Fee Arbitration, De Novo Litigation and Attorney Fees
Today's New York Law Journal article by Brendan Pierson highlights the New York fee dispute apparatus. Either attorney or client can trigger an arbitration, and if either is dissatisfied with the result, can request a de novo court case. What is fascinating about this case is the lack of caution and apparent bad judgment on the part of the attorney.
"A Manhattan lawyer was ordered to turn over all but $750 of more than $22,000 he collected from two clients after a judge determined the attorney billed the clients up to $450 an hour for time he spent brushing up on basic legal principles.
The clients, Gerald and Vivian Kleinerman, hired Ronny Buni in March 2011 to represent them in litigation against their co-op board, which was already in progress. In June 2011, Buni told the Kleinermans that he would not do any more work on the matter, citing an unpaid invoice for $6,239.
The matter went to the court system's fee dispute resolution program, an arbitration program pursuant to Part 137 of the Rules of the Chief Administrator. An arbitrator awarded the Kleinermans $5,000.
However, Buni initiated a new case in Manhattan Civil Court against the couple, seeking to recover the $6,239 bill minus the $5,000 arbitration award. The Kleinermans, for their part, sought return of all the money they had paid to Buni throughout the litigation, a total of $22,371."
"According to Nervo, Buni reviewed the litigation file, followed up on discovery requests already made by the parties before his involvement, attended a single status conference and "sent innumerable emails to his clients, some of which included berating them for their reasonable input into the matter."
While working on the case, Nervo said, Buni billed the couple up to $450 an hour for activities that he should not have billed.
According to bills quoted by Nervo, these included discussing filing a notice of appearance and contacting opposing counsel; doing an "attorney search" for the law clerk of the judge presiding over the case, Manhattan Supreme Court Justice Milton Tingling, "for purpose of determining his tenure and background" before calling chambers; reviewing the Civil Procedure Laws and Rules to determine the consequences of failing to demand expert information before the close of discovery; and reviewing case law "to survive [summary judgment] and prevail at trial," though no summary judgment motion had been filed.
Nervo cited as another example of Buni's "remarkable billing practices" an hour and a half spent writing a letter to Tingling seeking an expansion of time for discovery, even though Tingling had denied an identical request by phone the previous day.
Finally, Nervo noted an "inappropriate, if not bizarre" bill for time Buni spent consulting with a retired attorney he knew about how best to handle the case.
"A client should not be charged for an attorney's need to consult others because of that attorney's inability to determine how best to represent that client," Nervo said. "The client is not responsible for an attorney's need to obtain his or her own legal advice. Once plaintiff determined that he was incapable of representing defendants, rather than bill these clients for his own lack of legal knowledge he should have moved to withdraw at that time and not continue to build up legal fees.""