Opinion
35625/04.
Decided December 15, 2005.
Thomas R. Adinolfi, Esq., Law Office of Michael J. DeFilippo, Staten Island, NY, Counsel for Plaintiff.
Stewart B. Schachner, Esq., Staten Island, NY, Counsel for Defendant.
The defendant, Sara C. Gerbino moves for an order dismissing the plaintiff's complaint and further ordering the plaintiff to comply with the decision of The Richmond County Bar Association fee arbitration panel, rendered in the defendant's favor, following a legal fee dispute between the plaintiff and the defendant. The plaintiff, an attorney, commenced this action against the defendant to enforce the terms of a retainer agreement under which the plaintiff performed legal services for the defendant and for which the plaintiff alleges he is entitled to be paid $19,280.00.
In April, 2002, the defendant retained the plaintiff regarding Medicaid and Estate planning issues. The defendant allegedly paid the plaintiff $19,280.00 in two installments for those services. Thereafter, the defendant discharged the plaintiff and sought fee arbitration with the Richmond County Bar Association, utilizing its fee dispute arbitration program. On December 3, 2003, the defendant signed an acknowledgment that the determination of the arbitrators would be binding on both the lawyer and the defendant unless "either party rejects the arbitrator's award by commencing an action on the merits of the fee dispute (trial de novo) in a court of law within 30 days." There is no indication that the plaintiff objected to the arbitration.
On March 29, 2004, after considering testimony and evidence, the fee dispute arbitration panel rendered a determination which found that Sara C. Gerbino was entitled to a refund of $10,755.00 from Michael DeFilippo. The defendant has attached as an exhibit, a copy of the Notice of Arbitration Award, dated March 29, 2004, which notified the parties of the panel's determination and the fact that the award is binding unless either party rejects the award by commencing a trial de novo within thirty days of the date that the arbitrators mailed the decision. The defendant asserts that she commenced an action in Supreme Court, although she provides no details regarding the action.
On June 18, 2004 the plaintiff commenced this action, seeking a trial de novo on the issue of his entitlement to the legal fee. Pursuant to the rules of the Richmond County Bar Arbitration panel as mandated by the Fee Dispute Resolution Program established by Part 137 of the Rules of Chief Administrator ( 22 NYCRR § 137.0 et seq), the parties are bound by the arbitrators' finding unless either side commences a trial de novo within thirty days from the date of the mailing of the notice of the award.
Since the plaintiff commenced this action well over thirty days after the presumed mailing of the award, the action is untimely and therefore must be dismissed. The Court notes that the plaintiff has not contested the date that the arbitrators mailed award. However, since according to the rules of the arbitration panel, the date of the award's mailing is a significantly time-sensitive event, an affidavit of mailing, while not essential in this case, would be necessary proof when the mailing date is a contested issue. Since neither party provided an affidavit of mailing, the Court presumes that one is not regularly prepared by the arbitration panel. Such a practice, if continued, may render unnecessary confusion in actions involving trials de novo. The Court recommends that the Richmond County Bar Association adopt a procedure to memorialize the date of mailing.
In addition, the plaintiff's action is one in the nature of declaratory relief in that it seeks a determination contrary to the arbitrators' finding that he must refund a portion of the fee that he is entitled to retain the fee that he has already received from the defendant. As such, this Court lacks the jurisdiction to award the plaintiff declaratory relief. Civil Court may only grant declaratory relief in certain limited cases (Civil Court Act 212(a)).
Under the CPLR a party may make an application to vacate or modify an arbitrator's award within ninety days of the delivery of the award. Generally, such an action must be commenced by special proceeding and be based upon the grounds articulated in CPLR 7511. Pursuant to CCA 206, the Civil Court has jurisdiction over such actions. However, the plaintiff's request for relief is not in the nature of a proceeding to vacate or modify the award but rather one for declaratory relief, for which the Civil Court lacks jurisdiction. The question remains as to whether the scheme of Part 137, as configured, would allow a party to vacate or modify the arbitrators' award by means of judicial review pursuant to Article 75 of the CPLR. Professor Siegel contends that the trial de novo provision of the rules, subject to the thirty day time constraint, limits the availability of judicial review to that remedy, foreclosing the losing party from utilizing the Article 75 proceeding to modify or vacate the award (See 119 Siegel's Prac. Rev. 1).
Although the Rules of the Chief Administrator present a detailed procedure for fee arbitration and were designed to facilitate the resolution of attorney-client disputes outside the judicial forum, they permit a trial de novo under circumstances limited by time constraints. However, the rules do not provide for any procedure to confirm the award, nor do they address the issue of the remedies available to the prevailing party with respect to enforcing the award. Should the panel award the client a fee refund, as in this case, the Rules provide no mechanism by which the client may enforce the award either by obtaining a judgment or commencing a supplementary proceeding. Likewise, should the arbitration panel find that the attorney is due the payment of a certain fee amount, the question remains as to what remedies are available to that attorney to enforce the findings of the panel.
The Part 137 Rules and procedural aspects of the trial de novo are discussed at length in Borgus v. Marianetti, 7 Misc 3d 1003 [Rochester City Ct 2005].
While it is expected that an attorney or client would expeditiously pay any award ordered in the other's favor, there may be circumstances in which that does not occur. The attorney or client is left with the need to enforce the award by other means, none of which the current Rules address. Part 136 of the Rules of the Chief Administrator, repealed effective January 2002, and replaced by the current rules (Part 137), provided at § 136.9 that "[t]he client or attorney may seek review of the arbitration award pursuant to Article 75 of the Civil Practice Law and Rules." Notably, no such provision is found in the more recent Part 137 Rules. Although Part 137 lacks any directive regarding enforcement of the arbitrators' award, unless the successful party is permitted to utilize Article 75 to confirm the award and reduce it to a judgment, the arbitrators' award is ineffective, except if it is voluntarily satisfied by the losing party. As Professor Siegel discusses "[o]nce the award is confirmed into a judgment, all of the enforcement of judgment remedies become available for it. Further, while the award is itself entitled to res judicata treatment, on closer scrutiny one may discover that it is sometimes not the award, but rather a judgment entered on the award, that is so honored" (Siegel, NY Prac § 601 at 1061-1062).
There is some authority for the procedure whereby an arbitrator's award may be reduced to a judgment without commencing a special proceeding to confirm the award. The cases and authoritative discussion regarding that process are sparse and may be distinguished from this case in that they involve what is referred to as a court-annexed arbitration which typically occurs in Small Claims proceedings and arbitrations established by the Rules of the Chief Administrator, Part 28 ( 22 NYCRR § 28 et seq) (See Siegel, NY Prac § 585B, at 1019 [4th ed]; Zampella v. Plaza at Latham Ass'n, 69 AD2d 957 [3rd Dept 1979]. In the "Alternate Dispute Method of Resolution by Arbitration" as established in 22 NYCRR § 28, the rules provide detailed guidelines for reducing the award to a judgment without the requirement of commencing a special proceeding to enforce the award ( 22 NYCRR § 28.11). Since there is no correlative provision regarding fee dispute arbitrations under Part 137, the winner of an award must seek to confirm the arbitrators' award by commencing a special proceeding to reduce the award to a judgment and to obtain the benefit of the full array of enforcement remedies. Conversely, if the losing party disagrees with the award, one must either commence a trial de novo within the prescribed time limits or initiate a proceeding pursuant to the CPLR to vacate or modify the award, neither of which the plaintiff has done in this case. As we have already noted, a proceeding to vacate or modify the award may be precluded in view of the trial de novo option.
Professor Siegel contends that while Part 137 does not speak to the direct entry of judgment on the award, there is statutory authority to allow the award to go to judgment without commencing a special proceeding for its confirmation (119 Siegel Prac. Rev 1 at 5).
The defendant seeks an order compelling the plaintiff to comply with the arbitrator's finding that the plaintiff must refund a portion of the fee. Since the defendant has not commenced a proper proceeding to confirm the award in accordance with the CPLR, the Court denies the defendant's application without prejudice to renew upon the proper proceeding. The Court notes that the defendant has not explained the nature of Supreme Court action which she alleges that she commenced prior to this action.
The defendant's motion to dismiss the plaintiff's complaint is granted. The action is dismissed.
The foregoing constitutes the Decision and Order of the Court.
Court Attorney to notify both sides of this Decision/Order.