54 Misc. 2d 274 | N.Y. Sup. Ct. | 1967
By this application the allowance of counsel fees and disbursements to plaintiff’s counsel in a taxpayer’s action brought pursuant to section 51 of the General Municipal Law is sought. The town resists the application on the law arid asks that the legal question be first determined, and that the matter be set for hearing if the legal question is determined adversely to its contention. The court holds that plaintiff is entitled to an award of counsel fee.
Chase v. City of Syracuse (34 Misc. 144, 145-146) stated the governing principle as follows:
“ The action was brought by Mr. Chase, not so much for the protection of his own interests, which, as are shown by the defendants’ affidavits, would be very slightly affected, but on behalf of all the taxpayers of the city. This being so, there is no reason why he should be called upon to bear personally the necessary expenses of a litigation in which he has succeeded.
‘ ‘ While, on the one hand, the city should not be exposed to unfounded actions, and the unsuccessful plaintiff in a taxpayer’s action subjects himself to all the liabilities of a defeated party, yet, on the other, public policy requires that, where a taxpayer does prevent waste of the public funds, he should be protected from loss by means of a reasonable allowance. Otherwise the bringing of such actions, often most useful and necessary, will be discouraged.”
That principle was most recently applied by Mr. Justice Velsob in Gerzof v. Sweeney (52 Misc 2d 505) in awarding attorneys ’ fees in a taxpayer’s action that resulted in a large verdict for the municipality involved. The question is dealt with in both the Chase and Gersof cases as one of an extra allowance. In this respect, the court respectfully declines to follow those cases for the reasons stated in Matter of Attorney-General v. North Amer. Life Ins. Co. (91 N. Y. 57, 61-62). There the court dealt with a request for an allowance of counsel fees to interveners in an insurance receivership who had opposed the receiver’s application for commissions. The allowance was denied because intervenors were acting in their own interests. However, in stating the applicable principles the Court of Appeals referred to taxable costs and extra allowances and continued: “ The allowance which the petitioners seek is of a different character and entirely outside of the Code, and what is often described as costs between solicitor and client.
The town argues, however, that plaintiff’s action did not create the fund, and, therefore, there is no right to an award. Its claim is that it began negotiations with United States Dredging Corporation in May, 1959, whereas plaintiff did not write to town officials until September 9, 1959 and did not begin this action until October 2, 1959; that in good faith it settled wdth United States Dredging on April 19, 1960 for $31,449.29, and that the additional $128,550.71 which has now been paid by Dredging to the town resulted not from trial of the action and determination that there had been waste in the total sum of $160,000 but from the many practical and psychological factors motivating settlement.
So far as the $128,550.71 is concerned, the short answer is that (1) the town made a motion for summary judgment predicated in part on the $31,449.29 settlement, which was denied and denial of which was affirmed on appeal (13 A D 2d 1014); (2)
The amount of the fee should, in any event, be determined on proof rather than on papers (Matter of R. D. Brown, Inc. v. Board of Assessors, 4 A D 2d 926; Gerzof v. Sweeney, supra). Accordingly, the matter is set down before me at Trial Term, Part YIII on Tuesday, September 5, 1967 at 9:30 a.m. for hearing on the following issues: (1) whether the efforts of plaintiff’s attorney were a substantial factor in producing the $31,449.29 settlement, (2) whether the foregoing question is foreclosed by any prior determination in this case, (3) the fee to be allowed.