Sanders v Hoffman

2024 NY Slip Op 31128(U)

March 28, 2024

Supreme Court, New York County

Docket Number: Index No. 100956/2016

Judge: Leslie A. Stroth

Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York

State and local government sources, including the New

York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official

publication.
NYSCEF DOC. NO. 72 

INDEX NO. 100956/2016 

RECEIVED NYSCEF: 04/05/2024 

SUPREME COURT OF THE STATE OF NEW YORK 

NEW YORK COUNTY 

PRESENT: HON. LESLIE A. STROTH PART 12M 

Justice 

---·--------------------------------------------------------X 

SCOTT SANDERS, 

Plaintiff, 

- V -

JEFFREY C. HOFFMAN ESQUIRE, SUSAN C. WOLFE 

ESQUIRE, WILLIAM A. ROME ESQUIRE, SAMIRA DESAI 

ESQUIRE, THOMAS MOORE ESQUIRE, HOFFMAN & 

POLLOCK, LLP, BLANC (SIC) ROME, LLP, JOHN DOES 1-

6, JANE DOES 1-6 

Defendants. 

----------------------------------------------------------------------------------X 

INDEX NO. 100956/2016 

MOTION DATE 05/11/2023 

MOTION SEQ. NO. 006 

f+M~t,J t>~ 

DECISION + ORDER ON 

MOTION 

The following e-filed documents, listed by NYSCEF document number (Motion 006) 12, 13, 14, 15, 16, 

17, 18, 19,20,21,22, 23,24,25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39,40,41,42,43,44, 

45,48,49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59,60,61,62,63,64,65,66,67 

were read on this motion to/for JUDGMENT-SUMMARY 

Plaintiff Scott Sanders commenced this action for breach of contract arising from a 

retainer agreement entered into with the law firm Hoffman & Pollok, LLP. On April 24, 2009, 

Mr. Sanders retained Hoffman & Pollok, LLP to represent him during the investigative stage for 

insurance fraud in a federal criminal matter. The firm was retained by Mr. Sanders for a flat fee 

of $250,000, with a new agreement to be provided if the matter remained unresolved and formal 

charges were brought against him. Mr. Sanders was indicted in August of 2012 and a new 

retainer agreement was entered into on September 5, 2012 (Exh C). Plaintiff alleges that 

defendants failed to return $290,000 in unearned funds and that they billed for services in excess 

of the hourly rate set in the retainer agreement. 1 

1 On September 14,2017, Judge Barbara Jaffe granted defendants' motion to dismiss each of plaintiff's 

causes of action except for breach of contract, and dismissed defendant Blank Rome LLP from the action 

(Exh F). 

100956/2016 SANDERS, SCOTT vs. HOFFMAN ESQ., JEFFERY C. 

Motion No. 006 

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Plaintiff moves here for summary judgment on the breach of contract claim and for a 

finding that the $500,000 payment made to defendants was not a flat fee and is thus refundable 

as a matter oflaw. Defendants Hoffman & Pollok LLP and its partners Jeffrey C. Hoffman, 

Susan C. Wolfe, and William A. Rome, as well as associate Samira Desai filed a cross-motion 

for summary judgment dismissing the remaining claim. Plaintiff alleges that he had paid 

Hoffman & Pollok, LLP a retainer of $1,000,000, pursuant to the September 5th agreement - -

$500,000 for the motion phase and $500,000 in the event the firm represented Mr. Sanders at 

trial. The LLP would be permitted to retain any remaining portion of the fee in the motion phase 

as a premium if the action was resolved at such stage. However, plaintiff maintains that the 

agreement provided that if the action proceeded to trial, he was to be billed on an hourly basis for 

legal services during the motion phase, any unused portion of the motion phase $500,000 would 

be returned to him, and the remaining $500,000 would be paid to the firm as a trial fee. When 

Mr. Sanders demanded the refund, given that the matter did not resolve at the motion phase, 

defendants refused to return any unused portion of fees from the motion phase. 

It is well-established that the "function of summary judgment is issue finding, not issue 

determination" (Assafv Ropog Cab Corp., 153 AD2d 520 (1st Dept 1989) (quoting Sillman v 

Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957])). As such, the proponent of a 

motion for summary judgment must tender sufficient evidence to show the absence of any 

material issue of fact and the right to entitlement to judgment as a matter of law (Alvarez v 

Prospect Hospital, 68 NY2d 320 (1986); Winegrad v New York University Medical Center, 64 

NY2d 851 (1985)). Once a party has submitted competent proof demonstrating that there is no 

substance to its opponent's claims and no disputed issues of fact, the opponent, in tum, is 

required to "lay bare [its] proof and come forward with some admissible proof that would require 

a trial of the material questions of fact on which [its] claims rest" (Ferber v Sterndent Corp., 51 

100956/2016 SANDERS, SCOTT vs. HOFFMAN ESQ., JEFFERY C. 

Motion No. 006 

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NY2d 782, 783 (1980)). The party opposing a motion for summary judgment is entitled to all 

favorable inferences that can be drawn from the evidence submitted (See Dauman Displays, Inc. 

v Masturzo, 168 AD2d 204 (1st Dept 1990)). 

The Court of Appeals has held that "[w]hile, in the law generally, equivocal contracts 

will be construed against the drafters, courts as a matter of public policy give particular scrutiny 

to fee arrangements between attorneys and clients, casting the burden on attorneys who have 

drafted the retainer agreements to show that the contracts are fair, reasonable, and fully known 

and understood by their clients" (Shaw v. Manufacturers Hanover Tr. Co., 68 NY2d 172 (1986)). 

"The general rule that equivocal contracts will be construed against the drafters is subject to 

particularly rigorous enforcement in the context of attorney-client retainer agreements" (Albunio 

v. City of New York, 23 NY3d 65 (2014); see also Matter of Cooperman, 83 NY2d 465 (1994) 

[noting that "attorney-client fee agreements are a matter of special concern to the courts and are 

enforceable and affected by lofty principles different from those applicable to commonplace 

commercial contracts"]). 

Plaintiff argues that the agreement unambiguously and specifically provides through its 

terms and fee structure that the motion phase fee will become the firm's fully earned quantum 

meruit fee only if the matter is resolved without a trial. If the matter remained unresolved, the 

plaintiff was required to pay a flat fee of $500,000 for the trial phase, with the fees for the 

motion phase to be based on the_ firm's hourly billing rate. 

Defendants aver that the language of the September 5th retainer agreement 

unambiguously provides for a trial fee of $1,000,000, which was agreed upon by Mr. Sanders, 

with no indication of a refund. In addition, defendants argues that the voluntary payment doctrine 

bars plaintiff from recovering any voluntarily payments Mr. Sanders made to defendants. If the 

Court denies summary judgment, defendants further move to dismiss the action against the 

100956/2016 SANDERS, SCOTT vs. HOFFMAN ESQ., JEFFERY C. 

Motion No. 006 

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individual defendants, arguing that individual partners and employees of an LLP are not 

accountable for any breach of contract committed by the firm. 

The Appellate Division has held that "[t]he general, well-settled rule with regard to 

contract interpretation is that an agreement is to be construed in accordance with the parties' 

intent, which is generally discerned from the four corners of the document itself. Consequently, a 

written agreement that is complete, clear and unambiguous on its face must be enforced 

according to the plain meaning of its terms" (Tompkins Fin. Corp. v. John M Floyd & Assocs., 

Inc., 144 AD3d 1252 (3rd Dept 2016)). 

Here, the intention of the parties cannot be determined from the four corners of the 

retainer agreement, which provides that plaintiff pay a retainer of $1,000,000 in the following 

manner: i) $500,000 as a "Motion Phase Fee"; and ii) $500,000 as a trial flat fee if the case is not 

resolved during the stage before trial. It is true that the agreement provides that "[i]n the event 

that the matter is resolved without trial, the Motion Phase Fee will be deemed a minimum 

retainer" and "any amount not used pursuant to time spent by the Law Firm ( quantum meruit) 

shall be deemed a premium for the result ... " (Exh C, p 1 ). The agreement also states that the 

"Trial Fee is a flat fee and not based upon hours at quantum meruit. The normal hourly billing 

rates for the firm are $750.00 per hour for Jeffrey C. Hoffman[;] Other partners' hourly rates are 

$550.00; associates' rates range between $350.00 and $450.00 per hour; and paralegal rates are 

$125.00 per hour" (Id at p 2). However, the retainer fails to explicitly state whether or not the 

compensation at the motion phase shall be set at an hourly rate upon failure to resolve the matter 

at this stage. 

The First Department has held that "[ o ]n a motion for summary judgment, the 

construction of an unambiguous contract is a question of law for the court to pass on, and ... 

circumstances extrinsic to the agreement or varying interpretations of the contract provisions will 

100956/2016 SANDERS, SCOTT vs. HOFFMAN ESQ., JEFFERY C. 

Motion No. 006 

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not be considered, where ... the intention of the parties can be gathered from the instrument 

itself' (Koren Rogers Assocs. Inc. v. Standard Microsystems Corp., 79 AD3d 607 (1 st Dept 

2010)). Although it may be inferred that the parties did not intend to treat the motion fee the 

same as that of the trial fee based upon the exclusion of the language of a "flat fee and not based 

upon hours or quantum meruit", the Court finds that the language of the retainer agreement is 

ambiguous and insufficient to establish that the intention of either party was to have an hourly 

rate in the motion phase, entitling plaintiff to a refund of any unpaid portion of the initial 

retainer. 

According to the Affidavit of Jeffrey C. Hoffman, Mr. Sanders was to pay a trial fee of 

$1,000,000 and had paid $992,500 (Hoffman Aff, 114). This appears to be confirmed in a letter 

dated October 18, 2013 from Mr. Sanders to the "Departmental Disciplinary Committee", in 

which Mr. Sanders states that "Upon indictment, I was asked by Mr. Hoffman to deposit an 

additional $875,000 dollars into his escrow account. The $125,000 dollar credit from the prior 

agreement was applied. The new retainer covered pre-trial, trial, pre-sentencing, sentencing, 

post-sentencing and bail pending appeal" (Exh G, p 3). Mr. Sanders makes no reference in the 

letter to the motion phase fee. In fact, an invoice from an October 1 7, 2013 correspondence 

detailed the following payments totaling an amount paid of $992,500 (Exh F, p 3): 

TRIAL 

4/6/2012 

9/5/2012 

11/5/2012 

1/3/2013 

1/14/2013 

1/23/2013 

1/24/2013 

2/13/2013 

Fee per retainer agreement 

Check 

Credit from Investigative Stage 

. Transfer from IOLA 

Transfer from IOLA 

Wire from Robinson, Brog et al 

Wire from Robinson, Brog et al 

Transfer from IOLA 

Wire from Robinson, Brog et al 

Total paid 

Unpaid Trial fee 

Expenses 

Amount owed Trial 

100956/2016 SANDERS, SCOTT vs. HOFFMAN ESQ., JEFFERY C. 

Motion No. 006 

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$1,000,000.00 

$125,000.00 

$125,000.00 

$117,500.00 

$20,000.00 

$193,000.00 

$172,000.00 

$105,000.00 

$135,000.00 

$992,500.00 

$7,500.00 

$18,078.95 

$25,578.90 

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The billing statement specifies that the payments are related to "trial" and fails to detail 

any information regarding the motion phase and if any of the payment descriptions, such as 

"Investigative Stage" are related to motion fees. Mr. Hoffman maintains that the inclusion of the 

hourly rates is "in the event a client fires the law firm during the pendency of a flat fee matter" 

(Hoffman Aff, 113 ). Yet, Mr. Sanders contends that the Motion Phase ended around January 31, 

2013, and attaches pre-bill worksheets as of December 17, 2013 from Hoffman & Pollok LLP 

(Sanders Aff, 113 & Exh H). The Court finds that genuine issues of fact exist as to the parties' 

intention to pay the motion stage fees at an hourly rate and, as a result, whether plaintiff is 

entitled to any refund. Therefore, plaintiff and defendants' motions for summary judgment are 

denied in their entirety. 

Finally, the Court addresses defendants' motion to dismiss the individual defendants from 

this action. Partnership Law § 26(b) "immunizes from individual liability any partner in a 

partnership registered as a limited liability partnership who did not commit the underlying 

wrongful act, except to the extent that Partnership Law § 26( c) imposes liability on that partner 

where he or she directly supervised the person who committed the wrongful act" (Salazar v. 

Sacco & Fi/las, LLP, 114 AD3d 745 (2d 2014)). "Partnership Law§ 26(c)(i) provides that each 

partner, employee or agent of ... a registered limited liability partnership may be individually 

liable for, inter alia, his or her negligent or wrongful act" (Scarborough v. Napoli, Kaiser & 

Bern, LLP, 63 AD3d 1531 (4th Dept 2009)). In addition, "[a] cause of action against a partnership for 

breach of contract does not lie against the individual partners absent an allegation that the partnership is 

insolvent or otherwise unable to pay its obligations" (Lifeline Funding, LLC v. Ripka, I 14 AD3d 507 

(2014)). Further, § 26(c)(ii) states that a partner, member, or employee of a registered limited 

liability partnership "shall be personally and fully liable and accountable for any negligent or 

100956/2016 SANDERS, SCOTT vs. HOFFMAN ESQ., JEFFERY C. 

Motion No. 006 

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wrongful act or misconduct committed by him or her or by any person under his or her direct 

supervision and c,ontrol" (N.Y. P'ship Law§ 26 (McKinney)). Plaintiff has failed to establish 

that the individual defendants committed any negligent or wrongful acts of liability in its 

:remaining breach of contract claim, in which Mr. Sanders primarily seeks a refund in any unpaid 

portion of the motion phase fee. Of note, the retainer agreement was signed by Jeffrey C. 

Hoffman on behalf of Hoffman & Pollok LLP (Exh C, p 4). Thus, the Court grants defendants 

motion to dismiss the individual defendants from the action. 

Upon view of the foregoing, it is hereby 

ORDERED, that plaintiffs motion for summary judgment is denied; and it is further 

ORDERED, that defendants Hoffman & Pollok LLP, Jeffrey C. Hoffman, Susan C. 

Wolfe, William A. Rome, and Samira Desai's motion for summary judgment is denied; and it is 

further 

ORDERED, that defendants Jeffrey C. Hoffman, Susan C. Wolfe, William A. Rome, and 

Samira Desai, as individuals, are dismissed from this action. 

The foregoing constitutes the Decision and Order of the Court. 

Dated: March 28, 2024 

100956/2016 SANDERS, SCOTT vs. HOFFMAN ESQ., JEFFERY C. 

Motion No. 006 

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lROTH 

J.S.C. 

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