United States District Court, E.D. New York
BEATRICE ADAMS, NINA CASTLEBERRY, MARIA MONCHE, TINA O'BRIEN, and ELDORA QUICK, Plaintiffs,
THE CITY OF NEW YORK, Defendant. BEATRICE ADAMS, Plaintiff,
THE CITY OF NEW YORK, NEW YORK CITY DEPARTMENT OF CORRECTION, MARTIN F. HORN, DORA B. SCHRIRO, JOSEPH RUSSO, EDMUND SALPIETRO, JOSE VASQUEZ, CARMINE LABRUZZO, DARIO EMMANS, and ALISON YTREOY, Defendants.
LINDA CRONIN, ESQ., Cronin & Byczek LLP, New Hyde Park, NY, SUSAN B. EGAN, ESQ., Egan Law Firm, New York, NY, for the Plaintiff.
MEMORANDUM AND ORDER
FREDERIC BLOCK, District Judge.
On August 14, 2014, Magistrate Judge Ramon E. Reyes issued a Report & Recommendation ("R&R") in a fee dispute between two law firms, Cronin & Byczek ("C&B") and the Egan Law Firm ("ELF"), that represented Beatrice Adams ("Adams") in separate lawsuits. The R&R recommended that ELF be awarded $7, 650.77 in expenses and $26, 580.99 in attorneys' fees, for a total award of $34, 231.76. See R&R at 20.
C&B timely objected to the R&R. See Objection to Report and Recommendation, Adams et al. v. City of New York, No. 07-cv-2325 (E.D.N.Y. Sept. 11, 2014), Docket Entry No. 114 ("Objection Letter"). Upon de novo review, the Court adopts the R&R in its entirety.
This dispute arises out of two lawsuits that were brought by Adams, a former corrections officer, against the City of New York, alleging that she was mistreated by the New York City Department of Correction ("DOC") and by various DOC employees while working at Rikers Island.
ELF initially represented Adams in the first lawsuit ("2007 Lawsuit"), which was filed in the Eastern District of New York on June 8, 2007. The 2007 Lawsuit alleged that DOC had discriminated against Adams on the basis of race and gender, had permitted a hostile work environment, and had retaliated against her when she complained. On March 19, 2013, however, Adams discharged ELF "for cause" and designated C&B as replacement counsel. At that time, C&B was representing Adams in a second lawsuit ("2013 Lawsuit"), which was filed in the Eastern District of New York on January 16, 2013. This second suit also arose out of Adams' employment at Rikers Island and alleged, among other claims, that DOC had retaliated against Adams for the 2007 Lawsuit.
In August 2013, C&B settled the 2007 and 2013 Lawsuits for $190, 000. The settlement proceeds were attributed solely to the 2013 Lawsuit, while Adams' claims in the 2007 Lawsuit were dismissed with prejudice. In September 2013 ELF requested a conference to fix the amount of its attorneys' fee lien for the work it performed in connection to the 2007 Lawsuit. C&B opposed the request, arguing that ELF was not entitled to any of the settlement funds because it had been discharged for cause and because it had done no work on the 2013 Lawsuit. On November 1, 2013, the Court ordered C&B to retain $35, 000, approximately half of the one-third contingency fee, to be held in an escrow account pending resolution of the fee dispute, and referred the dispute to Magistrate Judge Reyes, who conducted two days of evidentiary hearings in December 2013.
In the R&R now before the Court, Magistrate Judge Reyes recommended that ELF be awarded attorneys' fees and expenses totaling $34, 231.76. First, Magistrate Judge Reyes found that ELF was terminated without just cause and is therefore entitled to assert a charging lien to secure payment of reasonable fees and expenses. Second, Magistrate Judge Reyes found that the 2013 Lawsuit was the "logical sequence" of the 2007 Lawsuit, and that ELF is therefore entitled to recover from the settlement proceeds of the 2013 Lawsuit. R&R at 9. Finally, Magistrate Judge Reyes evaluated evidence submitted by both law firms and concluded that ELF should be awarded $7, 650.77 in expenses and $26, 580.99 in attorneys' fees.
C&B timely objected to the R&R, taking issue with each of Magistrate Judge Reyes's conclusions. The Court reviews C&B's objections de novo. See 28 U.S.C. § 636(b)(1).
A. Just Cause Termination of ELF
Under New York law, attorneys may assert their right to a lien upon the proceeds of their client's cause of action, which attaches from the commencement of that action. N.Y. Jud. Law § 475. However, "[i]t is well-settled that an attorney loses his right to enforce a charging lien if the attorney... is discharged for cause." Petition of Harley & Browne, 957 F.Supp. 44, 48 (S.D.N.Y. 1997). A discharge "for cause" exists where "the attorney has engaged in some kind of misconduct, has been unreasonably lax in pursuing the client's case, or has otherwise improperly handled the case." Garcia v. Teitler, No. 04-cv-832, 2004 WL 1636982, at *5 (E.D.N.Y. July 22, 2004).
C&B advances two principal reasons why ELF was discharged for cause. First, C&B argues that ELF was negligent when it failed to advise Adams about how a bankruptcy filing would affect her federal lawsuit. However, the retainer agreement between ELF and Adams quite clearly limits the scope of representation to the 2007 Lawsuit only. Further, in the evidentiary hearing before Magistrate Judge Reyes on December 30, 2013, Adams admitted that she had not retained ELF to give her legal advice regarding bankruptcy, but had hired a bankruptcy attorney to whom she gave information and paperwork regarding her pending federal lawsuits. See Transcript of December 30 Hearing at 64:20-71:22. ELF therefore breached no legal duty by refusing to advise Adams on her bankruptcy petition.
C&B next argues that Adams discharged ELF because ELF "fail[ed] to prevail on any significant claim for Adams in the 2007 lawsuit." Objection Letter at 3. This argument misstates the facts. In an order dated September 22, 2011, the Court granted the City of New York's motion for summary judgment with respect to Adams' employment discrimination claims, but denied summary judgment with respect to her hostile workplace, retaliation, and Monell claims. See Adams v. City of New York, 837 F.Supp.2d 108 (E.D.N.Y. 2011). Moreover, failure to prevail on a claim is not, in and of itself, proof of failure to adequately represent a client's interests. While the record does show that Adams ...