Adams v. City of New York et al

Filing 41

MEMORANDUM & ORDER ADOPTING A REPORT & RECOMMENDATION: The Court adopts the Report & Recommendation Of MJ Reyes and directs the Clerk to enter judgment in accordance with the Report & Recommendation. Ordered by Judge Frederic Block on 9/16/2014. (Innelli, Michael)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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BEATRICE ADAMS, NINA
CASTLEBERRY, MARIA MONCHE,
TINA O’BRIEN, and ELDORA QUICK,
Plaintiffs,

MEMORANDUM AND ORDER
Case No. 07-CV-2325 (FB) (RER)

-againstTHE CITY OF NEW YORK,
Defendant.
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BEATRICE ADAMS,
Plaintiff,
-againstTHE CITY OF NEW YORK,
NEW YORK CITY DEPARTMENT OF
CORRECTION, MARTIN F. HORN,
DORA B. SCHRIRO, JOSEPH RUSSO,
EDMUND SALPIETRO, JOSE
VASQUEZ, CARMINE LABRUZZO,
DARIO EMMANS, and ALISON
YTREOY,
Defendants.
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Appearances:
For the Plaintiff:
LINDA CRONIN, ESQ.
Cronin & Byczek LLP
1983 Marcus Avenue, Suite C-120
New Hyde Park, NY 11042

Case No. 13-CV-271 (FB) (RER)

SUSAN B. EGAN, ESQ.
Egan Law Firm
805 Third Avenue, 10th floor
New York, NY 10022
BLOCK, Senior District Judge:
On August 14, 2014, Magistrate Judge Ramon E. Reyes issued a Report &
Recommendation (“R&R”) in a fee dispute between two law firms, Cronin & Byczek
(“C&B”) and the Egan Law Firm (“ELF”), that represented Beatrice Adams (“Adams”)
in separate lawsuits. The R&R recommended that ELF be awarded $7,650.77 in
expenses and $26,580.99 in attorneys’ fees, for a total award of $34,231.76. See R&R
at 20.
C&B timely objected to the R&R.

See Objection to Report and

Recommendation, Adams et al. v. City of New York, No. 07-cv-2325 (E.D.N.Y. Sept.
11, 2014), Docket Entry No. 114 (“Objection Letter”). Upon de novo review, the Court
adopts the R&R in its entirety.
I.
This dispute arises out of two lawsuits that were brought by Adams, a former
corrections officer, against the City of New York, alleging that she was mistreated by
the New York City Department of Correction (“DOC”) and by various DOC employees
while working at Rikers Island.
ELF initially represented Adams in the first lawsuit (“2007 Lawsuit”), which was
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filed in the Eastern District of New York on June 8, 2007. The 2007 Lawsuit alleged
that DOC had discriminated against Adams on the basis of race and gender, had
permitted a hostile work environment, and had retaliated against her when she
complained.1 On March 19, 2013, however, Adams discharged ELF “for cause” and
designated C&B as replacement counsel. At that time, C&B was representing Adams
in a second lawsuit (“2013 Lawsuit”), which was filed in the Eastern District of New
York on January 16, 2013. This second suit also arose out of Adams’ employment at
Rikers Island and alleged, among other claims, that DOC had retaliated against Adams
for the 2007 Lawsuit.
In August 2013, C&B settled the 2007 and 2013 Lawsuits for $190,000. The
settlement proceeds were attributed solely to the 2013 Lawsuit, while Adams’ claims
in the 2007 Lawsuit were dismissed with prejudice. In September 2013, ELF requested
a conference to fix the amount of its attorneys’ fee lien for the work it performed in
connection to the 2007 Lawsuit. C&B opposed the request, arguing that ELF was not
entitled to any of the settlement funds because it had been discharged for cause and
because it had done no work on the 2013 Lawsuit. On November 1, 2013, the Court
ordered C&B to retain $35,000, approximately half of the one-third contingency fee,

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Adams was joined in the lawsuit by four other plaintiffs, who were also former
corrections officers at Rikers Island. For the purposes of clarity, the Court will address only
Adams’ claims.
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to be held in an escrow account pending resolution of the fee dispute, and referred the
dispute to Magistrate Judge Reyes, who conducted two days of evidentiary hearings in
December 2013.
In the R&R now before the Court, Magistrate Judge Reyes recommended that
ELF be awarded attorneys’ fees and expenses totaling $34,231.76. First, Magistrate
Judge Reyes found that ELF was terminated without just cause and is therefore entitled
to assert a charging lien to secure payment of reasonable fees and expenses. Second,
Magistrate Judge Reyes found that the 2013 Lawsuit was the “logical sequence” of the
2007 Lawsuit, and that ELF is therefore entitled to recover from the settlement
proceeds of the 2013 Lawsuit. R&R at 9. Finally, Magistrate Judge Reyes evaluated
evidence submitted by both law firms and concluded that ELF should be awarded
$7,650.77 in expenses and $26,580.99 in attorneys’ fees.
C&B timely objected to the R&R, taking issue with each of Magistrate Judge
Reyes’s conclusions. The Court reviews C&B’s objections de novo. See 28 U.S.C. §
636(b)(1).
A.

Just Cause Termination of ELF
Under New York law, attorneys may assert their right to a lien upon the proceeds

of their client’s cause of action, which attaches from the commencement of that action.
N.Y. Jud. Law § 475. However, “[i]t is well-settled that an attorney loses his right to
enforce a charging lien if the attorney . . . is discharged for cause.” Petition of Harley
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& Browne, 957 F. Supp. 44, 48 (S.D.N.Y. 1997). A discharge “for cause” exists where
“the attorney has engaged in some kind of misconduct, has been unreasonably lax in
pursuing the client’s case, or has otherwise improperly handled the case.” Garcia v.
Teitler, No. 04-cv-832, 2004 WL 1636982, at *5 (E.D.N.Y. July 22, 2004).
C&B advances two principal reasons why ELF was discharged for cause. First,
C&B argues that ELF was negligent when it failed to advise Adams about how a
bankruptcy filing would affect her federal lawsuit. However, the retainer agreement
between ELF and Adams quite clearly limits the scope of representation to the 2007
Lawsuit only. Further, in the evidentiary hearing before Magistrate Judge Reyes on
December 30, 2013, Adams admitted that she had not retained ELF to give her legal
advice regarding bankruptcy, but had hired a bankruptcy attorney to whom she gave
information and paperwork regarding her pending federal lawsuits. See Transcript of
December 30 Hearing at 64:20-71:22. ELF therefore breached no legal duty by
refusing to advise Adams on her bankruptcy petition.
C&B next argues that Adams discharged ELF because ELF “fail[ed] to prevail
on any significant claim for Adams in the 2007 lawsuit.” Objection Letter at 3. This
argument misstates the facts. In an order dated September 22, 2011, the Court granted
the City of New York’s motion for summary judgment with respect to Adams’
employment discrimination claims, but denied summary judgment with respect to her
hostile workplace, retaliation, and Monell claims. See Adams v. City of New York, 837
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F. Supp. 2d 108 (E.D.N.Y. 2011). Moreover, failure to prevail on a claim is not, in and
of itself, proof of failure to adequately represent a client’s interests. While the record
does show that Adams was dissatisfied with ELF’s performance, the Court agrees with
Magistrate Judge Reyes that the record does not support a finding of misconduct or
breach of legal duty by ELF.
B.

Relatedness of 2007 and 2013 Lawsuits
Next, C&B argues that the 2013 Lawsuit is separate and distinct from the 2007

Lawsuit, and that ELF is therefore not entitled to any proceeds from the settlement of
the 2013 Lawsuit. In particular, C&B argues that the 2013 Lawsuit “covers a
completely subsequent time period[,] involves a different employment assignment and
seeks damages for discrimination against different individual defendants.” Objection
Letter at 4.
The Court agrees with Magistrate Judge Reyes that there is a “causal connection”
between the 2007 and 2013 Lawsuits such that ELF is entitled to a share of the
settlement proceeds. See R&R at 8. Both lawsuits arise out of Adams’ employment
at Rikers Island, and specifically out of a DOC pattern and practice of discriminating
against Adams by placing her in arduous and unpleasant work assignments. There are
many factual similarities between the two lawsuits; for example, both seek damages
arising out of Adams’ placement at Gate 9 Security, “one of the most undesirable posts
at [Rikers Island Security Unit].” Complaint at 18, Adams et al. v. City of New York,
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No. 07-cv-2325 (E.D.N.Y. June 8, 2007), Docket No. 1; see also Complaint at 7,
Adams v. City of New York et al., No. 13-cv-0271 (E.D.N.Y. Jan. 16, 2013), Docket No.
1 (alleging that Adams was assigned to Gate 9, “one of the most undesirable posts at
[Rikers Island Security Unit].”).
It is undeniably true that the 2013 Lawsuit encompasses different claims than the
2007 Lawsuit, including that Adams was assigned to another undesirable post in
October 2010, was subject to false disciplinary charges in November 2010, and was
ultimately forced to retire in February 2011. But each of these claims arises out of the
same factual nucleus as the first action, namely the alleged pattern of discrimination
and retaliation by DOC. Further, as Magistrate Judge Reyes noted, C&B’s complaint
in the 2013 Lawsuit “makes repeated references to the 2007 Lawsuit as the reason for
the retaliatory practices of the DOC and its employees.” R&R at 8.
In its Objection Letter, C&B attempts to disavow the statements of one of its
associates, who in an earlier letter to the Court stated that the 2013 Lawsuit “pertain[s]
to incidents of discrimination that are related and stem from an ongoing policy of
discrimination alleged within Plaintiff’s 2007 action.”

Letter in Opposition to

Defendant’s Pre-Motion Letter at 2, Adams v. City of New York et al., No. 13-cv-0271
(E.D.N.Y. August 27, 2013), Docket No. 28. That associate, however, was correct.
Since the 2013 Lawsuit was the logical sequence of the 2007 Lawsuit, ELF is entitled
to recover from the settlement proceeds of the 2013 Lawsuit. See Neimark v.
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Martin,183 N.Y.S.2d 812, 814 (2nd Dep’t 1959) (holding that “[t]he attorney’s lien
attaches to the client’s cause of action and any recovery thereon, albeit the recovery is
effected in an action other than the action in which the services were rendered . . . This
is especially so where the recovery is in an action which is a logical sequence of a prior
action in connection with which the services were rendered.”).
C.

Fee Apportionment
Finally, C&B argues that ELF is not entitled to recover out-of-pocket expenses

from the settlement proceeds because such expenses are the responsibility of the client.
The parties agree that expenses would ordinarily be deducted from settlement proceeds
prior to apportioning fees. Here, however, Adams has already received her share of the
settlement proceeds; thus, any solution that requires her to pay ELF’s expenses would
require her to return money she has already received, inflicting a substantial burden
upon her after seven years of litigation.
C&B makes much of ELF’s refusal to turn over its file to C&B, and argues that
“it is wholly unfair to assess reimbursement of . . . out of pocket disbursements on an
attorney who did not get the benefit of the file.” Objection Letter at 7. Under New
York law, however, “a retaining lien entitles an attorney to keep, as security against
payment of fees, all client papers and property, including money, that come into the
attorney’s possession in the course of employment, unless the attorney is discharged
for good cause.” Resolution Trust Corp. v. Elman, 949 F.2d 624, 626 (2d Cir. 1991).
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Since ELF was not discharged for cause and was still owed money by Adams, it had
no obligation to turn over its file to C&B, and its refusal to do so cannot be taken into
account in apportioning out-of-pocket expenses.
As Magistrate Judge Reyes noted, “[t]here is no simply no measured way for
either firm to recover their out-of-pocket expenses from Adams.” R&R at 10. The
Court finds that Magistrate Judge Reyes proposed solution – to deduct ELF’s expenses
from the entire one-third contingency fee – is the most sensible and just. C&B’s final
objection is therefore denied.
II.
For the foregoing reasons, the Court adopts the R&R and directs the Clerk to
enter judgment in accordance with the R&R.

SO ORDERED.
/S/ Frederic Block_____
FREDERIC BLOCK
Senior United States District Judge
Brooklyn, New York
September 16, 2014

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