Opinion ID: 597429
Heading Depth: 3
Heading Rank: 2

Heading: The February 2 Letter Contention

Text: 38 Nor is there merit in Morrissey's contention that through Monzon's signing of the February 2 Letter prepared by Morrissey, Mar Oil entered into a contract approving Morrissey's $925,675.38 self-payment. Although in general a person who signs a contractual document is conclusively bound by it even if he did not fully understand its terms, see, e.g., Gillman v. Chase Manhattan Bank, N.A., 73 N.Y.2d 1, 11, 537 N.Y.S.2d 787, 792 (1988); In re Estate of Stone, 272 N.Y. 121, 124, 5 N.E.2d 61 (1936), when the parties have a fiduciary relationship 39 transactions between them are scrutinized with extreme vigilance, and clear evidence is required that the transaction was understood, and that there was no fraud, mistake, or undue influence. Where those relations exist there must be clear proof of the integrity and fairness of the transaction, or any instrument thus obtained will be set aside, or held as invalid between the parties. 40 Gordon v. Bialystoker Center & Bikur Cholim, Inc., 45 N.Y.2d 692, 698, 412 N.Y.S.2d 593, 597, 385 N.E.2d 285, 289 (1978) (quoting Ten Eyck v. Whitbeck, 156 N.Y. 341, 353, 50 N.E. 963 (1898)). Thus, with respect to a fee controversy between an attorney and client, 41 courts as a matter of public policy give particular scrutiny to fee arrangements ..., 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. 42 Shaw v. Manufacturers Hanover Trust Co., 68 N.Y.2d 172, 176, 507 N.Y.S.2d 610, 612, 499 N.E.2d 864, 866 (1986); see Jacobson v. Sassower, 66 N.Y.2d 991, 993, 499 N.Y.S.2d 381, 382, 489 N.E.2d 1283, 1284 (1985). 43 [A]n attorney who seeks to avail himself of a contract made with his client, is bound to establish affirmatively that it was made by the client with full knowledge of all the material circumstances known to the attorney, and was in every respect free from fraud on his part, or misconception on the part of the client.... Under this rule it is not necessary for the client to show that the agreement was obtained by fraud or undue influence on the part of the attorney.... Even in the absence of such misconduct the agreement may be invalid if it appears that the attorney got the better of the bargain, unless he can show that the client was fully aware of the consequences and that there was no exploitation of the client's confidence in the attorney.... 44 Greene v. Greene, 56 N.Y.2d 86, 92, 451 N.Y.S.2d 46, 49, 436 N.E.2d 496, 499 (1982) (quoting Whitehead v. Kennedy, 69 N.Y. 462, 466 (1877), and Howard v. Murray, 38 N.Y.2d 695, 699, 382 N.Y.S.2d 470, 471, 346 N.E.2d 238, 239 (1976)). Thus, if the attorney has reason to believe that the client does not have a complete understanding of a purported contract between them that he is asking the client to sign, the attorney must, in order to make the agreement enforceable, discuss the terms with the client to ensure that the client is fully and fairly informed of the consequences. Greene v. Greene, 56 N.Y.2d at 93, 451 N.Y.S.2d at 50, 436 N.E.2d at 500. 45 The trial court, recognizing this legal framework, properly ruled that Morrissey was not entitled to rely on the February 2 Letter as approval of his demanded fee, because it concluded that Morrissey did not give Monzon an appropriate explanation of the document and that Monzon did not understand its import. These conclusions were supported by the court's findings (a) that Monzon had steadfastly refused since 1980 to agree to a contingent-fee arrangement and had rejected Morrissey's June 1983 demand for fees of $960,000; (b) that Morrissey did not call Monzon's attention to the parts of the February 2 Letter that purported to approve the demanded fee; (c) that Monzon did not realize that Morrissey had inserted fee-approval terms in the document presented to him; and (d) that Morrissey's lack of explanation and his presentation of the February 2 Letter at a time when he knew Monzon was in a rush were calculated, and his conduct was unconscionable. The record contains evidence to support these findings. For example, the organization of the February 2 Letter gave Morrissey ample reason to believe that his client did not have a complete understanding of that letter. The crucial language concerning the payment to Morrissey was omitted from the easily readable tabular list of eight disbursements in the second paragraph and instead buried within the language of the first paragraph, which primarily concerned deposits. Whether or not this placement was intended to thwart Monzon's understanding, it triggered Morrissey's obligation to ensure full comprehension by his client. 46 We reject Morrissey's contention that the trial court was required to find that Monzon had read and understood the February 2 Letter in its entirety. Morrissey's contention is based on the fact that Mar Oil, in its initial complaint in this action, alleged that the document Morrissey had Monzon sign on February 2, 1984, was not in fact the February 2 Letter of which Mar Oil was eventually given a copy in 1986, but rather was a document that nowhere contained any reference to the $960,000 fee, and that the February 2 Letter had a substituted page 1. Prior to trial, the district court, Miriam Goldman Cedarbaum, Judge, to whom the case was then assigned, ruled that the document had not been altered, granted partial summary judgment to Morrissey dismissing the substituted-page claim, and ordered Mar Oil to strike that claim from its complaint. Morrissey's reliance on this sequence of events to argue that Mar Oil could not in good faith contend that Monzon did not see and understand the fee language on page 1 is misplaced. Even aside from the serious question as to whether the authenticity of the document could properly be resolved on summary judgment, we see no fatal inconsistency between the two positions taken by Mar Oil. Monzon consistently maintained that he did not see in the document he signed any reference to the $960,000 in fees demanded by Morrissey; whether this was because the document Monzon actually signed contained no such reference, or because though it did, he was rushed and, as the trial court found, Morrissey calculated[ly] did not call his attention to it, is of no consequence to Mar Oil's effort to avoid Morrissey's attempt to enforce the February 2 Letter as a contract agreeing to a fee that Mar Oil had consistently refused to pay. 47 The trial court's findings that Morrissey deliberately did not call the fee item to Monzon's attention, that Monzon was unaware of it, and that Mar Oil did not knowingly or intentionally approve of Morrissey's disbursement or his fee demand are not clearly erroneous. Accordingly, the court properly refused to conclude that the February 2 Letter was a contract in which Mar Oil agreed to Morrissey's fee demand.