Judiciary Law 487 and Exiting the Case
Attorneys and clients have a unique compensation arrangement in contingent fees. It's almost unheard of for people to get paid only on success. Doctors get paid for treating you, not for curing you. Plumbers get paid for showing up, and then get paid more for doing the work. Lawyers often work on contingent plans where they agree to take the case, work the case, pay for the expenses of the case, and then make money if they are successful. It's an arrangement that works well if everyone keeps to the rules.
What happens when an attorney decides that he has paid enough of the expenses and now demands that the client put up some money? We see one outcome in Palmieri v Biggiani
2013 NY Slip Op 05194 Decided on July 10, 2013 Appellate Division, Second Department. Client alleges that attorney demanded expenses during the case after the defendant insurer marked the case "no pay". Of course, the contingent arrangement was that the attorney bear the expenses and the risk.
"On July 25, 2007, the parties stipulated to the substitution of the defendant as counsel (hereinafter the July 2007 stipulation). On August 12, 2008, the Supreme Court dismissed the underlying action. The parties dispute the basis for the August 2008 dismissal. The plaintiff alleges that the August 2008 dismissal was based on the Supreme Court's determination that more than one year had elapsed between the July 2005 order entered on the plaintiff's default and the May 2007 order vacating that default and restoring the action to the trial calendar, and that the underlying action was, thus, not restorable pursuant to the May 2007 order. He further alleges that, inasmuch as the defendant first withdrew as counsel under false pretenses, and had been reinstated as counsel in May 2007, the defendant's failure to timely rectify the consequences of the March 2006 dismissal of the underlying action constituted legal malpractice. The defendant contends that the August 2008 dismissal was based on the failure of the plaintiff's subsequent counsel to prosecute the underlying action. The only documentary evidence in the record as to the court's reason for the August 2008 dismissal was an entry in the Supreme Court's computerized calendar record indicating that the underlying action was dismissed "PER SFO J.EDB 3-23-2006."
The plaintiff thereafter commenced the instant legal malpractice action, and the defendant moved, in effect, to dismiss the amended complaint pursuant to CPLR 3211(a)(1), (5), and (7). In an order dated July 5, 2011, the Supreme Court granted that branch of the defendant's motion which was to dismiss the cause of action alleging legal malpractice, based on its conclusion that documentary evidence established that the underlying action was ultimately dismissed more than one year after the defendant was relieved as counsel, that events subsequent to the substitution of counsel could not be attributed to the defendant, and that, as a matter of law, the defendant's refusal to advance the expert's fee was not a proximate cause of the August 2008 dismissal. The Supreme Court also directed the dismissal of the causes of action alleging breach of contract, fraud, breach of fiduciary duty, and deceit as duplicative of the cause of action alleging legal malpractice. It further directed the dismissal of the remaining causes of action for failure to state a cause of action. In a judgment entered August 2, 2011, the Supreme Court dismissed the amended complaint. "
"Contrary to the Supreme Court's conclusion, the plaintiff stated a cause of action alleging violation of Judiciary Law § 487 (see CPLR 3211[a]; Judiciary Law § 487; Amalfitano v Rosenberg, 12 NY3d 8, 14; Rock City Sound, Inc. v Bashian & Farber, LLP, 74 AD3d at 1172; Boglia v Greenberg, 63 AD3d 973, 975; Kempf v Magida, 37 AD3d at 764; Izko Sportswear Co., Inc. v Flaum, 25 AD3d 534, 537). The plaintiff alleged in the amended complaint that the defendant's assertion, made in support of the motion to be relieved as counsel, that the plaintiff "steadfastly refused to pay the litigation expenses," was knowingly false and was offered with the intent to deceive the Supreme Court into believing that the defendant originally had sufficient cause to be relieved as counsel (see Dupree v Voorhees, 102 AD3d 912, 913). Thus, the Supreme Court should have denied that branch of the defendant's motion which was to dismiss the cause of action alleging a violation of Judiciary Law § 487. "