Court Opinion

ID: 9807436
Source: CourtListenerOpinion
Date Created: 2023-08-31 20:04:29.207247+00
Date Added: 2024-06-11T11:37:07.793380
License: Public Domain

Order, Supreme Court, New York County (Carol R. Edmead, J.), entered February 21, 2014, which, insofar as appealed from, denied nonparty appellant’s motion to fix nonparty respondent David B. Golomb, Esq.’s share of net attorneys’ fees at 12% and to determine nonparty respondent Jeffrey A. Manheimer, Esq.’s share of net attorneys’ fees on a quantum meruit basis, granted Golomb’s motion to fix his share of net attorneys’ fees at 40%, and granted Manheimer’s motion to fix his share of net attorneys’ fees at 20%, affirmed, without costs.
In February 2009, nonparty appellant Sheryl Menkes, as attorney of record for plaintiffs in this personal injury action, entered into an agreement with Jeffrey A. Manheimer under which he would, inter alia, act as cocounsel, provide advice to Menkes, and attend certain depositions and the trial in exchange for 20% of net attorneys’ fees. In June 2009, the agreement was amended to specify that Manheimer would act in an advisory capacity only and would not contact the court or others involved in the litigation without Menkes’s consent. Neither Manheimer nor Menkes informed plaintiffs of their arrangement or Manheimer’s involvement in the case. In August 2009, Menkes wrote to Manheimer discharging him. Menkes stated that from that point forward, she “preferred ‘to handle this matter alone.’ ”
In 2012, plaintiffs were granted summary judgment on liability. In February or March 2013, Menkes sought assistance *506from David Golomb to handle “a scheduled May 2013 mediation.” In an email to Menkes dated March 12, 2013, Golomb proposed to handle the mediation, including preparation of the case for mediation, for 12% of the attorneys’ fees when the case was resolved. He further proposed that “[i]f the case [did] not resolve at the mediation, presently scheduled for May 20, 2013,” he would be entitled to 40% of net attorneys’ fees. Menkes and Golomb exchanged a series of emails clarifying, among other things, that the total amount of fees Golomb would be entitled to would be 40%, should the case not settle at mediation. The final language regarding compensation was added at Menkes’s request. Plaintiffs were notified of this arrangement and consented to it in writing.
Counsel for the parties and representatives of various insurers attended a mediation sponsored by JAMS on May 20, 2013. During this mediation, plaintiffs reduced their demand to $8.5 million and the insurers raised their offer from $2 million to the full extent authorized by excess insurance carriers, which was either $7 million or $7.5 million. The mediation session thereafter ended, although the mediator stated he would attempt to speak with the excess carriers to see if they would negotiate directly with plaintiffs’ counsel. It is undisputed that the case was not resolved on that date.
The following day, Menkes and Golomb exchanged emails discussing cash that would be available to plaintiffs under a $7.5 million structured settlement and the effect that a “significant” Workers’ Compensation lien would have on the amounts received by plaintiffs.
On May 22, the mediator called Golomb to inform him that he had not heard from the excess carriers and would reach out to them. Golomb told the mediator that the Workers’ Compensation lien could not be negotiated downward. That same day, JAMS invoiced Menkes for her portion of five hours of mediation services for the May 20 session.
Menkes emailed Golomb on May 28th and asked whether there was “any news.” She proposed to Golomb that perhaps they should take a harder line in negotiations and directly advise the excess carriers that “if we do not settle by a date certain we will not accept settlement and will be prepared to let the jury decide the value of the case.” Golomb told Menkes that the mediator advised him that he was going to try and contact the insurers.
Three days later, on May 31, the mediator called Golomb to convey an offer of $8 million, which plaintiffs accepted. The mediator thereafter had no further discussions with any party. *507The parties then directly negotiated the terras of the structured settlement, including who would act as plaintiffs’ structured settlement broker, plaintiffs’ option in choosing an annuity company, etc. The final terms were memorialized in a letter dated June 3, 2013, which was executed on June 5.
Almost immediately thereafter, a dispute arose over the percentage of the fees due to Golomb and Manheimer. Menkes took the position that the mediation did not end on May 20, and, since it continued thereafter and resulted in a settlement, Golomb was only entitled to 12% of the fees. Golomb argued that the mediation ended on May 20, and, since the settlement did not occur as a result of the mediation, he was entitled to 40% of the fees. With respect to Manheimer, Menkes argues that he was entitled to fees based on a quantum meruit basis since he breached the terms of their agreement. Manheimer contends that the agreement clearly states that he is entitled to 20% of the fees since the agreement was terminated without cause by Menkes.
The issue before us is one of simple contract interpretation. Under well established precedent, agreements are to be generally construed in accord with the parties’ intent (see Slatt v Slatt, 64 NY2d 966 [1985]). The best evidence of the parties’ intent is “what they say in their writing” (Schron v Troutman Sanders LLP, 20 NY3d 430, 436 [2013], quoting Greenfield v Philles Records, 98 NY2d 562, 569 [2002]). “[W]hen parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms” (W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]; Jet Acceptance Corp. v Quest Mexicana S.A. de C.V., 87 AD3d 850, 854 [1st Dept 2011]). This rule is particularly applicable where the parties are sophisticated and are negotiating at arm’s length (see Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004]). Language in a written agreement is deemed to be clear and unambiguous where it is reasonably susceptible of only one meaning or interpretation (see White v Continental Cas. Co., 9 NY3d 264 [2007]; Riverside S. Planning Corp. v CRP/Extell Riverside, L.P., 60 AD3d 61, 67 [1st Dept 2008], affd 13 NY3d 398 [2009]). Finally, “[e]xtrinsic evidence may not be introduced to create an ambiguity in an otherwise clear document” (Jet Acceptance Corp., 87 AD3d at 854, citing W.W.W. Assoc., 77 NY2d at 163).
Here, as the dissent agrees, the language of the contract is unambiguous. Menkes argues that she interpreted the term “mediation” to constitute an ongoing process that would not be limited to a single session but rather would continue until an *508impasse or other termination had occurred. However, the assertion by a party to a contract that its terms mean something to him or her “where it is otherwise clear, unequivocal and understandable when read in connection with the whole contract” is not sufficient to make a contract ambiguous so as to require a court to divine its meaning (see Vesta Capital Mgt. LLC v Chatterjee Group, 78 AD3d 411, 411 [1st Dept 2010]). The specific fee language that Menkes now claims supports her position was added to the agreement at her request. She takes the untenable position that she was never advised that the mediation reached an impasse or had been terminated. Yet despite the fact that the agreement went through several revisions, neither party saw fit to add any language to that effect. Both parties to the agreement are attorneys and thus know the importance of precision in the words used (see Vermont Teddy Bear Co., 1 NY3d at 475). These clear terms, under these circumstances, need no interpretation by the court.
We agree with the dissent that the agreement in question must be read as a whole. When so read, however, the unambiguous language of this agreement does not support Menkes’s interpretation that Golomb was required to take steps to prepare the case for trial in order to be entitled to the higher fee. In fact, the language referenced by the dissent states just the opposite. The two pertinent paragraphs of the agreement provide in full:
“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 be receive [sic] twelve (12%) 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. This percentage due 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. In the event, this matter has to be tried, the total of all attorneys fees to which I am entitled for all of the services set forth, including mediation, shall be forty (40%) percent of all attorneys’ fees whenever the case is resolved, *509whether by settlement, verdict after trial or appeal, calculated after the attorneys have been reimbursed for all expenses laid out.”
The first paragraph makes reference to “the mediation,” not the “process” of mediation. The second paragraph again uses the term “the mediation” and further defines it as “presently scheduled for May 20, 2013.” Although the dissent contends the inclusion of the date is merely “descriptive” and “does nothing more than identify when the mediation was to commence,” the clear language of the paragraphs does not support that conclusion. Further, there is nothing contained in these paragraphs or the remainder of the agreement that conditions Golomb’s entitlement to the higher fee upon his commencing or taking any steps to prepare for trial.
The record clearly reflects that Menkes’s current position was part of the original draft of the agreement. As noted, she requested a number of revisions that were agreed to by Golomb before both signed the agreement.
In short, Menkes’s argument could best be described as constituting “buyer’s remorse,” asking us to reform a contract that is clear on its face and to insert terms that were not contemplated by the parties because of unforeseen results.
The dissent’s adoption of Menkes’s argument that mediation is a “process” misses the point. We are not concerned here with mediation in the abstract or what Menkes claims the term meant to her. The unambiguous terms of the contract speak for themselves. The dissent, however, relies on Menkes’s expert for the proposition that mediation is an ongoing process and interpreting the contract as we do to limit it to one session would essentially produce an absurd result. To accept Menkes’s argument in this regard is to admit extrinsic evidence to an admittedly unambiguous contract which is prohibited by longstanding precedent (see W.W.W. Assoc., 77 NY2d at 163). Moreover, the expert’s affirmation does no more than set forth general principles of mediation and his particular practices, and assumes for purposes of his affirmation that the May 20 mediation session was “adjourned,” despite the fact that there is nothing in the record indicating such an “adjournment.” In effect, his affirmation sets forth the general practice and custom in the industry. Since the contract is unambiguous, this evidence should not be considered (see e.g. Greenfield v Philles Records, 98 NY2d 562, 569 [2002]; OFSI Fund II, LLC v Canadian Imperial Bank of Commerce, 82 AD3d 537 [1st Dept 2011], lv denied 17 NY3d 702 [2011]).
As our dissenting colleague makes reference to the JAMS *510website for general propositions applicable to all mediations, we do the same. Under the heading, “The Joint Meeting,” the website states: “When all of the procedures have been agreed to and a mediation agreement has been signed, the mediation session or sessions are scheduled” (JAMS Arbitration, Mediation, and ADR Services, JAMS Mediation Guide, http:// www.jamsadr.com/mediation-guide [emphasis added]). Thus, as in this case, and contrary to the expert’s opinion, mediation can, and obviously does on occasion, consist of only one session. It is important to remember that Menkes entered into the agreement with Golomb after the mediation session had already been scheduled, hence the phrase “at the mediation, presently scheduled for May 20, 2013.” If she anticipated, as she now claims, that the mediation would be an ongoing process, and that a term such as impasse or other specific language formally terminating the mediation was required to activate Golomb’s entitlement to 40% of the net attorneys’ fees, she had more than ample opportunity to make the appropriate revisions to the agreement before signing it, as she did with several other terms, as noted above. The acceptance of her argument would constitute the addition of a provision to an otherwise unambiguous contract that the parties did not intend to include. More importantly, as discussed herein, Menkes’s conduct during settlement negotiations undermines the arguments she now makes in support of her claim that the contract entitles Golomb to only a 12% portion of the attorneys fee.
The parsing of and positioning of the number of commas in this contract, as advanced by Menkes and adopted by the dissent, is simply an attempt to create ambiguity where none exists. As this grammatical argument was raised for the first time in Menkes’s reply brief, we decline to consider it (OFSI Fund II, 82 AD3d at 538). Were we to consider it, we would find that the plain language of the agreement fails to support it. There is nothing in this agreement or in the record, that indicates that the parties contemplated additional mediation sessions or that the May 20 session was “adjourned,” as the expert posits. JAMS billed Menkes for only five hours on May 20, indicating that the mediation had ended. Significantly, despite plaintiffs present contention that the mediation was ongoing, her actions bespeak an acknowledgment that this was not the case. Her email to Golomb of May 28 regarding taking a harder line with the insurers in order to get them to increase their offer indicates her awareness that the mediation had ended and that some action had to be taken by her and Golomb to get the insurers to commence further discussions with a view toward a possible settlement. Thus, her argument that *511the contract anticipated additional sessions or a “process” of continuing mediation is belied by the record.
At the end of the day on May 20, the mediation ended because the carriers reached the limits of their authority. There was no commitment by them to seek approval for an increase in their offer or even to discuss settlement further. There was no agreement by the parties to continue negotiations through the mediator, although some may have anticipated that negotiations would continue in some form or other. As of May 28, the excess carriers had not called either the mediator or Golomb to continue negotiations. That the mediator offered to reach out to the excess carriers to see if they would increase their offer does not change the fact that the mediation had ended. At the conclusion of the mediation session on May 20, the parties were not even close to a settlement. They were at least $1 million apart. There were other significant issues such as whether the Workers Compensation lien could be negotiated and in what amount (as noted, Golomb subsequently advised the mediator that the lien could not be negotiated downward); whether any settlement amount could be structured and what surety would do such structuring; whether attorneys’ fees could be structured; the net amount to the clients after paying the lien if the offer of $7 million was accepted, as well as several other issues that needed to be resolved before a settlement amount could even be agreed upon.* Notably, the mediator took no action for several days, and the excess carriers did not contact either the mediator or Golomb during that time, and did not increase their offer for 11 days after the mediation session ended. As noted, Menkes herself wanted to take a harder line with the carriers to bring them back to the negotiating table, a distinct change in her position and one that does not indicate that the mediation “process” was ongoing. The claim that the parties anticipated further mediation is simply not supported by this record.
It is a stunning proposition advanced by Menkes and adopted by the dissent that our ruling today creates a situation where an attorney would intentionally violate the Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.7 in order to maximize his or her fee. There is an inherent tension between the interests of attorneys and their clients in settlement negotiations. However, the attorney is bound to resolve such tension in favor of the client by using his or her best judgment in doing what is in the best interests of the client, not his or her *512own best interests. In any event, such speculation is unwarranted here, since it is undisputed that Golomb did everything he could to settle the case at the mediation session on May 20.
Menkes’s invocation of equity in arguing that the motion court’s decision was an “absurdly harsh” interpretation of the contract also falls short, since there is no question that Golomb took the lead at the mediation, handled the negotiations during and after the mediation session ended, and even prepared the final settlement documents, which admittedly was beyond Menkes’s ability and was outside the scope of Golumb’s duties under the agreement. It has long been the rule that an agreement between attorneys regarding division of their legal fees is valid and enforceable and courts will not inquire into the precise worth of their services as long as each contributed, particularly where, as here, there is no claim that each refused to contribute more substantially (Benjamin v Koeppel, 85 NY2d 549, 556 [1995]).
With respect to Manheimer, Menkes offers no evidentiary support for her contention that he is only entitled to compensation on a quantum meruit basis because he breached his agreements with her by exceeding his role as set forth in those agreements. She made no claim of such breach at the time she discharged him, and there is nothing in the record to indicate that he did anything in contravention of the agreements. Nor can Menkes void the agreements by citing Manheimer’s failure to comply with Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.5 (g), formerly Code of Professional Responsibility DR 2-107 (a) (2) (22 NYCRR 1200.12 [a] [2]), which prohibits the division of legal fees between counsel from different firms except with the client’s consent and where the division is proportionate to the work performed by each. Since she violated the rule, she cannot seek to void the agreements by which she agreed to be bound and of which she received the benefit, and plaintiffs were not harmed by the violation (see Samuel v Druckman & Sinel, LLP, 12 NY3d 205, 210 [2009]; Law Offs. of K.C. Okoli, P.C. v Maduegbuna, 62 AD3d 477 [1st Dept 2009], lv dismissed 13 NY3d 771 [2009]). Concur — Sweeny, J.P., Saxe and DeGrasse, JJ.

 These matters hardly constitute “loose ends” as referenced by the dissent.