Reubenbaum v. B. & H. Exp., Inc.

• Decision Date: 27 May 1958
• Citation: 6 A.D.2d 47,174 N.Y.S.2d 287
• Parties: Samuel REUBENBAUM, Plaintiff-Respondent, v. B. & H. EXPRESS, Inc. and Ramiro A. Melendez, Defendants. Eugene L. Sugarman, Howard L. Kuttner and Abraham D. Fuss, copartners conducting practice as attorneys at law under the firm name of Sugarman, Kuttner & Fuss, Appellants; Glicker & Doynow, Respondents.
• Court: New York Supreme Court — Appellate Division

Page 287

174 N.Y.S.2d 287

6 A.D.2d 47

Samuel REUBENBAUM, Plaintiff-Respondent, v. B. & H. EXPRESS, Inc. and Ramiro A. Melendez, Defendants Eugene L. Sugarman, Howard L. Kuttner and Abraham D. Fuss copartners conducting practice as attorneys at law under the firm name of Sugarman, Kuttner & Fuss, Appellants; Glicker &amp Doynow, Respondents.

Supreme Court, Appellate Division, First Department.

May 27, 1958.

Eugene L. Sugarman, New York City, of counsel (Sugarman, Kuttner & Fuss, New York City, attorneys), for appellants.

Norman Roy Grutman, New York City, of counsel (Grabow & Katz, New York City, attorneys), for respondents.

Before BOTEIN, P. J., and BREITEL, FRANK, McNALLY and STEVENS, JJ. BREITEL, Justice.

In this personal injury negligence action there is a dispute between incoming and outgoing attorneys on the determination of the lien of the outgoing lawyers under the provisions of the Judiciary Law. The incoming attorneys insist that the fee of the outgoing lawyers be determined on a fixed dollar amount quantum meruit. The outgoing attorneys, on the other hand, assert their right to receive a contingent percentage payable at the conclusion of the case, but determined at the present time. Special Term directed a reference to determine the fees of the outgoing lawyers on a fixed dollar amount quantum meruit. ^*

Both sets of attorneys have filed retainer agreements providing for contingent percentage fees on a sliding scale ranging from 50% of the first $1,000 of recovery to 15% on any amount recovered over $50,000. Such contingent percentages are authorized by the rules of this Court (Rule 4 of Special Rules Regulating the Conduct of Attorneys).

Plaintiff client, aged 75, was injured September 4, 1957, when he, a pedestrian, was struck by a motor vehicle. He sustained a fractured skull. On September 9, 1957, the client retained the outgoing attorneys, who handled the case until October 24, 1957, when they were discharged. The outgoing attorneys aver that, in the interval, they investigated the case, prepared and served the summons and complaint, and received service of an answer and demand for a bill of particulars. They claim that their investigation had progressed far enough so that they were ready to try the case, if that were required.

The relevant principles are few and not difficult of application. The client always has the right to discharge his attorney, even without cause. When this happens, the attorney is entitled to compensation, determined by quantum meruit, whether that be more or less than that provided in the contract or retainer between the attorney and client. Matter of Montgomery's Estate, 272 N.Y. 323, 6 N.E.2d 40, 109 A.L.R. 669; Matter of Tillman, 259 N.Y. 133, 181 N.E. 75; Application of Krooks, 257 N.Y. 329, 178 N.E. 548. As between the client and the outgoing attorney, either can require that the compensation be a fixed dollar amount, presently payable or secured by lien on the cause of action, determined on the basis of quantum meruit, that is, the value of the services. Martucci v. Brooklyn Children's Aid Society, 284 N.Y. 408, 31 N.E.2d 506; see Robinson v. Rogers, 237 N.Y. 467, 143 N.E. 647, 33 A.L.R. 1291, generally, and particularly as to security in lieu of present payment, distinguishing between retaining and charging liens; 3 A.L.R.2d 148, et seq. However, the client and the outgoing attorney are free to agree that the outgoing attorney shall, in lieu of a presently determined fixed dollar amount, receive as compensation a contingent percentage determined either at the time of substitution or at the conclusion of the case. This follows as a matter of elementary principles of contract.

But, where the dispute is not between client and attorney but is in fact between incoming and outgoing attorneys, different rules apply. And in this connection the fact that the plaintiff is the nominal appellant is not determinative. If the dispute is primarily or exclusively between the attorneys, the outgoing attorney is given the right to elect whether he will take his compensation on the basis of a presently fixed dollar amount quantum meruit, or whether, still on the basis of quantum meruit, he will take a contingent percentage instead. However, in the latter situation where the outgoing lawyer elects to take a contingent percentage, this Court has repeatedly held, at least in tort cases, that the contingent percentage is better determined at the conclusion of the case. Then all of the factors properly determining compensation, especially the size of the recovery, have been ascertained.

This is precisely what was done in Buckley v. Surface Transportation Corp., 277 App.Div. 224, 98 N.Y.S.2d 576. There, as here, plaintiff client was the nominal appellant, though in fact the dispute was only between the attorneys. The outgoing attorneys were given the option of taking a fixed dollar amount compensation, presently...