Court Opinion

ID: 5889841
Source: CourtListenerOpinion
Date Created: 2022-01-13 02:44:20.689318+00
Date Added: 2024-06-11T08:45:18.434741
License: Public Domain

OPINION OF THE COURT
Fein, J. P.
The issue in this action by a firm of attorneys against a client is whether the attorneys are entitled to recover in quantum meruit an amount in excess of the bill rendered and in excess of the agreed upon fee because defendant client has failed to pay plaintiffs’ bills as rendered and claims them to be excessive.
*93This is not a case in which plaintiffs’ services were terminated. They completed their services and there was a subsequent dispute as to the amount of the bills rendered. No authority has been found, and none is cited, in support of the proposition that when an attorney has completed his services and has rendered a bill, he may sue in quantum meruit for an amount in excess of the bill. Nor is there authority for the doctrine that an agreed upon fee may be increased because the client has delayed payment.
The authorities relied upon by plaintiffs in this action, and in the dissent, are all cases in which the attorney’s services were terminated prior to completion. In those cases it was held that although the retainer agreement may be relevant in determining the fee to which the attorney is entitled, it is not dispositive. The client’s right to terminate the attorney’s services is well settled, but if he does so he must pay for the reasonable value of the attorney’s services up to the time of termination, even though the fee may exceed that called for in the agreement.
Thus, in Matter of Tillman (259 NY 133, 135), where the agreed upon compensation was to be 3% of the proceeds and the attorney’s services were terminated before the litigation was completed and a substitution of attorneys was directed by the court, the principle is stated as follows: "The client is entitled to cancel his contract of retainer but such an agreement cannot be partially abrogated. Either it wholly stands or totally falls. After cancellation, its terms no longer serve to establish the sole standard for the attorney’s compensation. Together with other elements they may, however, be taken into consideration as a guide for ascertaining quantum meruit. (Matter of Krooks, 257 N. Y. 329.) The value of one attorney’s services is not measured by the result attained by another. This one did not contract for his contingent compensation on the hypothesis of success or failure by some other member of the bar.”
Similarly, in Matter of Montgomery (272 NY 323), cited in the dissent, an attorney for the executrix of a will was discharged after he had performed about five sixths of his contracted services. It was held that the attorney was entitled to recover in quantum meruit and not on the basis of the contract price. The court stated (at pp 326-327):
"Thus far it has been decided that the discharge of the attorney canceled and annulled the contract and that the *94contract having been canceled, it could not limit the amount of the recovery although it might be considered in fixing the amount of the reasonable value of the services rendered, the theory being that the cancellation could not be a half-way cancellation.
" 'It wholly stands or totally fails [sic]. ’ (Matter of Tillman, 259 N. Y. 133; Matter of Krooks, 257 N. Y. 329.)
"Under that theory, the contract price does not constitute a limitation on the amount of an attorney’s recovery, although its effect may be to enhance the amount the client may be compelled to pay and in a certain sense penalizes the client for exercising a privilege given by law to discharge an attorney at will regardless of cause.”
Similar is Matter of Goldin (104 AD2d 890), also relied upon in the dissent, where the attorney was retained by an estate upon an agreed fee of $10,000. He was discharged without cause and a new attorney was substituted to complete the administration of the estate. The court ruled (at p 891): "We now reverse and remit the matter to the Surrogate’s Court for a new hearing to determine the fair and reasonable value of appellant’s services. While it is a fundamental right of a client to discharge his attorney without cause at any time, the discharged attorney is ordinarily entitled to recover in quantum meruit for the fair and reasonable value of his services up to the point of his discharge (see Demov, Morris, Levine & Shein v Glantz, 53 NY2d 553; Matter of Montgomery, 272 NY 323). Importantly, when the discharged attorney seeks recovery in quantum meruit, he is not limited by the terms of his original retainer agreement (Matter of Montgomery, supra). Indeed, at bar, the only evidence presented at the original hearing — by appellant and his expert witness — regarding the value of the services performed, indicated that the value of those services was well in excess of the amount set in the original agreement.” To the same effect is Matter of Krooks (257 NY 329), a contingent fee case, where it was held that the discharge of the attorney before the services were completed, permitted recovery in quantum meruit.
In accord is McAvoy v Schramme (238 App Div 225, affd 263 NY 548), also a contingent fee case, where this court stated (at p 228): "It is well established that a client may discharge his attorney at any time for any reason he deems sufficient. In such circumstances the attorney is relegated to an action for the reasonable value of his services, unless he has fully *95performed his contract. In the event of full performance prior to discharge, however, the attorney may stand upon his contract and the measure of his damages is the agreed value of his services.” This court has so ruled in Kronish, Lieb, Shainswit, Weiner & Hellman v Howard Stores Corp. (44 AD2d 813, 814): "And further, contrary to the claim of defendant, where a lawyer is discharged voluntarily by a client, the lawyer may sue in quantum meruit. He is not limited to the amount he would have been entitled to under a retainer. (MacAvoy [sic] v. Schramme, 238 App. Div. 225, affd. 263 N. Y. 548.) When services of the attorney are incomplete at the time of discharge, the lawyer is relegated, as a matter of law, to a suit in quantum meruit. (MacAvoy [sic] v. Schramme, supra.) The record on this appeal discloses that there is, at the very least, a question of fact as to when or if the plaintiff law firm was discharged by defendant’s house counsel and the status and worth of the firm’s services. Even if the services, for which the plaintiff was retained, had been completed prior to discharge, the plaintiff would still be entitled to sue in quantum meruit. (MacAvoy [sic] v. Schramme, supra; see, also, the majority opinion by Hubbs, J., in Matter of Montgomery, 272 N. Y. 323, 327, erroneously cited by Special Term in support of its opinion.)” To the same effect is Zimmerman v Kallimopoulou (56 Misc 2d 828).
In this case it is undisputed that the attorneys were not discharged. After the client had been billed, she raised questions as to the amount of the bill and made limited payments on account. Under these circumstances, there is no authority which supports the recovery of a fee in excess of the amount billed. Attorneys have no greater rights than those who render other services or sell other products. Absent express agreement, there is no right to increase the bill because of nonpayment. Nor does the assertion that the order granting summary judgment authorizes such recovery have any footing in the case authorities or in the record.
As the dissent notes, Justice Wright’s order granting summary judgment is not contained in the record. However, it was apparently before the court and is quoted, in pertinent part, in plaintiffs’ brief, as follows:
"In opposition to the motion, defendant does not dispute that plaintiffs did provide legal services to her; defendant does, however, disagree with 'the magnitude of plaintiff’s bills.[’]
*96"Plaintiffs’ motion is granted to the extent that plaintiffs are granted summary judgment against defendant on the issue of liability. An assessment shall be held to determine the amount of the judgment.”
There is simply no foundation in the record for the dissent’s assertion that this order authorized a recovery on the second cause of action in quantum meruit of an award in excess of the bill and the agreed upon fee. Since defendant challenged the size of the bill, it was proper in granting summary judgment on liability to direct an assessment. This provided a basis for proving the reasonableness of the bill, not for a judgment in excess of the bill and in excess of the agreed fee for the appeal which the dissent apparently approves.
It was equally necessary for an assessment to determine the amounts which had been paid, which were in dispute, as the dissent concedes.
The grant of summary judgment as to liability in no way authorized recovery in excess of the billed amounts. Obviously, the issue of liability was correctly decided. An assessment was properly directed because of the disputed issues. This imported no obligation to pay more than the billed and agreed upon amounts. Nor could it do so. There is no basis for the suggestion in the dissent that defendant’s failure to appeal from the order bars her from raising the issue now. There was nothing for her to appeal from. As the order states, the liability found was conceded. Defendant disputed only "the magnitude of plaintiff’s bills”. The surviving issue as to the reasonableness of the bill required the assessment which was directed.
The first cause of action expressly alleges that it is brought to recover the amounts billed for the agreed services and for the fee agreed upon for responding to a subsequent appeal. Thus, plaintiff could not be surprised, as feared by the dissent, by the conclusion that recovery must be limited by the amount billed and amount agreed upon for the appeal. The first cause of action plainly asserts this basis for recovery.
Paragraph fifth of the complaint alleges that on April 7, 1982 plaintiffs rendered a bill for all services performed prior to that date, for which payment had not been made. The bill was in the amount of $55,000. The complaint alleges two payments on account — one in the sum of $1,000 in December 1982 and another in the sum of $3,000 in February 1983, leaving a balance of $51,000. The complaint claims an additional sum for interest accrued.
*97In paragraph seventh the complaint further alleges that after rendition of the bill and the two payments made on account, in June 1983 defendant retained plaintiffs to handle the appeal at an agreed cost of $6,500, exclusive of disbursements. This would leave a balance due of $57,000 plus interest, against which plaintiffs admitted, in the complaint and at the trial on damages, that payments of $12,000 were subsequently made, leaving a balance due of $45,500, plus interest from July 1, 1983.
The evidence amply supported plaintiffs’ right to recover the amounts billed and the agreed upon fee for the appeal. The obligation of the court to insure that the fee was fair and reasonable was discharged by directing the assessment.
It is noted that on the trial, plaintiffs asserted that they were entitled to $7,500 for the appeal, although they admitted the agreed upon fee was $6,500. It is further notable that defendant contended that the $6,500 for the appeal was based upon the expected services of Miriam M. Robinson to handle the appeal, but that the appeal was actually handled by an employee of plaintiffs’ office for a fee of $1,000 which was added to the $6,500 claimed by plaintiffs, and allowed by the court in the judgment appealed from. No lawful basis whatsoever justifies the additional $1,000 in excess of the agreed upon fee for the appeal.
Accordingly, the judgment, Supreme Court, New York County (Burton Sherman, J.), entered November 12, 1985, which awarded plaintiffs the sum of $62,500 with interest from July 1, 1983 should be modified on the law and the facts, to award plaintiffs the sum of $45,500 with interest from July 1, 1983, and otherwise affirmed, without costs.