Weinberg v Sultan

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Weinberg v Sultan 2016 NY Slip Op 30272(U) February 10, 2016 Supreme Court, New York County Docket Number: 652273/2013 Judge: Cynthia S. Kern Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: Part 55 ,1 ---------------------------------------------------------------------~x SARAH WEINBERG, Plaintiff, Index No. 652273/2013 -against- DECISION/ORDER LESLIE SULTAN, ET AL. Defendants. " ~ ---------------------------------------------------------------------x HON. CYNTHIA s. KERN, J.S.C. II II Recitation, as required by CPLR 2219( a), of the papers co~sidered in the review of this motion for: l Papers Numbered I 'i Notice of Motion and Affidavits Annexed ......................... .:'.......... 1 Affirmations in Opposition to the Motion /Cross-motion ... '. ............ _ _ _ __ _ __ 2 Reply Affidavits .................................................................. :......... 3 4 Exhibits.......................................................................................... 5 Plaintiffs former attorney, Kenneth J. Glassman, has brought the present motion to withdraw as attorney for plaintiff Sarah Weinberg and to allow him to release and pay out of escrow attorneys' fees owed to him by' Sarah Weinberg. This court previously granted the motion by Mr. Glassman permitting him to withdraw as counsel for plaintiff and will now address the portion of the motion allowing him to release and pay of escrow attorneys' fees owed to him by Sarah Weinberg. There is also a cross-motion by the BrennanLaw Firm PLLC for an I :1 • order transferring the escrowed funds in the possession of Kenneth J. Glassman to an escrow ,i l i . account under the supervision of movant who is plaintiffs;:current counsel. :I 11 i In his affidavit in support of his application for attorneys' fees to tie paid to him out of the 1 [* 2] funds in escrow, Mr. Glassman alleges as follows. Mr. Glassman was retained by plaintiff pursuant to a written retainer agreement on May 30, 2od1• He was originally retained to defend 'I a pending foreclosure action for 371 W. 46th St. Howev~r, at the time he was retained, the property had already been sold. At the closing, plaintiff'!s attorney, Leslie Sultan, deposited into her escrow account $368,474.03 of the net sales proceeds: On September 9, 2014 plaintiff and defendant 22 W. 30th St. Properties LLC entered into a so~ ordered stipulition in which the II escrow from Sultan was transferred to the escrow account of Kenneth Glassman as plaintiffs ! attorney. The stipulation provided that $368,474.03 plus ibterest was "td be released to 'Kenneth J Glassman, as Attorney' and held in escrow until further.order of the court or plaintiff . . . . ior • • i withd raws with preJud.ice t he cause o f action i': resc1ss1on. " ~ In his moving pap~rs, Mr. Glassman alleges that he has a charging lien on the funds I~ ! [ I which he is holding in escrow as a result of which the court should issue an order allowing him to release the proceeds in the amount of his outstanding bill. Judiciary Law§ 475 provides: 11 .~ From the commencement of an action, special or other proceeding in any court ... 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 clients favor, and the proceeds thereof in whatever hands they may come; and the lien cannot be affected by any settlement between'Jhe parties before or after judgment, final order or determination. The court upon the petition of the client or attorney may determine and enforce the lien. ,, i :1 ti Under New York law, a charging lien under Judiciary Law§ 475. "is a security interest in i the favorable result of litigation (citation omitted), giving1the attorney equitable ownership ' ' interest in the client's cause of action and ensuring that th.e attorney can collect from the fund he '.i 'I has created for that purpose on behalf of the client." Chadbourne & Parke, LLP v. AB Recur i 11, Finans, 18 A.D.3d 222, 223 (1st Dept 2005). A charging lien is only enforceable against the I 2 'I 'I 'I [* 3] fund created in that action as there must be proceeds froni the litigation upon whi~h the lien can affix. Id. I In the present case, Mr. Glassman does not have ahy charging lien in the funds which are i " being held in the escrow account as the funds were not created as part of the litigation which Mr: i 'I Glassman commenced on behalf of plaintiff. There has been absolutely no "verdict, report, determination, decision, judgment or final order" in favor: of plaintiff in this action which resulted in the funds in escrow being created. To the ~ co~trary, " the escrowed funds were I generated as a result of the sale of plaintiffs building to rleslie Sultan, ~hich is the very transaction that plaintiff is challenging in the present action and which obcurred before Mr. i i Glassman represented plaintiff. The sole reason that the funds were placed in escrow in the first 11 instance and that plaintiff has not obtained the funds when. they were released by Leslie Sultan is ;, '! ' that she is still pursuing an appeal of this court's decision dismissing hei claim for rescission of •i the sale of her building. However, the proceeds from the sale of the building were not generated II as a result of any actions taken in this litigation as a result, of which plaintiff does not have a ,1 i charging lien in these proceeds. In his opposition to the cross-motion by plaintiffs current counsel to have the escrowed II . funds transferred to her, Mr. Glassman argues that he has .a retaining lien in the escrowed funds. ! Whether or not this is a new argument that should have been in raised iniMr. Glassman's moving II 11 papers or an argument that only needed to be raised in response to the motion by new counsel to 11 ~ ' have the escrowed funds transferred to her, the court finds that Mr. Glassman does not have a retaining lien in the escrowed funds. The Second Depart111ent has held that an attorney may not I 'I impose a retaining lien upon funds which it is holding in escrow on beha'lf of its client because it 3 [* 4] holds the funds in a fiduciary capacity on behalf of its client. Golberg & Connolly v. Graystone :( Constr. Corp., 65 A.D.3d 1082, 1084 (2nd Dept 2009). See also Schelte'r v. Schelter, 206 A.D.2d 865 (2d Dept 1994) (funds held in escrow by an attorney for a client are not subject to an Ii ,j attorneys' retaining lien). Since it is undisputed that Mr..~ Glassman is holding the funds in an I '! escrow account on behalf of his former client, he has no right to impose ·a retaining lien on these funds. 11 Based on the foregoing determination that Mr. Gllssman does not have a charging lien or I . a retaining lien on the escrowed funds, plaintiffs new C01;lnsel is entitled to have the funds transferred to her to be held in escrow. However, these funds cannot be released from escrow II ij ' pursuant to the stipulation and order of this court until th~re is a final determination of plaintiffs claim for rescission of the sale of the building, including ~ny appeal she may take of this court's determination dismissing her claim for rescission. The foregoing constitutes the decision and order of the court. Dated: -:l. hO\ \( • Enter: --~~-·°!(-+-----".___ _ ;·."......___ :....._ . i.S.C. CYNTHIA S. KERN J.S.C ., i 4 11 i'

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