338 F. Supp. 3d 358
S.D. Ill.2018Background
- Prout retained Vladeck, Raskin & Clark, P.C. to represent him on FMLA and SOX whistleblower/retaliation claims; defendants were later discharged in June 2017.
- After discharge Prout hired Sanford Heisler, which negotiated a $1.75 million settlement; Sanford Heisler allegedly received $593,333 in fees.
- Defendants filed counterclaims against Prout for breach of contract (seeking ~$29,115), quantum meruit (seeking at least $40,000), and a charging lien under N.Y. Judiciary Law § 475 (seeking at least $593,333).
- Prout moved to dismiss the charging-lien counterclaim under Rule 12(b)(6); defendants argued the motion was procedurally barred by Rule 12(g)(2).
- The parties agree the fee arrangement between Prout and defendants was hourly (not contingency); defendants admit the reasonable value of services is at least $40,000 (quantum meruit figure).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Prout's Rule 12(b)(6) motion is barred by Rule 12(g)(2) | The Rule 12(b)(6) motion is proper and timely | Prior Rule 12(f) motion precludes a later Rule 12(b)(6) motion under 12(g)(2) | Court construed motion as Rule 12(c) (permitted) and exercised discretion to allow the motion despite Rule 12(g)(2) concerns |
| Whether defendants may assert a charging lien for the full $593,333 fee recovered by subsequent counsel | Charging lien for the full amount should be dismissed because defendants were retained on an hourly basis and quantum meruit limits recovery | Charging lien should attach to the proceeds of the client’s recovery (including fees received by subsequent counsel) up to defendants’ entitlement | Charging-lien claim dismissed to the extent it seeks more than the quantum meruit value ($40,000); defendants cannot recover a charging lien exceeding the fair value of their services |
Key Cases Cited
- People v. Keeffe, 50 N.Y.2d 149 (1980) (when an attorney is discharged without cause, compensation is determined on a quantum meruit basis)
- Cohen v. Grainger, Tesoriero & Bell, 81 N.Y.2d 655 (1993) (discharged attorney recovers fair and reasonable value under quantum meruit; percentage-of-recovery fee not permitted absent agreement)
- Teichner by Teichner v. W & J Holsteins, Inc., 64 N.Y.2d 977 (1985) (if discharged without cause before completion, attorney’s compensation is measured by quantum meruit)