### 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 PlaintiffScott Sanders commencedthis action for breach ofcontract 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 agreementto be provided ifthe matterremained unresolved and formal charges were brought against him. Mr. Sanders was indicted in August of2012 and a new retainer agreement was entered into on September 5, 2012 (Exh C). Plaintiffalleges that defendants failed to return $290,000 in unearned funds and that they billed for services in excess ofthe hourly rate set inthe retainer agreement. 1

1On September 14,2017, Judge BarbaraJaffe granted defendants' motion to dismiss each ofplaintiff's causes ofaction except for breach ofcontract, and dismissed defendant Blank Rome LLP from the action (Exh F).

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Plaintiffmoves here for summaryjudgmentonthe breach ofcontract 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 summaryjudgmentdismissing the remaining claim. Plaintiffalleges that he had paid Hoffman & Pollok, LLP a retainer of$1,000,000, pursuantto the September 5th agreement
- - $500,000 for the motionphase and $500,000 in the eventthe firm represented Mr. Sanders at trial. The LLP would be permitted to retain any remaining portion ofthe fee inthe motionphase
as a premium ifthe action was resolved at such stage. However, plaintiffmaintains that the agreement provided that ifthe actionproceeded to trial, he was to be billed on an hourly basis for legal services during the motionphase, any unusedportion ofthe motionphase $500,000 would be returned to him, and the remaining $500,000 would be paidto the firm as a trial fee. When Mr. Sanders demanded the refund, given that the matter did not resolve atthe motionphase, defendants refused to return any unusedportion offees from the motion phase. It is well-established that the "function ofsummaryjudgment 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 ofa motion for summaryjudgmentmusttender sufficient evidence to showthe absence ofany material issue offact and the right to entitlementtojudgment as a matter oflaw 

### (Alvarez v ProspectHospital, 68 NY2d 320 (1986); 

### WinegradvNew York University Medical Center, 64 NY2d 851 (1985)). Once a party has submitted competentproofdemonstrating that there is no substance to its opponent's claims and no disputed issues offact, the opponent, intum, is required to "lay bare [its] proofand come forward with some admissible proofthat would require
a trial ofthe material questions offact on which [its] claims rest" 

### (Ferber v Sterndent Corp., 51

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### NY2d 782, 783 (1980)). The party opposing a motion for summaryjudgment is entitled to all favorable inferences that can be drawn from the evidence submitted (See Dauman Displays, Inc.
vMasturzo, 168 AD2d 204 (1st Dept 1990)). The Court ofAppeals has held that "[w]hile, inthe law generally, equivocal contracts will be construed against the drafters, courts as a matter ofpublic 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 ofattorney-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-clientfee agreements are a matter ofspecial concern to the courts and are enforceable and affected by lofty principles different from those applicable to commonplace commercial contracts"]). Plaintiffargues that the agreement unambiguously and specifically provides through its terms and fee structure that the motionphase fee will become the firm's fully earned quantum meruit fee only ifthe matter is resolved without a trial. If

### the matter remained unresolved, the plaintiffwas required to pay a flat fee of$500,000 for the trial phase, with the fees for the motion phase to be based onthe_firm's hourly billing rate. Defendants aver that the language ofthe September 5th 

### retainer agreement unambiguously provides for a trial fee of$1,000,000, which was agreed upon by Mr. Sanders, with no indication ofa refund. In addition, defendants argues that the voluntary payment doctrine bars plaintifffrom recovering any voluntarily payments Mr. Sanders made to defendants. If

### the Court denies summaryjudgment, defendants further move to dismiss the action against the

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### individual defendants, arguing that individual partners and employees ofan LLP are not accountable for any breach ofcontract committed by the firm. The Appellate Divisionhas held that "[t]he general, well-settled rule withregard 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 ofthe document itself. Consequently, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning ofits terms" (Tompkins Fin. Corp. v. John M Floyd &Assocs., Inc., 

### 144 AD3d 1252 (3rd 

### Dept 2016)). Here, the intention ofthe parties cannot be determined from the four corners ofthe retainer agreement, which provides that plaintiffpay 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 ifthe case is not resolved during the stage before trial. It 

### is true that the agreement provides that "[i]nthe event that the matter is resolved without trial, the Motion Phase Fee will be deemed a minimum retainer" and "any amount not used pursuantto 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 notbaseduponhours at quantum meruit. The normal hourly billing rates for the firm are $750.00 perhour for Jeffrey C. Hoffman[;] Otherpartners' hourly rates are $550.00; associates' rates range between $350.00 and $450.00 perhour; and paralegal rates are $125.00 perhour" (Id at p 2). However, the retainer fails to explicitly state whether ornotthe 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 summaryjudgment, the construction ofan unambiguous contract is a question oflaw for the courtto pass on, and
... circumstances extrinsic to the agreement orvarying interpretations ofthe contractprovisions will

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notbe considered, where
... the intention ofthe parties canbe gatheredfrom the instrument itself' 

### (Koren RogersAssocs. Inc. v. StandardMicrosystems Corp., 79 AD3d 607 (1 st Dept 2010)). Although it may be inferredthatthe parties didnotintend to treat the motion fee the
same as that ofthe trial fee based uponthe exclusion ofthe language ofa "flat fee and not based upon hours or quantum meruit", the Court finds that the language ofthe retainer agreement is ambiguous and insufficientto establishthat the intention ofeither party was to have an hourly rate inthe motionphase, entitling plaintiffto a refund ofany unpaid portion ofthe initial retainer. According to the Affidavit ofJeffrey 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 "Uponindictment, I was asked by Mr. Hoffmanto deposit an additional $875,000 dollars into his escrow account. The $125,000 dollar credit from the prior agreement was applied. The newretainer coveredpre-trial, trial, pre-sentencing, sentencing, post-sentencing and bail pending appeal" (Exh G, p 3). Mr. Sanders makes no reference inthe letter to the motionphase fee. In fact, an invoice from an October 17, 2013 correspondence detailed the following payments totaling an amountpaid 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 perretainer agreement Check Credit from Investigative Stage

.Transferfrom IOLA Transfer from IOLA Wire from Robinson, Brog et al Wire from Robinson, Brog et al Transferfrom 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
5 of 7 $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 Page 5 of 7 

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The billing statement specifies that the payments are related to "trial" and fails to detail any information regarding the motionphase and ifany ofthe payment descriptions, such as "Investigative Stage" are related to motion fees. Mr. Hoffman maintains that the inclusion ofthe hourly rates is "inthe event a client fires the law firm during the pendency ofa 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 ofDecember 17, 2013 from Hoffman & PollokLLP (Sanders Aff, 113 

### & Exh H). The Court finds that genuine issues offact exist as to the parties' intention to pay the motion stage fees at an hourly rate and, as a result, whetherplaintiffis entitled to any refund. Therefore, plaintiffand defendants' motions for summaryjudgment are denied in their entirety. Finally, the Court addresses defendants' motionto 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 committhe underlying wrongful act, exceptto the extent that Partnership Law § 26(c) imposes liability onthat partner where he or she directly supervisedthe personwho committedthe 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 orher negligent or wrongful act" 

### (Scarborough v. 

### Napoli, Kaiser & 

### Bern, LLP, 63 AD3d 1531 (4th Dept 2009)). In addition, "[a] cause ofaction against apartnership for breach ofcontractdoes not lie against the individual partners absent an allegation thatthe partnership is insolvent or otherwise unable to pay its obligations" (Lifeline Funding, LLCv. Ripka, I 14 AD3d 507 (2014)). Further, § 26(c)(ii) states that a partner, member, or employee ofa registered limited liability partnership "shall be personally and fully liable and accountable for any negligent or

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wrongful act or misconduct committedby him orher orby any person underhis or her direct supervision and c,ontrol" (N.Y. P'shipLaw§ 26 (McKinney)). Plaintiffhas failed to establish that the individual defendants committed any negligent orwrongful acts ofliability in its :remaining breach ofcontract claim, inwhich Mr. Sandersprimarily seeks a refund in any unpaid portion ofthe motion phase fee. Ofnote, the retainer agreement was signed by Jeffrey C. Hoffman on behalfofHoffman & Pollok LLP (Exh C, p 4). Thus, the Court grants defendants motion to dismiss the individual defendants from the action. Upon view ofthe foregoing, it is hereby ORDERED, that plaintiffs motion for summaryjudgmentis denied; and it is further ORDERED, that defendants Hoffman & Pollok LLP, Jeffrey C. Hoffman, Susan C. Wolfe, William A. Rome, and SamiraDesai's motion for summaryjudgment is denied; and it is further ORDERED, that defendants Jeffrey C. Hoffman, Susan C. Wolfe, William A. Rome, and SamiraDesai, as individuals, are dismissed from this action. The foregoing constitutes the Decision and Order ofthe Court.

Dated: March 28, 2024

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