Attorney CLEs generally preach that attorneys should refrain from legal fee suits as they bring legal malpractice counterclaims. Wojcik Law Firm, P.C. v Mull 2024 NY Slip Op 00060 Decided on January 09, 2024 Appellate Division, First Department is a legal fee claim with a guarantee twist.
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Order, Supreme Court, New York County (Gerald Lebovits, J.), entered on or about March 23, 2021, which, upon reargument, denied plaintiff’s motion and defendant’s cross-motion for summary judgment, unanimously modified, on the law, to grant that portion of plaintiff’s motion for summary judgment dismissing defendant’s affirmative defenses, except for overbilling, and to grant that branch of defendant’s cross-motion that asserted that the guaranty only applied to fees and expenses incurred after the February 2017 engagement letter, and remand for a hearing on the proper amount of fees and expenses, and otherwise affirmed, without costs.
Defendant’s reading of the guaranty contained in the 2017 engagement letter, limiting it to future fees and expenses, was reasonable given the text and the agreement as a whole. Therefore, defendant’s reading must be adopted (Shaw v Manufacturers Hanover Trust Co., 68 NY2d 172, 177 [1986]; see also Lo-Ho LLC v Batista, 62 AD3d 558, 559 [1st Dept 2009] [guaranty must be read strictly and in guarantor’s favor]).
The 2017 engagement letter was not procedurally unconscionable, where defendant was a sophisticated businessperson who had retained a number of other law firms and was not suffering from any clinical emotional or psychiatric condition. Mere business or financial stress is not sufficient to establish unconscionability (see King v Fox, 2004 WL 68397, *6, 2004 US Dist LEXIS 462, *18-19, [SD NY Jan. 14, 2004, No. 97CIV4134 (RWS)]). Moreover, the terms of the agreement at issue, a personal guaranty for fees, and an acknowledgement of past fees, are common terms that do not meet the high bar for substantive unconscionability (id.) In addition, the provision in the agreement setting a cap on defendant’s monthly payment undermines his argument that the agreement was unconscionable. For these same reasons, there was no issue of fact as to whether defendant was subject to undue influence by counsel (see Matter of Lawrence, 24 NY3d 320, 337—388 [2014]).”