State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: December 17, 2015 520534 

________________________________

ZAYTUNE DOVIAK, Individually

and as Guardian ad Litem of 

ROBERT DOVIAK,

Appellant,

v

MEMORANDUM AND ORDER

LOWE'S HOME CENTERS, INC.,

et al.,

Defendants.

FINKELSTEIN & PARTNERS, LLP,

et al.,

Respondents.

(And Two Third-Party Actions.)

________________________________

Calendar Date: October 14, 2015

Before: Lahtinen, J.P., McCarthy, Lynch and Devine, JJ.

__________

Phillips & Paolicelli, LLP, New York City (Steven J.

Phillips of counsel), for appellant.

Furman, Kornfeld & Brennan, LLP, New York City (A. Michael

Furman of counsel), for respondents.

__________

Lahtinen, J.P.

Appeals (1) from an order of the Supreme Court (Work, J.),

entered April 22, 2014 in Ulster County, which, among other

things, granted an application by Finkelstein & Partners, LLP for

an order directing, among other things, the payment of counsel

fees and disbursements, and (2) from the judgment entered
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thereon.

This appeal primarily involves a dispute about counsel fees

following a multi-million dollar recovery in a personal injury

action. The underlying facts of that action are set forth in an

earlier appeal (63 AD3d 1348 [2009]). Briefly, Robert Doviak

suffered catastrophic injuries when he fell at a construction

site and plaintiff – his wife and guardian ad litem – retained

Finkelstein & Partners, LLP (hereinafter Finkelstein). During

the eventual seven-day jury trial, several settlement offers were

reportedly rejected by plaintiff, including a final one of $12

million before summations. The jury returned a verdict for a

little over $3.7 million. Finkelstein then moved for a new trial

or significant additur, which Supreme Court (Egan Jr., J.)

partially granted in an order entered in March 2007 directing a

new trial on damages unless defendants stipulated to increase

damages by $3.1 million. Defendants so stipulated, bringing the

total damages to about $6.8 million. As relevant to the current

appeal, that award generated counsel fees of $1,892,760.31 under

the contingent fee retainer agreement. 

Disagreements about various aspects of the judgment delayed

entry thereof until December 2007. Prior thereto, plaintiff had

ostensibly stopped communicating with Finkelstein and retained

new counsel. After the judgment was entered, plaintiff's new

counsel moved to resettle the judgment, which was granted in part

in an order and ensuing amended judgment entered in July 2008. 

Plaintiff's new counsel perfected the appeal that had been filed

by Finkelstein, and we, among other things, increased damages by

$2.5 million (63 AD3d at 1356-1357), making total damages of

about $9.3 million. This resulted in additional contingency

counsel fees of $707,106. 

In the interim, plaintiff, eventually represented by

Phillips & Paolicelli, LLP (hereinafter Phillips),1 commenced a

1 Although there is confusion in the record about exactly

who plaintiff retained after Finkelstein and when, for purposes

of this decision, we hereinafter refer to plaintiff's new counsel

as Phillips without making any determination as to any other
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legal malpractice action in Orange County against Finkelstein

alleging, among other things, that the trial settlement offer of

$12 million had not been communicated by Finkelstein to

plaintiff. After an appeal to the Second Department (Doviak v

Finkelstein & Partners, LLP, 90 AD3d 696 [2011]), that case moved

to a seven-week jury trial, which resulted in the jury finding no

legal malpractice by Finkelstein. In addressing a posttrial

motion in that action, Supreme Court (Ecker, J.) noted that

certain aspects of plaintiff's allegations that Finkelstein had

been discharged for cause had not been decided in the Orange

County action and should be heard in connection with the pending

fee dispute in the underlying Ulster County action. 

Plaintiff then moved in the Ulster County action to, among

other things, discharge Finkelstein's liens in that action. In a

thorough written decision, Supreme Court (Work, J.) addressed a

host of remaining issues about the disputed fees and

disbursements. The court was unpersuaded by plaintiff's

contention that Finkelstein was discharged for cause so as to

justify denying Finkelstein any counsel fees. As for the counsel

fees of $1,892,760.31 generated from the pre-appeal action,

Supreme Court reduced Finkelstein's fee by $30,000 as sanctions

for several errors by Finkelstein that, ultimately, had not

adversely affected plaintiff but caused delay and necessitated

additional legal work. The court further directed that $40,000

from the pre-appeal counsel fees should be paid to Phillips for

its postverdict, pre-appeal legal work. The court thus awarded

Finkelstein $1,822,760.31 in counsel fees for pre-appeal legal

work and authorized Finkelstein to be reimbursed for its

disbursements of $199,126.73. As for the additional counsel fees

of $707,106 from the successful appeal, Supreme Court awarded two

thirds of such amount to Phillips and one third to Finkelstein.2 

counsel that may have been involved at some point.

2 By the time the judgment on appeal was entered, changes

had been made to various amounts (including counsel fees) set

forth in the earlier order reflecting, among other things,

accrued interest. For example, the May 2014 judgment recited

that the additur from the appeal resulted in counsel fees
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Plaintiff appeals.

We consider first plaintiff's argument that Finkelstein

should not get any counsel fees because it was discharged for

cause. "[A] client has an absolute right, at any time, with or

without cause, to terminate the attorney-client relationship by

discharging the attorney" (Campagnola v Mulholland, Minion & Roe,

76 NY2d 38, 43 [1990]). "If the discharge is with cause, the

attorney has no right to compensation or to a retaining lien"

(Teichner v W & J Holsteins, 64 NY2d 977, 979 [1985] [citations

omitted]). A "for cause" termination must be based on more than

"a client's 'general dissatisfaction' with the attorney's

performance" (Wiggins v Kopko, 105 AD3d 1132, 1134 [2013],

quoting De Luccia v Village of Monroe, 180 AD2d 897, 899 [1992])

and typically involves a "significant breach of legal duty" such

that the client can establish that the "attorney's conduct

constituted a failure to properly represent [the client's]

interests" (Antonmarchi v Consolidated Edison Co. of N.Y., 678 F

Supp 2d 235, 241 [SD NY 2010] [internal quotation marks and

citations omitted]; see Greenberg v Cross Island Indus., 522 F

Supp 2d 463, 467 [ED NY 2007]). 

The most serious allegation that could have supported a

"for cause" termination – i.e., the purported failure to inform

plaintiff of the $12 million settlement offer – was resolved in

Finkelstein's favor during plaintiff's unsuccessful malpractice

action. Plaintiff now relies on a litany of mostly postverdict

infirmities by Finkelstein. Supreme Court (Work, J.) fully

analyzed each of the purported errors and ethical breaches and we

discern no reason to depart from that court's conclusions. With

respect to Finkelstein's application to Supreme Court (Egan Jr.,

J.) for its counsel fees without providing adequate notice to

plaintiff, the fee request was consistent with the retainer

agreement, it was made at a time when plaintiff had apparently

ceased communicating with Finkelstein and Supreme Court (Work,

J.) found no willfulness by Finkelstein and noted no harm to

plaintiff. Given Finkelstein's extensive legal work in this

exceeding $1.2 million. For purposes of consistency, the amounts

used in the April 2014 decision and order are used herein. 
-5- 520534 

complex case that culminated in a generally favorable result for

plaintiff, this error was insufficient under all the relevant

circumstances to serve as a basis to deny Finkelstein any counsel

fees, and Supreme Court's decision to reduce Finkelstein's fee by

$10,000 was within its discretion and an appropriate sanction.

The initial incorrect inclusion in the proposed judgment of

a set off for plaintiff's children's Social Security disability

benefits was eventually corrected and, while the error

contributed to the delay in final resolution of the litigation,

it was adequately addressed by Supreme Court's reduction of

Finkelstein's fee by an additional $10,000. The remaining errors

have been considered and, to the extent they remained viable

after the jury verdict in favor of Finkelstein in plaintiff's

malpractice action, do not rise to the level of a significant

breach of Finkelstein's duty to plaintiff or reveal that

Finkelstein failed to properly represent plaintiff's interest to

such an extent as to justify termination for cause. We further

agree with Supreme Court that Finkelstein adequately established

the amount of its disbursements for which it was entitled to be

reimbursed under the retainer.

Nor are we persuaded that Supreme Court erred in the manner

in which it divided the counsel fees generated from the additur

resulting from the appeal to this Court. An attorney's "charging

lien does not merely give an attorney an enforceable right

against the property of another, it gives the attorney an

equitable ownership interest in the client's cause of action"

(LMWT Realty Corp. v Davis Agency, 85 NY2d 462, 467 [1995]; see

Judiciary Law § 475). Although the retainer provided that it did

not cover an appeal, it did specifically cover any monies that

plaintiff received by reason of the action and further provided

for a reasonable fee should there be an appeal. Supreme Court

noted that Finkelstein successfully developed the record that

became the basis for this Court's additur. Finkelstein also

filed a notice of appeal and took steps, including ordering the

trial transcript, toward perfecting the appeal. Further,

Finkelstein had researched, prepared and presented to the trial

court the partially successful motion for, among other things,

additur, which provided the foundation – expanded upon by

Phillips – for the successful appeal. The relevant language of
-6- 520534 

the retainer as well as the outcome at the trial level were

materially different here than in Shaw v Manufacturers Hanover

Trust Co. (68 NY2d 172, 175-176 [1986]), a case relied upon by

plaintiff. The retainer did not forfeit a fee upon an adverse

trial verdict, plaintiff's trial in the underlying personal

injury action did not end adversely to plaintiff, and

Finkelstein's retainer entitled it to a fee based on monies

recovered by reason of the claim. Supreme Court's division of

the counsel fees resulting from the appeal was appropriate (see

generally Matter of Cohen v Grainger, Tesoriero & Bell, 81 NY2d

655, 658-660 [1993]). 

Finally, in light of the proof in the record, Supreme Court

acted well within its discretion in setting quantum meruit fees

of $40,000 for Phillips for legal work conducted postverdict and

pre-appeal (see Chernofsky & DeNoyelles v Waldman, 212 AD2d 566,

566 [1995]). The remaining arguments have been considered and

are unavailing.

McCarthy, Lynch and Devine, JJ., concur.

ORDERED that the order and judgment are affirmed, with

costs.

ENTER:

Robert D. Mayberger

Clerk of the Court