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J B P HOLDING CORP. v. UNITED STATES

September 17, 1958

J B P HOLDING CORPORATION, Plaintiff,
v.
UNITED STATES of America, Defendant



The opinion of the court was delivered by: DAWSON

This is an action brought by petitioner David Kamerman against J B P Holding Corporation (hereinafter referred to as J B P) for an order making an allowance of counsel fees to the petitioner under § 475 of the Judiciary Law of the State of New York. A cross motion has been filed by J B P directing petitioner to pay over a check made by the United States of America to the order of J B P for the sum of $ 7,822.23, together with interest from June 19, 1958.

Petitioner is an accountant, an attorney and a member of the Bar of the State of New York. He maintains an office in the City of New York. On or about October 22, 1956, J B P by Joseph Shapiro its president, retained petitioner as an attorney, to prosecute a claim for a tax refund against the United States of America. Petitioner prior thereto had served as the accountant for J B P. By a written agreement of retainer J B P consented to pay petitioner 50% of the total recovery.

 This present action stems from the attorney-client relationship in the tax refund action. Kamerman, petitioner here, was attorney for the plaintiff in the original action.

 Petitioner maintains that solely as a result of his efforts the tax refund action was settled for the total sum of $ 7,822.23, consisting of $ 6,054.49 in refund, plus $ 1,767.74 interest. The United States Government issued its check for this amount to petitioner, payable to the plaintiff, on June 19, 1958. Petitioner still has this check in his possession and claims that he is entitled to and has a lien in the sum of $ 3,911.11, for which payment was demanded and no part paid. Further, petitioner states that he has never received from plaintiff any compensation for his services in the tax refund action. He therefore requests that this Court declare a lien on the check he is holding and permit execution for the sum requested.

 As a defense to this application, J B P maintains that this written agreement was submitted on petitioner's accountant stationery and therefore the retainer was entered into by petitioner as an accountant and not as an attorney. Accordingly, J B P states that petitioner is not entitled to the protection of or to the rights of the Judiciary Law. Moreover J B P maintains that even if petitioner were entitled to 50% of the refund, it should be 50% of $ 6.054.49, or $ 3,027.24, and not 50% of this sum plus interest.

 For reasons which are discussed infra, it is unnecessary to decide these defenses.

 Jurisdiction to determine this issue has been examined. The law is apparently settled that an attorney of record in a suit under which an action for a lien is brought has, by the New York Judiciary Law, § 475, a lien on his client's cause of action to secure payment of his compensation. This lien may be determined and enforced summarily in a proceeding ancillary to the main suit. Nic Projector Corp. v. Movie-Jecktor Co., D.C.S.D.N.Y.1935, 16 F.Supp. 605, 606. This power under § 475 of the Judiciary Law of New York State is applicable in the federal courts. Nolan v. Hemingway Bros. Interstate Trucking Co., D.C.S.D.N.Y.1950, 88 F.Supp. 111. Jurisdiction of this Court in this matter has been conceded by both sides, and this Court so finds.

 The first issue to be determined by the Court is whether there was a valid contingent fee contract which petitioner may use as the basis for his contention that an attorney's lien exists on the check he is withholding from J B P Holding Corporation.

 The contract upon which petitioner relies is set out as follows:

 October 22, 1956

 'Mr. Joseph Shapiro '115 Central Part West 'New York, New York 'Dear Joe:

 'We are planning to file suit for a refund of about $ 17,000.00 on account of taxes paid by J. B. P. This involves the issue of rent income and depreciation for 1951. The chief question involved is the valuation of the factory and in order to sustain our case, we expect to engage an expert who will be able to give convincing evidence in court.

 'We would be willing to bring this suit on a contingent basis with our fee to be 50% of the total recovery. We will of course, bear the expense of the expert.

 'We would appreciate your signing the original of this letter to signify your consent to this proceeding. Will you please return the signed letter as soon as ...


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