Wood v. Wood

• Decision Date: 20 October 1964
• Court: New York Supreme Court — Appellate Division
• Parties: Helena A. WOOD, Plaintiff-Respondent, v. Walter A. WOOD, Defendant-Respondent. Zelenko & Elkind, Appellants.

Page 195

253 N.Y.S.2d 195

21 A.D.2d 627

Helena A. WOOD, Plaintiff-Respondent, v. Walter A. WOOD, Defendant-Respondent Zelenko & Elkind, Appellants.

Supreme Court, Appellate Division, First Department.

Oct. 20, 1964.

Herbert Zelenko, New York City, of counsel (Philip I. Aaron, Jamaica, with him on the brief), for Zelenko & Elkind, appellants pro se.

Martin Kleinbard, New York City, of counsel (John Lyon, New York City, with him on the brief, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, attorneys), for plaintiff-respondent.

Schwartz & Frohlich, New York City, for defendant-respondent.

Before BREITEL, J. P., and VALENTE, McNALLY, EAGER and STEUER, JJ.

EAGER, Justice.

The attorneys, who formerly represented the plaintiff in this action, appeal from the order for substitution of attorneys and from the order denying reargument, insofar as such orders limit to a counsel fee award their recovery from plaintiff for the services rendered in a matrimonial action to the time of the entry of judgment.

The action was brought by the plaintiff wife against her husband for separation, and the defendant had interposed therein a first counterclaim for a declaratory judgment that he was never validly married to the plaintiff, a second counterclaim requesting judgment in his favor for a separation upon grounds of abandonment, and third and fourth counterclaims seeking to impress a constructive trust upon, and to obtain a retransfer to him of, the joint half-interest transferred by him to plaintiff in a proprietary lease of and the stock relating to, a cooperative apartment. Following a trial of several days' duration, presided over by Mr. Justice Coleman, the plaintiff's complaint was dismissed and a judgment was directed in defendant's favor annulling the marriage and directing a retransfer to him of the interest in the lease and stock, Wood v. Wood, 41 Misc.2d 95, 112, 245 N.Y.S.2d 800.

The appellants were substituted as the attorneys for the plaintiff shortly before the trial and represented her at the trial. A motion by plaintiff's prior attorneys for counsel fees, made before the trial, had been denied without prejudice to renewal before the trial court. Following the trial, on application of the appellants, in plaintiff's behalf, the trial court awarded plaintiff a counsel fee of $10,000, plus disbursements. Thereafter, and following the taking of an appeal from the judgment in defendant's favor, the plaintiff discharged the appellants as her attorneys and retained new counsel.

The appellants, conceding plaintiff's right to discharge them and to hire new attorneys, claimed a retaining lien upon plaintiff's papers and the right to recover $60,000 as the value of all services rendered to date to the plaintiff fixed on a quantum meruit basis. Special Term, however, determined that 'the value of their services rendered in the prosecution of the separation action to final judgment has been measured by the sum' awarded as counsel fees by the trial court. On such premise, Special Term directed a reference to a special referee, to hear and report, together with his recommendation, as to the reasonable value of legal services rendered and disbursements incurred, limited, however, to services and disbursements other than those rendered in the prosecution of the separation action to final judgment.

The attorneys insist that the prior counsel fee award is not binding upon them and that they are entitled to a hearing on the value of their services free of the limitations imposed by Special Term. We have concluded that, under the circumstances, the doctrines of res judicata and/or collateral estoppel are not applicable to deprive them of the right to a full hearing. These doctrines are not 'allowed to operate to deprive a party of an actual opportunity to be heard' where the issues between them have not been judicially settled. (See Comrs. of State Ins. Fund v. Low, 3 N.Y.2d 590, 595, 170 N.Y.S.2d 795, 798, 148 N.E.2d 136, 138.)

The trial court's determination was not rendered in an action or proceeding to which the attorneys were parties nor in which the attorneys and the plaintiff were adversaries with respect to any issue, and it did not constitute an adjudication upon the attorneys' claim as against the plaintiff. So, we do not have present here the identity of parties and of causes of action and the mutuality of estoppel which are required for the application of the doctrine of res judicata in its true sense. (See Israel v. Wood Dolson Co., 1 N.Y.2d 116, 151 N.Y.S.2d 1, 134 N.E.2d 97; Comrs. of State Ins. Fund v. Low, supra; City Bank Farmers Trust Co. v. Macfadden, 13 A.D.2d 395, 216 N.Y.S.2d 215, affd. 12 N.Y.2d 1035, 239 N.Y.S.2d 680, 190 N.E.2d 24, mot. to amend remittitur den. 13 N.Y.2d 673, cert. den. 375 U.S. 823, 84 S.Ct. 63, 11 L.Ed.2d 56.) Strictly speaking, too, the principles of collateral estoppel, as an aspect of res judicata, are not applicable here for the attorneys and the plaintiff have not, as between themselves, litigated any of the issues of law of fact now presented to this court for determination.

We must bear in mind that the prior application to the trial court related to and sought an adjudication upon the husband's liability to pay counsel fees to the wife in a matrimonial action. An award of counsel fees in such an action to the wife is 'the measure of her rights and of her husband's obligation' (Turner v. Woolworth, 221 N.Y. 425, 428, 117 N.E. 814, 815). In fact, the judgment, as entered here, expressly provided that 'pursuant to Section 237 of the Domestic Relations Law, the plaintiff is awarded counsel fees in the sum of $10,000 and the defendant is directed to pay the same to plaintiff together with disbursements'.

Moreover, the power of a court upon a motion in a matrimonial action, to fix and direct payment of counsel fees, is purely statutory. The authority of the court extends solely to the granting of allowances for services of the wife's attorneys rendered in the prosecution or defense of certain specified actions. (Domestic Relations Law, § 237, supra; see former Civil Practice Act, §§ 1169, 1169-a; Lake v. Lake, 194 N.Y. 179, 87 N.E. 87; Johnson v. Johnson, 206 N.Y. 561, 100 N.E. 408; Lea v. Lea, 182 Misc. 396, 47 N.Y.S.2d 645; Blaine v. Blaine, 20 A.D.2d 903, 248 N.Y.S.2d 960; Cashman v. Cashman, 17 A.D.2d 770, 232 N.Y.S.2d 278; Stahl v. Stahl, 18 A.D.2d 617, 234 N.Y.S.2d 981.) Furthermore, the allowance of counsel fees in the prescribed cases is a discretionary determination rather than one which results from the final resolution of precise issues. The power conferred upon the court is to fix and allow 'such sum or sums of money to enable the wife to carry on or defend the action or proceeding as, in the court's discretion, justice requires, having regard to the circumstances of the case and of the respective parties' (see Domestic Relations Law, § 237, subd. [a], supra). Included particularly within the 'circumstances' to be considered are the merits of the action or defense and the income and means of the husband.

So, we have a different case and different issues here. The counsel fee award, and the provisions of the judgment for payment thereof 'pursuant to Section 237 of the Domestic Relations Law', are not res judicata of the issues arising on the present application for the fixing of the compensation payable by plaintiff to the attorneys. Nevertheless, on settled principles and aside from the theory of res judicata, the prior determination may be qualifiedly binding upon the attorneys and, as hereinafter pointed out, is available as competent evidence which may dispose of or have considerable bearing upon issues now before the court.

The materiality, the relevancy and the effect of the prior determination may depend upon the nature and terms of the understanding, if any, between the attorneys and the plaintiff with respect to their fees. The plaintiff alleges that the attorneys agreed to look 'exclusively to my husband for its fee'. On the other hand, the attorneys allege that they did not agree to handle the matter on any contingent basis or to look solely to the defendant for their compensation, that the plaintiff is a woman of substantial means, and that she understood that they were to be paid for their services on the basis of their value and from her own funds, if necessary.

If the agreement between the parties was that the attorneys should look exclusively to the plaintiff's husband for their fee, then the determination of the trial court fixing the amount of the fee and disbursements to be paid by the husband is controlling. Their contract for services to the point of the rendition of final judgment was fully performed, and if the attorneys agreed to accept what the trial court would allow, they should be held to their agreement. An adjudication may be an operative fact in a subsequent action or proceeding between one of the parties to the adjudication and a third person, although the rules of res judicata are not applicable. (See Restatement, Judgments, § 111 (1942).) 'The rendition of a judgment is a fact upon which the rights and liabilities of strangers to the action may depend, not because of any rule of res judicata, but because the rendition of the judgment is a circumstance upon which their rights or liabilities depend because of their relation to each other or because of an agreement between each other with reference to the judgment. Thus, two persons not parties to an action may contract that the rights between them shall be dependent upon the outcome of an action.' (Restatement, Judgments, § 111, Comment a (1942).) 'When one covenants for the results or consequences of a suit between other parties, the decree or judgment in such suit is evidence against him, although he was not a party.' (Rapelye v. Prince, 4 Hill 119, 123.)

Noted, of...