Biscardi v Restaurant Depot

[*1] Biscardi v Restaurant Depot 2013 NY Slip Op 51340(U) Decided on August 6, 2013 County Court, Suffolk County Tarantino, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 August 6, 2013
County Court, Suffolk County

Joseph Biscardi, Plaintiff(s)

against

Restaurant Depot, Defendant(s)



13572/2010



Gruenberg Kelly Della PC

by: Anthony A. Ciaccio Esq

700 Koehler Ave

Ronkonkoma NY 11779

631-737-4110

Cartier Bernstein Auerbach & Dazzo PC

by: Kenneth A. Auerbach Esq

100 Austin St Bldg 2

Patchogue NY 11772

631-654-4900

Andrew G. Tarantino Jr., J.

NATURE OF THE CASE

This is an application by Gruenberg Kelly Della PC [hereinafter GRUENBERG] to distribute attorneys fees between it and Plaintiff's former attorneys, Cartier Bernstein Auerbach & Dazzo PC [hereinafter CARTIER]. In October 2012, the underlying action was transferred to the County Court, Suffolk County, Hon. James P. Flanagan, pursuant to NY Civ. Pract. Laws & Rules (CPLR) §325(d). In February 2013, GRUENBERG obtained a settlement of $195,000.00. By Order to Show Cause, dated June 4, 2013, GRUENBERG is seeking a 90% distribution of the contingency fee based upon a $195,000.00 settlement. On July 1, 2013, the Hon. James P. Flanagan recused himself and the motion was transferred to this Court. On July 22, 2013, this [*2]Court conducted a Settlement Conference with both counsel without success. The motion is determined as set forth below.

HISTORY

This history is based upon the documents submitted by both counsel. On April 9, 2010, CARTIER filed a summons and verified complaint on behalf of Joseph Biscardi which alleged, among other things, that on January 12, 2009, Biscardi was injured on the Restaurant Depot premises when a forklift struck a cart on which was stacked boxes of frozen chickens, which then fell on him. On May 11, 2010, Restaurant Depot filed a Verified Answer with various discovery demands. On October 27, 2010, CARTIER prepared and served a Verified Bill of Particulars which alleged that the stack of boxes that fell onto Biscardi was about 6 feet high. It also set forth Biscardi's alleged injuries which included, among other things, left shoulder injuries, rotator cuff sprains, cervical radiculitis, C6-C7 disc protrusion, lumbar radiculitis, L4-L5 disc herniation, L5-S1 disc herniation, left knee sprain, and restricted ranges of motion. Biscardi's Bill of Particulars further accounted for about $12,896.00 in special damages which were primarily medical expenses. On November 16, 2010, CARTIER attended a Preliminary Conference which resulted in a discovery schedule. In addition to the usual demand for medical authorizations, etc., depositions were to be conducted by February 3, 2011. CARTIER conducted and defended those depositions. On October 27, 2011, a Compliance Conference was held where it was stipulated that all discovery was completed and the matter was ready for trial. CARTIER filed the Note of Issue (with jury demand) and Certificate of Readiness on November 15, 2011.

On June 20, 2012, Joseph Biscardi discharged CARTIER and entered into a retainer agreement with GRUENBERG which provided for the customary thirty-three and one-third percent contingency fee of the gross sum recovered. In August 2012, GRUENBERG received Biscardi's file from CARTIER. In February 2013, GRUENBERG settled the matter for $195,000.00.

According to CARTIER, it rejected Restaurant Depot's initial $5,000.00 settlement offer. Later, when Restaurant Depot raised its offer to $20,000.00, CARTIER did not accept it. Instead, CARTIER conveyed the offer to Biscardi and explained that the low offers were the result of Restaurant Depot disputing the injuries. CARTIER stated that Restaurant Depot was aware that Biscardi had a prior serious injury from an incident at a local water park just two years earlier. CARTIER's records noted Biscardi's medical information from 2007 which reflected that he had severe neck pain and back pain radiating down his legs from that prior incident. CARTIER's notes indicated that Biscardi "doesn't recall where treated" following the prior incident. CARTIER further explained that Restaurant Depot's self insured status was an additional obstacle to negotiating a higher settlement: until Restaurant Depot offered its $50,000.00 retention coverage, the carrier could not offer a higher settlement. CARTIER's records noted that the carrier was awaiting Restaurant Depot to tender its $50,000.00 so that the carrier could proceed to negotiate further with CARTIER. Based upon CARTIER's notes, it appeared that the carrier was entertaining a higher settlement offer until early 2012 when the discussions appeared stalled. CARTIER stated to Restaurant Depot that it was prepared to [*3]proceed with trial if a settlement could not be reached. Even though the matter was marked ready for trial, CARTIER continued to negotiate with the carrier. According to CARTIER's affirmation, and records, it demanded a settlement of $175,000.00 from Restaurant Depot.

GRUENBERG asserted that it is entitled to 90% of the contingent fee because "Cartier Bernstein Auerbach & Dazzo P.C. was only able to procure a $20,000.00 offer to settle." GRUENBERG added that Restaurant Depot did not agree to a higher settlement through CARTIER because of Biscardi's prior injury. Even so, GRUENBERG believed that CARTIER failed to "investigate critical causation issues" and that upon receiving the case GRUENBERG ordered new medical tests which it believed led to the higher settlement it obtained.GRUENBERG's motion included an affidavit executed by Biscardi.

Biscardi acknowledged that CARTIER handled his case until he retained GRUENBERG in June 2012. He said he would often call for updates on his case, but CARTIER was unable to tell him the status. He also stated his belief that CARTIER was not prepared for his deposition because on the morning of the deposition his attorney produced a surveillance video they viewed together for the first time. He acknowledged that CARTIER conveyed to him the $20,000.00 settlement, and added that he believed that CARTIER was "no longer focused on preparing" his case. He alleged that CARTIER tried to convince him to accept the offer, and added that it appeared that CARTIER "did nothing further on my case in order to protect my interests or to increase the settlement."[FN1] In Biscardi's opinion, CARTIER "should be entitled to their fee based solely on the $20,000.00 settlement offer they obtained."

ANALYSIS

Where an attorney commences a personal injury action in New York State courts, the attorney has a statutory lien which attaches to any final order or settlement. See, NY Judiciary Law §475. Where a dispute over compensation arises between an attorney, who is discharged by the client without cause, and the incoming attorney, the outgoing attorney may elect to take compensation on the basis of a presently fixed dollar amount based upon quantum meruit or, in lieu thereof, the outgoing has a right to elect a contingent percentage based on the proportionate share of the work performed on the whole case. Lai Ling Cheng, 73 NY2d 454, 539 N.E.2d 570, 541 N.Y.S.2d 742 (1989). Where an election is not made at the time of discharge, the presumption should be that a contingent fee has been chosen. Matter of Cohen v Grainger, Tesoriero & Bell, 81 NY2d 655, 622 N.E.2d 288, 602 N.Y.S.2d 788 (1993). Where the client's

claims with respect to the conduct of her former attorney consist solely of dissatisfaction with reasonable strategic choices regarding litigation, such choices do not, as a matter of law, constitute cause for the discharge of an attorney. Callaghan v Callaghan, 48 AD3d 500, 852 N.Y.S.2d 273 (2d Dep't 2008). Personality conflicts, misunderstandings and differences of opinion "having nothing to do with impropriety by the lawyer do not constitute cause." Filler v Motta, 35 Misc 3d 1215(A), 951 N.Y.S.2d 85 (Table) (NY City Civ. Court 2012), citing, Allstate [*4]Ins. Co. v. Nandi, 258 F. Supp. 2d 309 (S.D.NY 2003). A for-cause finding requires a "significant breach of a legal duty." Filler v Motter, id. In distributing the attorney's fees between prior and current counsel, the court should look at the amount of time spent by each counsel in the action, the nature of the work performed, and their relative contributions. Pearse v Delehanty, 105 AD3d 1023, 964 N.Y.S.2d 557 (2d Dep't 2013). See also, Kottl v Carey, 85 AD3d 870, 925 N.Y.S.2d 187 (2d Dep't 2011). Where there is a fee dispute between attorneys, the amount due an outgoing attorney is based on the proportionate share of the work performed. Russo v City of New York, 48 AD3d 540, 853 N.Y.S.2d 87 (2d Dep't 2008).

CARTIER obtained a statutory lien on this matter in April 2010 when it commenced the underlying action for personal injuries. When its files were transferred to GRUENBERG, CARTIER did not seek payment for the value of its services to that date so it should have been presumed that it would be seeking payment by way of the contingency fee. However, before distributing any attorney's fees in this matter, the Court must determine if Biscardi discharged CARTIER for cause.

There is no black-letter definition of "for cause" when discharging an attorney. The Court's only guidance is prior decisional law of what has, or has not, been held to be "for cause." Personality conflicts and misunderstandings fail to meet the threshold, but a"significant breach of a legal duty" does qualify as "for cause." Examples of a "significant breach of legal duty" have been when an attorney interfered with a client's right to settle; or when an attorney failed to commence an action until days before the statute of limitations expired. No such allegations were raised in Biscardi's affidavit. On the contrary, CARTIER commenced the action by preparing and filing a summons and verified complaint; prepared and served a Bill of Particulars; conducted and defended depositions; attended Court conferences; completed discovery;

and had the case marked ready for trial within about 17 months.[FN2] Biscardi's belief that CARTIER did nothing to protect his interests cannot be supported by the record before this Court. Protecting a client's interests is not based upon the amount of an obtained settlement, but by how promptly the attorney uses Court intervention when a settlement cannot be reached. CARTIER, despite Restaurant Depot's resistance to settle, moved this case to trial, thereby protecting Biscardi's interests. This Court finds no merit to the claim that CARTIER's discharge was "for cause." Further, this Court cannot ignore that in this motion both GRUENBERG and Biscardi agreed that CARTIER is entitled to a contingency fee, albeit only upon the $20,000.00 offer. This belies any claim that CARTIER was discharged "for cause" because such an attorney would not be entitled to any fee.

In determining the apportionment of the attorneys' shares of the $64,935.00, similarly [*5]there is no black-letter formula. The Court must be guided by prior decisions. In Matter of Wingate, Russotti & Shapiro LLP v Friedman, Khafif & Assoc., 41 AD3d 367, 839 N.Y.S.2d 469 (1st Dep't 2007), the former attorney negotiated and accepted prior to client approval a $600,000.00 settlement, but the current attorney negotiated a $950,000.00 settlement. The former attorney did all of the investigatory work, prepared the pleadings and discovery, appeared for conferences, took and defended depositions; in other words, the former attorney did the bulk of the work. In that case, the Court awarded the former attorney his contingent fee on the $600,000.00 settlement, and awarded the current attorney its fee on the additional $350,000.00 it negotiated. In Pearse v Delahanty, supra, 964 N.Y.S.2d 557, where the former attorney obtained a $100,000.00 settlement, but the current attorney won a significant award after trial, the Court awarded 20% of the net contingency fee to the former attorney. In Kottl v Carey, supra, 925 N.Y.S.2d 187, where the former attorney completed extensive investigations, compiled various police and medical reports, and drafted and filed a complaint before being discharged, but the current attorney filed a new complaint, prepared bills of particulars, attended a preliminary conference, and received a $10,000.00 settlement after that conference, that Court awarded 20% of the contingency fee to the prior attorney. In Russo v City of New York, supra, 853 N.Y.S.2d 87, where the former attorney represented the client until it was substituted seven years later by the current attorney who obtained a $3.2 million settlement, the Court awarded 60% of one-third of the settlement to the former attorney.

This Court distinguishes the facts and circumstances herein from the facts set forth in Matter of Wingate, Russotti & Shapiro LLP v Friedman, Khafif & Assoc., supra, 839 N.Y.S.2d 469. In that case, the former attorney had accepted the lower settlement offer on behalf of the client before it was offered to the client. In this case, CARTIER did not accept any settlement offer on behalf of Biscardi. Instead, CARTIER communicated the offers to Biscardi which were then rejected. As stated above, CARTIER made a further demand of $175,000.00 clearly indicating that CARTIER continued to work towards a settlement. The fact that Biscardi sought other counsel instead of awaiting his trial might speak more to his impatience than to any breach of a legal duty by CARTIER. Overall, CARTIER commenced the underlying personal injury action, filed pleadings, prepared Bills of Particulars, took and defended depositions, attended Preliminary and Compliance Conferences, filed the Note of Issue, and continued to make demands on behalf of Biscardi. After reviewing the apparent amount of time spent by each counsel in the action [FN3], the nature of the work performed, their relative contributions, and proportionate share of the work performed, this Court determines that the distribution of the thirty-three and one-third percent contingency fee is to be apportioned as follows:

- CARTIER BERNSTEIN AUERBACH & DAZZO PC is awarded 45% of the thirty-three and one-third percent contingency fee of $175,000.00 representing the last demand made by CARTIER, or $26,223.75; and

- GRUENBERG KELLY DELLA PC is awarded 55% of the thirty-three and one-third [*6]percent contingency fee of the $175,000.00, together with 100% of the thirty-three and one-third percent contingency fee of the additional $20,000.00 it obtained, or $38,711.25.

This constitutes the decision and order of the Court.

Submit Judgment.

ENTER

____________________________________

Judge Footnotes

Footnote 1: GRUENBERG's argument that a hearing is required because CARTIER disputed this statement was unpersuasive. Biscardi's statement is addressed further below.

Footnote 2: This Court was made aware that in September 2010, Restaurant Depot moved to preclude Biscardi's testimony based upon an alleged failure to provide a Bill of Particulars and other disclosure. CARTIER provided that disclosure before the motion was determined by the Court. Despite that motion, the matter was made ready for trial in about 17 months.

Footnote 3: Both counsel were asked by the Court to submit time records. However, because of the nature of the contingency fee arrangement, actual time records were unavailable. The few records produced offered the Court little assistance in assessing time spent.