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NY Court: Attorney Fees Controlled by Circumstances and Equities

September 6, 2019 | Posted in : Contingency Fees / POF, Fee Agreement, Fee Allocation / Fee Apportionment, Fee Award Factors, Fee Dispute, Fee Issues on Appeal, Fee Jurisprudence, Quantum Meruit

A recent New York Law Journal story by Jason Grant, “In Fee Dispute Between Personal Injury Firms in Settled Case, Lower Court’s Award, and Discretion, Stands,” reports that a law firm pursuing a contingency fee dispute against a successor law firm in a personal injury action that settled for $50,000 was rightfully awarded only $1,500 in fees, despite its argument to a lower court that it was “entitled to 40% of the net contingency fee recoverable,” a state appeals court has ruled.

“The issue of apportionment of an attorney’s fee is controlled by the circumstances and equities of each particular case, and the trial court is in the best position to assess such factors,” wrote an Appellate Division, Second Department panel, while citing Rodriguez v Ryder Truck Rental, in an opinion that underscored the trial court’s latitude and discretion in arriving at an appropriate fee apportionment where there is a fee dispute between law firms retained on contingency.

The unanimous panel also noted in the opinion that “’when there is a fee dispute between the current and discharged attorneys for the plaintiff in an action to which a contingent fee retainer agreement applies, [t]he discharged attorney may elect to receive compensation immediately based on quantum meruit or on a contingent percentage fee based on his or her proportionate share of the work performed on the whole case,’” citing Ficaro v. Alexander, quoting Wodecki v. Vinogradov.

In the case before the panel, the originally retained law firm in the underlying motor vehicle accident-based suit, the Law Offices of Andrew Park, moved in March 2018 for a determination of appropriate attorney fees and had “elected to receive a contingent percentage fee at the conclusion of this action,” the panel said.  The firm’s motion came nearly a year and a half after the underlying case, Pyong Woo Ye v. Ebrahem Izak Pasha, had settled.

Panel justices Reinaldo Rivera, Hector LaSalle, Betsy Barros and Angela Iannacci wrote in their opinion that “‘an award of … reasonable attorney’s fee[s] is within the sound discretion of the Supreme Court based upon such factors as the time and labor required, the difficulty of the issues involved, the skill required to handle the matter, and the effectiveness of the legal work performed,’” citing Wodecki v. Vinogradov, quoting Juste v. New York City Tr. Auth.

They added, “Here, Andrew Park elected to receive a contingent percentage fee at the conclusion of this action.  Given the time and labor expended by each attorney in the action, the skill required for the various work performed, and the effectiveness of each counsel’s legal work, we agree with the Supreme Court’s determination to award Andrew Park attorneys’ fees in the sum of $1,500.”