348 F. Supp. 3d 219
W.D.N.Y.2018Background
- Decedent died in a November 15, 2012 helicopter crash; Brenda Crout (plaintiff) sued Haverfield Aviation; parties settled for $6,000,000 after extensive litigation and mediation.
- Plaintiff initially retained Cellino & Barnes in November 2012; Cellino & Barnes performed preliminary investigation and communications but never filed suit or appeared in court for plaintiff.
- Plaintiff discharged Cellino & Barnes in December 2012 and retained Norman Colon and Faraci Lange, who commenced the action and led the litigation to settlement.
- Cellino & Barnes demanded a contingent percentage fee; plaintiff (through new counsel) repeatedly demanded an itemized statement and insisted payment be on a quantum meruit (fixed-dollar) basis.
- At settlement, Faraci Lange sought approval of fees ($1,961,974.13) and disbursements; dispute arose over what, if any, portion must be paid to Cellino & Barnes.
- Court approved the $6,000,000 settlement, awarded Faraci Lange its requested fees and disbursements, and ordered Cellino & Barnes paid $7,500 on a quantum meruit basis; remaining fee allocation and distribution referred to Schuyler County Surrogate's Court.
Issues
| Issue | Plaintiff's Argument | Cellino & Barnes' Argument | Held |
|---|---|---|---|
| Whether settlement should be approved | Settlement is fair, negotiated by experienced counsel, benefits estate | N/A | Approved: $6,000,000 fair given risks, costs, and mediation history |
| Whether outgoing firm (Cellino & Barnes) holds a retaining lien | Plaintiff: no—file turned over; firm forfeited any retaining lien | Cellino & Barnes: asserted liens and sought contingent share | Held: No retaining lien—firm voluntarily surrendered file, forfeiting retaining lien |
| Whether Section 475 charging lien attached | Plaintiff: no—Cellino & Barnes never appeared or filed suit | Cellino & Barnes: claimed charging lien as attorney of record | Held: No Section 475 charging lien—no appearance or commencement by Cellino & Barnes; remedy limited to quantum meruit |
| Proper compensation method & amount for Cellino & Barnes | Plaintiff: quantum meruit; provided limited services; suggested ~$5,000 | Cellino & Barnes: sought contingent percentage of recovery (proportionate share) and later claimed ~80 hours of work | Held: Quantum meruit applies; Cellino & Barnes failed to prove hours, rates, or value; court awards $7,500 in full satisfaction |
Key Cases Cited
- Cheng v. Modansky Leasing Co., 73 N.Y.2d 454 (N.Y. 1989) (outgoing attorney may choose quantum meruit or contingent share vis-à-vis other attorneys; contingent share requires agreement)
- Universal Acupuncture Pain Servs., P.C. v. Quadrino & Schwartz, P.C., 370 F.3d 259 (2d Cir. 2004) (discharged attorney may recover quantum meruit; contingent portion requires client agreement)
- Wells v. Sullivan, 907 F.2d 367 (2d Cir. 1990) (courts should give deference to contingency fee agreements as expression of parties' negotiated intent)
- Picciolo v. State, 287 A.D.2d 721 (App. Div. 2d Dep't 2001) (no Section 475 charging lien where discharged attorney only performed preliminary services and never appeared in litigation)