Samuel v. Druckman & Sinel, LLP, 12 N.Y.3d 208 (2009)
A clear and unambiguous fee-sharing agreement between attorneys will be enforced according to its plain terms, even if one attorney’s contribution to the work is less significant, provided the client consented to the agreement and both attorneys assumed joint responsibility.
Summary
This case concerns a dispute over attorneys’ fees in a medical malpractice action. Sinel, initially retained, brought in Samuel as trial counsel under a fee-sharing agreement for one-third of the entire legal fee. Samuel later brought in Pegalis, and the case settled, resulting in enhanced fees. Samuel argued Sinel violated ethical rules and was entitled to no fee, or at most, one-third of the original fee, because Sinel didn’t contribute to the work leading to the enhanced fee. The New York Court of Appeals held that the unambiguous fee-sharing agreement should be enforced, entitling Sinel to one-third of the entire legal fee because the client consented, and both attorneys assumed responsibility for the representation, regardless of the uneven division of labor.
Facts
Elliot Sinel was retained for a medical malpractice case and engaged Steven Samuel as trial counsel. They agreed in writing that Druckman & Sinel, LLP (Sinel’s firm) would receive one-third of the entire legal fee recovered. The client was informed of and consented to this arrangement in writing, with assurance of no additional fees. Samuel later brought in Steven Pegalis due to difficulties with the case. The medical malpractice case settled for $6.7 million, resulting in significant attorneys’ fees, later enhanced by court order.
Procedural History
Samuel filed a declaratory judgment action arguing Sinel was not entitled to any fees. Sinel counterclaimed for one-third of the entire fee. The Supreme Court denied both parties’ summary judgment motions. The Appellate Division held Sinel was entitled to one-third of the unenhanced fee only. The Court of Appeals granted leave to appeal.
Issue(s)
Whether a fee-sharing agreement between attorneys should be enforced according to its plain terms, entitling one attorney to the agreed-upon share of the entire legal fee, even if that attorney did not directly contribute to the specific work that resulted in an enhanced fee award, when the client consented to the arrangement and both attorneys assumed joint responsibility for the representation.
Holding
Yes, because the fee-sharing agreement was clear and unambiguous, the client consented to the arrangement, and both attorneys assumed joint responsibility for the representation, courts will not inquire into the precise value of services performed when enforcing such agreements.
Court’s Reasoning
The Court of Appeals emphasized the importance of enforcing contracts according to their plain meaning when the agreement is “complete, clear and unambiguous on its face” (Greenfield v Philles Records, 98 NY2d 562, 569 [2002]). The court found the agreement’s language, “one-third of the entire legal fee recovered,” unambiguous. The court rejected the Appellate Division’s attempt to limit Sinel’s share to the unenhanced fee, stating, “in the realm of fee-sharing disputes, ‘courts will not inquire into the precise worth of the services performed by the parties’” (Benjamin v Koeppel, 85 NY2d 549, 556 [1995]). The court noted that DR 2-107 allows attorneys to negotiate fee divisions as they deem appropriate when each lawyer assumes joint responsibility, regardless of the division of services. The court also noted the client was informed and consented to the arrangement, and Samuel cannot argue the agreement is ethically void when he benefitted from it. The court awarded Sinel one-third of the entire legal fee, less disbursements, with interest from the date of the compromise order, as that was the earliest ascertainable date of the claim.