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Lawyer May Collect Fee Despite Billing Slip-Up
New York Law Journal
March 18, 2009
A divorce attorney who failed to bill his client at statutory 60-day intervals can still collect a fee for his services, a New York state judge has ruled.
"Although an attorney's failure to provide itemized bills at least every 60 days will preclude collection of a fee for services rendered ... where there has been 'substantial compliance' with the rules, recovery of fees has been allowed," Brooklyn Supreme Court Justice Mark I. Partnow held in Edelstein v. Greisman, 18848/08.
Saul Edelstein, a partner in The Edelsteins, Faegenburg & Brown in Manhattan, was retained by Abraham Greisman in June 2004 and discharged two years later.
Greisman, an accountant, said in an interview that he had paid Edelstein a total of $11,800, including a $10,000 retainer. He vowed to appeal Partnow's decision confirming a September 2007 arbitration ruling that he owed another $6,690.
Pursuant to 22 NYCRR 1400.2 and the parties' retainer agreement, Edelstein should have provided itemized statements every 60 days. But over approximately two years, only two invoices were sent, according to the decision: one 17 months after the representation began and the other in June 2006, when Edelstein was fired.
The attorney attributed the failure to timely bill his former client to "office failure, typical stress of running an office," but pointed out that the final bill was not an "outrageous sum." Edelstein argued that the services he rendered were itemized, that Greisman made a $1,500 payment on Jan. 30, 2006, toward the unpaid balance on the first bill, and that the former client did not object to payment until after the firing.
Greisman said his partial payment was a "knee-jerk reaction" to receiving the invoice but it did not mean that he "agreed to it."
In his decision, Justice Partnow deferred to the findings of the arbitration panel, which is required by law to rule on fee disputes between matrimonial attorneys and clients.
The 2-1 arbitration ruling for Edelstein held that he was entitled to an award in quantum meruit because he had "substantially complied" with the statute. Edelstein said that while he may not have sent timely bills, he did not overcharge Greisman and kept in constant contact with his client during the representation. If anything, he said, he was "too involved" with representing Greisman.
As an arbitrator "is not bound by the principles of substantive law or rules of evidence but 'may do justice as he sees fit,'" Partnow wrote, an award will not be vacated "unless it is violative of a strong public policy, or is totally irrational, or exceeds a specifically enumerated limitation on his power," quoting Matter of Silverman [Benmor Coats], 61 NY2d 299.
Pursuant to CPLR 7511(b) an award can be vacated only if a party's rights have been prejudiced by corruption, fraud, misconduct, bias, excess of power or procedural defects. Partnow concluded that none of the grounds for setting aside an award were present here.
"The arbitration panel ... reviewed petitioner's work performance, fee schedule, billing history and services rendered to respondent and heard the testimony of the parties, determining that petitioner had met his burden of demonstrating the reasonableness of his fee for the services rendered," the judge wrote, adding there was no evidence the panel exceeded its powers.
The judge cited Julien v. Machson, 245 AD2d 122, and Flanagan v. Flanagan, 267AD2d, for the proposition that "substantial compliance" with 22 NYCRR 1400.2 would allow fee recovery.
Stuart A. Blander of Heller, Horowitz & Feit in Manhattan represented Greisman. The public policy aspect of potential overreaching by matrimonial lawyers was the reason the 60-day rule was implemented, Blander said.
"The case law makes it clear that the matrimonial rules are to be taken quite seriously," he said, pointing to
Edelstein said he did not expect "to see a dime" but hoped the decision would help other lawyers seeking to recover legitimately owed fees.
"Lawyers are not all crooks," he said.
