Opinion
No. 04 Civ. 2744 (VM)(KNF).
December 19, 2005
MEMORANDUM and ORDER
Capell Vishnick LLP ("CV"), the law firm that previously represented Bok Sil Lee, Joshua Haesong Lee, Osaka Health Spa Inc. d/b/a Osaka 56, Osaka Health Spa Center Corp. d/b/a Osaka 56, Osaka 46 Traditional Health Spa, Inc. d/b/a Osaka 46 and Osaka Spa Construction, Inc. (collectively "Osaka defendants"), based upon a retainer agreement, has made an application that the Court fix its retaining lien at $32,762.30. Defendant Bok Sil Lee ("Lee") has filed an affidavit in response to her former counsel's request that the Court fix its retaining lien. In addition, Lee's daughters, Nam-Hi Lee and Myung-Hi Lee, who are defendants in this action but who were not represented by CV, have also submitted affidavits in connection with the instant matter.
Lee maintains that during her last meeting with Andrew Kimler, Esq. ("Kimler"), the partner at CV principally responsible for representing her and her husband, defendant Joshua Haesong Lee, as well as the Osaka defendants, he urged her to settle the instant action and demanded that she make a payment of $10,000 to CV towards the outstanding attorneys' fees that had accumulated during its representation of her, husband and the Osaka defendants. The amount of the outstanding legal fees was, according to Lee, $32,762. Lee sought permission from Kimler to pay the $10,000 in one week; that request was denied. Lee reports that she was very upset during her last meeting with Kilmer because she recalls that he indicated that he and his law firm would seek permission from the Court to withdraw as counsel to her, her husband and the Osaka defendants if their legal fees were not paid. Lee recalls that, following that meeting, she considered terminating the attorney-client relationship that existed between her, her husband, the Osaka defendants and the law firm. However, Lee's daughters convinced her to permit the law firm to "resign." CV made an application to the Court to be released from the obligation of representing the above-noted defendants, and the Court granted that application after it entertained the application at a hearing. Since that time, CV has retained in its possession documents pertinent to this action, belonging to its former clients, that it amassed while it was involved in this action. It has retained the documents due to Lee's failure to pay CV's legal fees.
"Under New York law, a retaining lien entitles an attorney to keep, as security against payment of fees, all client papers and property, including money, that come into the attorney's possession in the course of employment, unless the attorney is discharged for good cause." Resolution Trust Corp. v. Elman, 949 F.2d 624, 626 (2d Cir. 1991). The common law retaining lien is recognized and allowed by federal courts unless a specific federal law prevents a federal court from applying and enforcing such a lien. See Resolution Trust Corp. v. Elman, 949 F.2d at 627. In the case at bar, no federal law prevents the Court from fixing a retaining lien.
An attorney who has been discharged for cause has no right to compensation or to a retaining lien. This is so even in a circumstance where a retainer agreement is in existence. See Gurry v. Glaxo Wellcome, Inc., No. 98 Civ. 6243, 2000 WL 1702028, at *1 (S.D.N.Y. Nov. 14, 2000). A discharge for cause exists in a circumstance where "the attorney has engaged in some kind of misconduct, has been unreasonably lax in pursuing a client's case, or has otherwise improperly handled the case."Garcia v. Teitler, No. 04 CV 832, 2004 WL 1636982, at *5 (E.D.N.Y. July 22, 2004). An attorney who has been discharged without cause, prior to performing fully the legal services for which the attorney was engaged by the client, is entitled to be paid a fee on a quantum meruit basis for the reasonable value of the legal services that were provided. See Gurry, 2000 WL 1702028, at *1.
In the affidavit Lee submitted to the Court, in response to her prior counsel's request that the Court fix its retaining lien, she makes clear that she did not discharge her former counsel, although she contemplated doing so. Instead, as noted above, the Court relieved counsel of the obligation of continuing to represent Lee, her husband and the Osaka defendants, after a hearing, at which the Court became convinced that it no longer made sense for the parties to remain in an attorney-client relationship because of Lee's failure to compensate her counsel fully and because the relationship between counsel and counsel's clients had deteriorated substantially. Therefore, CV was not discharged for cause by its former clients and is entitled to be compensated for the reasonable value of the legal services it rendered to Lee, her husband and the Osaka defendants.
The Court has considered the submissions made by the parties. They include, among other things, the contemporaneous billing records generated by CV attorneys who provided legal services to Lee, her husband and the Osaka defendants in connection with the instant action. Lee has not challenged, in any meaningful way, the accuracy of the invoices sent to her by her former counsel for the work it performed in connection with this action. Furthermore, Lee has not challenged the accuracy of the entries in the contemporaneous billing records that her former counsel has submitted to the Court in connection with the instant application. The Court has reviewed the invoices noted above and the CV attorneys' contemporaneous billing data. In reviewing that information and determining the appropriate amount to fix as a retaining lien, the Court has remained mindful of the factors that are typically considered by courts in such a situation. Those factors include:
The Court has given very little weight to the affidavits submitted by Lee's daughters. Lee's daughters were not CV's clients. Moreover, Lee's daughters were not privy to all aspects of the relationship CV had with the parties it represented in this action, nor could Lee's daughters be, if CV and its clients wanted to avail themselves of the benefits of the attorney-client privilege.
(1) the difficulty of the matter; (2) the nature and extent of the services rendered; (3) the time reasonably expended on those services; (4) the quality of performance by counsel; (5) the qualifications of counsel; (6) the amount at issue; and (7) the results obtained. Casper v. Lew Lieberbaum Co., 182 F. Supp. 2d 342, 346 (S.D.N.Y. 2002).
Based upon, inter alia, the submissions made by the parties and the Court's knowledge — gained through numerous pretrial conferences and motions — of the complexities of the issues involved in this case, the Court finds that the reasonable value of the legal services provided by CV to Lee, her husband and the Osaka defendants is $32,762.30.
Therefore, CV's application, that the Court fix the amount of its retaining lien, is granted. CV may continue to retain, in its possession, its former clients' pleadings and related materials until those clients either pay CV $32,762.30 for the legal services CV rendered to them or furnish adequate security for CV's fees.
SO ORDERED.