PHILIP G. MINARDO, J.
The defendants Alfred Polizzotto III and Polizzotto & Polizzotto, LLC. (hereinafter “defendants”) move for summary judgment dismissing the amended complaint; and the plaintiffs, Charles Sanna and Lee Sanna (hereinafter “plaintiffs”) cross move for partial summary judgment on this issue of liability pursuant to CPLR 3212.
This action arises out of a dispute over legal fees between defendant law firm and one of its principals and the plaintiffs, their former clients. To the extent relevant, on April 18, 2005, plaintiffs retained the defendants' law firm in connection with a constructive trust, partition of a commercial business and its real property and claims for an accounting relative to the parcel of real property located at 18–20 Huntington Street in Brooklyn ( see Defendants' Exhibit “E”). In pursuance thereof, defendants filed on plaintiffs' behalf, a Summons and Complaint along with a Notice of Pendency in Kings County on September 13, 2005 (Defendants' Exhibit “N”). In that action, each plaintiff was asserting a one-third ownership interest of the subject property, as well as an individual one-third interest in the family business which was operated thereon.
The action was commenced in Kings County Supreme Court under Index No. 28009/08. In it, it was undisputed that the premises in question were inherited by plaintiffs and their sister, Amy McNeely, upon the death of their father, and that the family business was operated thereon.
Unbeknownst to the plaintiffs, at the time their action was commenced, the property and assets of the family business were in the process of being sold by their sister and her husband (defendants in the Kings County action), but the filing of the notice of pendency by the defendants operated to stay that transaction. Settlement discussions were subsequently initiated among the parties, and approximately one month later, i.e., on October 17, 2005, the underlying action was settled ( see Defendants' Exhibit “O”). Pursuant to the settlement agreement, the subject property was to be placed on the market, where it eventually sold for $1,325,000.00. The closing of title was scheduled for August 23, 2007 ( id.). At the closing, defendants represented the plaintiffs and the McNeelys as the sellers of the property. A closing statement was provided to plaintiffs on or about August 29, 2007, indicating their portion of the proceeds from the sale and a copy of the checks made out to the defendants for their legal fees as provided in the retainer agreement ( see Defendants' Exhibit “P”). Defendants have submitted to the Court a copy of those checks endorsed by plaintiffs' signed approval of their legal fees in the amount of $203,126.88 ( see Defendants' Exhibit “Q”).
According to the retainer agreement, plaintiffs had agreed to pay defendants as consideration for their legal services “twenty-five (25%) of the property or sum recovered, whether recovered by suit, settlement or otherwise” ( see Defendants' Exhibit “E”, emphasis supplied ).
On the basis of these facts, plaintiffs commenced this action against the defendants on or about April 22, 2008 asserting causes of action for conversion, breach of contract, fraud, breach of fiduciary duty and punitive damages, each arising out of their retainer agreement with defendants and the amount of the legal fees payable thereunder (Defendants' Exhibit “A”). In their amended complaint, plaintiffs asserted additional causes of action for legal malpractice, unjust enrichment, violation of the General Business Law x 349, undue influence and violation of Disciplinary Rules 2–106 and 6–101 ( id.). In effect, plaintiffs are seeking to recover all of the legal fees retained by defendants.
In their motion for summary judgment, defendants maintain that prior to the execution of the subject retainer agreement, plaintiffs were advised that the engagement of counsel would require plaintiffs to pay a $10,000 retainer, into which they would bill at an hourly rate of $300.00, plus related litigation expenses (EBT of Alfred Polizzotto III, Esq. at pp 124–130). Defendants contend that when plaintiffs were unwilling to pay the retainer, a contingent fee arrangement was suggested. Defendants further contend that plaintiffs should have been aware of the potential size of their legal fees, as they were already in possession of a property appraisal (Defendants' Exhibit “L”).In opposition to the motion and in support of their cross motion, plaintiffs maintain that they were not fully informed of the potential litigation costs involved. In addition, plaintiffs submit a copy of an invoice in the additional amount of $5,000 which they were charged in connection with the contract and sale of the subject property to another entity, in support of their claim that defendants double-billed them for those services (Plaintiffs' Exhibit “D”). For their part, defendants do not deny charging a separate fee for the contract and closing, at which plaintiffs' sister and her husband were also represented (EBT of Alfred Polizzotto III, Esq. at p 104).
Attorney-client fee agreements are a matter of special concern to the courts and, while enforceable, are affected by “lofty principles” different from those applicable to commonplace commercial contracts (Law Off of Howard M. File, Esq., PC v. Ostashko, 60 AD3d 643, 644 [2nd Dept 2009] quoting Matter of Cooperman, 83 N.Y.2d 465, 472 ;Malamut v. Doris L. Sassower, PC, 171 A.D.2d 780 [2nd Dept 1991] ). Accordingly, as a matter of public policy, the courts have subjected retainer agreements to particular scrutiny, casting the burden of proof upon the attorney who drafted the agreement to show that it is fair and reasonable, as well as fully disclosed and understood by the client ( see Law Off of Howard M. File, Esq., PC v. Ostashko, 60 AD3d at 644;O'Connor v. Blodnick, Abramowitz & Blodnick, 295 A.D.2d 586 [2nd Dept 2002] ). In this context, the fact that the fees in question already have been paid by the former client does not alter the burden of proof ( see O'Connor v. Blodnick, Abramowitz & Blodnick, 295 A.D.2d at 587).
Contingent fee agreements between attorneys and their clients generally operate to allow a client without sufficient financial means to obtain access to the justice system ( see Law Office of Howard M. File, Esq., PC v. Ostashko, 60 AD3d at 644). However, for attorneys entering into such arrangements, there is always the risk that their time and resources will be expended in the pursuit of legal endeavors that may ultimately prove fruitless ( see King v.. Fox, 7 NY3d 181, 192  ). In addition, it is well settled that while the attorney is obligated to comply with the terms of the agreement, the client may unilaterally terminate the contingent fee arrangement at any time, leaving the lawyer with no cause of action for breach of contract and a recovery limited to quantum meruit ( id.). Case law also provides that circumstances arising after contract formation can render a contingent fee agreement unenforceable, even though it was not unconscionable when entered into, e.g., where the agreed percentage of the recovery allocated to legal fees is deemed disproportionate to the value of the services rendered ( see Lawrence v. Miller, 11 NY3d 588  ). In this regard, it is not only the agreed-upon percentage of the recovery that can render a contingent fee agreement unconscionable. Also relevant are all of the facts and circumstances surrounding its formation and performance including, e.g., the parties' intent, but viewed in hindsight ( see King v. Fox, 7 NY3d at 192). Thus, a contingent fee agreement can be deemed unconscionable in retrospect, as well as at its formation ( see Lawrence v. Miller, 11 NY3d at 595). Nevertheless, in those circumstances where a fully informed client of equal bargaining power knowingly and voluntarily affirms an existing fee arrangement that might otherwise be deemed voidable for unconscionability, the client may still be held to have ratified same, so long as he or she does so with both an understanding of the facts that make the agreement voidable and knowledge of his or her rights as a client ( id.).
Here, plaintiff Lee Sanna testified at his deposition that he was aware of the 25% legal fee, but claimed that he did not read the retainer agreement prior to signing it (EBT of Lee Sanna at pp 36–40). For his part, co-plaintiff Charles Sanna testified at his deposition that he “didn't really understand” the agreement, and thought that the 25% fee based on the worth of the property “would cover [a] trial”. According to this witness, he also failed to read the retainer agreement prior to signing (EBT of Charles Sanna at pp 45–51) but, at the same time, concludes it was their understanding that the 25% contingency fee would apply only if the matter went to trial.
Assuming arguendo that the defendants have demonstrated prima facie that (1) the legal services which they performed on the plaintiffs' behalf were rendered in good faith; (2) plaintiffs knowingly accepted those services; and (3) they were fully informed of the terms of the contingency, plaintiffs' present assertion that they did not fully understand its terms is insufficient to generate a triable issue. There is no evidence to indicate the plaintiffs are under some type of disability which would prevent them from understanding a one (1) page retainer agreement which clearly and unambiguously indicated it was a 25% contingency agreement whether recovered in suit, settlement or otherwise. The plaintiffs could have terminated the defendants' services any time during the underlying representation and lawsuit, but did not. It is only after all litigation was completed, do the plaintiffs now object to their retainer agreement with the defendants though they each endorsed checks indicating their approval of defendants' legal fee.
Accordingly, defendants' motion for summary judgment dismissing the complaint is granted, except to the extent that a hearing must be held to determine whether a contingency fee of 25% is unconscionable under the circumstances as a matter of law for the services rendered in prosecuting the constructive trust, partition and accounting action on plaintiffs' behalf ( see generally Sprain Brook Manor Nursing Home v. Glazer, 6 AD3d 522 [2nd Dept 2004]; Matter of Seigel, 300 A.D.2d 668 [2nd Dept 2002] ).
This court finds plaintiffs' legal malpractice claim predicated upon defendants' failure to include a claim for loss of income in the partition action to be without merit. In a legal malpractice action, it is not merely the objective quality of defendants' representation that is determinative of a plaintiff's success, as an action to recover damages for legal malpractice requires a plaintiff to demonstrate both that the attorney failed to exercise the ordinary and reasonable skill and knowledge commonly possessed by a member of the legal profession, and that such failure proximately caused plaintiff to sustain actual and ascertainable damages ( see Mueller v. Fruchter, 71 AD3d 650 [2nd Dept 2010] ). “To establish the element of causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages but for the attorney's negligence” (Ali v. Fink, 67 AD3d 935, 936 [2nd Dept 2009] ). Here, plaintiffs have failed to present evidence sufficient to rebut defendants' prima facie showing that their claim for damages, one of the essential elements of a legal malpractice cause of action, is incapable of proof ( see Porello v. Longworth, 21 AD3d 541 [2nd Dept 2005]; cf. Stim & Warmuth, PC v. Hayes, 72 AD3d 795 [2nd Dept 2010] ), i.e., that their allegations of lost income are wholly speculative in nature ( see Pere v. St. Onge, 15 AD3d 465 [2nd Dept 2005] ). Mere speculation about a loss resulting from an attorney's omission is insufficient to sustain a prima facie case of legal malpractice ( see Albanese v. Hametz, 4 AD3d 379 [2nd Dept 2004]; Brooklyn Law School v. Great N Ins Co, 283 A.D.2d 383 [2nd Dept 2001] ). Further, based upon the undisputed facts of the underlying Kings County action, it is clear the plaintiffs understood the settlement and consented to it. Thus viewed, plaintiffs' cause of action for legal malpractice, which plainly represents the ultimate expression of their dissatisfaction with the amount of defendants' legal fees, is insufficient as a matter of law and must be dismissed ( see Pere v. St. Onge, 15 AD3d at 465).
Finally, since plaintiffs' remaining causes of action each arise out of the identical facts and circumstances as their cause of action for legal malpractice, they must also be dismissed ( see Stuart v. Kushner, 68 AD3d 974 [2nd Dept 2009]; Katz v. Herzfeld & Rubin, PC, 48 AD3d 640 [2nd Dept 2008]; Amodeo v. Kolodny, PC, 35 AD3d 773 [2nd Dept 2006]; Ross v. DeLorenzo, 28 AD3d 631, 636 [2nd Dept 2006] ).
Accordingly, it is
ORDERED that defendants' motion for summary judgment is granted except as to plaintiffs' claimed entitlement to reimbursement of defendants' legal fees under the theory the retainer agreement was unconscionable under the circumstances as a matter of law; and it is further
ORDERED that plaintiffs' other causes of action are hereby severed and dismissed; and it is further
ORDERED that plaintiffs' cross motion for summary judgment is denied; and it is further
ORDERED that the remaining issue of whether the retainer agreement is unconscionable under the circumstances as a matter of law, shall be determined at a hearing by this court.