Court Opinion

ID: 5489404
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:23:47.337703+00
Date Added: 2024-06-11T08:33:44.565836
License: Public Domain

Rivera, J.
(concurring in part and dissenting in part). I concur with the majority that the retainer agreement is enforceable. However, I disagree with the majority that the estate’s claim seeking a return of the gifts is untimely, and therefore I dissent from this portion of the opinion. I would hold that the continuous representation doctrine tolled the estate’s claim. As the Special Referee stated, which the Surrogate confirmed, “the nexus between the attorneys’ conduct complained of (the 1998 gifts) and the subject of their representation both before and for many years afterward is sufficient to apply the continuing representation doctrine for tolling purposes” (see Ref Rep Estate of Alice Lawrence’s Motion for Partial Summary Judgment and Cross Motions of Graubard Miller and of Defendants C. Daniel Chill, Elaine M. Reich and Steven Mallis for Partial Summary Judgment, Sept. 23, 2009 at 18; Matter of Lawrence, Sur Ct, NY County, Oct. 1, 2009, Webber, S.). Additionally, as the Appellate Division noted, “the doctrine applies where, as here, the claims involve self-dealing at the expense of a client in connection with a particular subject matter” (Matter of Lawrence, 106 AD3d 607, 608 [1st Dept 2013]).
As to the merits, I would hold that the challenged gifts are not valid for the reasons stated by the Appellate Division and the Surrogate, except insofar as the Surrogate suggests that Mrs. Lawrence’s age, by itself, is a factor weighing against finding the gifts were freely given (see Matter of Lawrence, Sur Ct, NY County, Sept. 8, 2011, Anderson, S.). Moreover, the attorneys’ failure to act in a manner that comported with ethical *346considerations and their fiduciary duties lends additional support for finding these gifts invalid.
First, the attorneys acted in a manner that suggests they elevated their own interests above those of their clients. Both the Appellate Division and Referee noted that the attorneys came up short of their ethical obligations (see Lawrence, 106 AD3d at 608-609 [“the secrecy surrounding the gifts, and their extraordinary amounts, which the individual defendants accepted without advising the widow to seek independent counsel, preclude a finding in the individual defendants’ favor”], citing Code of Professional Responsibility EC 5-5). As the Referee concluded, the attorneys violated Code of Professional Responsibility EC 5-5 by “failing to advise Alice to ‘secure advice from an independent, competent person cognizant of all the circumstances’ ” (Ref Rep on the Oct. 5, 2009 Hearing, Aug. 27, 2010 at 31, citing Code of Professional Responsibility EC 5-5). I agree with the Appellate Division that this was not the determining factor. However, even if such a violation was not a per se basis for invalidating the gifts, it suggests that the attorneys were more concerned with their own interests in the money than with ensuring Mrs. Lawrence’s gift was “fair and fully intended” (Radin v Opperman, 64 AD2d 820, 820 [4th Dept 1978], citing Nesbitt v Lockman, 34 NY 167, 169-170 [1866], Howland v Smith, 9 AD2d 197, 199-200 [3d Dept 1959], Reoux v Reoux, 3 AD2d 560, 562-564 [3d Dept 1957], Snook v Sullivan, 53 App Div 602, 606-607 [4th Dept 1900], Matter of Bartel, 33 AD2d 987 [4th Dept 1970], and Matter of Eckert, 93 Misc 2d 677, 679-681 [Sur Ct, NY County 1978]). This is not mere speculation as to the attorneys’ motivation, for here the attorneys failed to even investigate their ethical duties to the Lawrence children, further suggesting the primacy of their personal interests.
Second, the attorneys may have had an ethical responsibility to disclose the gifts because Mrs. Lawrence was not their sole client. As the record establishes, the estate’s expert and Graubard’s expert each agreed that the attorneys had an ethical duty to disclose the gifts to the Lawrence children. The experts testified that because the gifts were made by a co-client, disclosure was necessary to allow the children to assess potential conflicts raised by the gifts so that they might determine whether the attorneys were able to continue providing them with zealous representation, untainted by these life-altering gifts. Third, the gifts implicated the attorneys’ fiduciaiy duties to the firm’s partners regarding their shared compensation. All *347of this suggests that there was a significant question as to whether the attorneys could comply with their ethical and fiduciary duties while at the same time maintain the silence Mrs. Lawrence demanded and expected as a caveat to her generosity. Thus, they should have informed Mrs. Lawrence that their obligations as attorneys might well require them to disclose the gifts. Having failed to do so, knowing all the while that maintaining secrecy about the gifts was important to Mrs. Lawrence, it would seem that she was deprived of information necessary to make a truly informed and voluntary choice (see Radin, 64 AD2d at 820; Matter of Henderson, 80 NY2d 388, 392-393 [1992]; Howland, 9 AD2d at 199; Nesbitt, 34 NY at 169-170).
Chief Judge Lippman and Judges Graffeo and Pigott concur; Judge Rivera dissents in part in an opinion; Judges Smith and Abdus-Salaam taking no part.
Order reversed, with costs, matter remitted to Surrogate’s Court, New York County, for entry of a decree in accordance with the opinion herein, and certified question answered in the negative.