Case Name: Steven B. Samuel, Esq., et al., Respondents-Appellants, v. Druckman & Sinel, LLP, et al., Appellants-Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 2008-04-08
Citations: 50 A.D.3d 322
Docket Number: 
Parties: Steven B. Samuel, Esq., et al., Respondents-Appellants, v Druckman & Sinel, LLP, et al., Appellants-Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 50
Pages: 322–330

Head Matter:
(April 8, 2008)
Steven B. Samuel, Esq., et al., Respondents-Appellants, v Druckman & Sinel, LLP, et al., Appellants-Respondents.
[855 NYS2d 90]

Opinion:
Order, Supreme Court, New York County (Debra A. James, J.), entered April 4, 2007, which denied defendants' motion and plaintiffs' cross motion for summary judgment as well as plaintiffs' effort to have the matter referred to the judge who had approved the compromise settlement for award of legal fees in the underlying medical malpractice case modified, on the law, defendants' motion for summary judgment on its first counterclaim granted to the extent it seeks one third of the $805,767.30 legal fee awarded under Judiciary Law § 474-a (2) in the underlying medical malpractice action, plaintiffs' cross motion for summary judgment declaring the rights of the parties granted to the same extent and otherwise affirmed, without costs. The Clerk is directed to enter judgment in favor of defendant Druckman & Sinel and against plaintiff Samuel & Ott in the principal amount of $268,589, with statutory interest from April 7, 2007.
Following settlement of a medical malpractice action for $6.7 million in May 2005, the trial court issued an infant's compromise order directing the defendant therein to pay legal fees (including disbursements) of $1,137,826.41 to the plaintiffs law firm (Samuel & Ott) and $762,173.59 to cocounsel Pegalis & Erickson. This was greater than the $805,767.30 to which Samuel & Ott would have been entitled under the statutory sliding scale. Attorney Samuel justified the enhanced fee by pointing out that his firm was required to pay out of its portion both the Pegalis firm, which had joined in performing extraordinary services, as well as Sinel, the referring attorney, and that if limited to the fee under the statutory sliding scale, his and the Pegalis firms would not be adequately compensated for the thousands of hours expended in developing and trying this complex case. Attorney Pegalis offered his own statement citing his expert contribution to the successful settlement of the case, which involved brain injury suffered by an infant in the course of childbirth.
When Sinel insisted on one third of the entire enhanced amount awarded to Samuel and Pegalis, Samuel commenced the instant action, alleging that any award to Sinel's firm would be prohibited under Code of Professional Responsibility DR 2-107 (22 NYCRR 1200.12) and requesting that the court declare the parties' respective rights. Sinel counterclaimed for $588,832.08, which was approximately one third of the combined, enhanced fees awarded to the Samuel and Pegalis firms, net of disbursements, plus $3,000 in disbursements. Plaintiffs cross-moved for an order declaring that Sinel and his firm were not entitled to any portion of the legal fee awarded. The motion court denied the parties' respective motions on the ground that the papers submitted were inadequate. We find that the record permits, and indeed requires, summary resolution of this dispute on the merits (State of New York v Metz, 241 AD2d 192, 196-202 [1998]).
Contrary to plaintiffs' contention, Sinel demonstrated that he "actually contributed to the legal work" through initial investigation, and there is no claim that he ever refused a request to contribute more substantially (Benjamin v Koeppel, 85 NY2d 549, 556 [1995]). Further, by disclosing to the client in writing that he was bringing in Samuel & Ott as trial counsel to handle the bulk of the work, and that no additional fee would be charged to the client as a result, Sinel demonstrated sufficient compliance with DR 2-107 (a). Consistent with the parties' fee-sharing and retainer agreements, the Sinel firm is thus entitled to its one-third share of the amount recovered by the Samuel firm under the statutory sliding scale applicable in malpractice cases, without regard to any arrangement made between the Samuel and Pegalis firms (see Borgia v City of New York, 259 AD2d 648 [1999]; Gair, Gair & Conason v Stier, 123 AD2d 556 [1986], lv denied 69 NY2d 606 [1987]).
However, Sinel made no contribution to the extraordinary services provided by Samuel and Pegalis that resulted in the trial court granting their application for an enhanced award of legal fees over the normal sliding scale. Under the circumstances, allowing Sinel to share in any portion of the enhanced award would result in a fee grossly disproportionate to the services rendered. It would result in defendants, the referring attorneys, being awarded a fee larger than plaintiffs, the attorneys who did the bulk of the work. Clearly, this could not have been the intent of the attorneys when they entered into their agreement nor can it be consistent with this Court's obligation to oversee the reasonableness of legal fees (see Dugan v Dorff Constr. Co., 281 AD2d 158 [2001], lv denied 98 NY2d 606 [2002]; Code of Professional Responsibility DR 2-106 [22 NYCRR 1200.11]). Concur—Lippman, P.J., Mazzarelli and Sweeny, JJ.
The dissent's concern that by this decision we are encouraging further litigation is misplaced. None of the cases cited by the dissent, and in fact, none of the authorities those cases relied on, dealt with anything other than the usual statutory awards.