Attorneys and attorney fees inhabit such a large portion of the legal malpractice universe, and indeed the legal practice universe itself, that it is a tautology to say that attorney fees are always the subject of attorneys’ attention.

The story in Matter of Ginsburg 2016 NY Slip Op 07733 Decided on November 17, 2016  Appellate Division, Third Department starts with a suicide, one of many at this particular bridge over a gorge in Ithaca by a Cornell freshman.  The case then devolved into a fight over legal fees and claims of violation of Judiciary Law § 487.

“On February 17, 2010, Bradley Marc Ginsburg (hereinafter decedent), then a freshman at respondent Cornell University in Tompkins County, jumped to his death from the Thurston Avenue Bridge — one of several bridges extending across the gorges located on or near Cornell’s campus. The bridge in question, which spans Falls Creek Gorge and connects two portions of Cornell’s campus, is owned by respondent City of Ithaca. Petitioner, who is both decedent’s father and an attorney licensed to practice in this state, was granted letters of administration in May 2011 and thereafter retained respondent Leland T. Williams as counsel for the estate. In late 2011, Williams commenced an action upon petitioner’s behalf against, among others, Cornell and [*2]the City of Ithaca in the United States District Court for the Northern District of New York. The complaint set forth 14 causes of action sounding in, among other things, wrongful death and premises liability and sought damages in the amount of $180 million, including $12 million in punitive damages.

After District Court dismissed the punitive damages claim and all claims against those Cornell representatives or employees named in their individual capacities, petitioner terminated Williams’ representation and retained respondent McCallion & Associates, LLP (hereinafter the firm) as counsel ^[FN1]. Thereafter, Kenneth F. McCallion (hereinafter McCallion) — a principal therein — entered into settlement negotiations with Cornell and the City of Ithaca upon petitioner’s behalf. After much discussion, the parties devised a proposed settlement of the wrongful death claim — specifically, that petitioner would accept a monetary sum from the City of Ithaca and, as to Cornell, would agree that a scholarship would be established in decedent’s name ^[FN2]. While McCallion was not opposed to this resolution, he advised petitioner via email that, “[b]efore [he] sign[ed] onto any settlement proposal,” petitioner and the firm would need to “reach an understanding as to the allocation of any settlement funds” — namely, that “the balance of the net cash component of the settlement,” then anticipated to be $200,000, would be allocated to the firm as counsel fees. In response, petitioner advised District Court that he, in his capacity as co-counsel, would be handling all further negotiations, and McCallion was excluded from the settlement conferences that followed.”

“In September 2014, petitioner entered into stipulations of settlement with Cornell and the City of Ithaca resolving the wrongful death claim. Specifically, the City of Ithaca agreed to pay $100,000 in settlement of the District Court action against it, and Cornell agreed to establish a perpetual scholarship in memory of decedent. Although documentation in the record reflects that such scholarship, if funded by a private donor, would have required an endowment of approximately $1.6 million, the stipulation of settlement provided that the scholarship would be established “using existing financial aid funds” and, inasmuch as Cornell was neither “allocating any new money” to the scholarship nor otherwise making any payment to petitioner, the scholarship itself had “no monetary value” — except to the student recipients thereof. District Court thereafter signed off on the respective stipulations of settlement.

In November 2014, petitioner sought leave in Surrogate’s Court to compromise the wrongful death claim against Cornell and the City of Ithaca. In conjunction therewith, petitioner asked that both Williams and the firm (hereinafter collectively referred to as respondents) be denied counsel fees — essentially contending that Williams and McCallion each had engaged in conduct that was contrary to the interests of the estate. Respondents opposed petitioner’s requests and cross-moved to, among other things, disapprove the settlement agreements and sanction petitioner in accordance with Judiciary Law § 487.”

“Rather, as Surrogate’s Court appropriately found, petitioner — in his representative capacity as the administrator of decedent’s estate — received in settlement from Cornell only the sentimental, “symbolic or moral value” of the scholarship established in decedent’s name. As the scholarship itself clearly was not an asset of decedent’s estate, Surrogate’s Court did not abuse its discretion in computing respondents’ respective counsel fees based solely upon the $100,000 monetary settlement received from the City of Ithaca. To hold otherwise not only would ignore the plain language of the stipulation of settlement with Cornell but, further, would misconstrue the nature of the scholarship itself by assigning — to decedent’s estate — a monetary value or benefit that exists only with respect to the scholarship’s actual recipients. Adopting respondents’ valuation analysis also would obligate decedent’s estate, which ultimately received less than $4,000 in settlement proceeds and otherwise is devoid of assets, to pay a six-figure bill for counsel fees — a result that hardly can be characterized as reasonable, equitable or just. Respondents’ remaining contentions, to the extent that they do not lie outside the jurisdiction of Surrogate’s Court in the first instance (see SCPA 201), have been examined and found to be lacking in merit.”