Thursday, October 12, 2017

"Self-Serving Accounting"

The New York Appellate Division for the First Judicial Department unanimously modified an order dismissing a complaint against a law firm for return of paid fees

In March 2013, plaintiff Anna Gleyzerman was arrested on drug and drug-related charges. She entered into a retainer agreement with defendants to cover certain legal services for a flat fee (the first retainer). The following month, the District Attorney's Office filed an indictment against Anna, and in July 2013, following a nine-month-long wiretap investigation, it filed a superseding indictment against her. Anna's mother, plaintiff Tatyana Gleyzerman, then entered into a retainer agreement with defendants to secure defendant Gershfeld's appearance at Anna's arraignment on the superseding indictment for a flat fee (the second retainer). Tatyana subsequently entered into another retainer agreement with defendants to secure certain services in connection with the superseding indictment for an additional flat fee (the third retainer). In or about October 2013, after defendants had performed a substantial amount of work on Anna's behalf and had negotiated a favorable plea deal for her (albeit not as favorable as the one she ultimately accepted), plaintiffs terminated defendants' services and demanded a refund of unearned fees.

Defendants failed to demonstrate conclusively that the value of the services they rendered in connection with the first and third retainers equals or exceeds the fees that plaintiffs paid. Their self-serving accounting, which identified the number of hours spent on tasks but not the dates on which the work was done and the time spent on each of those dates, does not constitute irrefutable, documentary evidence that no unearned fees remain. However, defendants demonstrated that no unearned fees remain under the second retainer, which provided that the flat fee would cover "only the superseding arraignment appearance" (caps and boldface deleted); Gershfeld appeared with Anna on that arraignment.

Other claims were deemed properly dismissed. (Mike Frisch)

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