June 3, 2013
Denise Kingue BONNAIG, Esq., d/b/a Denise K. Bonnaig & Associates, Plaintiff,
Dr. Hilary C. WALTON, BrainPOP U, A Division of Anina Management Ltd., and BrainPOP.Com, LLC, Defendants.
[968 N.Y.S.2d 369] Bonnaig & Associates, New York, for Plaintiff.
Shiboleth, LLP by Daniel B. Faizakoff, New York, for Defendants.
LOUIS B. YORK, J.
In this litigation, Plaintiff, an attorney, seeks a charging lien, under Judiciary Law Section 475, against BrainPop, which settled with Plaintiff's former client, Defendant Dr. Walton, in the course of an EEOC mediation. On May 30, 2012, this Court issued a decision and order which granted Defendants' motion to dismiss and denied Plaintiff's motion to amend based on its examination of Judiciary Law Section 475. Currently, Plaintiff moves to renew this motion based on an amendment to the statute and, upon renewal, to obtain an order denying the BrainPOP defendants' motion to dismiss. In opposition, BrainPOP argues that the amendment applies prospectively and not retroactively. For the reasons stated below, the Court denies the motion.
As indicated above, Plaintiff represented Defendant Dr. Walton on her employment-related claims against the BrainPOP Defendants. In May 2007, the parties came before the EEOC where after mediation, Dr. Walton received money and benefits from the BrainPOP Defendants. Because the case was settled before the EEOC, there was never a formal legal action. Plaintiff still has not received the one-third contingent legal fee to which it is entitled. On October 5, 2007, Plaintiff gave written notice to the BrainPOP Defendants' attorney that they should honor Plaintiff's lien on the settlement proceeds. The BrainPOP Defendants have not paid any money to Plaintiff.
On May 30, 2012, the Court granted the BrainPOP defendants' motion to dismiss Plaintiff's claim under Judiciary Law Section 475, which governs the attorney's right to a charging lien. Banque Indosuez v. Sopwith Holdings Corp., 98 N.Y.2d 34, 37, 745 N.Y.S.2d 754, 755, 772 N.E.2d 1112 (2002). At that time, Judiciary Law Section 475 stated: From the commencement of an action, special proceeding or other proceeding in any court or before any state, municipal or federal department, except a department of labor, or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon his client's cause of action, claim or 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....
In its earlier order, this Court reasoned, " To enforce a charging lien Section 475 of the Judiciary Law requires that an action or proceeding be commenced. The [underlying] situation ... was not an action or proceeding, but an investigation and a mediation." Bonnaig v. Walton, Index No. 110429/2011 (Sup.Ct. N.Y. Co. May 30, 2012) (decision in motion seq. No. 1). This was consistent with longstanding judicial interpretation of the statute. See Banque Indosuez v. Sopwith Holdings Corp., 98 N.Y.2d 34, 43, 745 N.Y.S.2d 754, 759, 772 N.E.2d 1112 (2002) (stating that lien comes into existence when action or proceeding is commenced).
On January 1, 2013, however, an amendment to Judiciary Law Section 475 went into effect. The law as amended states that in addition to actions and proceedings, it applies to ... any means of [968 N.Y.S.2d 370] alternative dispute resolution including, but not limited to, mediation or arbitration, or the provision of services in a settlement negotiation at any stage of the dispute. N.Y. Jud. Law. Section 475.
Through this amendment, the legislature made clear that attorneys may seek charging liens not only with respect to an official court action or proceeding but also for out-of-court settlements, including those obtained through any form of alternative dispute resolution. The legislators referred to the amendment as an expansion of the existing law.
Had the amendment occurred prior to the commencement of the EEOC mediation, Plaintiff undisputedly could have enforced a charging lien. However, as this EEOC settled this matter in 2007, this case turns on whether the amendment applies prospectively or retroactively. Plaintiff states that it should apply retroactively to lien cases which currently are pending in the Court system. Defendants argue that the law should apply prospectively only. This is an issue of first impression.
A " primary rule of statutory construction [is] that a new statute [or amendment] is to be applied prospectively, and will not be given retroactive construction unless an intention to make it so can be deduced from its wording." 30 E. 33rd St. Realty LLC v. PPF Off Two Park Ave. Owner, LLC, 105 A.D.3d 515, 963 N.Y.S.2d 106, 107 (1st Dept.2013). In interpreting a statute a court should first look to the text of the statute to see whether the Legislature has stated its intent there. Majewski v. Broadalbin-Perth Cent. Sch. Dist., 91 N.Y.2d 577, 583, 673 N.Y.S.2d 966, 968, 696 N.E.2d 978 (1998).
In the amendment at hand, there is no express discussion of the issue of retroactivity. However, the amendment does state that " [t]his act shall take effect on the ninetieth day after it shall have become a law." N.Y. Jud. Law. Section 475. A postponement of the effective date of a statute is strong evidence that the Legislature did not intend for it to be retroactive. O'Connor v. Long Island Rail Road, 63 A.D.2d 1015, 1015, 406 N.Y.S.2d 502, 503 (2nd Dept.1978), appeal dismissed, 48 N.Y.2d 668, 421 N.Y.S.2d 880, 397 N.E.2d 391, appeal dismissed, 48 N.Y.2d 605, 424 N.Y.S.2d 1025, 397 N.E.2d 395 (1979); Stroud v. State, 184 Misc.2d 876, 878, 711 N.Y.S.2d 305, 306 (Ct.Cl.2000). Though language postponing the effective date does not preclude retroactivity, " in the absence of any corresponding provision for the statute's application to pending actions ... [it is] strongly supportive of a finding that retroactive application was not intended by the Legislature." Bolarinwa v. Albany Medical Center Hosp., 261 A.D.2d 21, 23, 701 N.Y.S.2d 451, 453 (3rd Dept.) (citations omitted), lv. dismissed, 95 N.Y.2d 825, 712 N.Y.S.2d 450, 734 N.E.2d 762 (2000). In fact, retroactive application under these circumstances risks " rendering that language entirely superfluous." Id. Here, there is no clear indication that the legislature intended the statute to apply retroactively. Therefore, the postponement of the effective date is dispositive. See also Spitzer v. Daicel Chemical Ind., Ltd., 42 A.D.3d 301, 302, 840 N.Y.S.2d 8, 12 (1st Dept.2007) (language that statute was to take effect " immediately" did not support retroactive application).
In addition to the time provided, this provision of the statute also uses the word " shall." As defendants argue, in looking to the intent of the legislature, a statute framed in words such as " shall" or hereafter, is construed prospectively. Kuryak v. Adamczyk, 265 A.D.2d 796, 705 N.Y.S.2d 739 (4th Dept.1999); Patricia F. v. Guiseppe F., 145 Misc.2d 1050, 1053, 548 N.Y.S.2d 861, 863 (Fam. Ct. Westchester Co.1989). From the language, which suggests [968 N.Y.S.2d 371] that the amendment or statute shall be applied in the future, courts presume a legislative intent for the statute or amendment to be prospective. Here, there is not ample support for a contrary interpretation.
In addition, the legislative intent does not support a finding of retroactivity. In deciphering legislative intent, the courts look to canons of statutory construction. Id. In general, amendments to statutes are applied prospectively. McKinney's Cons. Laws of N.Y., Book 1, Statutes Section 51; Majewski, 91 N.Y.2d at 583-84, 673 N.Y.S.2d at 968, 696 N.E.2d 978. A statute must overcome a strong presumption before a court will apply it retroactively. See Frontier Ins. Co. v. State, 160 Misc.2d 437, 609 N.Y.S.2d 748 (Ct.Cl.), aff'd, 197 A.D.2d 177, 610 N.Y.S.2d 647 (3rd Dept.1994), aff'd, 87 N.Y.2d 864, 638 N.Y.S.2d 933, 662 N.E.2d 251 (1995). Remedial and procedural amendments constitute an exception to the general rule against retroactive operation to the extent that they do not impair vested rights. McKinney's Cons. Laws of N.Y., Book 1, Statutes Section 54; see In re Marino S., 100 N.Y.2d 361, 370-71, 763 N.Y.S.2d 796, 801, 795 N.E.2d 21 (2003). However, the amendment, even if remedial, will not apply to pending actions if it creates a new remedy where none previously existed or destroys rights already accrued. McKinney's Cons Laws of N.Y., Book 1, Statutes Section 54; see Spitzer, 42 A.D.3d at 302, 840 N.Y.S.2d at 11.
The statute that has been amended, Judiciary Law § 475, is remedial in nature and therefore courts construe it liberally to effectuate its purpose. Morgan v. Drewry, 285 A.D. 1, 4, 135 N.Y.S.2d 171, 174 (1st Dept.1954). However, in interpreting the initial version of the statute, the Court of Appeals concluded the statute applied prospectively. Goodrich v. McDonald, 67 Sickels 157, 112 N.Y. 157, 19 N.E. 649 (1889); see In re Rowland, 55 A.D. 66, 66 N.Y.S. 1121, 1121 (2nd Dept.1900). This fact adds to the presumption that the amendment should apply prospectively as well. Thus, even if the amendment is remedial, an issue the parties debate, the Court concludes prospective application is proper.
Accordingly it is
ORDERED that the motion to renew is granted and, upon renewal, the Court adheres to its original determination.