Legal Malpractice

Contingent Fee Retainers, Appellate Work and Legal Malpractice

By (Andrew Lavoott Bluestone)

When may the representation of a client  end, what work does an attorney have to do for a contingent fee client, and how do legal malpractice considerations filter in?  Those questions are answered, in this context, in Matter of Mill Creek Phase 1 , Supreme Court, Kings County, Gerges, J.  Must a law firm perform appellate tasks under a contingent fee arrangement with no further legal fees due it, and what happens if the law firm refuses to perform ?

There, "Non-party Goldstein, Goldstein, Rikon & Gottlieb, P.C. (the Firm) moves for an order awarding it legal fees and disbursements in accordance with the retainer agreement executed by claimants Joseph Vigliarolo and Frank J. Vigliarolo and the closing statement that it prepared. Claimants cross move for an order: (1) directing the Firm to turn over the entire disputed amount of $11,506.46, plus interest; (2) directing the Firm to pay the bill of costs awarded to the City of New York Law Department with respect to the NYCTL 1998-1 Trust appeal in the amount of $1,860; and (3) awarding sanctions in the amount of $2,500 pursuant to 22 NYCRR 130-1.1(a).
 

Claimants further allege that the Firm agreed to accept a contingency fee to represent them in this matter and that the retainer agreement provided that the fee included the cost of defending any appeal taken by the condemnor. Accordingly, claimants did not object to the Firm's decision to continue to litigate the issue of the amount of interest due on the lien because they did not believe that they were incurring any costs. Moreover, claimants contend that they would not have agreed to pay $11,500 to oppose the appeal, since the lien would have been reduced by only $8,000 if they had been successful. It is their opinion that the Firm chose to use the instant proceeding as a test case in an effort to establish that the interest rate applicable to a tax lien is 6 percent, and not the 18 percent claimed by the lienor. Further, since the additional interest that accrued was only $5,200, while the lien at the time of the commencement of the appeal was $7,000, the financial benefit of pursuing such an appeal was minimal.

Herein, the Firm's retainer agreement with claimants unquestionably provides that the contingency fee agreed to "shall include the defense of any appeal taken by the condemnor but does not include appeals taken by the client for which, if the attorneys agree to their retention for that purpose, additional compensation will be required." It is equally clear that the appeal at issue herein was taken by the City and defended by claimants. From this it follows that the Firm is not entitled to charge additional fees to defend the appeal...."

Full post as published by New York Attorney Malpractice Blog on April 23, 2009 (boomark / email).