Wednesday, June 1, 2016
The Utah Court of Appeals held that a law firm failed to perfect a lien on settlement proceeds after a partner and the case departed
Thomas D. Boyle represented Dawn Woodson in a wrongful death action while he was employed by the law firm Clyde Snow & Sessions PC (Clyde Snow) and then later by Prince Yeates & Geldzahler (Prince Yeates). After six years of litigation the parties reached a settlement. Clyde Snow asserted a lien on a portion of the settlement funds for attorney fees. Prince Yeates interpleaded a portion of the settlement, and the district court awarded those funds to Clyde Snow. Boyle appeals the district court’s order awarding the money to Clyde Snow. Because we determine Clyde Snow did not properly intervene, we conclude the district court lacked jurisdiction to award it attorney fees. We therefore reverse.
In 2007, fifteen-year-old Caleb Jensen died while participating in a wilderness therapy program. His mother, Dawn Woodson, retained Clyde Snow to represent her in a wrongful death action. Boyle was lead counsel on the case. Woodson signed a contingency-fee agreement specifying that Clyde Snow would retain forty percent of any recovery...
In June 2010, three years after the case began, Boyle left Clyde Snow and joined Prince Yeates, and Woodson opted to have her case follow him there. Clyde Snow then filed a notice of its attorney lien. While he was with Prince Yeates, Boyle continued to represent Woodson until the case settled.
Settlement was reached in 2013.
On the merits
An attorney seeking to enforce an attorney lien must do so either "by filing a separate legal action‛ or ‚by moving to intervene in a pending legal action." Utah Code Ann. § 38-2-7(4)(a) (LexisNexis 2014). This section does not confer an unconditional right to intervene. See Bishop v. Quintana, 2005 UT App 509U, para. 5. Instead, a person desiring to intervene must submit a "timely application" and "shall serve a motion to intervene upon the parties as provided in Rule 5."
...Here, Clyde Snow did not file a timely motion to intervene. First, the only filing on behalf of Clyde Snow submitted before the parties’ settlement was a notice of Clyde Snow’s lien. After the parties’ settlement but before the court dismissed Woodson’s claims, Clyde Snow filed a restated notice of its attorney lien and an objection to the parties’ motion to dismiss the case, which stated that "Clyde Snow reserved its statutory right to intervene." But Clyde Snow never actually moved to intervene in the pending action.
Second, even if we construed Clyde Snow’s objection as a deficient attempt to intervene, it was not filed in a timely fashion.
The court also expressed concern about the danger presented to the client's interests
After the defendants expressed their concerns and objections to Clyde Snow’s participation, the court asked if anybody had ‚a strong objection‛ to keeping the case open, and no one replied. The court then decided to keep the case open for the sole purpose of resolving Clyde Snow’s attorney lien issue.
In doing so, the court inappropriately allowed Clyde Snow to derail resolution of the case by objecting to the parties’ stipulated agreement to dismiss Woodson’s claims. The court continuously referenced Clyde Snow and Boyle as parties even though neither had intervened as a party in this case. Although the actual parties did not reply when the court asked if anyone strongly objected to Clyde Snow’s participation, any further objections from the defendants would have been futile. Further, the court’s decision put the actual parties in an untenable situation: they either had to object to Clyde Snow’s presence at the risk of transforming Clyde Snow from non-party status to that of a party or refrain from objecting at the risk of having the court rule in a manner contrary to their interests.
Tuesday, May 17, 2016
Dan Trevas reports a case decided today by the Ohio Supreme Court
When attorney-fee billing statements with detailed information about the tasks undertaken by a law firm representing a city are intertwined with summaries of the legal work performed, the detailed information is not a public record, the Ohio Supreme Court ruled today.
The Supreme Court voted 5-2 to affirm a Ninth District Court of Appeals decision to release redacted copies of invoices from a law firm representing Avon Lake to James E. Pietrangelo II. The records are connected to pending litigation between Avon Lake and Pietrangelo. In a per curiam decision, the Court majority reasoned that Pietrangelo may acquire information useful in his litigation strategy against the city if provided more details than what the Ninth District permitted to be released.
In a dissenting opinion, Justice Sharon L. Kennedy wrote that only the narrative summary portion of the bills describing the work the firm did can be withheld and that Pietrangelo is entitled to more information as well as damages from Avon Lake.
Detailed Information Sought
Pietrangelo requested from the city and its law director the invoices from a law firm for services it rendered concerning his lawsuit. The city provided copies of invoices with the name of the firm, the general matter for which services were provided, the date of the invoice, the total fees billed for the period, and itemized expenses.
The city redacted the remaining information on the invoices citing exemptions for attorney-client privilege and attorney-work product. The information that was redacted included narrative descriptions of the particular legal services rendered, the name of each attorney in the firm providing services along with the service provided, the time spent, the billing rate, the total number hours billed, and the total fee attributed to each attorney.
Pietrangelo filed a writ of mandamus with the Ninth District to compel the city to provide unredacted invoices and requested statutory damages and attorney fees. Pietrangelo and Avon Lake both filed for summary judgment, but the Ninth District determined it could not side with a party without more information and ordered the city to file unredacted copies of the billing statements for the judges to review under seal.
After review, in March 2015 the Ninth District concluded the city disclosed all the records not exempt from disclosure by the Ohio Public Records Act, which is R.C. 143.43, except for one portion. The Ninth District found the part of the invoice titled “professional fee summary,” that described the hours, rates, and money charged for services was not exempt. It ordered the city to provide Pietrangelo with copies of the billing statements that included the professional fee summary.
The Ninth District denied Pietrangelo’s request for the fully unredacted records plus damages and attorney fees. He appealed to the Supreme Court, which agreed to hear the case.
Extent of Attorney-Client Privilege at Issue
Citing its 2011 State ex rel. Dawson v. Bloom-Carroll Local School Dist. decision, the Court’s opinion explains that narrative portions of itemized attorney billing statements containing descriptions of legal services are protected by attorney-client privilege and are not public records.
Pietrangelo argued that based on the Court’s 2012 State ex rel. Anderson v. Vermillion decision he is entitled to all the dates legal services were performed along with the hours and rates of services, which is more than what is provided in the professional fee summary. The Court in Anderson stated that “the general title of the matter being handled, the dates services were performed, and the hours, rates and money charged for the services,” on an attorney billing statement need to be disclosed.
The Court explained that Anderson was the former mayor of Vermillion and was seeking the billing statements regarding the legal services provided to the new mayor. His entire request was denied. The Court ordered Vermillion to turn over all of the billing statements, ruling only the narrative portions were exempt from the public records act by attorney-client privilege.
Avon Lake argued the situation with Pietrangelo is similar to the Dawson case where a parent sought billing statements for legal services provided to the school district regarding pending litigation between the district, the parent and her children. The district provided summaries with the attorney’s name, invoice total, and the matter involved, but withheld the actual invoices because they contained confidential information.
The Court allowed the district to withhold the invoices because the information in the invoices was “either covered by attorney-client privilege or so inextricably intertwined with privileged materials as to also be exempt from disclosure.”
“Like Dawson, the records that Pietrangelo seeks relate to the pending litigation between the parties. If disclosed, Pietrangelo may acquire information that would be useful in his litigation strategy against the city, whereas in Anderson, any harm from disclosure of attorney-client communication was remote and speculative,” the Court stated. “To the extent that Pietrangelo requests the dates, hours, and rates not identified in the professional-fee summary, they are inextricably intertwined with the narratives of services that are privileged materials. Such information is exempt from disclosure.”
Pietrangelo also sought $1,000 in statutory damages and attorney fees because the Ninth District found the city did not fully comply with the public records law. The Court affirmed the Ninth District’s denial of Pietrangelo’s request because Avon Lake reasonably believed it was entitled to withhold the information it did.
Chief Justice Maureen O’Connor and Justices Paul E. Pfeifer, Terrence O’Donnell, Judith Ann Lanzinger, and William M. O’Neill joined the opinion.
More Disclosure Required, Dissent Maintains
In her dissent, Justice Kennedy stated she would order the redaction of only the narrative services information and release all the other information on the billing statements to Pietrangelo in accordance with the Ohio Public Records Act.
She further disagreed with the majority’s conclusion that the relevant distinction between Dawson and Anderson regarding what information is subject to disclosure is whether litigation is pending between the record requestor and the government entity. Instead, Justice Kennedy wrote that the fact the records requestor is involved in litigation against the government body should have no bearing on whether the records are public.
“Whether a public-records requestor and a government entity are engaged in litigation is irrelevant to the question of whether the information in an itemized attorney-fee billing statement is privileged and exempt from disclosure. Instead, our case law mandates the proper focus is on the information sought and whether that information is privileged,” she wrote.
The relevant distinction between the two cases was that the school board in Dawson reduced the nonexempt information to a summary and released it, whereas the city in Anderson denied the request and failed to provide an alternative record.
Justice Kennedy recognized that the narrative portions of a billing statement containing descriptions of legal service are protected by the attorney-client privilege and not subject to disclosure. She explained that the billing statements at issue contain summary information on the first two pages, and that all subsequent pages contain four independent columns divided into the categories of date, name, services, and hours. Each billing statement concluded with the total number of hours invoiced, a professional fee summary, disbursements and expenses, and a total invoice amount.
She wrote the majority’s reliance upon Dawson to conclude that the date, name, and hours information was inextricably intertwined with the narrative of the services was disingenuous. She noted that Dawson offered little discussion of how the billing statements were constituted, whereas the format used in the statements to Avon Lake separated the information about the attorneys providing the services and the hours billed so that they “are not intertwined with the narrative services column.”
Justice Kennedy reasoned that the ability to redact the narrative services column mandated all remaining portions of the billing statements be released. By affirming the appellate court's decision not to release the remaining non-exempt portions of the billing statements the majority created a new “redundancy” exemption not authorized by the General Assembly she concluded.
Justice Kennedy would have also granted Pietrangelo damages because after Anderson decision it should have been clear to Avon Lake what information in a billing statement was privileged and what must be disclosed.
“Subsequently, no well-informed public office could reasonably believe that any portion of an attorney-fee billing statement, other than the narrative description of the legal services performed, is subject to redaction,” she wrote.
Justice Judith L. French joined the dissent.
Thursday, May 12, 2016
An attorney may be compensated for legal work done to secure fees in a guardianship matter, according to a decision issued today by the District of Columbia Court of Appeals.
Appellant, Bruce E. Gardner, Esq., asserts in this appeal that he is "entitled to compensation from the Guardianship Fund for the time he spent protecting his rights to compensation in appeals to this Court that are related to his appointment as guardian and the guardianship duties he performed." He seeks a remand to the Superior Court for that court to reconsider his fee petition and "to determine the reasonableness of the compensation" he requested for his appellate work. For the reasons discussed below, we agree that the Superior Court is authorized to approve compensation to Mr. Gardner for his fee-related appellate litigation work relating to his service as guardian — and, if the ward‟s assets are depleted, to approve payment to Mr. Gardner from the Guardianship Fund — even if (as appellee District of Columbia contends) "the fee-related litigation was of no benefit to the [particular] ward." We remand to the Superior Court the issue of Mr. Gardner‟s entitlement to compensation for his appellate work.
Associate Judge Thompson authored the unanimous opinion. (Mike Frisch)
The Washington State Court of Appeals has held that a trial court exceeded its authority in reducing an award of wages to a former in-house counsel
Following a month-long jury trial, attorney Geoffrey Chism was awarded $750,000 for breach of two compensation contracts by his former employer, Tri-State Construction, Inc., and exemplary damages for unlawful wage withholding. The trial court then dramatically reduced Chism's recovery, premised on findings that Chism violated Washington's Rules of Professional Conduct (RPCs) during his time as Tri-State's in-house general counsel. By ordering disgorgement of Chism's wages based on novel interpretations of several RPCs, the trial court exceeded the disciplinary authority delegated to it by our Supreme Court. Moreover, the trial court disregarded the strong legislative policy preference in favor of payment of earned wages by failing to even acknowledge that, unsupported by precedent, it was ordering disgorgement of an attorney's wages, as opposed to an attorney's fee. Accordingly, we reverse the trial court's challenged rulings and remand the cause for entry of judgment consistent with the jury's verdict.
The question presented arises at the intersection of judicial power over the practice of law and legislative power over the conditions of employment. Our Supreme Court has offered some guidance about resolving such situations, stating, "While we should jealously protect our prerogatives, if the legislative power is not limited by the constitution, it should be unrestrained." Demopolis, 103 Wn.2d at 65. As previously stated, in the area of attorney wages, the Supreme Court has taken no action, but the legislature has enacted a broad policy in favor of the payment of employee wages. Given this stark contrast, we defer to the strong legislative policy in this area.
This conclusion is consequential for how we view the application of the disgorgement sanction to attorney wages. As has been described, disgorgement does not require proof of either causation or damage, only misconduct. This is unlike other, related claims, including breach of fiduciary duty and restitution, both of which require such proof. Because there is no standard measure for a disgorgement order, nor a requirement that it be imposed as a compensatory measure, it poses a significant threat to the legislative policy in favor of the consistent payment of employee wages.
This threat is illustrated by the trial court's order in this case. Herein, Tri-State chose to pursue only disgorgement from Chism, not a separate claim for damages or restitution. Accordingly, Tri-State was never required to prove that it suffered any injury as a result of Chism's alleged misconduct. Nevertheless, the trial court ordered Chism to disgorge $550,000 in wages (plus another $550,000 in exemplary damages for wage withholding).
The trial court exceeded its disciplinary authority by ordering Chism to disgorge a significant portion of the wages otherwise owed to him without either acknowledging that itwas disgorging wages, not fees, or accounting for the strong legislative preference in favor of employers paying earned employee wages. Therefore, the trial court's order was improper as a matter of law.
Thanks to Alan Kabat for sending this opinion to us. (Mike Frisch)
Wednesday, May 11, 2016
A divorcing spouse was properly granted summary judgment in claims brought against her by her deceased husband's attorney, according to a decision of the New York Appellate Division for the First Judicial Department.
Beginning in September 2008, the plaintiff represented Daniel Sitomer (hereinafter the husband) in a matrimonial action commenced by his wife, Sheila Sitomer (hereinafter the defendant), pursuant to a retainer agreement dated September 15, 2008. The retainer agreement stated that the plaintiff would provide the husband with an itemized statement of charges every 60 days, and in the event that he discharged the plaintiff, or the plaintiff was relieved, the plaintiff reserved the right to seek to have a charging lien fixed "on the proceeds realized by you from the litigation."
In January 2009, the plaintiff moved pursuant to CPLR 1201 and 1202 to have a guardian ad litem appointed for the husband on the ground that "he had proven to be incapable to assist us so as to adequately defend his rights in [the] matter." The husband hired another attorney to oppose that application and paid that attorney over $32,000 in legal fees, and sought to discharge the plaintiff as his attorney. On June 5, 2009, the court relieved the plaintiff as counsel for the husband, at the husband's request.
The plaintiff moved to fix its attorneys' fees, and the husband opposed the motion on the ground that the plaintiff never provided him with periodic invoices every 60 days pursuant to their retainer agreement. Nevertheless, on August 24, 2010, the plaintiff and the husband entered into a so-ordered stipulation, fixing the husband's obligation for legal fees at the sum of $100,000, to be satisfied by a charging lien on "any and all equitable distribution proceeds" following satisfaction of the first $50,000 of a charging lien in favor of the husband's former attorney. The stipulation provided that in the event that the plaintiff provided no further services to the husband, the "charging lien shall serve in full satisfaction for all the [plaintiff's] claims for fees and services."
In September 2010, the husband died, and the divorce action abated. Therefore, there were no equitable distribution proceeds to satisfy the plaintiff's charging lien. In May 2011, the plaintiff commenced the instant action against the defendant, seeking to recover $100,000 in legal fees under a theory of common-law necessaries.
The court below properly ordered summary judgment
Under the common-law doctrine of necessaries, a spouse who receives necessary goods or services is primarily liable for payment. A creditor seeking to recover a debt against the nondebtor spouse must demonstrate that the primary debtor was unable to satisfy the debt out of his or her own resources, that necessaries were furnished on the nondebtor spouse's credit, and that the nondebtor spouse has the ability to satisfy the debt (see Gilberg v Lennon, 212 AD2d 662, 663; Medical Bus. Assoc. v Steiner, 183 AD2d 86). Legal services provided to a spouse in a matrimonial action have been considered necessaries (see Jordan v Jordan, 226 AD2d 349, 349; D'Agostino v Genovese, 190 AD2d 773, 774; Fernandes v Rucker, 186 AD2d 171, 172).
Here, the defendant established that the plaintiff's services were not furnished on her credit. Rather, the services were furnished in the expectation of "the proceeds" of the litigation, specifically articulated in the charging lien. Since the action abated, there were no proceeds of the litigation. Further, it is clear from this record that, although the husband may have had sufficient resources to pay the plaintiff, which included marital assets appropriated by him and court-ordered spousal support, he was unwilling to voluntarily pay the plaintiff, owing to their adversarial relationship.
In opposition, the plaintiff failed to raise a triable issue of fact.
Thursday, February 25, 2016
When a client receives and does not object to an invoice for described services at a stated hourly rate, the attorney suing to collect on the bill is entitled to summary judgment if the services were performed.
The New York Appellate Division for the Second Judicial Department holds
The plaintiff [lawyer] established its prima facie entitlement to judgment as a matter of law against the defendant on the cause of action alleging breach of contract by submitting evidence of the existence of a contract, the plaintiff's performance under the contract, the defendant's breach of the contract, and resulting damages.
The plaintiff also established its prima facie entitlement to judgment as a matter of law on the cause of action to recover on an account stated for legal fees by submitting copies of its invoices for professional services setting forth the billable hours expended and identifying the services rendered, and demonstrating that the defendant received and retained the invoices without objecting to them within a reasonable time, and made partial payment on the invoices. (citations omitted)
the defendant's unsupported and conclusory allegations were insufficient to raise a triable issue of fact in light of, inter alia, the evidence that he made partial payments on the account.
Tuesday, November 17, 2015
A decision issued today by the North Carolina Court of Appeals
This case presents as an issue of first impression the question of whether an attorney who enters into a business transaction with a client as compensation for a legal representation can be barred from enforcing the terms of their agreement based on the attorney’s failure to comply with the explicit requirements of Rule 1.8(a) of the North Carolina Rules of Professional Conduct.
The attorney represented the client in a patent matter. After a period of time, he took an interest in the client's patent.
On 19 March 2010, shortly after the Notice of Allowance was issued, Priest and Coch met to discuss entering into an agreement (“the Agreement”) regarding how to generate revenue through licensing the patent. Given Coch’s concerns that he and IP were financially unable to pay the same rate Priest had charged to file the patent application, the two men also discussed how best to compensate [attorney] Priest for the work his firm had already performed without pay since 2009. Eventually, they agreed in principle that going forward, Priest and his law firm would continue to prosecute and maintain IP’s patent and pay 25% of the actual costs of doing so, with the remainder split evenly between Coch, Knight, and Smith, in return for Priest receiving 25% of the proceeds Priest helped to generate from the patent. Coch’s contemporaneous emails to Knight and Smith demonstrate that Coch believed the Agreement’s terms would make Priest “an equal partner in pushing the Patent forward” based on the rationale that “there is still work to be done, of which I don’t know anything and [Priest] is willing to do it for his equity portion.” At the end of the meeting, Priest agreed to draft the Agreement and send it to Coch for his input and signature.
The attorney sued to enforce the eventual agreement.
we agree with the trial court’s observation that the Rule itself reflects the special obligation the attorneys of this State have when dealing with their clients, and we share the trial court’s conclusion that, for the sake of maintaining the public’s trust, attorneys should be held to abide by Rule 1.8(a)’s explicit requirements as a condition of their own recovery when that recovery is based on business transactions with their clients. While this may be an issue of first impression in our State, we note that courts in other jurisdictions have reached the same conclusion as we reach here.
The court affirmed the lower court judgment refusing to enforce the agreement due to the ethical violation. The attorney also failed to recover on a quantum meruit theory. (Mike Frisch)
Wednesday, October 28, 2015
An opinion from the Minnesota Supreme Court
Appellant Stowman Law Firm, P.A. (Stowman), which represented a client pursuant to a contingent-fee agreement, voluntarily withdrew from the representation of the client when efforts to settle the case failed. The client retained substitute counsel who then successfully settled the case. Stowman brought an action to recover in quantum meruit the value of the services provided prior to the withdrawal. Following a bench trial, the district court found that Stowman failed to establish good cause for withdrawal and, therefore, was not entitled to recover in quantum meruit. The court of appeals affirmed. We conclude that an attorney may withdraw from a contingent-fee agreement with or without cause, provided that the withdrawal satisfies the rules of professional responsibility. But the attorney must establish that the withdrawal is for good cause in order to recover in quantum meruit the reasonable value of the services rendered prior to withdrawal. Because Stowman failed to establish good cause, we affirm.
We conclude that an attorney who withdraws for good cause from representation under a contingent-fee agreement may recover in quantum meruit the reasonable value of services rendered prior to withdrawal, provided that the attorney’s recovery in the event of withdrawal for good cause is not otherwise addressed in the contract and the attorney satisfies the ethical obligations governing withdrawal from representation.
Saturday, October 24, 2015
An opinion authored by Judge Janice Rogers Brown of the United States Court of Appeals for the District of Columbia Circuit
“Hell hath no fury like a lawyer scorned.” Tom Gordon, Hell Hath No Fury Like a Lawyer Scorned, WALL ST. J., (Jan. 28, 2015), http://www.wsj.com/articles/tom-gordon-hell-hath-no-furylike-a-lawyer-scorned-1422489433. The problem with scorning a lawyer is that lawyers tend to sue. So it is here. A law firm based in the District of Columbia, Bode & Grenier, LLP, provided legal services to three Michigan-based companies owned and managed by Carroll Knight (“appellants”). More than ten years into the relationship, appellants stopped paying the bill. The predictable result? Litigation. The law firm prevailed in the district court, winning a judgment for $70,000 in overdue legal fees—plus $269,585.19 in legal fees for having to litigate over $70,000 in legal fees. We affirm the district court.
The law firm represented the client from 1994 to 2008
advising on taxation, gasoline contracts, petroleum futures and various regulatory enforcement and litigation matters. Throughout most of the relationship, no written agreement governed the terms of legal representation or manner of payment. Appellants paid the law firm monthly based on oral agreements...
On November 25, 2005, catastrophe struck. Approximately 100,000 gallons of petroleum spilled out of holding tanks owned by appellants in Toledo, Ohio. Appellants stopped the leak, but were powerless to stop the flood of regulatory actions that followed in its wake. A month after the spill, Knight called Bode & Grenier’s managing partner, William Bode, to request the firm’s services. The firm soon tackled regulatory enforcement proceedings in Ohio, a lawsuit in federal court in Ohio, and counseled the company on other regulatory issues. As before, the firm billed appellants monthly.
The suit came when the fees went unpaid.
The court applied D.C. law
Here, the factors weigh in favor of applying D.C. law, not Michigan law. The first two factors—the place of contracting and place of negotiation—are inconclusive. Mr. Knight negotiated from Michigan, and Bode & Grenier from D.C. Likewise, the fifth factor—domicil—weighs evenly on both ends. In a dispute over a service contract, no factor matters more than the place of performance.
Nearly all of the legal services at issue were performed in D.C. by attorneys licensed to practice in D.C. See Appellee Br. 28–30. While the representation required occasional travel outside D.C. (mainly to Ohio), we find no evidence suggesting the firm’s attorneys routinely practiced in Michigan. The firm managed the representation from its sole office, located in D.C. The fourth factor—the location of the subject matter of the contract— supports applying D.C. law for the same reasons. This contract called for legal services managed and performed in D.C.
As a result, the law firm was able to recover fees for representing itself in this litigation. (Mike Frisch)
Wednesday, October 14, 2015
An attorney must return $95,000 in fees paid by an estate, according to a recent decision of the North Dakota Supreme Court.
In August 2013, the beneficiaries of the Estate petitioned for court determination of reasonableness of fees and for settlement and distribution of estate. The petition objected to the fees charged by Magers and [attorney] Widdel for their services to the Estate and Trust. In September 2014, the district court found Magers had breached her fiduciary duty in several ways, which included paying Widdel large fees without question. The court also found administration of the Estate and Trust was not complicated and Widdel's fees were unreasonable in light of the nature of the work performed. The court ordered Widdel to return attorney's fees in the amount of $95,000.
The district court found that the estate was not complicated and that Widdel did not handle the litigation.
The attorney's "corporate veil" had been properly pierced
When a client engages the services of a lawyer, whether that lawyer is acting through the form of a professional organization or otherwise, the client has the right to expect preservation of a highly confidential relationship rooted in confidence, integrity, and professionalism. Such are the requirements expected of an officer of the court. Under the circumstances of this case, it would be inappropriate for Widdel to be allowed to hide behind the corporate veil and thus escape the professional and ethical requirements demanded by his profession.
And the district court properly found the fees unreasonable
In this case the district court considered the evidence and testimony before it and determined the fees collected by Widdel in his service to the Estate, as an attorney, were unreasonable. The district court did not abuse its discretion in determining the fees were unreasonable. The district court did not misinterpret or misapply the law in holding Widdel personally responsible for the unreasonable fees he charged.
Friday, August 21, 2015
An attorney prevailed in both a suit for legal fees and in dismissal of counterclaims of the former client in an opinion of the New York Appellate Division for the Second Judicial Department.
Here, the plaintiffs established, prima facie, their entitlement to judgment as a matter of law on the cause of action alleging breach of contract by submitting certain email exchanges between the parties, which demonstrated, "[b]y the plain language employed," that the plaintiffs made an offer to represent Landmark in each matter for a certain fee, and that Landmark accepted that offer (Kasowitz, Benson, Torres & Friedman, LLP v Duane Reade, 98 AD3d at 405). In one matter, the parties agreed that the plaintiffs would represent Landmark at a rate of $350 per hour. The invoices documenting the number of hours worked and the amount of disbursements paid out demonstrated, prima facie, the plaintiffs' entitlement to legal fees in the sum of $4,760 in connection with the services rendered for that matter. In the second matter, the agreement was for an initial retainer fee of $5,000, plus a 25% contingency fee with respect to any sums that Landmark ultimately recovered in that matter. Since it is undisputed that, shortly after the commencement of an action in connection with the second matter, Landmark entered into a stipulation of settlement whereby Landmark recovered $40,000, the plaintiffs established, prima facie, entitlement to their full fee of $5,000 plus a contingency fee of 25% of $40,000.
In opposition, Landmark failed to raise a triable issue of fact.
Landmark's counterclaim, which alleged tortious interference with contract and tortious interference with prospective business relations, was premised upon the plaintiffs' alleged contact with the third party with whom Landmark had entered into the stipulation of settlement in connection with the second matter. Specifically, Landmark alleged that, contrary to the terms of the stipulation, the plaintiffs requested that certain of the agreed-upon payments be made directly to them as Landmark's counsel, rather than to Landmark. The ostensible purpose of this communication was to ensure that the plaintiffs would be able to deduct their legal fees from the settlement funds.
The Supreme Court properly granted that branch of the plaintiffs' motion which was pursuant to CPLR 3211(a)(7) to dismiss so much of the counterclaim as alleged tortious interference with contract. A necessary element of such cause of action is the intentional and improper procurement of a breach and damages (see White Plains Coat & Apron Co., Inc. v Cintas Corp., 8 NY3d 422, 426). Here, Landmark failed to adequately plead facts that would establish that the plaintiffs, in communicating with the third party to secure their attorney's fees, intentionally procured that party's breach of the stipulation of settlement (see Dune Deck Owners Corp. v Liggett, 85 AD3d 1093, 1095).
To the extent that the counterclaim sought recovery based on a theory of tortious interference with prospective business relations, the Supreme Court properly granted that branch of the plaintiffs' motion which was pursuant to CPLR 3211(a)(7) to dismiss that portion of the counterclaim. A claim for tortious interference with prospective business relations does not require a breach of an existing contract, but the party asserting the claim must meet a "more culpable conduct" standard (NBT Bancorp. v Fleet/Norstar Fin. Group, 87 NY2d 614, 621). This standard is met where the interference with prospective business relations was accomplished by wrongful means or where the offending party acted for the sole purpose of harming the other party (see Carvel Corp. v Noonan, 3 NY3d 182, 190; Caprer v Nussbaum, 36 AD3d 176, 204). " Wrongful means' include physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some degrees of economic pressure" (Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d 183, 191, quoting Restatement [Second] of Torts §§ 768, Comment e and 767, Comment c). As a general rule, the offending party's conduct must amount to a crime or an independent tort, as conduct that is neither criminal nor tortious will generally be "lawful" and thus insufficiently "culpable" to create liability for interference with prospective business relations (Carvel Corp. v Noonan, 3 NY3d at 190 [internal quotation marks omitted]). The mere violation of an attorney disciplinary rule will only create liability if actual damages are incurred as a result of the violating conduct (see Tabner v Drake, 9 AD3d 606, 610). In addition, where the offending party's actions are motivated by economic self-interest, they cannot be characterized as solely malicious (see Out of Box Promotions, LLC v Koschitzki, 55 AD3d 575, 577). Here, contrary to the conclusion of our dissenting colleague, the allegations in the counterclaim do not establish the elements of tortious interference with prospective business relations. The allegations that the plaintiffs contacted a settling party to protect [*2]their attorney's fees after having been discharged as Landmark's counsel, while arguably alleging a violation of a disciplinary rule, do not, without more, allege that the plaintiffs' acts constituted a crime, or an independent tort, or that the plaintiffs acted solely for the purpose of harming Landmark (see Worldcare Intl., Inc. v Kay, 119 AD3d 554, 556-557; Adler v 20/20 Cos., 82 AD3d 915, 918).
A dissent by Justice Duffy on the tortious interference with business relations count
Although I agree with the majority's position that the plaintiff attorney was motivated by his desire to ensure that he received the fees he contended that Landmark owed him and that, with such motives, the plaintiff attorney's actions cannot be considered "solely malicious," the majority appears to require that, absent facts alleging that the plaintiffs engaged in conduct with the sole purpose of harming Landmark, Landmark failed to state a cause of action for tortious interference with prospective business relations. To the extent that the majority requires that, in order to avoid dismissal of this claim, Landmark had to set forth facts alleging that the plaintiffs engaged in conduct with the sole purpose of harming Landmark and that they did so by means that were unlawful or improper, I disagree. Such an analysis is more rigorous than that applied by the Court of Appeals (citations omitted) in evaluating the sufficiency of a cause of action alleging tortious interference with prospective business relations. To make out a claim for tortious interference with business relations where, as here, the alleged interference was with prospective contractual relationships, rather than existing contracts, the proponent must show that the other party interfered with the proponent's business relationships either with the sole purpose of harming the movant or by means that were unlawful or improper...I submit that Landmark's allegation that the plaintiff attorney interfered with Landmark's business relationships by means that were unlawful or improper—to wit, that he held himself out as counsel for Landmark when he no longer represented it—was sufficient to withstand that branch of the motion which was to dismiss the counterclaim...
The Court of Appeals has enunciated a general rule that, to be sufficiently "culpable" to create liability for tortious interference with prospective business relations, the alleged conduct must amount to a crime or an independent tort (Carvel Corp. v Noonan, 3 NY3d at 190). However, the Court of Appeals did not preclude "other instances of conduct which, though not a crime or tort in itself," are so culpable that they could be the basis of such a claim (id.). Here, the facts alleged by Landmark, that the plaintiff attorney held himself out to be Landmark's counsel when he no longer represented Landmark, in order to obtain money the plaintiffs contend was owed to him by Landmark, if true, would constitute a breach of fiduciary duty as well as a violation of the ethical rules that govern the conduct of attorneys (see Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.8[f] ["A lawyer shall not accept compensation for representing a client, or anything of value related to the lawyer's representation of the client, from one other than the client unless: (1) the client gives informed consent"]; see generally Matter of Cooperman, 83 NY2d 465, 472).
I also disagree with the majority's assertion that, without a concomitant allegation of actual damages, an allegation that, if true, may constitute a violation of an attorney disciplinary rule cannot meet the culpable conduct element required to plead tortious interference with prospective business relations sufficient to defeat the motion to dismiss in this matter. The analysis adopted by the majority is one applied in the context of determining whether a cause of action for legal malpractice has been established (see Tabner v Drake, 9 AD3d at 610), but is not the analysis this Court already has applied in determining the culpable conduct necessary to establish a claim of tortious interference with prospective business relations. In Lyons v Menoudakos & Menoudakos, P.C. (63 AD3d at 802), this Court held that an attorney's violation of a disciplinary rule and his professional obligations was sufficient to demonstrate the culpable conduct required for a claim of tortious interference with prospective business relations so as to withstand a motion for summary judgment. In that case, this Court noted that, to constitute "culpable conduct," the conduct must amount to a crime or an independent tort, and may include " [w]rongful means'" defined as " physical violence, fraud or misrepresentations, civil suits and criminal prosecutions, and some degrees of economic pressure'" (id. at 802, quoting Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d at 191, and citing Carvel Corp. v Noonan, 3 NY3d at 190-193, and Smith v Meridian Tech., Inc., 52 AD3d 685, 687). In Lyons, this Court took note of the various ethical obligations of the defendant in that matter, who had been the attorney for the seller in a real estate transaction and allegedly wished to purchase the property for himself (see Lyons v Menoudakos & Menoudakos, P.C., 63 AD3d at 802). This Court held that "[e]vidence of a violation of a [*4]disciplinary rule is relevant to the question of tort liability," and concluded that the defendant had failed to eliminate all triable issues of fact as to whether his judgment was affected by his personal interest in the transaction and whether he furthered that interest by making misrepresentations to the seller about the creditworthiness of the plaintiff, thereby wrongfully interfering with the prospective transaction (id.). Here, as in Lyons, the allegations of the plaintiff attorney's violations of his ethical obligations, if true, would meet the culpable conduct element necessary to state a cause of action for tortious interference with prospective business relations.
Friday, May 29, 2015
The Illinois Review Board has recommended a three-year suspension of an attorney who blogged about a probate court case
This case involves Respondent's statements on a blog impugning the integrity of certain judges, guardians ad litem ("GALs") and the lawyers involved in a case in the Probate Court of Cook County. The Hearing Board concluded that Respondent violated Rules 8.2(a) which provides that "a lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge, adjudicatory officer or public legal officer"; 8.4(c) which prohibits lawyers from engaging in "conduct involving dishonesty, fraud, deceit or misrepresentation"; and 8.4(d) which prohibits "conduct that is prejudicial to the administration of justice."
The Administrator's Complaint alleged that Respondent made statements in violation of the above rules when she blogged about an adult guardianship of Mary G. Sykes ("Mary") pending in the Probate Division of the Circuit Court of Cook County ("the Sykes case"). In December 2009, the probate court had disqualified Respondent from representing Gloria Sykes ("Gloria"), one of Mary's daughters, in the case. Thereafter, Respondent published blogs related to the Sykes case. The Administrator's Complaint set forth ten excerpts taken from Respondent's blogs and alleged that the statements in the excerpts were made in violation of the Rules. The Hearing Board based its findings on these ten statements.
The board rejected the First Amendment defense
The First Amendment does not afford Respondent any protection. No ruling of the United States Supreme Court or any other court supports the conclusion that Rules 8.2(a) or 8.4(c) are unconstitutional, or that enforcing the rules in this case violates her First Amendment rights. The Respondent cites no case or authority that knowingly making false statements about a judge's integrity is protected under the First Amendment. Indeed, in a recent case cited by Respondent, Alvarez v. United States, 567 U.S. ___, 132 S.Ct. 2537 (2012), the Supreme Court pointed out that there are situations in which knowingly or recklessly made false statements are not protected under the First Amendment, citing Garrison v. Louisiana, 379 U.S. 64, 75 (1964) a case in which the district attorney was convicted of defamation for making disparaging statements about the judiciary (" the knowingly false statement and the false statement made with reckless disregard of the truth, do not enjoy constitutional protection.").
Similarly, the Illinois Supreme Court has routinely rejected attempts by respondents to argue that the First Amendment protects lawyers from making false accusations about judges and court proceedings that have no basis in fact and are false or made with reckless disregard to the truth.
The board further recommends that the attorney establish fitness for reinstatement.
At the risk of possible sanction, I blogged on the hearing committee report and opined
As a blogger who frequently finds it necessary to criticize disciplinary processes in D.C. and elsewhere, I confess that I find this proposed sanction excessive given the absence of prior discipline and the conceded sincerity of the attorney's beliefs, even if unfounded.
Corruption in our courts does exist and attorneys have an obligation to speak out when it occurs.
In my view, that conduct should be, if not encouraged, at least allowed.
Thursday, May 28, 2015
Incurred and future legal fees to defend criminal charges against former Massey Energy chief Don Blankenship must be paid by the company that acquired Massey, according to a Delaware Court of Chancery decision issued today.
This advancement action involves some unusual facts but an all too common scenario: the termination of mandatory advancement to a former director and officer when trial is approaching and it is needed most.
Plaintiff Donald L. Blankenship is the former Chief Executive Officer and Chairman of Massey Energy Company, which is now known as Alpha Appalachia Holdings, Inc. (“Massey”). Blankenship held those positions when there was a tragic explosion at a Massey subsidiary’s coal mine in West Virginia in April 2010, killing 29 miners. In June 2011, after Blankenship had retired from Massey, Alpha Natural Resources, Inc. (“Alpha”) acquired Massey. For several years after the explosion, Massey and Alpha (together, the “Defendants”) honored Blankenship’s rights to advancement and paid his legal expenses relating to various civil proceedings and a federal criminal investigation that had been launched as a result of the explosion.
Alpha paid his fees until he was indicted. The decision to stop paying counsel's bills came after Alpha had sought advice from Cleary Gottlieb
In the wake of the indictment, Alpha stopped paying Blankenship’s legal fees. Alpha management, with approval from Alpha’s board of directors, then initiated a process to review the company’s indemnification and advancement obligations to Blankenship. Alpha focused on an unusual undertaking Blankenship had signed in April 2011 (the “Undertaking”), which states, in relevant part, that Massey’s indemnification and advancement obligations to Blankenship are “contingent upon [certain] factual representations and undertakings,” including a representation that, in performing his duties as a director and officer of Massey, Blankenship “had no reasonable cause to believe that [his] conduct was ever unlawful.” In late January 2015, after a process described below, Philip Cavatoni, an Alpha officer and Massey director, determined that Blankenship had breached that representation (the “Determination”). Based on the Determination, Alpha asserts that Blankenship is no longer entitled to advancement of any of his legal expenses from Massey.
Alpha must pay
Defendants must (1) advance Blankenship’s unpaid legal expenses incurred in connection with the federal criminal investigation and the Criminal Proceeding and (2) pay his reasonable expenses of litigating this action. Counsel shall confer and submit an implementing order within five business days, providing for the foregoing payments to be made within ten business days of entry of judgment.
Defendants have not advanced any substantive argument that the aggregate fees that have not been paid (approximately $5.8 million as of April 1, 2015) are unreasonable. Nor have they identified, in my view, any “gross problem” or other legitimate reason that would warrant injecting a special master to “perform the task of playground monitor, refereeing needless and inefficient skirmishes in the sandbox.” Disputes over the reasonableness of Blankenship’s expenses in the Criminal Proceeding can ultimately be resolved when any determination on indemnification is made
Blankenship is represented by the Zuckerman Spaeder firm. (Mike Frisch)
Thursday, April 9, 2015
From the Indiana Supreme Court
The law firm Cohen & Malad, LLP ("C & M"), filed a quantum meruit claim for part of the contingent fees earned in cases that were handled first by C & M attorneys (including John P. Daly, Jr., when employed there as an associate) and later by Daly and his law firm after he left C & M. The trial court found that C & M attorneys – including Daly while employed there – worked a substantial number of hours on those cases and that most of those cases generated attorney fees. The court nevertheless denied C & M quantum meruit relief because it found Daly was not unjustly enriched where: (1) the client in each case at issue chose to continue with Daly when he left C & M, (2) C & M and Daly had no agreement about what would happen if they parted ways, (3) their employment agreement had no provision for file ownership and lacked a non-competition covenant, and (4) C & M made a "very shrewd deal" for Daly’s services when it employed him on a salary basis, and C & M was "very well compensated" for Daly’s time at C & M, as shown by the amount of fees Daly helped C & M generate on other cases while he worked there. (App. at 32-33.) C & M appealed. Citing the four enumerated findings above, the Court of Appeals affirmed, over Judge Crone’s dissent. Cohen & Malad, LLP v. Daly, 17 N.E.3d 940 (Ind. Ct. App. 2014). We grant transfer.
Absent agreement otherwise, "a lawyer retained under a contingent fee contract but discharged prior to the contingency is entitled to recover the value of services rendered if there is a subsequent settlement or award[,]" and in that case, "the fee is to be measured by the proportion of the total fee equal to the contribution of the discharged lawyer’s efforts to the ultimate result[.]" Galanis v. Lyons & Truitt, 715 N.E.2d 858, 860 (Ind. 1999). The trial court’s findings of fact and conclusions of law do not acknowledge Galanis or apply its standards. Accordingly, we reverse and remand with instructions to determine, in accordance with Galanis, what proportional contributions toward the results in the cases at issue were made by attorneys working for C & M, and to enter a corresponding judgment in C & M’s favor. We summarily affirm the part of the Court of Appeals opinion addressing whether C & M should have sued its former clients to recover attorney fees from them. see Ind. Appellate Rule 58(A)(2).
Opinion linked here. (Mike Frisch)
Tuesday, March 31, 2015
Herbert M. Kritzer (U. Minn., Law) has published a new volume Lawyers at Work, collecting and updating his 35 years of empirical and theoretical study of attorneys in action, including daily office work, use of expert witnesses, contingency fees, "professionalism," sanctions, and international comparisons. He's known as one of the most insightful and sustained researchers in law and political science on the legal occupation and professional literature. The book is published as part of my Quid Pro Books project and is found as such places as Amazon and Barnes & Noble, in print (hardcover and paperback) and ebooks. (Alan Childress)
Tuesday, February 24, 2015
A recent decision of the Connecticut Supreme Court deals with charging liens in domestic relations matters
The plaintiff, Ralph Olszewski, challenges the Appellate Court’s conclusion that equitable charging liens are permissible in marital dissolution actions in Connecticut. He claims that they are barred by the Rules of Professional Conduct, they are not supported by Connecticut precedent, and the public policy considerations that justify equitable charging liens in other contexts do not apply in marital dissolution actions. The defendants Carlo Forzani and Carlo Forzani, LLC. respond that equitable charging liens against marital assets are permissible in Connecticut because the Rules of Professional Conduct specifically provide for charging liens, the rules do not preclude the use of charging liens in marital dissolution actions, and public policy considerations support their use in domestic relations matters. We agree with the plaintiff and reverse the judgment of the Appellate Court.
in the eight jurisdictions in which the court explicitly held or determined that an attorney’s charging lien could be enforced against an award of alimony and/or child support, the courts in five jurisdictions based their holdings on statutory authority rather than the common law. Id., §§ 4a and 4b, pp. 613–17. We therefore conclude that attorneys are not entitled by operation of law to equitable charging liens on marital assets for fees and expenses incurred in obtaining judgments for their clients in marital dissolution proceedings in Connecticut.
Wednesday, February 11, 2015
Appeal Dismissed: Dissent Contends Dismissal Encourages Discovery Violations Against Law School Clinic Clients
The Ohio Supreme Court has dismissed an appeal and, according to a dissent, endorsed the proposition that fees for discovery violations cannot be awarded to law school clinics as such clinics charge no fees to their clients.
Justice Pfeifer's dissent
As can happen, something we said in one context, where it made sense, is being applied in another context, where it does not. In State ex rel. Citizens for Open, Responsive & Accountable Govt. v. Register, 116 Ohio St.3d 88, 2007-Ohio-5542, 876 N.E.2d 913, we stated that “an award of attorney fees as a sanction for a discovery violation must actually be incurred by the party seeking the award.” In that case, there was an ongoing dispute involving compensated attorneys, and an award of attorney fees made sense only if additional fees had actually been incurred. Nothing in that opinion suggests that we were deciding the issue with respect to every situation involving discovery sanctions that might possibly arise in Ohio.
Legal services can be rendered in Ohio by legal interns, including, as here, those working for a law-school clinic. Gov.Bar R. II. In that special context, legal fees are not allowed. Gov.Bar R. II(6) (“A legal intern shall not ask for or receive any compensation or remuneration of any kind from a financially needy client * * *.”)
The lower court’s opinion, as allowed to stand, holds that discovery sanctions can never be granted when the prevailing party is represented by a law-school clinic because attorney fees cannot be incurred by a clinic’s client. Such a conclusion reads too much into Register, an opinion that had nothing to do with law-school clinics and legal interns. Moreover, the holding allows parties to commit discovery violations with some level of impunity. It is also contrary to Gov.Bar R. II(6), which states that a law-school clinic “may be awarded attorney fees for services rendered by the legal intern consistent with the Ohio Rules of Professional Conduct and as provided by law.” Attorney fees as sanctions for discovery violations are attorney fees “provided by law.”
By dismissing the appeal as improvidently accepted, this court is implicitly endorsing a decision that allows attorneys opposing law-school clinics to commit discovery violations without fear of economic sanctions, subverting Gov.Bar R. II(6), and devaluing the efforts of hundreds of legal interns and licensed attorneys who provide pro bono legal services throughout this state.
I would reach the merits of the case before us and reverse the judgment of the court of appeals. I dissent.
Justices French and O'Neill joined the dissent. (Mike Frisch)
Tuesday, February 3, 2015
The New York Appellate Division for the First Judicial Department affirmed dismissal of a claim brought against O'Melveny & Myers
Plaintiffs alleged that defendant attorneys (OM & M), who represented their preparatory school in an earlier federal action alleging the school's negligent supervision and retention of a football coach, made intentional misrepresentations in the federal action that proximately caused plaintiffs' attorneys to spend unnecessary attorney hours to establish an equitable estoppel argument opposing the school's motion to dismiss on statute of limitations grounds. The parties to the federal action ultimately entered into a confidential settlement, and plaintiffs voluntarily discontinued their claims, with prejudice, as against all the named defendants therein. Plaintiffs' counsel in the federal action had a contingency fee arrangement with the plaintiffs, and was evidently compensated accordingly.
Even assuming any unwarranted attorney hours were, in fact, expended by plaintiffs' counsel on account of OM & M's challenged representations made to the court, any burden in rendering such additional attorney hours, and corresponding injury, was shouldered by plaintiffs' counsel, who worked pursuant to a contingency fee. Plaintiffs, upon settlement of their federal action, paid the same attorney fees to their counsel regardless of the hours their counsel had expended on the matter. Thus, plaintiffs have not alleged facts as would show OM & M's alleged misrepresentations proximately caused them any injury (see Strumwasser v Zeiderman, 102 AD3d 630 [1st Dept 2013]). Indeed, regardless of the alleged deceit by OM & M in federal court, the burden always remained with plaintiffs in such court to establish, in the first instance, a basis for their equitable estoppel argument, which warranted the pre-dismissal motion early discovery they conducted. To the extent plaintiffs' discovery was inhibited at all due to alleged lost notes prepared by one of the school's initial investigators, the attorney hours expended on such issue were not attributable to the alleged OM & M misrepresentations. Moreover, plaintiffs' spoliation motion was pending in the federal court, and a final determination of such motion was interrupted by plaintiffs' settlement of the action.
Plaintiffs' second cause of action, alleging OM & M was unjustly enriched by its receipt of attorney fees from its client, and that such fees should be disgorged in light of the alleged unwarranted attorney hours OM & M caused plaintiffs' counsel to expend in the federal action, fails to state a claim, as plaintiffs have not shown how OM & M's alleged fraud enriched OM & M at plaintiffs' expense (see Edelman v Starwood Capital Group, LLC, 70 AD3d 246, 250-251 [1st Dept 2009], lv denied 14 NY3d 706 ).
Law360 reported on the trial court disposition. (Mike Frisch)
Saturday, January 31, 2015
The United States Court of Appeals for the District of Columbia Circuit affirmed the dismissal of a law firm's suit for fees.
In August 2010, Stephen R. Berry of Berry Law advised Kraft that it might have an antitrust claim worth tens of millions of dollars against News Corporation, News America Marketing FSI LLC, and News America Marketing In-Store LLC (collectively “News Corp.” or “News”). (All referenced facts come from the complaint.) The claim related to possible monopolization and tying in the “sale of in-store promotion services and free-standing-insert coupons placed in newspapers.” Kraft’s chief litigation counsel, Douglas Cherry, asked Berry for further legal analysis of the possible claim.
Berry Law then prepared a 42-page evaluation memorandum for Kraft’s top management analyzing liability and damages issues. Berry alleges that he completed that memo by November 10, 2010. At about the same time, Cherry noted that the matter was “moving pretty fast” and that he wished to brief Kraft’s general counsel about the matter. The complaint says that “upon information and belief, [the evaluation memorandum] was forwarded at the very least to Kraft’s General Counsel in early 2011.” It was presumably Cherry who did the forwarding.
In response to an email from the law firm seeking a fee agreement, Kraft's counsel stated in part
we have never paid for that work as far as I know for any outside counsel.
The firm later claimed fees due in an amount over $191,000 on a theory of implied-in-fact contract,
To state a claim for breach of an implied-in-fact contract, Berry Law must plausibly allege that it rendered Kraft valuable services; that Kraft accepted, used, and enjoyed those services; and that the circumstances “reasonably notified” Kraft that Berry “expected to be paid” by Kraft...
Kraft told Berry that it would not compensate him for work completed prior to management approval. No compensation is due where the “plaintiff did not contemplate a personal fee, or the defendant could not reasonably have supposed that he did.” Bloomgarden, 479 F.2d at 212. Rather, in view of Kraft’s unequivocally expressed position on preliminary work, Berry cannot reasonably have contemplated a fee for work completed before Kraft moved forward, nor could Kraft reasonably have known Berry contemplated any such payment. Instead, Berry completed the memorandum and other legal work in the hope that Kraft would retain him as counsel in the event that Kraft “moved forward.” Because Berry Law’s “services were rendered simply in order to gain a business advantage,” its quasicontract claim fails. Id. at 211.
Thursday, November 20, 2014
An attorney was properly paid a fee of over half a million dollars for his work in a contested probate matter, according to a decision of the New York Appellate Division for the Second Judicial Department
Karen Cullin retained James Spiess to represent her in a contested probate proceeding. The parties entered into a contingent fee agreement, pursuant to which Spiess agreed to represent Cullin for an initial retainer of $5,000 plus 33 % of any proceeds he would recover on her behalf, by settlement or trial, up to a maximum fee of $600,000. Just before Cullin was to be examined by potential objectants pursuant to SCPA 1404, Cullin directed Spiess to settle the probate proceeding as expeditiously as possible. Spiess negotiated a settlement providing, inter alia, for the propounded instrument, which primarily benefitted Cullin, to be admitted to probate in exchange for a minimal payment to the objectants. Speiss thereafter was paid, from estate funds, fees in the amount of $585,000.
The court here relied upon a recent (and, in my view, shamefully pro-lawyer) decision of the Court of Appeals in affirming the reasonableness of the fee
Here, the evidence supports the Surrogate's conclusion that the fee paid to Spiess was reasonable in light of the difficulty of the issues involved, the favorable terms of the settlement to which Spiess's efforts and expertise contributed, and the significant risk that Spiess took that probate of the propounded instrument would be denied and that he would not earn any fees other than the initial retainer of $5,000 (see generally Matter of Lawrence, ______ NY3d ______, 2014 NY Slip Op 07291, 9-10 ). Under the circumstances, we perceive no basis upon which to disturb the Surrogate's determination with respect to Spiess's attorney's fee.