Law Firm Wins Bid to Have Insurer Pay Fees, Again

After one law firm substituted for another in a personal injury case and then disappeared with the check for the entirety of the fees, the insurance company that issued the single check is liable for the original firm's lost fees, a Manhattan judge has ruled. Granting Sherman & Basichas' motion for summary judgment, the judge found that the firm established that Geico General Insurance failed to protect Sherman's statutory lien.

X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
After one law firm substituted for another in a personal injury case and then disappeared with the check for the entirety of the fees, the insurance company that issued the single check is liable for the original firm’s lost fees, a Manhattan judge has ruled. Civil Court Judge Ellen Gesmer ruled that Sherman & Basichas established that Geico General Insurance failed to protect the law firm’s statutory lien and granted the firm’s motion for summary judgment in Sherman & Basichas LLP v. GEICO General Insurance Co.. In the underlying case, Sherman & Basichas’ client, Kseniya Golovina, initiated a personal injury action against Geico for injuries she suffered in an August 1999 car accident. In May 2000, Golovina replaced her original attorneys with Shakhanov & Associates, a Brooklyn-based firm. At the time of substitution, the firms agreed that each side’s share of the fees would be determined at the conclusion of the case. In February 2002, Golovina’s new attorney, Simon Shakhanov, settled the case with Geico for $80,000, and Brooklyn Civil Court Judge Alice Fisher Rubin awarded attorney fees of $26,640 to be evenly split between the firms. Geico issued a check payable to both firms and mailed it to Shakhanov. Shakhanov cashed the check and then disappeared, according to the decision. His law license was suspended in August 2004. Sherman & Basichas initiated an action against Geico and moved for summary judgment, claiming the insurer violated its duty to protect the law firm’s lien and was therefore liable for its fees. Gesmer held that, as required in a summary judgment motion, the plaintiff law firm established a prima facie case. “[U]nder Judiciary Law �475, the plaintiff law firm must prove that it has a charging lien on the proceeds of a lawsuit; that the lawsuit was resolved favorably, leading to the creation of a fund; that a determination has been made as to the portion of the fund due to the plaintiff law firm; that defendant is on notice of the lien; and that the amount due to the plaintiff law firm has not been paid,” she wrote. “In this case, Sherman adequately stated each of these elements in its complaint.” Geico, which also moved for summary judgment, set forth a number of defenses. It argued among other things that because it could not have foreseen Shakhanov’s actions, it could not be held liable for them. “That is not correct,” Gesmer ruled. If Sherman & Basichas had agreed that Geico could discharge the lien by sending a check to Shakhanov, Geico could proffer a consent defense. However, the firm had not agreed to the mailing of the single check to Shakhanov, the court said. Geico also claimed that Sherman & Basichas technically “received payment,” but that the name of Scott Sherman of Sherman & Basichas was forged. “This is a remarkable argument,” the judge wrote. “If one of Geico’s customers claimed that it had properly mailed a check to Geico but the check was intercepted in the mail and illegally forged, would Geico agree that it had ‘received payment’ since the check was properly made out to it?” Gesmer ruled that Geico neither established its own right to summary judgment nor rebutted Sherman & Basichas’ prima facie case. She therefore granted the Sherman firm’s motion for summary judgment. Gesmer awarded Sherman & Basichas $13,120, with 9 percent interest dating to March 6, 2003, the date of an earlier unsatisfied order for Shakhanov to pay Sherman & Basichas its share of the fees. Alisa R. Lebensohn and Sherman represented Sherman & Basichas. Lebensohn said the firm has already received Geico’s replacement check. Amelia Dweck of Morris, Duffy Alonso & Faley represented Geico and could not be reached for comment.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

Trending Stories

 

Featured Product

Global Briefing

A weekly, curated selection of our international content from around the globe, across the business of law, in-house, regulatory, technology and more, with expert insights from our senior editors.

Learn More

More from ALM

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Privacy Policy

About Us / Contact Us / Site Map / Advertise With Us/ Customer Service / Terms of Service/ FAQ / Privacy Policy

Publications

Law Topics

Rankings

More

Law.com

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.