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
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
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.
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