Tuesday, July 31, 2012

Don't Knock The Block (Billing)

An award of fees to an attorney who sued his client in a matrimonial case was affirmed by the New York Appellate Division for the First Judicial Department:

"Where there has been substantial compliance' with the matrimonial rules, an attorney will be allowed to recover the fees owed for services rendered, but not yet paid for" (Edelman v Poster, 72 AD3d 182, 184 [2010], quoting Flanagan v Flanagan, 267 AD2d 80, 81 [1999]). The applicable rule, 22 NYCRR 1400.3, mandates that an attorney in a matrimonial matter file a copy of the signed retainer agreement with the court, along with the statement of net worth. Here, the record shows that a copy of the executed retainer was filed with the court on May 14, 2004, along with the updated statement of net worth. Even if plaintiff, as substituted counsel, should have filed the retainer within 10 days of its execution, he substantially complied with the requirements by filing the executed copy with the updated statement of net worth. Although it would have been better practice for plaintiff to have put proof of the filing in evidence on his direct case, his failure to do so does not change the fact that he substantially complied with the rule (see Kurtz v Kurtz, 1 AD3d 214, 215 [2003]).

Defendant also argues that plaintiff's billing practices and willful spoliation of evidence should result in sanctions, and dismissal of his claims. Specifically, defendant argues that block billing was improper and that "task billing," which lists the time for each separate task and is an enhanced level of billing, should have been used. However, block billing is common practice among law firms and neither 22 NYCRR 1400.3 nor the retainer agreement calls for task based billing. Regarding the spoliation of evidence allegation, defendant contends that plaintiff intentionally destroyed a particular attorney's individual time sheets, thereby preventing her from using those records to impeach plaintiff. Plaintiff testified at trial that the information from that attorney's individual time sheets was entered into the firm's time entry system, then reviewed by him and incorporated into the firm's bills to defendant. In any event, the time sheets were not key evidence, and thus their alleged destruction did not deprive defendant of the ability to defend against plaintiff's claim for fees(Coleman v Putman Hops. Center, 74 AD3d 1009 [2010], lv dismissed 16 NY3d 884 [2011]). Accordingly, a spoliation sanction is not warranted.

(Mike Frisch)

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