Sassower v. Barone

• Decision Date: 22 February 1982
• Parties: Doris L. SASSOWER, Appellant, v. Joseph BARONE, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 966

447 N.Y.S.2d 966

85 A.D.2d 81

Doris L. SASSOWER, Appellant, v. Joseph BARONE, et al., Respondents.

Supreme Court, Appellate Division,

Second Department.

Feb. 22, 1982.

George Sassower, New Rochelle, for appellant.

Milton S. Zeiberg, New York City, for respondent Joseph Barone. ^*

Edward H. Petruzzi, Yonkers, for respondent Sally Barone.

Before MANGANO, J. P., and GIBBONS, GULOTTA and O'CONNOR, JJ.

GIBBONS, Justice.

The questions presented here for resolution are: (1) whether an award of counsel fees to a plaintiff wife contained in a judgment of divorce may constitute res judicata in a subsequent plenary action for counsel fees against the husband on the theory of necessaries and against the wife on her retainer agreement, where, as part of their agreement to reconcile, the plaintiff wife withdrew her appeal from the judgment where the sole issue for appellate review was the inadequacy of the counsel fees allowed; and (2) whether in a subsequent plenary action for counsel fees against the parties, a retainer agreement providing for legal services at $100 per hour, upon which a cause of action against the wife is founded, may be deemed unconscionable solely for the reason that, at the time it was entered into, the wife was not gainfully employed and was without assets. The instant litigation arose prior to the amendment of section 237 (subd. ) of the Domestic Relations Law, under which it is now provided that "applications for counsel fees and expenses may be maintained by the attorney for either spouse in his own name in the same proceeding" (L.1978, ch. 444, eff. July 19, 1978, as amd. by L.1980, ch. 281; cf. Sadofsky v. Sadofsky, 78 A.D.2d 520, 431 N.Y.S.2d 594).

On April 25, 1974, Sally Barone, a housewife not gainfully employed and the mother of one child, retained the plaintiff, Doris L. Sassower, as her attorney to commence a divorce action against her husband, defendant Joseph Barone. At that time, she stated that she had no money or property other than some jewelry and that everything was in her husband's name, including "the house, the car * * * the bank accounts * * * and the bars and restaurants he owned." The retainer agreement provided for a fee of $100 per hour and stated that it was "without prejudice to your right to recovery against my husband for the full value of the services which you will render to me in the action and in the negotiation of any settlement." Mrs. Barone paid her counsel $1,500 on account and the divorce action was soon after commenced.

In his answer Mr. Barone interposed a counterclaim for divorce and demanded custody of the child. There then ensued protracted proceedings between the parties in both the Family Court and in the divorce action in the Supreme Court.

On November 9, 1976, Mrs. Barone's attorney, plaintiff herein, applied for an interim counsel fee. In her affirmation, plaintiff stated that her services up to that point exceeded $15,000 based on the retainer rate of $100 per hour and that she had received no more than the initial payment of $1,500. The motion was referred to the trial court for disposition.

The trial before the court (SULLIVAN, J.), without a jury, commenced on November 23, 1976 and continued for nine days. On January 31, 1977, the court rendered a decision granting a divorce and the custody of the child to Mrs. Barone and directed that "all issues regarding property rights, and alimony and support * * * be tried separately." The court, in its decision, did, however, award plaintiff an "additional" counsel fee of $3,000 to be paid by Mr. Barone for legal services furnished up to January 31, 1977. In fixing this amount the court concluded that the total value of all the legal services to Mrs. Barone, rendered to that date, were worth $4,500 and, after deducting therefrom the $1,500 previously paid to the attorney by Mrs. Barone, arrived at the $3,000 figure. No testimony was taken on the issue of counsel fees at that time, and the court did not request counsel to furnish her affidavit of services. The court, in its decision, predicated its determination on plaintiff's interim request for fees, which was general in nature and contained no evidentiary showing of what services were performed.

A final judgment of divorce, including said award of counsel fees, was entered on April 28, 1977.

On May 20, 1977, Mr. Barone filed a notice of appeal from the entire divorce judgment, except, inter alia, as to the award of counsel fees. On May 27, 1977, Mrs. Barone filed a notice of cross appeal which was limited solely to the inadequacy of the counsel fee awarded.

After the entry of the judgment and during the pendency of the appeals, negotiations continued between the attorneys for the parties, on matters including the question of counsel fees, up to the time when Mrs. Barone called to tell her counsel that she did not wish to continue the appeal and terminated her services as counsel. Her discharge was confirmed by letter of Mrs. Barone, dated August 25, 1977.

On November 30, 1977, Mrs. Sassower commenced a plenary action to recover her legal fees. Although not separately stated, she alleged a cause of action against Mr. Barone for "necessaries furnished to his wife" and a cause of action against Mrs. Barone based on the retainer agreement. She alleged that her services were of the value of $25,000, plus disbursements of $200, making a total of $25,200, and, after deducting the $4,500 previously paid, she sought a recovery of $20,700.

The defendants appeared by separate counsel. The affirmative defenses interposed by each of them were similar and alleged essentially that the counsel fee awarded in the judgment of divorce of "the additional sum of $3,000" paid by Mr. Barone, over and above the initial $1,500 paid by Mrs. Barone, aggregating a total amount of $4,500, constituted a res judicata finding of the value of Mrs. Sassower's services up to January 31, 1977, the date of the decision in the divorce action.

At the trial of her action from which this appeal stems, Mrs. Sassower testified that she was relegated to such action because her discharge as Mrs. Barone's attorney aborted the prosecution of the cross appeal which sought to review the inadequacy of the counsel fee award made by the trial court. She testified that her professional services exceeded 400 hours including the protracted pretrial proceedings, a nine-day trial, and that her expertise and the successful results achieved merited the contracted $100 per hour fee.

Mrs. Barone testified that after the judgment of divorce had been obtained by her, Mr. Barone gave her a gift of an automobile and other items and that, with her consent, he returned to the marital home despite the fact that she had been awarded exclusive possession. During that period they tried to resolve their marital problems and she discharged Mrs. Sassower as her attorney.

In its decision after the trial, the court (MARBACH, J.) held that the award in the judgment of divorce of "the additional sum of $3,000 * * * for all services rendered" up to the date of the decision was "absolutely binding as res judicata " as to Mr. Barone, and that Mrs. Sassower's subsequent legal services to Mrs. Barone, up to the time of discharge, merited a further award of $1,000 to be paid by Mr. Barone.

Concerning the cause of action against Mrs. Barone, the court stated that the retainer was unconscionable because "an attorney knows that the lady does not have assets, it is obligation to take into account * * * Attorneys who take on for indigent or nearly indigent wives the prosecution of a matrimonial action are making a substantial personal sacrifice in many cases. They can never be adequately compensated."

The court continued:

"I do find that the plaintiff, Doris Sassower, has a degree of expertise and a great deal of experience in the field of family and matrimonial law, and that she is entitled to adequate compensation, in part, based upon such expertise. The number of hours, the difficulty of the litigation must also be taken into consideration. It was difficult; it was long. The result produced in obtaining the divorce, in obtaining for the wife the custody of the child, which was so important to the wife, deserves important consideration. But the overwhelming duty of an officer of this court to a just compensation in the light of the resources of the client does not permit me to do merely a mathematical job of multiplying some four hundred or five hundred hours by $100 an hour and reach an award of some $40,000 or $50,000 as appropriate to this case.

* * *

* * *

"Under all the circumstances of this case, I find that the total value of the services rendered is the sum of $10,000, of which $4500 has already been paid, and I have given $1,000 more here by way of an award or verdict against the husband. The balance, therefore, of $4500 is to be entered in favor of the plaintiff against the defendant, Sally Barone."

Upon the succeeding colloquy, the court, in explaining its ruling, said:

"I will state that on the basis of the time put in--and it appears necessarily put in--by the plaintiff, both in the courtroom and in the preparation of the documents encompassed in this very bulky file, in the conferences at home and in her office, on the basis of her standing at the bar and her expertise, would, if the client had substantial assets, have amounted to the sum of $40,000, if that were the sole test.

"I say that factually, that is the proof. But, again, I reiterate that such services, even having such a value, are subject to the philosophically imposed discount.

"But if you are talking about what she did, what the plaintiff did, she did render substantial services of value, and except for this philosophy, the value of these services would be $40,000." (Emphasis added.)

In making its determination, the trial court erred. We hold that, under the circumstances herein, the defendants are estopped from...