Wednesday, August 2, 2017

Thanks For Sharing

An agreement to share legal fees between two law firms is enforceable according to an opinion of the New York Appellate Division for the Second Judicial Department.

The facts

The defendant, Davis, Saperstein & Salomon, P.C., represented Jorge Angamarca in a personal injury action (hereinafter the Angamarca action) in the Supreme Court, New York County, against, among others, Jefferson Townhouses, LLC (hereinafter Jefferson), the owner of the property where Angamarca was injured in a construction-related accident. Jefferson was insured by Imperium Insurance Company, formerly known as Delos Insurance Company, formerly known as Sirius America Insurance Company(hereinafter Imperium), and Imperium retained the law firm of Wilson, Elser, Moskowitz, Edelman & Dicker LLP (hereinafter Wilson Elser) to defend Jefferson in the Angamarca action. Following the entry of a judgment after a jury trial in the Angamarca action in favor of Angamarca and against Jefferson, Jefferson appealed and Angamarca cross-appealed to the Appellate Division, First Judicial Department. While that appeal was pending, Marc Saperstein, a partner of the defendant, contacted Bruce Yukelson, a partner of the plaintiff, Wolfe & Yukelson, PLLC, and Jefferson’s corporate attorney, to propose that Jefferson assign to Angamarca Jefferson’s claims against Imperium for bad faith and against Wilson Elser for legal malpractice relating to their failure to offer the policy limits in settlement of the Angamarca action. On November 23, 2009, the defendant sent the plaintiff a written fee-sharing agreement whereby the plaintiff would receive a fee “to assist with the prosecution of those claims.” On January 28, 2010, Jefferson assigned to Angamarca its claims against Imperium and Wilson Elser for failing to settle the Angamarca action for the limits of both policies by executing an assignment agreement. The assignment agreement included a covenant by Angamarca that he would not execute the excess portion of the judgment against Jefferson. By decision and order entered June 21, 2011, the Appellate Division, First Department, modified the judgment by vacating the awards for past and future pain and suffering, and directing a new trial on damages for past and future pain and suffering unless Jefferson stipulated to increase the awards for those damages (Angamarca v New York City Partnership Hous. Dev. Fund, Inc., 87 AD3d 206). Although Jefferson was granted leave to appeal to the Court of Appeals, on November 30, 2011, Angamarca and Imperium, on its own behalf and on behalf of Jefferson, settled the Angamarca action. The settlement included the settlement of the claims that were the subject of the fee-sharing agreement.

Summary judgment goes to the plaintiff

the defendant, which is bound by the same Rules of Professional Conduct (22 NYCRR 1200.0) as the plaintiff, cannot be heard to argue that the fee-sharing agreement and the obligations thereunder must be voided on ethical grounds, when it freely agreed to be bound by, and received the benefit of, the same agreement, particularly since there is no indication that the client was in any way deceived or misled.

(Mike Frisch)

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