Notice Of Arbitration Rights Required

An attempt to collect a legal fee was rejected by the New York Appellate Division for the Fourth Judicial Department

Where, as here, the attorney’s complaint fails to allege that the attorney timely provided the client with notice of both the fee being sought and the right to arbitrate a dispute over that fee, it must be dismissed.

The facts

The underlying fee dispute between the parties arises from legal services performed by plaintiff and his firm to defendants between July 2014 and June 2015 in a residential real property contract dispute. Although plaintiff did not provide defendants with a written letter of engagement, defendants delivered to plaintiff a $1,500 advance payment. When the contract dispute settled in June 2015, plaintiff returned the advance payment to defendants along with the settlement proceeds. Four and a half years later, plaintiff’s firm sent defendants an invoice for legal services relating to the property contract dispute, but did not provide written notice of defendants’ right to arbitration of fee disputes under the [Fee Dispute Resolution Program]. In 2021, plaintiff commenced this action to recover the invoiced fees, alleging in his complaint that the FDRP did not apply because his firm had not rendered legal services to defendants “for more than two years prior to the date of th[e] complaint.” When defendants sought to have the dispute resolved by arbitration, the Bar Association of Erie County rejected their petition and advised that FDRP rules “do not allow for arbitration where no attorney’s services have been rendered for more than two years.” Defendants then moved to dismiss the complaint based upon plaintiff’s failure to provide timely notice of their right to arbitration of fee disputes pursuant to the FDRP. Supreme Court granted defendants’ motion, and plaintiff now appeals. We affirm.

(Mike Frisch)