Court Opinion

ID: 9807437
Source: CourtListenerOpinion
Date Created: 2023-08-31 20:04:29.220162+00
Date Added: 2024-06-11T11:37:07.797609
License: Public Domain

Andrias and Gische, JJ.,
concur in part and dissent in part in a memorandum by Andrias, J., as follows: This appeal involves a fee-sharing dispute between nonparty appellant, Sheryl Menkes, Esq., the attorney of record for plaintiffs in this personal injury action, and the successive attorneys she retained to act as cocounsel. The action was settled for $8,000,000.
*513I agree with the majority that nonparty respondent Jeffrey A. Manheimer, Esq., the first attorney retained by Menkes, is entitled to 20% of the net attorneys’ fees under the terms of their agreement, as modified. However, because the action was settled as a direct result of “the mediation” commenced on May 20, 2013, I disagree with the majority’s holding that nonparty respondent David B. Golomb, Esq., the second attorney retained by Ms. Menkes, is entitled to a 40% share, rather than a 12% share, of the net attorneys’ fees under the terms of their agreement. Therefore, I dissent from that part of the decision.
By letter agreement dated March 12, 2013, at which point plaintiffs had already been granted summary judgment as to liability and a trial had been scheduled on damages, Ms. Menkes retained Mr. Golomb to “assume responsibility for representing plaintiffs in this case.” The agreement, drafted on Mr. Golomb’s letterhead, provided in relevant part:
“I have agreed to review the file, provide whatever services are needed, with your and your office’s assistance, to prepare it for the mediation and to handle the mediation. For those services, I . . . will receive twelve (12%) percent of all attorney’s fees whenever the case is resolved, whether by settlement, verdict after trial or appeal, calculated after the attorneys have been reimbursed for all expenses laid out. This percentage shall become fixed and owed upon execution of this agreement.
“If the case does not resolve at the mediation, presently scheduled for May 20, 2013, then I will be responsible, with your and your office’s assistance as requested, for preparing for trial and trying the case. After such mediation, I will be entitled to forty (40%) percent of all attorneys’ fees whenever the case is resolved, whether by settlement, verdict after trial or appeal, calculated after the attorneys have been reimbursed for all expenses laid out” (emphasis added).
On May 20, 2013, at 2:00 p.m., a mediation session was held at JAMS before retired Justice Alan Hurkin-Torres. Plaintiffs initially demanded $19,000,000 and defendants offered $2,000,000. By the time the session ended at 7:00 p.m., plaintiffs’ demand had been reduced to $8,500,000 and defendants’ offer had increased to $7,000,000. However, defendants’ offer was not final; they needed to obtain additional authority from their excess insurance carrier for any additional amounts. Consequently, although no adjourned date was set, the mediator, with the parties’ consent to his ongoing involvement, continued his negotiations with the carriers and Mr. Golomb, which resulted in an agreement in principle for an $8 million *514settlement on May 31, which was memorialized in a letter from Mr. Golumb to defense counsel dated June 3, 2013.
Supreme Court denied Ms. Menkes’s motion to fix Mr. Golomb’s share of net attorneys’ fees at 12% and granted Mr. Golomb’s motion to fix his share at 40%. The court found that the phrase, “If the case does not resolve at the mediation, presently scheduled for May 20, 2013,” was unambiguous and meant that if the case did not settle at the mediation session held on that specific date, Mr. Golomb would be entitled to a 40% share of net attorneys’ fees, even if the settlement was the direct result of the mediation process that began that day. A majority of the panel in this Court agrees.
The court’s function in interpreting a contract is to apply “the meaning intended by the parties, as derived from the language of the contract in question” (Duane Reade, Inc. v Cardtronics, LP, 54 AD3d 137, 140 [1st Dept 2008]). “[T]he aim is a practical interpretation of the expressions of the parties to the end that there be a realization of [their] reasonable expectations” (Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397, 400 [1977] [internal quotation marks omitted]; see also Gessin Elec. Contrs., Inc. v 95 Wall Assoc., LLC, 74 AD3d 516, 518 [1st Dept 2010]).
“[A] contract should not be interpreted to produce an absurd result, one that is commercially unreasonable, or one that is contrary to the intent of the parties” (Cole v Macklowe, 99 AD3d 595, 596 [1st Dept 2012]). In examining a contract to find the parties’ intent as to a particular section, a court should read “the entirety of the agreement in the context of the parties’ relationship,” rather than isolating discrete provisions out of an entire agreement (Matter of Riconda, 90 NY2d 733, 738 [1997]).
In the first paragraph of the letter agreement, Mr. Golomb agreed to “provide whatever services are needed ... to prepare [the file] for the mediation and to handle the mediation” in return for 12% of the net attorneys’ fees. In the second paragraph, the parties agreed that “[i]f the case [did] not resolve at the mediation, presently scheduled for May 20, 2013,” Mr. Golomb would be responsible for “preparing for trial and trying the case,” and would receive 40% of the net attorneys’ fees.
The majority focuses on the phrase “at the mediation, presently scheduled for May 20, 2013,” in the second paragraph to conclude that the agreement unambiguously provided that Mr. Golomb would be entitled to a 40% fee unless the case settled at the May 20 session. However, in performing its analysis, the *515majority misconstrues the first paragraph, which does not restrict “the mediation” to a single date or session, and expressly obligates Mr. Golomb to “provide whatever services are needed” with respect to the mediation. The majority also gives no weight to the language in the second paragraph regarding Mr. Golomb’s obligation to “prepar[e] for trial and try[ ] the case” if it is not resolved at the mediation. By misconstruing this language in the first and second paragraphs, which does not limit the services required of Mr. Golomb in furtherance of “the mediation” and ties his entitlement to the higher fee to post-mediation services, the majority violates the basic rules of construction, which “require [the court] to adopt an interpretation which gives meaning to every provision of a contract or, in the negative, [that] no provision of a contract should be left without force and effect” (Muzak Corp. v Hotel Taft Corp., 1 NY2d 42, 46 [1956]; see also James v Jamie Towers Hous. Co., 294 AD2d 268, 269 [1st Dept 2002] [the courts must construe a contract in a manner that avoids inconsistencies and reasonably harmonizes its terms], affd 99 NY2d 639 [2003]).
Had the intent of the parties been to state or imply that the mediation process was confined to a single session on May 20, different language, such as “at a single one-day mediation session” could or should have been incorporated in the agreement; there is no such language here. The agreement did not state that the 40% fee vested if the case settled after the conclusion of the May 20 session. Rather, the agreement made a distinction between the fee due after a successful mediation and the fee due if the case was not resolved by mediation and Mr. Golomb had to prepare the case for trial, and to try it if necessary. In contrast, under the majority’s view, even if the parties reached a monetary settlement on May 20, but loose ends remained that did not require the mediator’s input or assistance to resolve, the matter would not be considered settled “at” mediation, and Mr. Golomb would be entitled to a 40% share, an absurd result.
The majority rejects this analysis, finding that it was Ms. Menkes’s obligation to include language indicating that the mediation was an ongoing process and required to end before the 40% fee vested. However, this is what the first paragraph contemplated when it provided that Mr. Golomb would “provide whatever services are needed ... to prepare [the file] for the mediation and to handle the mediation” in return for 12% of the net attorneys’ fees, without limitation, and what the second paragraph contemplated when it obligated Mr. Golomb to prepare the case for trial and to try it if necessary as consideration for the increased fee.
*516Furthermore, an analysis of the language employed in the second paragraph does not support the majority’s view. The term “presently scheduled for May 20, 2013,” separated by commas, is a descriptive term, not one of limitation (see Gravatt v General Star Indent. Co., 1998 WL 842351, *4 n 5, 1998 US Dist LEXIS 18827, *13 n 5 [SD NY, Dec. 2, 1998, No. 98-Civ-6670(RWS)] [“These commas indicate a non restrictive clause. Nonrestrictive clauses do not limit or define, but merely expand upon the meaning of the words to which they relate”]; see also Gertrude Block, Language Tips, 72 NY St BJ 54, 54 [June 2000] [“Commas enclose non-restrictive relative clauses; no commas are used around restrictive clauses”; non-restrictive clauses do not “define” the terms they follow, but merely add information]; NACS v Board of Governors of Fed. Reserve Sys., 746 F3d 474, 487 [DC Cir 2014], cert denied 574 US —, 135 S Ct 1170 [2015]). Although the phrase identifies the start date of the mediation, it does not limit Mr. Golomb’s responsibilities with respect to “the mediation” to that single date. Thus, when read as a whole, the agreement unambiguously provides for a 12% fee if the case resolves through the mediation and a 40% fee if the mediation was unsuccessful and the case has to proceed towards trial.
The majority states that this parsing of commas is an attempt to create an ambiguity where none exists. However, it is in fact a straightforward grammatical analysis of the language employed. As the court observed in Massachusetts Mut. Life Ins. Co. v Aritech Corp. (882 F Supp 190, 195 [D Mass 1995]): “The distinction may be analogized to the lessons everyone learned in junior high school about defining and non-defining relative clauses. Thus, the sentence ‘Lawyers who are charlatans should be flogged’ is quite different from the sentence ‘Lawyers, who are charlatans, should be flogged.’ In the first sentence the relative clause, not being set off with commas, defines a certain class of lawyers; the clause limits its antecedent. In the second sentence, because of the commas, the relative clause is merely descriptive, and all lawyers take a beating.”
Here, as set forth above, the phrase “at the mediation, presently scheduled for May 20, 2013,” is separated by commas, and the reference to the date is descriptive; it does nothing more than identify when the mediation is to commence.
The majority states that we should not review this argument because it is raised for the first time on appeal. However, Ms. Menkes did argue before the motion court that the reference to “at” the mediation did not state or imply that the mediation *517process was confined to May 20. Moreover, the argument is properly considered because it involves a question of law appearing on the face of the record that could not have been avoided by Mr. Golomb if brought to his attention in a timely manner (see Ellington v EMI Music Inc., 106 AD3d 401 [1st Dept 2013], affd 24 NY3d 239 [2014]).
Even if the phrasing in the parties’ agreement is viewed as ambiguous, which it is not, an affirmation by David Brodsky, a professional mediator/arbitrator who specializes in complex commercial and financial disputes, was submitted by Ms. Mendes for the proposition that mediation is often a process that does not begin and end in a single day (see also Robin Gise, Jed Melnick, Vivien Shelanski & John Wilkinson, Mediation Starts from the First Phone Call—Practice Pointers and Helpful Hints for Lawyers Going to Mediation, 11 Cardozo J Conflict Resol 463, 475-476 [2010] [“Mediation is a process that may incorporate a day of face-to-face negotiations, and there may or may not be a settlement on that day. To suggest, however, that there is such a thing as ‘after the mediation’ is to force mediation into a ‘one day’ paradigm that undermines the true potential of mediation. Rather, a mediation starts the moment the first call comes in, and it should not end until the parties have put the dispute behind them”]).*
This view is consistent with the information provided on the JAMS website, which states, “Mediation is a process wherein the parties meet with a mutually selected impartial and neutral person who assists them in the negotiation of their differences” (JAMS Arbitration, Mediation, and ADR Services, Mediation Defined, http://www.jamsadr.com/mediation-defined). The JAMS Mediation Guide states, under “Follow Up,” that “[i]n some cases, telephone conferences occur following mediation sessions if no agreement has yet been reached. Sometimes, further information is required for the process to continue or additional people may need to be involved in the decision making process” (JAMS Arbitration, Mediation, and ADR Services, JAMS Mediation Guide, http://www.jamsadr.com/mediationguide/). Under “Agreement,” the Guide states, “The mediator will work with counsel to finalize a settlement agreement and determine the procedures necessary for implementation. The mediator is available to provide assistance throughout the process” (http ://www.j amsadr. com/mediation-guide/).
*518Although Mr. Golomb’s performance was exemplary, and he diligently worked towards obtaining a settlement beneficial to plaintiffs, the trial court’s interpretation would create a perverse incentive to avoid settling a case at mediation, even if the parties were close to agreement, where an attorney’s retainer provided that he or she would receive a greater fee thereafter. It would also discourage the efforts of an outstanding mediator, such as the one the parties selected here, to continue his or her efforts where the parties were on the verge of reaching a settlement, even though a specific mediation session had ended.
The majority finds that the mediation ended on May 20 and that the fact that the mediator offered to reach out to the carriers to see if they would increase their offer thereafter is of no consequence. However, this interpretation again ignores that mediation is a process that often takes time to produce an agreement, especially where the case involves multiple responsible parties, complex injuries, and a large claim for damages. More importantly, it is not supported by the record, which demonstrates that further action by the mediator was expected when the May 20 session ended, and that the $8 million settlement was the direct result of the mediator’s efforts.
As Supreme Court observed: “[c]o-defendant General Restoration Associates’s counsel . . . avers, in his supplemental affirmation . . . that although [the parties] did not schedule another in-person session, he understood that the Mediator would continue efforts to bridge the gap after the May 20 session by contacting the excess carriers and plaintiffs’ attorneys to continue negotiations” (42 Misc 3d 1227[A], 2014 NY Slip Op 50206[U], *8 [Sup Ct, NY County 2014]).
Consistent with this statement, emails between Mr. Golomb and Ms. Menkes demonstrate that Mr. Golomb was still negotiating with the mediator after May 20.
In an email dated May 21 addressing plaintiffs’ “WC [Workers’ Compensation] situation,” Mr. Golomb advised Ms. Menkes, “For now, if we can come to agreement via [the mediator] on the number, we can say subject to approval by WC and approval by clients.”
In an email dated May 22, Mr. Golomb advised Ms. Menkes, “[The mediator] has not yet called back.” In another email that day, Mr. Golomb advised Ms. Menkes that the mediator had called back and “hasn’t heard from the excess people and is going to reach out to them [and] hopes to get back to me by Friday.” The mediator also advised Mr. Golomb that the Workers’ Compensation lien could be negotiated. In an email dated *519May 28, Ms. Menkes asked if there was any news and if “we should say that if we do not settle by a certain date we will not accept settlement and will be prepared to let the jury decide the value of the case.” Later that day, Mr. Golomb replied that he had gotten a text from the mediator that morning, who said he would try to contact the excess carrier that day and would let Mr. Golomb know what happened. Three days later, on May 31, the mediator conveyed the $8 million offer to Mr. Golomb, which plaintiffs accepted.
Mr. Golomb also acknowledged at oral argument on the motions that at the close of the mediation there was an expression of hope by the mediator that the gap between the parties would be closed. Mr. Golomb explained: “He gave me the card for the Zurich excess — the RSUI excess representative. He gave her my card. He expressed the hope that we would remain in touch because the only way the case was going to settle was, (a), if I could get a greater than statutory one-third reduction of the comp lien which I hoped to and, (b) if one or both of the excess carriers would put a substantial amount, at least a million dollars, if not more, on the case.”
Mr. Golomb further acknowledged that after the May 20 session, he had further conversations with the mediator and with the structured settlement brokers and defense counsel. Mr. Golomb admitted that he ultimately agreed to the $8 million figure with the mediator, who was involved when all the parties locked in the number, after which he and defense counsel worked out the terms of the structured settlement and the release on their own. During this entire 10-day period, Mr. Golomb and Ms. Menkes took no steps to prepare the case for trial and were merely awaiting news of the mediator’s progress with the excess carrier in anticipation of settlement. That the parties came to an agreement on the details of the structured settlement and release, including the issues arising from plaintiffs’ receipt of Workers’ Compensation benefits, without needing the assistance of the mediator, does not alter the fact that the offer of $8,000,000 and the acceptance of that figure was accomplished through the mediator.
On this record, the fact that the mediator, whether to generate good will or otherwise, chose to bill for only five hours is inconsequential. The fact that it took 11 days to reach a settlement merely demonstrates the extent of the mediator’s continued involvement and efforts to resolve the case. While the majority believes that Mr. Golomb should be rewarded because he took the lead at the mediation and in the follow-up negotiations, that is what he agreed to do for 12% of the net attorneys’ fees.
*520Accordingly, I would award Mr. Golomb 12% of the net attorneys fees.

 Contrary to the majority’s implication, this analysis is presented as an alternative grounds for reversing the award of a 40% fee, should the agreement be deemed ambiguous. My primary holding is that the agreement unambiguously entitles Mr. Golomb to only 12%, which does not rely on prohibited extrinsic evidence as the majority contends.