5 posts tagged “reform”

Lawyer Who Failed to Follow Billing Rules Forfeits Fees

Jun 7, 2009
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Vesselin Mitev
New York Law Journal
May 05, 2009

A Long Island, N.Y., matrimonial attorney who did not bill her client at the requisite 60-day intervals cannot collect claimed legal fees, a New York state judge has ruled.

Attorney Charlene K. Verkowitz, appearing pro se, argued that she had substantially complied with rules requiring matrimonial lawyers to provide written, itemized bills at least every 60 days.

But New York Supreme Court Justice William R. LaMarca of Nassau County disagreed, noting in Verkowitz v. Torres, 17206/06, that since Verkowitz had not "follow[ed] the rules," she had to forfeit her fees.

Verkowitz, of New Hyde Park, N.Y., was hired by Ernest Torres on Nov. 7, 2002, to represent him in a Suffolk County Family Court support hearing. That day, Torres signed a retainer and paid a $3,500 fee, according to the decision.

The next month, Torres retained Verkowitz to represent him in a separate matrimonial action. Unused portions of his previous retainer were credited to the matrimonial bill, and Torres paid an additional $3,500.

On July 14, 2003, Torres relieved Verkowitz as counsel, prompting the subsequent suit over $7,915 in counsel fees plus costs, according to the decision.

During the eight-month period from initial retainer to her discharge, Verkowitz sent four bills to Torres: on Dec. 6, 2002; Feb. 3, 2003; June 17, 2003; and Nov. 5, 2003.

The Feb. 3, 2003, bill showed a credit balance of $2,309 but more than 120 days had elapsed between the February bill and the June 17 bill. Her lawsuit only covered fees mentioned in the first three bills.

At trial in December 2008, Verkowitz testified that between the second and third billing cycle she "continually advised" Torres that his retainer had been exhausted. Torres was "often" in her office during this time reviewing his case, according to the decision.

Torres denied he was told about the bills and claimed he told Verkowitz about his "dire financial straits," which were also the subject of a motion to modify a separation agreement with his wife, Justice LaMarca wrote.

According to Michael R. Walker, Torres' attorney, his client had limited funds, as evidenced by the fact he charged the first two retainers on his girlfriend's credit card.

Under 22 NYCRR 1400.3, a retainer agreement sets forth the "[f]requency of itemized billing, which shall be at least every 60 days; the client may not be charged for time spent in discussion of the bills received."

Here, LaMarca wrote, "there is no doubt that Verkowitz did not abide by the rules, in that she did not provide written itemized bills at least every 60 days."

The failure to comply with the 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," the judge continued, quoting Julien v. Machson, 245 AD2d 122.

Verkowitz cited, among other cases, Mulcahy v. Mulcahy, 285 AD2d 587, and Sherman v. Sherman, 34 AD3d 670, which set forth that attorney fees may be recovered if there is "substantial compliance" with 22 NYCRR 1400.3.

However, LaMarca distinguished those cases as addressing the recovery of legal fees from an adversary spouse, observing "[t]hat is not this case."

"In all cases cited by Verkowitz, the courts recited the law ... that attorneys must follow the rules or forfeit legal fees," the judge held. "There is no doubt that the third bill ... was not sent within 60 days as mandated."

Although he held that Verkowitz did not substantially comply with the rules, LaMarca did not order her to return the $2,309 credit indicated on the second bill, citing Mulcahy for the proposition that "a court need not direct the return of a retainer fee already paid for properly-earned services."

In an interview, Walker said his client's case was factually different than that of a Brooklyn accountant who earlier this year was ordered to pay his attorney fees despite a 17-month billing delay.

In Edelstein v. Greisman, 18848/08, attorney Saul Edelstein had won at the arbitration level before Brooklyn Supreme Court Justice Mark I. Partnow upheld his award.

Here, Verkowitz had lost in arbitration, Walker said.

LaMarca properly interpreted the statute, said Walker, of Gallagher, Walker, Bianco & Plastaras in Mineola, N.Y. "We have strict rules precisely for this reason."

In an interview, Verkowitz said she "respectfully disagree[d] with the judge's interpretation of substantial compliance."

She said the initial arbitration award was "100 percent" in her favor but had been overturned by a "technicality," prompting a rehearing which she lost.

LaMarca's decision did not mention the arbitration.

http://www.law.com/jsp/law/careercenter/CareerCenterArticleFriendly.jsp?id=1202430444547

Lawyer Who Failed to Follow Billing Rules Forfeits Fees

Jun 7, 2009
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