Woodward et al v. Energy Curtailment Specialists et al
Filing
57
ORDER resolving 47 Motion for Attorney Fees. Signed by Hon. H. Kenneth Schroeder, Jr on 1/27/2015. (KER)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
SEAN M WOODWARD,
CHARLES D. ALEXIS,
NIAMBI D. PRESSLEY,
JEFFREY A. McCARTER, JR. and
ROBENA D. CATHEY,
Plaintiffs,
v.
12-CV-0373A(Sr)
ENERGY CURTAILMENT SPECIALISTS, INC.
and
BIDURENERGY, INC.,
Defendants.
DECISION AND ORDER
This case was referred to the undersigned by the Hon. Richard J. Arcara,
pursuant to 28 U.S.C. § 636(b)(1), for all pretrial matters and to hear and report upon
dispositive motions. Dkt. #9.
Plaintiffs, represented by attorney Prathima Reddy, commenced this
action alleging discrimination on the basis of race in violation of Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 2000e et seq. (“Title VII”), and the New York State
Human Rights Law, N.Y. Exec. Law § 296 (“NYSHRL”). Dkt. #1. Mr. Alexis, Mr.
McCarter and Mr. Cathey also alleged claims of hostile work environment and
retaliation in violation of Title VII and the NYSHRL. Dkt. #1.
Ms. Reddy’s retainer agreement provided that plaintiffs would pay onethird of the net recovery to counsel. Dkt. #47-2; Dkt. #47-3 & Dkt. #47-4. The retainer
agreement provides Ms. Reddy with a lien for her fee on any sum recovered by way of
settlement “even though client may discharge attorney and obtain another attorney
before settlement is received.” Dkt. #47-2; Dkt. #47-3 & Dkt. #47-4. The retainer
agreement also provides that Ms. Reddy may withdraw from the action at any time, on
reasonable notice to plaintiffs. Dkt. #47-2; Dkt. #47-3 & Dkt. #47-4.
Ms. Reddy moved to withdraw as counsel for plaintiffs Charles D. Alexis
and Robena D. Cathey on December 20, 2012. Dkt. #15. In support of her motion, Ms.
Reddy affirmed that fundamental differences of opinion concerning the best approach
to the litigation of the case and a breakdown in communication made it impossible for
her to continue as counsel. Dkt. #15-1. Ms. Reddy further affirmed that
the positions that Ms. [sic] Alexis and Mr. Cathey continue to
advocate, if acted upon, would not be in the best interest of
co-plaintiffs, Mr. Woodward, Ms. Pressley and Mr. McCarter.
It would be unethical for me to continue representing Mr.
Alexis and Mr. Cathey.
Dkt. #15-1, ¶ 11. By text order entered January 22, 2013, Ms. Reddy was granted
permission to withdraw as counsel for plaintiffs Charles D. Alexis and Robena D.
Cathey. Dkt. #20.
On January 28, 2013, attorney Kevin P. Wicka filed a notice of
appearance for plaintiffs Charles D. Alexis, Robena D. Cathey and Jeffrey A. McCarter.
Dkt. #21.
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Charles D. Alexis, Robena D. Cathey and Charles McCarter filed
stipulations of dismissals on September 12, 2013. Dkt. ##39-41. Stipulations of
dismissal were filed on October 30, 2013 with respect to the remaining plaintiffs, Sean
Woodward and Niambi D. Pressley, who continued to be represented by Ms. Reddy.
Dkt. ##44-45.
Currently before the Court is Ms. Reddy’s motion for attorney’s fees. Dkt.
#47. In support of her motion, Ms. Reddy declares that she filed and oversaw
administrative charges with the U.S. Equal Employment Opportunity Commission
(“EEOC”), commenced this action, represented plaintiffs during an initial mediation
session and subsequent settlement negotiations and collected and reviewed discovery
documents in preparation for litigation of plaintiffs’ claims. Dkt. #47-1, ¶¶ 13 & 25. Ms.
Reddy submits documentation of the time spent working on plaintiffs’ claims and seeks
$3,330.00 from the settlement proceeds paid to Charles D. Alexis; $2,830.00 from the
settlement proceeds paid to Robena D. Cathey; and $4,230.00 from the settlement
proceeds paid to Jeffrey McCarter. Dkt. #47-1, ¶ 15.
Mr. Wicka argues that Ms. Reddy is not entitled to a charging lien as set
forth in New York Judiciary Law § 475 because her withdrawal from representation of
Charles D. Alexis and Robena D. Cathey was without good cause and her discharge by
Mr. McCarter was for cause. Dkt. #54, pp.2 & 7. In fact, Mr. Wicka argues that Ms.
Reddy’s failure to inform Mr. Alexis, Mr. Cathey and Mr. McCarter of defendant’s
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settlement offer1 constitutes misconduct sufficient to forfeit her charging lien. Dkt. #54,
pp.6 & 7-8. In addition, Mr. Wicka argues that Ms. Reddy forfeited her charging lien
because plaintiffs’ interests in pursuing the litigation diverged over the potential use of
an audio recording obtained by Mr. Alexis. Dkt. #54, pp.5-6. Even if Ms. Reddy is
entitled to attorney’s fees, Mr. Wicka argues that such fees should be calculated from
the commencement of the federal court action on April 27, 2012 rather than the
commencement of Ms. Reddy’s representation of plaintiffs before the EEOC. Dkt. #54,
pp.8-9. Mr. Wicka also challenges Ms. Reddy’s hourly rate of $250 for Mr. Alexis and
Mr. Cathey and $270 for Mr. McCarter, given that he charges an hourly rate of $225
even though he has more experience and peer recognition than Ms. Reddy. Dkt. #54,
p.11. Finally, Mr. Wicka challenges the value of Ms. Reddy’s services to plaintiffs given
her lack of success in mediation and failure to demand discovery or respond to
defendants’ discovery demands. Dkt. #50, ¶¶ 16 & 21 & Dkt. #54, pp.12-13.
Ms. Reddy replies that her representation of plaintiffs conformed with
professional and ethical standards and specifically declares that she “never failed to
present any settlement offers to any plaintiff in this case” and, although acknowledging
concern over Mr. Alexis’ intent to release an audiotape of a conversation between him
and his supervisor to the media, denies that she would not have disclosed the
audiotape at the appropriate time. Dkt. #55, ¶¶ 3, 5 & 16. Ms. Reddy declares that the
plaintiffs’ interests in this matter are not divergent, but that the communications
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Mr. Alexis, Mr. Cathey and Mr. McCarter each declare that they “later learned that
Defendants’ offered a lower settlement amount, but this information was never conveyed to me
by Ms. Reddy.” Dkt. #51, ¶ 12; Dkt. #52, ¶ 11 & Dkt. #53, ¶ 12.
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between her and Mr. Alexis and Mr. Cathey had deteriorated to the point where they
were impacting Ms. Reddy’s relationship with the other plaintiffs. Dkt. #55, ¶ 6. Ms.
Reddy declares that she charges a standard fee of $250 per hour and argues that this
is a reasonable hourly rate given her experience and qualifications. Dkt. #55, p.10. Ms.
Reddy earned a BA in Economics from the University of California, Berkeley and a J.D.
from Case Western Reserve School of Law and previously worked for the District of
Columbia Office of Human Rights. Dkt. #55-2. She was admitted to practice in 2006.
During the time period during which Ms. Reddy represented plaintiffs, New
York Judiciary Law § 475 provided:
From the commencement of an action, special or other
proceeding in any court or before any state, municipal or
federal department, except a department of labor, or the
service of an answer containing a counterclaim, 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. The court upon the petition of
the client or attorney may determine and enforce the lien.
The Court of Appeals for the Second Circuit has “long recognized that the lien created
by § 475 is enforceable in federal courts in accordance with its interpretation by New
York courts.” Chesley v. Union Carbide Corp., 927 F.2d 60, 67 (2d Cir. 1991); See ItarTass Russian News Agency v. Russian Kurier, Inc., 140 F.3d 442, 448 (2d Cir. 1998)
(New York Judiciary Law § 475 governs attorneys’ charging liens in federal courts sitting
in New York). Thus, “an attorney who is discharged is statutorily entitled to a charging
lien on any monetary recoveries obtained by the former client in the proceedings in
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which the attorney has rendered legal services.” Stair v. Calhoun, 722 F. Supp.2d 258,
267 (E.D.N.Y. 2010).
“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.” Varga v. Rent-A-Center East, Inc., No. 10-CV-559, 2012 WL 6626284, at
*3 (N.D.N.Y. Dec. 19, 2012); See Petition of Harley & Browne, 957 F. Supp. 44, 48
(S.D.N.Y. 1997) (“It is well-settled that an attorney loses his right to enforce a charging
lien if the attorney withdraws or is discharged for cause.”). “Courts typically find a
discharge ‘for cause’ where there has been a significant breach of legal duty.”
Antonmarchi v. Consolidated Edison Co., 678 F. Supp.2d 235, 241 (S.D.N.Y. 2010).
“Evidence of a general dissatisfaction with an attorney’s performance or a difference of
opinion between attorney and client does not establish that the attorney was discharged
for cause absent some evidence that the attorney failed to properly represent the
client’s interest.” Greenberg v. Cross Island Indus., Inc., 522 F. Supp.2d 463, 467
(E.D.N.Y. 2007); See Allstate Ins. Co. v. Nandi, 285 F. Supp.2d 309, 312 (S.D.N.Y.
2003) (“Where an attorney is discharged not because he or she neglected to properly
represent the client but because of personality conflicts, misunderstandings or
differences of opinion having nothing to do with any impropriety by the lawyer, the
discharge is not ‘for cause’ and the attorney does not forfeit his or her fee.”); Doviak v.
Finkelstein & Partners, LLP, 90 A.D.3d 696 (2nd Dep’t 2011) (client’s dissatisfaction with
reasonable strategic choices regarding litigation does not constitute cause for the
discharge of an attorney).
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In the instant case, Ms. Reddy’s motion to withdraw was granted by the
Court due to her uncontradicted declarations of fundamental differences of opinion
concerning the best approach to the litigation of the case and a breakdown in
communication between her and Mr. Alexis and Mr. Cathey. Neither the allegations in
her motion to withdraw nor the declarations submitted by plaintiffs in response to this
motion for attorney’s fees suggest that plaintiffs’ interests in this discrimination lawsuit
were adverse to each other, but merely suggest differing opinions in litigation strategy
justifying counsel’s motion to withdraw. See S.A. v. S.K., 40 Misc.3d 1241 (Sup. Ct.
Bronx Cty 2013) (“there must a showing that the attorney’s representation of a client is
materially adverse to that of another client to warrant a non-discretionary
disqualification pursuant to the ethical rules”); Cf. Quinn v. Walsh, 18 A.D.3d 638, 648
(2nd Dep’t 2005) (representation of both the driver of an automobile involved in a
collision and a passenger in that automobile was a conflict of interest disqualifying
counsel from payment of legal fees for services rendered); Pessoni v. Rabkin, 220
A.D.2d 732 (2nd Dep’t 1995) (multiple representation of driver of automobile involved in
collision and passengers in that automobile created a conflict of interest disqualifying
counsel from payment of legal fees for services rendered). Similarly, Mr. McCarter’s
declaration does not demonstrate, at the time of his discharge of Ms. Reddy, any basis
for terminating her services beyond a general dissatisfaction with her strategy for
mediation and commitment to plaintiff’s case, which is insufficient to establish
termination for cause.
However, plaintiffs’ allegations of subsequently learning of counsel’s
failure to communicate a settlement offer, if proven, would establish a violation of New
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York’s Rules of Professional Conduct, thereby barring Ms. Reddy’s claim to fees
subsequent to the ethical violation. See Zito v. Harding, 110 A.D.3d 628, 629 (1st Dep’t
2013) (“If proven, the failure to communicate a settlement offer would constitute a
violation of Rules of Professional Conduct . . . and could bar [counsel’s] claim to fees, at
least from [the date the offer was conveyed to counsel] onward.”); Margrabe v.
Rusciano, 55 A.D.3d 689, 691 (2nd Dep’t 2008) (awarding fees from commencement of
representation until attorney engaged in misconduct by advancing loan to client), lv.
denied, 11 N.Y.3d 715 (2009). “Where there are conflicting claims as to whether an
outgoing attorney was discharged with or without cause, a hearing is necessary to
resolve such a dispute.” Schultz v. Hughes, 109 A.D.3d 895, 897 (2nd Dep’t 2013).
Thus, absent a request from Ms. Reddy for a hearing to resolve the contradiction
between plaintiffs’ declarations and Ms. Reddy’s declaration as to whether plaintiffs
were informed of a settlement offer, the Court will determine Ms. Reddy’s fee without
consideration of the 2.6 hours billed to the three plaintiffs for mediation and subsequent
settlement discussions.
Moreover, Mr. Wicka is correct that, by its terms, Judiciary Law § 475
does not permit a lien for services rendered prior to the commencement of the action.
Stair, 722 F. Supp.2d at 270; See Winkfield v. Kirschenbaum & Philips, P.C., No. 12
Civ. 7424, 2013 WL 371673, at * (S.D.N.Y. Jan. 29, 2013) (charging lien should be
fixed to account for services rendered beginning at the time of the action’s
commencement and not at the time that the firm was retained); Melnick v. Press, No.
06-CV-6686, 2009 WL 2824586, at *6 (E.D.N.Y. Aug. 28, 2009) (same). Accordingly,
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the Court will disregard billing entries on or before April 27, 2012, the date of filing of
the Summons and Complain in this action.
“The amount of a charging lien granted under § 475 is to be determined
by the reasonable value of the services provided.” Skylon Corp. v. Greenberg, 164
F.3d 619 (2d Cir. 1998) (internal quotation omitted); See Stair, 722 F. Supp.2d at 268
(Absent an express agreement between the attorney and client to the contrary, it is well
settled in New York that a discharged attorney may recover the fair and reasonable
value of the services rendered computed on the basis of quantum meruit.). “Among the
factors a court must consider in assessing the amount of a charging lien on a quantum
meruit basis are: (1) the difficulty of the matter; (2) the nature and extent of the services
rendered; (3) the time reasonably expended on those services; (4) the quality of
performance by counsel; (5) the qualifications of counsel; (6) the amount at issue; and
(7) the result obtained (to the extent known).” Sequa Corp. v. GBJ Corp., 156 F.3d 136,
148 (2d Cir. 1998). The “overriding criterion for determining the amount of a charging
lien is that it be ‘fair.’” Sutton v. New York City Transit Auth., 462 F.3d 157, 161 (2d Cir.
2006). “Moreover, the determination of the reasonable value of the attorney’s services
‘is a matter within the sound discretion of the trial court.’” Sequa, 156 F.3d at 149,
quoting Chernofsky & DeNoyelles v. Waldman, 212 A.D.2d 566 (2d Dep’t 1995).
Upon consideration of these factors and review of Ms. Reddy’s billing
entries, the Court finds it appropriate to compensate counsel for 10.2 hours expended
on behalf of Mr. McCarter; 5.8 hours expended on behalf of Mr. Cathey; and 5.1 hours
spent on behalf of Mr. Alexis at an hourly rate of $200. See Tyo v. Lakeshore Hockey
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Arena, Inc., No. 11-CV-6239, 2014 WL 2532447, at *3 (W.D.N.Y. June 5, 2014) ($250
hourly rate reasonable for attorney practicing employment law for 25 years);
Ghadersohi v. Health Research, Inc., No. 08-CV-355, 2011 WL 5040668, at *6
(W.D.N.Y. Oct. 21, 2011) ($250 hourly rate reasonable for firm partner with twenty
years legal experience); Grievson v. Rochester Psychiatric Center, 746 F. Supp.2d 454,
463 (W.D.N.Y. 2010) ($250 hourly rate reasonable for skilled litigator with nearly 30
years of experience in employment cases); Williams v. Beemiller, Inc., 2010 WL
891001 (W.D.N.Y. Mar. 10, 2010) ($250 hourly rate reasonable for named partner with
over 30 years of federal litigation experience; $200 hourly rate reasonable for partner
with 10 years litigation experience), rev’d on other grounds, 416 Fed. Appx. 97 (2011).
Therefore, it is hereby ordered that Mr. Wicka forward attorneys fees to
Ms. Reddy as follows: $2,040 for her representation of Mr. McCarter; $1,160 for her
representation of Mr. Cathey; and $1,020 for her representation of Mr. Alexis.
SO ORDERED.
DATED:
Buffalo, New York
January 27, 2015
s/ H. Kenneth Schroeder, Jr.
H. KENNETH SCHROEDER, JR.
United States Magistrate Judge
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