Sanford F. Young, P.C. v Solovay

[*1] Sanford F. Young, P.C. v Solovay 2007 NY Slip Op 51355(U) [16 Misc 3d 1109(A)] Decided on July 11, 2007 Supreme Court, New York County Ling-Cohan, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 11, 2007
Supreme Court, New York County

Sanford F. Young, P.C., Plaintiff,

against

Norman Solovay, Esq. and Marshall and Solovay, LLP, Defendants.



101034/04



Plaintiff

Sanford F. Young, P.C.:

Sanford F. Young, P.C.

225 Broadway, Suite 2008

New York, NY 10007

(212) 227-9755

Defendants

Norman Solovay, Esq. and Marshall & Solovay LLP

Norman Solovay, Esq.

Hartman & Craven LLP

488 Madison Ave.

New York, NY 10022

(212) 754-6915

Doris Ling-Cohan, J.

Upon the foregoing papers, it is ordered that this motion is granted, and the cross motion is denied, for the reasons set forth below.

Background

This matter concerns the collection of legal fees pursuant to a document characterized as a "retainer agreement" between the plaintiff law firm, Sanford F. Young, P.C. (plaintiff or Young), and defendant attorney, Norman Solovay, Esq.[FN1] (Solovay).

The "Retainer Agreement"

A letter agreement dated May 17, 2002 (as "Revised May 30, 2002"), confirmed that Solovay was retaining Young's law firm to work with him on an "of-counsel basis" to perfect the appeal on behalf of the plaintiff-appellant wife to the Appellate Division, Second Department, in an underlying matrimonial action entitled, Kay Lowinger v Louis Lowinger, Index No. 12763/93 (Lowinger v Lowinger orthe "divorce action"), which was pending in the Supreme Court, Westchester County (see "revised retainer agreement", annexed to Affirmation of Norman Solovay, Esq. in Support of Motion [Solovay Aff. in Support], Ex. 1 and Affirmation of Sanford Young, Esq. in Support of Cross Motion [Young Aff. in Support], Ex. C). Solovay had been representing the plaintiff wife, Kay Lowinger, in the underlying divorce action. The appeal was from a judgment issued in the underlying divorce action which, among other things, dismissed Mrs. Lowinger's application for maintenance.

The revised retainer agreement provided that Young's firm was to be responsible for drafting the briefs and, at Solovay's option, oral argument of the appeal. The retainer further provided that the total fee for Young's work with Solovay on the appeal was to be a total of [*2]$70,000, payable in two stages. The first $20,000, described as the "initial retainer and non-refundable fee", was payable in two checks of $10,000 at the initial phase of the work on the appeal. It is not disputed by the parties that Solovay has paid the $20,000 towards Young's fee, and Solovay has not contested this portion of the fee.

The dispute in this matter concerns an additional fee of $50,000, payable by Solovay on a contingency basis "after the Second Department issues a decision reversing or modifying the Judgment in a manner that confirms the Plaintiff's entitlement to maintenance"[FN2] (Revised retainer agreement, at 1[emphasis supplied]). The first $10,000 of this contingency fee was payable "within 30 days after service of notice of entry of the Second Department's decision" (Revised retainer agreement at 1). The remaining sum of $40,000 was payable in five installments of $8,000, "each installment being payable every six months after it is ascertainable that the [appellate] decision is final and cannot and will not be overturned" (id. [parenthetical supplied]).

The revised retainer agreement contained the following provision regarding the categories of work not included: "This retainer does not include any motion practice, nor any proceedings subsequent to the initial appeal to the Appellate Division, such as further appellate practice, motions for leave to appeal or reargument, trials or hearings. We will include, however, motion practice to enlarge our time to perfect."

(Revised retainer agreement, at 2). The retainer agreement further prescribed that Solovay and his law firm would be responsible for paying the fee for the appeal, as follows: "This fee arrangement is between my [Young's] firm, on the one hand, and you [Solovay] individually and your firm, on the other hand, and you [Solovay] and your firm's compensation to my [Young's] firm to assist you [Solovay] on an of-counsel basis to handle this appeal. You [Solovay] and your firm acknowledge and represent that this fee will be solely your [Solovay's] and your firm's responsibility and that you [Solovay] and your firm will not seek to recover all or part of our fee from your client or adversary based upon any contingency or upon any basis other than the actual time and effort expended on the appeal. In addition, in the event that any part of our fee arrangement is deemed unenforceable for any reason, you [Solovay] and your firm agree that my firm will be entitled to recover in quantum meruit for the time and effort we expend... ."[*3]

(Revised retainer agreement, at 2 [parentheticals supplied]).

The revised retainer agreement was signed by Young, as well as by Solovay, under a line stating "Understood and Agreed". Young and Solovay also signed a letter, dated June 3, 2002, adding a provision permitting Young to accelerate the entire balance of the contingency fee if "any installment is missed and not paid within 15 days after we give you written notice via certified mail, return receipt requested" (Young Aff. in Support, Ex. D).

The Appeal in the Divorce Action

Young's firm drafted the appellant's brief and the reply brief, listing his firm as "Appellate Counsel for Plaintiff-Appellant", and describing Solovay and his firm as "Attorneys for Plaintiff"(appellant's brief) and "Attorneys for Plaintiff-Appellant Kay Lowinger a/ka Kyung Shin Lowinger" (reply brief) (Young Aff. in Support, Exs. E and G). As stated previously, the appeal was from a judgment issued in the underlying divorce action which, among other things, dismissed the application of the plaintiff wife, Kay Lowinger, for maintenance.

In a decision issued on March 31, 2003, the Appellate Division, Second Department modified the judgment of the trial court by, among other things, deleting the provision denying the request by the plaintiff wife for maintenance (Lowinger v Lowinger, 303 AD2d 723 [2d Dept 2003]). The Appellate Division concluded that the trial judge had erroneously granted the defendant husband's motion "to preclude all evidence pertaining to his earnings and imputed earnings", by applying the doctrine of judicial estoppel based upon "the plaintiff's alleged inconsistent position in the New York action wherein she asserted that the defendant was incapable of earning a living" (id., at 724). The New York action referred to by the Appellate Division was one in which Mrs. Lowinger sued in Supreme Court, New York County, seeking to enforce oral promises allegedly made by her mother-in-law, inter alia, that she would give Mrs. Lowinger and the family a wonderful home and generous support, in exchange for Mrs. Lowinger's conversion to Judaism and her agreement to raise her children as Orthodox Jews. After a trial, a jury in New York County delivered a verdict concluding that Mrs. Lowinger's mother-in-law had made enforceable oral promises that she would provide Mrs. Lowinger and the family with a wonderful home and certain financial benefits, in exchange for the religious conversion. The Second Department decision noted, however, that the Appellate Division, First Department had issued a decision reversing the judgment of the trial court in the New York County action, and dismissing Mrs. Lowinger's complaint, after concluding that her mother-in-law's alleged oral promises were unenforceable pursuant to the Statute of Frauds (General Obligations Law § 5-701 [a] [1]; Lowinger v Lowinger, 287 AD2d 39, 44-45 [1st Dept 2001][FN3], lv denied 98 NY2d 605 [2002]).

Thus, as a result of the First Department's reversal of the judgment in New York County and the dismissal of Mrs. Lowinger's complaint against her mother-in-law, the Appellate Division, Second Department, held that there was no longer any basis to apply the doctrine of judicial estoppel, which had been relied upon by the trial judge in the divorce action, to grant Mr. Lowinger's motion to preclude all evidence concerning his earnings and imputed earnings. The Second Department observed, "Judicial estoppel, or the doctrine of inconsistent positions, [*4]precludes a party who successfully assumed a certain position in a prior legal proceeding and secured a judgment therein from assuming a contrary position in another action simply because his or her interests have changed" (Lowinger v Lowinger, 303 AD2d at 724). Accordingly, the Appellate Division, Second Department ruled, "Since the defendant is not entitled to preclusion of his financial capacity, including his income and imputed income, the matter must be remitted to the Supreme Court, Westchester County for a hearing on the issue of the plaintiff's entitlement of an award of maintenance [FN4]" (id.).

Post - Appeal Dealings between the Parties

Young served the notice of entry of the Appellate Division, Second Department decision on April 10, 2003 (Young Aff. in Support, Ex. I). Solovay paid the first installment of $10,000 on the contingency fee for the appeal on or about May 19, 2003 (Young Aff. in Support, at ¶ 24). On or about October 1, 2003, Young sought payment of the installment of $8,000 towards the remaining $40,000 due on the contingency fee (Young Aff. in Support, Ex. K). In a series of letters in October, 2003, Solovay indicated that he had paid the first installment of $10,000 towards the contingency fee based upon the mistaken belief, apparently shared by Young, that the Appellate Division "had unequivocally confirmed Kay [Lowinger]'s right to maintenance" (Young Aff. in Support, Ex. N [parenthetical supplied]). Solovay noted, however, that the trial judges to whom the divorce action had been referred on remand did not agree with this position that the Appellate Division "had unequivocally confirmed ... [Mrs. Lowinger's] right to maintenance" (id.) and, in fact, had concluded that her right to maintenance still had to be ascertained. Although Solovay was given permission to move for summary judgment on the issue of Mrs. Lowinger's right to maintenance, the matter was set down for trial [FN5] (Young Aff. in Support, Exs. L and N). Solovay also indicated that he would make additional payments, if Young agrees to work with him on the further proceedings at the trial level (id.). Solovay concluded, however, that absent an understanding with Young to perform further work in the divorce action, "I must decline to make any further payments unless and until Kay's right to [*5]maintenance is conclusively established" (Young Aff. in Support, Ex. N).

In response, Young reiterated his position that the appeal was successful, triggering his right to payment of the contingency portion of his fee, as the Appellate Division had vacated the dismissal of the wife's application for maintenance and had remanded the case for a hearing and a new determination with respect to this matter (Young Aff. in Support, Ex. M). Young also rejected Solovay's suggestion that Solovay would make additional payments if Young provided assistance with further proceedings at the trial court level (id.). Young emphasized that the appeal was a separate matter, and he would require another retainer for work on the trial court proceedings (id.).

By summons and complaint filed on or about January 22, 2004, Young commenced this action to recover the sum of $40,000, plus interest, representing the remaining amount due on the contingency portion of the fee for the appeal under the retainer agreement. In the alternative, if all or a portion of the retainer agreement is deemed to be unenforceable, Young sought compensation for the appeal on a quantum meruit basis, for the time and effort he and his associate expended on the appeal (Solovay Aff. in Support, Ex. 5 [Complaint]). In his answer, Solovay denied the material allegations of the complaint, asserting, among other things, that no payment was due under the retainer agreement, as the Appellate Division decision did not, in fact, confirm Mrs. Lowinger's entitlement to maintenance (Solovay Aff. in Support, Ex. 6 [Answer]; see esp. ¶ ¶ 3,5,6). In addition, Solovay alleged that he had formed an "attorney-client relationship" with Young, and asserted an affirmative defense based upon the failure of the parties' retainer agreement to comply with the mandatory fee dispute arbitration requirements in 22 NYCRR Part 137, including the requirement that Young allege compliance with these regulations in his complaint (see Answer, at ¶ ¶ 2, 9). Solovay asserted a counterclaim against Young to refund the $10,000 he had paid towards the contingency fee under an alleged "mutual mistake of fact" (id., at ¶ 10 [second ¶ 10]).

Solovay moves to dismiss the complaint, and also seeks a protective order, staying his deposition until after the disposition of his motion to dismiss. Young cross-moves for an order pursuant to CPLR 3212, granting summary judgment in his favor, and directing Solovay to pay him the additional legal fee of $40,000, which he asserts is due pursuant to the contingency fee provision of the retainer agreement.

Discussion

Although Solovay's motion is denominated as a motion to dismiss the complaint, the supporting papers include an affirmation referring to factual matters, as well as exhibits annexing documents other than the pleadings. Accordingly, this Court will treat Solovay's motion as a motion for summary judgment (see CPLR 3211 [c]), governed by the same standard as Young's cross motion for summary judgment.

The following general principles govern motions for summary judgment. Summary judgment is a drastic remedy, which is the procedural equivalent of trial, and should not be granted where there is any doubt as to the existence of triable issues of fact (see S.J. Capelin Assoc., Inc. v Globe Mfg. Corp., 34 NY2d 338, 341 [1974]; Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]; Epstein v Scally, 99 AD2d 713, 714 [1st Dept 1984]). The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Further, in [*6]order to obtain summary judgment, the movant must "establish his cause of action or defense sufficiently to warrant the court as a matter of law in directing judgment' in his favor (CPLR 3212 [b]) and he must do so by tender of evidentiary proof in admissible form" (Friends of Animals, Inc. v Associated Fur Mfrs., Inc., 46 NY2d 1065, 1067 [1979]); see also Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). The failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853; see also Wright v C.H. Martin of White Plains Rd., Inc., 23 AD3d 295, 296 [1st Dept 2005]). Once this showing has been made, however, the burden shifts to the party opposing the motion for summary judgment to "produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which he rests his claim or must demonstrate acceptable excuse for his failure to meet the requirement of tender in admissible form" (Zuckerman v City of New York, 49 NY2d at 562).

In support of his motion, Solovay asserts that Young is not entitled to the contingency fee, as the decision of the Appellate Division did not "confirm the Plaintiff's [Mrs. Lowinger's] entitlement to maintenance". Alternatively, he argues that the retainer agreement did not comply with the mandatory fee arbitration provisions in 22 NYCRR Part 137, as well as with certain rules applicable to attorneys in domestic relations matters (see 22 NYCRR Part 1400 [Procedure for Attorneys in Domestic Relations Matters] and 22 NYCRR § 1200.11 [DR 2-106 - Fee for Legal Services]). Young asserts, however, that he is entitled to recover the full amount of $40,000 pursuant to the contingency provisions of the retainer agreement, which are in full compliance with the applicable regulations, and ethical standards, as the decision of the Appellate Division, Second Department did, indeed, "confirm" the Mrs. Lowinger's "entitlement to maintenance".

The Court concludes that it is not necessary to reach the issues raised by the parties concerning the validity of the retainer agreement, as it is clear that the decision of the Appellate Division, Second Department did not, in fact, confirm Mrs. Lowinger's "entitlement to maintenance", within the meaning of the unambiguous language of the contingency fee provision.

The language of the retainer agreement is clear and unambiguous. Solovay is required to pay the contingency fee of $ 50,000, only "after the Second Department issues a decision reversing or modifying the Judgment in a manner that confirms the Plaintiff's entitlement to maintenance" (emphasis supplied). The legal term, "confirm", means "(t)o complete or establish that which was imperfect or uncertain ... (t)o make firm or certain; to give new assurance of truth or certainty; to put aside past doubt ..." (Black's Law Dictionary 270 [5th ed 1979]). The decision of the Appellate Division, Second Department, modified the judgment of the trial court in the divorce action by, among other things, deleting the provision denying the plaintiff wife's request for maintenance (Lowinger v Lowinger, 303 AD2d at 723). The Appellate Division did not, however, "confirm the Plaintiff's entitlement to maintenance" by concluding that she was, in fact, entitled to maintenance, nor did it determine the amount of maintenance to which she was entitled. Instead, the Appellate Division merely determined that "the matter must be remitted to the Supreme Court, Westchester County, for a hearing on the issue of the plaintiff's entitlement to an award of maintenance" (id., at 724). In fact, the order portion of the decision stated that "the matter is remitted to the Supreme Court, Westchester County, for (1) a hearing and new determination with respect to the plaintiff's application for maintenance in accordance herewith [*7]..." (id., at 723).

Thus, the Appellate Division did not "confirm" that Mrs. Lowinger was entitled to maintenance. The language of the Appellate Division clearly provided that the trial court, on remand, was responsible for determining whether Mrs. Lowinger was entitled to maintenance and, if so, the amount of maintenance which should be awarded to her. The Appellate Division merely afforded Mrs. Lowinger another opportunity to establish that she was entitled to maintenance before the Supreme Court, Westchester County. As Solovay stated in his affirmation in support of his motion to dismiss, upon remand after the Appellate Division decision, the trial court declined to award Mrs. Lowinger pendente lite maintenance and legal fees (Solovay Aff. in Support, at ¶ 10). Another trial judge denied Mrs. Lowinger's motion for summary judgment on her application for maintenance, concluding that the court could not summarily impute to her former husband income based upon monies controlled by his family. Instead, Mrs. Lowinger had the burden to establish, at trial, the amount of money that her former husband was actually earning and/or receiving and what income he is currently earning and/or receiving (id.). According to Solovay, no judge was available to try the issue of Mrs. Lowinger's entitlement to maintenance and the matter was assigned to a referee who brokered a "minimal settlement", which Solovay has not disclosed (id., at ¶ 11). The outcome of the underlying divorce action before the Supreme Court, Westchester County, which Young does not dispute, demonstrates that the Appellate Division Second Department did not, in fact, "confirm" that Mrs. Lowinger was entitled to maintenance.

The retainer agreement involved in the instant matter was negotiated and drafted by two attorneys, sophisticated professionals who understood the meaning of the agreement's terms and had relatively equal bargaining power. Thus, this retainer agreement differs significantly from a retainer agreement between an attorney and a lay client, which must be construed strongly against the attorney who prepared it (see Shaw v Mfrs. Hanover Trust Co., 68 NY2d 172, 176-177 [1986]; Jacobson v Sassower, 66 NY2d 991, 993 [1985]). Plaintiff attorney is, therefore, bound by the terms of the agreement he negotiated, and, as such, having failed to obtain the necessary result at the Appellate Division, as required under the agreement, plaintiff is not entitled to recover any portion of the $ 50,000 in legal fees payable pursuant to the contingency fee provision. Therefore, summary judgment is granted in favor of Solovay, dismissing the complaint. In addition, this Court grants summary judgment in favor of Solvay on his counterclaim, and Young is directed to refund to Solovay the sum of $ 10,000 he paid towards the contingency fee.

While the Court, as indicated previously, need not reach the issue of whether such agreements between attorneys in matrimonial disputes are covered by the "Matrimonial Rules" (22 NYCRR Part 1400) and the mandatory fee arbitration provisions in 22 NYCRR Part 137, the Court observes that Young and Solovay did not have an attorney-client relationship, as contemplated by those rules.

Accordingly, it is

ORDERED that the motion for summary judgment by defendant Norman Solovay, Esq. is granted and the complaint is dismissed, with costs and disbursements to defendant as taxed by the Clerk of the Court upon the submission of an appropriate bill of costs; and it is further

ORDERED that summary judgment is granted in favor of defendant Norman Solovay, Esq. on the counterclaim, and plaintiff Sanford F. Young, P.C. is directed to refund to defendant [*8]Solovay the sum of $10,000.00 he has paid pursuant to the contingency fee provision of the retainer agreement, plus interest; and it is further

ORDERED that the Clerk is directed to enter judgment accordingly; and it is further

ORDERED that, within 30 days of entry, defendants shall serve upon plaintiff a copy of this decision and order, together with notice of entry.

This constitutes the Decision and Order of the Court.

Dated:ENTER:,

Doris Ling-Cohan, JSC Footnotes

Footnote 1: Defendant Marshall & Solovay, LLP is Solovay's former law firm.

Footnote 2: The original retainer agreement proposed by Young provided that the obligation to pay the contingency portion of the fee was triggered "within 30 days after the Second Department issues a decision reversing or modifying the Judgment" (Young Aff. in Support, Ex. B). According to Young, Solovay's revision of the retainer agreement added the language providing that the contingency fee was payable "after the Second Department issues a decision reversing or modifying the Judgment in a manner that confirms the Plaintiff's entitlement to maintenance" (emphasis supplied; see Young Aff. in Support, Ex. C and Young Reply Aff., at ¶ 6). Solovay asserts, however, that Young drafted the disputed language triggering the payment of the contingency fee (Solovay Reply Aff., at ¶ 2).

Footnote 3: The factual background of Mrs. Lowinger's troubled relationship with her former husband is discussed in the opinion of the Appellate Division, First Department.

Footnote 4: In addition, the Appellate Division, Second Department concluded that the trial judge properly denied Mrs. Lowinger's motion to set aside a stipulation that the home in which the parties had resided during their marriage would not be considered a marital asset for the purposes of equitable distribution (Lowinger v Lowinger, 303 AD2d at 724).

Footnote 5: In his affirmation in support of his motion to dismiss the complaint, Solovay gave his version of the proceedings in the trial court on the remand of the divorce action. He indicated that he was under the "misapprehension", that as a result of the decision of the Appellate Division, Second Department, the trial court would award Mrs. Lowinger retroactive pendente lite maintenance as well as legal fees (Solovay Aff. in Support, at ¶ 10). In fact, the trial court declined to award pendente lite maintenance or legal fees before a full trial of Mrs. Lowinger's application for maintenance (id.). A trial judge denied Mrs. Lowinger's motion for summary judgment on her entitlement to maintenance, concluding that the court could not summarily impute to her former husband monies controlled by his family (id.). According to Solovay, no judge was available to try the matter, and it was assigned to a referee, who brokered a "minimal settlement", which Solovay did not describe (id., at ¶ 11).