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Business Litigation - Appellate Practice - Attorney Fee Dispute

283 A.D.2d 649, *; 725 N.Y.S.2d 364, **;

2001 N.Y. App. Div. LEXIS 5517, ***

In the Matter of Efi Papadopoulos, et al., respondents, v Goldstein, Goldstein & Rikon, P.C., appellant.

2000-10051

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT

283 A.D.2d 649; 725 N.Y.S.2d 364; 2001 N.Y. App. Div. LEXIS 5517

May 4, 2001, Argued

May 29, 2001, Decided

CASE SUMMARY

PROCEDURAL POSTURE:

Appellant law firm appealed an order of the Supreme Court, Westchester County (New York) holding that law firm was entitled only to recover in quantum meruit for the legal services it rendered to respondent clients in connection with a condemnation matter.

OVERVIEW: Law firm was retained by the clients in connection with a condemnation matter. Several months later, the clients discharged the law firm since clients had negotiated a private sale of their properties on their own. Law firm filed a notice of lien. The trial court held that because the clients discharged the law firm without cause, the law firm was entitled to recover in quantum meruit. The law firm sued for their contingent fee. The appellate court held that the clients had the right to settle their own case. Because the law firm was granted an exclusive right to sell the property, it was limited to recovery in quantum meruit.

OUTCOME: The order was affirmed. The rules governing the attorney-client relationship are well established. A client has an absolute right, at any time, with or without cause, to terminate the attorney-client relationship by discharging the attorney. Where the discharge is for cause, the attorney has no right to compensation. Where the discharge is without cause before the completion of services, the attorney is limited to recovering the reasonable value of its services in quantum meruit.

COUNSEL: [***1] Sanford F. Young, P.C., New York, N.Y. (Jan B. Rothman of counsel), for appellant.

McCarthy Fingar, Donovan, Drazen & Smith, LLP, White Plains, N.Y. (Robert M. Redis and Robert H. Rosh of counsel), for respondents.

JUDGES: GABRIEL M. KRAUSMAN, J.P., SONDRA MILLER, LEO F. McGINITY, ROBERT W. SCHMIDT, JJ. KRAUSMAN, J.P., S. MILLER, McGINITY and SCHMIDT, JJ., concur.

OPINION: [*649] [**364] DECISION & ORDER

In a proceeding pursuant to Judiciary Law § 475 to determine an attorney's lien, the appeal is from so much of an order of the Supreme Court, Westchester County (Palella, J.), entered September 21, 2000, as determined that the appellant is entitled only to recover in quantum meruit for the legal services it rendered to the petitioners in connection with a condemnation matter.

ORDERED that the order is affirmed insofar as appealed from, with costs.

The appellant law firm was retained by the petitioners in connection with a condemnation matter. Several months later, the petitioners discharged the appellant because they had negotiated a private sale of their properties on their own. The appellant filed a notice of lien. The Supreme Court determined that the petitioners discharged [***2] the appellant without cause, and that the appellant was therefore entitled to recover in quantum meruit. We affirm.

The rules governing the attorney-client relationship are well established. "[A] client has an absolute right, at any [**365] time, with or without cause, to terminate the attorney-client relationship by discharging the attorney" ( Campagnola v Mulholland Minion & Roe, 76 N.Y.2d 38, 43, 556 N.Y.S.2d 239, 555 N.E.2d 611; see, Solomon v Bartley, 203 A.D.2d 449, 610 N.Y.S.2d 602). Where the discharge is for cause, the attorney has no right to compensation (see, Campagnola v Mulholland Minion & Roe, supra; Orendick v Chiodo, 272 A.D.2d 901, 707 N.Y.S.2d 574; Matter of Leopold, 244 A.D.2d 411, 664 N.Y.S.2d 323). Where the discharge is without cause before the completion of services, the attorney is limited to recovering the reasonable value of its services in quantum meruit (see, Campagnola v Mulholland Minion & Roe, supra; Teichner v W & J Holsteins, 64 N.Y.2d 977, 489 N.Y.S.2d 36, 478 N.E.2d 177; Bruk v Albin, 270 A.D.2d 441, 704 N.Y.S.2d 648; Scordio v Scordio, 270 A.D.2d 328, 705 N.Y.S.2d 58). [***3]

The appellant contends that the petitioners entered into a collusive settlement to defeat its right to its contingent fee in accordance with the retainer agreement. However, the petitioners had the right to settle their own case, and the appellant is thus limited to recovery in quantum meruit (see, Lurie v New Amsterdam Cas. Co., 270 N.Y. 379, 1 N.E.2d 472; Greenberg v Walsh, 279 A.D.2d 338, 718 N.Y.S.2d 847). [*650]

The appellant's reliance upon Matter of City of New York (Mill Brook Homes-Goldstein) (1 A.D.2d 667, 146 N.Y.S.2d 520, affd., 2 N.Y.2d 869) is misplaced. In that case, the attorney sought to enforce his lien in connection with a condemnation award that was secretly negotiated by the client. However, "the fee arrangement was extended to cover an acquisition of the property by purchase" ( Matter of City of New York [Mill Brook Homes-Goldstein], supra)

In this case, there was no similar extension of the retainer agreement. The appellant was not granted an exclusive right to sell the properties. Thus, the petitioners were within their rights to sell their properties to settle their case.

The parties' remaining contentions are without merit.

KRAUSMAN, [***4] J.P., S. MILLER, McGINITY and SCHMIDT, JJ., concur.