Kasowitz, Benson, Torres & Friedman LLP v Amira Nature Foods, Ltd. 2017 NY Slip Op 30488(U) March 13, 2017 Supreme Court, New York County Docket Number: 158126/2016
Judge: Carol R. Edmead is a fine example of the attorney fee claim-legal malpractice counterclaim paradigm. This one ended well for the law firm.
“On August 6, 2015, Bruce Wacha (“Wacha”), Defendant’s Chief Financial Officer, engaged Plaintiff to represent Defendant in connection with a short selling attack against it.2 On August 7, 2015, the parties signed the written retention agreement (“Retention Agreement”), wherein Defendant agreed to “investigate, advise, advocate, and potentially litigate concerning, among other things, the dissemination of misinformation related to [Defendant], the manipulation of its securities, and harm caused to its business, reputation, and interests” (Retention Agreement, at p.1 ). The Retention Agreement further states that, “[i]n addition to legal fees, you will be charged for other expenses incurred in connection with our representation of you …. This retention may also include investigative work by our affiliate Intelligence Options LLC” (“IO”) (id. at p.2).”
“On August 19, 2015, Plaintiff withdrew as counsel with Defendant’s consent. On November 3, 2015, Defendant e-mailed plaintiff for the return of the remainder of the retainer fee. On November 5, 2015, Plaintiff sent Defendant its invoice-for the first time-for services provided from August 6, 2015 until August 21, 2015 (the “Invoice”).3 The aggregate amount of Plaintiffs representation of Defendant totaled $23 7 ,603 :98: fees of $143,236 for legal work, and costs of $94,367.98, of which $91,843.36 was attributable to investigative services by IO (Id.) ”
“To state a cause of action for account stated, plaintiff must allege defendant’s receipt and retention of the subject statement of account ~ithout proper objection within a reasonable time (Goldmuntz v. Schneider, 99 A.D.3d 544, 952 N_.Y.S.2d 172 [1st Dept 2012]). Where an account is rendered showing a balance, if the party receiving the account fails to dispute its correctness or completeness, that party will be bound by it as an account stated, unless fraud, mistake or other equitable considerations are shown (Shaw v. Silver, 95 A.D.3d 416, 943 N.Y.S.2d 89 [1st Dept 2012], citing Peterson v. !BJ Schroder Bank & Trust Co, 172 A.D.2d 165 [1st Dept 1991]). General objections to an invoice are insufficient to defeat a motion for summary judgment (Morrison Cohen Singer & Weinstein, LLP v. Ackerman, 280 A.D.2d 355, 356, 720 N.Y.S.2d 486 [1st Dept 2001 ]). ”
“Plaintiff fails to demonstrate a prima facie showing that it is entitled to summary judgment for its account stated claim. Plaintiffs submissions indicate that Wacha issued sufficiently specific written objections to Plaintiffs Invoice. First, Wacha’s November 16, 2015 e-mail identifies a specific objection: the excessiveness of the Invoice compared with the time devoted an~ scope of work Plaintiff completed. Further, Plaintiffs subsequent email response to Wacha on December 9, 2015 acknowledges Wacha’s objection to the Invoice by attempting to justify the amount billed vis-a-vis work performed, considering the circumstances in which it was accomplished. Second, Wacha’s December 31, 2015 e-mail specifically objects to the disbursements.and billing for legal services after the Notice and Summons were filed, as addressed within the Invoice ((see Herrick, Feinstein LLP v. Stamm, 297 A.D.2d 477, 746 N.Y.S.2d 712 [1st Dept 2002] (holding that “a trier of fact could reasonably conclude that defendant’s alleged statement … with plaintiff that he was “very troubled by the size of the bills then in hand” was sufficiently specific and timely to negate any inference of assent to the invoices.”); see also Collier, Cohen, Crystal & Bock v. MacNamara, 237 A.D.2d 152, 655 N. Y.S.2d 10 [1st Dept 1997] (sufficient proof of a timely objection found where “plaintiffs [law] firm itself wrote to defendant acknowledging his complaints and, in its October 1993 motion to withdraw as counsel, the firm gave defendant’s refusal to pay as its reason for seeking withdrawal, stating “upon receipt of the invoice, Mr. MacNamara expressed his intention not to pay the outstanding balance.)). Further, Defendant’s objections were timely. A lapse of two months between the receipt and the objection has been held not so long as to constitute “an unequivocal assent to the balance(s) stated” (Herrick, Feinstein LLP v. Stamm, 297 A.D.2d 477, 478, 478 [1st Dept 2002), quoting Epstein Reiss & Goodman v Greenfield, 102 A.D.2d 749, 750 [1st Dept 1984)). Plaintiff sent the Invoice to Wacha on November 5, 2015. Thereafter, Defendant initially objected on November 16, 2015, eleven days after it received the Invoice, and again on December 31, 2015, just under two months after Plaintiff sent the Invoice. Therefore, the branch of Plaintiffs motion for summary judgment of its account stated claim (Third Cause of Action), is denied. ”
“Plaintiff demonstrates a prima facie showing its entitlement to judgment as a matter of law against Defendant on its breach of contract claim. Specifically, Plaintiff submitted the Retention Agreement, which states that Plaintiff shall provide Defendant legal services in exchange for payment, and further, explicitly states that in the event Plaintiff terminates the Retention Agreement, such “resignation shall not affect [Plaintiffs] right to be paid for all of our previously incurred but unpaid fees? and all of our previously incurred but unpaid charges and disbursements” (Retention Agreement at p.2-3). As the Invoice, Affidavit of Michael Bowe who was “primarily responsible” for Defendant’s legal representation, Plaintiff provided legal services to Defendant. ”