Matter of Barbosa

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[*1] Matter of Barbosa 2004 NY Slip Op 50812(U) Decided on August 4, 2004 Surrogate's Court, Bronx County 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 4, 2004
Surrogate's Court, Bronx County

IN THE MATTER OF THE ESTATE OF VICTOR DAVID BARBOSA, Deceased



128M/2004



Guillermo A. Gleizer, Esq., for Nancy Santana, the administratrix.

Gary B. Freidman, Esq., Guardian Ad Litem for Sael Barbosa, infant.

Lee L. Holzman, J.

In this proceeding, the administratrix, the decedent's mother who is the guardian of the property of the decedent's posthumous child, seeks permission to distribute escrow funds derived from the September 11th Victim Compensation Fund of 2001 ("the Fund") established to aid the victims of the World Trade Center disaster and their survivors. Since the filing of the petition, the petitioner obtained an order permitting the collection of an additional $55,000 from the Red Cross.

The decedent, a 23 year old restaurant employee, was survived by a spouse who bore him a son on April 28, 2002. Although the guardian ad litem for the infant distributee had no objection to the proposed distribution of the net distributable amount of the economic recovery between the two distributees pursuant to the formula set forth in Matter of Kaiser, 198 Misc. 582 (1950), he objected to the amount of the contingency fee sought by counsel pursuant to the retainer agreement signed by both the administratrix and the surviving spouse. The guardian ad litem correctly pointed out that his ward was not bound by the retainer agreement, citing Matter of Muccini, 118 Misc2d 38 (1983). After a conference with the court, the guardian ad litem requested and received permission to enter into a stipulation whereby the attorney's fee was reduced by more than sixty per cent.

Counsel's agreement to accept substantially less compensation than he would have received under the retainer agreement obviates the need to explore in depth whether he had a full and complete discussion with his clients about the minimum award that they were likely to receive from the Fund. Any attorney who entered into a contingent fee arrangement with survivors of victims whose status was not in issue may have mislead them into believing that there was a reasonable chance that no award would be paid by the Fund. This would be misleading because in each case the Fund's award includes the following: $250,000 for non-economic loss, $100,000 for each person who could be considered a dependent for income tax purposes, and economic loss equal to at least the amount set forth in the schedules prepared by the Fund which appeared, inter alia, on its website. Thus, there is a serious question as to whether any contingent fee, regardless of the percentage, is fair with regard to the portion of the award that could have been calculated by the Fund's formula for any survivor whose status was not at issue. Of course, to the extent that any fee arrangement is [*2]misleading or in excess of a reasonable fee, it violates DR2-106 of the Code of Professional Responsibility (22 NYCRR § 1200.11).

Accordingly, counsel's compensation is allowed in the reduced amount set forth in the stipulation. This compensation shall also cover the services that he performed in collecting $55,000 from the Red Cross Fund.

After deducting the amount of counsel fees allowed pursuant to the stipulation, the attorney-escrow agent shall pay the balance allocated to non-economic loss, together with the Red Cross proceeds, to the decedent's distributees pursuant to EPTL 4-1.1. The amount allocated to economic loss shall be paid to the distributees pursuant to the Kaiser formula as follows: 70% to Marina Barbosa and 30% to Sael Barbosa. The amount payable to the infant distributee shall be paid jointly to the guardian of his property and the Guardian Clerk of this court, subject to the further order of the court. The guardian of the property may designate a sufficient number of banks so that no more than $100,000 is in one bank at a given time. After the distributees have received and deposited the amounts to which they are entitled, counsel may then pay the counsel fee allowed herein.

The court notes that a great many attorneys throughout the country responded to the disaster by offering their services without expecting compensation, as did people in many other walks of life. This does not mean to suggest that any attorney who wishes to be compensated and enters into a fair retainer agreement should not be compensated. In some cases, the results obtained by the compensated attorneys may have been well worth the additional expense in that they obtained significantly higher awards for their clients than a pro bono attorney with less expertise in the area may have.

The court wishes to thank the guardian ad litem for his valuable services in this matter. In the spirit of so many other members of the Bar, he has waived any compensation herein, even though substantial sums were in issue and his services resulted in a significant gain both to his infant ward and the decedent's spouse. The Chief Clerk shall mail a copy of this decision to the fiduciary and to the surviving spouse and the decree shall be settled upon them as well as on the guardian ad litem.

Settle decree.

SURROGATE