Opinion
No. 2011–100402/A.
09-08-2014
Application of Andrew SEARAH as Administrator of the Estate of Lawrence C. Werper, Deceased. To Discover and Recover Property Withheld and Belonging to the Estate.
William F. Smith, Esq., New City, for the Petitioner. The Law Firm of William G. Sayegh, PC, Carmel, for Respondent.
William F. Smith, Esq., New City, for the Petitioner.
The Law Firm of William G. Sayegh, PC, Carmel, for Respondent.
Opinion
JAMES D. PAGONES, J.
By order dated April 15, 2014, petitioner was directed to submit a judgment and an affirmation of services accompanying the judgment, so that the Court could award reasonable legal fees.
Petitioner submitted a proposed decree on notice and the same was made returnable on August 21, 2014. Upon review of the petitioner's counsel's affirmation of legal services, this further decision has taken shape out of necessity.
Attorneys for an estate are allowed such compensation for their legal services as appears to the court to be just and reasonable (see SCPA § 2307[1] ). The Surrogate bears the ultimate responsibility for deciding what constitutes a reasonable attorney's fee (see Matter of Szkambara, 53 AD3d 502 [2nd Dept 2008] ). Reasonableness of legal fees is determined by the factors outlined in the Matter of Freeman (34 N.Y.2d 1 [1974] ) and Matter of Potts 213 AD 59 [4th Dept 1925]affd 241 N.Y. 593 ). These factors include: time and labor required; the difficulty of the questions involved; and the skill required to handle the problems presented; the lawyer's experience, ability and reputation; the amount involved and benefit resulting to the client from the services; the customary fee charged by the bar for similar services; the contingency or certainty of compensation; the results obtained; and the responsibility involved (see Matter of Freeman, 34 N.Y.2d 1 [1974] ). The Surrogate has jurisdiction to review attorney's fees even if no party objects to them (see Stortecky v. Mazzone, 85 N.Y.2d 518 [1995] ). A Surrogate is not obliged to accept at face value an attorney's summary of the hours expended (see Matter of Bobeck, 196 A.D.2d 496 [2nd Dept 1993]. The attorney seeking the fees bears the burden of establishing the reasonableness of said fees (see Cohen v. Ryan, 34 A.D.2d 789 [2d Dept 1970] ).
Counsel for the petitioner indicates that his affirmation of legal services solely pertains to legal services provided to the Estate in relation to the claim against the respondent Mr. William A. Orr, Jr. In his affirmation of legal services, counsel seeks the amount of Fifty–Three Thousand Sixty Four Dollars and Thirty–Eight Cents ($53,064.38).
By way of background and as was stated in this Court's Decision and Order of April 15, 2014:
“Here, the subject matter of the within summary judgment motions is two promissory notes. They are mutually identified by the petitioner and respondent in this proceeding as the 2006 loan and the 2010 loan. Each loan, initially in the amount of Fifty Thousand Dollars ($50,000.00), was given by the decedent to the respondent. Respondent admits that he stopped making payments as of the decedent's date of death and at that point, the principal balance on the 2010 loan was Fifty Thousand Dollars ($50,000.00) and the principal balance on the 2006 loan was Twelve Thousand Four Hundred Fifty–Five Dollars and Four Cents ($12,455.04). Respondent alleges that the 2006 loan was amended three times and that the 2010 loan was amended once. Respondent further alleges that as a result of the amendments to the loan, specifically the addition of a forgiveness upon death provision, both loans should be declared paid in full.”
Upon review of the affirmation of legal services and consideration of factors as set forth in the Matter of Freeman and Matter of Potts, the Court will substantially reduce petitioner's request for fees. The following factors as set forth in the aforementioned matters are particularly relevant herein: (1) the difficulty of the questions involved, and the skill required to handle the problems presented; and, (2) the amount involved and benefit resulting to the client from the services.
The question before this Court involving the petitioner and the respondent was quite simple in nature, i.e. was respondent indebted to the estate based upon two promissory notes. The Court notes that a petitioner or plaintiff in an action upon a promissory note need only establish its existence, execution and a failure to pay (see Sound Shore Med. Ctr. of Westchester v. Maloney, 96 AD3d 823 [2nd Dept 2012] ). Moreover, an action upon a promissory note may be subject to expedited proceedings, given that it is only an instrument for the payment of money (see CPLR § 3213 ). Here, petitioner's counsel describes a less than extraordinary view into an action based upon two promissory notes. While the Court notes that the parties engaged in discovery and motion practice, this alone does not warrant the inflated fee sought.
Turning next to the second factor, the amount involved and benefit resulting to the client from the services. The petitioner, and thus the Estate, received a pre-interest benefit of Sixty–Two Thousand Four Hundred Fifty–Five Dollars and Four Cents ($62,455.04), the balance owed on the two promissory notes. When comparing this amount with the fees sought, Fifty–Three Thousand Sixty Four Dollars and Thirty–Eight Cents ($53,064.38), it is clear that the benefit received by the Estate does not warrant such an unreasonably high fee request.
The New York Court of Appeals has not enunciated a standard for determining what is a reasonable attorney's fee with respect to collecting on a promissory note (see Peoples Westchester Sav. Bank v. Ganc, 715 F. Supp 610 [SDNY 1989] ). In the sales contract context, however, it has suggested that, to be acceptable, a fee must be “reasonably related to the normal fee an attorney would charge for the collection of plaintiff's claim (see Peoples Westchester Sav. Bank v. Ganc, 715 F. Supp 610 [SDNY 1989]citing Equitable Lumber Corp. v. IPA Land Development Corp., 38 N.Y.2d 516 [1976] ). The court in Peoples Westchester Savings Bank v. Ganc noted the lower courts of New York State have upheld fees, in cases involving the enforcement of promissory notes, as high as 20% of the notes' face value (id. ).
Here, the Court will determine reasonable attorney's fees using a similar approach, i.e. allowing reasonable attorney's fees at 20% of the notes' face value. The pre-interest value of the notes is Sixty–Two Thousand Four Hundred Fifty–Five Dollars and Four Cents ($62,455.04), multiplying this value by 20% results in a figure of Twelve Thousand Four Hundred Ninety One Dollars ($12,491.00), the reasonable amount of legal fees due the petitioner's counsel. Accordingly, on the facts of this proceeding and in an exercise of discretion, the amount of legal fees awarded to petitioner's counsel is Twelve Thousand Four Hundred Ninety One Dollars ($12,491.00) (see Long Island Trust Co. v. Westbury Donuts, Inc., 94 A.D.2d 738 [2nd Dept 1983] ).
The proposed decree is signed contemporaneously herewith. The foregoing constitutes the decision of the Court.