Klein v Klein

[*1] Klein v Klein 2005 NY Slip Op 50018(U) Decided on January 14, 2005 Supreme Court, Nassau County Falanga, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 14, 2005
Supreme Court, Nassau County

LAWRENCE KLEIN, Plaintiff,

against

STEPHANIE KLEIN, Defendant



03-200558

Anthony J. Falanga, J.

This is a motion by the Law Offices of Dominic A. Barbara for an order 1) pursuant to CPLR 321(b)(2) allowing said law firm to withdraw as counsel for the wife in the above captioned action; 2) staying all proceedings; and 3) granting the law firm a charging lien in the sum of $19,066.25. The wife filed a letter in opposition dated November 22, 2004. The movant accepted service of said letter on November 23, 2004.

The parties were married on October 28, 1984. The wife is 52 and the husband is 51 years old. There are two children of the marriage, Elizabeth born March 9, 1988 and Brittany born July 11, 1990. The parties have not resided together since August 2002. The husband commenced the above captioned action for divorce on the ground of constructive abandonment on or about February 26, 2003. A complaint was served on or about March 26, 2003. An answer denying the allegations in the complaint was served on March 27, 2003. Said answer did not assert a claim for any ancillary relief. A request for a preliminary conference was filed on or about April 28, 2003 and a preliminary conference was conducted on June 17, 2003. The wife was represented at the preliminary conference by Eugene Bechtle, Esq. Her retainer agreement indicates that she paid Mr. Bechtle a retainer of $3500.00. Pursuant to the preliminary conference order, the parties stipulated that the wife would have interim exclusive use and occupancy of the marital residence and temporary custody of the children. The husband agreed to pay household expenses and direct support of $300.00 a week and to maintain existing medical and life insurance. The preliminary conference order states that the wife has a high school equivalency diploma and she is not employed. She states that she is in poor health. The husband is a college graduate employed as a salesman for Blackman Plumbing Supply earning $4441.00 a month, $53,300.00 a year. He also earns commissions and a bonus. His net worth affidavit dated April 2003 states that his bonus is $500.00 and commission is $4645.00. The husband has an IRA worth $24,000.00 and a pension and profit sharing plan with Blackman [*2]Plumbing. Other than the marital residence purchased in 1990 for $200,000.00, the parties do not own any other assets of significant value. The wife drives a 1989 Taurus. The husband drives a 2001 Windstar, provided by his employer. There are custodial accounts for the children. The husband's mother has historically paid the cost of parochial school for the children.

The wife retained her present attorney of record, the movant herein, on or about August 11, 2003. She paid a retainer of $10,000.00. On October 8, 2003, the wife served an amended answer denying the allegations of the complaint and interposing a counterclaim seeking a judgment awarding her custody, spousal and child support, medical insurance, necessaries and legal fees. On or about May 4, 2004, the husband served a verified amended complaint seeking a divorce on the sole ground of cruel and inhuman treatment. The wife served an amended answer and counterclaim on or about June 23, 2004. The husband's deposition has been completed.

By motion submitted on September 13, 2004, the wife moved for an order pursuant to CPLR 3211(a)(7) dismissing the amended verified complaint and granting her counsel fees for costs incurred defending a frivolous action. Said application was decided by order dated September 22, 2004 that provided, in relevant part, as follows:

...(T)he Court finds that even if true, the allegations set forth in the verified amended complaint do not constitute substantial misconduct sufficient to support the granting of a judgment of divorce to the husband on the ground of cruel and inhuman treatment. Accordingly, the verified amended complaint must be dismissed.

Leave to replead is denied. The husband has been aware that grounds would be contested in this action since on or before November 3, 2003 and he has previously amended his complaint to assert instances of misconduct that occurred during the marriage. He has not demonstrated that if he were granted leave to serve a second verified amended complaint, he would be able to set forth additional acts of cruelty that occurred prior to the commencement of the action.

With regard to the events of alleged misconduct that occurred subsequent to the commencement of the action, resulting in his arrest, incarceration, a trial and the dismissal of criminal charges after trial, the husband is relegated to commencing a new action for divorce on the ground of cruel and inhuman treatment. Such post commencement conduct, when viewed together with previous incidents during which the wife called the police or threatened to call the police, would state a viable cause of action for divorce, since on a motion to dismiss pursuant to CPLR 3211(a)(7) for failure to state a viable claim, the Court is required to deem as true, the allegations that the wife's accusations to the police, resulting in the husband's arrest and incarceration, were baseless. Clearly, a pattern of conduct by a spouse of calling the police and making baseless allegations resulting in the arrest of the other spouse, if proven at trial, would make out a prima facie case that it [*3]would be improper for the parties to continue to cohabit (see, Raynore v Raynore, 186 AD2d 1082). However, as explained by Justice Silbermann in Hallingby v Hallingby, 159 Misc 2d 988, as the date of the commencement of an action for divorce "cuts off" a defendant's rights with regard to certain assets comprising the marital estate, it would be improper in this case, where the husband did not have grounds for divorce on the commencement date of February 26, 2003, to permit him to replead misconduct by the wife that occurred after that date.

The husband's remedy is to commence a new action and move to consolidate same with the wife's counterclaim for necessaries and for ancillary relief in the above captioned action. In the interest of financial and judicial economy, counsel should consider encouraging the parties to enter into a stipulation 1) permitting the husband to serve a second verified amended complaint, and 2) fixing the valuation date for appropriate assets, such as the husband's pension, as of the date of service of the second amended complaint (see, Scheinkman, Alan D., 11 NY Practice. New York Laws of Domestic Relations 10:72 [database update 2004]).

Although, the complaint was dismissed, the action was calendared for a conference on October 20, 2004 on the wife's counterclaim. Said conference was stayed pursuant to the instant order to show cause dated October 12, 2004 wherein the Law Offices of Dominic A. Barbara seeks to be relieved as counsel for the wife.

In support of the application to be relieved, Mr. Barbara states as follows: that the retainer agreement signed by the wife provides that the movant may withdraw if any bill remains unpaid for 60 days and the client acknowledges that account delinquency shall be good cause for withdrawal; the wife paid a retainer of $10,000.00 and an additional payment of $7500.00 and presently owes $19, 066.25; that she has no source of income and is dependent on the husband for support; that she has a viable counterclaim; that she has advised the movant that she is unable to pay the outstanding fee or any additional fees that may accrue; that as the Court will not be adjudicating the equitable distribution of marital assets in this action, the outstanding fee cannot be secured or satisfied from the equity in the marital residence or the husband's retirement assets; and that the husband has indicated an intent to commence a new action for divorce and the wife will require legal representation to defend same. Counsel has not alleged that the wife has failed to cooperate; that there has been a disagreement with regard to litigation strategy; or that there has been any breakdown in the attorney-client fiduciary relationship.

The wife responds that she has disputed counsel's billings in the past; that she paid the second payment of $7500.00 by charging said sum on a credit card; that to date she has paid a total of $21,000.00 in legal fees; that she has been served with a notice to arbitrate the claimed outstanding fees; and that the husband is in arrears in paying his pendente lite financial obligations.

Based upon all of the foregoing, the motion is decided as follows: [*4]

The substantive law governing withdrawal from representation of a client is well settled. Pursuant to 22 NYCRR 1200.15 (c)(1)(vi), an attorney may withdraw from representation if a client "... deliberately disregards an agreement or obligation to the lawyer as to expenses or fees" (emphasis added). A client's failure to pay an outstanding fee, does not, without more, entitle an attorney to withdraw (see, Frevola Frevola, 260 AD2d 480; George v George, 217 AD2d 913; Haskell v Haskell, 185 AD2d 333; Torres v Torres, 169 AD2d 829; Shannon v Shannon, NYLJ Oct 30, 2003 col. 1; see also, Kaye v Kaye, 245 AD2d 549; Cashdan v Cashdan, 243 AD2d 598; Kiernan v Kiernan, 233 AD2d 867).

The procedure applicable to withdrawal from representation of a client is also well established. Under the Code of Professional Responsibility (DR 2-110[a][1]; 22 NYCRR 1200.15[a][1]), "(i)f permission for withdrawal from employment is required by the rules of a tribunal, a lawyer shall not withdraw from employment in a proceeding before that tribunal without permission." Pursuant to CPLR 321(b) "an attorney of record" may withdraw or be changed either through a consent signed by the attorney and client or "by order of the court in which the action is pending, upon motion on such notice...as the court may direct." These procedures must be followed even when the client discharges the attorney (see, Gersten v Gersten, 134 AD2d 224; Moustakas v Moustakas, 112 AD2d 981).

Here, the sole grounds for the application for leave to withdraw is a contractual provision in the retainer agreement that states counsel may withdraw for non-payment of fees and the claimed outstanding fee. The contractual provision in the retainer agreement that purports to authorize counsel to withdraw upon non-payment of fees does not vitiate the procedural requirements of CPLR 321(b), nor does it deprive the Court of its traditional discretion to regulate the legal profession by denying leave to withdraw in an appropriate case ( see, Judiciary Law 474; Bank of East Islip v Brower, 42 NY2d 471; Gair v Peck, 6 NY2d 97).

The movant herein has not alleged that the wife has deliberately failed to pay the outstanding fee. It is clear that as she has no income, and owns no assets, other than her interest in the marital residence, her failure to pay is not deliberate. The movant's withdrawal would have a materially adverse effect on the wife, not only by delaying the trial of her counterclaim, but by leaving her without the financial means to retain new counsel (see, 22 NYCRR 1200.15[c]). As the movant has been paid $17,500.00, discovery relevant to the wife's counterclaim has either been completed or is near completion, and as the wife's counterclaim requires a trial as soon as practicable to both promote the best interests of the parties and their children and the goal of judicial economy, the application by the Law Offices of Dominic A. Barbara to withdraw as counsel of record for the wife in the above captioned action is denied. Counsel's application for a charging lien is denied without prejudice to counsel's right to renew said application upon a showing that the wife will receive proceeds of this action which can be attached by means of a charging lien.

The issue of the wife's entitlement to an award of counsel fees in this action was not denied, but was referred to the trial of her counterclaim. Nevertheless, the movant states that the [*5]instant application was necessitated by the Court's denial of the wife's application for an interim counsel fee award of $30,000.00. Said law firm contends that it should not be required to represent the wife at the trial on her counterclaim or provide further legal services without any prospective of remuneration.

As the husband was the sole wage earner during the marriage, and as his action for divorce has been dismissed for failure to state a viable claim, it is clear that if he has the financial means, he should be required to contribute toward payment of the wife's legal fees. The dilemma is that the husband appears to have a limited financial ability, if any, to contribute toward the payment of the almost $40,000.00 in claimed legal fees incurred by the wife defending this action or the substantial additional fees she will likely incur prosecuting her counterclaim.

This Court has entertained numerous applications in matrimonial actions wherein counsel seek to be relieved after the client, who has paid substantial fees, is no longer able to fund unanticipated costly litigation expenses. In many of these cases, the litigant, unable to pay counsel of record, lacks the means to retain substitute counsel, and is forced to enter into a settlement or represent himself or herself at trial. Often, the withdrawal of counsel causes inordinate delay while the client attempts to raise funds to retain new counsel.

It was incumbent upon moving counsel in this case, and the Court submits, is the obligation of all matrimonial attorneys, prior to entering into a retainer agreement with a client, to make an assessment of the fees that will likely be incurred, and the income and assets of the parties that will be available to satisfy said fees. In fact, the Statement of Client's Rights and Responsibilities ( 22 NYCRR 1400.2), provided to every matrimonial client, must recite that upon request, and after a reasonable opportunity to investigate a case, counsel will provide a good faith estimate of approximate future costs of the case.

Where it appears likely, in counsel's estimation, that the prospective client's and or the client's spouse's income and assets may not be adequate to secure payment of counsel's customary fee, counsel should either decline the case, so that the prospective client can seek other representation, or undertake to represent the client through disposition of the action, despite the acknowledgment that the parties' resources and any interim and or final counsel fee award may be insufficient to fund the litigation or satisfy counsel's fee.

While matrimonial litigation is not undertaken on a contingency fee basis, family law practitioners nevertheless are not immune to the risk of not being fully compensated for services rendered. Once a retainer fee is accepted, an attorney is duty bound to diligently and zealously represent his or her client to the conclusion of the matter unless it becomes clear that the attorney client relationship has been irreparably impaired for some reason other than a fee dispute, or the client has deliberately refused to comply with his or her obligations under the retainer agreement.

Applications to be relieved appear to have become more the rule than the exception in matrimonial cases. This fact highlights the need for attorneys and litigants to carefully chart [*6]out the anticipated expenditure of resources available to fund the ever increasing costs of matrimonial litigation, and to explore every effort, with the assistance of the Court, to expedite, facilitate and negotiate dispositions of matrimonial actions.

This constitutes the decision and order of the Court. Any relief not specifically addressed is denied. The parties and counsel shall appear for a certification conference on the wife's counterclaim on February 8, 2005 at 2:00p.m. It is expected that all discovery will be completed by that date.

E N T E R:

_________________________

Dated: January 14, 2005 Anthony J. Falanga, Justice

Mineola, NY Supreme Court, Nassau County