The Case is Settled...Now Comes the Bigger Fight

Piro sued Russo, Karl, Widmaier & Cordano PLLC for legal malpractice.  Piro used attorney Rodriguez for that case.  At the same time Bonacasa obtained a default judgment against Piro. A guess is that both arose from the same issues and that Russo, Karl should have been defending Piro from Bonacasa.  So, in Russo, Karl, Widmaier & Cordano PLLC v Piro  2014 NY Slip Op 30505(U)  February 24, 2014  Supreme Court, Suffolk County  Docket Number: 13-19943  Judge: Peter H. Mayer, we see both Rodriguez and Bonacasa fighting over the same proceeds.  The winner is determined by Judiciary Law 475.  Proceeds of a litigation have a higher priority than other debts. 

"Rodriguez now cross-moves for an order directing the plaintiffs to release its legal fee of $30,000, and dismissing Bonacasa's cross claims. In support of its cross motion, Rodriguez submits, among other things, the pleadings herein, its written retainer agreement and billing statements in the Piro action, a copy of a Court order in the Bonacasa action, and a "settlement" signed by Piro regarding Rodriguez's legal fee. It is undisputed that Rodriguez was retained by Piro on January 10, 2010, that Rodriguez commenced the Piro action on February 1, 2010, that Rodriguez  represented Piro throughout the litigation, and that Rodriguez claims a charging lien based on its procuring a settlement in the mount of $65,000. It is 'A-ell settled that a charging lien for legal fees attaches automatically upon commencement of the client's action (Judiciary Law 475; Resnick v Resnick, 24 AD3d 238, 806 NYS2d 200 [1st Dept 2005]; Matter of Dresner v State of New York, 242 AD2d 627, 662 NYS2d 780 [2d Dept 1997]; Rotker v Rotker, 195 Misc 2d 768, 761 NYS2d 787 [Sup Ct, Westchester County 2003]; see also Matter of Cohen v Grainger, Tesoriero & Bell, 81NY2d655, 602 NYS2d 788 [1993]). An attorney's charging lien is vested equitable ownership interest in client's cause of action and maintains superiority over anyone claiming through the client (LMWT Realty Corp. v Davis Agency Inc., 85 NY2d 462, 626 NYS2d 39 [1995]; see also Banque Indosuez v Sopwith Holdings Corp., 98 NY2d 34, 745 NYS2d 754 [2002]; O'Connor v Spencer (1977) Inv. Ltd. Partnership, 8 Misc 3d 658, 798 NYS2d 888 [Sup Ct, Queens County 2005]). The right to assert such a lien is based upon the equitable doctrine that an attorney should be paid out of the proceeds of the judgment procured by the attorney (Theroux v Theroux, 145 AD2d 625, 536 NYS2d 151 [2d Dept 1988]; see LMWT Realty Corp. v Davis Agency, supra; Kaplan v Reuss, 113 AD2d 184, 495 NYS2d 404 [2d Dept 1985], affd 68 NY2d 693, 506 NYS2d 304 [ 1986]). The statute codifying the law regarding charging liens, Judiciary Law 475, provides, in relevant part, "[f]rom the commencement of an action ... the attorney who appears for a party has a lien upon his client's cause of action, claim or counterclaim, which attaches to a ... determination, decision, judgment
or final order in his client's favor, and the proceeds thereof in whatever hands they may come."  thus, a charging lien affects only the proceeds obtained in a particular litigation and may be enforced only to obtain the reasonable value of legal services and disbursements in connection with that litigation (Kaplan v Reuss, id.; see Natole v Natole, 295 AD2d 706, 708, 744 NYS2d 227 [3d Dept 2002]; Butler, Fitzgerald & Potter v Ge/min, 235 AD2d 218, 651NYS2d525 [1st Dept 1997]; Surdam v Marine Midland Bank, 198 AD2d 578, 603 NYS2d 233 [3d Dept 1993]). It has been held that the statute is remedial in nature and calls for a liberal construction thereunder (Herlihy v Phoenix Assur. Co., 274 AD 342, 83 NYS2d 707 [3 Dept 1948]). Here, Rodriguez has established its entitlement to summary judgment regarding its claim to a  charging lien and the release of its legal fees in the Piro action. 2 Thus, it is incumbent upon the nonmoving parties to produce evidence in admissible form sufficient to require a trial of the material issues of fact (Roth v Barreto, supra; Rebecchi v Whitmore, supra; O'Neill v Fishkill, supra). In opposition to Rodriguez's cross motion, Bonacasa submits the affirmation of her attorney, who reiterates the contentions set forth in her cross motion for summary judgment. As determined above, Bonacasa has failed to raise an issue of fact requiring a trial of Rodriguez's claim for legal fees. As noted above, Piro does not dispute the validity of his retainer agreement with Rodriguez, or the legal fee charged thereunder."

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