Case 1:15-cv-02921-ER-JLC Document 159 Filed 06/27/18 Page 1 of 8
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`BARRY J. BRETT and LESLIE BRETT,
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`Petitioners,
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`JAROSLAWICZ & JAROS PLLC and ELIZABETH
`EILENDER,
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`Respondents.
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`Ramos, D.J.:
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`OPINION & ORDER
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`15 Civ. 2921 (ER)
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`Petitioners Barry J. Brett and Leslie Brett ask this Court to determine under N.Y. Judiciary
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`Law § 475 the value of a charging lien held by their former counsel, Respondents Jaroslawicz &
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`Jaros PLLC and Elizabeth Eilender. Petitioners argue that Respondents were discharged as
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`counsel prior to the conclusion of the case and are therefore entitled only to the quantum meruit
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`value of the legal services they rendered. Respondents argue that they were never discharged by
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`Petitioners and the charging lien should therefore be enforced in the amount of $191,966.66, the
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`one-third contingency fee they were entitled to collect under their original retainer agreement. For
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`the reasons set forth in this opinion, it is ORDERED that the charging lien in favor of Respondents
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`is fixed in the amount of $191,966.66.
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`I.
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`BACKGROUND
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`On February 28, 2015, Petitioner Barry J. Brett (“Brett”) swallowed a 2.5 cm wire bristle
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`with a bite of his meal at DB Bistro Moderne, a popular New York City restaurant. See Am.
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`Compl. ¶¶13–16. Brett underwent emergency surgery to extract the bristle, which had become
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`lodged in his throat. Am. Compl. ¶18. He was then confined to a hospital Intensive Care Unit,
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`where he underwent an extensive course of antibiotic treatment. Am. Compl. ¶18. To prosecute
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`a claim for the damages he suffered, Brett and his wife retained Elizabeth Eilender, a lawyer at the
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`law firm Jaroslawicz & Jaros PLLC (“J&J”). Resp’ts’ Ex. 1, at 1. Brett signed a retainer
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`agreement with J&J for Eilender’s services on March 23, 2015. Resp’ts’ Ex. 1, at 5. The
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`agreement provided that Eilender would be compensated for her services one-third of the gross
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`sum recovered, with J&J paying all costs and expenses. Resp’ts’ Ex. 1, at 2. Appellate services
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`were specifically excluded from the scope of the contract. Resp’ts’ Ex. 1, at 5.
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`Pursuant to the retainer agreement, Eilender represented the Bretts in a negligence and
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`products liability action against DB Bistro Moderne (“Defendant”). Eilender represented the
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`Bretts during all pretrial proceedings and at the jury trial, which took place from the 24th to the
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`27th of October 2016. The jury returned a verdict in favor of the Bretts and awarded them
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`$285,790.92 in compensatory damages and $1,000,000 in punitive damages. J. 1–2, Nov. 18,
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`2016. Defendant’s counsel promptly notified the court of his intention to challenge the award of
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`punitive damages post-trial. Trial Tr. 464:15–23.
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`The Bretts and Eilender got along up to and during the trial. Hr’g Tr. 73:2–6, Oct. 4, 2017.
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`After the trial, however, a series of events led their relationship to sour. First, Brett and Eilender
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`disagreed over whether to approach Defendant to settle. Days after the jury verdict was
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`announced, Brett urged Eilender to approach Defendant with a settlement proposal he drafted.
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`Hr’g Tr. 21:15–23, Oct. 4, 2017. Eilender did not do so, thinking that approaching Defendant
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`unprompted might compromise the Bretts’s bargaining position. Hr’g Tr. 22:18–23:4, Oct. 4,
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`2017. Responding to an email in which Eilender laid out her reasoning, Brett requested that David
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`Jaroslawicz, a partner at J&J who was familiar with the case, call Brett to discuss the possibility
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`of settlement. Pet’rs’ Ex. 2, 3. No settlement offer was made by Eilender.
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`Second, Brett and Eilender disagreed over whether to file a motion for reargument on the
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`issue of future damages. On November 14, 2016, this Court issued an order determining that, in
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`lieu of the $51,000 in future damages the Bretts claimed they were entitled to, they were owed
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`$5100. The next day, Brett sent Eilender a proposed draft of a letter motion to reargue. Pet’rs’
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`Ex. 4. Eilender opposed making a motion to reargue, as did Jaroslawicz, who suggested the
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`possibility of Brett appearing pro se before the Court if he insisted on making the motion against
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`their advice. Pet’rs’ Ex. 7. No motion to reargue the future damages issue was made.
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`Finally, Brett became dissatisfied with Eilender’s work on the opposition to Defendant’s
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`Rule 50 and 59 motions, which Defendant filed on November 28, 2016. Opposition briefing was
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`due on December 28, 2016. Trial Tr. 465:9–466:3. Brett and Eilender clashed over how to
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`approach the brief. In the middle of the drafting process, Brett called Eilender to notify her that
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`another law firm, Troutman Sanders LLP, was going to take over the briefing. Hr’g Tr. 48:9–12,
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`Oct. 4, 2017. Eilender agreed. Hr’g Tr. 48:9–12, Oct. 4, 2017. On December 14, 2016, Eilender
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`and the Bretts signed a stipulation for withdrawal and substitution of counsel. Resp’ts’ Ex. 5. This
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`stipulation was never filed with the Court. Sometime after the stipulation was signed, the Bretts
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`paid Eilender and J&J their full one-third legal fee on the compensatory damages portion of the
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`verdict. Hr’g Tr. 12:22–13:6, Oct. 4, 2017.
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`With new counsel, the Bretts filed their opposition to Defendant’s Rule 50(b) and 59(e)
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`motions on December 28, 2016. Defendant filed its reply on January 11, 2017. Before the motion
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`could be decided, the Bretts and Defendant entered mediation on the punitive damages award.
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`Hr’g Tr. 3:4–8, Sept. 15, 2017. During mediation, on March 22, 2017, Brett sent Eilender an email
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`seeking to “confirm” that she would not be paid pursuant to the retainer agreement, instead offering
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`to pay her 10% of any settlement eventually reached, up to $50,000. Pet’rs’ Ex. 10. Eilender did
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`not accept. The Bretts eventually settled the punitive damages award at $575,900. Hr’g Tr. 3:17–
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`18, Sept. 15, 2017. As Defendant did not challenge the jury verdict’s award of compensatory
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`damages, upon the settlement, all claims asserted had been resolved. The Court consequently
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`ordered the action against Defendant discontinued on June 27, 2017.
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`Though she was not involved in the mediation, Eilender continued to represent Brett after
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`she signed the stipulation substituting counsel. Specifically, Eilender negotiated to reduce the
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`amount on Brett’s Medicare lien. Hr’g Tr. 82:8–21, Oct. 4, 2017. Documents uploaded to the
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`Court’s Electronic Case Filing system continued to be sent to Eilender and J&J.
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`After the settlement was reached, Eilender asserted a lien over the funds, preventing their
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`immediate disbursement by Defendant. Hr’g Tr. 3:21–4:4, Sept. 15, 2017. On September 15,
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`2017, the Court held a conference to resolve outstanding payments issues with Defendant. At the
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`conference, the Bretts also asked the Court to resolve the value of Eilender’s claimed lien, pursuant
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`to N.Y. Judiciary Law § 475. Hr’g Tr. 4:18–5:9, Sept. 15, 2017. The Bretts claimed that Eilender
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`is not entitled to any compensation because she was discharged for cause. Hr’g Tr. 5:2–5, Sept.
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`15, 2017. Eilender’s counsel stated that his “client heard for the first time today that she was
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`discharged for cause.” Hr’g Tr. 14:4–5, Sept. 15, 2017.
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`A hearing to resolve the lien was held on October 4, 2017. At the hearing, the Bretts
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`maintained that Eilender was not entitled to any compensation for her legal services because she
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`was discharged for cause. Hr’g Tr. 2:25–3:8, Oct. 4, 2017. Eilender testified that she was never
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`told she was discharged at all:
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`THE COURT: Ms. Eilender, were you ever told in so many words that you were
`discharged?
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`THE WITNESS: Never.
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`THE COURT: Did you at any point come to an understanding that you were discharged?
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`THE WITNESS: No.
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`Hr’g Tr. 81:22–82:2, Oct. 4, 2017. Eilender also testified, however, that she had signed a
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`stipulation to the substitution of counsel:
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`MR. BRETT: Ms. Eilender, in or about December of 2016, was there a substitution of
`counsel executed and signed and became effective?
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`THE WITNESS: Yes.
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`MR. BRETT: So Troutman was substituted for you as counsel?
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`THE WITNESS: Yes.
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`Hr’g Tr. 83:14–19, Oct. 4, 2017. At the end of the hearing, the Court found that Eilender
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`was not discharged for cause. Hr’g Tr. 84:7–8, Oct. 4, 2017. However, the Court reserved decision
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`and requested briefing on whether Eilender was discharged without cause, and if she was, what
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`relief she would be entitled to. Hr’g Tr. 85:20–86:8, Oct. 4, 2017.
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`II.
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`DISCUSSION
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`A client may discharge his or her attorney at any time, with or without cause. Universal
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`Acupuncture Pain Servs., P.C. v. Quadrino & Schwartz, P.C., 370 F.3d 259, 263 (2d Cir. 2004).
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`An act of a client “indicating an unmistakable purpose to sever relations” is sufficient to establish
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`a discharge. Costello v. Bruskin, 58 A.D.2d 573, 574 (N.Y. App. Div. 2d Dep’t 1977). If the client
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`discharges an attorney retained on a contingency fee basis after the attorney has fully performed
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`the duties set out in their contract, the attorney is entitled to the fee set out in the contract. See
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`McAvoy v. Schramme, 238 A.D. 225, 228 (N.Y. App. Div. 1st Dep’t 1933), aff’d, 263 N.Y. 548
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`(1933). If, on the other hand, the client discharges an attorney retained on a contingency fee basis
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`before full performance and without cause, the two should agree to fix the former attorney’s
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`compensation at a set amount or a set percentage of the client’s ultimate recovery. Lai Ling Cheng
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`v. Modansky Leasing Co., 73 N.Y.2d 454, 457–58 (1989). In the absence of such an agreement,
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`the discharged attorney is limited to recovery on a quantum meruit basis. Universal Acupuncture,
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`370 F.3d at 263; Cohen v. Grainger, Tesoriero & Bell, 81 N.Y.2d 655, 658 (1993). Under quantum
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`meruit, the discharged attorney can only recover the fair and reasonable value of the services
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`rendered, even if that amount is less than the fee provided for in the retainer agreement. Lai Ling
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`Cheng, 73 N.Y.2d at 457–58. The factors considered in determining the value of the services
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`rendered include “the difficulty of the matter, the nature and extent of the services rendered, the
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`time reasonably expended on those services, the quality of performance by counsel, the
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`qualifications of counsel, the amount at issue, and the results obtained.” Sequa Corp. v. GBJ Corp.,
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`156 F.3d 136, 148 (2d Cir. 1998). The contingency rate of the original retainer agreement is a
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`factor as well. Smith v. Boscov’s Dep’t Store, 192 A.D.2d 949, 950–51 (N.Y. App. Div. 3d Dep’t
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`1993); see also Liddle Robinson, LLP v. Garrett, 720 F.Supp.2d 417, 425 (S.D.N.Y. 2010).
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`There is no need to determine the quantum meruit value of Eilender’s services in this case
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`because this Court finds that Eilender was never discharged. The Bretts submit no evidence
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`showing Eilender was discharged, while Eilender disputes she was ever discharged. Eilender
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`claims that she heard for the first time that she was discharged for cause at the September 15th
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`conference. Hr’g Tr. 14:4–5, Sept. 15, 2017. At the October 4th hearing, Eilender testified that
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`she was never told she was discharged. Hr’g Tr. 81:22–24, Oct. 4, 2017. Supporting Eilender’s
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`contention that she was never discharged is the fact that, with Brett’s knowledge and acquiescence,
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`she continued to represent Brett in negotiations with Medicare arising from the incident well into
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`2017. Hr’g Tr. 82:8–21, Oct. 4, 2017.
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`The Bretts point out, and Eilender admits, that Eilender signed a stipulation for the
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`withdrawal and substitution of counsel on December 14, 2016. Resp’ts’ Ex. 5. But this stipulation
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`does not show a discharge occurred. In fact, under New York law, a stipulation of withdrawal and
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`a discharge are two distinct ways of ending an attorney-client relationship. See Farage v.
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`Ehrenberg, 124 A.D.3d 159, 165 (N.Y. App. Div. 2d Dep’t 2014) (“There are different ways that
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`attorney-client relationships can be ended. One way is for the client to discharge the
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`attorney . . . . A second way is for the attorney and client to execute a Consent to Change Attorney
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`or for counsel to execute a stipulation of substitution . . . .”). Further, the stipulation did not effect
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`a withdrawal because it was never filed with the Court. An attorney of record may only withdraw
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`or be substituted in the manner prescribed by statute, Moustakas v. Bouloukos, 112 A.D.2d 981,
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`983 (N.Y. App. Div. 2d Dep’t 1985), and the relevant statute here requires that a stipulation to the
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`substitution of counsel be filed with the Court, see N.Y. C.P.L.R. § 321(b) (McKinney); see also
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`Vincent Alexander, Practice Commentaries (2011). The unfiled stipulation does suggest that
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`Eilender and Brett had a previous conversation where Brett sought to replace her on the case. But
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`in light of Eilender’s testimony that the Bretts never discharged her, Eilender’s continued work for
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`Brett on his Medicare lien, and the lack of any documentation showing discharge, the Court instead
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`credits Eilender’s interpretation of the document — as an agreement that new counsel would take
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`over the post-trial opposition motion and the appeal, the latter of which she was not obliged to
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`handle in any event pursuant to the retainer agreement. The Court finds that the Bretts did not
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`discharge Eilender and are therefore still bound under the terms of the parties’ retainer agreement.
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`Hence, the Bretts owe Eilender and J&J the full one—third contingency fee on the punitive damages
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`awarded, which amounts to $191,966.66.
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`Even assuming that the Bretts discharged Eilender during the post—trial motion stage of the
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`suit, this Court would award Eilender $191,966.66. This Court witnessed Eilender’s conduct of
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`the case from its inception through the end of trial. Eilender expended over a year’s worth of effort
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`on the Bretts’s case, effort which manifested in a very favorable jury verdict for the Bretts.
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`Eilender has been awarded $95,483 in fees already. Hr’g Tr. 12225—132, Oct. 4, 2017. An
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`additional $191,966.66 would put her total fee at $287,449.66. Considering the terms of the
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`parties” original retainer agreement in addition to the amount and quality of Eilender’s work,
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`$287,449.66 is a fair and reasonable valuation of the services Eilender rendered. The Court would
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`thus fix the remaining value of Eilender’s charging lien at $191,966.66.
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`III.
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`CONCLUSION
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`The escrow agent is respectfully directed to pay Respondents the sum of $191,966.66 plus
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`any accrued interest. The Clerk of the Court is respectfully directed to close the case.
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`It is SO ORDERED.
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`Dated:
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`June 26, 2018
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`New York, New York
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`% Jk ill
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`Edgardo Rainos, U.S.D.J.
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