The opinion of the court was delivered by: SWEET
Ned R. Phillips ("Phillips"), a former attorney for plaintiff Eolla Viventi, has moved pursuant to Rule 59(e), Fed.R.Civ.P., to alter the judgment entered in the abovecaptioned action on May 18, 1981. That judgment allocated fees to five attorneys who played a part in this protracted litigation. Phillips was awarded $ 18,592, considerably less than the $ 105,000 that he requested under a contingent fee agreement once entered into between himself and his former client. The reasons for the reduction are set forth in the opinion of this court in this action dated April 14, 1981. Phillips' motion is denied.
Only one ground raised in support of this motion merits discussion. As set forth in the April 14 opinion, one basis on which Phillips was awarded less money than he claimed entitlement to was that his initial retainer provided for a contingent fee of 40%, in excess of the 33 1/3% allowed in the State of New York. Phillips contends that that arrangement was proper under Section 603.7(e)(5) of the Rules Governing the Conduct of Attorneys, New York Supreme Court, Appellate Division, First Department, which exempts lawyers retained by other lawyers who are not themselves subject to the New York rules from the one-third contingent fee limitation. Phillips points to the fact that he was retained in this case by way of a referral from a Pennsylvania firm as support for his contention that his initial 40% fee arrangement was proper under this provision. He argues that the court's reliance on this initial fee arrangement in reducing his allocation below that which the requested was therefore misplaced.
Even assuming the validity of Phillips' contention regarding the propriety of his initial fee arrangement, however, I conclude that the reduction in Phillips' fee below his request was warranted. As set forth in the April 14 opinion, that reduction was based not only on the initial 40% fee, but on a number of other factors as well, including the quality of Phillips' work. Even if the 40% fee were to be deemed proper, those other factors would lead me to conclude that Phillips is entitled to no more than he was awarded. See generally Dunn v. H.K. Porter Co., 602 F.2d 1105, 1108 (3d Cir. 1979) (courts' supervisory power over members of the bar may be exercised to monitor contingent fee agreements and to reduce fees when agreements yield unreasonable results); In re Michaelson, 511 F.2d 882, 888 (9th Cir.) cert. denied, 421 U.S. 978 (1975) (courts have inherent power to regulate the bar and its inquire into fee arrangements). Farmington Dowel Products Co. v. Forster Mfg. Co., 421 F.2d 61, 87 (1st Cir. 1970) (courts have "generic power to confine the cost of legal services to a reasonable amount.")
There is an additional and perhaps even more significant factor that defeats Phillips' claim to entitlement to his full contingent fee. That is that at the time of the final settlement, Phillips no longer represented Mrs. Viventi, who had retained other counsel. Under New York law, which governs this matter, "where... the client discharges his attorneys before entering into a settlement, the attorneys' right to compensation is measured by quantum meruit, rather than by the provisions of the original retainer agreement." Cook v. Moran Atlantic Towing Corp., 79 F.R.D. 392, 396 (S.D.N.Y.1978). In such a case, "the original contract of employment between attorney and client is not in effect at the time of settlement, its terms accordingly will not be enforced, and the attorneys are limited to the reasonable value of their services prior to the time of their discharge." Id. at 397. In my estimation, the reasonable value of Phillips' services here is the $ 18,592 which he was awarded; the contract having been dissolved, he is entitled to no more, and specifically is not entitled to the full contingent fee recovery he continues to seek.
Phillips' other contentions are refuted by the record and, in large part, dealt with in the April 14 opinion. They compel no other result and warrant no further discussion.
© 1992-2004 VersusLaw ...