Tunick v Shaw

[*1] Tunick v Shaw 2004 NY Slip Op 51787(U) Decided on December 10, 2004 Supreme Court, New York County Goodman, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 10, 2004
Supreme Court, New York County

JEFFREY P. TUNICK, Petitioner,

against

LARRY SHAW, EDITH SHAW MARCUS, META SHAW STEVENS, MYRON BELDOCK, ESQ., WILLIAM S. GREENAWALT, ESQ., MARTIN BRESSLER, ESQ., SHAW FAMILY ARCHIVES, LTD., TRUCOLOR, INC. and GAB ROBBINS NORTH AMERICA, INC., Respondents



116636/03

Emily Jane Goodman, J.

In this special proceeding, petitioner Jeffrey P. Tunick, Esq. seeks an order, pursuant to Judiciary Law § 475, fixing a charging lien for his attorney's fees in the amount of $557,505.77, upon the fund created by a Stipulation of Settlement, dated June 5, 2002, in the action entitled Edith Shaw Marcus and Meta Shaw Stevens, as Temporary Administrators of the Estate of Sam Shaw, deceased v Martin Bressler and Larry Shaw, et al, Index No. 123783/94, Supreme Court, New York County (the "Shaw action"). Respondent William S. Greenawalt, Esq., cross-petitions for an order fixing a charging lien for his attorney's fees in the Shaw action in the amount of $1,066,294. Respondent Martin Bressler, Esq. moves for summary judgment regarding his priority as a judgment creditor of Sam Shaw.[FN1]

FACTS

The Shaw action involved an eight year familial battle over ownership of 700,000 valuable photographic images, shot over 35 years, including the famous photograph of Marilyn Monroe with a blowing skirt. The lawsuit, which was fraught with family distrust, was originally filed in 1994 by Sam Shaw against his son Larry Shaw, also a photographer.

At the heart of the Shaw action, Sam Shaw contended that many of the commercially viable photographic images shot by him were wrongfully in the hands, or the under control of, his son. Thus, Sam Shaw sued his son for $100 million for his alleged conversion of approximately 200,000 photographic images. However, Larry claimed that his father had given him possession and control of those images, and that he alone had all of the marketing rights to certain Marilyn Monroe photographic images, by virtue of a written assignment by Sam Shaw to him in June 1992. Sam Shaw contended that the assignment was procured by fraud and was [*2]fraudulently altered by Larry after its execution to transform a document granting temporary agency into an assignment of marketing rights.

The relief sought in the Shaw action included an accounting of the photographs; an injunction directing his son to turn over all property belonging to him; a declaration that the June, 1992 assignment of all commercial rights in the Marilyn Monroe photos to Larry Shaw was a nullity, and that Sam Shaw was entitled to ownership and possession of the collection.

In April 1999, Sam Shaw died. Upon his death, his daughters, Edith Shaw Marcus and Meta Shaw Stevens (the "Shaw Sisters"), were appointed as Temporary Administrators to continue prosecution of the Shaw action.

By order dated May 13, 1999, this Court appointed respondent Myron Beldock, Esq. as receiver of the 500,000 photographic images which had been in Sam Shaw's possession prior to his death. Beldock stored these photographs at a Manhattan Mini Storage location, where the photographs were allegedly damaged. Beldock filed an insurance claim for the damage to the collection, in the amount of $2,000,000, with Reliance Insurance Company. Shortly after the claim was filed, Reliance filed for bankruptcy, and the claim was turned over to the New York State Liquidation Bureau. Respondent GAB Robbins North America, Inc. took over the claim to act as the adjuster on behalf of the Liquidation Bureau. The insurance claim is still pending, and the collection is now warehoused at the premises of respondent TruColor, Inc.

On June 5, 2002, after eight years of hearings, motions, appeals, stays, changes of counsel, spin-off actions and referrals of most of the issues in 1995 to Judicial Hearing Officer Martin Evans, the Shaw action was finally settled by a Stipulation of Settlement (the "Settlement"). Under the terms of the Settlement, respondent Shaw Family Archives, Ltd., a domestic corporation, was formed to take possession and ownership of all of the photographs involved in the Shaw action. As a result, a collection of photographic images was created (the "Collection"), consisting of 700,000 photographic images, which included the 500,000 images that had been in Sam Shaw's possession, as well as the 200,000 images in Larry Shaw's possession. Pursuant to the Settlement, Larry Shaw became a 50% owner of the entity that owned the Collection, and the Shaw Sisters each received a 25% ownership interest in that entity. In addition, both Larry Shaw and the Shaw Sisters, respectively, received equal agency rights to the Collection, as well as equal rights to the marketing and commercialization of the Marilyn Monroe photos.

DISCUSSION

Judiciary Law § 475 governs an attorney's lien for services provided in securing a judgment or settlement. It provides: From the commencement of an action *** the attorney who appears for a party has a lien upon his client's cause of action, claim or counterclaim, which attaches to a verdict, report, determination, decision, judgment or final order in his client's favor, and the proceeds thereof in whatever hands they may come; and the lien cannot be affected by any settlement between the parties before or after judgment, final order or determination. The court upon petition of the client or attorney may determine and enforce the lien.[*3]

A charging lien is a security interest in the favorable result of the litigation (see Butler, Fitzgerald & Potter v Gelmin, 235 AD2d 218 [1st Dept 1997]; Rotker v Rotker, 195 Misc2d 768 [Sup Ct, Westchester County 2003]). It gives an attorney equitable ownership interest in the client's cause of action (LMWT Realty Corp. v Davis Agency Inc., 85 NY2d 462 [1995]) and it ensures that the attorney can collect his fee from the fund that he or she has created and obtained on behalf of his or her client (Petition of Rosenman & Colin, 850 F2d 57 [2d Cir 1988]). The lien attaches automatically upon the interposition of a claim, whether in a complaint or a responsive pleading (see Judiciary Law § 475; see also Banque Indosuez v Sopwith Holdings Corp., 98 NY2d 34 [2002]; LMWT Realty Corp. v Davis Agency Inc., 85 NY2d 462, supra). An attorney's charging lien also extends to settlement proceeds (see LMWT Realty Corp. v Davis Agency Inc., 85 NY2d 462, supra; Costello v Kiaer, 278 AD2d 50 [1st Dept 2000]). "In the event of settlement, the attorney's lien attaches to the fund representing the cause of action extinguished by the settlement" (In re Shirley Duke Assocs., 611 F2d 15, 18 [2d Cir 1979]; accord In re Ralph Lauren Womenswear Inc, 204 BR 363 [SD NY 1997]).

There are three prerequisites to the creation of a charging lien: as a result of the attorney's efforts, (1) the client must assert a claim (2) which results in proceeds (3) payable to or for the benefit of the client (In re Schick, 215 BR 13 [SD NY 1997], citing United Orient Bank v 340 West 31st Street Owners Corp., 155 Misc2d 675 [Sup Ct, NY County 1992]).

With respect to the first requirement, an attorney's charging lien does not attach when an attorney merely defends or protects a client's interests in property the client already owns, without asserting an affirmative claim, or obtaining an affirmative recovery (Petition of Rosenman Colin Freund Lewis & Cohen, 600 F Supp 527 [SD NY 1984]; Spinello v Spinello, 70 Misc2d 521 [Sup Ct, Nassau County 1972]). Moreover, a defendant's attorney cannot obtain a charging lien unless his client asserts a counterclaim (see In re Schick, 215 BR 13, supra; Natole v Natole, 295 AD2d 706 [3d Dept 2002]).

With respect to the second and third requirements, the lien attaches only when proceeds in an identifiable fund are created by the attorney's efforts in that action or proceeding (see Schneider, Kleinick, Weitz, Damashek & Shoot v City of New York, 302 AD2d 183 [1st Dept 2002]). "In other words, the litigation or settlement must result in more than the mere entry of a judgment on behalf of a client: there must be proceeds from the litigation upon which the lien can affix" (Banque Indosuez v Sopwith Holdings Corp., 98 NY2d at 44). Thus, an attorney may collect out of funds or property he obtains on behalf of his client on the theory that "it is the attorney who has created the fund out of which he is paid by his efforts" (Goldstein, Goldman, Kessler & Underberg v 4000 East River Road Assocs., 64 AD2d 484, 487 [4th Dept 1978], affd 48 NY2d 890 [1979]; see also In re Manshul Constr. Corp., 225 BR 41 [SD NY 1998]; Rosenman & Colin v Richard, 850 F2d 57, supra).

Here, both Tunick and Greenawalt are entitled to an attorney's lien on the Collection pursuant to Judiciary Law § 475.

I.Tunick's Petition

Tunick's petition seeks a judicial determination under Judiciary Law §475 of the liability of respondent Larry Shaw for legal services rendered by petitioner and asserts claims based upon (1) breach of contract, (2) account stated, and (3) quantum meruit. In support of his petition for [*4]an attorney's lien in the amount of $557,505.77, Tunick alleges that, on November 4, 1994, Larry Shaw retained him, pursuant to a written retainer agreement, to defend him, and to interpose and prosecute counterclaims in the Shaw action.[FN2] In the retainer agreement, Larry Shaw also specifically retained Michael J. Marino, Esq., who was designated "of counsel" to Tunick, and agreed to pay legal fees at the rate of $200 per hour.

Tunick alleges that his firm agreed to represent Larry Shaw on the condition that he pay a minimum amount of $1,000 per month towards legal fees (later increased to $1,200 per month), on the understanding that the balance due would be paid in full immediately upon Larry Shaw being afforded the opportunity to market the Collection. Tunick further alleges that, up until the Settlement, Larry Shaw made his payments in a timely manner. After the Settlement, however, Tunick did not receive a lump sum payment, as previously agreed, and the minimum payments ceased after February 2003.

Tunick alleges that he was attorney of record for Larry Shaw for 8 years, and successfully prosecuted his counterclaims in the Shaw action, resulting in the Settlement, which was achieved largely through his firm's efforts. Tunick asserts that the entire Collection of the 700,000 photographic images is the fund created by Tunick in prosecuting Larry Shaw's claims and that, since he rendered professional services in the Shaw action toward the creation of the fund, he has a valid attorney's charging lien on the fund to the extent of the reasonable value of his services. Tunick contends that value of the entire Collection exceeds $3,000,000.

Larry Shaw vigorously disputes Tunick's entitlement to an attorney's lien under Judiciary Law §475. Larry argues that the Collection cannot be considered a "fund" created by Tunick. According to him, Tunick's legal services did not create the Collection, nor did they create Larry Shaw's interest in the Collection, because the ownership of the photographic images was never at issue in the litigation.

Larry Shaw further contends that, before the Shaw action was commenced, he had possession and control of the entire marketing rights to the Marilyn Monroe photographs in the Collection. However, as a result of the Settlement, he now has only a 50% interest in the marketing rights to those photographs. Larry further argues that he has a smaller interest in the Collection after settlement because he no longer owns certain photographs that the Shaw Sisters did not dispute were taken by him. Accordingly, Larry maintains that Tunick's legal services did not create any asset upon which Tunick would be entitled to a lien and Tunick merely defended title to his vested property.

The Court rejects these arguments. It is true that an attorney does not create a fund or proceeds where the attorney seeks to impress a charging lien on property previously owned by the client (see Golden v Whittemore, 125 AD2d 942 [4th Dept 1986] [attorney who settled divorce action was denied a charging lien on the marital residence because his client already owned an undivided one-half interest in the property before the settlement]). However, the main issue in the underlying litigation concerned the conflicting claims of ownership in the Collection, and therefore, this case "involved two parties both seeking to clarify their respective rights and obligations arising out of an involved and complex relationship" (Petition of Rosenman Colin [*5]Freund Lewis & Cohen, 600 F Supp at 534). Indeed, in a May 18, 1995 order, this Court specifically referred to JHO Evans the issue of "who is the rightful owner of the photographs, prints, contact sheets and other artwork that is the subject of this litigation" (see Joint Reply Aff., Exh 7). Prior to the commencement of the Shaw action, there was no single Collection of the approximately 700,000 photographic images shot by both Larry and Sam Shaw. Sam Shaw had possession of approximately 500,000 of these images. Although Larry Shaw had possession of approximately 200,000 of these images, he had no vested legal title to these images, and the validity of the assignment of the Marilyn Monroe photographs was a central issue in the action. As a result of Tunick's efforts, a single Collection of all of these images was created by the Settlement, and, as a result of the Settlement, Larry obtained a 50% interest in the entity that owns the entire Collection of 700,000 photographic images, as well as agency and marketing rights.

Larry Shaw further argues that Tunick does not have a valid charging lien because all but one of his counterclaims were dismissed by me and that thus, Tunick was merely defending Larry's interests without asserting an affirmative claim on his behalf. To the contrary, four of Larry Shaw's original counterclaims still remained after I decided the motion to dismiss on April 20, 1995 the second counterclaim for libel, the fifth and sixth counterclaims for Lanham Act and copyright violations (which were not the subjects of the motion), and a portion of the tenth counterclaim which related to the assignment of the Marilyn Monroe photographs.

Indeed, as a result of the Settlement, Larry Shaw received an affirmative recovery on his tenth counterclaim. The portion of the tenth counterclaim that was not dismissed by me sought to enforce the validity of Sam Shaw's alleged written assignment of the Marilyn Monroe photographs to Larry Shaw, which Sam Shaw disputed and which was contradicted by a different writing. Thus, the counterclaims asserted by Tunick in the litigation which resulted in the Settlement "successfully provided [Larry Shaw] with certain rights and interests" that he did not previously have 50% of the marketing and commercialization rights to the Marilyn Monroe photos (Petition of Rosenman Colin Freund Lewis & Cohen, 600 F Supp at 534).

Petitioner, however, has not shown that the charging lien should be fixed at $557,505.77. Therefore, the amount of fees due under Judiciary Law §475 must be referred to a Special Referee to hear and report. Although Petitioner relies on the theory of account stated and breach of contract, these claims were improperly brought in a special proceeding under Judiciary Law §475. The value of the charging lien under Judiciary Law §475 is determined by the reasonable value of the services (see Matter of Shaad, 59 AD2d 1061 [4th Dept 1977]). To reach the issues of account stated and breach of contract, the Court would have to convert this special proceeding to an action pursuant to CPLR 103 (c) (see Matter of Jacob D. Fuchsberg Law Firm v Danzig, 248 AD2d 178 [1st Dept 1998]). However, the Court does not find that it is appropriate to convert this special proceeding to an action. Further, even if Petitioner had commenced an action, he has not shown entitlement to an account stated.[FN3]

[*6]II.Greenawalt's Cross Petition

Greenawalt's cross petition seeks recovery of his unpaid legal fees and disbursements incurred in the Shaw action. In support of his cross petition, Greenawalt states that the Shaw Sisters substituted him as their counsel in the Spring of 2000 in the Shaw action. Pursuant to the signed retainer agreement, dated September 13, 2000, the Shaw Sisters agreed to pay Greenawalt $300 per hour, and to double his legal fees if certain results were obtained.

Greenawalt alleges that, during the prosecution of the Shaw action, he conducted over 70 days of trial, hearings and proceedings before JHO Evans and myself. He also participated in settlement negotiations on behalf of the Shaw Sisters, and in hearings on motions or orders to show cause, discovery proceedings and numerous conference with attorneys and parties in and out of court. Greenawalt asserts that he is entitled to a charging lien in the amount of $1,066,294, because, by virtue of his efforts in effectuating the Settlement, the Shaw Sisters now have a 50% ownership interest in the entity that owns the Collection.

The Shaw Sisters argue that Greenawalt is not entitled to a charging lien, because his legal services did not create the Collection, nor, the Shaw Sisters' interest in the Collection. They also argue that Greenawalt did not obtain an affirmative recovery on their behalf.[FN4] The Shaw Sisters contend that, after Sam Shaw's death, and prior to the Settlement, they owned 100% of the Collection, but now, as a result of Settlement, they only own 50% of the Collection.

Greenawalt is entitled to an attorney's lien pursuant to Judiciary Law § 475. In support of his cross petition, Greenawalt submitted unrefuted proof that the proceeds of the Settlement were procured, in part, through his efforts. Moreover, the Collection/Fund is an affirmative recovery to which a lien may attach (see Petition of Rosenman & Colin, 850 F2d 57, supra). Contrary to the Shaw Sisters' contentions, the complaint in the Shaw action contains many claims seeking relief which has been affirmatively obtained by the Shaw Sisters as a result of the Settlement. For example, the complaint repeatedly referred to "The Theft of Plaintiff's Photographic Collection," and the first cause of action alleged that Larry Shaw breached his agency agreement "by failing and refusing to return all property belonging to plaintiff despite demands therefore." The fifth and fourteenth causes of action alleged that Larry Shaw, among others, was "in [*7]possession of parts of the Collection," and "refuse[d] to return [them] to plaintiff despite demands therefore." In the ninth cause of action, Sam Shaw alleged that Larry Shaw "falsely represented to third parties" that he "owns all rights in and to the Marilyn Monroe photographs that form a part of the Collection," that Larry should be held not to have such rights, and that Sam Shaw should be held to have rights in the Marilyn Monroe photographs.

Thus, the Shaw Sister's entitlement to the 200,00 photographic images held by Larry Shaw was clearly at issue, especially given Larry's claim that his father assigned him the marketing rights to the Marilyn Monroe photographs, which were the most valuable photographs at issue. As a result of Greenawalt's efforts, a single Collection of all of these images was created by the Settlement, and, as a result of the Settlement, the Shaw Sisters each obtained a 25% interest in the entity that owns the entire Collection of 700,000 photographic images, as well as agency and marketing rights.

With respect to the retainer agreement, the Court rejects Greenawalt's contention that he is entitled to double his hourly rate. The retainer agreement provides, in relevant part: William S. Greenawalt shall be paid double his calculated hourly fee if the undersigned obtain some or all of the contested photos, negatives, transparencies or images (collectively "images") which constitute part of the Americana Collection, the Jazz Collection, the collection of any movie or movie set on or for which Sam Shaw shot photos, the Casavetes collection, the John Wayne collection and any other collection or set of images as to which Larry Shaw is claiming ownership or will not yield possession, or if they obtain monies from Larry Shaw, some of the marketing and commercial exploitation rights to the images of Marilyn Monroe, or some or all of the missing Marilyn Monroe images, or if a substantial portion of the so called "9800" images held by Larry Shaw are recovered.

The term "obtain" is not defined in the retainer agreement. Both in the ordinary sense of the word and the reasonable expectation of the parties, the Court interprets "obtain" to mean securing 100% ownership in items described in the above cited paragraph. Further, it is black letter law that any ambiguity in a contract is construed against the drafter (Lai Ling Cheng v Mondansky Leasing Co., Inc., 73 NY2d 454,460 [1989]). The Shaw Sisters do not individually own any photo, negative, transparency or image. As a result of the Settlement, all photos, negatives, transparencies and images are owned by the Shaw Family Archives, Ltd., in which the Shaw Sisters each received a 25% interest in that entity. Accordingly, Greenawalt is not entitled to a $600 hourly rate under these circumstances.

As with Tunick's contention, Greenawalt's claim that he is entitled to his legal fees based on breach of contract and account stated are not appropriate for resolution in this Judiciary Law §475 proceeding, and the Court declines to convert the proceeding to an action pursuant to CPLR 103 (c).[FN5] Accordingly, the issue of the amount of Greenawalt's charging lien is referred to a [*8]Special Referee to hear and report pursuant to Judiciary Law §475.

III. Insurance Proceeds

As previously noted, the Receiver, Myron Beldock, filed an insurance claim for alleged damage to the Collection, which is still pending. Tunick and Greenawalt contend that any proceeds from the insurance claim are also subject to their liens. The Shaw Siblings argue the contrary and the Court agrees. Tunick admits that the insurance claim was filed by the Receiver, who has "the obligation to effectuate the resolution of the claim" (see Petitioner's Joint Reply Affirm., p. 58). The case cited by Tunick, is inapposite (see Herlihy v Phoenix Assur. Co., 274 App Div 342 [3d Dept 1948]). In that case, the attorney was hired to prosecute insurance claims arising out of losses due to several fires. Here, neither Tunick nor Greenawalt were retained to prosecute the insurance claim, which is being handled by the Receiver. Thus, in Kaplan v Reuss (113 AD2d 184, 187 [2d Dept 1985]), a charging lien was appropriate on "the proceeds of the insurance policy because they were obtained through [the attorney's] efforts." Where, as here, proceeds have not been created as a result of the attorney's efforts, imposition of a charging lien is inappropriate (see, e.g., In re Shirley Duke Assoc., 611 F2d 15 [2d Cir. 1979]). Further, even assuming the attorneys were so retained, no insurance monies have been received, and therefore, cannot be the product of their actions (see Matter of Rosentover, 247 App. Div. 137 [1st Dept 1936] [attorneys who were retained to prosecute claim for benefits under insurance disability policy and who were paid upon client's receipt of monies, were not entitled to a charging lien under Judiciary Law §475 for future disability payments]; see also Surdam v Marine Midland Bank, N.A., 198 AD2d 578 [3d Dept 1993] [attorney denied charging lien pursuant to Judiciary Law §475 where his services did not create any proceeds to which the lien could attach]).[FN6]

In light of the determinations that Tunick and Greenawalt are each entitled to a charging lien, a hearing must be immediately held to determine the amount of each attorney's lien, based upon the reasonable value of their services (see Katsaros v Katsaros, 152 AD2d 539, supra; see also Coburn v Coburn, 303 AD2d 281 [1st Dept 2003]; Mello v City of New York, 303 AD2d 564 [2d Dept 2003]; Haser v Haser, 271 AD2d 253 [1st Dept 2000]).[FN7] Pending receipt of the [*9]report and recommendations of the Referee, the Court continues the temporary restraining order, restraining the respondents from transferring, selling or assigning the Collection.

IV. Priority of Liens

Tunick, Greenawalt, and Bressler each contend that they have priority over other creditors with respect to the Collection. Tunick claims that his lien is superior to Greenawalt's lien, Martin Bressler's judgment (against Sam Shaw), the Receiver's right to commissions, and respondent TruColor's lien, if any.[FN8] Greenawalt claims that his lien is superior to Bressler's judgment.[FN9] Bressler claims that he has priority over both attorney's charging liens, citing Banque Indosuez v Sopwith, 98 NY2d 34 [2002]), and has priority over the Receiver's right to commissions.[FN10]

The issue of the priority of Tunick's charging lien as against the Receiver's right to his commissions and fees was settled by stipulation between Tunick and the Receiver. With respect to Tunick's claim that his charging lien takes precedence over Greenawalt's charging lien, neither lien has priority, because neither Tunick nor Greenawalt are competing creditors. Each attorney's charging lien is only upon his respective client's cause of action, claim or counterclaim, which attaches to their client's respective interests in the Collection.

As to the priority of Bressler's judgment over both attorneys' charging liens, Bressler points to the following language in Banque Indosuez which provides: [a]n attorney's charging lien maintains superiority over a right of setoff where the setoff is unrelated to the judgment or settlement to which the attorney's lien attached. However, we conclude that a different rule should apply here, where the setoff is the result of judgments emanating from the same transaction or instrument (Banque Indosuez, 98 NY2d at 34).

Tunick and Greenawalt correctly point out that Banque Indosuez is inapposite. That case involves the issue of whether a defendant's attorney's charging lien attaches to defendant's $2.4 million judgment awarded on defendant's counterclaim, where the plaintiff seeks to offset that amount against its $3.4 million judgment. There, the Court of Appeals determined that "where competing claims arise out of the same transaction or instrument," the plaintiff is entitled to offset the two judgments, and the charging lien will only recoverable on the net recovery (if any) based on the principle that "there must be proceeds from the litigation upon which the lien can affix" (id. at 44). Banque Indosuez is not applicable to Martin Bressler's claim for priority, because Bressler is not attempting to offset a judgment against him, his claim does not arise from [*10]the same transaction, and there are clearly proceeds from the litigation to which the charging liens of Tunick and Greenawalt attach.

At this time, however, the Court cannot determine the priorities of Tunick, Greenawalt and the Receiver vis a vis Bressler's judgment.[FN11] Given that Bressler's judgment was filed against Sam Shaw, it is unclear whether this judgment can be enforced against any part of the Collection.[FN12] Accordingly, before the Court makes any determination, the issue must be properly briefed by all parties.

Accordingly, it is

ORDERED AND ADJUDGED that the petition and cross petition are granted only to the extent that Tunick and Greenawalt each have an attorney's lien against the Collection, but not against the proceeds of any insurance settlement as a result of the insurance claim filed by the Receiver; and it is further

ORDERED that the issues of the amount of the attorney's liens are referred to a Special Referee to hear and report with recommendations, except that, in the event of and upon the filing of a stipulation of the parties, as permitted by CPLR 4317, the Special Referee, or another person designated by the parties to serve as referee, shall determine the aforesaid issue; and it is further

ORDERED that the summary judgment motion submitted by Martin Bressler, Esq. is deemed a cross petition,

ORDERED that Tunick's petition and Greenawalt's cross petition are held in abeyance pending a decision on a motion to confirm and/or reject the report of the Special Referee; and it is further

ORDERED that the parties may submit further briefs to this Court (Room 551) on the issue of the priorities of Tunick, Greenawalt and the Receiver vis a vis Bressler's judgment and on the issue of whether that judgment can be enforced against any part of the Collection, within 60 days, and Bressler's cross petition is held in abeyance pending further decision of the Court; and it is further

ORDERED that a copy of this order with notice of entry shall be served on the Clerk of the Judicial Support Office (Room 311) to arrange a date for the reference to a Special Referee; and it is further

ORDERED that, pending receipt of the report and recommendations of the [*11]Referee, the Court continues the temporary restraining order previously issued, restraining the respondents from transferring, selling or assigning the Collection.

Dated: December 10, 2004

ENTER:

_______________________

J.S.C. Footnotes

Footnote 1:Bressler should have submitted a cross petition for an order, in lieu of moving for summary judgment. However, the Court will disregard the mistake, and convert the motion to a cross petition, as no party has been prejudiced (see CPLR 2001).

Footnote 2:According to Larry Shaw, he already paid petitioner in excess of $160,000 for legal fees. Petitioner, however, contends that Larry paid $140,450.

Footnote 3:Petitioner has not established when, if ever, the invoices attached to the petition as Exhibit C were presented to Larry Shaw, and therefore, has not shown that Larry Shaw retained the statements for a sufficient period of time so that an agreement as to the amount could be deemed implied (see Molinaro v Bedke, 292 AD2d 285 [1st Dept 2002] [trial court erroneously granted summary judgment on the basis of account stated because attorneys, as proponents of summary judgment, did not offer evidence that they rendered copies of the invoices to all plaintiffs]; Tru-Temp Indus. Supply Co. v Flower City Asbestos, Inc., 283 AD2d 1003 [4th Dept 2001] [trial court erroneously granted partial summary judgment on the basis of account stated because there was no evidence that the account analysis was previously presented to the defendants for a sufficient period of time so as to constitute an account stated]; Legum v Ruthen, 211 AD2d 701 [2d Dept 1995] [trial court erroneously granted summary judgment on the basis of account stated because attorney submitted no proof as to when the bill was submitted or for how long it was held]).

Footnote 4:The Shaw Sisters further argue that Greenawalt's remedies should be limited to the manner of payment specified in the retainer agreement. The method of payment, however, does not preclude a determination as to amount of legal fees due to Greenawalt pursuant to Judiciary Law §475.

Footnote 5:In any event, even if the Court considered such a claim, no account could be stated. Greenawalt admits that he did not bill the Shaw Sisters until November 20, 2003, a few weeks before he brought his cross petition (Exhibit 7 to cross petition). In opposition to the cross petition, the Shaw Sisters contend that he hours Greenawalt spent were unnecessary, especially given his wasteful "photo by photo" approach to the Shaw action. Thus, even if the bill was actually presented to the Shaw Sisters in November, 2003, Greenawalt cannot establish that the bill was retained for a sufficient period of time so that an agreement as to the amount could be deemed implied.

Footnote 6:Even if insurance proceeds had already been obtained, a lien is supportable only where the proceeds are created through the attorney's efforts. Neither attorney has substantiated what efforts, if any, they made, and what benefits were achieved as a result of their efforts.

Footnote 7:Although the hours spent by an attorney is one of the factors to be considered in arriving at a fee award, the Referee should not place undue emphasis on the actual hours billed, particularly where skilled, long experienced, conscientious attorneys should be able to render services in substantially less time by reason of their expertise (Matter of Mergentime, 207 AD2d 453, 615 NYS2d 761 [2d Dept 1994]). It is the view of this Court that unnecessary hours were consumed by the lawyers in this case.

Footnote 8:The Court can make no determination as to the priority of Tru-Color. No information was provided about that lien, or, whether such a lien exists.

Footnote 9:Greenawalt has no position with respect to whether the Receiver has priority over his charging lien and has not sought a determination on that issue.

Footnote 10:Bressler, who originally represented Larry Shaw in the Shaw action, obtained a judgment in the sum of $102,321.10 against Sam Shaw for punitive damages and sanctions, which was filed and docketed on March 17, 1999. On November 21, 2000, the First Department reduced the judgment by striking the punitive damages award as an improper double recovery.

Footnote 11:Tunick claims that his lien, which vested years before Bressler's judgment was filed, is superior because charging liens only stand behind liens that vested prior to commencement of the litigation in which the attorney appeared (see City of New York v Paulson, 31 AD2d 895 [1st Dept 1969]). Greenawalt maintains that, as a result of a Stipulation of Settlement between the Shaw Siblings, the Shaw Family Archives, Ltd., Greenawalt and Martin Bressler, dated March 5, 2003 (relating to the method of paying Bressler the judgment amount), the determination of priority is premature because payments are being made in accordance with that stipulation.

Footnote 12:It appears that in 1994, Sam Shaw transferred the photographs (now a part of the Collection) into a trust benefitting the Shaw Sisters, before Bressler's judgment was entered and filed against Sam Shaw.