Cole-Hoover, et al v. Dept. of Corrections, et al
Filing
447
DECISION AND ORDER denying 431 motion for attorney fees, without prejudice to renewal or reinstatement upon conclusion of the underlying litigation. Signed by Hon. Jeremiah J. McCarthy on 12/30/14. (DAZ)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
____________________________________________
GWENDOLYN COLE-HOOVER, M.D.,
Plaintiff,
DECISION AND
ORDER
02-CV-00826(M)
v.
STATE OF NEW YORK DEPARTMENT OF
CORRECTIONAL SERVICES, et al.,
Defendants.
_____________________________________________
Familiarity with the relevant facts and procedural history is presumed. Before me
is the Amended Motion of plaintiff’s former attorney, Prathima Reddy, Esq. (“Reddy”), for a
quantum meruit award of attorneys’ fees [431].1 Oral argument was held on July 17, 2014 [437],
and a further telephonic conference was held on December 19, 2014 [445] to discuss the status of
the defendants’ appeal from the judgment entered on November 13, 2013 [394].2 For the
following reasons, the motion is denied, without prejudice to reinstatement or renewal upon
completion of the underlying litigation.
ANALYSIS
A.
Does the Invalidity of the Retainer Agreement Bar Quantum Meruit Recovery?
In denying Reddy’s first motion [414] for enforcement of her retainer agreement
with plaintiff, I ruled that since the agreement provided for a non-refundable retainer, it was
1
2
Bracketed references are to CM/ECF docket entries.
By Text Order dated December 22, 2014 [446], I set a deadline of December 31, 2014
for any further submission by Reddy concerning the issues discussed at the December 19 conference, to
which plaintiff could respond by January 7, 2015. However, by e-mail dated December 29, 2014,
Reddy’s counsel advised that they “are content to rely upon the papers previously filed”.
rendered unenforceable by Rule 1.5(d)(4) of the New York Rules of Professional Conduct (22
N.Y.C.R.R. §1200.0). April 17, 2014 Decision and Order [426]. In her Amended Motion,
Reddy now seeks recovery in quantum meruit rather than pursuant to the retainer agreement.
In opposing that request, plaintiff argues that “New York courts have consistently
held that an attorney who engages in misconduct by violating the Disciplinary Rules is not
entitled to legal fees for any services rendered”. Plaintiff’s Memorandum of Law [434], p. 2
(quoting Chen v. Chen Qualified Settlement Fund, 552 F.3d 218, 225 (2d Cir. 2009)).
However, the weight of authority is to the contrary.
“[W]hile the special nonrefundable retainer agreement will be unenforceable and
may subject an attorney to professional discipline, quantum meruit payment for services actually
rendered will still be available and appropriate.” Matter of Cooperman 83 N.Y.2d 465, 475
(1994).3 See also Mar Oil, S.A. v. Morrissey, 982 F.2d 830, 840 (2d Cir. 1993) (“Under New
York law, attorneys may be entitled to recover for their services, even if they have breached their
fiduciary obligations”); Petition of Rosenman & Colin, 850 F.2d 57, 63 (2d Cir. 1988) (“Where a
retainer agreement is unenforceable, the attorney is entitled under New York law to collect the
reasonable value of his services, notwithstanding that it was the attorney’s misconduct that
precluded liability under the written contract”); Application of Kamerman, 278 F.2d 411, 414 (2d
Cir.1960) (“While the authorities are divided, the more widely supported view is that an attorney
3
This statement in Cooperman was dictum, because the court “decide[d] the precise
issue . . . in a disciplinary context only”. Id. However, “dictum in a Court of Appeals decision carries
considerable weight”. Adirondack Trust Co. v. Farone, 245 A.D.2d 840, 842 (3rd Dept. 1997), app.
dismissed, 91 N.Y.2d 1002 (1998).
-2-
may recover upon the basis of quantum meruit for professional services rendered by him under a
champertous retainer agreement”).
Therefore, I conclude that the unenforceability of the retainer agreement does not
automatically bar Reddy from recovering in quantum meruit for the reasonable value of her
services.
B.
Can the Reasonable Value of Reddy’s Services be Determined at this Time?
Among the factors to be considered by the court “in determining the fair and
reasonable value of an attorney’s services under quantum meruit include . . . the results achieved”
by the attorney. Tops Markets, Inc. v. Quality Markets, Inc., 2001 W 392082, *2 (W.D.N.Y.
2001) (Elfvin, J.). See also Bonnaig v. Nunez, 2012 WL 6200977, *4 (S.D.N.Y. 2012), aff’d,
546 Fed. Appx. 55 (2d Cir. 2013) (Summary Order) (“the client’s benefit from the services” is a
factor to be considered). In fact, Reddy argues that “[t]he success achieved by Reddy for the
Plaintiff is the most critical factor in determining a reasonable fee”. Reddy’s Memorandum of
Law [431-1], p. 16 (emphasis added). She claims that she “obtained an excellent result for the
Plaintiff, in a case that had at least three prior attorneys and had spanned a decade of litigation,
by avoiding a risk of a ‘no cause’ at trial”. Id.
However, defendants have appealed the judgment obtained by plaintiff (with
Reddy’s assistance) to the United States Court of Appeals for the Second Circuit [394].
Although plaintiff’s current attorney previously stated that he settled the appeal “after expending
a mere 5.4 hours” (plaintiff’s Memorandum of Law [440], p. 2; [441], p. 3 of 6), he admitted
during the status conference on December 19, 2014 that the settlement has not yet been finalized,
-3-
and that the appeal is scheduled for oral argument on January 26, 2015. Since the outcome of the
appeal is uncertain at this time, I cannot predict whether the judgment which Reddy obtained for
plaintiff will be of any benefit to her, and therefore cannot yet properly evaluate this factor in
determining the amount of a quantum meruit recovery.
Reddy argues that she should not have to await the outcome of the underlying
action to have her fee determined, since “a discharged attorney’s recovery in quantum meruit for
a fee is not limited by the former client’s ultimate recovery, which may be determined after sometimes long after - the time of discharge”. Reddy’s Letter Brief [439], p. 2 (quoting
Universal Acupuncture Pain Services, P.C. v. Quadrino & Schwartz, P.C. 370 F.3d 259, 264 (2d
Cir. 2004)). However, Reddy was not discharged by plaintiff - instead, her representation
“cease[d] upon the entry of final judgment”. Reddy’s Letter Brief [439], p. 1, n. 1. Moreover,
even as to a discharged attorney, “[t]he court has discretion to defer the determination of the fair
and reasonable value of . . . fees under quantum meruit until the conclusion of the litigation
because the amount of recovery is an element in fixing such”. Tops Markets, 2001 WL 392082,
*3. See also Universal Acupuncture, 370 F.3d at 264 (“the district court did not abuse its
discretion by waiting to determine the issue of a possible quantum meruit award until the
underlying litigation was completed”).
Therefore, a proper determination of Reddy’s request for quantum meruit recovery
of attorney’s fees must await the outcome of the underlying litigation.
-4-
CONCLUSION
For these reasons, Reddy’s Amended Motion [431] is denied, without prejudice to
renewal or reinstatement upon conclusion of the underlying litigation.
SO ORDERED.
Dated: December 30, 2014
/s/ Jeremiah J. McCarthy
JEREMIAH J. MCCARTHY
United States Magistrate Judge
-5-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?