Ie v. Ageha Japanese Fusion, Inc.
1:15-cv-00063
| S.D.N.Y. | Apr 2, 2018Background
- Plaintiff Fortunata Liana Ie sued defendants for FLSA and New York Labor Law violations; case was set for trial in April 2017.
- Plaintiff privately accepted a $15,000 cash payment from defendants without involving her attorneys; plaintiff did not appear at a April 12, 2017 conference.
- Court declined to approve the private settlement (concern re: FLSA oversight) and dismissed the case without prejudice, retaining ancillary jurisdiction to decide a charging-lien dispute.
- Plaintiff’s counsel moved to fix and enforce a charging lien under N.Y. Judiciary Law § 475 seeking $39,306.98 (fees + costs); defendants opposed, arguing counsel was discharged for cause and no enforceable settlement existed.
- Court found no evidence counsel had been discharged for cause, concluded a charging lien attached when defendants paid the $15,000 directly to plaintiff, and fixed the reasonable lien amount but limited recovery to the $15,000 actually paid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did counsel lose lien rights by being discharged for cause? | Counsel: not discharged; last contact March 22, 2017. | Defs: Plaintiff discharged counsel on April 3 after private settlement, so lien lost. | Court: No evidence of discharge for cause; counsel retains lien. |
| Did a charging lien attach despite dismissal without prejudice? | Counsel: lien attached when defendants paid plaintiff $15,000. | Defs: Court dismissal means no settled/ extinguished claim, so no "favorable result." | Court: Private payment constituted a favorable result; lien attached at settlement. |
| What is the reasonable value of counsel's services? | Counsel: $37,980 fees + $1,326.98 costs = $39,306.98. | Defs: Challenges vagueness/block billing (argued to reduce fee). | Court: Reduced fees 20% for vague/block billing; reasonable fees $30,384 + costs $1,326.98 = $31,710.98. |
| What amount may be recovered now from defendants and plaintiff? | Counsel: seek full fixed lien amount. | Defs: No recovery beyond what was paid to plaintiff ($15,000). | Court: Lien cannot exceed funds obtained; judgment entered for $15,000 jointly and severally against plaintiff and defendants. |
Key Cases Cited
- Chesley v. Union Carbide Corp., 927 F.2d 60 (2d Cir. 1991) (New York §475 lien enforceable in federal court per NY interpretation)
- Fischer-Hansen v. Brooklyn Heights R.R., 173 N.Y. 492 (N.Y. 1903) (attorney’s charging lien attaches at settlement and protects attorneys’ security)
- Lai Ling Cheng v. Modansky Leasing Co., 73 N.Y.2d 454 (N.Y. 1989) (charging lien value based on reasonable value of services, not limited to retainer agreement)
- In re Shirley Duke Assocs., 611 F.2d 15 (2d Cir. 1979) (charging lien attaches to settlement fund extinguishing the cause of action)
- Skylon Corp. v. Greenberg, 164 F.3d 619 (2d Cir. 1998) (proper measure of lien is reasonable value of services)
- Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015) (explaining need for judicial oversight of FLSA settlements)