Matter of Smith

[*1] Matter of Smith 2012 NY Slip Op 52313(U) Decided on December 19, 2012 Sur Ct, Bronx County Holzman, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 19, 2012
Sur Ct, Bronx County

In the Matter of the Estate of Johanna C. Smith, Deceased.



40-A-2007/A



Beverly Smith, pro se, petitioner

Peter G. Gray, Esq., pro se, respondent

Lee L. Holzman, J.

In this SCPA 2110 proceeding the petitioner, a daughter of the decedent and the proponent in the underlying probate proceeding, seeks to fix the fee of the attorney who represented her from February 6, 2007 until she discharged him on or about April 18, 2011. In a bill dated June 16, 2011, the respondent indicated that he was owed the sum of $13,970 for legal services performed and disbursements incurred, after he credited the petitioner with $18,326.10 that was previously paid. Specifically, he requests a legal fee of $29,200, based upon an hourly charge of $400 for 73 hours of legal services and disbursements of $3,132.10. The respondent acknowledges receipt of a $16,000 retainer fee and agrees that thereafter, he received an additional $2,362.10 in partial payment of disbursements. The petition requests that the court fix the respondent's fee at $10,000 and certainly at "no more than $17,000."

The decedent died on November 1, 2006 survived by the petitioner and two other daughters, one of whom is under a disability. The only asset listed in the probate petition is a parcel of realty valued therein at $365,900. The respondent drafted the propounded instrument and his then secretary was one of the attesting witnesses. This secretary moved to another state and the respondent spent a substantial amount of time in unsuccessful attempts to arrange for the secretary's appearance at an SCPA 1404 examination. The other daughter not under a disability filed objections in the probate proceeding on March 25, 2011. To date, the will has not been admitted to probate and the realty remains unsold.

The February 9, 2007 retainer agreement executed by the petitioner and the respondent provides that the respondent shall: (1) file all documents required to probate the decedent's will; (2) contest the Public Administrator's applications for letters of administration in this estate and the [*2]estate of the decedent's predeceased husband; (3) obtain and file a NYS Estate Tax Certification and Release of Lien; (4) represent the petitioner in the sale of the realty and prepare an executor's deed; and, (5) assist and advise the petitioner with regard to the administration of the estate. The fee to be paid pursuant to the agreement is "an amount equivalent to an executor's commission on the probate assets (. . . estimated to be at least $16,000)," but in the event that the probate proceeding became contested, the attorney's fees would exceed $16,000 and be calculated on an hourly basis at the rate of $400. Notwithstanding that the petitioner paid a $16,000 retainer fee, the agreement provides that the total fee (presumably any amount in excess of $16,000) is to be paid upon the probate of the will and the sale of the real property or equity therefrom.

The petitioner asserts that after she hired the respondent she focused upon caring for her husband who died after a prolonged illness and she also suffered from health problems. Due to these problems and the failure of the respondent to advise her otherwise, the petitioner avers that she had no idea that the probate proceeding was anything other than routine until she received a March 26, 2009 letter from the respondent stating that the probate proceeding had become contested because one of her sisters "has a lawyer opposing us" and the guardian ad litem for the other sister "is also opposing us." This letter also sets forth the respondent's disbursements but does not reflect the hours of legal services rendered to that date or specifically state that the services he performed to that date and any services to be performed in the future would be charged at an hourly rate of $400. Notwithstanding that the respondent concedes that he did not provide the petitioner with a detailed list of hours and services until 2011, he contends that the petitioner knew he was spending a substantial amount of time on this matter because, on numerous occasions, she visited his office when he was performing legal services on estate matters and she also went to court with him on some occasions when the probate proceeding was on the court's calendar. In any event, the respondent avers that his March 26, 2009 letter clearly notified the petitioner that he deemed the probate proceeding contested.

A client may discharge an attorney at any time, with or without cause and, notwithstanding that the attorney obtained a retaineragreement and was discharged without cause, the amount of the attorney's compensation is determined on a quantum meruit basis (see Cohen v Grainger, Tesoriero & Bell, 81 NY2d 655 [1993]; Teichner v W & J Holsteins, Inc., 64 NY2d 977 [1985]). Quantum meruit compensation is to be determined based on the following factors: "time and labor required, the difficulty of the questions involved, and the skill required to handle the problems presented; the lawyer's experience, ability and reputation; the amount involved and benefit resulting to the client from the services; the customary fee charged by the Bar for similar services; the contingency or certainty of compensation; the results obtained; and the responsibility involved" (Matter of Freeman, 34 NY2d 1, 9 [1974] [citations omitted]).

Obviously, where the attorney discharged without cause obtained a retainer agreement, the provisions of the retainer agreement and whether its terms are customary for the attorney and the Bar in general are relevant in fixing quantum meruit compensation. The fact that the retainer agreement is a relevant consideration in determining quantum meruit compensation does not change the well-settled law that the reasonableness of legal compensation awarded to counsel for a fiduciary is within the sound discretion of the court (see Matter of Stortecky v Mazzone, 85 NY2d 518 [1985]), and that the court bears the ultimate responsibility to determine reasonable compensation regardless of the existence of a retainer agreement (see Lawrence v Graubard, Miller, 48 AD3d 1 [2007], affd 11 [*3]NY3d 588 [2008]). Furthermore, attorney-client retainer agreements are "affected by lofty principles different from those applicable to commonplace commercial contracts" (Matter of Cooperman, 83 NY2d 465, 472 [1994]). Accordingly, attorneys bear the burden of insuring that the terms of retainer agreements are fully comprehended by clients (see Jacobson v Sassower, 66 NY2d 991 [1985]), and any ambiguity in a retainer agreement will be construed in favor of the client (see Matter of Kunicki, 35 AD3d 742 [2006], lv denied 8 NY3d 816 [2007]; Matter of Schanzer, 7 AD2d 275 [1959], affd 8 NY2d 972 [1960]).

Here, a reasonable client could interpret the retainer agreement as providing that the respondent's legal fee would not exceed $16,000 or an amount equivalent to a statutory commission in the event that the attorney was discharged as soon as the proceeding became contested. The respondent's contention that the probate proceeding became contested when he encountered problems in obtaining the attendance of one of the attesting witnesses at a SCPA 1404 deposition requested by the objectant and the guardian ad litem, is questionable, at best (see EPTL 3-3.5 [b] [3] [D]). Instead, a client might assume that a probate proceeding is not contested until objections are interposed. To the extent that the retainer agreement might be viewed as ambiguous on this issue, it must be construed in favor of the petitioner (see Matter of Kunicki, 35 AD3d at 752; Matter of Schanzner, 7 AD2d at 275). Moreover, assuming, arguendo, that the court accepted the respondent's interpretation as to when the contest began, he should not have waited more than two years thereafter to apprise his client that by that time, based on his hours of legal services, he was seeking a legal fee that exceeded his initial retainer fee by $13,200. There is also a certain amount of irony in the respondent's contention that the SCPA 1404 examinations commenced the litigation of the proceeding where, as here, he was the one who elected to have his secretary serve as an attesting witness and she was the one who would not cooperate. Although the court has no reason to doubt that the respondent performed the hours of legal services he alleges he performed, he is not entitled to be compensated at $400 an hour, especially in view of the fact he failed to come even close to achieving the two primary reasons he was retained; i.e., probating the will and selling the realty.

Based upon all of the relevant factors in determining quantum meruit compensation (see Matter of Freeman, 34 NY2d at 9), the court fixes the legal fee of the respondent for services rendered in the probate proceeding in the sum of $16,000. As the respondent has not been reimbursed the sum of $770 as the balance of his disbursements, this decision constitutes the decree of the court directing the petitioner to pay the sum of $770 to the respondent. The Chief Clerk is directed to mail a copy of this decision and decree to the respondent, to the petitioner who was pro se in this SCPA 2110 proceeding and to the attorney who is now representing the petitioner in the probate proceeding

SURROGATE