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Appellate Panel: Law Firm Deserve Higher Fee Award

December 20, 2016 | Posted in : Fee Award, Fee Dispute, Fee Dispute Litigation / ADR, Fee Issues on Appeal, Lawyering, Unpaid Fees

A recent New York Law Journal Law story, “Law Firm Deserved Higher Fee Award, Panel Says,” reports that a Manhattan-based law firm has more than tripled an award linked to unpaid legal fees after a state appeals court found it had to "zealously represent" its client even as it was trying to withdraw as counsel.

The Appellate Division, First Department, panel said in an unsigned decision that Davidoff Hutcher & Citron must be paid $73,478 in fees, rather than the $27,291 awarded by Manhattan Supreme Court Justice Ira Gammerman in 2015.

The panel further modified Gammerman's decision by awarding $28,300 in prejudgment interest, for a total of $101,778. Gammerman had decided no interest was due.

Justices Angela Mazzarelli, Dianne Renwick, Rosalyn Richter, Sallie Manzanet-Daniels and Paul Feinman found in Davidoff Hutcher v. Smirnov, 156137/12, that Davidoff Hutcher was "required to continue to zealously represent defendants until the court granted its motion to withdraw."

The justices said "it was incorrect for [Gammerman] to refuse to consider any value for plaintiff's work from the time it moved by order to show cause to withdraw."  That was especially true, they noted, where a separate lower court took six months to grant an application for the firm to withdraw as counsel to its client.

The underlying case centered on a $2 million breach of contract action tied to undeveloped property in the Bronx, said Joseph Polito, a Davidoff Hutcher associate who worked on the case.  Eventually, he said, it became clear to his firm that his clients, Ioori Smirnov and Irina Stavrovskaya, were not going pay their bills.

The firm brought an order to show cause motion, asking to be removed as counsel.  Later, it sued Smirnov and Stavrovskaya for unpaid fees.  Their lawyer, Mario DeMarco, did not return a call seeking comment.