Opinion
2004-1070.
Decided January 10, 2007.
HOWARD B. FELCHER Attorney for Plaintiff, New York.
BRIAN D.PERSKIN, Attorney for Defendant, Brooklyn, NY.
Upon the foregoing papers, defendant-wife moves by motion for an order directing payment of $20,000 in counsel fees by the plaintiff-husband to the wife, pendente lite, pursuant to Domestic Relations Law 237 (a). The husband opposes the application, claiming inter alia that the wife's attorney's failure to send a bill to the wife every 60 days pursuant to 22 NYCRR 1400.2 is a bar to her seeking an award of counsel fees pursuant to DRL 237.
Background
The parties married in November 2002, and have one child, two (2) years of age. The parties physically separated in November 2005. The instant divorce action was commenced on February 23, 2006. The husband is 38 years of age and works as a music executive with an annual income of at least $158,630. The wife is 33 years of age and works as a full-time homemaker and a part-time disc jockey with an annual income of $4,800.
On March 15, 2006, the parties entered into a stipulation, pendente lite, wherein the husband agreed to pay the wife $2,650 each month for child support and $500 each month for maintenance. The parties further stipulated that the husband would pay the wife $7,500 towards her counsel fees.
The husband contends that his basic monthly expenses are as follows: $2,050 for rent; $40 for gas; $80 for electric; $50 for telephone, for a total of $2,220. The wife alleges she is a full-time homemaker and therefore, unable to pay her counsel fees. The wife contends her basic monthly expenses are as follows: $1,800 for rent; $40 for gas; $60 for electric; $100 for telephone; $120 for unreimbursed medical expenses, for a total of $2,120.
The wife retained counsel on March 1, 2006. The retainer agreement states that the minimum retainer fee is $15,000, however it is conceded that counsel has not received these monies. The husband gave the wife $1,000 towards counsel fees when the parties believed they were proceeding to an uncontested matrimonial. Thereafter, when it became clear that this matter was proceeding as an contested matrimonial, the husband provided an additional $7,500 towards the wife's counsel fees, pursuant to a pendente lite stipulation. Thus far, the wife's counsel has expended approximately 91 hours and his fees, to date, total $19,093 of which $11,593 remains due and owing. The husband's counsel fees through October 1, 2006, total $26,225; this balance is paid in full.
The husband asserts that the wife's counsel is simply "churning" the file to generate counsel fees. However, the wife's counsel contends that the husband has been less than forthright with discovery throughout this litigation. For instance, the wife's counsel claims he first learned at the husband's deposition of his royalty agreements with various record companies. The husband also failed to provide the wife with a copy of his partnership agreement or contracts with recording artists. The wife avers that there was substantial discovery necessary due to the husband's failure to fully voluntarily disclose his income. At this juncture, it appears that the matter must be set down for trial.
Significantly, the husband claims that the wife's attorney failed to provide the wife with systematic billing every 60 days and pursuant to the disciplinary rules, she is barred from seeking an award of counsel fees pursuant to DRL 237.
Discussion
It is undisputed that the joint rules adopted by the Appellate Divisions relating to attorney conduct in domestic relations matters require that attorneys provide "an itemized bill on a regular basis at least every 60 days" (see 22 NYCRR 1400.2).
The wife received $8,500 from the husband for counsel fees. She now seeks an additional award of attorneys' fees in the amount of $20,000 premised upon the gross disparity in their respective incomes and the fact that she is reliant on his earnings for her maintenance and support. The husband opposes this application, asserting that an award of attorneys' fees is not appropriate in a case where the wife's counsel has failed to comply with the court rules in that the wife's counsel has not sent the wife a bill in seven months.The wife's counsel contends that he is in compliance with 22 NYCRR 1400.2. The retainer agreement was signed on March 1, 2006 and counsel asserts that his client was given a copy of the retainer agreement. Pursuant to the retainer agreement, the wife's counsel started charging the wife for services as of March 1, 2006 however, the first bill for services rendered was dated June 1, 2006. The wife's counsel sent the wife three (3) itemized billing statements dated June 27, 2006, September 1, 2006, and October 30, 2006.
It appears that counsel provided legal services for three (3) months: March, April and May, before generating his first billing statement dated June 1, 2006. The husband contends that the rules mandate billing statements be sent every 60 days in domestic relations matters. Wife's counsel waited 90 days before generating his first billing statement, 30 days beyond the minimum time enunciated in the Court Rules. Thereafter, the billing statement(s), according to the wife and her attorney, have been in full compliance with the rules.
It is clear that determining whether or not a violation of the rules vitiates the ability to seek fees has been the subject of numerous appellate cases. The Second Department recently held that an attorney who failed to execute and file a retainer agreement was not in "substantial compliance" with the provisions of 22 NYCRR 1400.3 and thus could not recover counsel fees from an adversary spouse ( Sherman v Sherman, 2006 NY Slip Op 08764 [App. Div., 2nd Dept] ("filing of a new retainer agreement in support of instant motion for post judgment attorney's fee, which purportedly ratified the former agreement, did not amount to substantial compliance with the matrimonial rules. . ."); see also Pillai v Pillai, 15 AD3d 466, 467 [2nd Dept 2005] ( the court denied ". . . motion to establish a charging lien since the appellant failed to demonstrate that she substantially complied with the rules governing the conduct of matrimonial attorneys"); Bishop v Bishop, 295 AD2d 382, 383 [2nd Dept 2002])) ( ". . .violation of the rules governing the conduct of matrimonial attorneys precluded him from recovering unpaid fees for legal services rendered . . ."); ( Julien v Machson, 245 AD2d 122 [1st Dept 1997] (an action to recover legal fees in a matrimonial action was dismissed upon plaintiff failure to comply with the requirements ". . . to file a copy of the retainer agreement with the court with a statement of net worth, to file a copy of the closing statement with the clerk of the court within 15 days of terminating the retainer agreement, to provide the client with the notice of her right to arbitrate any fee dispute prior to the institution of the action"). The Appellate Term, Second Department has also held that there was substantial noncompliance where an attorney sent the client three (3) bills over a two and a half (2 ½) year time period ( see Kaplowitz v Newman, 185 Misc 2d 205 [App. Term, 2nd Dept 2000] ("[D]efendant is entitled to summary judgment dismissing the complaint for plaintiffs' failure to render a written bill every 60 days as required by 22 NYCRR 1400.2. . . plaintiffs' utter failure to comply with the 60-day billing requirement vitiates their right to legal fees").
The requirement of filing a closing statement was subsequently repealed.
In this case, the wife's counsel's omission of one billing statement does not rise to the level of "substantial noncompliance". Clearly, the intent of 22 NYCRR 1400.2 requiring attorneys to bill their clients every 60 days was to keep litigants apprised of the amount of legal expenses they were incurring for legal services in a timely manner. In the case at bar, the husband seeks to utilize what wife's counsel contends is an inadvertent omission of a mandate, which is clearly designed to protect a litigant in the relationship with their lawyer, to prevent a non-monied spouse from collecting a pendente lite counsel fee. This court will not apply such a standard, to do so would allow the husband with a superior "pocketbook" who has paid his attorneys significant sums of monies to prevent the wife from seeking counsel fees and the ability to be adequately represented because of one missed billing that was 30 days late. Under these circumstances, a first billing in 90 days instead of 60 does not mean that counsel was not in "substantial compliance" with the rules. The rule was intended to protect the client, not prevent the adversary from being directed to pay a non-monied spouse's fee based upon a 30 day late bill (see Winkelman v Furey, 281 AD2d 908 [4th Dept 2001]).
As recently stated in a report by the Hon. Jacqueline Silbermann to Chief Judge Judith Kaye entitled The Matrimonial Rules-Ten Years Later, "In particular, requiring a detailed explanation of the fee arrangement, coupled with regular itemized billing, would ensure that a client knew in advance what charges could be incurred as well as kept regularly informed of what charges had in fact accrued. Eliminating the element of surprise-and ignorance in this regard was meant to address a common source of conflict between attorney and client as the case progressed. (See "Rules Governing Attorney Conduct: 22 NYCRR Part 1400, Procedure for Attorneys in Domestic Relations Matters"; The Matrimonial Rules-Ten Years Later, A Report to Chief Judge Judith S. Kaye and Chief Administrative Judge Jonathan Lippman, by the Office of the Statewide Administrative Judge for Matrimonial Matters, Hon. Jacqueline W. Silbermann, January 2004).
The case at bar differs significantly from the facts in Wagman v Wagman, 8 AD3d 263 (2nd Dept. 2004). In Wagman, the noncompliance was failure to timely file the retainer agreement pursuant to 22 NYCRR 1400.1, and there was no evidence of any bills rendered at least every 60 days.
DRL 237
Domestic Relations Law 237 (a) permits the court to direct either spouse to pay counsel fees to the other "to enable that spouse to carry on or defend the action or proceeding as, in the court's discretion, justice requires, having regard to the circumstances of the case and of the respective parties." The award of counsel and accountant's fees is controlled by the equities and circumstances of each particular case ( see e.g. Levy v Levy, 4 AD3d 398 [2nd Dept 2004], citing DRL 237(a), (d); DeCabrera v Cabrera-Rosete, 70 NY2d 879, 881; Kearns v Kearns, 270 AD2d 392, 393
[2nd Dept 2000], appeal denied 95 NY2d 760). "The intent of the provision is to ensure a just resolution of the issues by creating a more level playing field with respect to the parties' respective abilities to pay counsel, to make sure that marital litigation is shaped not by the power of the bankroll but by the power of the evidence'" ( Silverman v Silverman, 304 AD2d 41, 48 [1st Dept 2003], quoting Scheinkman, Practice Commentaries, McKinney's Cons Laws of NY, Book 14, Domestic Relations Law C237:1, at 6, citing O'Shea v O'Shea, 93 NY2d 187). "A counsel fee award helps reduce what would otherwise be a substantial advantage to the non-monied spouse. Such awards are designed to redress the economic disparity between the monied spouse and the non-monied spouse' and ensure that the matrimonial scales of justice are not unbalanced by the weight of the wealthier litigant's wallet'" ( Kaplan v Kaplan, 812 NYS2d 360 {28 AD3d 523} [2nd Dept. 2006], quoting Frankel v Frankel, 2 NY3d 601, 607, quoting O'Shea v O'Shea, 93 NY2d 187, 190).
This Court is permitted to use its "sound discretion" when awarding counsel fees
( see Matter of Grald v Grald, 33 AD3d 922 [2nd Dept 2006]); Matter of Dalessandro v O'Brien, 285 AD2d 592 [2nd Dept 2001]), Matter of Olesh v Auerbach, 227 AD2d 406
[2nd Dept 1996]); DeCabrera v Cabrera-Rosete, 70 NY2d 879, 881, 524 NYS2d 176). The Court must consider the following factors when determining reasonable attorney's fees: "the parties' ability to pay, the nature and extent of the services rendered, the complexity of the issues involved, counsel's experience, ability, and reputation, and the resources of the party seeking the award" ( see Matter of Israel v Israel, 273 AD2d 385 [2nd Dept 2000]). The court is mindful of the admonition of the Court of Appeals that counsel fees should not, as a matter of routine, be deferred to trial ( see Frankel v Frankel, 2 NY3d 601, 607).
In this case, the husband's annual income is $158,630. The wife's annual income is $4,800 and her monthly living expenses are $2,120. She also receive $2,650 in child support $500 in maintenance each month. The wife's counsel is an experienced attorney devoting much of his practice to matrimonial and family law. His current hourly rate for services is $325 and his associate's rate is $225 per hour. In addition, it appears that the husband may not have been forthcoming with his finances, causing additional time and expenses to be incurred.
Taking the above factors into account, including the counsel fee the husband paid his own counsel and the amount of fees the husband already paid towards the wife's attorney, this court awards to the wife an additional $10,000 in interim counsel fees to be awarded directly to the wife's counsel pendente lite. The wife has no other resources to draw upon to [*10] [*11] pay her counsel's fee and it appears that this matter is going to trial with issues regarding the husband's income being a significant trial issue.
Payment shall be made by January 24, 2007. Upon the defendant's failure to make payment by that date, counsel may enter a money judgment with statutory costs and interest from the date of default, on seven (7) days mail notice.
This shall constitute the decision and order of the court.