A recent New York Law Journal story by Jason Grant, “Client Fee Suit Continues Against Nassau County Law Firm That Skipped Retainer Invoices,” reports that a Nassau County law firm that failed to provide its client with a written retainer agreement or an accounting of time spent working on his case will continue to face a lawsuit alleging that the firm owes him thousands of dollars in never-earned fees.
An Appellate Division, First Department, panel ruled that the lawsuit, claiming breach of an oral agreement, launched by physician Alan Dubrow against his former lawyers at Herman & Beinin must go forward and not be dismissed.
Dubrow has sued the boutique firm for what he calls the “unearned portion” of a $176,500 retainer he paid to the firm near the start of his employment discrimination action, according to the panel. The exact amount of money he wants returned was not specified by the court.
“In context of an attorney-client relationship, the attorney bears the burden of showing that the parties’ fee agreement was fair, reasonable, and fully known and understood by plaintiff,” the unanimous panel wrote.
The panel simultaneously dispensed with Herman & Beinin’s argument that Dubrow’s breach claim was barred by the “voluntary payment doctrine.” The court wrote that, “while defendants assert that plaintiff voluntarily made payments to compensate them for their services, they have not established that plaintiff had full knowledge of the relevant facts, such as the number of hours spent by defendants in connection with their representation of him. Nor did they submit any evidence to show that the amount of plaintiff’s payments was fair and reasonably related to the value of services rendered.”
On Tuesday, Herman & Beinin’s Mark Herman, who described himself as having more than 35 years of litigation experience, said that while he “respects” the First Department’s decision, he believes the panel “failed to appreciate the fact that Dubrow didn’t want a retainer.”
“There was never a retainer because he didn’t want a retainer. We’d be happy to give him a retainer,” Herman said by phone, adding that “every quarter [we took in payments from Dubrow] was earned.”
“I’m not in the business of taking money and not doing services for it. That’s wrong,” Herman said. He added that as the case progresses, his firm intends to provide an itemization of the time it billed when representing Dubrow in what he said was an age discrimination lawsuit lodged by the nephrologist after being dismissed by Beth Israel Medical Center.
But the panel, composed of Justices Sallie Manzanet-Daniels, Judith Gische, Peter Tom, Ellen Gesmer and Anil Singh, wrote in the Jan. 25 decision that Herman & Beinin had “not conclusively refute[d] plaintiff’s allegations,” and therefore its motion to dismiss had been properly denied by Manhattan Supreme Court Justice Ellen Coin.
The justices also took the Bellmore, Long Island, law firm to task for not providing Dubrow with more information about the lawyer-client relationship, and the billing and services performed. “It is undisputed that defendants never provided plaintiff with a written agreement, as required under 22 NYCRR 1215.1, and failed to provide plaintiff with written billing statements, as required by 22 NYCRR 1210.1(4),” the panel wrote in Dubrow v. Herman & Beinin, 651605/16.
“Nor does defendants’ contention that plaintiff never questioned their legal fees until the underlying matter was dismissed on summary judgment warrant dismissal,” the court continued. “Plaintiff alleges that defendants promised to return any balance at the resolution of the underlying action, and his attempts to obtain an accounting after dismissal of the action are in line with this alleged understanding.”
Jonathan Strauss, the lawyer for Dubrow, said that while it has been hard to pin down the exact amount of money owed to his client, because he “still doesn’t have a breakdown” of the services rendered by Herman & Beinin, “it’s nowhere near 176,500.”
“It’s much more of a nominal amount,” he said, while contending that Dubrow had paid Herman & Beinin the large retainer in advance of a trial or appeal, but that his discrimination action never went to trial because it was dismissed.
Strauss, a solo practitioner in Manhattan, also said that he has asked for punitive damages against the law firm, “because I think a New York County jury may look at this and find outrageous conduct in it.”
“If jurors believe the worse [about Herman & Beinin and the firm’s motives], they could decide to send the bar a message” by awarding high punitive damages, he said. Then, after pausing, he said of the entire episode and lawsuit, “It’s disturbing that it has had to come to this.”