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In re SCPA 2110 Proceeding, Estate of Eisenberg

Sur Ct, New York County

October 15, 2013

In the Matter of SCPA 2110 Proceeding, Estate of Albert Nathan Eisenberg, Deceased.

Unpublished Opinion

Law Offices of Seema Verma PLLC, New York City (Seema Verma of counsel), for petitioner.

SNR Denton U.S. LLP, New York City (Ralph M. Engel and Martin R. Gold of counsel), for respondent Citibank, N.A.

Eric T. Schneiderman, Attorney General, New York City (Deborah Yurchuk McCarthy of counsel), for respondent Ultimate Charitable Beneficiaries.

Theodore A. Goldbergh, P.C., New York City (Theodore A. Goldbergh, of counsel) and Seth Rubenstein, P.C., Brooklyn (Leo Beitner of counsel), for respondent Etsuko Hamada.

Rita M. Mella, J.

Seema Verma, Esq., on behalf of the Law Offices of Seema Verma PLLC ("Verma") which represented Etsuko Hamada as: (1) nominated executor of the will of Albert Nathan Eisenberg; (2) as successor co-trustee of a revocable trust created under an agreement between decedent, as settlor, and Citibank, N.A. ("Citibank"), as co-trustees, dated May 3, 1991, as amended and restated on June 11, 2004; and (3) as co-trustee of a charitable trust created under an agreement between decedent, as settlor, and Ms. Hamada, as co-trustees, dated June 11, 2004, seeks an order fixing its fees, to be paid from the revocable trust, in the amount of $250, 802 (see SCPA 2110). Verma further seeks "costs and pre/post judgment interests [sic] and attorney's fees." Ms. Hamada, individually, already has paid $82, 000 to Verma. Verma has allocated $64, 436 of the $82, 000 to services allegedly benefitingdecedent's estate and the balance to services rendered to Ms. Hamada, individually. [1]

The trustees of the revocable trust are the sole beneficiaries under decedent's will, and the trustees of the charitable trust are the remainder beneficiaries of the revocable trust.Objections to the requested relief have been filed by the Attorney General of the State of New York, on behalf of the ultimate charitable beneficiaries; by Citibank, currently sole trustee of both the revocable and charitable trusts; and by Ms. Hamada.

In addition, there are two motions before the court. Citibank, as sole trustee of the revocable and charitable trusts, has moved for an order imposing sanctions and costs against Verma (see 22 NYCRR 130-1.1). Ms. Hamada, a beneficiary under the revocable trust of $ 2 million, reduced by its share of taxes, has moved for a determination of Verma's attorney's lien.

Decedent died on June 1, 2010, at age 93, leaving a probate estate (according to the application for preliminary letters) of $106, 970, subject to liabilities of $60, 000 to $120, 000. At the time of decedent's death, the revocable trust (according to Citibank, in its accounting proceeding which has since been withdrawn) had a value of $6.5 million.

On June 12, 2010, Ms. Hamada retained Verma to represent her, initially only as nominated executor. By November 22, 2010, Verma had ceased to represent Ms. Hamada. [2] Thus, Verma seeks compensation for representing Ms. Hamada for a period of less than six months.

The procedural posture of the instant application is somewhat anomalous.

I. Procedural History:

On November 26, 2010, Verma submitted a claim for legal fees to Citibank, as co-trustee of the revocable trust. On March 22, 2011, Citibank petitioned for settlement of its account as co-trustee of the revocable trust, for the period from July 16, 2004, to June 1, 2010, decedent's date of death. Both Ms. Hamada, individually, and Verma filed objections to the account.

On May 11, 2011, Verma filed the instant SCPA 2110 petition. Citibank moved to dismiss Verma's SCPA 2110 proceeding or, alternatively, to consolidate it with the accounting proceeding.

In a July 18, 2011 decision, the court determined to hold Verma's petition in abeyance pending resolution of the accounting proceeding or until further order of the court. The court explained that Ms. Hamada had "hired two additional attorneys whose fees must also be taken into consideration in fixing fees compensable from the trust. The corporate co-trustee has filed an accounting proceeding where the fees of those attorneys can be considered along with those of petitioner." The court noted that Verma had been asked to supplement the information submitted with the petition so as to clarify, and to provide additional detail, as to the time attributable to the representation of Ms. Hamada, as a co-trustee, rather than individually. The July 18, 2011 decision was affirmed unanimously, with costs, by the Appellate Division (93 A.D.3d 413 [1st Dept 2012], lv dismissed 19 N.Y.3d 1011 [2012]). In a May 15, 2012 order, the Appellate Division denied Verma's motion for reargument of that court's decision, and her alternative motion for leave to appeal.

In a December 28, 2012 decision, the court granted a motion by Citibank — made in both the accounting proceeding and Verma's SCPA 2110 proceeding — to the extent of permitting Citibank to discontinue its accounting proceeding. In addition, the court lifted the July 18, 2011 stay on the SCPA 2110 proceeding. The court observed that all parties to the accounting proceeding, with the exception of Verma, had consented to the discontinuance, and that the issues raised by Verma in its objections were the subject of its proceeding for determination of legal fees and would be adjudicated therein. The court noted that the papers filed by Citibank and Ms. Hamada in the accounting proceeding, opposing Verma's fee request, would be considered in the SCPA 2110 proceeding, and the court permitted Verma to file responsive papers by February 4, 2013.

On January 22, 2013, Verma filed a notice of appeal of the December 28, 2012 decision.

On January 18, 2013, Verma filed in this court a compact disc which, she stated, contained ".pdf and audio files, in support of my pending petition for a judicial determination of my outstanding legal fees." She added: "As the document evidence is quite voluminous, bated 1-3377, I cannot reasonably submit a hardcopy [sic] filing and serve it to all parties of record." [3]

The two instant motions were returnable on February 22, 2013. As indicated in this court's May 3, 2013 decision, the court conducted several conferences and, on April 11, 2013, the parties agreed to waive a hearing, and that both motions would be marked submitted as of May 10, 2013.

On May 6, 2013, Verma filed a second memorandum of law, ostensibly in response to Citibank's motion for the imposition of sanctions. (The first memorandum of law was filed on February 11, 2013.) On May 9, 2013, the Attorney General of the State of New York filed a responsive affidavit.

II. Verma's Representation of Ms. Hamada:

Ms. Hamada signed three letters of engagement with Verma, dated June 12, 2010, July 29, 2010 and August 2, 2010, respectively. [4] The letters are signed by Ms. Hamada and by Seema Verma, Esq., of the Law Offices of Seema Verma PLLC. The relationship of the three letters is not entirely clear. [5]

The first letter reads: "Client, Etsuko Hamada, hires Attorney to provide legal representation in handling of initial matters concerning client's estate administration and executorship." It indicates that Ms. Hamada will provide a retainer of $4, 000, against which Verma would bill at an hourly rate of $400. The letter further reads: "Should matters go to litigation and client agrees to continue with my representation under a new retainer agreement, client understands that my hourly rate will be at $500 per hour with a minimum retainer of $50, 000."

The second letter purports to "redefine" the "full scope of representation and its challenges." Verma agreed to represent Ms. Hamada, as co-trustee of each of the two trusts and as nominated executor, and individually, in a host of capacities. [6] The letter provides for Verma's fees of $400/hour, for services, generally, but $500/hour for litigation, and a contingency fee of 40% of Ms. Hamada's recovery with respect to her individual claims and any "award" to decedent's estate. [7] Apparently, however, ...


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