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United States District Court, S.D. New York

February 11, 2004.


The opinion of the court was delivered by: KEVIN FOX, Magistrate Judge


The law firm of Sullivan, Chester & Gardner, L.L.P. ("SCG"), was permitted to withdraw as counsel to the defendants and counterclaimants Generadora Electrica Del Oriente, S.A. ("GEDO"), and Antonio Jorge Alvarez ("Alvarez") (collectively "defendants") in this action. SCG seeks a determination from the Court of the amount of a charging lien that SCG contends it has against any judgment its former clients might obtain on the counterclaims they asserted in this action. SCG maintains that the amount of the charging lien should be equal to the fees and expenses the defendants owe to SCG for the legal services it rendered to them in connection with this action.

New York Judiciary Law § 475 provides that:

  From the commencement of an action . . . in any court . . ., or the service of an answer containing a counterclaim, the attorney who Page 2 appears for a party has a lien upon his client's . . . counterclaim, which attaches to a verdict, report, determination, decision, judgment or final order in his client's favor, and the proceeds thereof in whatever hands they may come; and the lien cannot be affected by any settlement between the parties before or after judgment, final order or determination. The court upon the petition of the client or attorney may determine and enforce the lien.

 N.Y. Judiciary Law § 475.

  "[S]ection 475 does not authorize the court to impose a charging lien upon any and all property owned by the attorney's client. . . . Rather, an attorney is limited to a lien on the judgment `in his client's favor.'" Petition of Rosenman & Colin, 850 F.2d 57, 61 (2d Cir. 1988). "An attorney who merely defends or protects his client's interest in property without obtaining an affirmative recovery is not entitled to a lien on the property that his client retains." Id Furthermore, the determination of a charging lien pursuant to § 475 is a discretionary exercise of the court's ancillary jurisdiction. Pay Television of Greater New York v. Sheridaa 766 F.2d 92, 94 (2d Cir. 1985). Accordingly, if a party has ceased to prosecute his claims in an action such that it is apparent that no recovery is forthcoming, it is within the discretion of the Court to decline to determine the amount of a recovery that would be subject to the charging lien of the party's attorney.

  On March 26, 2002, prior to SCG's withdrawal, the assigned district judge issued a Memorandum and Order ("Order") dismissing three of the defendants' four counterclaims. The Order also directed the defendants to serve and file an amended answer with permissible counterclaims within twenty business days of the date of the Order. The docket sheet maintained for this action by the Clerk of Court does not contain any indication that the defendants have filed or served an amended answer subsequent to the Order. Moreover, the docket sheet does not Page 3 contain any indication that the defendants have taken steps subsequent to the Order to prosecute the remaining counterclaim. In fact, after SCG's withdrawal, the court's records do not indicate that GEDO had new counsel enter an appearance on its behalf, as it would be required to do, since it cannot prosecute its counterclaim pro se.

  In light of these circumstances, SCG's petition for the Court to fix the amount of its charging lien is denied without prejudice.

  SO ORDERED. Page 1


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