Aldrich v Marsh & McLennan Cos., Inc.

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Aldrich v Marsh & McLennan Cos., Inc. 2005 NY Slip Op 30519(U) July 15, 2005 Sup Ct, NY County Docket Number: 605336/99 Judge: Herman Cahn Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] I SUPREME COURT OF THE STATE OF NEW YafdK - NEW YORK COUNTY s PART PRESENT: Justice -v- The following papers, numbered 1 to were read o n this motion tolfor PAPERS NUMBERED Notice of Motion/ Order to Show Cause - Affidavits Answering Affidavits - Exhibits - Exhibits -- Replying Affidavits Cross-Motion: 0 t- ... E Yes 0 No c Upon the foregoing papers, it i ordered tha this motion s a L u ---. Dated: 7 J. Check one: 0 FINAL DISPOSITION s.c. NON-FINAL DISPOSITION [* 2] - against - MARSH & McLENNAN COMPANIES, INC., MARSH, INC., GUY CARPENTER & CO., INC., C.T. BOWKING & CO. LTMITED and SEI3GWICK GROIJP, PLC, Dcfendants, X _lr_______________--______________I_____-------~-~------------- Herman Cahn, J. Names Legal Chmmittcc, Inc., moves (scq. no. 009) to intervene in a related attorneys fee proceeding, and to compel thc production of ccrtain documents relevant thcreto, CPLR I O 12 (a) (2), 3 124; or, alternatively, to stay the proceeding and compel arbitration of thc issues raised therein, id., 7503 (a). The facts underlying this action are sct forth in prior decisions of the court. Familiarity thcrcwith is presumed. The following summarizcs the facts pertinent to this motion. Fncts: This action alleges causes o l action against insuraiicc brokers Marsh & McLeiman Companics, Tnc., and subsidiaries, for fraud and negligcnt misrepresentation in conncction with certain Lloyd s of London reinsurance policics. Names Legal Committee, Inc. ( NLC ), is chaired by Elizabeth Lucssenhop, who submits an affidavit stating that it organized the plaintiff group as a constituency of Lloyd s of London Names, i.e., underwriters, allcgedly harmed by defendants actions. Neither NLC or Luesscnhop are parties to this action. [* 3] I Plaintiffs were initially representcd by Levi, Lubarsky & Feigenbaum, LLP, which was granted lcave to withdraw in May 2000. Thereafter, plaintiffs retained Gibson, D U I& ~ Crutcher, LLP. Gibson Dunn appeared on plaintill s behalf, filing an anicndcd complaint and, as it asscrts, interviewed witnesses, reviewcd documents, developed litigation strategy, opposed a motion to dismiss, conducted discovery, represented plaintiffs at evidentiary proceedings, and prepared writtcn submissions. NLC, however, ceased paying the h n s bills as of September 200 1. As of thc close of 2002, the oulstanding balance was $1,150,000.00 (Gregory Aff. [ 12/3O/O2I fT 3). In response to a lctter from Gibson Dunn requesting payment of its fees, Luessenhop wrote the firm s executive director on November 22,2002, stating: Wc arc dceply grateful for the excellent represcntation froin Fred Gregory[ ] and everyone at your firm, who workcd so successfully to advance our case. We arc painfully aware that we havc not done our part by not paying your bills as they came due. (Akkapcddi Aff, Ex, G.) She repeated that acknowledgment in a letter to Gregory, dated lkccrnber 3,2002, by stating: I will be most happy to send money to you as soon as it is received in Washington. You have won everything for us to date. (Id.) Due to continued non-payment of its fecs, Gibson Dunn moved for leavc to withdraw as plaintil l s counsel. The court granted that motion by order datcd January 28,2003. l hcorder severed the issue of Gibson Dum s rcasonable attorneys fees herein, refcrring it to a Special Rel eree lo hear and report. A hearing cornmenccd before Special Rekree Nicholas Doyle on October 22, 2003. Thc only parties who appeared were Gibson Dum, by Fred F. Gregory, Esq., and Richard 1 A member of Gibson Dum. 2 [* 4] .. IDavis, Esq., and two plaintiffs, Edith Anthoine and Thomas W. Tilsley, through their counscl, Alison Anthoine, Esq. Said counscl informed Referee Doyle that Luessenhop advised her before the hearing that she did not plan to attend. The hearing continued until conclusion. Almost a full ycar after Gibson Dunn s withdrawal in January 2003, and thrcc months after the conclusion of the Referee s Hearing in October 2003, NLC presently moves to intervene in the hearing; or, more accurately, to reopen it. Along with such relief, NLC seeks an ordcr compclling tlic production of certain documents preparatory to its participation in a reopened hearing; or, alternatively, staying the hearing, pnst,fbcto, and compclling arbitration of the fee issue.2 Discussion : Intervention, even as of right, may only bc granted [ulpon timely motion (CPLR 10 12 [a]). J hc sarnc is, of course, truc with regard to intervention by permission (id., 13). 10 NIX S failure to move for intervention until the passage of a year from the order of reference and three months from the conclusion of the Referee s Hearing violates the mandate of timelincss, warranting denial of thc niotion (id.; Opuruji v Weslon, 293 AD2d 592 [2d Dept 20021; Krenitsly v Ludlow Molor Clo., 276 AD 5 1 1, lv denied 277 AD 800 [3d Dept 1, appeal dismissed 301 N Y 609 119501). Apart horn NLC s procedural neglect, its belatcd objection to Gibson Dunn s fee ignores the express requirement in paragraph 4 of Gibson Dunn s Tcrnis of Rctcntion (contained in Akkapeddi Aff. Ex. E), that any and all fee disputes be raised within 30 days h m 2 The court temporarily stayed the Special Referee from issuing his rcport pcnding the outcome of the instant motion. 3 [* 5] invoicing. N I K not only breached that condition; it praised Gibson D u m for its representation of plaintiffs and acknowledged their outstanding iiidebtcdness to the firm (id., G). NLC s Ex. failure to follow the fee disputc mechanism in the Terms of Retention, as wcll as its candid recognition of the quality of Gibson Dunn s professional services and its own liability on account of same, waivcs its right to contest the fee (see, Hadden v Consoliduled Edison Co. qf N. Y , inc., 45 NY2d 466 [ 19781). This is especially so, where NLC did nothing to intcrvcne in the fee procccding until afterward, and lor an inordinate period of time (Opuruji, supru; Krenitsb, supru). Moreover, NI C s November 22, 2002, acknowledginciit lctter - replete with compliments on thc quality of Gibson Dum s work, and confessionals concerning NLC s nonpayment therefor - apparently had the effect o l inducing the fr to continuc working for im plaintiffs, without payment. Such conduct gives rise to estoppel, whereby NLC may not now, bclatedly, attack the firm s lee application - (First Union Natl. Bank v Tecklenburg, 2 AD3d 575 [2d Dept 20031). NLC points to a clause in Gibson Dum s Engagement Letter, dated May 4, 2001 (contained in Akkapeddi Aff. Ex. E), providing that fee disputes are subject to arbitration. Howcver, that clausc must be considercd in conjunction with paragraph 4 of the Terms of Retention, attached to and referenced in the Engagemcnt Lctter, conditioning any fee disputes on notice or objection within 30 days o l invoicing (id. Muzuk Corp. v / @ Hotel Corp., 1 NY2d 42, ; 46 119561 [ The rules of construction of contracts require us to adopt an interpretation which gives meaning io every provision of a contract . . . . ]). As obscrvcd, N I X not only failed to do this; it took measures to let Gibson D u m know - or think - that all was well between them, and 4 [* 6] that it would soon be paid. Consequently, NLC's motion to intervene in the related attorncys' fee proceeding, and to compel the production of certain documents relevant thereto; or, alternatively, to stay the proceeding and compel arbitration o l the fee issues, is denied. Accordingly, it is OKDERED that the motion is denied; and it is i-urther ORDERED that thc stay of issuance of the Spccial Kcferee's report is vacated. Datcd: July 15, 2005 + ENTER: J. S . C. 5

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