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In re Application of Hayes

Surrogates Court, Essex County

March 17, 2017

In the Matter of the Application of Susan M. Hayes As Administratrix of the Goods, Chattels and Credits which were of Ryan Haywood Quigley, Deceased, For leave to compromise a certain claim for wrongful death of the decedent and to settle an account of the proceedings as such Administratrix

          Joseph W. McPhillips, Esq., South Glens Falls, New York for the Administratrix.

          Richard B. Meyer, J.

         The petitioner entered into a power of attorney and contingent fee contract (the "fee agreement") with two separate Texas law firms, the Thomas J. Henry - Injury Attorneys and Hilliard Munoz Gonzales, LLP (collectively, "litigation counsel" except where otherwise noted), providing for a contingent attorneys' fee of 33.3% "figured on the total gross recovery". By decision and order dated January 19, 2017, decision was reserved on fixing the amount of reasonable attorneys fees for litigation counsel in connection with prosecuting claims of the estate for the wrongful death of the decedent as the result of an alleged defective ignition switch in the General Motors vehicle operated by the decedent at the time of his tragic death on December 30, 2011. Litigation counsel was offered the opportunity to submit further information to assist this Court in fixing a reasonable attorneys fee, and an affidavit of Michael E. Henry, Esq. (Henry), sworn to on January 26, 2017 was filed.

         "Courts 'give particular scrutiny to fee arrangements between attorneys and clients, ' placing the burden on attorneys to show the retainer agreement is 'fair, reasonable, and fully known and understood by their clients' (Shaw v. Manufacturers Hanover Trust Co., 68 N.Y.2d 172, 176, 507 N.Y.S.2d 610, 499 N.E.2d 864');">499 N.E.2d 864 [1986])." (In re Lawrence, 24 N.Y.3d 320, 336, 998 N.Y.S.2d 698, 708-709, 23 N.E.3d 965, 976 [2014]). "Absent incompetence, deception or overreaching, contingent fee agreements that are not void at the time of inception should be enforced as written (Lawrence, 11 N.Y.3d at 596, 873 N.Y.S.2d 517, 901 N.E.2d 1268 n. 4)." (id., at 339, 998 N.Y.S.2d at 710, 23 N.E.3d at 978).

         Both Texas and New York have adopted, with their own modifications, the American Bar Association Model Rules of Professional Conduct. Under Rule 1.04 of the Texas Disciplinary Rules of Professional Conduct, entitled "Fees":

"(a) A lawyer shall not enter into an arrangement for, charge, or collect an illegal fee or unconscionable fee. A fee is unconscionable if a competent lawyer could not form a reasonable belief that the fee is reasonable.
(b) Factors that may be considered in determining the reasonableness of a fee include, but not to the exclusion of other relevant factors, the following:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal ...

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