Opinion
INDEX NO. 501809/2016
04-13-2017
THE CHAPMAN STEAMER COLLECTIVE LLC, AND MEI WANG, Plaintiffs, v. DOUGLAS M. JONES, ESQ., Defendant.
NYSCEF DOC. NO. 89 At an IAS Term, Part 63 of the Supreme Court of the State of New York, held in and for the County of Kings, at the Courthouse, at Civic Center, Brooklyn, New York, on the 28th day of March, 2017. PRESENT: HON. ELLEN M. SPODEK, Justice. The following e-filed papers read herein:
| Papers Numbered | |
|---|---|
| Notice of Motion/Order to Show Cause/Petition/Cross Motion andAffidavits (Affirmations) Annexed | 5-51 59, 61-77 |
| Opposing Affidavits (Affirmations) | __________ |
| Reply Affidavits (Affirmations) | 87 |
| Affidavit (Affirmation) | __________ |
| Memoranda of Law | 52 56 60 81 86 |
Upon the foregoing papers, in this action by plaintiffs the Chapman Steamer Collective LLC (Chapman) and Mei Wang (Wang) (collectively, plaintiffs) against defendant Douglas M. Jones, Esq. (defendant) alleging a claim of legal malpractice and seeking to recover $20,000 in legal fees that they paid to defendant and $1,000,000 in damages, defendant moves, under motion sequence number one, for an order, pursuant to CPLR 3211 (a) (1) and (7), dismissing plaintiffs' complaint against him, or, in the court's discretion, treating this motion as a motion for summary judgment pursuant to CPLR 3211 (c) and granting him summary judgment dismissing plaintiffs' complaint against him. Plaintiffs cross-move, under motion sequence number two, for an order granting them partial summary judgment, pursuant to CPLR 3211 (c) and 3212 (e), with respect to the recovery of the $20,000 in legal fees that they paid to defendant, severing their remaining causes of action, and granting them the costs of this motion, pursuant to CPLR 8301 (b), plus the disbursements and costs of this lawsuit.
FACTS AND PROCEDURAL BACKGROUND
In August 2007, Wang purchased real property located at 179 Dubois Street, in Newburgh, New York (the property). In September 2008, Wang transferred the property to Chapman, a limited liability company formed by her in order to purchase and renovate the property, which was an old firehouse. Wang was the sole member of Chapman. Wang planned a mixed use for the property and sought financing for this construction project through Keybank National Association (Keybank).
In 2008, Chapman applied for a long-term construction loan in the sum of $700,000 with Keybank (the permanent construction loan), which was to be a community development loan involving the potential grant of tax credits. In order to finance interim construction while waiting for the application process for the permanent construction loan to be completed, plaintiffs sought a line of credit bridge loan from Keybank. On October 14, 2008, Chapman signed a Joan agreement, a note, and a mortgage on the property securing the note for a line of credit loan from Keybank in the sum of $221,000 (the bridge loan), which was personally guaranteed by Wang pursuant to a written guaranty executed by her. The loan documents provided that the bridge loan was for a 12-month term at the interest rate of the prime rate plus one percent, and the unpaid principal and interest was required to be paid in full by November 1, 2009. In addition, paragraph 25 of the mortgage bridge loan and the guaranty provided that plaintiffs waived the right to interpose any defense, setoff or counterclaim whatsoever to any action brought by Keybank to enforce its rights under such mortgage and guaranty. Chapman drew the entire $221,000 line of credit from the bridge loan.
On January 14, 2009, Keybank's affiliate, Key Community Development New Markets, LLC (KCDNM), issued a commitment letter to Chapman for a $600,000 permanent construction loan, which expired on March 31, 2009, and was subject to the condition Chapman obtain site plan approval from the City of Newburgh Planning Board. Plaintiffs signed the commitment letter for this $600,000 permanent construction loan. Chapman was unable to provide proof of the site plan approval until June 2008, but KCDNM indicated that it was willing to close the permanent construction loan despite the fact that its commitment letter had already expired. Chapman, though, was unwilling to close the permanent construction loan because the principal amount of $600,000 had become insufficient to cover the costs of completing the construction project. Chapman proposed that KCDNM amend its original $600,000 loan commitment by reducing some fees and increasing the amount of its permanent construction loan to $750,000. After further negotiations between Chapman and KCDNM, KCDNM offered to reduce some fees and to lend $26,000 more, i.e., the sum of $626,000. Chapman, however, declined and the permanent construction loan never closed.
When the bridge loan became due on November 1, 2009 pursuant to the terms of the note and mortgage, Chapman defaulted on the note and Wang defaulted on the guaranty. Consequently, on August 3, 2010, Keybank commenced an action in the Supreme Court, Orange County (the foreclosure action), to foreclose the mortgage and to recover on the guaranty to the extent of holding Wang liable for any deficiency remaining after the foreclosure sale. Keybank filed a summons, complaint, and a notice of pendency in the foreclosure action.
Plaintiffs then retained defendant to represent them with respect to defending them in the foreclosure action. Plaintiff and defendant had an initial meeting on July 19, 2010. A written retainer agreement, dated August 17, 2010, was signed by plaintiffs. The retainer agreement provided that this letter of engagement was furnished to plaintiffs in accordance with Part 1215 of the Joint Rules of the Appellate Division. It attached a copy of the Statement of Client's Rights and the Statement of Client's Responsibilities. It set forth that the scope of the representation was to defend the foreclosure action and to institute counterclaims against Keybank relating to the mortgage agreement of the bridge loan and Keybank's failure to execute a mortgage for the permanent construction loan for plaintiffs. As to fees, the retainer agreement stated that defendant intended to submit a bill to plaintiffs "no less frequently than every 60 days, or otherwise as appropriate based on the transaction, case or matter." It also provided that if a dispute arose relating to defendant's fees, plaintiffs may have the right to arbitration of the dispute pursuant to Part 137 of the Rules of the Chief Administrator of the Courts. Plaintiffs were to be charged $250 per hour for the work performed by defendant. The retainer agreement further provided that in consideration of defendant's legal services, a retainer of $25,000 was required. On November 21, 2011, Wang asked defendant if she could have a "loan" from her retainer deposit in the amount of $5,000, and he agreed and sent her a check in the amount of $5,000, thereby reducing the retainer paid to defendant to the amount of $20,000.
Defendant interposed an answer, on behalf of plaintiffs, in the foreclosure action, dated October 15, 2010, asserting 13 affirmative defenses and a counterclaim. The seventh affirmative defense alleged that although Chapman had complied with all of Keybank's lending requirements, it failed to proceed to closing on the permanent construction loan. The ninth affirmative defense alleged that Keybank was barred from proceeding with the foreclosure action because it promised and enticed plaintiffs to accept the note and mortgage of the bridge loan with the express promise that it would write a construction loan for the benefit of Chapman to fund the final phase of construction. The counterclaim asserted that Keybank was negligent in failing to close the permanent construction loan and sought to recover damages, alleging, among other things, that Keybank, as part of a series of predatory lending practices, induced plaintiffs into mortgaging the property pursuant to the bridge loan based on unfulfilled promises of access to further development funding, i.e., the permanent construction loan.
Defendant, on behalf of plaintiffs, served a notice for discovery and inspection and a notice of deposition to Keybank. Instead of complying with defendant's discovery demands, Keybank moved for summary judgment in the foreclosure action on its first cause of action to foreclose the mortgage. Defendant opposed Keybank's motion and filed a cross motion to compel discovery. By a decision and order dated March 15, 2012, the Supreme Court, Orange County, granted Keybank's motion for summary judgment, directed a foreclosure and sale of the property, denied plaintiffs' cross motion to compel disclosure, and dismissed plaintiffs' counterclaim.
On April 25, 2012, defendant filed a motion to reargue on plaintiffs' behalf. By a decision and order dated July 25, 2012, that motion was denied. Defendant timely filed notices of appeal for the decisions issued by the court and a third notice of appeal with regard to the final judgment of foreclosure and sale entered on October 18, 2012. He prepared and filed an Appeal Brief and Appendix, dated May 10, 2013, with the Appellate Division, Second Department. By an email dated May 15, 2013, Wang demanded that defendant withdraw the brief and enlarge her time to appeal. By a Substitution of Attorney on Consent, dated June 28, 2013, signed by plaintiffs, Bruce Stern, Esq. (Stern) of Giordano & Stern, LLP was substituted in place of defendant as plaintiffs' attorney in the foreclosure action. Stern filed a Replacement Brief, dated August 23, 2013, with the Appellate Division, Second Department.
By an email dated October 13, 2013, Wang asked defendant to send her copies of all of her billing statements. An October 19, 2013 billing statement listed a description of each of the services provided, the amount of hours spent on each service, and the fee charged for each of these services. It set forth that the amount billed for a total of 212.1 hours at the rate of $250 per hour from My 19, 2010 to August 22, 2013 was $53,025 plus disbursements of $1,976.11 for a total amount billed of $55,001.11. After subtracting the $20,000 retainer fee from this sum, it listed the remaining balance due as $35,001.11. Defendant asserts that he never asked plaintiffs for any money over and above the $20,000 retainer paid to him because it appeared to him that plaintiffs lacked the ability to pay him any additional funds.
After Stern took over plaintiffs' file from defendant, Stern, on behalf of plaintiffs, filed a grievance against defendant with the Orange County Bar Association Grievance Committee regarding defendant's representation of plaintiffs, contending that defendant retained a $20,000 retainer while virtually all of his work was incompetent and fatally defective on the facts and the law from the outset. On November 18, 2013, defendant responded to the grievance, disputing, in detail, the allegations made against him.
By a decision and order dated May 28, 2014, the Appellate Division, Second Department, in ruling on the appeal of the judgment in the foreclosure action, found that Keybank had demonstrated its prima facie entitlement to judgment as a matter of law on its first cause of action to foreclose the bridge loan mortgage by submitting the mortgage, the unpaid note, and an affidavit evidencing Chapman's default, and that Keybank also demonstrated its prima facie entitlement to judgment as a matter of law dismissing plaintiffs' counterclaim, which plaintiffs had validly waived under the express terms of the mortgage and guaranty, and plaintiffs had, in opposition, failed to raise a triable issue of fact. It, therefore, affirmed the judgment in the foreclosure action (see KeyBank N.A. v Chapman Steamer Collective, LLC, 117 AD3d 991 [2d Dept 2014]).
A foreclosure sale of the property was completed and a third party was the successful bidder on the property. On September 18, 2014, plaintiffs, represented by Stern, filed an action against Keybank and KCDNM (the Keybank action). On March 12, 2015, Keybank and KCDNM filed a motion to dismiss, and plaintiffs filed an amended complaint dated April 1, 2015. Plaintiffs' amended complaint alleged claims that Keybank and KCDNM breached a contractual obligation to them, breached the implied covenant of good faith and fair dealing, perpetrated a constructive fraud against them, breached a fiduciary duty owed to them, committed fraud and fraud in the inducement, breached an implied contract, and committed negligence. On September 11, 2015, plaintiffs filed a cross motion for leave to file a second amended complaint. By a decision and order dated November 20, 2015, the Supreme Court, Orange County, found that the allegations of the original complaint, the amended complaint, and the proposed amended complaint were all barred by the doctrine of res judicata. It held that while plaintiffs tried to assert that the Keybank action concerned the permanent construction loan while the foreclosure action was limited to the bridge loan, that claim was disingenuous since nearly the entire counterclaim asserted various causes of action concerning Keybank's failure to close the permanent loan. It stated that it could not find any distinction between the claims in the counterclaim in the foreclosure action and the claims in the Keybank action, and that plaintiffs had asserted the identical claims in the Keybank action as had been asserted in the counterclaim in the foreclosure action. It, therefore, dismissed plaintiffs' amended complaint against Keybank and KCDNM in the Keybank action on the ground that it was barred by the doctrine of res judicata, and denied plaintiffs' cross motion for leave to further amend their amended complaint as moot.
On February 9, 2016, plaintiffs, by their attorney, Stern, commenced this legal malpractice action against defendant. Plaintiffs allege that defendant knew or should have know that there was no factual or legal defense to the foreclosure action because of the waiver in paragraph 25 of the bridge loan mortgage, and that they had meritorious claims against Keybank regarding its actions with regard to the permanent construction loan. Plaintiffs further allege that they had breach of contract claims against Keybank and claims against Keybank for negligent conduct, and that they had the right to commence an action against Keybank for breach of contract and negligence and to consolidate that action with the foreclosure action or otherwise stay the foreclosure action. They claim that defendant failed to protect their rights and interests, did not send them bills as required by rules, inflated his billing after the fact, and performed unnecessary work,
Plaintiffs' complaint against defendant alleges five causes of action. Plaintiffs' first and second causes of action allege claims of legal malpractice and seek to recover the $20,000 retainer and damages of $1,000,000 for the loss of the property, attorney's fees charged by Stern, and expert fees and disbursements. Plaintiffs' third cause of action alleges a claim of unjust enrichment, claiming that defendant performed work for them which had no value and that he was unjustly enriched by his retention of the $20,000 retainer. Plaintiffs' fourth cause of action alleges that defendant inflated his billing, and seeks a disgorgement by defendant of the $20,000 retainer. Plaintiffs' fifth cause of action alleges that defendant breached the implied covenant of good faith and fair dealing with respect to his retainer agreement with them. On March 21, 2016, defendant filed the instant motion to dismiss, and on May 16, 2016, plaintiffs filed their cross motion for partial summary judgment.
DISCUSSION
In addressing defendant's instant motion, the court notes that "'[t]o state a cause of action to recover damages for legal malpractice, a plaintiff must allege: (1) that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possfessed by a member of the legal profession; and (2) that the attorney's breach of the duty proximately caused the plaintiff actual and ascertainable damages'" (Janker v Silver, Forrester & Lesser, P.C., 135 AD3d 908, 909 [2d Dept 2016], quoting Dempster v Liotti, 86 AD3d 169, 176 [2d Dept 2011]; see also Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 49 [2015], rearg denied 27 NY3d 957 [2016]; Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 441 [2007]; Ingvarsdottir v Gaines, Gruner, Ponzini & Novick, LLP, 144 AD3d 1099, 1101-1102 [2d Dept 2016]; Silverman v Potruch & Daab, LLC, 142 AD3d 660, 660 [2d Dept 2016]). "To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer's negligence" (Rudolf, 8 NY3d at 442; see also Leder v Spiegel, 9 NY3d 836, 837 [2007], cert denied 552 US 1257 [2008]; Janker, 135 AD3d at 909; Keness v Feldman, Kramer & Monaco, P.C., 105 AD3d 812, 813 [2d Dept 2013]).
"[A] plaintiff must plead and prove actual, ascertainable damages as a result of an attorney's negligence" (Dempster, 86 AD3d at 177; see also LaTouche v Terezakis, 132 AD3d 956, 958 [2d Dept 2015]). "'Conclusory allegations of damages or injuries predicated on speculation cannot suffice for a malpractice action, and dismissal is warranted where the allegations in the complaint are merely conclusory and speculative'" (Janker, 135 AD3d at 909-910, quoting Bua v Purcell & Ingrao, P.C., 99 AD3d 843, 848 [2d Dept 2012], lv denied 20 NY3d 857 [2013]; see also Dempster, 86 AD3d at 177; Hashmi v Messiha, 65 AD3d 1193, 1195 [2d Dept 2009]).
Plaintiffs' theory of recovery for legal malpractice is predicated on their allegations that there was no defense to Keybank's complaint in the foreclosure action due to the waiver of defenses and counterclaims contained in paragraph 25 of the bridge loan mortgage. Plaintiffs contend that there was absolutely no defense to the foreclosure action that could have been claimed at the time that defendant filed the answer on their behalf.
Plaintiffs have submitted the expert affidavit of Brian Berlandi, Esq. (Berlandi), an attorney, who asserts that paragraph 25 provided an absolute wavier except as to the attempted allegation of a claim for fraud. Berlandi further asserts that, as determined by the court in the foreclosure action, defendant's attempt to interpose a counterclaim of fraud did not meet the threshold of factual particularity required by CPLR 3016 (b). He opines that defendant, therefore, received the retainer payment from plaintiffs for meritless legal work that had no value. He further opines that but for defendant's negligence in representing that he would be able to defend plaintiffs in the foreclosure action, plaintiffs would not have retained him in the first instance and they would not have incurred $20,000 in attorney's fees to raise a defense in the foreclosure action that could not succeed.
Plaintiffs' argument and Berlandi's opinion are rejected. Plaintiffs sought representation from defendant in the foreclosure action, and he interposed the only cognizable defense to the foreclosure action available to plaintiffs by interposing a counterclaim and defenses sounding in fraudulent inducement. In these defenses and counterclaim, defendant alleged that Keybank fraudulently induced plaintiffs to enter into the bridge loan based on the unfulfilled promise to provide additional permanent financing pursuant to the contemplated permanent construction loan. Defendant's attempt to defend plaintiffs in this manner was not an unreasonable course of action, but a strategic decision to pursue the only available defense. The fact that plaintiffs' counterclaim and defenses of fraud were unsuccessful, despite defendant's efforts, is not a ground for a claim of legal malpractice. Plaintiffs' present dissatisfaction with defendant's strategic choice does not support a legal malpractice claim as a matter of law (see Tantleff v Kestenbaum & Mark, 131 AD3d 955, 958 [2d Dept 2015], lv denied 27 NY3d 906 [2016]). "[A]n attorney is not a guarantor of a particular result . . . and may not be held liable in negligence for . . . the exercise of appropriate judgment that leads to an unsuccessful result" (Bua, 99 AD3d at 846-847 [internal quotation marks and citation omitted]; see also Rubinberg v Walker, 252 AD2d 466, 467 [1st Dept 1998]).
Plaintiffs also attempt to argue that because the Keybank action, which they commenced following the granting of the judgment in the foreclosure action with Stern as their attorney, was dismissed pursuant to the doctrine of res judicata, this somehow shows that defendant failed to protect their rights and interests in the foreclosure action. Specifically, plaintiffs contend that this dismissal based upon the ground of res judicata demonstrates that defendant should have interposed the claims relating to Keybank's failure to close the permanent construction loan and its fraudulent inducement of them to enter into the bridge loan, contemporaneously in time with the foreclosure action. They claim that they had a breach of contract claim based upon Keybank's breach of an oral promise to supply $700,000 in financing to them which should have been raised in a separate action. They contend that there is, therefore, an issue of fact as to whether they would have prevailed in the foreclosure action but for defendant's failure to bring a separate plenary action.
This contention is devoid of merit. Plaintiffs did not have a viable breach of contract claim to assert in a separate action because plaintiffs and Keybank never entered into a contract for the permanent construction loan. Indeed, the commitment letter from Keybank with respect to the permanent construction loan was not even issued until after the bridge loan closed. Commencing a separate action versus interposing a counterclaim and defenses in the foreclosure action would not have resulted in any different outcome for plaintiffs. Moreover, contrary to plaintiffs' argument, the court in the Keybank action did not find that plaintiffs' claims had to be dismissed because defendant had failed to interpose these claims contemporaneously in time with the foreclosure action. Rather, it held that plaintiffs' claims were the same ones that had been interposed in the counterclaim in the foreclosure action, and, as such, they were barred by the doctrine of res judicata.
The pleadings, motion papers, and judicial decisions from the foreclosure action constitute documentary evidence which demonstrate that defendant interposed the fraudulent inducement counterclaim and defenses with respect to the permanent construction loan and that these defenses and counterclaim were adjudicated by the Supreme Court and the Appellate Division. In fact, defendant specifically raised the claim of fraudulent inducement in the foreclosure action by arguing that at the time the bridge loan was signed, plaintiffs were induced by Keybank's oral representations to believe that Chapman would receive the permanent construction loan. Plaintiffs continued to assert this argument in their appeal of the judgment in the foreclosure action, maintaining that there was an oral contract to close the $600,000 construction loan. They expressly argued that the bridge loan was a component of the larger contract for the $600,000 permanent construction loan, and that this contract was breached by Keybank. Indeed, in the Replacement Brief filed by Stern on behalf of plaintiffs, plaintiffs argued that the answer filed by defendant stated defenses and a counterclaim for breach of contract, breach of the implied covenant of good faith and fair dealing, and justifiable detrimental reliance against Keybank.
Plaintiffs additionally argue that defendant is not entitled to dismissal of this action because he has failed to present any expert testimony in support of his motion to dismiss. This argument must be rejected. There is no requirement that a defendant in a legal malpractice action must provide an expert affidavit on a motion to dismiss pursuant to CPLR 3211 (a) (1) and (7) (see Gourary v Green, 143 AD3d 580, 581 [1st Dept 2016]). Moreover, expert testimony is unnecessary to determine that the documentary evidence submitted by defendant completely refutes plaintiffs' allegations of legal malpractice.
Plaintiffs' complaint fails to plead any factual allegations showing that, but for alleged negligence on the part of defendant, they would have obtained a more favorable outcome in the foreclosure action (see Janker, 135 AD3d at 910; Leiner v Hauser, 120 AD3d 1310, 1311 [2d Dept 2014]; Schiller v Bender, Burrows & Rosenthal, LLP, 116 AD3d 756, 758 [2d Dept 2014]; Keness v Feldman, Kramer & Monaco, P.C., 105 AD3d 812, 813 [2d Dept 2013]; Tortura v Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082, 1083 [2d Dept 2005], lv denied 6 NY3d 701 [2005]). Rather, the court's finding that Keybank was entitled to a judgment of foreclosure and sale was not based upon defendant's failure to present a competent defense. Instead, pivotal to the court's decision in the foreclosure action were the facts that plaintiffs accepted the $600,000 loan commitment from Keybank without complaint, that Chapman failed to complete the conditions stated in the loan commitment and then refused to close the $600,000 loan when the conditions were cleared, and that plaintiffs sought additional financing over the $600,000 and then refused to close on Keybank's loan offer even after KCDNM agreed to a reduction of fees and an additional $26,000 in the principal amount of the loan.
Thus, plaintiffs have failed to adequately allege that there was any negligence by defendant that was the proximate cause of the loss of the property in the foreclosure action, that they incurred actual damages as a result of any action or inaction by defendant, or that but for negligence by defendant, they would have prevailed in the foreclosure action (see Bauza v Livington, 40 AD3d 791, 793 [2d Dept 2007]). This is fatal to their claim of legal malpractice and the other causes of action asserted in their complaint which are, in essence, duplicative of their legal malpractice claim.
Plaintiffs further argue, however, that since they had no viable defense to the foreclosure action based upon the waiver clause in paragraph 25 of the bridge loan mortgage, defendant should not have agreed to represent and defend them in the foreclosure action or accepted a retainer of $20,000, and that because he did so, this entitles them to partial summary judgment, pursuant to CPLR 3211 (c) and 3212 (e), for a return of this sum. They assert that defendant's retainer agreement falsely represented that he would defend them in the foreclosure action. They contend that defendant received $20,000 for work which had no value, and that, therefore, this retainer fee was excessive.
This argument must be rejected. Defendant performed legal services on behalf of plaintiffs, and, as discussed above, defendant defended the foreclosure action by raising a defense of fraudulent inducement. The fact that the court in the foreclosure action rejected this claim and plaintiffs were ultimately unsuccessful with respect to this defense does not constitute a basis to require defendant to return the legal fees he earned for rendering his professional services.
Moreover, defendant has shown that Wang chose to oppose the foreclosure action, knowing that her defenses were limited. Defendant points to the fact that Wang was aware that her own prior actions during the loan application process and thereafter could be detrimental to her defenses against the foreclosure action. Specifically, in an August 27, 2010 email, Wang acknowledged that she refused to sign what might be interpreted as a generous forbearance offer from Keybank prior to its commencement of the foreclosure action, and that she also had refused to accept KCDNM's increased loan of $626,000 that it tendered in June 2009, after the commitment period had expired.
Defendant asserts that Wang's plan was to continue to work at the property so that the building could be brought to a point of completion and enable her to attract private investors. He further points to the fact that although the property was ultimately lost in the foreclosure sale, Wang had the opportunity, during the three years while the foreclosure action was being litigated, to work on the building and seek out additional investors. It is also noted that while defendant was representing plaintiff in the foreclosure action, Keybank made settlement offers, including one set forth in a March 3, 2013 email, in which Keybank offered to accept repayment of taxes, expenses, and $100,000 plus 50% of any profit over the $100,000, but plaintiffs declined all settlement offers.
Plaintiffs further argue, however, that since defendant failed to send out bi-monthly bills to them, he is not entitled to keep the retainer fee paid by them. 22 NYCRR 1215.1, which governs retainer agreements in non-matrimonial actions, requires an attorney "who undertakes to represent a client and enters into an arrangement for, charges or collects any fee from a client [to] provide to the client a written letter of engagement." The letter of engagement is required to provide an explanation of the scope of the legal services to be provided by the attorney, an explanation of the attorney's fees to be charged, the expenses, and the billing practices of the attorney, and where applicable, it must provide that the client may have a right to arbitrate fee disputes under 22 NYCRR Part 137. Defendant's retainer agreement complied with these requirements. 22 NYCRR 1215.1 does not require an attorney to send bi-monthly bills to the client. It is only in matrimonial actions where the attorney is required, pursuant to 22 NYCRR 1400.3, to provide the client with itemized billing, at least every 60 days.
Moreover, plaintiffs agreed to the amount of compensation that they paid to defendant. While the retainer set forth that defendant intended to submit a bill to plaintiffs no less frequently than every 60 days, it also provided that he may submit a bill to plaintiffs as "otherwise appropriate based on the transaction, case or matter." Although defendant did not submit bills on a bi-monthly basis, plaintiffs were aware that defendant was performing work on their behalf and had a $20,000 retainer for the payment of legal fees for this work. This provision in the retainer does not constitute a basis to deny defendant the legal fees that he has earned and which were already paid to him. Indeed, as plaintiffs concede, even in the absence of a retainer agreement, an attorney is entitled to recover the reasonable value of the legal services rendered by him or her on a quantum meruit basis (see Filler v Motta, 35 Misc 3d 1215[A], 2012 NY Slip Op 50710[U], *7 [Civil Ct, Richmond County 2012], affd, appeal dismissed 45 Misc 3d 41 [App Term 2014]). As discussed above, defendant, in his billing statement, described, in detail, the legal services rendered by him and the amount of time spent performing each of these legal services, which totaled 212.1 hours of work at a rate of $250 per hour. While plaintiffs characterize defendant's fee as excessive, her allegations in this regard are conclusory and are based upon her claim that defendant's work had no value because she did not prevail in the foreclosure action. Thus, defendant is entitled to retain this $20,000 retainer fee paid by plaintiffs to him.
Consequently, since, as established by the documentary evidence submitted by defendant, plaintiffs have failed to allege a viable claim for legal malpractice against defendant and plaintiffs' complaint does not allege any cognizable cause of action against him, defendant's motion to dismiss plaintiffs' complaint must be granted (see CPLR 3211 [a] [1], [7]). In view of this dismissal of plaintiffs' complaint and in the absence of any showing that defendant was not entitled to the $20,000 fee paid to him by plaintiffs, plaintiffs' cross motion for partial summary judgment to recover the $20,000 retainer fee must be denied.
CONCLUSION
Accordingly, defendant's motion to dismiss plaintiffs' complaint against him is granted. Plaintiffs' cross motion for partial summary judgment is denied in its entirety.
This constitutes the decision, order, and judgment of the court.
ENTER,
/s/
J. S. C.