Wexler & Burkhart, LLP. v Grant

[*1] Wexler & Burkhart, LLP v Grant 2006 NY Slip Op 51005(U) [12 Misc 3d 1162(A)] Decided on May 25, 2006 Supreme Court, Nassau County Palmieri, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 May 25, 2006
Supreme Court, Nassau County

Wexler & Burkhart, LLP, Plaintiff,

against

Latrice Grant, Defendant.



010296/05



Burkhart Wexler Hirschberg

Attorneys for Wexler & Burkhart, LLP

585 Stewart Avenue, Suite 750

Garden City, New York 11530

Daniel R. Palmieri, J.

Upon the foregoing papers it is ordered that counsel's correspondence dated May 5, 2006 is treated as an application to reargue denial of his prior ex parte application for an order of inquest, which order was refused by hand-written endorsement on such order dated May 1, 2006, and is denied.

The undersigned refused to sign the default order/order of inquest presented by the law firm plaintiff because there was no indication of compliance with Uniform Rules regarding fee disputes between attorney and client prior to the commencement of suit (see, 22 NYCRR § 137.6(2)[b]). In response, the plaintiff's attorney asserts that the Uniform Rules do not apply because the defendant did not at any time dispute the amount stated on the bills, but rather simply did not pay them. Based on this state of facts, the attorney argues that this means there was no "fee dispute" that would be subject to this section.

This interpretation is untenable and would effectively eviscerate Part 137 of the Rules, a comprehensive scheme "for the informal and expeditious resolution of fee disputes between attorneys and clients through arbitration and mediation" (22 NYCRR § 137.0). Section [*2]137.1 is entitled "Application", and at subsection (a) recites that the Part shall apply to all attorneys admitted to practice in New York who undertake representation in any civil matter after January 1, 2002. Against this broad, inclusive statement, subsection (b) lists eight instances/conditions where the Part does not apply. Nowhere among those eight items is there a provision excluding compliance where a client does not object to the bill, but simply does not pay it. Under the well-established statutory construction doctrine of expressio unius est exclusio alterius, where exceptions are created as to certain matters, inclusion of such exceptions should be considered to deny the existence of others not mentioned (McKinney's Cons. Laws of NY, Book 1, Statutes § 240; see Cavallaro v Nassau County Bd. of Elections, 2 Misc 3d 880 [2003], affd as modified 307 AD2d 1003 [2003]; Sportsmen's Assn. For Firearms Educ. v Kane, 178 Misc 2d 185 [1998], affd 266 AD2d 396 [1999]). Moreover, the Rule itself provides that "An attorney who institutes an action to recover a fee must allege in the complaint (i) that the client received notice under this Part of the client's right to pursue arbitration or (ii) that the dispute is not otherwise covered by this Part" (22 NYCRR § 137.6(2)[b]). The Court finds that subsection (ii) is a clear reference to the exclusionary list noted above, as well as being part of a mandatory pleading requirement that was not met in the present case.

Moreover, adopting the movant's position would mean that a client, unschooled in the law and unaware of the fee dispute resolution program established in the Uniform Rules, would lose any chance of arbitrating or mediating bills he or she felt were excessive by simply remaining silent when the bills arrived. It is difficult to imagine how such a result comports with the overall plan evidenced by Part 137.

The Court notes that before Part 137 was promulgated the Appellate Division, Second Department, had held that the predecessor fee dispute arbitration Rule did not apply where the client did not dispute the reasonableness of the fees charged (Scordio v Scordio, 270 AD2d 328 [2000]). However, that older Rule (22 NYCRR Part 136 [repealed, effective January 1, 2002]) was limited to domestic relations matters only. It was replaced by the current version that, in its scope and detail, was clearly intended to cast a much wider net and, more to the point here, added a provision placing the burden on the attorney who did not notify the client of the right to arbitrate to plead that the controversy was excepted from the operation of the Part.

The Court's own research has found two reported cases citing Scordio as a basis for bypassing Part 137's notice requirements; however, neither discusses the differences between the two versions of the Rule, especially the additional pleading requirement, and the Court declines to follow them (see, Rotker v Rotker, 195 Misc 2d 768 [2003]; Helene Greenberg Law Offices v Disanto, 5 Misc 3d 130(A) [2004]).

It is of some interest that in a more recent decision dismissing a fee action under the older Part 136, the Appellate Division, Second Department cited with approval a decision of the Appellate Division, First Department, which had held that a client's failure to affirmatively object to the billings could not be used to avoid the notice and pleading requirements of this older Rule (Herrick v Lyon, 7 AD3d 571 [2004], citing Paikin v [*3]Tsirelman, 266 AD2d 136 [1999]). In Scordio, the Second Department had specifically declined to follow Paikin; this indicates that Scordio may no longer be good law, even with regard to disputes considered under the older Part 136. As stated above, it was the holding in Scordio that the Rotker and Helene Greenberg courts cited in expressing their views concerning Part 137.

The plaintiff is granted leave to replead and to reapply for an order of inquest upon a demonstration that it has complied with Part 137 of the Uniform Rules, and all other rules applicable to defaults generally, should there be a default.

This shall constitute the Order of this Court

E N T E R

DATED: May 25, 2006

_____________________________

HON. DANIEL PALMIERI

Acting Supreme Court Justice