Asher B. White and Menachem White
Asher B. White and Menachem White (NYLJ/Rick Kopstein)

The retainer agreement is a contract between an attorney and the client. However, in matrimonial cases, it is a force of its own. There are countless rules under the New York City Rules and Regulations as well as in the Rules of Professional Responsibility regarding matrimonial retainers. Add to this the hundreds of cases in all of the courts, and you get a basic idea of its vast importance and weight.

If an attorney wants fees from the opposing side or from his own client if there is a breakdown of the attorney-client relationship, the attorney needs to prove that he has followed the rules of the court.

The Appellate Division, Second Department, has held that attorney fees need not be denied “where there is substantial compliance” with 22 NYCRR 1400.3, which requires the execution and filing of a retainer agreement that sets forth, inter alia, the terms of compensation and the nature of services to be rendered, and the party must file the retainer agreement with the court. 22 NYCRR §1400.3 (2); Wagman v. Wagman, 8 AD3d 263 (2d Dept. 2009), see also Mulcahy v. Mulcahy, 285 A.D.2d 587 (2d Dept. 2001). Said retainer must be filed within 10 days of execution. 22 NYCRR 202.16 (c)(1).

Additionally, the Second Department has held that an attorney who failed to execute and file a retainer agreement was not in “substantial compliance” with the provisions of §22 NYCRR 1400.3 and thus could not recover counsel fees from an adversary spouse. Sherman v. Sherman, 34 AD3d 670 (2d Dept. 2009). The issue raised by attorneys is what is substantial compliance?

In Julien v. Machson, the First Department found that:

[T]he motion court properly dismissed the complaint with prejudice, [because the] plaintiff conceded he failed to comply with the rules pertaining to domestic relations matters (22 NYCRR part §1400), in particular the requirements to file a copy of the written retainer agreement with the court with a statement of net worth (22 NYCRR 1400.2, 1400.3)…, [and] to provide the client with written, itemized bills at least every 60 days (22 NYCRR 1400.2). Such utter failure to abide by these rules, promulgated to address abuses in the practice of matrimonial law and to protect the public, will result in preclusion from recovering such legal fees.

Julien v. Machson, 245 A.D.2d 122 (1st Dept. 1997); [Rabinowitz v. Cousins, 219 A.D.2d 487, 488 (1st Dept.)].

Furthermore, the Second Department has ruled that the filing of a new retainer agreement in support of the motion for a post-judgment attorney’s fee, which purportedly ratifies the former agreement, does not amount to substantial compliance with the matrimonial rules. Sherman at Id. citing Wagman at Id. Accordingly the Supreme Court properly concluded that the appellant’s attorney was not entitled to recover a fee for post-judgment services rendered to the appellant. Sherman at Id. The court further found that because the retainer agreement was not filed with the court until the making of the motion, the plaintiff’s counsel did not substantially comply with 22 NYCRR 1400.3. Id.

In Bentz v. Bentz, the Second Department found that an award of an attorney’s fee to the party was improper because the applicable retainer agreement was not filed with the court until the defendant made her motion for an attorney’s fee. Bentz v. Bentz, 71 A.D.3d 931, 932 (2d Dept. 2010). Therefore, the court found that the party’s attorney did not substantially comply with 22 NYCRR 1400.3. Id., citing Wagman at Id.

Furthermore, 22 NYCRR 202.16 (c)(1) states that

A signed copy of the attorney’s retainer agreement with the client shall accompany the statement of net worth filed with the court, and the court shall examine the agreement to assure that it conforms to Appellate Division attorney conduct and disciplinary rules. Where substitution of counsel occurs after the filing with the court of the net worth statement, a signed copy of the attorney’s retainer agreement shall be filed with the court within 10 days of its execution.

Because of this, all counsel who practice matrimonial cases and are retained on a new matrimonial matter should have a retainer for each specific case and each retainer should be immediately filed with the court along with the client’s statement of net worth.

Additionally, an attorney is precluded from seeking fees from his client where the attorney has failed to comply with 22 NYCRR §1400.3 (see, Kayden v. Kayden, 278 A.D.2d 202 [2d Dept. 2010]; Potruch v. Berson, 261 A.D.2d 494 (2d Dept. 1999)).

Attorney and Client

Most retainers are boilerplate and therefore, many attorneys wrongfully conclude that one retainer will cover all cases. This is not the Lord of the Rings. A retainer is case-specific and each case, even with the same client, needs its own retainer. If a client retains an attorney for a divorce and custody, all work done for child support might be forfeited if it is not in the retainer.

Furthermore, the Second Department has found that where the party fails to establish that he provided the respondent with a statement of the client’s rights and responsibilities, that attorney can’t collect an attorney’s fee. Gahagan v. Gahagan, 51 A.D.3d 863 (2d Dept. 2008) citing Bishop v. Bishop, 295 A.D.2d 382, 383 (2d Dept. 2010); Hunt v. Hunt, 273 A.D.2d 875, 876 (4th Dept. 2000).

The Second Department has further found that substantial compliance with the rules is required, and such a showing must be made on a prima facie basis as part of the moving party’s papers. Gottlieb v. Gottlieb, 101 A.D.3d 678, 679 (2d Dept. 2012) citing 22 NYCRR 1400.2, 1400.3; Hovanec v. Hovanec, 79 A.D.3d 816, 817 (2d Dept. 2010); Gahagan at 864.

Additionally, the courts have found that when an attorney fails to provide the client with itemized bills at least every 60 days, the case should be dismissed. (see Bishop v. Bishop, supra at 383; Julien v. Machson, 245 A.D.2d 122).

Furthermore, in Kaplowitz v. Newman, 185 Misc.2d 205 (2d Dept. 2010), the Second Department found that where the attorney sent only three bills to the defendant over a two-and-a-half-year time period, the attorney’s utter failure to abide by these rules vitiated the attorney’s right to his legal fees (see Julien v. Machson at Id.)

This seems to mean that the attorney making the motion for attorney fees must show the work that he did, how that work was calculated, that the fee charged was fair according to the attorney’s reputation and that bills were sent every 60 days or less to their client.

Additionally, in Wagman the court found that: “§22 NYCRR 1400.1 required the plaintiff’s counsel to render a written bill at least every 60 days, there is no evidence that any bill was rendered and none was submitted in support of the motion for an amount of an attorney’s fee. This failure alone warrants the denial of the motion.” Wagman at 263 citing Julien v. Machson at Id.; Kaplowitz v. Newman, 185 Misc.2d 205.

On another point, in Law Office of Sheldon Eisenberger v. Blisko, the First Department found that a law firm could not collect fees from beyond the wording of the retainer agreement. Law Office of Sheldon Eisenberger v. Blisko, 106 A.D.3d 650, 651 (1st Dept. 2013).

In Blisko, the attorneys for plaintiff agreed that the plain language of the retainer between the parties stated that the law office’s representation of Elaine Blisko included work leading up to a trial, but not including an actual trial. Id at 651. Indeed, the law office acknowledged that the retainer did not include representation at trial. Id. at 652. The court found that following the commencement of the trial in that case, the??retainer between the law office and Blisko terminated and plaintiff was representing Blisko without a written retainer. Id. (see Sherman, 34 A.D.3d at 671).

Therefore, attorneys must be so careful in what wording is in the retainer as they will be limited to those words.

In Daniele v. Putillo 97 A.D.3d 512, 513 (1st Dept. 2012), the court found that:

[T]he record shows that a copy of the executed retainer was filed with the court on May 14, 2004, along with the updated statement of net worth. Even if plaintiff, as substituted counsel, should have filed the retainer within 10 days of its execution, he substantially complied with the requirements by filing the executed copy with the updated statement of net worth.

97 A.D.3d 512, 513 (1st Dept. 2012). The court additionally found that the retainer was signed March 2004 and filed with the court in May of 2004. Id.

Timing and Filing

The courts seem to agree that there is no set statute of limitations for filing the retainer at 10 days exactly. However, there seems to be agreement that if it is not done within a reasonable time (three months seems to be the longest), an attorney may be denied attorney fees for their failure. Advice for counsel on new cases would be to file the retainer with the statement of net worth. If an attorney is retained as counsel to take over the case of previous counsel, they should immediately file the retainer with the court.

If the above is followed, most requests for attorney fees will be decided on the merits of the particular case and not on the question of whether the attorneys complied with the statutes and case law.