Opinion
5538/00.
Decided June 20, 2006.
Mitchell Proner, Esq., Proner Proner, NY NY, for Plaintiff.
William J. Bendix, Esq., Brooklyn NY, Outgoing Attorney for Plaintiff.
Proner and Proner ("Proner"), counsel for all plaintiffs, except John Vallejo, Sr., moves by order to show cause to vacate any liens for attorneys' fees in this action claimed by attorney William J. Bendix, Esq. ("Bendix"), counsel for all plaintiffs prior to May 2002, except John Vallejo, Sr. Bendix opposes the order to show cause, claiming that he is owed one-half of the attorneys' fees in this matter.
This case was assigned to me on September 12, 2005 for a jury trial, after the jury had been selected. Three plaintiffs then remained in the action, Maria Vallejo, Carmen Reina (who reached the age of majority prior to trial) and Mayra Reina. Most of the defendants had been previously dismissed from the action. After extensive discussions and negotiations with plaintiffs' counsel, Mitchell Proner, Esq., and respective counsels for the remaining defendants, the matter was settled on September 13, 2005. A stipulation of settlement was placed on the record, with a total settlement of $920,000 ($75,000 for Maria Vallejo, $405,000 for Carmen Reina, and $440,000 for Mayra Reina). At issue between Proner and Bendix is the appropriate fee, if any, for Bendix. Proner contends that Bendix was discharged by plaintiffs for cause and is not entitled to any legal fees. Bendix, in his opposition papers, claims that he is entitled to legal fees for extensive work performed by him prior to his May 2002 discharge. This Court has no choice but to conduct a hearing to determine if Bendix was discharged with or without cause. If Bendix is entitled to any legal fees, this Court must determine the amount.
Background
This personal injury action was the result of a May 9, 1999-motor vehicle accident. Proner's instant order to show cause affirmation in support and attached affidavits allege that Bendix mishandled the underlying case and the related no-fault claims of Mayra Reina. The attached plaintiffs' affidavits to the order to show cause [exhibits D and G of the order to show cause] were all prepared subsequent to the September 13, 2005 settlement by stipulation. They were all sworn to on October 18, 2005, before the same notary public. The affidavits of Carmen Reina and Mayra Reina are almost identical. Both claim:
Almost three years went by and it seemed that nothing was happening with our cases. He [Bendix] notified us of deposition dates, but they kept getting adjourned. When we called him to find out what was happening with our cases and to ask why the depositions had been adjourned, he rarely returned our phone calls. He never called us to tell us how our cases were progressing and left us in the dark.
Approximately three years went by and since we had no idea what was going on with the case, myself and my sister . . . contacted Proner Proner to represent us.
All three affidavits state "I discharged WILLIAM BENDIX' because I felt he did not provide me with proper representation in this action." Further, all three affidavits conclude with the identical assertion that "[b]ecause of his [Bendix] poor representation of us in this case, I do not think that he should be entitled to any of the legal fees in this case."
While the Proner papers speak glowingly of the work performed by Proner's firm, Bendix, in paragraph 3 of his affirmation in opposition states that the Proner's application "to vacate your affirmant's lien is a layer cake of misinformation laid upon fabrication intended to deny your affirmant his rightful share of the legal fee in this matter." Curiously, Proner failed to provide this Court with any documents from plaintiffs to Bendix, stating that Bendix was discharged for cause. The only documentation presented with respect to Bendix being discharged for cause are the October 18, 2005 affidavits, more than three years after plaintiffs discharged Bendix.
Exhibit E of the order to show cause presents various documents connected to the 2002 change in plaintiffs' representation. Attached to exhibit E are: copies of the April 30, 2002 retainer agreements by plaintiffs with Proner; copies of plaintiffs' May 1, 2002 consents to change their attorney to Proner from Bendix; copies of May 1, 2002 letters from plaintiffs to Bendix, advising Bendix of the change of counsel to Proner, and requesting Bendix to transmit "information and documents" to Proner; and, the May 1, 2002 cover letter from Mitchell Proner to William Bendix, advising Bendix of the counsel change and the transmittal of the above-mentioned documents. Mitchell Proner, in his May 1, 2002 cover letter to William Bendix states, "[i]f you would like to discuss your disbursements and/or liens, please contact the undersigned upon receipt of this letter [ emphasis added]."
The Proner firm subsequently had problems in getting the file from Bendix. Proner submitted an order to show cause with respect to the file transfer issues, to Justice Hutcherson, who signed it on May 17, 2002, returnable on June 5, 2002. Jennifer Bailine, Esq., an associate of Proner, not only prepared the instant order to show cause and affirmation in support, but also prepared the May 17, 2002 order to show cause with its affirmation in support. It is interesting to note that Ms. Bailine in the instant order to show cause affirmation in support moves to vacate any Bendix lien, while in her May 13, 2002 affirmation in support she stated, "[o]ur office has communicated to the outgoing attorney that we would acknowledge its lien and attorneys fees to be resolved at the conclusion of the case [emphasis added]." Justice Hutcherson, in his June 5, 2002 order, instructed that "liens and Bendix's attorneys fees to be resolved . . . by stipulation or court."
Thus, the Court must resolve whether Bendix has a lien on attorneys' fees or not. This will be decided after a hearing to determine if Bendix's discharge was with or without cause.
Discussion
The Court of Appeals, in Cohen v. Grainger, Tesoriero Bell, 81 NY2d 655, 658 (1993), instructed that the "[i]t is settled that a client may discharge an attorney at any time, with or without cause (Lai Ling Cheng v. Modansky Leasing Co., 73 NY2d 454, 457; Matter of Montgomery, 272 NY 232)." See Teichner by Teichner v. W J Holsteins, Inc., 64 NY2d 977, 979 (1985); Campagnola v. Mulholland, Minion Roe, 76 NY2d 38 (1990); Matter of Leopold, 244 AD2d 411 (2nd Dept 1997); Papadopoulos v. Goldstein, Goldstein Rikon, P.C., 283 AD2d 649 (2nd Dept 2001); Byrne v. Leblond, 25 AD3d 640 (2nd Dept 2006).
If an attorney is discharged for cause, the attorney is not entitled to any fee, notwithstanding a specific retainer agreement. Teichner by Teichner v. W J Holsteins, Inc., supra at 979; Campagnola v. Mulholland, Minion Roe, supra at 44; Byrne v. Leblond, supra at 641. However, when an attorney is discharged without cause, the attorney is entitled to compensation based upon quantum meruit. Reubenbaum v. B. H.Exp., 6 AD2d 47, 48 (1st Dept 1958); Teichner by Teichner v. W J Holsteins, Inc., supra at 979; Cohen v. Grainger, Tesoriero Bell, supra at 658; Matter of Leopold, supra at 411; Papadopoulos v. Goldstein, Goldstein Rikon, P.C., supra at 649; Byrne v. Leblond, supra at 641.
However, when the dispute is between attorneys, as in the instant matter, the Court in Cohen v. Grainger, Tesoriero Bell, supra at 658, observed that:
the rules are somewhat different. The discharged attorney may elect to receive compensation immediately based on quantum meruit or on a contingent percentage fee based on his or her proportionate share of the work performed on the whole case (Cheng, supra, at 458 [citations omitted]).
In the instant case, with conflicting claims as to whether or not Bendix was discharged for cause, a hearing is necessary to resolve this fee dispute. Hawkins by Hawkins v. Lenox Hill Hosp., 138 AD2d 572 (2nd Dept 1988); Klein v. Eubank, 87 NY2d 459 (1996); Byrne v. Leblond, supra at 642. This Court has no evidence, other than the October 18, 2005 affidavits of plaintiffs, that Bendix may have been discharged for cause. In Klein v. Eubank, supra at 463, the Court noted that:
Attorney-client relationships frequently end because of personality conflicts, misunderstandings or differences of opinion having nothing to do with any impropriety by either the client or the lawyer. Others end because of unexpected conflicts of interests or changes in litigation strategy that require different lawyering skills. In some of those situations, the client may ask the attorney to withdraw. In others, it may be the attorney who initiates the termination process by offering to withdraw in order to avoid embarrassment, avert further conflict, preserve the relationship on a long-term basis or simply save the client from the discomfort of having to fire the attorney. Importantly, in many such cases, the decision to terminate the relationship is the product of a mutual choice.
Thus, a hearing is necessary to determine the facts and circumstances relating to the 2002 discharge of Bendix. If Bendix was discharged without case he is entitled to a portion of the attorneys' fees in the instant matter, based upon either quantum meruit or a percentage of the contingency fee earned for his proportionate share of the work. Lai Ling Cheng v. Modansky Leasing Co., supra at 458; Cohen v. Grainger, Tesoriero Bell, supra at 658; Klein v. Eubank, supra at 464; Byrne v. Leblond, supra at 642. Further, this Court takes judicial notice of Justice Hutcherson's June 5, 2002 order, which stated that Bendix' "fees to be resolved . . . by stipulation or court."
Conclusion
Accordingly, it is
ORDERED that plaintiffs' order to show, to vacate Attorney William J. Bendix's lien in this matter, is set for a hearing before me on Friday, August 4, 2006, in Part 27, Room 479, Supreme Court, Kings County, 360 Adams Street, Brooklyn, New York, at 2:15 P.M., to determine: whether William J. Bendix, Esq. was discharged with cause or without cause by plaintiffs Maria Vallejo, Carmen Reina, and Mayra Reina; and, the lien for attorneys' fees, if any, of William J. Bendix, Esq.
This constitutes the decision and order of this court.