Opinion
99 Civ. 10861 (JSR)(HBP)
August 1, 2002
OPINION AND ORDER
I. Introduction
This is a tort action in which Mayra Cruz and fifteen other passengers sought to recover damages for personal injuries they sustained in a bus accident. The underlying claims for personal injuries have all been settled. The matter is currently before me to resolve a dispute between the firm which commenced the action on behalf of Mayra Cruz — Budin, Reisman, Kupferberg Bernstein ("Budin, Reisman") — and the attorney who subsequently took over the representation of Cruz — Rosemarie Arnold — concerning how fees should be divided between the two. As memorialized in the Order of the Honorable Jed S. Rakoff, United States District Judge, dated February 21, 2001 (Docket Item 16), Budin, Reisman and Ms. Arnold have consented to my exercising plenary jurisdiction over this dispute pursuant to 28 U.S.C. § 636(c). The court has subject matter jurisdiction over the dispute pursuant to the doctrine of supplemental jurisdiction. Itar-Tass Russian News Agency v. Russian Kurrier, Inc., 140 F.3d 442, 448 (2d Cir. 1997).
Pursuant to the Judge Rakoff's Order of reference, I held a conference with Budin, Reisman and Ms. Arnold on March 21, 2001 and issued an Order the following day directing both counsel to submit memoranda setting forth their legal and factual positions no later than April 27, 2001. Copies of this Order were sent to both Budin, Reisman and Ms. Arnold; neither has been returned as undeliverable. Ms. Arnold timely submitted an unsworn statement of facts and a memorandum of law; Budin, Reisman neither made any submission nor contacted my chambers concerning the matter in any way.
Since Ms. Arnold's submission did not contain any affidavits, there were no materials before me addressing the factual issues raised by the parties' dispute. As a result, I issued a second Order on June 4, 2001 which provided, in pertinent part, as follows:
No later than ten (10) days from the date of this Order, the firm of Budin, Reisman, Kupferberg Bernstein is directed to show cause why their claim should not be dismissed for failure to comply with my March 22, 2001 Scheduling Order.
In addition, no later than ten (10) days from the date of this Order, Rosemarie Arnold, Esq. is directed to submit an affidavit or affirmation attesting to the truth of the factual assertions made in her submission. She is also to provide an affidavit of service stating when he submission was served on the Budin, Reisman, Kupferberg Bernstein firm and sent to my chambers.
Again, copies of the June 4, 2001 were sent to Budin, Reisman and Ms. Arnold. Neither have been returned as undeliverable.
Ms. Arnold supplemented her submission in accordance with my June 4, 2001 Order on June 7, 2001. Budin, Reisman has submitted nothing.
Accordingly, I shall resolve the dispute based on Ms. Arnold's unopposed submissions.
II. Facts
On August 14, 1999, at approximately 9:30 a.m., Mayra Cruz was a passenger on a bus that was involved in an accident on the New Jersey Turnpike, in Ridgefield Park, New Jersey (Plaintiff's Statement of Facts ("Plaintiff's SOF") ¶ 1). As a result of the accident, plaintiff Cruz suffered multiple fractures to her tibia, neck and back sprains and strains, acute stress disorder, sadness and depression. Plaintiff was hospitalized for six days and underwent surgery to repair her tibia (Plaintiff's SOF ¶ 2).
While Cruz was hospitalized, someone from Budin, Reisman visited her in the hospital for about twenty minutes (Plaintiff's SOF ¶ 3). Approximately four weeks after her release from the hospital, plaintiff Cruz went to Budin, Reisman's office for a meeting and retained it as counsel. That meeting lasted about thirty minutes (Plaintiff's SOF ¶ 4). At the time plaintiff retained Budin, Reisman, she did not know that the firm also represented eight other passengers who were on the bus at the time of the accident, and that there was a "limited" policy of insurance (Plaintiff's SOF ¶ 5).
Budin, Reisman's services to plaintiff were limited to: (1) preparation of the Complaint and Amended Complaint; (2) two meetings with Cruz that totaled fifty minutes in length, and (3) two telephone calls with an aggregate duration of approximately ten minutes. During her meetings with Budin Reisman, the firm advised plaintiff that it believed her claims was. worth a maximum of $75,000.00 (Plaintiff's SOF ¶ 6).
Cruz was dissatisfied with the representation provided by Budin, Reisman because the firm did not return her phone calls and believed that her case was worth only $75,000.00. In addition, when Cruz expressed a belief that her case was worth more, Mr. Budin became very condescending and defensive to plaintiff, and told her that she was greedy. "Mr. Budin never established a no-fault claim" (Plaintiff's SOF ¶ 7).
In November 1999, Cruz met with Elizabeth Arnold, Esq., in order to retain the Law Offices of Rosemarie Arnold as counsel. Cruz consulted with Ms. Arnold for about two hours concerning her case. Cruz told Ms. Arnold that she wanted to retain her because she was dissatisfied with Budin, Reisman. Cruz stated she was dissatisfied with the Budin, Reisman because Mr. Budin did not return her phone calls, did not establish a no-fault claim and told her that her case was only worth about $75,000.00 (Plaintiff's SOF ¶ 8).
On December 1, 1999, Rosemarie Arnold, Esq. sent a letter to Budin, Reisman requesting the file (Plaintiff's SOF ¶ 9). As of March 2000, despite numerous requests, Budin, Reisman had still failed to provide Ms. Arnold with the file. On March 1, 2000, an attorney employed by Ms. Arnold went to Budin, Reisman to pick up the file herself (Plaintiff's SOF ¶ 10).
At a conference held on April 19, 2000, the Honorable Jed S. Rakoff, United States District Judge, orally permitted Ms. Arnold to be substituted for Budin, Reisman as counsel for Mayra Cruz. Thereafter, Ms. Arnold sent a stipulation of substitution to Budin, Reisman on at least two occasions. Without explanation, Budin, Reisman refused to sign it (Plaintiff's SOF ¶ 11).
Ms. Arnold's firm reconstructed the medical file. An attorney employed by Ms. Arnold spoke with Cruz on a weekly basis to keep her up-to-date on the status of her case. Ms. Arnold "established" a no-fault claim in order to get Cruz's medical bills paid, and did in fact get the medical bills paid (Plaintiff's SOF ¶ 12).
In September 2000, Ms. Arnold settled Cruz's claim for $475,000.00 (Plaintiff's SOF ¶ 13). Prior to the settlement, Ms. Arnold and her staff expended approximately 236 hours of professional services to prepare the case for trial (Plaintiff's SOF at 5-11).
III. Analysis
A. Choice of Law
The only issue in this case is what fee, if any, Rudin, Reisman is entitled to receive for its work on Mayra Cruz's behalf. Before addressing the merits of Budin, Reisman's claim, it is first necessary to determine what law applies to Budin, Reisman's claims.
This Court's subject matter jurisdiction with respect to the underlying action is predicated on diversity of citizenship. Accordingly, I am required to apply New York's choice of law rule to determine what law applies to the claims asserted herein. Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941); Lazard Freres Co. v. Protective Life Ins. Co., 108 F.3d 1531, 1538-39 (2d Cir. 1997).
The relationship between attorney and client is basically a contractual relationship. Catisone v. Wolff, 71 F. Supp.2d 365, 368 (S.D.N.Y. 1999). New York applies a "center of gravity" or "grouping of contacts" analysis test to choice of law issues in contract cases:
In contract cases, New York courts now apply a "center of gravity" or "grouping of contacts" approach. [Babcock v. Jackson, 12 N.Y.2d 473, 481-82, 191 N.E.2d 279, 283-84, 240 N.Y.S.2d 743, 749 (1963).] Under this approach, courts may consider a spectrum of significant contacts, including the place of contracting, the places of negotiation and performance, the location of the subject matter, and the domicile or place of business of the contracting parties. In re Allstate Ins. Co. and Stolarz, 81 N.Y.2d 219, 227, 597 N.Y.S.2d 904, 908, 613 N.E.2d 936, 940 (1993). New York courts may also consider public policy "where the policies underlying conflicting laws in a contract dispute are readily identifiable and reflect strong governmental interests." Id. at 226, 597 N.Y.S.2d at 907, 613 N.E.2d at 939. The traditional choice of law factors, the places of contracting and performance, are given the heaviest weight in this analysis. Id.
Brink's Ltd. v. South African Airways, 93 F.3d 1022, 1030-31 (2d Cir. 1996). Accord Lazard Freres Co. v. Protective Life Ins. Co.,, 108 F.3d 1531, 1539 (2d Cir. 1997).
The weight of authority holds that New York has the greatest contact with disputes arising out of a claim by a New York attorney for a fee in connection with an action brought in New York, and that New York law should, therefore, be applied to such actions. Butler. Fitzgerald Potter v. Ryan, 92 Civ. 0006 (JFK), 1992 WL 315635 at *2 (S.D.N.Y. Oct. 22, 1992); Roberts Finger v. Worldstyle, Inc., 88 Civ. 7559 (RWS), 1990 WL 16082 at *4 n. 2 (S.D.N.Y. Feb. 9, 1990); Kramer, Levin, Nessen, Kamin Frankel v. Aronoff, 638 F. Supp. 714, 719 (S.D.N.Y. 1986); Arrow, Edelstein Gross, P.C. v. Rosco Prods., Inc., 581 F. Supp. 520, 523 (S.D.N.Y. 1984). In light of these authorities, I shall apply New York law to Budin, Reisman's claim.
B. The Merits of Budin, Reisman's Claim
"It is well-settled [under New York law] that an attorney loses his right to enforce a charging lien if the attorney withdraws or is discharged for cause." Harley Brown v. Ressler Ressler, 957 F. Supp. 44, 48 (S.D.N.Y. 1997). Accord First Nat'l Bank of Cincinnati v. Pepper, 454 F.2d 626, 633 (2d Cir. 1972) ("[A]n attorney discharged for cause or guilty of professional misconduct in the handling of his client's affairs has no right to payment of fees. . . ."); Winter Garden Co. v. Globe Rutgers Fire Ins. Co., 9 F.2d 560, 562 (2d Cir. 1925); Campagnola v. Mulholland, Minion Roe, 76 N.Y.2d 38, 44, 555 N.E.2d 611, 614, 556 N.Y.S.2d 239, 242 (1990); Papadopoulos v. Goldstein, Goldstein Rikon, P.C., 283 A.D.2d 649, 649, 725 N.Y.S.2d 364, 365 (2d Dep't 2001). If, on the other hand, an attorney is discharged without cause, he is entitled to be compensated for his services on a quantum meruit basis. Campagnola v. Mulholland, Minion Roe, supra, 76 N.Y.2d at 44, 555 N.E.2d at 614, 556 N.Y.S.2d at 242.
Given the unrebutted and unchallenged statement of facts submitted by Ms. Arnold, I am compelled to conclude that Budin, Reisman was terminated for cause. Budin, Reisman's repeated failure to return plaintiff's telephone calls was improper, and could have subjected the firm to disciplinary conduct, see 22 N.Y.C.R.R. § 1210.1; In Re Birman, N.Y.L.J. July 27, 2000, at 4, col.4; Victoria Rivkin, Steps for Avoiding Disciplinary Committee Complaints, N.Y.L.J., Sept. 25, 2000, at 1, col. 3; Nicholas Cooper, Avoiding Common Grievance Complaints, N.Y.L.J., Sept. 24, 1999, at 1, col., 1, and constituted cause to terminate the firm.
To the extent that Mayra Cruz argues that Budin, Reisman's alleged undervaluation of the case constituted cause for termination, I reject the argument. Especially in the field of personal injury litigation, competent attorneys will frequently differ widely in their evaluation of a claim. By their nature, claims for pain and suffering are not susceptible to mathematical calculation or even estimation, and there simply is no formula, table, or even rule of thumb, for evaluating personal injury claims. The fact that Budin, Reisman estimated plaintiff's recovery at less than one-sixth of the figure at which the case was settled does not establish deficient representation.
As to the other alleged deficiencies cited by Mayra Cruz and Ms. Arnold, their submission lacks sufficient detail for me to determine whether these other problems constituted cause for terminating Budin Reisman. For example, plaintiff claims that Budin, Reisman "never established a no-fault claim" (Plaintiff's Statement of Material Facts ¶ 7). I do not understand what plaintiff is referring to by this language. If she is contending that Budin, Reisman failed to prove her claim, the statement does not make sense. The matter was settled prior to trial, and, thus, the time for offering proof simply never came. To the extent plaintiff relies on Budin, Reisman's unexplained failure to sign a stipulation of substitution, the firm's conduct is immaterial since the decision to terminate it must have been made prior to the point that it was asked to sign a stipulation of substitution.
Finally, to the extent plaintiff claims that Budin, Reisman's representation of Mayra Cruz and other plaintiff's constituted a conflict of interest, the claim is not proven. Plaintiff's theory here is that the firm's representation of multiple clients all seeking recovery from a single, limited policy of insurance necessarily created a conflict. Although, it is theoretically possible that a conflict could arise in this situation, plaintiff has not provided sufficient information to determine whether there was an actual conflict here. For example, if the defendant's insurance policy and assets was sufficient to cover the claims of all plaintiffs represented by Budin, Reisman, there would be no conflict. Based on the limited information currently available to me, I cannot determine if Budin, Reisman committed an ethical violation, and I decline to speculate on the issue.
Finally, I note that even if the merits of the case did not warrant dismissal of Budin, Reisman's claim, I would, nevertheless dismiss the firm's claim as a result of its failure to comply with my Orders March 21, 2001 and June 4, 2001. Stated simply, Budin, Reisman have never submitted a shred of evidence or a shred of legal authority in support of their claim. The firm's unexplained failure to comply with my Orders in this case constitutes an independent ground for dismissal of its claim.
IV. Conclusion
Accordingly, for all the foregoing reasons, I dismiss Budin, Reisman's claim for a share of plaintiff's settlement proceeds in its entirety and conclude that Budin, Reisman is entitled to no fee in connection with whatever services it provided to Mayra Cruz.