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Marin v. Constitution Realty, LLC

New York Court of Appeals

February 9, 2017

Jose Marin, et al., Plaintiffs,
v.
Constitution Realty, LLC, et al., Defendants. Sheryl Menkes, Esq., Non-Party Appellant,
v.
David B. Golomb, Esq., et al., Non-Party Respondents.

          Scott T. Horn, for nonparty-appellant.

          Brian J. Shoot, for nonparty-respondent Golomb.

          Jay L. T. Breakstone, for nonparty-respondent Manheimer.

          OPINION

          DiFIORE, CHIEF JUDGE

         Plaintiffs Jose and Ada Marin obtained an $8 million settlement for serious injuries Jose Marin sustained when he fell approximately 40 feet while working on a building in Manhattan. This appeal concerns a fee dispute between plaintiffs' attorney-of-record in that action, Sheryl Menkes, and two attorneys she engaged to assist her: Jeffrey A. Manheimer and David B. Golomb. Based on the plain language of their respective fee-sharing agreements, we conclude that Manheimer is entitled to 20% of net attorneys' fees and Golomb is entitled to 12% of net attorneys' fees. We therefore modify the Appellate Division order accordingly.

         I.

         A.

         In February 2009, Menkes engaged Manheimer to act as co-counsel and provide advice in the action [1]. Their written agreement provided that Manheimer would receive 20% of net attorneys' fees if the case settled before trial and 25% once jury selection commenced. Neither attorney informed the clients of Manheimer's involvement, although Manheimer believed Menkes had done so. The failure to inform the clients violated the former Code of Professional Responsibility DR 2-107 (a) (22 NYCRR 1200.12 [a]) and the current Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.5 (g) [2]. In June 2009, the agreement was amended to specify that Manheimer would act solely in an advisory capacity and would "not contact the client[s], defendants['] experts or the [c]ourt" without Menkes's permission. The fee arrangement was unchanged. In August 2009, Menkes wrote to Manheimer unilaterally discharging him and advising him that his portion of the fees would be determined on a quantum meruit basis. Manheimer did not respond to Menkes; he did no further work on the case.

         B.

         In August 2012, Menkes obtained partial summary judgment on liability under Labor Law § 240 (1) on plaintiffs' behalf. She later sought assistance from Golomb for an upcoming mediation - scheduled for May 20, 2013 - and a potential trial on damages. In March 2013, Menkes and Golomb entered into a written agreement, which stated, in relevant part: [3]

"I [Golomb] have agreed to review the file, provide whatever services are needed, with your and your office's assistance, to prepare it for the mediation and to handle the mediation. For those services, I will be [sic] receive twelve (12%) percent of all attorneys' fees whenever the case is resolved, whether by settlement, verdict after trial or appeal, calculated after the attorneys have been reimbursed for all expenses laid out. This percentage due shall become fixed and owed upon execution of this agreement.
"If the case does not resolve at the mediation, presently scheduled for May 20, 2013, then I will be responsible, with your and your office's assistance as requested, for preparing for trial and trying the case. After such mediation, I will be entitled to forty (40%) percent of all attorneys' fees whenever the case is resolved, whether by settlement, verdict after trial or appeal, calculated after the attorneys have been reimbursed for all expenses laid out. In the event this matter has to be tried, the total of all attorneys' fees to which I am entitled for all of the services set forth, including mediation, shall be forty (40%) percent of all attorneys' fees whenever the case is resolved, whether by settlement, verdict after trial or appeal, calculated after the attorneys have been reimbursed for all expenses laid out."

         The mediation began on May 20, 2013 at 2:00 p.m. Although the parties' original settlement positions were approximately $17 million apart, by the time the session concluded at approximately 7:00 p.m., the gap was about $1.5 million. Since the excess insurance carriers lacked authority to increase their offer at that time, the mediation session ended without a settlement agreement. On May 22, 2013, and during the following week, the mediator maintained contact with both Golomb and the carriers. On May 31, 2013, the mediator telephoned Golomb to convey a settlement offer ...


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