The opinion of the court was delivered by: Jack M. Battaglia, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the printed Official Reports.
With this action, filed on her behalf by attorney William Pager, Esq., plaintiff Jemma B. Moore seeks damages for personal injuries allegedly sustained in an automobile accident on December 11, 2006. Exactly two years later, on December 11, 2008, Plaintiff retained the law firm of Peters Berger Koshel & Goldberg, P.C. to represent her in the action, and directed Mr. Pager to immediately "stop all work . . . and arrange for the transfer of any and all records" to the incoming attorneys.
A Stipulation dated December 19, 2008, signed by Mr. Pager, the outgoing attorney, and Richard L. Goldberg, Esq., on behalf of the incoming firm, provides, among other things, that "The Law Offices of William Pager have not been discharged for cause"; that the outgoing attorney shall have "a lien . . . on a portion of attorneys fees obtained" by the incoming firm; that "the fee to be paid to the outgoing attorneys (sic) . . . shall be determined by a Justice of the Supreme Court . . . , Kings County at the conclusion of the case, unless an agreement is reached between counsel, in writing prior to seeking the intervention of the Court"; and that "the entire file maintained by the outgoing attorney shall be released immediately to the incoming attorney upon receipt of this signed stipulation and a check for disbursements." The current dispute concerns only the provision requiring release of the file upon receipt of payment for "disbursements."
In a letter dated December 19, Mr. Pager advised Mr. Goldberg that disbursements in the total amount of $1,035.89 were owed, including a charge for a copy of the file of $517.50, computed at $0.75 per page for 690 pages. Mr. Goldberg responded in letter dated January 7, forwarding a check in the amount of $518.37, that is, the total requested less the amount for copying. Mr. Goldberg stated, "As we demanded, and are entitled, to the original file, we will not pay for copying the file."
When Mr. Pager would not release the file without additional payment for copying, the incoming firm brought on the instant motion by an Order to Show Cause dated February 9, 2009, seeking an order, among other things, compelling Mr. Pager to turn over the file to the incoming firm.
Preliminarily, however, the motion seeks to "[r]estor[e] the case to active status," because on January 9, 2009 the action was administratively marked "disposed" for Plaintiff's failure to file a note of issue by the date specified by court order. Since there was "no basis" for denying Plaintiff's motion to restore under these circumstances (see Khaolaead v Leisure Video, 18 AD3d 820, 821 [2d Dept 2005]; see also Gorski v St. John's Episcopal Hosp., 36 AD3d 757, 757 [2d Dept 2007]), on the return date for the motion the Court issued an interim order restoring the action and scheduling a compliance conference for March 12, 2009.
The interim order, moreover, included provision for release of Plaintiff's file to the incoming firm, since the outgoing attorney's Affirmation in Partial Opposition did not oppose that aspect of the relief sought with the instant motion. As will appear, an order for release of the file would otherwise have been in error until resolution of the dispute about the charge for copying. The Court notes also that neither the outgoing attorney nor the incoming firm questions the appropriateness of the instant motion as a vehicle for resolution of that dispute.
"[A] client may at anytime, with or without cause, discharge an attorney." (Demov, Morris, Levin & Shein v Glantz, 53 NY2d 553, 556 .) As the Court of Appeals has noted, an attorney's discharge does not in itself imply a lack of competence or diligence on the part of the attorney.
"Attorney-client relationships frequently end because of personality conflicts, misunderstandings or differences of opinion having nothing to do with any impropriety by either the client or the lawyer. Others end because of unexpected conflicts of interests or changes in litigation strategy that require different lawyering skills. In some of those situations, the client may ask the attorney to withdraw. In others, it may be the attorney who initiates the termination process by offering to withdraw in order to avoid embarrassment, avert further conflict, preserve the relationship on a long-term basis or simply save the client from the discomfort of having to fire the attorney. Importantly, in many such cases, the decision to terminate the relationship is the product of a mutual choice." (Klein v Eubank, 87 NY2d 459, 463 .)
"The three remedies of an attorney discharged without cause - - the retaining lien, the charging lien, and the plenary action in quantum meruit - - are not exclusive but cumulative." (Levy v Laing, 43 AD3d 713, 715 [1st Dept 2007]; see also Schneider, Kleinick, Weitz, Damashek & Shoot, v City of New York, 302 AD2d 183, 186-89 [1st Dept 2002].) "[I]n disputes between attorneys, the discharged attorney may elect to receive compensation based on quantum meruit or on a contingency basis, whereas as against a former client, the discharged attorney is entitled to quantum meruit only, unless the client and attorney agree otherwise." (Levy v Laing, 43 AD3d at 715.)
The instant dispute concerns only the retaining lien. "A common-law retaining lien, also known as a general possessory lien, entitles the attorney to retain all papers, securities or money belonging to the client' that come into the attorney's possession in the course of representation as security for payment of attorneys' fees." (Hope v Ortiz, 83 NY2d 323, 311  [quoting People v Keefe, 50 NY3d 149, 155 (1980)].) "[A]n attorney's rendition of services and expenditure of disbursements on behalf of the client entitles him to a common-law retaining lien on the client's file." (Theroux v Theroux, 145 AD2d 625, 626 [2d Dept 1988].) "A retaining lien remains in force until the client's account is paid in full." (Id.)
The authorities are uniform, however, that "[a] court has discretion to secure the fees and to order the files to be returned to the client before the fees have been paid'." (See Schneider, Kleinick, Weitz, Damashek, & Shoot v City of New York, 302 AD2d at 187 n1 [quoting Cosgrove v Tops Mkts, Inc., 39 Fed Appx661, 664 (2d Cir 2002)].) A court may "substitut[e] the statutory charging lien for the retaining lien with respect to the amount of that fee." (See Security Credit Sys., Inc. v Perfetto, 242 AD2d 871, 871-72 [4th Dept 1997]; see also Picott v ATA Housing Corp., 306 AD2d 393, 393 [2d Dept 2003]; Hom v Hom, 210 AD2d 296, 298 [2d Dept 1994].) "A finding of indigence will justify converting the attorney's retaining lien into a charging lien." (Cohen v Cohen, 183 AD2d 802, 804 [2d Dept 1992].)
But there appears to be inconsistency on whether the disbursements may be secured. Some courts say that "a court may not order the return of the file before the client has fully paid the attorney's disbursements." (See Schneider, Kleinick, Weitz, Damashek & Shoot v City of New York, 302 AD2d at 187 n1 [quoting Cosgrove v Tops Mkts, Inc., 39 Fed Appx at 664]; see also Gonzalez v City of New York, 45 AD3d 347, 348 [1st Dept 2007]; Lansky v Easow, 304 AD2d 533, 533 [2d Dept 2003]; Cohen v Cessna Aircraft Co., 56 AD2d 860, 860 [2d Dept 1997].) Other courts say that "[a]bsent evidence of discharge for cause, a court should not order turnover of an outgoing attorney's file before the client fully pays the attorney's disbursements or provides security therefore." (See Warsop v Novik, 50 AD3d 608, 608 [1st Dept 2008] [emphasis added]; see also Tuff & Rumble Mgmt., Inc. v Landmark Distribs., Inc., 254 AD2d 15, 15 [1st Dept 1998]; Manes v Manes, 248 AD2d 515, 515-16 [2d Dept ...