Guzik v. Lendit Conference, LLC et al

Filing 152

OPINION AND ORDER: re: 62 MOTION for Summary Judgment filed by Dara S. Albright. For the foregoing reasons, Albright's motion for summary judgment is DENIED. The Clerk of Court is directed to close the motion at Docket Number 62 and to lift t he stay, which was effectively terminated on August 10, 2016 (see Dkt. No. 25). The parties are directed to complete discovery in good faith and to submit a status update to the Court on or before October 6, 2017, addressing whether the parties intend to move for summary judgment on any other grounds or, if not, when the parties believe they will be ready for trial. SO ORDERED. (Signed by Judge J. Paul Oetken on 8/21/2017) (ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SAMUEL S. GUZIK d/b/a GUZIK &
ASSOCIATES,
Plaintiff,

16-CV-2257 (JPO)
OPINION AND ORDER

-vDARA S. ALBRIGHT,

Defendant.

J. PAUL OETKEN, District Judge:
This is a dispute between a lawyer and his former client seeking recovery in quantum
meruit for legal services rendered prior to the lawyer’s resignation. On March 28, 2016, Samuel
S. Guzik filed this action against Dara S. Albright. 1 Both parties are representing themselves.
The operative complaint alleges a single count for quantum meruit. 2
On August 24, 2016, Albright moved to dismiss Guzik’s Second Amended Complaint for
failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 26.) This
Court denied Albright’s motion. Guzik v. Albright, No. 16 Civ. 2257, 2016 WL 6952347
(S.D.N.Y. Nov. 28, 2016). Now, Albright moves for summary judgment on Guzik’s quantum
meruit claim. (Dkt. No. 62.) For the reasons that follow, that motion is denied.

1

Initially, the complaint was also filed against LendIt Conference, LLC (“LendIt”).
(Dkt. No. 1.) On June 1, 2016, however, the Court issued an order dismissing the case for lack
of subject-matter jurisdiction, because Defendant LendIt was not diverse to Guzik, and allowing
Guzik to file an amended complaint dropping LendIt as a party to cure the jurisdictional defect.
(Dkt. No. 23.) On June 30, 2016, Guzik filed a Second Amended Complaint naming only
Albright as Defendant. (Dkt. No. 24 (“SAC”).)
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Albright also filed a set of counterclaims that are not the subject of a motion for
summary judgment at this time. (See Dkt. No. 41.) Discovery in this case is ongoing and expert
depositions are set to be completed by September 29, 2017. (Dkt. No. 150 at 5.)
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I.

Background
Familiarity with this dispute is presumed, based on the factual allegations detailed in the

Court’s prior Opinion and Order at the motion-to-dismiss stage. See Guzik, 2016 WL 6952347.
Albright contends that there are five undisputed facts that entitle her to summary
judgment on Guzik’s claim for quantum meruit. First, “Guzik resigned prior to the completion
of his duties.” (Dkt. No. 87 ¶ 1.) Although Guzik expresses concern about the exact meaning of
the phrase “completion of his duties,” he does not meaningfully dispute this fact. (Id.)
Second, “[t]here was never any written engagement or retainer agreement between Guzik
and Albright.” (Id. ¶ 2.) Guzik admits this fact.
Third, Albright states that “[t]he oral contingency arrangement between Guzik and
Albright remained ambiguous and unfinalized during Guzik’s entire representation of Albright
and even following his resignation.” (Id. ¶ 3.) Guzik disputes this fact. He affirms that the
parties “entered into an oral agreement” in which “Albright was to pay [Guzik] 1/3 of the value
of the net recovery, contingent upon recovery, plus out-of-pocket expenses.” (Dkt. No. 86 ¶ 9.)
Guzik also states that he “furnished Albright with an Invoice via email for all services rendered
to Albright . . . from May 2014 through December 17, 2015, the date of termination,” for an
amount Guzik thought reflected one-third of the value of Albright’s net recovery, consistent with
the alleged oral agreement. (Id. ¶ 12.)
Fourth, Albright relies on an email from Guzik that she contends serves as an admission
that he had no expectation of compensation—which, if true, would bar recovery in quantum
meruit. (Dkt. No. 87 ¶ 4.) Guzik accuses Albright of taking this document out of context: The
email simply reflects that he did not expect compensation “at that juncture.” (Id.)

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Finally, the parties do not dispute that Guzik furnished an invoice to Albright for the first
time in March 2016, months after his resignation. (Id. ¶ 5.)
Based on these facts, Albright now moves for summary judgment on Guzik’s claim for
quantum meruit.
II.

Legal Standard
“A document filed pro se is ‘to be liberally construed’ . . . .” Erickson v. Pardus, 551

U.S. 89, 94 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)).
“Summary judgment is warranted when, after construing the evidence in the light most
favorable to the nonmoving party and drawing all reasonable inferences in its favor, there is no
genuine issue as to any material fact.” Sledge v. Kooi, 564 F.3d 105, 108 (2d Cir. 2009) (citing
Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–50 (1986)). The Court
may not grant summary judgment unless the record discloses “no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
“The moving party bears the burden of disproving the existence of any genuine issue of
material fact.” Loccenitt v. City of New York, No. 10 Civ. 8319, 2012 WL 5278553, at *3
(S.D.N.Y. Oct. 22, 2012) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). “Once the
moving party has asserted facts showing that the non-movant’s claims cannot be sustained, the
opposing party must ‘set out specific facts showing a genuine issue for trial,’ and cannot ‘rely
merely on allegations or denials’ contained in the pleadings.” Toshiba Corp. v. Am. Media Int’l,
LLC, No. 12 Civ. 800, 2012 WL 3822759, at *4 (S.D.N.Y. Sept. 4, 2012) (quoting Fed. R. Civ.
P. 56(e)). “[A] party may not rely on mere speculation or conjecture as to the true nature of the
facts to overcome a motion for summary judgment.” Hicks v. Baines, 593 F.3d 159, 166 (2d Cir.

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2010) (alteration in original) (quoting Fletcher v. Atex, Inc., 68 F.3d 1451, 1456 (2d Cir. 1995))
(internal quotation mark omitted).
III.

Discussion
“In order to recover in quantum meruit under New York law, a claimant must establish

‘(1) the performance of services in good faith, (2) the acceptance of the services by the person to
whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable
value of the services.’” Mid-Hudson Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp.,
418 F.3d 168, 175 (2d Cir. 2005) (Sotomayor, J.) (quoting Revson v. Cinque & Cinque, P.C., 221
F.3d 59, 69 (2d Cir. 2000)).
In this action, Guzik is seeking to recover legal fees for the performance of his services
over the relevant time period. Albright makes three arguments as to why Guzik’s claim for
quantum meruit must fail. First, Albright argues that, under New York law, Guzik was required
either to memorialize any contingent fee agreement in writing or to demonstrate that the terms of
the agreement were fair, fully understood, and agreed to by the client. Second, Albright argues
that Guzik cannot, as a matter of law, assert a claim in quantum meruit if there is an enforceable
contract between the parties. Third, Albright argues that Guzik did not have an expectation of
compensation, which is required in order to recover in quantum meruit. Each argument is
discussed in turn.
A.

No Agreement in Writing

Albright contends that New York law requires that a lawyer who seeks to collect legal
fees after the termination of an attorney-client relationship must memorialize any agreement in
writing or, failing that, must otherwise demonstrate that the agreement was fair, understood, and
agreed to by the client. (See Dkt. No. 63 at 5–8.) In particular, Albright directs the Court to part

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1215.1 of title 22 of the New York Codes, Rules and Regulations (“NYCRR”), which states, in
relevant part:
(a) Effective March 4, 2002, an attorney who undertakes to
represent a client and enters into an arrangement for, charges or
collects any fee from a client shall provide to the client a written
letter of engagement before commencing the representation, or
within a reasonable time thereafter:
(1) if otherwise impracticable; or
(2) if the scope of services to be provided cannot be
determined at the time of the commencement of
representation.
22 NYCRR § 1215.1. In this case, the parties agree that Guzik did not comply with § 1215.1 as
there was never any written agreement between the parties. (Dkt. No. 87 ¶ 2)
However, failure to comply with the requirements of § 1215.1 does not preclude an
attorney from recovering in quantum meruit. Under New York law, in the absence of a written
agreement, an attorney who seeks to recover his fees “bears the burden of proving the terms of
the retainer and establishing that the terms of the alleged fee arrangement were fair, fully
understood, and agreed to by the client.” Gary Friedman, P.C. v. O’Neill, 982 N.Y.S.2d 359,
360 (App. Div. 2d Dep’t 2014).
Moreover, there are exceptions to the application of § 1215.1. It does not apply, for
instance, to a “representation where the attorney is admitted to practice in another jurisdiction
and maintains no office in the State of New York.” 22 NYCRR § 1215.2(d).
Guzik argues that § 1215.1 does not apply because he “is admitted to practice law in
California and maintains no office in the State of New York.” (Dkt. No. 85 at 6; see also id. at
6–9.) Albright does not dispute that Guzik is a lawyer admitted to practice law in California, but
she does dispute whether Guzik maintains an office in the State of New York. (Dkt. No. 88 at 2–
3.) In particular, she points to Guzik’s website, on which Guzik displayed a New York address

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for a period of approximately six years. (Id.) For his part, Guzik proffers that the address was
displayed “in anticipation of establishing a New York office,” but that he never had meetings at
the New York address, never used the address to accept service, and never conducted business at
the address. (Dkt. No. 85 at 8–9.)
In any event, the parties’ dispute as to application of § 1215.1 is irrelevant to the present
motion. “Section 1215.1 . . . ‘contains no express penalty for noncompliance’ and ‘was not
[meant] to address abuses in the practice of law, but rather, to prevent misunderstandings about
fees . . . between attorneys and clients.’” Popal v. Slovis, No. 12 Civ. 3916, 2015 WL 10687614,
at *7 (S.D.N.Y. Apr. 28, 2015) (second and third alterations in original) (quoting Seth
Rubenstein, P.C. v. Ganea, 833 N.Y.S.2d 566, 570 (App. Div. 2d Dep’t 2007)). “Accordingly,
New York courts have held that an attorney’s noncompliance with section 1215.1 does not
preclude the recovery of legal fees in quantum meruit.” Id. (collecting cases).
Indeed, where, as here, the dispute is between the client and attorney, “if it is established
that [the] defendant[] [was] discharged without cause, [his] recovery is limited to quantum
meruit in a fixed dollar amount, which may be more or less than that provided in the rescinded
contract that had existed between [him] and plaintiff, and which may be presently payable or
secured by lien.” Nabi v. Sells, 892 N.Y.S.2d 41, 44 (App. Div. 1st Dep’t 2009). In that event,
“the annulled contingency fee agreement no longer governs the parties’ relationship,” though “it
may ‘be taken into consideration as a guide for ascertaining quantum meruit,’” in addition to
other factors. Id. (quoting Matter of Tillman, 181 N.E. 75, 76 (N.Y. 1932)).
Accordingly, Albright has not established as a matter of law that Guzik is precluded from
bringing a quantum meruit claim for failure to comply with § 1215.1. Nor has it been

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established beyond genuine dispute whether the terms of the oral fee arrangement were fair, fully
understood, and agreed to by Albright.
B.

Enforceable Contract

Albright argues that the existence of a valid, oral agreement precludes recovery by Guzik
under a quantum meruit theory. In its Opinion at the motion-to-dismiss stage, this Court noted
“that [Guzik] cannot recover under a quantum meruit theory if the oral agreement alleged in the
SAC is a ‘valid, enforceable contract that governs the same subject matter as the quantum meruit
claim.’” See Guzik, 2016 WL 6952347, at *3 n.3 (quoting Mid-Hudson Catskill Rural Migrant
Ministry, 418 F.3d at 175).
However, New York courts have crafted what appears to be a specific exception to this
general rule, allowing an attorney who is discharged without cause to recover under quantum
meruit even when the parties had an otherwise valid agreement covering the same subject matter.
Where “an attorney allegedly discharged without cause seeks unpaid legal fees . . . New York’s
highest court would find . . . that the attorney is limited to seeking relief in quantum meruit.”
Liddle & Robinson, LLP v. Garrett, 720 F. Supp. 2d 417, 425 (S.D.N.Y. 2010). Indeed, in such
a case, “an attorney can bring only a quantum meruit claim to recover attorneys’ fees.” Id.
(emphasis added). This is true regardless of whether the attorney is pursuing quantum meruit
recovery based on a retainer for hourly fees or based on contingency. Id.
Here, there is no dispute that Guzik terminated his representation of Albright. (Dkt. No.
87 ¶ 1.) Guzik’s recovery, if any, in quantum meruit depends on the circumstances of his
termination. “If a lawyer is discharged for cause, he or she is not entitled to legal fees. If the
lawyer is discharged without cause and prior to the conclusion of the case, however, he or she
may recover either (1) in quantum meruit, the fair and reasonable value of the services rendered,

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or (2) a contingent portion of the former client’s ultimate recovery, but only if both of the parties
have so agreed.” Universal Acupuncture Pain Servs., P.C. v. Quadrino & Schwartz, P.C., 370
F.3d 259, 263 (2d Cir. 2004) (citation omitted). “Under New York law . . . to determine the fair
and reasonable value of legal services on the basis of quantum meruit, courts consider ‘the
difficulty of the matter, the nature and extent of the services rendered, the time reasonably
expended on those services, the quality of performance by counsel, the qualifications of counsel,
the amount at issue, and the results obtained.’” Popal v. Slovis, 646 F. App’x 35, 36 (2d Cir.
2016) (quoting Sequa Corp. v. GBJ Corp., 156 F.3d 136, 148 (2d Cir. 1998)).
At this stage, the Court cannot conclude whether the termination was with or without
cause. Nor can it conclude whether the parties had an oral agreement that Guzik would recover a
contingent portion of Albright’s ultimate recovery, a fact distinctly disputed between the parties.
(See Dkt. No. 87 ¶ 3). Accordingly, summary judgment is not warranted on the ground that
Guzik is precluded from bringing a quantum meruit claim due to the existence of a valid,
enforceable contract.
C.

Expectation of Compensation

Finally, Albright argues that Guzik has acknowledged in writing that he had no
expectation of compensation. “[A]n expectation of compensation” is one of the four factors
required to recover under a theory of quantum meruit. Mid-Hudson Catskill Rural Migrant
Ministry, 418 F.3d at 175.
Albright relies on an email sent by Guzik “in response to one of Albright’s attempts to
reach an agreement with Guzik regarding his legal fees” (Dkt. No. 63 at 9), after the termination
of the attorney-client relationship (Dkt. No. 85 at 16). In that email, dated February 5, 2016,
Guzik stated:

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I was not kept in the loop [as to Albright’s settlement]. . . . For this
reason alone I choose to move on. I have no expectation of receiving
any compensation from you at this juncture. Nor do I wish to engage
in any negotiations with any client over fees. I have a long history
of satisfied clients, and I want to keep it that way.
(Dkt. No. 62, Ex. D at 1–2.) Guzik emphasizes that any disclaimer of expectation of
compensation was limited to that particular “juncture” and explains that “this email reflects [his]
frustration over his inability to negotiate a resolution of the fee dispute following his
resignation.” (Dkt. No. 85 at 16–17.) Albright construes this e-mail as conclusive evidence of
Guzik’s lack of any expectation of compensation for services rendered and, therefore, as a bar to
recovery under a quantum meruit theory. (Dkt. No. 63 at 8–9.)
However, the parties do not dispute that in March 2016, approximately one month after
sending this e-mail, Guzik furnished an invoice to Albright. (See Dkt. No. 87 ¶ 5.) Albright
argues that the lack of specificity of the invoice lowers its probative value into whether Guzik
had an expectation of compensation. (Dkt. No. 63 at 9.) But Guzik did furnish the invoice for
legal services rendered, which itself evidences at least some expectation of compensation.
Moreover, Albright affirms that she repeatedly requested an itemized bill from Guzik before he
sent her the invoice in March 2016. (Dkt. No. 62 ¶ 14.) This, too, suggests an understanding
that Guzik expected some compensation for legal services provided to Albright.
Under New York law, “[t]he question of whether a party had a reasonable expectation of
compensation for services rendered is a matter for the trier of fact to determine based on the
evidence before it.” Farina v. Bastianich, 984 N.Y.S.2d 46, 49 (App. Div. 1st Dep’t 2014)
(alteration in original) (quoting Caribbean Direct, Inc. v. Dubset, LLC, 954 N.Y.S.2d 66, 67
(App. Div. 1st Dep’t 2012)) (internal quotation marks omitted). On this record, there remains a
genuine dispute as to whether Guzik’s disclaimer via e-mail demonstrates a lack of expectation

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of compensation. Accordingly, the Court denies Albright’s request 3 for summary judgment on
the ground that Guzik had no expectation of compensation for legal services rendered.
III.

Conclusion
For the foregoing reasons, Albright’s motion for summary judgment is DENIED.
The Clerk of Court is directed to close the motion at Docket Number 62 and to lift the

stay, which was effectively terminated on August 10, 2016 (see Dkt. No. 25).
The parties are directed to complete discovery in good faith and to submit a status update
to the Court on or before October 6, 2017, addressing whether the parties intend to move for
summary judgment on any other grounds or, if not, when the parties believe they will be ready
for trial.
SO ORDERED.
Dated: August 21, 2017
New York, New York
____________________________________
J. PAUL OETKEN
United States District Judge

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Guzik also requests that the Court determine that there is “no genuine issue of fact
as to Guzik’s expectation of compensation” in this case. (Dkt. No. 85 at 17.) For the reasons
stated above, that request is denied.
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