Ritz v. Mike Rory Corp.
1:12-cv-00367
E.D.N.YAug 28, 2014Background
- Plaintiff Nicholas Ritz sued Mike Rory Corp. (d/b/a Astoria Brewhouse), Sean Straw, and Brendan Straw under the FLSA and New York Labor Law alleging unpaid wages and overtime; the underlying employment case settled.
- Milman Labuda Law Group PLLC (MLLG) represented the defendants, later moved to withdraw after lack of communication and nonpayment, and the court allowed withdrawal.
- MLLG seeks $28,229.31 in unpaid legal fees ($26,149.31 billed plus $2,080 additional work) based on a retainer signed by Mike Rory Corp.; defendants did not oppose the fee motion.
- The retainer (Oct. 4, 2010) set hourly rates ($350 partners, $275 associates) and permitted annual adjustments; MLLG produced contemporaneous time records and invoices sent to defendants.
- MLLG asserts breach of contract against Mike Rory Corp., account stated against Brendan Straw (invoices sent to him, no objection), and quantum meruit against Sean Straw and the Straw brothers generally for services rendered and retained.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Court jurisdiction to decide fee dispute | Court may exercise supplemental/ancillary jurisdiction over attorney-client fee disputes related to the main action | No opposition asserted | Court exercised supplemental jurisdiction and proceeded to resolve fee dispute |
| Enforceability of retainer / breach by Mike Rory Corp. | Retainer is presumptively fair; MLLG performed and billed under contract; fees unpaid → breach | Defendants did not contest | Retainer found fair and enforceable; Mike Rory Corp. liable for breach of contract for unpaid fees |
| Account stated against Brendan Straw | Invoices were sent to Brendan, he retained them without objection → acceptance and promise to pay | No opposition asserted | Account stated established; judgment recommended against Brendan Straw |
| Quantum meruit / recovery from Sean Straw and others | MLLG performed services for all defendants, expecting compensation; reasonable value should be awarded | No opposition asserted | Quantum meruit established; lodestar (reasonable rates × hours) appropriate; fees awarded jointly and severally against all defendants |
Key Cases Cited
- Alderman v. Pan Am World Airways, 169 F.3d 99 (2d Cir. 1999) (supports exercising supplemental jurisdiction over fee disputes related to main action)
- Garcia v. Teitler, 443 F.3d 202 (2d Cir. 2006) (ancillary jurisdiction appropriate to vindicate court management and decrees)
- Itar-Tass Russian News Agency v. Russian Kurier, Inc., 140 F.3d 442 (2d Cir. 1998) (declining to refuse relief to relieved counsel would be an abuse of discretion)
- Joseph Brenner Assocs., Inc. v. Starmaker Entm't, Inc., 82 F.3d 55 (2d Cir. 1996) (ancillary jurisdiction proper where court familiar with attorney's work)
- Cluett, Peabody & Co. v. CPC Acquisition Co., 863 F.2d 251 (2d Cir. 1988) (district court may exercise supplemental jurisdiction over fee disputes when it has responsibility to protect its officers)
- Mar Oil, S.A. v. Morrissey, 982 F.2d 830 (2d Cir. 1993) (attorney bears burden to show fee arrangement was fair and understood by client)
- LeBoeuf, Lamb, Greene & MacRae, L.L.P. v. Worsham, 185 F.3d 61 (2d Cir. 1999) (account stated requires agreement based on prior transactions)
- Sequa Corp. v. GBJ Corp., 156 F.3d 136 (2d Cir. 1998) (quantum meruit factors and endorsement of lodestar approach to value services)