Matter of Lundy-Smith (Smith)

Matter of Lundy-Smith (Smith) 2024 NY Slip Op 32091(U) June 17, 2024 Surrogate's Court, New York County Docket Number: File No. 2012-3497/A/B/C Judge: Hilary Gingold Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

New York County Surroga:1e's Court DATA ENTRY DEPT.

SURROGATE'S COURT OF THE STATE OF NEW YORK JUN, 1 7 2024 COUNTY OF NEW YORK ------------------------------------------------------------------x In the Matter of the Application of CAROLYN LUNDY- SMITH, as Administrator of the Goods, Chattels and Credits Which Were of File No.: 2012-3497/A/B/C FREDERICK SMITH, a/k/a FREDERICK 0. SMITH

Decea$ed,

For Leave to Compromise, Settle, Collect, and Distribute the Proceeds of a Certain Cause of Action for Personal Injury and to Settle her Account. -------------------------------------------------------------------x

GINGOLD, S.

Petitioner's petition for leave to compromise a cause of action for decedent's conscious

pain and suffering was filed on July 31, 2023, in which petitioner's attorney asked to be reimbursed

$63,322.21 for disbursements. After the court requested information regarding disbursements in

accordance with Estate of Herlinger, NYLJ, Apr. 28, 1994 at 29 col. 3 [Sur Ct, NY County 1994],

petitioner's counsel filed an affirmation to amend the petition with a list of the disbursements

attached as an exhibit on December 15, 2023, decreasing the requested disbursements to

$61,705.09 by removing travel expenses. The list of disbursements still failed to comply with

Herlinger. On February 1, 2024, the court requested (1) an affirmation from counsel describing

every charge, (2) proof of every charge, and (3) a separate memorandum of law to support each

disbursement request. Petitioner's attorney did not respond or file any documents with the court,

and so the court issued an order on April 18, 2024 ordering that petitioner file with the court (1)

an affirmation of counsel describing every charge listed on the itemized list of disbursements, (2)

proof of every charge, and (3) a separate memorandum of law to support such disbursement

requests within thirty days, or the court would strike that portion of the petition. [* 1]

On May 16, 2024, petitioner filed an attorney affirmation regarding disbursements with

seventy-eight exhibits, a memorandum of law in support of attorney disbursements, and a

supplemental affirmation to amend petition as to disbursements. In the supplemental affirmation,

counsel reduced the requested disbursements to $47,991.16. The documents were not

appropriately tabbed, and the ink was so light that the documents were illegible when scanned by

the court. In fact, the court contacted counsel directly on June 12, 2024 to explain that her papers

were unacceptable in their present format and needed to be resubmitted.

"It is settled law that the Surrogate bears the ultimate responsibility of deciding what

constitutes reasonable legal compensation, regardless of the existence of a retainer agreement"

[Matter of Nicastro, 186 AD2d 805, 805 [2d Dept 1992] [internal citation omitted] [finding the

Surrogate did not improvidently exercise his discretion in fixing attorney compensation in an

application for leave to compromise and settle a wrongful death claim]; see Matter of Diamond,

219 AD2d 717, 717 [2d Dept 1995] [affirming the Surrogate's decision to not award

disbursements]). In determining a reasonable attorney's fee, the court should consider factors such

as time and labor; difficulty of the questions involved, the amount involved; counsel's experience,

ability, and reputation; the contingency or certainty of compensation; and the customary fee

charged for such services (see Matter of Freeman, 34 NY2d 1, 9 [1974]; JK Two LLC v Garber,

171 AD3d 496,496 [1st Dept 2019] [affirming the lower court's use of the appropriate factors in

determining attorneys fees]; Matter ofCincotta, 139 AD3d 1058, 1059-60 [2d Dept 2016] [finding

the referee properly determined attorneys fees, rejected unsubstantiated disbursements sought by

the attorney and found the billing entries lacked detail]).

Here, even in counsel's supplementary documentation, many disbursement requests did

not adequately state what the charges were for. Many exhibits did not include independent proof

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of such charges, instead providing only copies of checks from counsel's firm or other documents

that did not provide proof of the charges. Moreover, counsel still has not provided the court with

any meaningful substantive explanation for the vast number of charges seeking reimbursement.

For example, counsel requests reimbursement of thousands of dollars to an expert witness, but

does not explain why an expert witness was required for a case that settled in mediation.

Petitioner's four-page memorandum of law does not address how such charges are reasonable

based on the work provided by counsel, or even discuss the need for an expert witness in the case.

Counsel also requests reimbursement for work performed by Total Trial Solutions, LLC

even though the work performed by the LLC appears to be law office overhead. Total Trial

Solutions, LLC is described in counsel's retainer agreement as providing "a very broad menu of

litigation support services." The retainer agreement also states that "Total Trial is owned in whole

or in part by Andrew Finkelstein, Partner of [counsel's] Law Firm." In her memorandum of law,

counsel argues that she should be reimbursed for work performed by Total Trial Solutions, LLC,

citing Estate of Herlinger (NYLJ, Apr. 28, 1994 at pg. 29 col. 3 [Sur Ct, NY County 1994]).

Herlinger allows an attorney to apply for reimbursement of out-of-pocket expenses upon the

representation that it is the attorney's normal practice to bill separately for such disbursements and

that an accurate method of allocation has been established (id.). Counsel argues that she should be

reimbursed because it is counsel's normal practice to bill separately for work performed by Total

Trial Solutions, LLC, and because there is a separate provision for Total Trial Solutions, LLC in

counsel's retainer agreement.

However, Herlinger also states "[a]ttorneys should not be permitted to charge clients for

expenses long considered to be part of law office overhead when there has not been a

corresponding decrease in the hourly rate charged for legal services (which presumably do include

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overhead)" (id.; see also Matter ofStiftung, NYLJ, Nov. 17, 2014 at 23, col. 1 [Sur Ct, NY County

2014]). Here, counsel requests to be paid a contingency fee equal to one third of the settlement

amount as her attorneys fees. The one third contingency fee is presumed to include law office

overhead. Counsel has failed to demonstrate how the services performed by Total Trial Solutions,

LLC decreases the rate charged for legal services when the rate for legal services is a flat

contingency fee. There is no reason why counsel, allegedly a full-service law firm, should hire an

outside LLC to perform services generally considered law office overhead. In addition, there is a

question as to whether an LLC owned by a partner at counsel's law firm can be considered an

outside LLC.

Accordingly, it is hereby

ORDERED that petitioner's application for leave to compromise a cause of action for

decedent's conscious pain and suffering is denied with leave to renew upon proper paper papers

with shall include fully legible supplemental affirmations, memoranda of law, and attorney

affirmations regarding disbursements. All documents must be properly tabbed for court

consideration. Counsel has until June 28, 2024 to file appropriately.

The Clerk of the Court is directed to email a copy of this decision of the Court to counsel

as listed below. ~ Dated: June Jl, 2024

To: Annie Ma, Esq. Jacoby & Meyers, LLP ama@foalaw.com Counsel for Petitioner

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