Opinion
No. 99 Civ. 10861 (JSR) (HBP)
February 11, 2003
AMENDED OPINION AND ORDER
On January 13, 2003, I received a letter from plaintiff's counsel suggesting that my December 12, 2002 Opinion and Order contained a factual error on page three. As a result of counsel's letter, I reviewed the record, concluded that I had misinterpreted ambiguous testimony appearing at page 19 of the transcript of proceedings conducted on August 13, 2002 and made revisions to page three. The revisions to page three do not alter the result herein.
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 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 Kurier, Inc., 140 F.3d 442, 449 (2d Cir. 1997).
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. Both sides timely complied with that Order.
As noted in my Order dated August 5, 2002, the statement in my August 1, 2002 Opinion and Order in this matter that Budin, Reisman had not made a timely submission was erroneous. My August 5, 2002 Order vacated my August 1, 2002 Order in all respects.
Because there was a factual dispute concerning whether Budin, Reisman was terminated for cause, I held a hearing on August 13 and September 4, 2002 concerning the circumstances under which Mayra Cruz terminated Budin, Reisman. On the basis of that hearing and the submissions of all parties, I make the following findings of fact and conclusions of law.
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. As a result of the accident, Cruz suffered multiple fractures of 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.
While Cruz was hospitalized, an attorney from Budin, Reisman met with her, and Cruz retained Budin, Reisman as her attorneys. Budin, Reisman was also retained by all 14 other plaintiffs in this matter.
Until Mayra Cruz terminated Budin, Reisman on November 29, 1999, Budin, Reisman represented plaintiff and drafted an original and an amended complaint on behalf of all plaintiffs, attended a scheduling conference and participated in the formulation of a pretrial schedule. Although plaintiff claims that Budin, Reisman did not pay sufficient attention to her claim, Adam Bernstein, the Budin, Reisman attorney assigned to the matter, offered credible testimony at the hearing that he filed a no-fault claim on behalf of plaintiff, contacted plaintiff's doctors, obtained medical records from Englewood Hospital and started obtaining insurance benefits for plaintiff. Bernstein testified that he spoke with Cruz between six and eight times. Bernstein also testified that Cruz never expressed dissatisfaction with the Budin, Reisman firm, and Bernstein's testimony in this regard is corroborated by plaintiff's letter dated November 29, 1999 terminating Budin, Reisman, which does not even suggest dissatisfaction with Budin, Reisman's work. Finally, Budin, Reisman also offered documentary and testimonial evidence that after it had been terminated, it offered its file to successor counsel within two weeks. Successor counsel, however, did not pick-up the file for several months.
After plaintiff terminated Budin, Reisman on November 29, 1999 and directed it to cease work, her new counsel did not formally seek substitution until April, 2000. The transcript of a pretrial conference held at that time indicates that although Budin, Reisman timely completed discovery with respect to all other plaintiffs, Cruz's new counsel failed to complete discovery by the court-ordered deadline.
Plaintiff's successor counsel also offered credible testimony at the hearing that she performed substantial additional work to prepare plaintiff's case for trial, and, in particular, developed substantial additional medical evidence. As a result of negotiations conducted by plaintiff's successor counsel, plaintiff's case against the bus company ultimately settled for $475,000.00.
III. Conclusions of Law
A. Choice of Law
The only issue that remains in this case is what fee, if any, Budin, 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 claim.
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 rules 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, in essence a contractual relationship. Catizone v. Wolff, 71 F. Supp.2d 365, 368 (S.D.N.Y. 1999). New York applies a "center of gravity" or "groupings of contacts" 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., supra, 108 F.3d at 1539.
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. 513, 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-settle [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 Browne 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 Dept 2001). If, on the other hand, an attorney is discharged without cause, he is entitled to be compensated for his or her 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. See also Sequa Corp. v. GBJ Corp., 156 F.3d 136, 147 (2d Cir. 1998) ("Under New York law, an attorney dismissed without cause is entitled to liens in his favor to secure payment of reasonable fees and costs incurred prior to the date of substitution of counsel." (citations omitted)); Casper v. Lew Lieberbaum Co., 97 Civ. 3016 (JGK) (RLF) 1999 WL 335334 at *5 (S.D.N.Y. May 26, 1999). The burden of proving that a termination is for cause is on the client. Casper v. Lew Lieberbaum Co., supra, 1999 WL 335334 at *6.
In this case, I find that plaintiff has not sustained her burden of establishing that Budin, Reisman was terminated for cause. Although plaintiff claims that Budin, Reisman did not return her calls and failed to communicate with her, her letter terminating Budin, Reisman inexplicably contains no reference to such misconduct. In addition, her claim that Budin, Reisman did no work on her case is rebutted by the size of the file Budin, Reisman turned over to successor counsel and the documentary evidence establishing that Budin, Reisman obtained some no fault benefits for plaintiff. Although it does appear that plaintiff was far more satisfied with her successor counsel than she was with Budin, Reisman, she has failed to prove that Budin, Reisman is guilty of any unprofessional conduct or other misconduct that would justify termination for cause.
There remains the issue of determining the reasonable value of Budin, Reisman's services. Unfortunately, Budin, Reisman, like most plaintiff's personal injury firms, kept no time records, and I am left to estimate the value of its services based on the sparse information available to me. I estimate that the work Budin, Reisman did for plaintiff Mayra Cruz (exclusive of the work it was already doing for the other plaintiffs) would have taken a maximum of sixty (60) hours. Using an hourly rate of $275 which I conclude to be a reasonable hourly rate for this District,see generally Marisol A. v. Giuliani, 111 F. Supp.2d 381, 386 (S.D.N.Y. 2000), I conclude that Budin, Reisman is entitled to a fee of $16,500.00 for the work it did for plaintiff.
IV. Conclusion
Accordingly, I conclude that Budin, Reisman is entitled to a lien on plaintiff Mayra Cruz's recovery in this matter in the total amount of $16,500.00.
SO ORDERED