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Edelman v. Poster

February 4, 2010


Plaintiff appeals from an order of the Supreme Court, New York County (Emily Jane Goodman, J.), entered March 12, 2009, which denied his motion for summary judgment and granted defendant's cross motion to dismiss the complaint.

The opinion of the court was delivered by: Andrias, 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 Official Reports.

Luis A. Gonzalez, P.J., Richard T. Andrias, Dianne T. Renwick, Sallie Manzanet-Daniels, JJ.


Pursuant to three separate written retainer agreements, the plaintiff-appellant, an attorney, represented the defendant-respondent in a matrimonial action and related appeals. In 2007, he commenced this action against plaintiff to recover, under theories of breach of contract and of account stated, the sum of $155,934.05, plus interest, representing fees allegedly due for services rendered under the retainer agreements. Plaintiff also sought to recover the attorney's fees incurred in the prosecution of this action.

Plaintiff moved for summary judgment and defendant cross-moved to dismiss the complaint. Characterizing the issue before it as "one of pure contract interpretation," the Supreme Court dismissed the complaint, finding that plaintiff breached the unambiguous retainer agreements by failing to give defendant 30 days' notice of her right to fee arbitration prior to commencing suit. We now consider whether in performing its analysis, the Supreme Court erred when it held that the retainer agreements may be construed without reference to the matrimonial rules governing retainers, fee disputes and arbitration in domestic relation matters that were in effect at the time the retainer agreements were executed.

The rules pertaining to retainers, fee disputes and arbitration in domestic relations matters, found at 22 NYCRR part 1400 (the matrimonial rules), were "promulgated to address abuses in the practice of matrimonial law and to protect the public" (Julien v Machson, 245 AD2d 122, 122 [1997]). At the time the parties executed the retainer agreements in this case, March 10, 1997, August 17, 1999 and July 6, 2001, respectively, arbitration was governed by 22 NYCRR part 136, which provided for binding arbitration of fee disputes at the client's option (22 NYCRR 136.2), where the amount in dispute did not exceed $100,000 (22 NYCRR 136.4[a]). An attorney's "utter failure to abide by these rules" precludes the attorney from collecting fees, even if the services were already rendered (Julien v Machson, supra; see also Mulcahy v Mulcahy, 285 AD2d 587 [2001]). Where there has been "substantial compliance" with the matrimonial rules, an attorney will be allowed to recover the fees owed for services rendered, but not yet been paid for. (See Flanagan v Flanagan, 267 AD2d 80 [1999]; Markard v Markard, 263 AD2d 470 [1999]).

In granting defendant's motion for summary judgment dismissing the complaint on the ground that the plaintiff-attorney failed to give defendant notice of her right to arbitrate prior to commencing suit, the Supreme Court found that defendant was entitled to such notice "regardless of the existence of 22 NYCRR 136, et seq., and regardless of plaintiff's unexpressed intention that the arbitration be governed by that section" because the unambiguous "writing contains no reference at all to 22 NYCRR 136, et seq., no reference to a 30 day period to respond to a notice of a fee dispute [sic], and no mention of a jurisdictional limit to disputes that defendant may arbitrate." The court further stated that even if the agreement was ambiguous, it must be construed against plaintiff as drafter.

Because we do not believe that the parties' retainer agreements may be interpreted without reference to the matrimonial rules in effect at the time they were entered, which governed the attorney-client relationship in domestic relations matters with respect to fee disputes and arbitration, we reverse the grant of summary judgment in defendant's favor and reinstate the complaint. A contrary result would do violence to the very rules we endeavor to enforce and penalize an attorney who complied in all respects with the matrimonial rules in effect at the time each retainer agreement was drafted and executed.

Under New York law, an enforceable contract requires mutual assent to its essential terms and conditions. If an agreement is not reasonably certain in its material terms, there can be no legally enforceable contract (see Matter of 166 Mamaroneck Ave. Corp. v 151 E. Post Rd. Corp., 78 NY2d 88, 91 [1991]; Mellen & Jayne, Inc. v AIM Promotions, Inc., 33 AD3d 676 [2006]). "[A] court will not order a party to submit to arbitration absent evidence of that party's unequivocal intent to arbitrate the relevant dispute and unless the dispute falls clearly within that class of claims which the parties agreed to refer to arbitration" (Primavera Labs. v Avon Prods., 297 AD2d 505, 505 [2002] [internal quotation marks and citations omitted]).

In the case before us, by agreement dated February 28, 1997 and executed March 10, 1997, plaintiff was retained by defendant to prosecute an action for divorce in Poster v Poster. The agreement provided in pertinent part: While I seek to avoid any disputes concerning the payment of our fee, in the event such a dispute does arise, you have the right, at your election, to seek arbitration, the results of which are binding on both parties. I shall advise you in writing by certified mail that you have 30 days from receipt of such notice in which to elect to resolve the dispute by arbitration, and I shall enclose a copy of the arbitration rules and a form for requesting arbitration. If no action is pending and if you do not timely enforce your rights to enter into fee arbitration, I may commence legal proceedings against you to recover any unpaid fee (emphasis added).

By agreement dated May 10, 1999 and executed August 17, 1999, and by agreement dated July 3, 2001 and executed July 6, 2001, plaintiff was also retained by defendant to represent her in appeals related to the divorce action. Each of these retainers included the same arbitration clause.

Attached to each of the three retainer agreements was a copy of a "Statement of Client's Rights and Responsibilities" which informed the client of what he or she is "entitled to by law or by custom." Consistent with the retainer agreement, the statement provides, among other things, that "[i]n the event of a fee dispute, you have the right to seek arbitration, the results of which are binding. Your attorney will provide you with the ...

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