Appeal from an order entered in the Eastern District of New York, Eugene H. Nickerson, District Judge, holding that fees should be divided between two attorneys on a quantum meruit basis rather than equal as provided in their express written agreement.
Timbers, Van Graafeiland and Pratt, Circuit Judges.
Appellant Alvin L. Stern ("Stern"), an attorney, appeals from an order entered October 17, 1986 in the Eastern District of New York, Eugene H. Nickerson, District Judge, which divided unequally certain attorneys' fees between Stern and appellee Edward F. Gerace ("Gerace"), also an attorney.
The dispute over attorneys' fees leading to the instant appeal arose out of the joint representation by Stern and Gerace of Barbara Stissi ("Barbara") in her wrongful death action against Interstate & Ocean Transport Co. of Philadelphia and others resulting from the death of her husband, Ronald Stissi ("Ronald"), in a boating accident. Before the commencement of that action, Stern and Gerace agreed to represent Barbara on a one-third contingent fee basis and agreed orally to divide equally any "fees, costs and disbursements as well as responsibility." A letter from Gerace to Stern setting forth these terms memorialized their agreement.
The wrongful death action resulted ultimately in a judgment for Barbara in excess of $1.19 million. A dispute arose between Gerace and Stern as to the appropriate division of the resulting attorneys' fee. Stern filed a motion in the district court seeking an equal division of the fee based on the fee agreement. After an evidentiary hearing on Stern's motion, the court awarded Gerace and Stern, respectively, approximately 58% and 42% of the fee. The court made the division based on the amount of time each attorney had devoted to the prosecution of Barbara's claim.
On appeal, Stern claims that the district court erred in dividing the fee based on the time each attorney contributed rather than on an equal basis as provided in the fee agreement. We agree.
We hold that the district court erred when, faced with an express contract, it nevertheless proceeded to apportion the attorneys' fees on the basis of work done. Where, as here, there was no breach of that express contract, such a quantum meruit approach has no basis either in the law of contracts or the record before the district court.
On two previous occasions we have set forth facts relevant to Barbara's wrongful death action. Stissi v. Interstate and Ocean Transport Co., 765 F.2d 370 (2 Cir. 1985) (Van Graafeiland, J.); In re Interstate Towing Co., 717 F.2d 752 (2 Cir. 1983) (Van Graafeiland, J.); see also Stissi v. Interstate and Ocean Transport Co., 590 F. Supp. 1043 (E.D.N.Y. 1984) (Nickerson, J.). We assume familiarity with those opinions. We shall summarize here only those additional facts believed necessary to an understanding of the issue raised on the instant appeal.
Both Stern and Gerace are attorneys admitted to practice law in the State of New York. At some point prior to the events leading to the instant appeal, Gerace was associated with a New York law firm of which Stern was a partner. By August 1980, Gerace was practicing law in Florida, and Stern had his own private practice in New York. Stern's practice consisted largely of prosecuting and defending personal injury and wrongful death actions arising out of admiralty accidents.
Ronald's boating accident occurred on August 22, 1980. On August 24, Barbara's father-in-law telephoned Gerace, who is Barbara's cousin, to inform him of the accident and to seek advice regarding a possible law suit. Gerace arranged to meet with Barbara in New York. In mid-September, Gerace telephoned Stern, requesting him to attend the meeting and suggesting that, in view of Stern's expertise in admiralty law, he could be local counsel if Barbara decided to assert a wrongful death claim.
At the meeting on September 26, 1980, Barbara signed a retainer agreement naming both Gerace and Stern as her attorneys. Under the retainer agreement, they were to prosecute Barbara's wrongful death action on a contingent fee basis. After Barbara signed the retainer agreement, Gerace and Stern discussed and ...