Albunio v. City of New York, 11 N.E.3d 1104

In 2005, appellants Lori Albunio and Thomas Connors hired Mary Dorman to represent them in a NYCHRL suit against the City of New York and the NYPD.
Dorman and the clients executed three retainer agreements: a Trial Agreement (trial stage) and two Appellate Agreements (appeals).
The Trial Agreement provided a 1/3 contingency on the sum recovered, computed on the net sum recovered after deductions, and did not expressly address statutory fees.
The Appellate Agreements stated that, if Dorman was entitled to appellate fees, she could receive them in full; if fees were awarded but less than $20,000, clients would pay $20,000, and if fees exceeded $20,000 duties shift accordingly.
A jury awarded damages of $986,671; Dorman received statutory trial fees of $296,826 and appellate fees of $233,965, totaling just over $530,000 in fees.
The trial court and First Department treated the Trial Agreement as allowing the contingency to be based on the total recovery, including statutory fees; the Court of Appeals held the Trial Agreement’s “sum recovered” did not unambiguously include statutory fees and adopted the greater-of-two-rule against the drafter-ambiguous contract interpretation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Trial Agreement includes statutory fees in the sum recovered.	Dorman argues the Trial Agreement’s ‘sum recovered’ should include statutory fees as part of the total recovery.	Albunio/Connors contend the Trial Agreement did not include statutory fees; statutory fees should not augment the contingency.	The Trial Agreement does not unambiguously include statutory fees; Dorman may recover either one-third of the jury verdict or the statutory trial fees, whichever is greater.
How should statutory fees affect the contingency fee when the retainer is silent on the matter?	Dorman seeks the greater of the contingency fee or the total statutory fees.	Appellants urge offsetting statutory fees against the contingency, reducing the client’s liability.	Absent a contrary contract term, the lawyer is entitled to the greater of the contingency or the statutory award; offset applies when applicable to ensure fairness.
Are the Appellate Agreements enforceable as written regarding appellate fees?	Dorman asserts the Appellate Agreements unambiguously entitle her to statutory appellate fees in full.	Appellants argue the appellate fee structure is enforceable and offsets apply if appellate fees exceed or fall short of $20,000.	Yes; the Appellate Agreements are enforceable as written, and statutory appellate fees exceed $20,000 are awarded in full, with minimums applied per agreement.

Lowe v. Pate Stevedoring Co., 595 F.2d 256 (5th Cir. 1979) (fee on fee not included unless contract so provides; full damages not reduced by statutory fee)
Bates v. Kuguenko, 100 F.3d 961 (9th Cir. 1996) (absent explicit inclusion, fees awarded are deducted from the sum divided for contingency)
Cambridge Trust Co. v. Hanify & King Professional Corp., 430 Mass. 472 (1999) (better approach is greater of contingent fee or court-awarded fees, whichever is greater)
State ex rel. Oklahoma Bar Assn. v. Weeks, 969 P.2d 347 (Okla. 1998) (statutory fees should not be treated as addition to contingent fee; credit against contingency)
Venegas v. Skaggs, 867 F.2d 527 (9th Cir. 1989) (windfall concerns; statutory awards generally offset against contingency)
King v. Fox, 7 N.Y.3d 181 (2006) (ambiguous fee agreements construed against the drafter; client understanding matters)
Shaw v. Manufacturers Hanover Trust Co., 68 N.Y.2d 172 (1986) (attorney-client fee agreements are subject to strict scrutiny for clarity and understanding)
Jacobson v. Sassower, 66 N.Y.2d 991 (1985) (special concern for attorney fee agreements between lawyers and clients)
Gair v. Peck, 6 N.Y.2d 97 (1959) (attorney fees governed by high standards of fairness and clarity)