Opinion
HUC45705.
Decided August 9, 2005.
Richard M. Gordon, Esq., Richard M. Gordon Associates, Huntington, New York, Attorney for Plaintiff.
Victor K. Soffer, Esq., Soffer Rech, LLP, New York, NY, Attorney for Defendant.
The defendant has moved for summary judgment seeking to dismiss the plaintiff's complaint to recover upon a contract to pay legal fees rendered in connection with a Family Court proceeding. The defendant asserts that 22 NYCRR § 1400.3 precludes recovery. It is undisputed that the defendant consulted with the plaintiff, received a copy of a detailed retainer letter, arranged for the tender of a third party $2,500 retainer check, and authorized plaintiff to appear in the action on her behalf. Prior to the actual hearing, the defendant terminated plaintiff's representation and hired another attorney. The retainer letter was not returned by the defendant. Plaintiff rendered approximately 3 hours of legal services during the short engagement for which he seeks to recover $975.
The defendant correctly asserts the general proposition that 22 NYCRR 1400.3 mandates that an attorney [who undertakes] to represent a party and enters into an arrangement for, charges for or collects any fee from a client shall execute a written agreement with the client setting forth in plain language the terms of compensation and the nature of services to be rendered. The agreement . . . shall be signed by both client and attorney . . . Plaintiff's failure to comply with 22 NYCRR 1400.3 precludes its recovery of attorney's fees. Mulcahy v. Mulcahy, 728 NYS2d 90 (2d Dept. 2001); Ackerman v. Gebbia-Ackerman, 796 NYS2d 528, (2d Dept 2005).
However, in the forementional precedent, New York's Appellate Courts recognized that this is not a strict liability regulation and that an attorney need only establish "substantial compliance" with its requirements. See also Wasner Kuplovitz v. Solomon, 776 NYS2d 379 (3rd Dept 2004); Flanagan v. Flanagan, 699 NYS2d 406 (1st Dept 1999).
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In the instant case the plaintiff professionally and competently undertook every act under his control to effectuate the Sec. 1400.3 directive. It is undisputed that after the initial consultation he expeditiously drafted and transmitted to the defendant a retainer letter which complied with the regulation's disclosure requirements. After being tendered a third party retainer check, and motion papers, the plaintiff commenced preparation for a hearing scheduled four days later. His representation was terminated by the defendant sometime prior to the hearing but after his documentary review.
This retainer check was subsequently dishonored.
Issue
Once plaintiff executed and mailed a proper 22 NYCRR Sec. 1400.3 retainer disclosure letter to defendant, he was at a compliance impasse which could only be traversed by the defendant. The legal issue posed for consideration is whether plaintiff has substantially complied with the regulation or whether any circumstances exist wherein the defendant would be equitably estopped from asserting the regulation as a defense to payment for requested emergency legal services.
Policy Purpose
The common thread running through New York's Appellate Courts relaxation of the Sec. 1403.3 regulation via a "substantial compliance" interpretation is the concept of "disclosure of clients rights" and "lack of prejudice". See generally, Agostin-Knops v. Knops, 783 NYS2d 328 (1st Dept. 2004), Cromer v. Cromer, 711 NYS2d 894 (2nd Dept. 2000); Webb v. Webb, 701 NYS2d 140 (3rd Dist. 1999). Once an attorney makes the requisite Sec. 1400.3 extensive disclosure and tenders the detailed retainer letter, it is reasonable for him to rely upon the defendant's oral representation that she will expeditiously execute and return same. Absent a demonstration of prejudice to the defendant; how could she equitably argue that she should not have to pay for requested emergency legal services arising from noncompliance which was totally in her control. It would seem that the regulation itself contemplates the time/delay practicalities of executing a retainer by affording a 10 day period to file same with the Court after representation commences.
Unfortunately, the substance of the parties conversations have not been disclosed to the Court. The defendant has been careful not to state her version of the retainer conversation under the mistaken assumption that the subject regulation involves strict compliance. The plaintiff's assertions can not be considered at this time as the movant correctly notes that the submission of the affirmation by Richard M. Gordon, Esq. is procedurally erroneous as he is an active litigant on his own behalf. CPLR 2106; Schutzer v. Suss-Koyler, 57 AD2d 613 (NY AD2d Dept 1977); Fitzgerald v. Willies, 83 Misc2d 853 (NY App. Term., 1st Dept 1975).
The issue of whether the defendant represented she would execute and return the retainer letter and whether she requested emergency legal services during the delay is obviously a factual dispute which can only be resolved at trial or via stipulated facts. Accordingly, the Court denies the defendant's application for summary judgment.