Opinion
2008-1895 K C.
Decided February 2, 2010.
Appeal from an order of the Civil Court of the City of New York, Kings County (Ellen M. Spodek, J.), dated October 11, 2007. The order, insofar as appealed from, in effect, denied the branch of a motion by Greg C. Gorodetsky, Esq., tenant Irina Feldbein's former attorney, seeking to impose a charging lien in the amount of $26,566 against Irina Feldbein's recovery in this case.
ORDERED that the order, insofar as appealed from, is reversed without costs, and the matter is remitted to the Civil Court for a determination de novo, following a hearing, of the branch of Greg C. Gorodetsky's motion seeking the imposition of a charging lien.
PRESENT: WESTON, J.P., GOLIA and STEINHARDT, JJ.
Irina Feldbein commenced a constructive eviction action against her former landlords, including plaintiff W.D.G.R. Properties, LLC (W.D.G.R.), in Supreme Court, Kings County. Thereafter W.D.G.R. commenced the instant holdover proceeding against Feldbein in Civil Court, Kings County. The Supreme Court action was subsequently dismissed as against all the defendants other than W.D.G.R. and removed to the Civil Court, where it was consolidated into the pending holdover proceeding and ultimately settled following a five-day trial. The settlement provided, among other things, that Feldbein's rent arrears from July 15, 2006 through the time of the trial were forgiven and that Feldbein could maintain her dental offices in the demised premises rent free until December 31, 2007. Additionally, under the terms of the stipulation, Feldbein was to be paid a total of $25,000 by W.D.G.R.: $15,000 shortly after signing the stipulation of settlement, and $10,000 upon vacating the premises.
Feldbein was represented in the consolidated actions by non-party appellant Gregory C. Gorodetsky, Esq. On the second day of trial, Feldbein hired an additional attorney, Ilya Braz, who served as Gorodetsky's co-counsel. Following the trial and settlement of the consolidated actions, Gorodetsky moved to be relieved as counsel of record for Feldbein, for the imposition of a retaining lien against funds of Feldbein's that he held in escrow, and, pursuant to Judiciary Law § 475, for the imposition of a charging lien in the amount of $26,566 against Feldbein's recovery. Said amount represented Gorodetsky's accrued unpaid fees and disbursements, including the amount charged by a court reporter. Feldbein opposed Gorodetsky's motion for a retaining lien and a charging lien, and cross-moved for an order compelling Gorodetsky to release the money he held in escrow and directing Gorodetsky to release to Feldbein her file in the consolidated actions.
As Feldbein had retained alternate counsel and did not oppose Gorodetsky's motion to be relieved as counsel, the Civil Court declared that the branch of Gorodetsky's motion whereby he sought to be relieved as counsel of record to Feldbein was rendered moot. The Civil Court denied the branch of Gorodetsky's motion for a retaining lien on the monies he held in escrow and ordered Gorodetsky to pay such monies over to Feldbein, permitting him, however, first to pay the court reporter out of such fund or, in the event that he had already paid the court reporter, to repay himself such amount as he had paid the court reporter. Gorodetsky was also ordered to turn over his files respecting the Feldbein litigation to Feldbein or her attorneys. The Civil Court, in effect, denied the branch of Gorodetsky's motion which sought the imposition of a charging lien.
It is undisputed that, following the Civil Court's decision, Gorodetsky released Feldbein's files in the consolidated actions to her and, after deducting the sum that had been paid to the court reporter, paid Feldbein the escrow monies. The only issue presented on appeal is whether the Civil Court erred in refusing to assess a charging lien against Feldbein's recovery in the litigation.
The charging lien, originally invented by the courts as a device to protect attorneys from clients who renege on their obligation to pay for services rendered, is codified in section 475 of the Judiciary Law ( see Banque Indosuez v Sopwith Holdings Corp., 98 NY2d 34, 38). A charging lien gives the attorney an equitable ownership in the client's cause of action; it extends to settlements, but is enforceable only against the proceeds of the action ( see Banque Indosuez, 98 NY2d at 43-44; Chadbourne Parke, LLP v AB Recur Finans, 18 AD3d 222, 223; Kaplan v Reuss, 113 AD2d 184, 186). The charging lien is enforceable even after the proceeds of the litigation have passed into the possession of the client or of a third party with knowledge ( Kaplan, 113 AD2d at 187). Moreover, even if substitute counsel subsequently replaces a litigant's initial attorney of record, if there has been no discharge for a legally cognizable just cause ( see Callaghan v Callaghan, 48 AD3d 500, 501) and no abandonment by the initial attorney, the initial attorney has a statutory lien on settlement proceeds obtained in the litigation ( see Klein v Eubank, 87 NY2d 459, 464; Tutarashvili v Barzilay, 39 AD3d 851). Here, since the settlement of the action required W.D.G.R. to make payments potentially totaling $25,000 to Feldbein, there were proceeds from the litigation upon which the lien could affix. It was therefore incumbent upon the Civil Court to determine whether Gorodetsky was entitled to a charging lien, and, if so, to determine the appropriate compensation including disbursements due him ( see Alami v Volkswagen of Am., Inc., 51 AD3d 952, 953). Such determination will require a finding as to whether Gorodetsky had been discharged prior to the completion of his services for a legally cognizable cause.
In deciding the motion and cross motion, the Civil Court commented on Gorodetsky's failure to procure a Yellowstone injunction for Feldbein, to maintain the status quo and protect her investment in her leasehold pending the determination of the litigation. We note that Feldbein and Gorodetsky gave diametrically opposed accounts of the underlying facts, and whether or not Feldbein gave Gorodetsky notice of the fact that she had received a notice to cure in time for him to have obtained a Yellowstone injunction ( see 319 Smile Corp. v Forman Fifth, LLC, 37 AD3d 245; Retropolis, Inc. v 14th St. Dev. LLC, 17 AD3d 209). With the underlying facts thus controverted, the Civil Court should have held an evidentiary hearing on this issue.
Accordingly, the order insofar as appealed from, is reversed and the matter is remitted to the Civil Court for a determination de novo, following a hearing, of the branch of Greg C. Gorodetsky's motion seeking the imposition of a charging lien.
Weston, J.P., Golia and Steinhardt, JJ., concur.