The Suffolk County surrogate has ruled that a $590,000 legal fee was reasonable, finding the risks for the attorney handling a dispute over a will were staggering and the time spent on legal services is not a controlling factor.

"Time spent has been referred to as the least important factor in determining legal fees," Surrogate John Czygier (See Profile) wrote in Matter of the Estate of Jo D. Talbot, 215 P 2006/C. "Attorneys can sometimes recover much more than an hourly rate would produce, but in determining the reasonableness of such fees courts should not be preoccupied with the ratio of fees to hours or time spent."

Czygier’s ruling involved Karen Cullin, the sole beneficiary to a multimillion-dollar estate who argued the $590,000 contingency fee she paid to attorney James Spiess was excessive as he only spent six hours negotiating the settlement.

Read briefs for Cullin and Spiess.

Her attorney, Paul Haug of Fort Myers, Fla., said he planned to appeal to the Appellate Division, Second Department, and called the decision "completely absurd."

Spiess "was retained for less than 30 days, there was no trial, objections were never filed, the matter was settled and the fee was $590,000," Haug said.

The case has already been to the appellate court once before. In 2011, the Second Department found that Czygier, who rejected Cullin’s 2009 request to review his approval of the fee, had a "broader responsibility" to determine whether fees are reasonable. In re Talbot, 84 AD3d 967 (NYLJ, May 17, 2011).

Czygier then held a hearing on the fee question in June 2012.

Cullin was a friend of decedent Jo D. Talbot, who died in December 2005 at age 75. Cullin retained Spiess, a solo practitioner at McNulty-Spiess in Riverhead in 2007 to represent her after the will was opposed by nine people, seven of whom claimed to be relatives of Talbot, who was blind.

Two wills existed before Talbot signed the final will six days before she died. That will named Cullin, who had been given power of attorney about six months before Talbot’s death, as sole beneficiary.

Spiess testified at the hearing that he agreed to take the case on a one-third contingency. He said he told Cullin he would need $5,000 as an initial retainer to cover disbursements, and Cullin’s friend volunteered this amount after Cullin said she couldn’t pay it, Spiess said.

Indicating that a one-third fee would be very large, Cullin proposed capping his fee at $600,000, and Spiess agreed. They signed a retainer agreement in February 2007.

About a month later, Spiess negotiated a settlement in which $115,000 would go to nine potential objectors while Cullin waived the right to a trust worth about $1 million. The settlement provided the will would be admitted into probate and Cullin would be entitled to the entire net amount left, which included about $4 million, less the $115,000. Spiess testified at the hearing that Cullin refused to pay the objectors more than $100,000 and that he offered to reduce his fee by $15,000 and apply that amount to the settlement.

Cullin approved a $585,000 fee sent to Spiess’ firm.

Haug said in an interview that his client has only received about $1.5 million of the estate, with much of the rest going toward tax payments and legal fees.

In 2009, Cullin petitioned Czygier to review the reasonableness of the fees pursuant to his authority under Surrogate Procedure Act §2110.

Czygier rejected the request and the Second Department ruled that surrogates have a broader responsibility to determine whether fees are reasonable and the surrogate should fix and determine the fee.

In the subsequent fee proceeding, Haug maintained Spiess, at his hourly billing rate of $300, was only entitled to receive about $1,800.

"Time spent is the only or most important factor and the courts have repeatedly emphasized the importance of contemporaneous time records," Haug said in court papers.

He also argued there were no difficult questions in the probate proceeding, that the matter was settled before objections were filed, and there was no prospect of trial. Also, orders from an Article 81 Guardianship Proceeding supported there had been "no undue influence" by Cullin, he said.

But Spiess, represented by Anthony Tohill, claimed Cullin stated under oath in a March 21, 2007, stipulation that she understood the settlement and was "absolutely" satisfied with Spiess’ representation.

Tohill argued Spiess was facing several risks in the case.

In his ruling, Czygier said that "this court can only conclude that the petitioner, an articulate business woman who had previously run her own business, understood the terms of the agreement when she entered into it; indeed, a contingency fee arrangement was her suggestion."

He also found that, at the time of the fee agreement, the admission of the will to probate was going to be extremely difficult, "given the substantial litigation which had already taken place, the anticipated continuing litigation, the questions surrounding the decedent’s competence," and if the last will was denied, Cullin would have to overcome a prior will that left her nothing.

Czygier cited Lawrence v. Miller, 11 NY3d 588, which states: "In general, agreements entered into between competent adults, where there is no deception or overreaching in their making, should be enforced as written… It is not unconscionable for an attorney to recover much more than he or she could possibly have earned at an hourly rate. Indeed, the contingency system cannot work if lawyers do not sometimes get very lucrative fees, for that is what makes them willing to take the risk—a risk that often becomes reality—that they will do much work and earn nothing."

In determining how much to set the fee, the surrogate said the court should consider several factors, such as time and labor involved, difficulty of the questions involved, required skills, the lawyer’s experience and the results.

Cullin’s lawyer evaluated the contingency fee as if it were an hourly fee, but "such an evaluation is misplaced," Czygier wrote. "While time spent often serves as an appropriate starting point…it is not controlling.

"The risks in this case were staggering, the results achieved, under the circumstances, impressive. In light of these circumstances, the fee is not disproportionate to the value of the services rendered," he wrote, fixing the fee at $585,000 plus the $5,000 initial retainer.

Tohill could not be reached for comment. Spiess said he had no comment.