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SERVIDONE CONSTR. CORP. v. ST. PAUL FIRE & MARINE

December 11, 1995

SERVIDONE CONSTRUCTION CORPORATION, Plaintiff,
v.
ST. PAUL FIRE & MARINE INSURANCE COMPANY and FIRST BANK NATIONAL ASSOCIATION, Defendants/Counterclaimants, v. JOSEPH A. SERVIDONE, VICTORIA SERVIDONE, GODDARD & BLUM, and RAY GODDARD, Additional Defendants on the Counterclaims. SERVIDONE CONSTRUCTION CORPORATION, Plaintiff, v. WILLIAM BARR, Attorney General of the United States and CHARLES BOWSHER, Comptroller General of the United States, Defendants, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY and FIRST BANK NATIONAL ASSOCIATION, Intervenors, v. MAX E. GREENBERG, CANTOR, TRAGER & TOPLITZ and NAOMI REISS, Additional Defendants on the Cross-Claim. SERVIDONE CONSTRUCTION CORPORATION, Petitioner, v. GODDARD & BLUM, a law partnership; RAY GODDARD; and ST. PAUL FIRE & MARINE INSURANCE COMPANY, Respondents. and GODDARD & BLUM, RAY GODDARD, GREGORY RONAN and HOWARD BLUM, Cross-claimants, v. NAOMI REISS, Additional Defendant on the Cross-Claims. and HOWARD BLUM, BARRY GOLOMB, and THE MINORITY INTEREST OF GODDARD & BLUM, Cross-claimants, v. GREGORY RONAN, RAY GODDARD, and THE MAJORITY INTEREST OF GODDARD & BLUM, Cross-claimants (ANCILLARY PROCEEDING).



The opinion of the court was delivered by: MCCURN

 INTRODUCTION

 St. Paul moves for summary judgment dismissing all claims asserted by Ray Goddard to any of the interpleaded funds (approx. $ 5 million). St. Paul bases this motion upon its assertion that under New York law, Mr. Goddard's alleged fee agreement and charging lien upon which he bases his claim are unenforceable because Mr. Goddard is not authorized to practice law in New York.

 Mr. Goddard opposes this motion on two grounds. First of all, he contends that St. Paul lacks standing to raise the claim that he is engaged in the unauthorized practice of law. Secondly, addressing the merits of St. Paul's motion, Mr. Goddard asserts that his representation of Servidone did not constitute the unauthorized practice of law within the meaning of New York Judiciary Law § 478.

 In addition to opposing St. Paul's motion, Mr. Goddard cross-moves for summary judgment. In this regard, he argues that St. Paul lacks standing to challenge his retainer agreement with Servidone and that Servidone has expressly waived all claims to the interpleaded funds. Alternatively, Mr. Goddard contends that St. Paul should be judicially estopped from raising any objections to his fee in the present action because of its actions and conduct in a state court action which also involved the fees earned as a result of the successful prosecution of the same underlying litigation. St. Paul opposes Mr. Goddard's cross-motion in its entirety.

 Howard Blum, Barry Golomb and the Minority Interest of Goddard & Blum oppose both of these motions in their entirety. *fn1" Max E. Greenberg, Cantor, Trager & Toplitz ("the Greenberg firm" or "the MEG firm") submitted an affidavit in response to the cross-motions of Goddard & Blum, Ray Goddard, Howard Blum and Barry Golomb requesting that "to the extent any of the cross-motions are successful, any judgment issued on behalf of Goddard & Blum or its partners should provide for the initial payment of $ 106,884.25, plus interest from March 31, 1995, to cross-claimant Max P. Greenberg, Cantor, Trager & Toplitz." See Kamien Affidavit dated November 21, 1995, at P 5.

 The court entertained oral argument on these motions on December 5, 1995, and reserved decision at that time. The court informed counsel that a written decision would be forthcoming. The following memorandum-decision and order constitutes the court's conclusions with respect to these motions.

 BACKGROUND

 Mr. Goddard was a partner in the law firm of Goddard & Blum. *fn2" Throughout this litigation, he has maintained that he entered into a retainer agreement on January 18, 1989, with Servidone concerning the Servidone/Texas matter pursuant to which Servidone agreed to pay "Ray Goddard his standard and regularly charged legal fees, and the standard legal fees of those with whom he is associated, plus all disbursements in his representation of this matter." See Spalj Affidavit dated July 21, 1995, Exhibit B attached thereto. In addition, in this same agreement, Servidone agreed to pay

 
Ray Goddard a sum equal to twenty-five (25%) percent of all recoveries obtained, whether by settlement, court decision or otherwise, in excess of Six Million Dollars ($ 6,000,000), and, in such case, Ray Goddard will refund to me the fees previously charged and/or paid not to exceed fifty (50%) percent of the twenty-five (25%) percent contingency fee.

 See id.

 Mr. Goddard also contends that this retainer agreement was between Servidone and him personally and that Goddard & Blum was not a party to this agreement. As a result of this agreement, Mr. Goddard asserts that he is entitled to a fee of $ 4,139,478.24 plus interest.

 Throughout this litigation, St. Paul has challenged the validity of this retainer agreement and has asserted that Mr. Goddard is not entitled to any fee purportedly earned thereunder. In support of its present motion, however, St. Paul relies solely upon its argument that this agreement is unenforceable because Mr. Goddard's representation of Servidone ...


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