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NAIMAN v. NEW YORK UNIVERSITY HOSPITALS CENTER

January 7, 2005.

ALEC NAIMAN, Plaintiff,
v.
NEW YORK UNIVERSITY HOSPITALS CENTER, Defendant.



The opinion of the court was delivered by: ROBERT PATTERSON, Senior District Judge

OPINION & ORDER

The Plaintiff, Alec Naiman ("Naiman"), sought money damages and injunctive relief under Title III of the Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12181-12189, the Rehabilitation Act, 29 U.S.C. §§ 794-94a, the New York State Human Rights Law, N.Y. Exec. Law §§ 290-301, and the New York City Civil Rights Law, N.Y.C. Admin. Code §§ 8-101 to 8-807, against New York University Hospitals Center (the "Center") for failing to provide him with qualified sign-language interpreters on five separate occasions when he sought medical treatment at one of the Center's hospitals. On July 23, 2002, the parties entered into a Consent Decree and Release, which provided, inter alia, that the Center would deliver a check for $527,500 payable to Naiman and the Law Offices of Alan J. Rich for full settlement of all claims for money damages, costs, and attorney's fees. The Consent Decree and Release also provided that the Center would pay the Law Offices of Alan J. Rich reasonable attorney's fees incurred from March 8, 2002 until the date the parties executed the Consent Decree and Release.

On December 24, 2003, Naiman moved for an order directing Alan J. Rich, Esq. ("Rich"), his attorney in the underlying case against the Center, to pay Naiman the balance of the moneys due and owing to him under a 1994 retainer agreement. Rich responded on February 26, 2004, denying that the retainer agreement existed and cross moving to disqualify Naiman's current attorney, Ronald Kahn. This Court denied the cross motion after hearing argument on March 17, 2004.

  After receiving Rich's response papers and Naiman's reply papers regarding Naiman's motion for the balance of the moneys due and owing to Naiman, this Court issued an Order on May 12, 2004, stating that it would treat Naiman's motion as a motion for summary judgment and ordering Naiman and Rich to submit Local Rule 56.1 statements.*fn1 Naiman filed a 56.1 Statement of Material Facts on July 1, 2004, to which Rich responded with a cross motion requesting (1) a deferment on Naiman's motion so that limited discovery could be conducted; and (2) a continuance of Rich's submission of his response to Naiman's 56.1 Statement and the requested statement of hours. This Court issued an Order on August 5, 2004, denying Rich's request for discovery and directing Rich to respond to Naiman's Local Rule 56.1 Statement of Material Facts so that the Court could determine whether discovery was required. Rich filed a Local Rule 56.1 Statement on August 19, 2004.*fn2 For the reasons that follow, discovery is not necessary and Naiman's motion is granted.

  BACKGROUND

  On or around January 10, 1994, Naiman, a deaf person, retained Rich to represent him in an action against the Center after Naiman was not provided with a sign-language interpreter on five occasions when he sought medical treatment at one of the Center's hospitals. (Naiman's Local Rule 56.1 Statement ("Naiman's 56.1 Stmt.") ¶ 1.) On that date, Naiman executed a written retainer agreement that provided that Rich would "prosecute or adjust a claim for damages arising from personal injuries sustained by Alec Naiman, on Nov. 16, 1993." (Retainer Agreement between Naiman and Rich dated Jan. 10, 1994, attached as Ex. A to Rich's Local Rule 56.1 Statement ("Rich's 56.1 Stmt.").) In exchange for Rich's legal representation, the retainer established the following fee arrangement:
The client agrees to pay you, and you are authorized to endorse for the undersigned checks that may be paid in settlement of this action, and to retain out of any moneys that may come into your hands by reason of the above claim, based on the following attorney fee schedule:
Thirty three and one-third percent (33 1/3%) on the sum recovered;
Attorney is also entitled to such fee as is awarded pursuant to Federal law.
Such percentage is computed on the net sum recovered after deducting and repaying to the attorneys disbursements in accordance with Rules of Appellate Division, First Department.
In the event extraordinary services are required, application may be made to the court for greater compensation pursuant to the provisions of subdivision (d) of Rule 4 of Special rules regulating the conduct of attorneys, Appellate Division: First Department.
(Id.) Since entering into the agreement, Rich has not made an application to a court for greater compensation, nor has he applied for an award of attorney's fees under federal law.
  At a conference on January 24, 2002, this Court informed the parties that they had until the following Friday to settle the case and set a trial date for March 2002. Five days later — prior to beginning settlement negotiations with the Center — Rich sent Naiman a lengthy e-mail explaining why the terms of their retainer agreement should be adjusted. (E-mail from Rich to Naiman dated Jan. 29, 2002, attached as Ex. D to Rich's 56.1 Stmt.) In the e-mail, Rich explained that if the case proceeded to trial and Naiman prevailed, federal civil rights law would permit the Court to order the Center to pay Naiman's attorney's fees. (Id.) Rich further explained that even if a jury ruled in Naiman's favor, Naiman might receive only nominal damages and the court could award a much larger sum for attorney's fees. (Id.) After stating that he did not "even know if the defendant is going to be in the right neighborhood to settle this case," Rich continued, "But, I want to raise the issue that when I negotiate, I need to take into account my fee, which might be by our understanding, be something greater than 1/3 of the entire settlement." (Id.) Rich went on to state:
After we settle the money damages side of the case, I have no idea how much work would be involved in hammering out an agreement for the Court to approve on changes in policy, practice, training, etc. at the hospital. . . . As I would move forward with work on the "injunctive" modifications in policy, etc. the defendant hospital would be responsible for paying my fees for this future work. None of these fees would come out of the money damages settlement you get.
(Id.) Rich's e-mail also asked Naiman to "write to confirm that you are in agreement with my having the flexibility to move forward in view of the above framework. . . . I must . . . be ready to have a serious negotiation with the lawyer for the hospital about settling between now and Friday afternoon's conference, so your prompt reply is necessary." (Id.) Neither Rich nor Naiman claim that Naiman replied to this e-mail. The parties advised the Court on March 8, 2002 that they had settled the issue of the amount of damages, subject to reaching an agreement on the injunctive relief.

  According to Rich, at some time after he sent the January 29, 2002 e-mail, he and Naiman "explicitly agreed in-person that they would equally divide the $527,500 after the payment of expenses." (Rich's 56.1 Stmt. ¶ 26.) Rich further states that during settlement negotiations, "[w]hen defendant offered $527,500, Naiman specifically asked Rich how much he would receive personally under the 50-50 division they had discussed." (Id. ¶ 29.) Rich states that he told Naiman that he would receive a check for roughly $260,000. (Id.) Naiman, on the other hand, asserts that he never consented to a change in the retainer agreement. (Naiman's 56.1 Stmt. ¶ 12.)

  Naiman and the Center executed a Consent Decree and Release on July 23, 2002, which provided, inter alia, that the Center would pay Naiman and Rich $527,500, inclusive of attorney's fees.*fn3 (Consent Decree and Release dated July 23, 2002, ¶ 45, attached as Ex. 1 to Naiman's Notice of Motion.) Rich received a check from the Center for $527,500 on or about August 1, 2002.*fn4 (Naiman's 56.1 Stmt. ¶ 10.) Between August 15, 2002 and October 7, 2002, Naiman made numerous attempts to contact Rich about his portion of the settlement award; in sum, Naiman sent three e-mails to Rich, telephoned Rich's office four times, and mailed Rich two letters requesting his share of the settlement. (E-mails, Letters, and TTY Transcripts from Naiman to Rich dated between Aug. 15, 2002 and Oct. 7, 2002, attached as Ex. 3 to Naiman's Notice of Motion.) On October 14, 2002, Rich mailed Naiman a check in the amount of $260,665.01. (Rich's 56.1 Stmt. ¶ 34.) Rich included a letter with the check, which stated in pertinent part: As per our supplemental agreement, my fee would be larger because of the extent of the work performed over the years and we agreed on a 50%-50% division after the payment of expenses.

 
The expenses were some $8,189.99. Due to the delay, I paid an additional $2,000 of that amount, reducing the expenses to $6,189.99, thereby increasing your share. The client share and the enclosed check is for $260,655.01.
(Letter from Rich to Naiman dated Oct. 14, 2002, attached as Ex. G to Rich's 56.1 Stmt.)

  On February 19, 2003, Naiman sent Rich an e-mail concerning Rich's division of the settlement money. Naiman wrote, "From the beginning your fee was to be one-third of the settlement amount, and absent certain conditions which did not in fact obtain (such as a very small award) I have not agreed to any other division nor do I now." (E-mail from Naiman to Rich dated Feb. 19, 2003, attached as Ex. 5 to Naiman's Notice of Motion.) Rich's response to this e-mail, if he sent one, has not been provided by either party. Naiman ultimately filed the instant motion on December 24, 2003, requesting an order from this Court directing Rich to pay Naiman his alleged share of the Consent Decree and Release proceeds under the 33 1/3 percent fee schedule established by the 1994 retainer agreement.

  DISCUSSION

  As a preliminary matter, federal district courts may exercise jurisdiction over fee disputes between litigants and their attorneys where, as here, the court has federal jurisdiction over the underlying action. See Alderman v. Pan Am World Airways, 169 F.3d 99, 101-02 (2d Cir. 1999) (internal quotation marks and citation omitted); see also In re Austrian & German Bank Holocaust Litig., 317 F.3d 91, 98 (2d Cir. 2003) ("Whenever a district court has federal jurisdiction over a case, it retains ancillary jurisdiction after dismissal to adjudicate collateral matters such as attorney's fees."). To interpret and rule on contractual attorney's fee provisions, federal courts apply state law. See Alderman, 169 F.3d at 103 (citation omitted).

  Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A court deciding a motion for summary judgment must view the facts in the light most favorable to the non-moving party, drawing all reasonable inferences in his favor. See Young v. County of Fulton, 160 F.3d 899, 901 (2d Cir. 1998). "When no rational juror could find in favor of the non-moving party because the evidence to support its case is so slight, there is no genuine issue ...


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