Klein Calderoni & Santucci, LLP v Bazerjian
Annotate this CaseDecided on February 3, 2005
Supreme Court, Bronx County
KLEIN CALDERONI & SANTUCCI, LLP, Plaintiff,
against
THOMAS A. BAZERJIAN, Defendant.
22351/04
Yvonne Gonzalez, J.
This action arose as a result of a legal fee dispute between plaintiff, law firm, and defendant, client. Plaintiff represented defendant at an appellate hearing before the September 11th Victim Compensation Fund. As a result of the hearing, the compensation awarded to defendant was increased from the standard, $65,000, to $204,451. Plaintiff billed defendant $34,862.75 which is 25% of the award recovered over $65,000. Defendant disputes that he agreed to any contingency fee, whatsoever, plaintiff contends that the 25% of the award recovered over $65,000, was the agreed upon contingency fee.
Defendant moves pursuant to CPLR §3212, for summary judgment, dismissing the complaint and moves pursuant to 22 NYCRR §130-1.1 for sanctions, awarding costs associated with defending this action, including attorney's fees, costs and disbursements. Plaintiff, cross-moves pursuant to CPLR §3212 for summary judgment against defendant.
22 NYCRR§ 1215.1 provides as follows: (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 (I) if otherwise impracticable or (ii) if the scope of services to be provided cannot be determined at the time of the commencement of representation.
It is undisputed that no letter of engagement or retainer was provided by plaintiff. In paragraph 26 of its cross-moving affirmation, plaintiff suggests that under the circumstances of this case, it was "impracticable" to provide defendant with a letter of engagement. However, even under plaintiff's version of events, defendant contacted plaintiff on May 12, 2004, and on May 14, 2004 defendant came to plaintiff's office. Since the hearing was held on May 19, 2004, it is clear that there was sufficient time and opportunity to provide a letter of engagement. Moreover, in the paragraph eight of Fred T. Santucci, Jr.'s, (hereinafter, Santucci), affidavit, he states that after the hearing, defendant asked Santucci "whether he needed to sign something regarding my fee. I told him that he need not because of my past dealings with his co-worker [*2]clients and my belief that he would honor my bill." Plaintiff's failure to provide a letter of engagement or a signed retainer agreement was deliberate, and not a result of being "impracticable."
Clearly, plaintiff has not complied with 22 NYCRR §1215.1. At issue for this Court is what is the penalty for lack of compliance with a rule, that was intended to avoid the very type of dispute at issue herein. While 22 NYCRR§ 1215.1 is a relatively recent rule with no appellate gloss, it has been held to be similar to 22 NYCRR §1400.3, which governs retainers in domestic relations matters. Feder v Ronan, 195 Misc 2d 704 (Nassau Dist Ct 2003) (attorney precluded from recovering legal fees for failure to comply with 22 NYCRR §1215.1). In domestic relations matters, "[a]n attorney is precluded from seeking fees from his or her client where the attorney has failed to comply with 22 NYCRR 1400.3, which requires the execution and filing of a retainer agreement that sets forth, inter alia, the terms of compensation and the nature of services to be rendered." Mulcahy v Mulcahy, 285 AD2d 587 (2nd Dept 2001).
While there are clearly differences between 22 NYCRR §1215.1 and 22 NYCRR 1400.3, preclusion from seeking fees is a reasonable penalty for non-compliance with 22 NYCRR §1215.1, when the rule was intended to avoid the type of dispute plaintiff's have brought to this Court, and plaintiff's failure to comply was deliberate. While the Surrogate of Bronx County has fashioned a less absolute remedy for failure to comply with 22 NYCRR §1215.1, under the facts of that case, the attorneys mailed its client a retainer agreement, and the Court deemed the failure to comply with 22 NYCRR §1215.1 "unintentional." Matter of Feroleto, (6 Misc 3d 680). In Matter of Feroleto, the Bronx Surrogate reasoned that the "Feder case might be used as a 'forbidding precedent' to 'create an unfair windfall for clients' should it be followed where clients know that the services are not pro bono and the failure to comply with the rule is not willful (Davis, Engagement letters: Can't Live Without Them, Can't Change Them, NYLJ, January 5, 2004, at 3, col. 1)." Here the attorney intentionally failed to comply with 22 NYCRR §1215.1, resulting in this action. It should be noted that while the Bronx Surrogate in Matter of Feroleto, fashioned a different penalty than in Feder, the Bronx Surrogate opined that the Feder result is appropriate in that case.
Plaintiff argues that 22 NYCRR §603.7 does not apply to this case because the claim herein is not a negligence claim. 22 NYCRR §603.7 provides as follows: (1) Every attorney who, in connection with any action or claim for damages for personal injuries for property damages or for death or loss of services resulting from personal injuries, or in connection with any claim in condemnation or change of grade proceedings accepts a retainer or enters into an agreement, express or implied, for compensation for services rendered or to be rendered in such action, claim or proceeding, whereby his compensation is to be dependent or contingent in whole or in part upon the successful prosecution or settlement thereof, shall, within 30 days from the date of any such retainer or agreement of compensation, sign personally and file with the Office of Court Administration of the State of New York a written statement of such retainer or agreement of compensation, containing the information hereinafter set forth.
On the face of the rule it applies to claims for personal injuries. The term negligence, does not appear anywhere in the rule. Defendant's claim before the September 11th Victim [*3]Compensation Fund, was for an asthmatic condition resulting from his search and recovery efforts at the World Trade Center. Plaintiff's claim was clearly for personal injuries, and 22 NYCRR §603.7 is applicable.
It is undisputed that plaintiff has not complied with 22 NYCRR §603.7. The failure to file a retainer statement is a prerequisite for an attorney to receive legal fees. Rabinowitz v Cousins, 219 AD2d 487 (1st Dept 1995).
Accordingly, defendant's motion for summary judgment is granted to the extent that the complaint is dismissed. Though plaintiff's claims are ultimately unmeritorious, plaintiff's claims are not frivolous and therefore, sanctions pursuant to 22 NYCRR §130-1.1, are unwarranted. Plaintiff's cross-motion for summary judgment, is denied.
The Clerk of the Court is directed to enter judgment for defendant, dismissing the complaint.
This constitutes the decision and order of the Court.
Dated: ____________________________________
YVONNE GONZALEZ, J.S.C.
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