Labor Law Cases which arise from construction accidents often have large numbers attached to them.  After all, people can get really hurt when they fall on a construction site.  So was the situation in Doviak v Lowe’s Home Ctrs., Inc.  2015 NY Slip Op 09333  Decided on December 17, 2015  Appellate Division, Third Department.

The bigger fight came between the largest law firm in New York state and a smaller trial firm in NYC over the trial verdict.  At trial defendants offered $12 Million to settle.  Whether or not plaintiff was adequately informed of the offer, it was turned down.  Eventually the jury awarded only $ 3.7 million.  Finkelstein & Partners successfully moved, post trial for an additional $ 3.1 million, to a total of $ 6.8 million.

Plaintiff then retained the second law firm, and the fight over attorney fees started.  Whether or not the first attorney should get any fees at all depended on whether they were terminated for cause.

“Disagreements about various aspects of the judgment delayed entry thereof until December 2007. Prior thereto, plaintiff had ostensibly stopped communicating with Finkelstein and retained new counsel. After the judgment was entered, plaintiff’s new counsel moved to resettle the judgment, which was granted in part in an order and ensuing amended judgment entered in July 2008. Plaintiff’s new counsel perfected the appeal that had been filed by Finkelstein, and we, among other things, increased damages by $2.5 million (63 AD3d at 1356-1357), making total damages of about $9.3 million. This resulted in additional contingency counsel fees of $707,106.

In the interim, plaintiff, eventually represented by Phillips & Paolicelli, LLP (hereinafter Phillips),^[FN1] commenced a legal malpractice action in Orange County against Finkelstein alleging, among other things, that the trial settlement offer of $12 million had not been communicated by Finkelstein to plaintiff. After an appeal to the Second Department (Doviak v Finkelstein & Partners, LLP, 90 AD3d 696 [2011]), that case moved to a seven-week jury trial, which resulted in the jury finding no legal malpractice by Finkelstein. In addressing a posttrial motion in that action, Supreme Court (Ecker, J.) noted that certain aspects of plaintiff’s allegations that Finkelstein had been discharged for cause had not been decided in the Orange County action and should be heard in connection with the pending fee dispute in the underlying Ulster County action.

Plaintiff then moved in the Ulster County action to, among other things, discharge Finkelstein’s liens in that action. In a thorough written decision, Supreme Court (Work, J.) addressed a host of remaining issues about the disputed fees and disbursements. The court was unpersuaded by plaintiff’s contention that Finkelstein was discharged for cause so as to justify denying Finkelstein any counsel fees. As for the counsel fees of $1,892,760.31 generated from the pre-appeal action, Supreme Court reduced Finkelstein’s fee by $30,000 as sanctions for several errors by Finkelstein that, ultimately, had not adversely affected plaintiff but caused delay and necessitated additional legal work. The court further directed that $40,000 from the pre-appeal counsel fees should be paid to Phillips for its postverdict, pre-appeal legal work. The court thus awarded Finkelstein $1,822,760.31 in counsel fees for pre-appeal legal work and authorized Finkelstein to be reimbursed for its disbursements of $199,126.73. As for the additional counsel fees of $707,106 from the successful appeal, Supreme Court awarded two thirds of such amount to Phillips and one third to Finkelstein ^[FN2]. Plaintiff appeals.

We consider first plaintiff’s argument that Finkelstein should not get any counsel fees because it was discharged for cause. “[A] client has an absolute right, at any time, with or without cause, to terminate the attorney-client relationship by discharging the attorney” (Campagnola v Mulholland, Minion & Roe, 76 NY2d 38, 43 [1990]). “If the discharge is with cause, the attorney has no right to compensation or to a retaining lien” (Teichner v W & J Holsteins, 64 NY2d 977, 979 [1985] [citations omitted]). A “for cause” termination must be based on more than “a client’s ‘general dissatisfaction’ with the attorney’s performance” (Wiggins v Kopko, 105 AD3d 1132, 1134 [2013], quoting De Luccia v Village of Monroe, 180 AD2d 897, 899 [1992]) and typically involves a “significant breach of legal duty” such that the client can establish that the “attorney’s conduct constituted a failure to properly represent [the client’s] interests” (Antonmarchi v Consolidated Edison Co. of N.Y., 678 F Supp 2d 235, 241 [SD NY 2010] [internal quotation marks and citations omitted]; see Greenberg v Cross Island Indus., 522 F Supp 2d 463, 467 [ED NY 2007]).

The most serious allegation that could have supported a “for cause” termination — i.e., the purported failure to inform plaintiff of the $12 million settlement offer — was resolved in Finkelstein’s favor during plaintiff’s unsuccessful malpractice action. Plaintiff now relies on a litany of mostly postverdict infirmities by Finkelstein. Supreme Court (Work, J.) fully analyzed each of the purported errors and ethical breaches and we discern no reason to depart from that court’s conclusions. With respect to Finkelstein’s application to Supreme Court (Egan Jr., J.) for its counsel fees without providing adequate notice to plaintiff, the fee request was consistent with the retainer agreement, it was made at a time when plaintiff had apparently ceased communicating with Finkelstein and Supreme Court (Work, J.) found no willfulness by Finkelstein and noted no harm to plaintiff. Given Finkelstein’s extensive legal work in this complex case that culminated in a generally favorable result for plaintiff, this error was insufficient under all the relevant circumstances to serve as a basis to deny Finkelstein any counsel fees, and Supreme Court’s decision to reduce Finkelstein’s fee by $10,000 was within its discretion and an appropriate sanction.

The initial incorrect inclusion in the proposed judgment of a set off for plaintiff’s children’s Social Security disability benefits was eventually corrected and, while the error contributed to the delay in final resolution of the litigation, it was adequately addressed by Supreme Court’s reduction of Finkelstein’s fee by an additional $10,000. The remaining errors have been considered and, to the extent they remained viable after the jury verdict in favor of Finkelstein in plaintiff’s malpractice action, do not rise to the level of a significant breach of Finkelstein’s duty to plaintiff or reveal that Finkelstein failed to properly represent plaintiff’s interest to such an extent as to justify termination for cause. We further agree with Supreme Court that Finkelstein adequately established the amount of its disbursements for which it was entitled to be reimbursed under the retainer.

Nor are we persuaded that Supreme Court erred in the manner in which it divided the counsel fees generated from the additur resulting from the appeal to this Court. An attorney’s “charging lien does not merely give an attorney an enforceable right against the property of another, it gives the attorney an equitable ownership interest in the client’s cause of action” (LMWT Realty Corp. v Davis Agency, 85 NY2d 462, 467 [1995]; see Judiciary Law § 475). Although the retainer provided that it did not cover an appeal, it did specifically cover any [*3]monies that plaintiff received by reason of the action and further provided for a reasonable fee should there be an appeal. Supreme Court noted that Finkelstein successfully developed the record that became the basis for this Court’s additur. Finkelstein also filed a notice of appeal and took steps, including ordering the trial transcript, toward perfecting the appeal. Further, Finkelstein had researched, prepared and presented to the trial court the partially successful motion for, among other things, additur, which provided the foundation — expanded upon by Phillips — for the successful appeal. The relevant language of the retainer as well as the outcome at the trial level were materially different here than in Shaw v Manufacturers Hanover Trust Co. (68 NY2d 172, 175-176 [1986]), a case relied upon by plaintiff. The retainer did not forfeit a fee upon an adverse trial verdict, plaintiff’s trial in the underlying personal injury action did not end adversely to plaintiff, and Finkelstein’s retainer entitled it to a fee based on monies recovered by reason of the claim. Supreme Court’s division of the counsel fees resulting from the appeal was appropriate (see generally Matter of Cohen v Grainger, Tesoriero & Bell, 81 NY2d 655, 658-660 [1993]).