SETH RUBENSTEIN, P.C.v.HOJANIDOV

Supreme Court of the State of New York. Kings CountyJul 3, 2006
820 N.Y.S.2d 846 (N.Y. Misc. 2006)
820 N.Y.S.2d 8462006 N.Y. Slip Op. 51247

32306/04.

Decided July 3, 2006.


This Court conducted a bench trial in this action on February 16, 2006. Plaintiff law firm had successfully prosecuted a will contest for defendant client in Surrogate's Court, Kings County, and then successfully represented defendant on the appeal. Subsequently, plaintiff commenced this action for legal fees on October 12, 2004, after defendant failed to pay all of the legal fees billed for the appeal. Pro se defendant counterclaimed for $4,550.00, alleging that various appeal costs should not have been billed to her and that the $4,550.00 should have been paid by her brother, appellant Norman Henig.

I instructed the parties at the conclusion of the trial to submit proposed findings of fact, conclusions of law and anything else they wished me to review by March 31, 2006. Plaintiff submitted proposed findings of fact and conclusions of law. Defendant submitted various documents, most of which were previously placed in evidence during the trial. All parties appeared before me on April 11, 2006 for oral argument with respect to the proposed findings of fact and conclusions of law. I reserved decision. After a review of the record and all documents submitted for review, I make the following findings of fact and conclusions of law.

Findings of fact

Defendant admitted her liability for legal fees, at page 6, lines 9-14 of the trial transcript ("Tr."):

THE COURT: Ms. Hojandiov, do you admit that legal services were provided to you by Mr. Rubenstein's law firm?

MS. HOJANDIOV: Yes.

THE COURT: So, there is an admission that legal services were provided.

Exhibit 4 at the trial is the January 2002 retainer agreement in which defendant agreed to retain plaintiff law firm ("SRPC") for the Surrogate's Court, Kings County, trial of the contested will of her father, Alex Henig. Defendant, in the written retainer, agreed to pay plaintiff $450.00 per hour for the services of Seth Rubenstein, Esq. and $325.00 per hour for the services of Mr. Rubenstein's associate, Nora S. Anderson, Esq.

After the instant summons and complaint was filed and served, the parties settled their fee dispute in a November 12, 2004 agreement [exhibit 10], signed by Ms. Anderson for SRPC and defendant. This agreement compromised the appellate fee dispute for $25,000.00. Defendant paid $12,500.00 that day and the $12,500.00 balance was due by December 31, 2004. Defendant at Tr., page 7, lines 2-6 acknowledged to the Court that she agreed to compromise plaintiff's fee for the appeal of the Alex Henig will contest at $25,000.00. Defendant defaulted in paying the second $12,500.00 installment of the $25,000.00 settlement. She paid plaintiff $7,950.00, not $12,500.00, on December 31, 2004 [Tr., pages 83-84].

SRPC is a New York professional corporation providing legal services, with two attorneys, Mr. Rubenstein and Ms. Anderson [Tr., pages 18 and 93; exhibit 1 — complaint]. Mr. Rubenstein is an experienced attorney, specializing in estate work [Tr., pages 18-24]. After testifying to his qualifications, the Court deemed Mr. Rubenstein to be an expert in "his field of probate and estates [Tr., page 24, lines 19-20]. Ms. Anderson is an experienced lawyer, also specializing in estate work [Tr., pages 93-94]. At Tr., page 97, Ms. Anderson was deemed an expert in matters of estate and probate trials and appeals.

SRPC successfully defended defendant in the challenge to her father's will in a Surrogate's Court jury trial [Tr., pages 32-34; exhibit 1 — complaint]. Defendant's brother then appealed the Surrogate's Court verdict to the Appellate Division, Second Department. The appellate issues were complex and required specialized work [Tr., pages 42-48, 53, 99-100]. SRPC prepared an appellate brief and related documents for the appellate record [Tr., pages 57, 99-100; exhibit 11 — appellate brief].

SRPC tendered to defendant several invoices for appellate fees on a regular basis [Tr., pages 60, 66, 68; exhibits 5-9]. The final invoice totaled $31,536.25 in legal fees and expenses [exhibit 9]. The invoices itemized SRPC's legal services and expenses [Tr., pages 79-80; exhibits 5-9]. The invoices were created in accordance with the terms and conditions, including billing rates and expenses, of the retainer agreement between the parties [Tr., pages 70-72; exhibits 5-9]. After being victorious at trial and on appeal [Tr., page 33; exhibit 1], SRPC demanded payment of its outstanding bill of $31,536.25 [Tr., pages 81-82]. After defendant didn't pay the bill, SRPC sued defendant [Tr., pages 81-82]. As mentioned above, in exhibit 10 and at Tr., page 82, defendant signed the November 12, 2004 agreement to compromise the fee for $25,000.00, and subsequently defaulted in paying the second $12,500.00 installment in full [Tr., pages 83-84]. Plaintiff seeks the full amount billed of $31,536.25 on both "account stated" and "quantum meruit" grounds.

In the expert opinion of Seth Rubenstein, SRPC is owed the $11,086.25 balance as an "account stated" [Tr., page 86]. Nora Anderson, in her expert opinion, concurred [Tr., pages 97-98]. As experts, both Mr. Rubenstein and Ms. Anderson also testified that SRPC is owed $11,086.25 under "quantum meruit" [Tr., pages 85-86; 97-98]. Defendant paid SRPC only $20,450.00 ($12,500.00 on November 12, 2004 and $7,950.00 on December 31, 2004) of the $31,536.25 billed. The balance due on the original bill is $11,086.25.

The Court allowed Ms. Hojandiov to present her version of the issues in a narrative form [Tr., pages 107-108]. She testified in a rambling, disjointed fashion [Tr., pages 108-111], continually making accusations that she was cheated by plaintiff. At Tr., page 108, she admitted her default, but alleged the absence of any agreement. She testified at Tr., page 108, line 10-page 109, line 10:

I want to tell the Court that I am in default of the amount of the appeal, of the $31,000, which we never had agreement or a contract. We only have a contract, that I had to beg for, for $25,000, that I had to beg to do this contract, so I shouldn't be led into more money.

So I came into the office and we agreed for $25,000.

And I was promised to receive back my money of $4,500 for the past three or four years, which I never received.

So the last payment, I deducted $4,500, to get back my monies.

And when we finished the trial, we had a contract. And the contract, after the hours Nora Anderson and Seth Rubenstein scribbled and scrabbled whatever they wanted here, hours, 85,000, 100,000, go pay it.

So, right after that, they got paid, and it rolled right into the appeal.

They had put numbers, $31,000. I don't know from where, thinking that I am some kind of stupid person, thinking that I am going to pay that kind of money, which I paid, overpaid the $100,000, on trial, and which I overpaid the $25,000 in the appeal.

This is a lot of money.

Defendant continued with her monologue of unsubstantiated accusations, testifying at Tr., page 110, lines 5-24:

So, then all of a sudden, I see $100,000. And I was overcharged.

I overpaid. I was misled.

And then, into the appeal, $25,000, 31,000, 25,000. Those are phone numbers. These numbers are outrageous, outrageous, unheard of.

I never heard of this in my life. This is dishonesty.

And we never had an agreement of $31,000. This is truthfully not the truth. This is all wrong. And I'm very upset that legal attorneys are allowed to do this. This is unbelievable. There should be a stop to this.

Stop fooling with hours, and lives.

And this is absolutely wrong. And there was no agreement. And I had to force myself for $25,000 to make sure they would do an agreement.

You have to see the paper, how they wrote 65,000, 85,000, like they were in a butcher shop putting prices on meat.

This is disgusting. And the world should know about this. They should never go through what I went through. Dishonesty. If they want money, she should go to work Defendant failed to present credible evidence with respect to her $4,550.00 counterclaim when asked to do so by the Court [Tr., page 111]. Defendant's lack of a defense to plaintiff's claim, her failure to have credible evidence in support of her counterclaim, and her rambling, accusatory testimony all demonstrated her lack of credibility.

Conclusions of law

The Court of Appeals in Stortecky v. Mazzone, 85 NY2d 518, 525 (1995), observed that "it is well established that Supreme Court has inherent power to supervise the fees attorneys charge for legal services ( see Matter of First Natl. Bank v. Brower, 42 NY2d 471, 474; Gair v. Peck, 6 NY2d 97; see also, Matter of Freeman, 34 NY2d 1, 10)." Prior to Stortecky v. Mazzone, in Matter of First Natl. Bank v. Brower, supra at 474, the Court noted that "there should be recognition of the traditional authority of the courts to supervise the charging of fees for legal services under the courts' inherent and statutory power to regulate the practice of law." See Hom v. Hom, 210 AD2d 296 (2nd Dept 1994); Ogletree, Deakins, Nash, Smoak Stewart, P.C. v. Albany Steel, Inc., 243 AD2d 877 (3rd Dept 1997); Collier, Cohen, Crystal Bock v. Macnamara, 237 AD2d 152 (1st Dept 1997); Orix Credit Alliance, Inc. v. Grace Industries, Inc., 261 AD2d 521 (2nd Dept 1999).

In Ogletree, Deakins, Nash, Smoak Stewart, P.C. v. Albany Steel, Inc., supra at 878, the Court noted not only that "determination of reasonable counsel fees is a matter within the sound discretion of the trial court," but, at 879, "particularly where, as here, the court's findings are largely premised upon its assessment of the witnesses' credibility ( see, Thoreson v. Penthuse Int., 80 NY2d 490; Gendelman v. Presti, 220 AD2d 820, 821-822 [3rd Dept 1995]." In the instant matter, the testimony of Mr. Rubenstein and Ms. Anderson was credible, while the testimony of Ms. Hojandiov was incredible.

Defendant, as noted in the findings of fact, admitted liability [Tr., page 6, line 9-14]. Plaintiff has proceeded to claim damages under both "account stated" and "quantum meruit." An attorney may recover legal fees under an "account stated." Parker, Chapin, Flattau Klimpl v. Daelen Corp., 59 AD2d 375 (1st Dept 1977). Also, an attorney may recover legal fees owed by a client under "quantum meruit." In re Montgomery's Estate, 272 NY 323 (1936); Lai Ling Cheng v. Modansky Leasing Co., Inc., 73 NY2d 454 (1989); Cohen v. Grainger, Tesoriero Bell, 81 NY2d 655 (1993).

In Volkening v. De Graaf, 82 NY2d 268, 270 (1880), the Court held that an "account stated" is "is an account balanced and rendered, with an assent to the balance express or implied; so that the demand is essentially the same as if a promissory note had been given for the balance." Judge Cardozo, in Newberger-Morris, Co. v. Talcott, 219 NY 505, 512 (1916), instructed that "the very meaning of an account stated is that the parties have come together and agreed upon the balance of indebtedness, insimul computassent, so that an action to recover the balance as upon an implied promise of payment may thenceforth be maintained."

Defendant, in the instant action, received invoices from SRPC. There is no evidence that defendant objected to these mailed invoices or that they were returned to a sender. In addition, because defendant made partial payment upon plaintiff's account, her retainer constituted an acknowledgment of the validity of plaintiff's bills. This established an account stated. Rik Shaw Associates, Limited v. Bronzini Shops, Inc., 22 AD2d 769 (1st Dept 1964); Milstein v. Montefiore Club of Buffalo, Inc., 47 AD2d 805 (4th Dept 1975); Parker, Chapin, Flattau Klimpl v. Daelen Corp., supra at 378; Chisholm-Ryder Co., Inc. v. Sommer Sommer, 70 AD2d 429 (4th Dept 1979); M. Palladino, Inc. v. J. Lucchese Son Contracting Corp., 247 AD2d 515 (2nd Dept 1998). Further, as experts, both Mr. Rubenstein and Ms. Anderson testified that an "account stated" existed for the outstanding balance of $11,086.25, based upon the retainer agreement between the parties and the itemized invoices sent to defendant.

"Quantum meruit" is simply defined in Reubenbaum v. B. H. Exp. Inc., 6 AD2d 47, 48 (1st Dept 1958) as "the value of the services" performed by an attorney for a client. Unlike an "account stated" which is contractual, "quantum meruit" is quasi-contractual in nature. In Moors v. Hall, 143 AD2d 336 (2nd Dept 1988), the Court stated at 337-338, that "to make out a claim in quantum meruit, a claimant must establish (1) the performance of the services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services." See Geraldi v. Melamid, 212 AD2d 575 (2nd Dept 1995). Pattern Jury Instruction 4:30, dealing with contract actions by attorneys for services rendered, explains "quantum meruit" as follows:

The reasonable value of an attorney's services is determined by taking into consideration all of the following elements: the character of the services, the nature and importance of the (litigation, transaction), the degree of responsibility assumed by the attorney, the amount or value involved, the length of time spent, the ability, skill and experience required and exercised, the character, qualifications and standing of the attorney and the results achieved.

Further, as cited above, both Mr. Rubenstein and Ms. Anderson testified that SRPC is owed the $11,086.25 balance under "quantum meruit." Pursuant to the Moors v. Hall test, SRPC established that it performed legal services in good faith, defendant accepted these legal services, and SRPC expected compensation as evidenced by the regular tendering of invoices to defendant. The uncontradicted expert testimony of both Mr. Rubenstein and Ms. Anderson established the reasonable value of SRPC services to defendant at $31,086.25. Further, SRPC provided defendant with the requisite ability, skill, and experience to prevail in the Appellate Division under "quantum meruit."

The testimony of both Mr. Rubenstein and Ms. Anderson was credible and conclusive. In Hull v. Littauer, 162 NY 569, 572 (1900), held that "[w]here . . . the evidence of a party to the action is not contradicted by direct evidence, nor by any legitimate inferences from the evidence, and it is not opposed to the probabilities, nor, in its nature, surprising or suspicious, there is no reason for denying to it conclusiveness."

In the instant action, SRPC successfully provided $31,563.25 of legal services to defendant in its appeal of Alex Henig's contested will. Defendant defaulted in paying the compromised fee of $25,000.00 on December 31, 2004. Therefore, defendant owed the original invoiced fee of $31,563.25 to plaintiff on both "account stated" and "quantum meruit" grounds. Crediting defendant with the previously paid $20,450.00 leaves a balance owed to plaintiff of $11,086.25, plus prejudgment interest from December 31, 2004, the date of defendant's default on the compromised fee. CPLR § 5001 (b) states that "[i]nterest shall be computed from the earliest ascertainable date the cause of action existed." See Ogletree, Deakins, Nash, Smoak Stewart, P.C. v. Albany Steel, Inc., supra at 880.

Conclusion

Accordingly, it is

ORDERED, that judgment is granted to plaintiff for $11,086.25 plus costs, disbursements, and statutory interest from December 31, 2004; and it is further

ORDERED, that defendant's counterclaim is dismissed.

This constitutes the Decision and Order of the Court.