We’re still looking at Wortman v. Cheng today.

Although at oral argument, plaintiff’s principal stated he was not challenging the contingency fee agreement the law firm is, in fact, doing just that. Wortman states in his February 17, 2012 affidavit that "I am entitled to the quantum meruit  value of my services In the Cheng v. Cartelli case. Chang has unreasonably refused to settle the Cartelli case for the maximum limits of Cartelli’s policy of $500,000 despite her representations that she would accept such amount once offered, despite 4 offers to settle at $500,000 …”    

Elsewhere plaintiff states that Wortman relied on these misrepresentations in agreeing to represent her in three cases. Thus the law firm contends that it is entitled to its fees based upon quasi contractual principles because it was induced and defrauded into signing the flat free retainer with Chang, The law firm contends that had it known Chang had no intention of settling the Cartelli case immediately or ever, it would not have taken the other matters on would have made a different agreement with Chang her In connection with the Citidress and Golden City matters. Phrased differently, anticipating an effortless recovery of a 20% contingency fee in the malpractice action, Wortman agreed to take the foreclosure cases on for a modest fee. These arguments blur the distinctions between plaintiffs 2d COA for quantum meruit and its 3d COA for fraud.

Regardless of which factual claims are true, Wortman has no claim against Chang for legal fees in the Cartelli action, other than for the 20% contingency fee of the amount – if any- Chang eventually recovers on the judgment entered against the Cartelli estate. By its very nature a contingency fee is “contingent” on a successful result. Although Chang prevailed in the Cartelli action, and the $8,708,490 judgment was affirmed on appeal, it is unclear whether she will ever recover any part of that judgment. This uncertainty is the subject of Chang’s malpractice counterclaim against the law firm. Since Chang and the law firm entered Into a retainer agreement for a contingency fee, Wortman cannot assert a valid claim against his client for quantum meruit in the Cartelli action. Georgia Malone & Co., Inc. v. Ralph Rieder, 86 A .D.3d 406,410 [lst Dept 201 11).

The existence of a valid and enforceable written contract governing the disputed subject matter precludes the law firm from recovering in quantum meruit (Sheiffer v. Shenkman Capital Management, supra).

The law firm contends it was defrauded by Chang because Chang lied to Wotman about her eagerness and willhgness to settle the Cartelli case for $500,000. This claim presents complicated issues about an attorney’s fiduciary duties to his or her client and the nature of retainer agreements.

The unique relationship between an attorney and his or her client is based upon "the elements of trust and confidence on the part of the, client and of undivided loyalty  and devotion on the part of the attorney …" Demov, Morris. Levin & Shein v. Glantz. 53 N.Y.2d 553 [1981]). An attorney has a fiduciary duty to his or her client and this duty transcends those prevailing in the commercial market place (Ulico Cas. Go. v. Wilson, Elser. Moskowitz , Edelman & Dicker, 56 A.D.3d 1,8 [1st "Dept 2008]  internal citations  omitted). It is well established law that an agreement between an attorney and his or her is subject to close scrutiny and in the event of any ambiguity, it must be construed in a manner most favorable to the client [Shaw v., Manufacturers Hanover Trust Co,, 68 N.Y.2d 172 [1986]).
 

A "deliberate misrepresentation of present intent made for the purpose of inducing another to enter a contract will normally constitute actionable fraud if there is a reliance by the party to whom the misrepresentation was made" (Demov. Morris. Levine & Shein v, Glantz, 53 N.Y.2d at 557). Where, however, it is a client who made a misrepresentation to an attorney to induce him to take the case, that misrepresentation, even if deliberate, will not, as a matter of public policy, support a fraud cause of action against the client   [Demov, Morris. Levin & Shein v. Glantz  supra].

Applying the legal principles of Damov, plaintiffs claim fails because he has not established a material element of his fraud claim: reliance. Although in the client discharged the attorneys after she had promised them they would be substitute in as counsel on another, more financially lucrative matter, the underlying type of promise in this case is  indistinguishable. Wortman’s fraud claim is based on his expectation of fees which have not materialized. Therefore, plaintiff cannot, as a matter of public policy assert a fraud claim against Chang, its client. Even were the court to decide that the firm’s claim is valid, plaintiffs claims skirt dangerously close to the prohibitions set forth in DR 5-101 [1200.20] pertaining to conflicts of interest and a lawyer’s own interests. An attorney must deal fairly, honestly with his or her client and with undivided loyalty, avoiding conflicts of interest, operating competently, safeguarding his or her client’s property and honoring the client’s interests over the lawyer’s own interests ( Matter of Cooperman, 83 N.Y.2d 465 [1994]