Opinion
19900/07.
Decided on July 11, 2008.
Kelly Labeck, PC, Long Beach, NY, Counsel for Plaintiffs.
Cheryl Kitton, Esq., Bellmore, NY, Counsel for Defendants.
Pursuant to CPLR 321(b)(2), Cheryl Kitton, Esq. ("Kitton") moves for leave to withdraw as attorney for the Defendants, Louis Nunziata ("Nunziata"), Sand Dune Real Estate Inc., Manor Gate Real Estate Inc., Louis Nunziata Real Estate, Inc., Joseph Valentino ("Valentino") and Mary Beth Tarter ("Tarter").
BACKGROUND
Plaintiffs brought this action against the Defendants alleging breach of an asset purchase agreement, dated March 31, 2007, between Plaintiff, Mary Volosevich, as President of Plaintiff, Sand Dune Realty of Long Beach, Ltd., and Nunziata. Nunziata, was served with the Summons and Complaint on November 7, 2007. He approached Kitton shortly before such service to ask her to represent him in the matter.
Kitton prepared a Retainer Agreement, but Nunziata refused to sign it. He did, however, pay her a $2,500 retainer fee to represent all Defendants. Kitton alleges that Nunziata stated that he would be responsible for the legal payments and that Valentino and Tarter had no relationship to the contract in question.
Kitton began work on the matter even though Nunziata never signed the Retainer Agreement. She answered the complaint on behalf of all Defendants, filed a counterclaim, and spent in excess of sixteen (16) hours in preparation of this matter. However, Nunziata has refused to pay for the legal fees incurred beyond the initial $2,500 retainer payment.
On or about March 7, 2008, Plaintiffs served Combined Demands and a Demand for a Verified Bill of Particulars on Kitton. Pursuant to the Preliminary Conference Order, dated February 8, 2008, these demands were to be responded to by April 11, 2008. Nunziata has refused to cooperate with Kitton's verbal and written requests for information responsive to Plaintiffs' Combined Demands and Demand for a Verified Bill of Particulars. To date, these Demands remain unanswered.
Kitton claims that she cannot continue representing the Defendants since she does not have the full cooperation of Nunziata. Consequently, she requests that she be relieved as attorney for the Defendants and that the Court order payment on a quantum meruit basis for the work she performed on behalf of the Defendants.
DISCUSSION
A. Leave to Withdraw
Under CPLR 321(b)(2), an attorney of record may be removed from a case by an order of the court in which the action was brought. The attorney must show good cause for withdrawal. 22 NYCRR 1200.15(c)(6) [Code of Professional Responsibility DR 2-110(c)(6)]. The decision to grant or deny permission to withdraw lies within the discretion of the trial court. Matter of Khan v. Dolly , 39 AD3d 649 , 650 (2nd Dept. 2007).
Good cause exists where the conduct of the client renders it unreasonably difficult for the attorney to properly represent the client. 22 NYCRR 1200.15(c)(1)(iv) [Code of Professional Responsibility DR2-110(c)(1)(iv)]. See, Green v. Gasparini , 24 AD3d 505 (2nd Dept. 2005); and Walker v. Mount Vernon Hosp. , 5 AD3d 590 (2nd Dept. 2004). Sufficient cause for withdrawal has also been found to exist if the client fails or refuses to pay attorney's fees or expenses necessary to carry on the litigation. Permission to withdraw has also been granted when the attorney-client relationship has deteriorated to the point where continued representation is inappropriate. Lake v. M.P.C. Trucking, Inc., 279 AD2d 813 (3rd Dept. 2001); and Winter v. Rise Steel Erection Corp., 231 AD2d 626 (2nd Dept. 1996).
Here, Defendants have failed to respond to Kitton's repeated attempts to secure cooperation with discovery requests and for payment. Nunziata has repeatedly failed or refused to assist Kitton in the defense of this action. Under such circumstances, Kitton has demonstrated good cause sufficient to be relieved as counsel for Defendants.
B. Quantum Meruit Fees Claim
An attorney who fails to obtain a written retainer agreement or letter of engagement with a non-matrimonial client in violation of 22 NYCRR 1215.1 may recover the reasonable value services rendered on a quantum meruit basis. Seth Rubenstein, P.C. v. Ganea , 41 AD3d 54 (2nd Dept. 2007). Therefore, even though Nunziata never signed a retainer agreement, there was an implied promise that he would pay the costs of Kitton's services, which is evidenced by the fact that he paid the retainer fee.
22 NYCRR 1215.1 carries no sanction for its violation (see, Beech v. Gerald B. Lefcourt, P.C., 12 Misc 3d 1167[A] [Civ. Ct. NY Co. 2006]) as does 22 NYCRR 1400.3 which requires a written retainer agreement in matrimonial retentions (see, Sherman v. Sherman , 34 AD3d 670 [2nd Dept. 2006] [recovery of an attorney's fees in a domestic relations matter was barred in the absence of a retainer letter]).
Kitton's failure to obtain a retainer agreement with Nunziata occurred through no fault of her own inasmuch as she proffered an agreement which Nunziata rejected. Nunziata's decision to eschew the public policy protection offered by 22 NYCRR 1215.1 should not now serve as a bar to Kitton's ability to recover her legal fees on a quantum meruit basis. See, Matter of Feroleto , 6 Misc 3d 680 (Surr.Ct. Bronx Co. 2004). The absence of a signed written retainer agreement does not preclude the recovery of legal fees. Mintz v. Gold, LLP v. Hart , 48 AD3d 526 (2nd Dept. 2008).
On the question of an attorney's right of recovery in the absence of a retainer agreement, courts had been divided before Seth Rubinstein, P.C. v. Ganea, supra. In addition to the approach of allowing quantum meruit recovery where there was no retainer agreement, courts had allowed no further recovery beyond the retainer fee (see, Smart v. Adams, 4 Misc 3d 1026[A] [Sup. Ct. Dutchess Co 2004]), or no recovery at all (see, Nadelman v. Goldman, 7 Misc 3d 1011[A][NY City Civ. Ct. 2005]).
It is beyond cavil that, given Nunziata's refusal to sign a retainer agreement and the absence of a sanctions component in 1215.1, recovery of the legal fees earned by Kitton should be awarded on a quantum meruit basis. As the Second Department held in Seth Rubenstein, P.C.:
We find that a strict rule prohibiting the recovery of counsel fees for an attorney's noncompliance with 22 NYCRR 1215.1 is not appropriate and could create unfair windfalls for clients, particularly where clients know the legal services they receive are not pro bono and where the failure to comply with the rule is not willful (see, Matter of Feroleto, supra at 684).
Legal fees awarded on a quantum meruit basis cannot be determined summarily. See, Simoni v. Time-Line, Ltd., 272 AD2d 537 (2nd Dept. 2000); and Borg v. Belair Ridge Dev. Corp., 270 AD2d 377 (2nd Dept. 2000). Therefore, the matter must be referred to a Special Referee to hear and determine the amount of legal fees to which Kitton is entitled in connection with her legal services provided for the defense of this action.
Accordingly, it is,
ORDERED, that Cheryl Kitton's motion for leave to withdraw as attorney for the Defendants is granted; and it is further
ORDERED, that a copy of this Order with Notice of Entry together with a Notice to Appoint Another Attorney as provided for by CPLR 321(c) shall be served upon Louis Nunziata, Joseph Valentino and Mary Beth Tarter pursuant to CPLR 308 (1) or (2), upon Sand Dune Real Estate Inc., Manor Gate Real Estate Inc., and Louis Nunziata Real Estate, Inc. pursuant to CPLR 311(a)(1) and upon the attorney for the Plaintiffs pursuant to CPLR 2103(b)(2); and it is further
ORDERED, that no proceedings in this action shall be taken against the Defendants without permission of the Court for a period of 30 days after service of a copy of this Order with Notice of Entry; and it is further
ORDERED, that the matter is respectfully referred to Special Referee Thomas V. Dana on August 12, 2008, at 10:00 a.m., to hear and determine all issues relating to the quantum meruit value of legal services rendered by Cheryl Kitton, Esq. in connection with this matter; and it is further
ORDERED, that incoming counsel for Defendants and counsel for Plaintiffs shall appear for a status conference on September 5, 2008 at 9:30 a.m.
This constitutes the decision and Order of the Court.