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Maher v. Railo

United States District Court, S.D. New York

February 27, 2018

JUSTIN T. MAHER, Plaintiff,
v.
CAITLIN H. RAILO and QUALITY BUS SERVICE, LLC, Defendants.

          OPINION AND ORDER

          JUDITH C. MCCARTHY, UNITED STATES MAGISTRATE JUDGE

         In this action, Plaintiff Justin T. Maher (“Plaintiff”) sought to recover damages for personal injuries he allegedly sustained as a result of a motor vehicle accident that occurred on February 14, 2013, when Plaintiff's vehicle was struck by a bus that was operated by Defendant Caitlin H. Railo (“Ms. Railo”) and owned by Defendant Quality Bus Service, LLC (“QBS”) (together, “Defendants”). The parties settled the case, and, on December 8, 2015, the Court entered a Stipulation of Settlement, Discontinuance and Order of Dismissal.[1] (Docket No. 119). On December 6, 2016, Plaintiff's counsel of record, Cognetti & Cimini, LLC (“C&C”), sought and obtained an order to show cause regarding whether the Court should accept ancillary jurisdiction over an attorneys' fee dispute between C&C and Plaintiff's former counsel, Gary Greenwald & Partners, P.C. (“GG&P”).[2] (Docket No. 120). At the show cause hearing held on December 13, 2016, the Court accepted ancillary jurisdiction with the consent of all parties. Presently before the Court is a motion filed by GG&P seeking reimbursement from C&C of certain litigation costs advanced by GG&P, a percentage of the contingency fee received by C&C from the settlement proceeds, and interest. (Docket No. 136). On August 3, 2017, the Court heard oral argument on the motion. For the reasons set forth below, GG&P's motion is granted in part and denied in part. The Court finds that GG&P is entitled to (1) reimbursement of litigation costs advanced by GG&P in the amount of $10, 238.69, (2) five percent of the contingency fee received by C&C from the settlement of Plaintiff's claims, and (3) interest running from November 30, 2015 at a rate of nine percent per annum.

         I. BACKGROUND

         The factual and procedural history of this case is complex and largely immaterial to the present fee dispute. The following is a summary of the relevant history based on the declarations and other documents submitted in support of and opposition to GG&P's motion, as well as the Court's familiarity with the prior proceedings in this case.[3]

         On February 14, 2013, Plaintiff was involved in a motor vehicle accident in Orange County, New York, sustained serious head injuries, and was placed in a medically-induced coma for nearly a month. (Docket No. 137 ¶ 12; Docket No. 141 ¶¶ 5-6).[4] On February 16, 2013, Plaintiff's biological father, Edward Maher, consulted with C&C and entered into a Contingent Fee Agreement, ostensibly on Plaintiff's behalf, requesting that C&C investigate the circumstances surrounding the accident and pursue an appropriate civil action to recover for Plaintiff's accident-related injuries. (Docket No. 141 ¶¶ 7-8; Docket No. 141-3). Pursuant to the Contingent Fee Agreement, C&C undertook representation of Plaintiff by retaining the services of investigators and accident reconstruction experts to obtain witness statements and perform site and vehicle inspections. (Docket No. 141 ¶ 9).

         On February 20, 2013, while Plaintiff remained in a coma, Plaintiff's maternal grandparents, William and Christine Eveleth, executed a written retainer agreement to retain GG&P for purposes of pursing a lawsuit in the Supreme Court of the State of New York arising from the injuries sustained by Plaintiff. (Docket No. 137 ¶ 15; Docket No. 137-6). After being retained, GG&P began investigating the accident, obtaining medical records, and negotiating with insurance companies. (Docket No. 137 ¶ 17).

         On February 27, 2013, GG&P initiated a proceeding pursuant to Article 81 of the New York Mental Hygiene Law in the Orange County Surrogate's Court and petitioned to have Plaintiff's grandfather, William Eveleth, appointed as Plaintiff's guardian. (Docket No. 141 ¶ 11; Docket No. 137 ¶ 13; Docket No. 137-4). As a result of the Article 81 proceeding, William Eveleth was appointed as Plaintiff's temporary guardian pending a hearing on GG&P's application scheduled to take place on April 5, 2013. (Docket No. 141 ¶ 12). C&C acknowledged the temporary guardianship in correspondence to GG&P dated March 6, 2013. (Docket No. 141 ¶ 13; Docket No. 141-6).

         On March 11, 2013, shortly after Plaintiff emerged from his coma, GG&P obtained Plaintiff's mark and/or initials upon (1) a Contingent Fee Agreement; (2) an “acknowledgement” that GG&P's fees and costs incurred in connection with the February 27, 2013 Article 81 proceeding would be asserted as a lien against Plaintiff's recovery in his litigation for personal injuries; and (3) a pre-typed letter addressed to Vincent S. Cimini, who served as lead counsel from C&C in this matter, advising: “I am no longer in a coma . . . I am most satisfied with the Greenwald Law Offices representing me. Please do not do any work on my behalf.” (Docket No.

         141 ¶¶ 3, 15; Docket No. 137 ¶ 16; Docket No. 141-7).

         By correspondence dated March 19, 2013, Gary Greenwald of GG&P forwarded a copy of the termination letter to Vincent S. Cimini of C&C and advised:

I am so incredibly troubled by your obvious stupidity. . . . I have in my possession a retainer signed by the lawfully appointed guardian of Justin Maher. In addition, now that Mr. Maher is out of the coma, he has signed a retainer with me in the presence of his grandparents. He has also signed a letter that was written to you to stop having any involvement in this matter.

(Docket No. 141 ¶ 16; Docket No. 141-8).

         On April 15, 2013, GG&P served a four-page Notice of Claim by Plaintiff against Port Jervis City School District at the Port Jervis School District Superintendent's Office. (Docket No. 143 ¶ 5; Docket No. 143-1). On June 12, 2013, Jamie C. Greenwald, Esq., of GG&P participated in Plaintiff's pre-litigation deposition pursuant to New York General Municipal Law § 50-h. (Docket No. 143 ¶ 6; Docket No. 143-2).

         On June 28, 2013, GG&P commenced a lawsuit for Plaintiff's injuries by filing a Summons and Complaint against Ms. Railo, QBS, Port Jervis City School District, and New Life Christian Day School in the Supreme Court of the State of New York (the “State Court Action”). (Docket No. 137 ¶ 17; Docket No. 137-8). GG&P has submitted contemporaneous time records, which, according to GG&P, document work performed by GG&P in connection with the State Court Action. (Docket No. 137-11; Docket No. 137 ¶ 23). According to those records, GG&P devoted approximately 107 hours of attorney and paralegal time in furtherance of the State Court Action. (Docket No. 137-11 at 13). That work amounted to $33, 235.25 in billable fees, based on the rates reflected in the time records. (Id.). According to the records, GG&P also incurred $10, 623.69 in out-of-pocket expenses in furtherance of the State Court Action. (Docket No. 137-11 at 18).

         GG&P has submitted a declaration describing the work performed by GG&P in connection with the State Court Action. (See Docket No. 137 ¶ 23). Among other things, between July 3, 2013 and July 18, 2013, GG&P filed affidavits of service reflecting completed service of process on the defendants in the State Court Action. (Docket No. 143 ¶ 8; Docket No. 143-4). On August 21, 2013, Defendant New Life Christian Day School filed a motion to dismiss Plaintiff's complaint in the State Court Action. (Docket No. 143 ¶ 9; Docket No. 143-5). Between August 21, 2013 and September 12, 2013, in opposition to New Life Christian Day School's motion to dismiss, GG&P submitted a brief response arguing that the motion was premature, followed by a two-page sur-reply ...


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