Varga v. Rent-A-Center East, Inc. et al
DECISION AND ORDER that each party to the instant fee dispute will be entitled to take limited discovery which must be completed by 2/15/13. Following the close of discovery, the parties are directed to file further submissions in connection with Att y Benjamin's request for apportionment of the resulting fee as follows: Atty Benjamin's initial submission due 3/1/13. F&P's Response due 3/15/13. Court Hearing concerning Atty Benjamin's fee application (if necessary) will be held 4/3/13 at 11:00 AM in Syracuse. Signed by Magistrate Judge David E. Peebles on 12/18/12. (sfp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF NEW YORK
EMESE M. VARGA,
Civ. Action No.
RENT-A-CENTER EAST, INC.,
FINKELSTEIN & PARTNERS, LLP
1279 Route 300
Newburgh, New York 12550
ANDREW J. GENNA, ESQ.
ELEANOR L. POLIMENI, ESQ.
KENNETH B. FROMSON, ESQ.
LAW OFFICE OF RONALD R.
P.O. Box 607
126 Riverside Drive
Binghamton, New York 13902-0607
RONALD R. BENJAMIN, ESQ.
SMITH MAZURE LAW FIRM
111 John Street
New York, New York 10038
MARK D. LEVI, ESQ.
GEORGE S. KOLBE, ESQ.
DAVID E. PEEBLES
U.S. MAGISTRATE JUDGE
DECISION AND ORDER
This personal injury action, which has been settled, comes before
the court for resolution of a fee dispute between the attorney who
represented the plaintiff at the outset and the firm that was substituted in
his place relatively early in the case, and thereafter represented the
plaintiff through the time of settlement. That fee dispute has been referred
to me for the issuance of a recommended resolution, pursuant to 28
U.S.C. § 636(b)(1)(B) and Federal Rule of Civil Procedure 54(d)(2)(D).
Plaintiff’s claims in this case stem from an automobile accident that
occurred on April 29, 2010, resulting in serious injuries to plaintiff Emese
M. Varga. See generally Dkt. No. 1. On or about May 8, 2010, plaintiff
retained Ronald R. Benjamin, Esq., on a contingency-fee basis to
represent her in connection with any claim arising from the accident.1 Dkt.
Although the record does not include a copy of Attorney Benjamin’s
retention letter that would confirm the terms of his fee agreement with plaintiff, in his
submissions to the court, Attorney Benjamin indicates that he represented plaintiff on a
contingency-fee basis. Dkt. No. 69 at 1. I note, moreover, that the parties’ arguments
are grounded in the law governing contingency-fee liens. Dkt. No. 71 at 2; Dkt. No. 72
No. 69 at 1; Dkt. No. 72 at 4.
Based upon the limited information now before the court, it appears
that, following his engagement with plaintiff, Attorney Benjamin conducted
an investigation into the accident, interviewed first responders, met with
the plaintiff on multiple occasions both in the hospital and at her home,
traveled to the scene of the accident to gather evidence and attempt to
reconstruct the relevant events, obtained a police report concerning the
incident, made freedom-of-information-law requests to the Village of
Bainbridge and the Chenango County Highway Department, performed
research, and drafted and filed the complaint in this action, which was
commenced on May 13, 2010. Dkt. No. 69 at 1; Dkt. No. 71 at 3-4.
Shortly after commencement of this action, plaintiff discharged
Attorney Benjamin, and retained the law firm Finkelstein & Partners, LLP
(“F&P”). The record, however, is not clear as to the precise date on which
plaintiff discharged Attorney Benjamin. Attorney Benjamin originally
argued that he represented plaintiff “through July 2010,” Dkt. No. 69 at 1,
but F&P argues that plaintiff discharged Attorney Benjamin “by letter dated
June 9, 2010,” and that Attorney Benjamin acknowledged receipt of that
letter on June 11, 2010, Dkt. No. 70 at 1; Dkt. No. 72 at 4. There appears
to be no dispute, however, that plaintiff retained F&P to represent her in
this matter on May 25, 2010. Dkt. No. 72 at 4. The court has been
provided with little information concerning the substitution, but,
significantly, F&P has acknowledged that Attorney Benjamin was not
discharged for cause. Dkt. No. 72 at 4.
Following the receipt of plaintiff’s discharge letter, Attorney Benjamin
sought and received repayment for the disbursements advanced by him
on the plaintiff’s behalf. Dkt. No. 72 at 4. However, at the time of the
substitution, which was formalized on the court’s records on July 19, 2010,
Dkt. No. 7, Attorney Benjamin and F&P left a determination as to the
apportionment of attorney fees to be addressed at the conclusion of the
action, Dkt. No. 72 at 4.
Following the retention of F&P, the case was actively litigated. See
generally Docket Sheet. The parties engaged in considerable discovery,
including the exchange of expert reports, and motions were brought by the
plaintiff before the trial judge seeking an order dismissing defendant’s
affirmative defense and striking the report of one of defendant’s experts.
Dkt. Nos. 31-36, 40-54. A notice was ultimately sent by the court advising
the parties that a jury trial was scheduled for October 29, 2012. Dkt. No.
62. In anticipation of trial, and at the request of the parties, District Judge
Mae A. D’Agostino conducted a settlement conference on October 5,
2012, that resulted in settlement of the case in the amount of $2.3 million.
Dkt. No. 63; Text Minute Entry dated Oct. 5, 2012.
Based upon that settlement, and the contingency fee arrangement
between plaintiff and F&P, attorney fees payable from that settlement
have been quantified in the amount of $741,698.79. Dkt. No. 72 at 5.
On October 29, 2012, Attorney Benjamin filed a letter with the court
requesting permission to file a motion to enforce a charging lien upon the
proceeds of the settlement, pursuant to N.Y. Judiciary Law § 475. Dkt.
No. 69. F&P responded by letter dated October 30, 2012, in which the
firm implicitly acknowledged Attorney Benjamin’s right to share in the
attorney fees, and maintained that an evidentiary hearing should be
conducted to determine the proper apportionment. Dkt. No. 70.
On November 5, 2012, the court held a telephone conference
concerning the issue. Text Minute Entry dated Nov. 5, 2012. During that
conference, Attorney Benjamin was granted permission to file an
application to quantify the attorney charging lien, and the court afforded
F&P an opportunity to respond. Id. The parties have since filed the
anticipated submissions with the court. Dkt. Nos. 71 and 72. Rather than
applying for attorney fees and providing the court with the information
necessary to begin the apportionment process, however, Attorney
Benjamin instead has requested the opportunity to engage in discovery in
order to assist him in developing the information necessary to support his
claim. Dkt. No. 71. F&P has opposed that request. Dkt. No. 72.
By statute, New York recognizes the existence of a charging lien in
favor of an attorney who appears in an action, but is subsequently
replaced. N.Y. Judiciary Law § 475; see also Casper v. Lew Liberbaum &
Co., Inc., 97-CV-3016, 1999 WL 335334, at *5 (S.D.N.Y. May 26, 1999).
Section 175 of the N.Y. Judiciary Law provides, in pertinent part, as
From the commencement of an action . . . in any
court . . ., the attorney who appears for a party has a
lien upon his client’s cause of action, claim or
counterclaim, which attaches to a verdict, report,
determination, decision, judgment or final order in his
client’s favor, and the proceeds thereof in whatever
hands they may come; and the lien cannot be
affected by any settlement between the parties
before or after judgment, final order or determination.
N.Y. Judiciary Law § 475.
Under section 475, “[t]he court[,] upon the petition of the client or
attorney[,] may determine and enforce the lien.” N.Y. Judiciary Law § 475;
see also Casper, 1999 WL 335334, at *5. “By its terms, a charging lien
attaches to the client’s ultimate recovery in the same case.” Casper, 1999
WL 335334, at *8. The right to assert a charging lien under section 475 is
relinquished only when the attorney is terminated by the client for cause,
or withdraws without proper justification. Cruz v. Olympia Trails Bus Co.,
99-CV-10861, 2002 WL 1835440, at *4 (S.D.N.Y. Aug. 8, 2002); Casper,
WL 1999 WL 335334, at *5. Because neither of these limitations apply in
this case, the court concludes that Attorney Benjamin is entitled to assert
a charging lien under section 475.
The more difficult issue is the question of quantifying the outgoing
attorney’s charging lien. In a case such as this, where the dispute is
between attorneys who have represented a prevailing party, the outgoing
attorney may either elect to take compensation on the basis of a fixed
dollar amount, calculated based upon quantum meruit to approximate the
reasonable value of his or her services, or, “in lieu thereof, the outgoing
attorney has the right to elect a contingent percentage fee based on the
proportionate share of the work performed on the whole case.” Lai Ling
Cheng v. Modansky Leasing Co., 73 N.Y.2d 454, 458 (N.Y. 1989); see
also Ballow Brasted O’Brien & Rusin P.C. v. Logan, 435 F.3d 235, 241 (2d
Cir. 2006); Buchta v. Union-Endicott Cent. School Dist., 296 A.D.2d 688,
689 (N.Y. App. Div. 3d Dep’t 2002).
Among the factors informing the determination of a proper
apportionment between attorneys are “the time and labor spent by each,
the actual work performed, the difficulty of the questions involved, the skill
required to handle the matter, the attorney’s skills and experience, and the
effectiveness of counsel in bringing the matter to resolution.” Buchta, 296
A.D. 2d at 689-90 (internal quotation marks, citations, alternations
omitted); see also Cheng, 73 N.Y. 2d at 458 (listing “the amount of
recovery [that] can be ascertained” as an additional factor for
Here, the record now before the court is woefully lacking in the
information needed to meaningfully apply these factors. I agree with
Attorney Benjamin that at least some amount of discovery is appropriate
to allow the court to determine the attorneys’ skills, experience, and the
work performed in connection with this action. Once such limited
discovery has been exchanged, the court will invite submissions that,
ideally, will either provide a suitable record upon which a recommendation
regarding the apportionment can be made, or, instead, signal that an
evidentiary hearing is required to more completely explore the relevant
factors to be considered in making a just apportionment.2 Cf. Ballow
Brasted O’Brien & Rusin P.C., 435 F.3d at 235 (affirming district court’s
decision in an attorney-fee dispute that was issued on summary judgment
SUMMARY AND ORDER
To meaningfully apply the test necessary to determine the extent of
Attorney Benjamin’s charging lien under N.Y. Judiciary Law § 475, the
court needs further evidence that demonstrates the relative measure of
work performed by the attorneys in this action, and how that work affected
the result ultimately achieved, as well as any additional pertinent
information concerning the attorneys’ respective levels of skill and
experience. In order to permit a full development of the record in
connection with those factors, I will permit limited discovery to occur in the
Notably, although F&P now argues that Attorney Benjamin’s request for
attorney fees should be denied, Dkt. No. 72 at 10, it did, at the outset of this dispute,
acknowledge that the proper means of attaining a charging lien is requesting the court
to hold an evidentiary hearing. See Dkt. No. 70 at 1.
case, following which the parties will be required to file more complete
submissions with the court. After the court reviews these additional
submissions, it will determine whether an evidentiary hearing is necessary
to decide the amount of Attorney Benjamin’s charging lien.
Based upon the foregoing, it is hereby
ORDERED, as follows:
Each party to the instant fee dispute will be entitled to take
limited discovery in this matter. All such discovery must be completed not
later than February 15, 2013.
The discovery permitted hereunder may include use of
interrogatories, not to exceed ten in number, service of requests for the
production of documents, also not to exceed ten in number, and the taking
of one deposition per side. Specifically, F&P is authorized to depose
Attorney Benjamin, and Attorney Benjamin is permitted to depose a
witness produced by F&P, pursuant to Rule 30(b)(6) of the Federal Rules
of Civil Procedure, that possesses full knowledge of the legal services
rendered by that firm on behalf of the plaintiff in this action. Neither
deposition is to exceed three hours each in duration, and each is to be
taken at or near the place of business of the witness being examined, or
at such other place upon which the parties agree.
Following the close of discovery, as permitted above, the
parties are directed to file further submissions in connection with Attorney
Benjamin’s request for apportionment of the resulting fee in this case, as
Attorney Benjamin’s Initial Submission
March 1, 2013
March 15, 2013
Court Hearing Concerning Attorney
Benjamin’s Fee Application (if
April 3, 2013 at 11:00AM
in Syracuse, NY
December 18, 2012
Syracuse, New York
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