Brooklyn Bar Association helps attorneys improve their resumes during COVID-19

Richard Klass in white shirt speaking at Brooklyn Bar Association, helping attorneys dealing with unemployment during COVID-19 pandemic.
Richard Klass (pictured), second vice president of the Brooklyn Bar Association, moderated the panel, which included attorney Andrea Bonina and retired attorney David Sarnoff. Screenshots via Zoom

Reported by Rob Abruzzese, Legal Editor
opens in a new windowBrooklyn Daily Eagle
May 26, 2020

“More than two million New Yorkers have filed for unemployment since the COVID-19 pandemic started, and lawyers are not immune. To help laid-off attorneys and people who are simply looking for a new job, the Brooklyn Bar Association held a continuing legal education seminar to help ensure that lawyers are putting their best foot forward.

“On Monday, May 18, Richard Klass, second vice president of the Brooklyn Bar Association, moderated a two-hour CLE entitled, “Resume Building and Interview Skills” along with panelists Andrea Bonina and David Sarnoff….”

#COVID19 #BklynEagle #BrooklynBarAssoc #CourtStreetLawyer


R. A. Klass
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Scales of justice

When Clients Don’t Pay Their Lawyers

Red text reading "Always the Last to Know" with blue text "Be Paid" superimposed over the word "know" illustrating article about legal fees.

The crisis has been averted. The lawyer did a great job for his client. The lawyer sent his client the final bill for services rendered. Unfortunately, the client now had other bills to pay and the legal problem the lawyer dealt with was starting to appear very small in the rearview mirror.

The lawyer came to Richard A. KlassYour Court Street Lawyer, to sue the client to collect on the outstanding bill.

Complaint for Legal Fees Filed against Client

The lawyer commenced an action against his client alleging several causes of action in the complaint, including:

Breach of contract: A written retainer agreement with an attorney is an enforceable contract. As held in Jacobson v Sassower, 66 NY2d 991, 993 [1985], “as a matter of public policy, courts pay particular attention to fee arrangements between attorneys and their clients. An attorney has the burden of showing that a fee contract is fair, reasonable, and fully known and understood by the client.”

Assuming that the fee arrangements were fair to the client, the lawyer may establish his prima facie entitlement to judgment as a matter of law against the client on the cause of action alleging breach of contract by submitting evidence of the existence of a contract, the lawyer’s performance under the contract, the client’s breach of the contract, and resulting damages. SeeJoseph W. Ryan, Jr., P.C. v Faibish, 136 AD3d 984 [2d Dept 2016].

Account Stated: Many times, an attorney is able to prove that he sent his client monthly invoices and the client never said one word about fees; then, when the bill comes due, the client ‘wakes up’ and starts objecting to all of the attorney’s charges.

An attorney can make out a prima facie showing of his entitlement to summary judgment on an “account stated” claim by providing documentary evidence of the invoices, and an affidavit stating that he sent the invoices on a monthly basis to defendant, and that defendant received the invoices and failed to object to the invoices until this litigation. SeeGlassman v Weinberg, 154 AD3d 407 [1st Dept 2017].

Quantum Meruit: This Latin phrase basically means that one should be paid the reasonable value of services rendered on behalf of another.

If the terms of a retainer agreement are not established, or if a client discharges an attorney without cause, the attorney may recover only in quantum meruit to the extent that the fair and reasonable value of legal services can be established. SeeSeth Rubenstein, P.C. v Ganea, 41 AD3d 54 [2d Dept 2007]. A cause of action for quantum meruit requires a showing of “a plaintiff’s performance of services in good faith, acceptance of those services by a defendant, an expectation of compensation and proof of the reasonable value of the services provided.” SeeHyman v Schwartz, 127 AD3d 1281, 1282 [3d Dept 2015].

Pre-litigation Considerations

Before an attorney files a lawsuit to recover legal fees, there are a number of considerations as to whether it is worth doing. The commencement of a lawsuit by an attorney against his client ought to be the last resort after an attempt to resolve nonpayment. While not exhaustive, some questions to ask before suing a client may be:

  • Did the attorney achieve a favorable result? While not necessarily a defense, the client in unsuccessful litigation may perceive that the attorney provided no value.
  • Is the client judgment-proof? Will any judgment actually be collectible?
  • Is there a written retainer agreement? It may be required by Uniform Rules of Court Part 1215.
  • Were contemporaneous time records kept?
  • Was the client sent detailed bills at regular intervals?
  • Has the client threatened to sue for legal malpractice? An estimated 40% to 50% of legal malpractice cases emanate from an attorney’s collection case.
  • Is the amount of unpaid fees large enough to justify bringing an action?
  • Is there a requirement for service of a notice of the availability of fee dispute arbitration under Uniform Rules of Court Part 137.
  • Is there the possibility of pursuing a charging lien on the case, or a retaining lien on the file?
  • How long has the clock been ticking on the dispute? The statutes of limitations are three years for the client to sue for legal malpractice and six years for the attorney to sue the client to collect his fees.

– Richard A. Klass, Esq.


Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.com with any questions.

Prior results do not guarantee a similar outcome.

© 2020 Richard A. Klass
Credits:
Image at top of page: Richard A. Klass

R. A. Klass
Your Court Street Lawyer

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Scales of justice

Legal malpractice action dismissed based upon doctrines of res judicata and collateral estoppel

The Appellate Division, in Kleinman v Weisman Law Group, P.C., 176 AD3d 1046 [2d Dept 2019], dismissed a former client’s legal malpractice action based upon the doctrines of res judicata and collateral estoppel. The court stated as follows:

In 2013, the defendant Weisman Law Group, P.C. (hereinafter the defendant firm), commenced an action against the plaintiff to recover unpaid legal fees in the Nassau County District Court. The plaintiff asserted a counterclaim, alleging that he was overbilled by the defendant firm. A judgment was entered in favor of the defendant firm and against the plaintiff. The plaintiff appealed the judgment of the Nassau County District Court to the Appellate Term of the Supreme Court for the Ninth and Tenth Judicial Districts, which affirmed the judgment (see Weisman Law Group, P.C. v. Kleinman, 60 Misc.3d 133[A], 2018 N.Y. Slip Op. 51042[U], 2018 WL 3309514 [App Term, 2d Dept, 9th & 10th Jud Dists 2018] ). In 2016, the plaintiff commenced the instant action against the defendants asserting causes of action alleging, inter alia, breach of contract and legal malpractice.

Scales of justice illustrating article about legal malpractice.

The plaintiff contends that the doctrines of res judicata and collateral estoppel do not apply in the instant case, as the Nassau County District Court lacked subject matter jurisdiction over his counterclaim in the prior action. Contrary to the plaintiff’s contention, the Nassau County District Court did have jurisdiction over his counterclaim pursuant to Uniform District Court Act Section 208(b), as the counterclaim was for money only. The doctrine of res judicata precludes the plaintiff from litigating the claims set forth in his complaint, as a judgment on the merits exists in the prior action between the same parties involving the same subject matter (see Matter of Josey v. Goord, 9 N.Y.3d 386, 389, 849 N.Y.S.2d 497, 880 N.E.2d 18; Matter of Hunter, 4 N.Y.3d 260, 269, 794 N.Y.S.2d 286, 827 N.E.2d 269). New York has adopted the transactional analysis approach to res judicata, so that once a claim is brought to a final conclusion, all other claims between the same parties or those in privity with them arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy (see Matter of Josey v. Goord, 9 N.Y.3d at 389–390, 849 N.Y.S.2d 497, 880 N.E.2d 18; Matter of Hunter, 4 N.Y.3d at 269, 794 N.Y.S.2d 286, 827 N.E.2d 269; *124 O’Brien v. City of Syracuse, 54 N.Y.2d 353, 357, 445 N.Y.S.2d 687, 429 N.E.2d 1158; Greenstone/Fontana Corp. v. Feldstein, 72 A.D.3d 890, 893, 901 N.Y.S.2d 643).

Furthermore, the plaintiff’s causes of action are barred by the doctrine of collateral estoppel, which precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same (see Ryan v. New York Tel. Co., 62 N.Y.2d 494, 500, 478 N.Y.S.2d 823, 467 N.E.2d 487; Williams v. New York City Tr. Auth., 171 A.D.3d 990, 97 N.Y.S.3d 692). The doctrine of collateral estoppel applies here, as the issues in both actions are identical, the issue in the prior action was actually litigated and decided, there was a full and fair opportunity to litigate the action, the issue previously litigated was necessary to support a valid and final judgment on the merits, and the defendant Rachel J. Weisman was in privity with the defendant firm (see Conason v. Megan Holding, LLC, 25 N.Y.3d 1, 17, 6 N.Y.S.3d 206, 29 N.E.3d 215; Williams v. New York City Tr. Auth., 171 A.D.3d at 991–992, 97 N.Y.S.3d 692; Karimian v. Time Equities, Inc., 164 A.D.3d 486, 83 N.Y.S.3d 227).

R. A. Klass
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In an action involving Judiciary Law Section 487…

In an action involving Judiciary Law Section 487, the court considered the issue as to what type of matter fits into the definition in the statute, holding:

Contrary to the defendants’ contention, the cause of action alleging a violation of Judiciary Law Section 487 was not duplicative of the cause of action alleging legal malpractice. “ A violation of Judiciary Law Section 487 requires an intent to deceive, whereas a legal malpractice claim is based on negligent conduct ” (Moormann v Perini & Hoerger, 65 AD3d 1106, 1108 [2009] [citation omitted]; see Lauder v Goldhamer, 122 AD3d 908, 911 [2014]; Sabalza v Salgado, 85 AD3d 436, 438 [2011]).

Nevertheless, the Supreme Court should have granted that branch of the defendants’ motion which was for summary judgment dismissing the cause of action alleging a violation of Judiciary Law Section 487. A chronic extreme pattern of legal delinquency is not a basis for liability pursuant to Judiciary Law Section 487 (see Dupree v Voorhees, 102 AD3d 912, 913 [2013]). Further, the plaintiffs failed to allege sufficient facts demonstrating that the defendant attorneys had the “ intent to deceive the court or any party ” (Judiciary Law Section 487 [1]; see Schiller v Bender, Burrows & Rosenthal, LLP, 116 AD3d 756, 759 [2014]; Agostini v Sobol, 304 AD2d 395, 396 [2003]). Allegations regarding an act of deceit or intent to deceive must be stated with particularity (see CPLR 3016 [b]; Facebook, Inc. v DLA Piper LLP [US], 134 AD3d 610, 615 [2015]; Armstrong v Blank Rome LLP, 126 AD3d 427 [2015]; Putnam County Temple & Jewish Ctr., Inc. v Rhinebeck Sav. Bank, 87 AD3d 1118, 1120 [2011]). That the defendants commenced the underlying action on behalf of the plaintiffs and the plaintiffs failed to prevail in that action does not provide a basis for a cause of action alleging a violation of Judiciary Law Section 487 to recover the legal fees incurred.

Bill Birds, Inc. v Stein Law Firm, P.C., 164 AD3d 635, 637 [2d Dept 2018]

R. A. Klass
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If attorney regularly invoices client and client doesn’t object, then court assumes “ account stated. ”

When an attorney has billed a client for legal services rendered, the attorney will presumably send the client bill at regular intervals. If the attorney does regularly invoice the client and the client doesn’t object, then the court can assume there is an “account stated.” This is what occurred in Glassman v Weinberg, 154 AD3d 407 [1st Dept 2017], where the court held:

Plaintiff made a prima facie showing of his entitlement to summary judgment on his account stated claim by providing documentary evidence of the invoices, and an affidavit stating that he sent the invoices on a monthly basis to defendant, and that defendant received the invoices and failed to object to the invoices until this litigation (see L.E.K. Consulting LLC v. Menlo Capital Group, LLC, 148 A.D.3d 527, 528, 52 N.Y.S.3d 1 [1st Dept.2017]; Morrison Cohen Singer & Weinstein, LLP v. Waters, 13 A.D.3d 51, 52, 786 N.Y.S.2d 155 [1st Dept.2004] ).

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When Lawyers Engage in a Tug-of-War

man and woman in a tug-of-war, illustrating article by Richard Klass about a law firm ’s charging lien

He was an associate at a law firm that handled cases involving workplace discrimination, including cases based upon age, disability, gender, race, religion and sexual orientation discrimination. The associate decided it was time for him to transition from the law firm to another firm in which he would become a partner. Some of the law firm’s clients whose cases were handled by the associate elected to transfer representation from the former firm to the associate’s new law firm.

Law Firm’s Charging Lien

When an attorney commences a lawsuit or appears in a lawsuit, he is deemed the “attorney of record” in the case. One of the ramifications of being the attorney of record is that the attorney has the right to maintain a “charging lien” on any recovery in the case. This right is derived both from longstanding common law and statutory law, codified in New York’s Judiciary Law Section 475, which provides:

Section 475. Attorney’s lien in action, special or other proceeding. From the commencement of an action, special or other proceeding in any court or before any state, municipal or federal department, except a department of labor, or the service of an answer containing a counterclaim, or the initiation of any means of alternative dispute resolution including, but not limited to, mediation or arbitration, or the provision of services in a settlement negotiation at any stage of the dispute, the attorney who appears for a party has a lien upon his or her client’s cause of action, claim or counterclaim, which attaches to a verdict, report, determination, decision, award, settlement, judgment or final order in his or her client’s favor, and the proceeds thereof in whatever hands they may come; and the lien cannot be affected by any settlement between the 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.

Practically, the charging lien gives the attorney the right to collect his legal fees from any moneys recovered in the lawsuit, even once the attorney is no longer representing the client. This is based on the premise that when an attorney is dismissed without cause, he is entitled to a lien to secure payment of his reasonable fees and costs incurred prior to the date of substitution of counsel. See, Sequa Corp. v. GBJ Corp., 156 F.3d 136 [2 Cir. 1998].

Agreement to Determine the Amount of Lien

When a client discharges an attorney without cause, the attorney is entitled to recover compensation from the client measured by the fair and reasonable value of the services rendered whether that be more or less than the amount provided in the contract or retainer agreement (Matter of Montgomery, 272 NY 323 [1936\]). As between them, either can require that the compensation be a fixed dollar amount determined at the time of discharge on the basis of quantum meruit (Reubenbaum v. B. & H. Express, 6 AD2d 47 [1 Dept. 1958]) or, in the alternative, they may agree that the attorney, in lieu of a presently fixed dollar amount, will receive a contingent percentage fee determined either at the time of substitution or at the conclusion of the case. See, Lai Ling Cheng v Modansky Leasing Co., Inc., 73 NY2d 454 [1989].

In one of the cases which the associate took with him to his new law firm, the former firm retained Richard A. Klass, Esq., Your Court Street Lawyer, to enforce its charging lien. The two firms came to an agreement, which was so-ordered by the judge, that the former law firm maintained a charging lien against any recovery in the case and that the amount of that lien would be determined at the conclusion of the litigation (assuming there would be a recovery from the defendants).

Entitlement to Attorney’s Fees in Proportionate Contribution to Case

The workplace discrimination case settled and the net legal fee sat in escrow as per the attorneys’ agreement pending resolution of their division amongst the two law firms. Unfortunately, the two firms were unable to come to terms as to the percentage split and requested that the judge hold a hearing to determine the allocation of fees.

The judge granted the law firms’ request for a hearing on the issue of the charging lien. It was noted that the court’s determination would be centered on determining the proportionate contributions of both prior and substitute counsel, citing to the case of Mason v. City of New York, 2016 WL 2766652 [SDNY 2016]. As stated in Buchta v Union Endicott Cent. School Dist., 296 AD2d 688, 689–90 [3 Dept 2002], “In assessing each firm’s proportionate contribution, we focus on the time and labor spent by each, the actual work performed, the “difficulty of the questions involved, the skill required to handle the matter, the attorney’s skills and experience, [and] the effectiveness of counsel in bringing the matter to resolution.”

A hearing was held in which both the partner in the original law firm and the associate/partner in the new law firm testified as to the services rendered on behalf of the clients in the case. The prior law firm’s partner testified as to all of the intake and pre-litigation tasks performed before substitution of counsel, including compiling evidence; interviews of clients; review of vast collection of evidence including email communications, video recordings and audio recordings. The former associate testified as to all of the services he rendered both at his old and new firms. Unfortunately for the former firm, it was unable to produce contemporaneous time records for services rendered while the former associate was in its employ. Based upon the testimony of the attorneys and the documents produced at the hearing, the judge apportioned the net legal fee between the two law firms.

Practice Tip:

It is critical for attorneys to enter and keep time records for all time spent working on their cases. Contemporaneous time records are important if the attorney must file a lien or prove time spent on a case. Equally important, a law firm should ensure that its attorneys, paralegals and support staff submit their time records in case the firm needs to justify its fees on a case.

Richard A. Klass, Esq.


Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached by phone at (718) COURT●ST or at RichKlass@courtstreetlaw.com with any questions.
Prior results do not guarantee a similar outcome.

©2017 Richard A. Klass.
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Difference of Opinion regarding Mandatory Attorney Fee Dispute Arbitration

The Fee Dispute Resolution Program (22 NYCRR Section 137) was created to mandate arbitration of fee disputes between attorneys and their former clients in civil matters. It has been subject to differing opinions among different departments leading to divergent opinions on the issue of whether or not an arbitration is necessary when the former client fails to object the validity of the underlying fee.

In 2000, the Second Department determined in Scordio that when there is a fee dispute between an attorney and a former client, the attorney was not required to send notice to the former client informing them of their rights to arbitrate when there was no dispute or objection to the reasonableness of the attorney’s fees. Scordio v. Scordio, 270 A.D.2d 328 (2nd Dept. 2000).

The decision in Scordio would ordinarily lend to the notion that an attorney may pursue collection of his fees without notice to a client of his right to arbitration but the rules regarding arbitration of fee disputes were modified and expanded in 2002, and now lists exceptions to when a notice to a client of his right to arbitrate can be waived. In Wexler & Burkhart, the court held that a reading of the Rules in this way would “effectively eviscerate Part 137 of the Rules, a comprehensive scheme for the informal and expeditious resolution of fee disputes between attorneys and clients through arbitration and mediation.” Wexler & Burkart LLP v. Grant, 12 Misc.3d 1162(A) (Nassau Cty. 2006).

The court in Rotker determined that “the rules of the appellate division establish a clear public policy in favor of the arbitration of attorney-client fee disputes.” Rotker v. Rotker, 195 Misc.2d 768 (Westchester Cty. 2003). Rotker was a matrimonial case where the attorneys for the wife instituted a retainer lien against her for non-payment of her fees. The attorneys asserted that since the client had not disputed the fees, under Scordio, they were entitled to payment without arbitration. The court held that even if it was determined that counsel was not fired for cause, the attorneys were required to provide the client notice of her rights to arbitrate the dispute, with said notice given in writing. If the client then failed to avail herself of her right to arbitrate after 30 days of mailing the notice, the right to arbitration would be waived. Id at 790-791.

The court in Rotker went so far as to hold that the failure of former counsel to send the 30-day notice, regardless of whether or not there is a dispute, would mandate the dismissal of any action for unpaid counsel fees. Rotker at 791.

The basic tenet held in these decisions is the idea that if the Scordio argument is used as a means to avoid Rule 137, then nearly anyone can circumvent the protections that Rule 137 was meant to provide. Wexler & Burkhart LLP at 214;

The position of the Wexler & Burkhart decision and the Rotker decision was most recently supported in Noel F. Caraccio, where the court held that regardless of whether there was an objection or dispute as to the fees when they were billed, the attorney was still required to send the 30-day notice of the right to arbitrate. Noel F. Caraccio PLLC v. Thomas, 29 Misc.3d 1230 (A) (City Ct., Rye 2010); Rotker at 791.

Thus, it is questionable as to whether Scordio remains good law, and as such, it is prudent to notify the former client of his rights to arbitrate the fee in order to prevent a dismissal of an attorney’s action for payment.

— Elisa S. Rosenthal, Esq.
Associate
Law Office of Richard A. Klass
Copyr. 2014

Elisa S. Rosenthal, Esq. is an associate of the law firm of Richard A. Klass, Esq.. She practices primarily in the areas of commercial litigation, debt collection/enforcement of judgments, legal malpractice and real estate litigation. She may be reached by phone at (718) COURT-ST [(718) 268-7878)] or www.courtstreetlaw.com.

———–
copyr. 2014 Richard A. Klass, Esq.
The firm’s website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.com with any questions.
Prior results do not guarantee a similar outcome.


R. A. Klass
Your Court Street Lawyer

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Defendants in Mortgage Foreclosure Cases May Recover Their Attorney’s Fees and Expenses under Real Property Law Section 282

A defendant/mortgagor who prevails in the successful defense of a mortgage foreclosure proceeding may be entitled to recover his  reasonable attorney’s fees and expenses under Real Property Law Section 282, which provides as follows:

Section 282. Mortgagor’s right to recover attorneys’ fees in actions or proceedings arising out of foreclosures of residential property

    1. Whenever a covenant contained in a mortgage on residential real property shall provide that in any action or proceeding to foreclose the mortgage that the mortgagee may recover attorneys’ fees and/or expenses incurred as the result of the failure of the mortgagor to perform any covenant or agreement contained in such mortgage, or that amounts paid by the mortgagee therefor shall be paid by the mortgagor as additional payment, there shall be implied in such mortgage a covenant by the mortgagee to pay to the mortgagor the reasonable attorneys’ fees and/or expenses incurred by the mortgagor as the result of the failure of the mortgagee to perform any covenant or agreement on its part to be performed under the mortgage or in the successful defense of any action or proceeding commenced by the mortgagee against the mortgagor arising out of the contract, and an agreement that such fees and expenses may be recovered as provided by law in an action commenced against the mortgagee or by way of counterclaim in any action or proceeding commenced by the mortgagee against the mortgagor. Any waiver of this section shall be void as against public policy.
    2. For the purposes of this section, “residential real property” means real property improved by a one- to four-family residence, a condominium that is occupied by the mortgagor or a cooperative unit that is occupied by the mortgagor.

In an appropriate case, where the mortgage provides for the recovery of the mortgagee’s attorney’s fees and expenses, the above statute applies, and the subject real property constitutes residential real property (one family) that is the mortgagors’ home, the court may award the defendant legal fees and costs.

by Richard A. Klass, Esq.

———–
copyr. 2014 Richard A. Klass, Esq.
The firm’s website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.com with any questions.
Prior results do not guarantee a similar outcome.


R. A. Klass
Your Court Street Lawyer

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