DeGregorio v Bender

[*1] DeGregorio v Bender 2010 NY Slip Op 51618(U) [28 Misc 3d 1236(A)] Decided on March 26, 2010 Supreme Court, Westchester County DiBella, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 March 26, 2010
Supreme Court, Westchester County

Eileen DeGregorio, Plaintiff,

against

Joel C. Bender, Esq., LAW OFFICES OF JOEL C. BENDER, P.C., et. al., Defendants.



993/02



Robert Curtis, Esq.

Pro-se Petitioner

Curtis & Associates, P.C.

155 Duane Street

New York, New York 10013

Herbert Monte Levy, Esq.

Attorney for Eileen DeGregorio

230 Park Avenue, 10th floor

New York, New York 10169

Robert M. DiBella, J.

This case stems from a matrimonial action in which the plaintiff, Eileen DeGregorio, (hereinafter "DeGregorio") sued her former matrimonial attorney, Joel Bender, Esq., for legal malpractice for allegedly failing to value her former husband's substantial pension plan prior to settlement of the case. In the settlement, which was placed on the record in open court, DeGregorio waived any claim with respect to the failure of Bender's office to obtain, in discovery, an evaluation of the pension plan.

After the legal malpractice action was dismissed by the Appellate Division, Second Department[FN1], W. Robert Curtis, Esq. of Curtis & Associates, P.C., (hereinafter "Curtis") moved for a quantum meruit hearing to determine the fair and reasonable value of legal services he rendered to DeGregorio in the action for legal malpractice and in his attempts to re-open the stipulation of settlement[FN2] placed on the record.

Curtis & Associates billed DeGregorio $185,515.61 dollars for the legal malpractice case. She was credited with paying a total of $81,109.87. Curtis sought the balance in quantum meruit in the amount of $104,405.74. A nine (9) day hearing took place before the Hon. Robert James Friedman, J.H.O., which resulted in a Decision dated September 28, 2006 awarding judgment to Curtis, based upon quantum meruit, in the amount of Ninety-Four Thousand Seventeen ($94,017.70) Dollars and Seventy Cents. DeGregorio appealed this decision. [*2]

By Decision and Order dated June 17, 2008, the Appellate Division, Second Department[FN3] reversed the judgment and remanded the matter back to this court for a new hearing and determination before a different Judicial Hearing Officer. The Appellate Court held that "...the hearing court failed to consider and give appropriate weight to all the relevant factors involved in valuing legal services, including the court's own finding of ethical violations committed by Curtis."[FN4]

A second quantum meruit hearing was held before this court on March 24, 26, 31, April 1, April 2, April 7, April 13 and April 14, 2009. The following exhibits were admitted into evidence: Court's collective Exhibit 1 (A - I) [FN5]; Petitioner's Exhibits 1; 2; 3; 4; 5; 6; 7; 8; 10; 11; 12-1; 12-2; 12-3; 13; 14; 23; 24; 25; 26; 27; 28; 29-1; 29-2; 30; 32; 33; 37; 43; 44; 45; Respondent's A; B; C; D; E; F; G; H; I; J; K; L; M; N; O; P; Q; R; S; and T. The court also considered DeGregorio's Post-Hearing Memorandum of Law and Curtis' Proposed Findings of Fact and Conclusions of Law.

At this new hearing, W. Robert Curtis, Esq., David M. Bushman, Esq., and John McManus, Esq. testified. Upon the credible testimony and the exhibits in evidence, the court makes the following findings of fact and conclusions of law:

Curtis earned a Master's degree in psychology from Boston University and two Master's degrees from Harvard University, one in Behavioral Sciences and another in Public Health. He also earned a Doctor of Science from Harvard University and a Juris Doctorate degree from Cardozo School of Law. Upon graduation from law school and in or about 1987, Curtis and his former wife established the firm of Curtis & Riess-Curtis, P.C. The firm is now known as Curtis & Associates. The firm limits its practice to representing plaintiffs in legal malpractice actions.

On or about May 22, 2001, DeGregorio consulted with Curtis to evaluate her legal malpractice claim against Mr. Bender. In turn, Curtis retained the services of Bernard Dworkin, Esq., to conduct an evaluation.

On or about December 18, 2001, DeGregorio retained Curtis by written retainer agreement to pursue a legal malpractice action. This retainer agreement was not a contingency fee arrangement, but set forth an hourly rate agreement. Curtis' standard hourly rates for both attorneys and paralegals were reduced for DeGregorio. Through the retainer agreement, she agreed, inter alia, to contemporaneously pay fees and costs as set forth in monthly bills that were to be sent to her and to replenish a Ten Thousand ($10,000) Dollar retainer amount upon receiving each statement. DeGregorio requested that provisions be added to the retainer agreement which stated that she could stop the malpractice litigation at any time and for any reason and that she would be permitted to participate in making all strategic decisions and could read and assist in preparing every legal document before it was served.

Curtis' office then prepared the complaint against Mr. Bender, charging for twenty-eight (28) hours of time to do so. The twenty-eight (28) hours of time spent preparing the complaint included [*3]four and a half (4 ½) hours to bind the complaint and to travel to the court for filing. Curtis testified that part of the reason he spent so many hours on the complaint was that he had frequent meetings with DeGregorio and she insisted on making numerous changes.

Mr. Bender made a motion to dismiss the legal malpractice complaint which was denied. He appealed the denial of his motion to the Second Department.

By April 2003, DeGregorio had fallen behind on her payments to Curtis and owed him Twenty-One Thousand One Hundred Twenty-Six ($21,126.56) Dollars and Fifty-Six Cents[FN6]. On or about April 14, 2003, DeGregorio wrote Curtis a letter and stated she could not meet her further financial obligations, that she could not afford to move forward with discovery, including depositions, and that any further fees owed would come out of any settlement that she received. She also directed Curtis to cease doing any further work on her case. In response, on or about April 19, 2003, Curtis sent DeGregorio a letter which, inter alia, suggested that she immediately seek independent legal counsel. Thereafter, on or about April 23, 2003, Curtis wrote DeGregorio another letter advising her that court-ordered depositions were imminent and that if she did not obtain new counsel, he would move to withdraw as counsel. On or about the next day, DeGregorio advised Curtis, by letter, that she again wished to pursue her malpractice case.

On or about May 28, 2003, a Supplemental Engagement Agreement was drafted, which provided inter alia, that Curtis would cap DeGregorio's overall payment of fees to Eighty-Nine Thousand Six Hundred Eight Dollars and ($89,608.70) Seventy Cents. Additionally, in this agreement, DeGregorio agreed to sign a release that she would not hold the Curtis firm responsible for any legal fees or costs incurred in attempting to obtain an updated authorization for pension information in the matrimonial action. This release was obtained by Curtis in response to DeGregorio's claims that Curtis and his firm had committed malpractice in seeking to have Judge Shapiro direct Mr. DeGregorio to update his pension authorization.

On June 26, 2003, Curtis sent DeGregorio a blank general release. On October 22, 2003, DeGregorio executed the release after having it reviewed by an attorney, Jack A. Addesso, Esq.

In the interim, depositions began on or about August 13, 2003. On December 1, 2003, oral argument on Mr. Bender's appeal was held before the Second Department. On December 1, 2003, DeGregorio executed a "Clarification of Engagement Agreement" agreeing to pay Curtis all fees, but that payment would be deferred until the conclusion of the case. On or about December 3, 2003, DeGregorio sent Curtis a fax telling him to cease working on her case. The representation apparently ended because DeGregorio realized her chances of winning the appeal were not favorable after attending oral argument at the Appellate Division. On February 9, 2004, the Second Department reversed the denial of Mr. Bender's motion to dismiss the legal malpractice complaint and DeGregorio's complaint against him was dismissed. See DeGregorio v. Bender, 4 AD3d 384 (2d Dept. 2004).When fixing an award of legal fees in quantum meruit, the court is required to consider such things as, inter alia, the time and skill that was required, the complexity of the matter, the experience, ability and reputation of the attorney, whether the client derived any benefit from the services, the fee usually charged by other attorneys in similar matters and whether the attorney committed any ethical violations. See Padilla v. Sansivieri, 31 AD3d 64 (2d Dept. 2006) and the [*4]cases cited therein. Curtis, as the attorney seeking an award of legal fees, has the burden of proof on each element of a quantum meruit award. See Sand v. Lammers, 150 AD2d 355 (2d Dept. 1989).

It is evident that Curtis is experienced and has the skill required to prosecute legal malpractice actions and he limits his practice to handling such matters. However, the court finds that the time required to perform these services was excessive. Thus, while the fees charged and collected were based on the original retainer agreement and the prevailing rates for handling similar matters, the excessive hours billed to perform the services exceeded fees usually charged by other attorneys in similar matters. Additionally, although Curtis reduced the "normal" hourly rates charged for both attorneys and paralegals, did not engage in double-billing and agreed to have DeGregorio act as a "paralegal" of sorts, the total fees billed and paid are excessive. It is also clear that the issues involved were not terribly complex and Curtis' aggressive and provocative reputation among his adversaries reduced any chance of the amicable settlement his client requested.

While Curtis and his firm did a large amount of work on behalf of DeGregorio, there was ultimately no benefit to DeGregorio as she lost her case entirely.[FN7] Her legal malpractice case was dismissed after she spent One Hundred Forty-One Thousand Two Hundred Eleven ($141,211.60) Dollars and Sixty Cents in legal fees.[FN8] In addition, Curtis was aware from the beginning that DeGregorio's malpractice case would be difficult to win. DeGregorio had settled her matrimonial action by stipulation of settlement, which was placed on the record in open court, and Curtis was aware that vacating such stipulations is disfavored by the courts. See e.g. Abeido v. Abeido, 54 AD3d 330 (2d Dept. 2008). Nonetheless, he eschewed his client's April 2003 request to pursue settlements talks and thereafter billed approximately Sixty-Three Thousand ($63,000) Dollars for legal fees and expenditures to continue discovery and to prepare for and conduct four (4) depositions. Additionally, the depositions were not conducted by Mr. Curtis, but by an attorney, David J. Aronstam, who Mr. Curtis led Ms. DeGregorio to believe was an associate of Mr. Curtis' law firm. Instead, the attorney who conducted the depositions was from a temporary employment agency.

DeGregorio did not definitively exercise her right to discharge Curtis until her December 3, 2003 fax to him, after she attended oral argument at the Appellate Division. It apparently became clear to her after attending oral argument that an outcome in her favor was unlikely. In viewing this matter, the court is well aware that a client's dissatisfaction with her attorney's "reasonable strategic choices regarding litigation" [See Callaghan v. Callaghan, 48 AD3d 500 [*5](2d Dept. 2008)] does not constitute cause to discharge the attorney thereby warranting forfeiture of his fee. Nevertheless, misconduct by an attorney that happens before his discharge may serve as the ground for a fee forfeiture. See Orendick v. Chiodo, 272 AD2d 901 (4th Dept. 2000).

In the instant matter, the court finds that Curtis had already obtained an estimated value of Mr. DeGregorio's pension by letter dated January 8, 2003 sent to Curtis from T.J. Kowalchuk Associates, Inc.[FN9] The estimated value of the pension was placed at One Million Five Hundred Fifty-Nine Thousand ($1,559,000) Dollars. Thus, the court finds that Curtis knew the approximate value of the pension as early as January 2003 [seven (7) months before depositions were taken] and he also knew the disfavored position of his client's claim. The record demonstrates that although his client expressed her desire to entertain settlement discussions, Curtis simply advised DeGregorio that the court could not mandate settlement talks and that discussions of settlement could not be had until after depositions were taken.[FN10] Mr. Curtis erred in this regard and the court finds that, in not pursuing settlement discussions which his client requested, he failed in his obligation to Ms. DeGregorio. See 22 NYCRR §1200.32 [DR 7-101].

Finally, it is clear that Curtis' interest became adverse to that of his client when Ms. DeGregorio began making claims that Curtis had also committed malpractice. Curtis' letter to DeGregorio dated May 28, 2003[FN11] is troublesome in that in paragraph three (3), Curtis states "(w)e have agreed to undertake this legal work for you under the following condition: You agree to sign a release clearly stating that you will not hold Curtis & Riess-Curtis, P.C., Curtis & Associates, P.C. or me in any way responsible for any legal fees...." The letter ends by stating "(i)f you agree to these provisions, please sign this supplemental engagement agreement."

An attorney may not use coercion against a client by threatening to stop work on a matter. See Brooks v. Lewin, 48 AD3d 289 (1st Dept. 2008). While Curtis did not use a threat of withdrawal to coerce a fee increase (Id.), the court finds he did exercise coercion in seeking a release. Furthermore, the court finds that, in ultimately obtaining the release, Curtis violated 22 NYCRR §1200.31 [DR 6-102] by seeking to prospectively limit both his individual and his firm's liability. See Matter of Sims, 201 AD2d 72 (4th Dept. 1994); See also Weil, Gotshal & Manges, LLP. v. Fashion Boutique of Short Hills, 56 AD3d 334 (1st Dept. 2008).

In cases where an attorney has breached his professional obligations to a client relating to his representation, forfeiture of his fee has been deemed to be warranted. See Brooks v. Lewin, supra ; see also Campagnola v. Mulholland, Minion & Roe, 76 NY2d 38 (1990). In the instant case, while Curtis advised DeGregorio to have independent counsel review the release that he had given her, there is no evidence in the record that DeGregorio was advised that she should consult with independent counsel to discuss the circumstances under which she was signing such a release. Additionally, Mr. Curtis ignored Ms. DeGregorio's instructions to engage in voluntary settlement discussions, which precluded Ms. DeGregorio's possible recovery through settlement.

An attorney can be discharged for cause when he has engaged in misconduct, did not [*6]prosecute his client's case in a diligent manner, has otherwise handled the case improperly or has committed malpractice. See Coccia v. Liotti, 70 AD3d 747 (2d Dept. 2010) and cases cited therein. The court finds that Curtis' ethical breaches coupled with his excessive billable hours warrants Curtis' forfeiture of a portion of his fee.

As such, the court finds that Curtis is not entitled to Sixty-Seven Thousand Five Hundred Ninety-Four ($67,594.03) Dollars and Three Cents, which represent the fees and expenses incurred from April 18, 2003 through October 22, 2003[FN12] when DeGregorio requested that Curtis pursue settlement discussions and Curtis failed to do so. Additionally, the court finds that spending 28.80 hours to draft the initial complaint was excessive, Curtis is not entitled to the Three Thousand Five Hundred Eighty ($3,580.00) Dollars he charged for working on the initial Complaint. The court also finds that Curtis billed excessively for the time and work expended in opposing defendant Bender's Motion to Dismiss (89.80 hours) which totaled Sixteen Thousand Two Hundred Twenty ($16,220.00) Dollars in legal fees. Finally, the court finds that Curtis is not entitled to the Nine Thousand Nine Hundred Forty-Eight ($9,948.16) Dollars and Sixteen Cents he billed from December 3, 2003 (the date DeGregorio definitively instructed Curtis to stop all work) through June 30, 2004 which was the date of his last bill.

Accordingly, the total amount that must be forfeited by Curtis is $97,342.19. The total fees charged are $185,515.61. These fees are reduced to $88,173.42 ($185,515.61- $97,342.19 = $88,173.42). Plaintiff has paid Mr. Curtis $81,109.87. Thus, Mr. Curtis is entitled to receive an additional $7,063.55.

Neither party shall be entitled to legal fees or costs on this application.

This constitutes the Decision and Order of the court.

Settle Judgment.

DATED: March 26, 2010

White Plains, NY____________________________

Hon. Robert DiBella, AJSC

Robert Curtis, Esq.

Pro-se Petitioner

Curtis & Associates, P.C.

155 Duane Street

New York, New York 10013

Herbert Monte Levy, Esq.

Attorney for Eileen DeGregorio

230 Park Avenue, 10th floor

New York, New York 10169 Footnotes

Footnote 1: See DeGregorio v. Bender, 4 AD3d 384 (2d Dept. 2004).

Footnote 2:The stipulation of settlement of DeGregorio's matrimonial action was placed on the record on January 20, 1999. Part of this settlement was that each party waived their respective claim to the other's pension. Mr. DeGregorio's pension had not been appraised at that time.

Footnote 3: See DeGregorio v. Bender, 52 AD3d 645, 860 NYS2d 193 (2d Dept. 2008).

Footnote 4: See DeGregorio v. Bender, 52 AD3d 645, 860 NYS2d 193 (2d Dept. 2008).

Footnote 5: This Exhibit is the entire record of the first quantum meruit hearing, which included the testimony of Eileen DeGregorio.

Footnote 6: See Respondent's Exhibit "Q" in evidence.

Footnote 7: The court does note that had DeGregorio won her case, she stood to gain approximately Seven Hundred Fifty Thousand ($750,000) Dollars which represents her equitable distribution share of her husband's pension.

Footnote 8: Ms. DeGregorio had paid $116,211.60 in legal fees to Mr. Curtis, plus she was ordered by the court to pay a $26,000 legal fee to her ex-husband when Mr. Curtis sought an updated authorization to obtain Mr. DeGregorio's pension information in the underlying matrimonial case instead of in the legal malpractice action. Ms. DeGregorio ultimately paid these legal fees to her ex-husband.

Footnote 9: See Petitioner's Exhibit 1-2.

Footnote 10: See p. A153 of Court's Exhibit 1-A (Vol. I).

Footnote 11: See Petitioner's Exhibit 1-10.

Footnote 12: April 18, 2003 was the date of DeGregorio's first instruction to Curtis to stop work. October 22, 2003 was the date that DeGregorio signed the Release.