Opinion
March 29, 1943.
In an action by plaintiffs, attorneys, to recover for legal services rendered in two lawsuits to defendants, plaintiffs obtained a recovery for the reasonable value of their services in the second suit, and the defendants succeeded upon their counterclaim for a sum allegedly withheld by the plaintiffs in excess of the amount agreed upon in a written retainer as the plaintiffs' fee in the first suit. Upon cross-appeals, judgment, insofar as appealed from, affirmed, without costs. The retainer provided only for the payment to plaintiff Richard J. Mackey of a percentage of the "moneys" recovered on behalf of the defendants in an action for breach of contract against one Sowerbutt. The judgment recovered on behalf of defendants was diminished by the allowance of a counterclaim in favor of Sowerbutt for materials which the latter had supplied to defendants and for which no payment had been made. Contrary to the statement contained in the opinion of the trial justice, the record shows that when the retainer was signed Mackey knew that defendants had failed to pay Sowerbutt for the materials sold to them pursuant to the aforementioned contract. Under the circumstances, Mackey's preparation of a retainer setting up "moneys recovered" as a basis for the computation of his fee indicates that he assumed the risk that the recovery in moneys would be diminished by the allowance of the Sowerbutt counterclaim.
Johnston, Taylor and Lewis, JJ., concur; Close, P.J., dissents and votes to reverse the judgment, to direct judgment for appellants-respondents on the first cause of action, to dismiss defendants' counterclaim, and to direct a new trial of the second cause of action, with costs to appellants-respondents to abide the event, with the following memorandum:
The first cause of action is based on a written retainer, pursuant to which defendants retained plaintiffs to represent them in an action to be brought against certain parties for loss of profits in connection with the corporate defendant's contract with the city of New York to supply certain stone. The salient portion of the retainer reads: "I agree to pay you for representing me thirty-five per cent (35%) of any moneys recovered whether as a result of settlement or after trial; and I further agree to pay the necessary disbursements of the action. It is understood that if no recovery is obtained in any way, no fee will be required of me." When the action was begun in the United States District Court for the District of New Jersey, the defendants in that action set up a counterclaim for certain stone furnished to plaintiffs therein. At the close of the proof the trial court directed a verdict in favor of one defendant on his counterclaim and submitted to the jury plaintiffs' claim for loss of profits. After the judgment on the counterclaim had been entered, the jury rendered a verdict in favor of plaintiffs on their complaint for loss of profits in the sum of $5,114.47. The question posed in the present action is whether these attorneys are entitled to thirty-five percent of the amount of that judgment or thirty-five per cent of the amount left after deducting the amount of the judgment entered on the counterclaim. The trial court held that plaintiffs' retainer applied only to the difference, and dismissed plaintiffs' complaint insofar as they sought to recover their agreed percentage on the amount of the judgment entered in the New Jersey action for loss of profits. It is conceded that both judgments have been satisfied. In my opinion, the language used in the retainer is clear and unambiguous and should not be construed so as to limit the amount of plaintiffs' recovery to thirty-five per cent of the money actually received, rather than to thirty-five per cent of the amount recovered where, as here, the client has received the monetary benefit of the entire recovery. ( Matter of Disborough v. Herdman, 52 N.Y. 660; Saulsbury v. American Vulcanized Fibre Co., 28 Del. 182.) As to the second cause of action, I believe the judgment is excessive in view of the amount involved and the time spent.
In my opinion there is no ambiguity in the retainer; and the allowance in the second cause of action is not excessive.