and the law firm against the St. Paul Fire and Marine Insurance Company on its surety bond to recover for Lewis' failure to make timely support payments; and a number of vendors' actions brought against Susan or against Susan and Lewis for purchases made by Susan during the separation. In this action the law firm sought to recover for its services in each of these suits, as well as for its work on the appeal from the support and attorneys' fee awards in the annulment suit. In addition, the firm sought to recover various disbursements made in connection with several of the other suits mentioned above.

The district court held that it had jurisdiction because the plaintiff had established diversity of citizenship, and the suit was not one for divorce or alimony but simply for attorneys' fees.2 Having taken jurisdiction, the court held that under New York common law action for "necessaries" the plaintiff could recover for the various services rendered to Susan, although it reduced the plaintiff's claim from a total of $200,000 to $122,615.37. The defendant has appealed, contending that the district court misread the applicable New York law in several significant respects, and that the judgment was therefore grossly inflated. In addition, the defendant contended at oral argument that the district court improperly assumed jurisdiction over the case and should either have dismissed the suit or stayed it to permit a state court to resolve the difficult questions of New York law here presented.


We must first consider the correctness of the district court's ruling that the suit was not barred by the rule that diversity jurisdiction does not extend to matrimonial actions. This principle has its origin in a dictum in Barber v. Barber, 62 U.S. (21 How.) 582, 584, 16 L.Ed. 226 (1859).

We disclaim altogether any jurisdiction in the courts of the United States upon the subject of divorce, or for the allowance of alimony, either as an original proceeding in chancery or as an incident to divorce a vinculo, or to one from bed and board.

The three Justices who dissented from the assumption of jurisdiction in Barber supplied a rationale for the dictum. The case had been brought as a diversity suit in the district court for Wisconsin to enforce a New York decree for separation and alimony, and the majority held that the court had jurisdiction since the case was not a suit for allowance of alimony, but merely a suit to prevent a valid state court decree from being defeated by fraud. The dissenters responded that chancery jurisdiction in England had not extended to divorce and alimony, with the result, presumably, that a proceeding seeking such relief did not come within the language, "all suits of a civil nature at common law or in equity," of the diversity statute, 1 Stat. 78.3 The Court gave support to this reasoning in Maynard v. Hill, 125 U.S. 190, 206, 8 S.Ct. 723, 31 L.Ed.2d 654 (1888), where it noted that the power to grant divorces in England had been divided between the ecclesiastical courts, which could grant divorces from bed and board, and Parliament, which alone could grant absolute divorces.

In Simms v. Simms, 175 U.S. 162, 167, 20 S.Ct. 58, 44 L.Ed. 115 (1899), the Court reaffirmed the Barber dictum, although in that case it exercised appellate jurisdiction over a divorce decree of a territorial court.4 The Court applied the dictum in Ohio ex rel. Popovici v. Agler, 280 U.S. 379, 50 S.Ct. 154, 74 L. Ed. 489 (1930), in refusing to issue a writ of prohibition against an Ohio proceeding in which a consul was sued for divorce, despite the constitutional provisions on the subject and the statutory reservation to the federal courts of exclusive jurisdiction "of all suits and proceedings" against consuls and the grant of jurisdiction of such suits and proceedings to the district courts and the Supreme Court. After stating that the exclusive jurisdiction statutes "do not purport to exclude the State Courts from jurisdiction except where they grant it to Courts of the United States," Mr. Justice Holmes, no tyro in legal history, continued, id. at 383-384, 50 S.Ct. at 155:

Therefore, they do not affect the present case if it be true as has been unquestioned for three-quarters of a century that the Courts of the United States have no jurisdiction over divorce. If when the Constitution was adopted the common understanding was that the domestic relations of husband and wife and parent and child were matters reserved to the States, there is no difficulty in construing the instrument accordingly, and not much in dealing with the statutes. `Suits against consuls and vice-consuls\' must be taken to refer to ordinary civil proceedings and not to include what formerly would have belonged to the ecclesiastical Courts.

We have no disposition to question that conclusion, whether the history was right or not, cf. Spindel v. Spindel, supra, 283 F.Supp. at 802-803. More than a century has elapsed since the Barber dictum without any intimation of Congressional dissatisfaction. It is beyond the realm of reasonable belief that, in these days of congested dockets, Congress would wish the federal courts to seek to regain territory, even if the cession of 1859 was unjustified. Whatever Article III may or may not permit, we thus accept the Barber dictum as a correct interpretation of the Congressional grant.

However, the scope of the exception relating to matrimonial actions, like that of the related one concerning matters of probate and administration, has been rather narrowly confined, see generally Hart & Wechsler, supra, at 1186-92 (2d ed. 1973). As already noted, in the very case enunciating the matrimonial exception the Supreme Court sustained federal jurisdiction to enforce an alimony award already made by a state court in a divorce proceeding. Accord, Sistare v. Sistare, 218 U.S. 1, 16-17, 30 S.Ct. 682, 54 L.Ed. 905 (1910). We have upheld federal jurisdiction in an action to determine whether a Connecticut divorce decree was invalid as having failed to give full faith and credit to a previous Nevada decree, Southard v. Southard, 305 F.2d 730, 731 (2 Cir. 1962). In Harrison v. Harrison, 214 F.2d 571 (4 Cir.), cert. denied, 348 U.S. 896, 75 S.Ct. 217, 99 L.Ed. 704 (1954), the court sustained federal jurisdiction in a diversity action to...

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