The opinion of the court was delivered by: Roanne L. Mann, United States Magistrate Judge
Currently pending before this Court, on a referral from the Honorable Brian M. Cogan, is an application by Michael B. Lumer and the law firm of Reibman & Weiner, former counsel to siblings Lucy Chow ("Ms. Chow") and John Chow ("Mr. Chow") (collectively, "the Chows" or "plaintiffs"), to enforce a charging lien for costs in the amount of $1,158 against $5,200 in settlement funds, which have not yet been disbursed by the defendant City of New York. Following an evidentiary hearing held on March 9, 2010, this Court ruled that Mr. Lumer and his firm had good cause to move to be relieved as counsel to the Chows and that therefore they had not forfeited their charging lien for costs. The Court further noted that an opinion would follow. See Minute Entry (March 9, 2010), ECF Docket Entry ("D.E.") #48. This Memorandum and Order constitutes that opinion.
On March 11, 2009, Mr. Lumer and his firm initiated this civil rights action on behalf of the Chows, arising out of their allegedly wrongful arrest for theft of services on the morning of March 18, 2006. See Compl., D.E. #1. The complaint alleges that on that date, plaintiffs were arrested at a subway station for allegedly attempting to use their father's reduced fare Metro card, when in fact all they had attempted to do was determine the balance on, and possibly refill, that card. See id. ¶¶ 8-9.
On September 16, 2009, Mr. Lumer wrote to Judge Cogan, seeking permission to move to be relieved as counsel. See Letter Motion for Pre-Motion Conference (Sept. 16, 2009), D.E. #14. Two days later, Mr. Lumer filed an ex parte affidavit in support of that motion. See Declaration of Counsel In Support of the Motion to Be Relieved (Sept. 18, 2009), D.E. #16. The catalyst for Mr. Lumer's application was his recent discovery, through documents produced to him by defense counsel, that John and Lucy Chow had been arrested together on another occasion, i.e., on December 20, 2007, for criminal possession of stolen property and petit larceny -- charges that were dismissed in February 2009, after plaintiffs accepted Adjournments in Contemplation of Dismissal ("ACDs"). Id. ¶ 14. According to Mr. Lumer, this information was contrary to the Chows' statements to him at their initial consultation, contrary to the information they provided him in responding to defendants' interrogatories, and contrary to their sworn deposition testimony, in which they denied having been arrested on any other occasion. See id. ¶¶ 5, 11, 13.
In response to Mr. Lumer's application, Judge Cogan conducted an ex parte conference with the Chows and Mr. Lumer on September 21, 2009. See September 21, 2009 Transcript ("9/21/09 Tr."). At that conference, Mr. Lumer expressed "Rule 11 concerns" about continuing to represent the Chows. See id. at 5-6. In addition to the undisclosed arrests on December 20, 2007, he cited newly acquired information about a prior arrest of Lucy Chow for theft of services, and a lawsuit resulting from that additional arrest. See id. at 6, 8. These credibility concerns now made him question whether, contrary to the Chows' statements to him, his clients had in fact used their father's Metro card to "double up" and go through the subway turnstile, as charged by the police. See id. at 5, 8.
At the conclusion of the September 21st in camera proceeding, Judge Cogan denied Mr. Lumer's request to be relieved. See id. at 10. In doing so, he posited that perhaps the Chows had been told by prior counsel that their arrests would be "expunged," see id. at 5, and the judge thus identified "a plausible explanation as to why they didn't tell you about this history" of arrests. Id. at 6. On the basis of that assumption, Judge Cogan declined to allow Mr. Lumer to withdraw: "[I]f indeed they didn't deliberately lie to [counsel]," this "communication error" would not warrant "abandoning a client...." Id. at 7. The Chows, who were present throughout this proceeding, did nothing to clarify the reason for their failure to have disclosed their other arrests.
Following the in camera proceeding, Judge Cogan conducted an order-to-show-cause hearing in response to defense counsel's September 14th motion to compel discovery. See generally Motion to Compel (Sept. 14, 2009), D.E. #13. At the conclusion of that hearing, Judge Cogan issued an order directing plaintiffs to serve executed releases for the unsealing of records relating to their arrest histories, as well as telephone records and an authorization for telephone records; he also ordered plaintiffs' father, Frank Chow, to appear for his deposition in two days -- i.e., on September 23, 2009, at 1:00 p.m. See Minute Order (Sept. 21, 2009).
On October 5, 2009, Mr. Lumer again wrote to Judge Cogan, requesting a pre-motion conference and permission to renew his firm's motion to be relieved. See Letter to Judge Cogan from Michael Lumer (Oct. 5, 2009), D.E. #20. He cited "the complete breakdown of the attorney-client relationship" and his inability "to comply with outstanding orders and deadlines." Id.
The following day, the Chows wrote to Judge Cogan, complaining about Mr. Lumer's failure to have promptly communicated to them the City's $2,000 Rule 68 offer of judgment, and Mr. Lumer's "belligerent" attitude towards them. See Letter to Judge Cogan from John and Lucy Chow (Oct. 6, 2009), D.E. #21. At a conference before Judge Cogan on October 13, 2009, Mr. Lumer expressed his belief that the case had no value, waived his right to fees, but reserved his right to seek reimbursement for costs. See October 13, 2009 Transcript ("10/13/09") Tr. at 2-6. Although the Chows voiced their grievances regarding Mr. Lumer's representation, they did not object to his withdrawal or respond to Judge Cogan's direct question as to whether they consented to his application. See id. at 1-2, 6-10. Judge Cogan nonetheless granted the motion on the ground that "the relationship between client and attorney is irretrievably broken...." Id. at 9. Consistent with the rationale of Hallmark Capital Corp. v. Red Rose Collection, Inc., No. 96-CV-2839 (RPP)(AJP), 1997 WL 661146, at *3 (S.D.N.Y. Oct. 21, 1997), Judge Cogan did not determine who was at fault, and thus "made no ruling about entitlement to recovery of costs out of a potential settlement." 10/13/09 Tr. at 10.
Judge Cogan subsequently referred the case to the undersigned magistrate judge for all non-dispositive pretrial matters. See Referral Order (Oct. 23, 2010), D.E. #25. Thereafter, the parties filed various discovery-related requests, including defense counsel's motion to compel the Chows (who were now proceeding pro se) to produce the releases previously ordered by Judge Cogan. See Letter to the Court from Karl J. Ashanti (Nov. 13, 2009) at 2, D.E. #29.
On November 20, 2009, this Court conducted a conference to resolve the parties' discovery disputes. At the conclusion of the proceeding, both sides agreed to settle the litigation for a payment of $2,600 to each plaintiff, inclusive of costs. See Minute Entry (Nov. 20, 2009), D.E. #33. After the parties filed their stipulation of discontinuance and the case was closed, see Stipulation of Discontinuance, D.E. #35, the Chows again wrote to Judge Cogan, objecting to Mr. Lumer's assertion of a charging lien for $1,158 in costs on the settlement proceeds. See Letter to Judge Cogan from Lucy and John Chow (docketed Jan. 8, 2010), D.E. #36. Judge Cogan referred their request to the undersigned magistrate judge. See Order (Jan. 15, 2010), D.E. #37.
Following several telephone conferences and further submissions from Mr. Lumer and the Chows, the Court held an evidentiary hearing on March 9, 2010, to determine whether Mr. Lumer and his firm had good cause to terminate their representation of the Chows. Prior to the taking of testimony, and again before the hearing concluded, Mr. Chow, on behalf of both plaintiffs, stated his "settlement" proposal on the record: he and his sister would refrain from filing disciplinary charges against Mr. Lumer if Mr. Lumer agreed to waive his costs. Mr. Lumer declined the offer.
The hearing testimony provided by Mr. Lumer was entirely credible and corroborated in significant part by documentary evidence.*fn1 The Court credits his account of his discussions with the Chows and his reasons for seeking to be relieved. In contrast, John and Lucy Chow each gave testimony that not only conflicted with Mr. Lumer's version of events, but that was belied by contemporaneous documentation and circumstantial evidence. Simply put, the Court found their testimony to be patently perjurious in material respects.
I. Mr. Lumer's Testimony and Exhibits
Mr. Lumer, a civil rights attorney admitted to practice in May 1996, first met the Chows in February or March 2009, after Lucy Chow had contacted him -- shortly before the expiration of the statute of limitations -- about representing her and her brother in connection with their March 2006 arrests. The Chow siblings met with Mr. Lumer at his office. There they explained that they had walked to a subway station near their home to ascertain the balance on their father's "senior" Metro card; according to their story, the police officer who arrested them falsely claimed that they had "doubled up" ...