Opinion
2012–9
02-07-2018
In the MATTER OF the Application of Susan M. HAYES, as Administratrix of the Goods, Chattels and Credits which were of Ryan Haywood Quigley, Deceased, for leave to compromise a certain claim for wrongful death of the decedent and to settle an account of the proceedings as such Administratrix.
Joseph W. McPhillips, Esq., South Glens Falls, New York for the Administratrix. E. Stewart Jones Hacker Murphy LLP (James E. Hacker, Esq., of counsel), Troy, New York for Robert C. Hilliard, Esq. and Thomas J. Henry, Esq., Litigation Counsel For Administratrix.
Joseph W. McPhillips, Esq., South Glens Falls, New York for the Administratrix.
E. Stewart Jones Hacker Murphy LLP (James E. Hacker, Esq., of counsel), Troy, New York for Robert C. Hilliard, Esq. and Thomas J. Henry, Esq., Litigation Counsel For Administratrix.
Richard B. Meyer, S. By decision and order dated January 19, 2017, the petition of the Administratrix to compromise and settle the wrongful death litigation against General Motors arising out of the decedent's fatal one-car accident on December 30, 2011 was approved. However, decision was reserved on the amount of attorneys' fees to be paid to two separate Texas law firms, the Thomas J. Henry—Injury Attorneys (the Henry firm) and Hilliard Munoz Gonzales, LLP (the Hilliard firm) (collectively, "litigation counsel") because the contingent fee agreement signed by the Administratrix naming both law firms and providing for an attorneys' fee of 33.3% "figured on the total gross recovery" appeared not to be in compliance with either the Texas or New York rules of professional responsibility regarding the division of fees ( Texas Disciplinary Rules of Professional Conduct, Rule 1.04 [f]; New York Rules of Professional Conduct, 22 NYCRR Part 1200, Rule 1.5[g] ). Litigation counsel was then offered the opportunity to submit further information to assist this Court in fixing a reasonable attorneys' fee for litigation counsel and resolving questions concerning expenses related to the multi-district litigation (MDL) venued in the United States District Court for the Southern District of New York involving General Motors (GM) ignition interlock device defects and the settlement of claims (In re General Motors LLC Ignition Switch Litigation , Case No. 14–MD–2543 [JMF] [S.D.N.Y] ).
The unresolved questions at that time were the source of the MDL administrative cost account funds and to whom the same were to be ultimately paid, and whether the 1% common benefit fund assessment was to be paid to the Common Benefit Order Fund and by whom. Those issues have subsequently been resolved and are not addressed here.
After additional papers were filed in support of a fee award, a supplemental decision and order was rendered ( In re Hayes , 55 Misc.3d 990, 50 N.Y.S.3d 827 [N.Y. Sur. 2017] ) on March 17, 2017 scheduling a hearing for April 20, 2017 for determination of the reasonable attorneys' fees to which litigation counsel were entitled. Litigation counsel then appeared through separate counsel and submitted affidavits and affirmations in support of a determination that the Texas and New York rules on the division of fees did not apply to situations in which separate law firms were simultaneously retained, thus rendering the contingent fee agreement valid such that the requested attorneys' fees pursuant to that agreement be approved. Primarily, litigation counsel contend that Texas Rule 1.04(f) and New York Rule 1.05(g) were only intended to apply to situations where a client initially retains just one law firm or attorney who subsequently refers the matter to, or otherwise involves, another lawyer or firm in the representation of the client.
Affidavit of Susan M. Hayes sworn to April 5, 2017 with exhibits A through C; affidavit of James E. Hacker, Esq. sworn to April 11, 2017 with exhibit A; affidavit of Robert C. Hilliard, Esq. sworn to April 10, 2017; affirmation Lynn A. Barker, Esq. dated April 9, 2017 with exhibit A; affirmation of Roy D. Simon, Esq. dated April 7, 2017 with exhibit A; affirmation of Hal R. Lieberman, Esq. dated April 7, 2017 with exhibit A; and a memorandum of law with exhibits A and B.
The Administratrix also filed papers in support of an order sealing the confidential settlement agreement and all court records pursuant to 22 NYCRR § 216.1. The attorneys for the Administratrix and litigation counsel requested that the issues be decided on the papers submitted without a hearing.
Affirmation of Joseph W. McPhillips, Esq. dated April 3, 2017 with exhibits 1 and 2; affirmation of Robert C. Hilliard, Esq. dated April 3, 2017 with exhibits 1 through 3; copy of affidavit of Susan M. Hayes sworn to April 5, 2017 (see footnote 2 above); memorandum of law dated March 30, 2017.
I. Application To Seal Court Records & Expunge Confidential Information From Prior Decisions
The parties contend that the gross amount paid in settlement, the amount of requested attorneys' fees, and other confidential terms of the settlement agreement with GM should be sealed, and that such information should be redacted from the prior decisions in this case. The grounds for such sealing rest upon the confidentiality agreement the Administratrix executed with GM, two orders of the MDL court, and the assertions that sealing "is necessary to preserve Petitioner's privacy and obligation of confidentiality, and to facilitate the settlement of other claims against GM in connection with the ignition switch defect."
McPhillips affirmation dated April 3, 2017, paragraph 12; Hilliard affidavit sworn to April 3, 2017; petition of Susan M. Hayes dated November 8, 2016, paragraph 9.
There is a presumption, based upon common law and the First Amendment, that court records are open to the public. "The common law right of public access to judicial documents is firmly rooted in our nation's history. See U.S. v. Amodeo I , 44 F.3d 141, 145 (2nd Cir.1995). * * * In addition to the common law right of access, it is well established that the public and the press have a ‘qualified First Amendment right to attend judicial proceedings and to access certain judicial documents.’ Hartford Courant Co. v. Pellegrino , 380 F.3d 83, 91 (2d Cir.2004)." ( Lugosch v. Pyramid Co. of Onondaga , 435 F.3d 110, 119–120 [2d Cir. 2006] ; see, also, Gryphon Domestic VI, LLC v. APP Int'l Fin. Co., B.V. , 28 A.D.3d 322, 324, 814 N.Y.S.2d 110, 112–113 [1st Dept. 2006] ). "Judicial documents" consist of "relevant documents which are submitted to, and accepted by, a court of competent jurisdiction in the course of adjudicatory proceedings, become documents to which the presumption of public access applies," ( FTC v. Standard Fin. Mgmt. Corp. , 830 F.2d 404, 409 [1st Cir.1987] ).
With regard to the records of the New York Surrogate's courts, "[a]ll books and records other than those sealed are open to inspection of any person at reasonable times" ( SCPA § 2501[8] ). Those records may be sealed pursuant to court rule "upon a written finding of good cause" ( 22 NYCRR § 216.1 ). "[C]ourt records" are defined to "include all documents and records of any nature filed with the clerk in connection with the action." ( 22 NYCRR § 216.1 [b] ). This court rule "was promulgated by the Chief Administrative Judge of the Courts in response to a concern that, where the parties were in agreement that court records should be sealed, the public interest in accessing those documents was properly considered and weighed by the courts (see Matter of Twentieth Century Fox Film Corp. , 190 A.D.2d 483, 485–486, 601 N.Y.S.2d 267 )." ( Mancheski v. Gabelli Grp. Capital Partners , 39 A.D.3d 499, 501, 835 N.Y.S.2d 595, 597 [2d Dept. 2007] ). However, "[c]ourts should be reluctant to seal court records even when all of the parties to the litigation have requested such sealing (see Gryphon Dom. VI, LLC , 28 A.D.3d at 324, 814 N.Y.S.2d 110 )" ( Fordham–Coleman v. Nat'l Fuel Gas Distribution Corp. , 42 A.D.3d 106, 115, 834 N.Y.S.2d 422, 429 [4th Dept. 2007] ).
"(a) Except where otherwise provided by statute or rule, a court shall not enter an order in any action or proceeding sealing the court records, whether in whole or in part, except upon a written finding of good cause, which shall specify the grounds thereof. In determining whether good cause has been shown, the court shall consider the interests of the public as well as of the parties. Where it appears necessary or desirable, the court may prescribe appropriate notice and opportunity to be heard. (b) For purposes of this rule, ‘court records' shall include all documents and records of any nature filed with the clerk in connection with the action. Documents obtained through disclosure and not filed with the clerk shall remain subject to protective orders as set forth in CPLR 3103(a)."
The settlement agreement, including the amount of gross settlement and the requested attorneys' fees, clearly represent judicial documents and court records since they are required filings in connection with an application for judicial approval of the settlement of claims for the wrongful death or personal injuries sustained by a decedent (see, 22 NYCRR § 207.38 [a] ). On such an application, "[t]he petition also shall show * * * the gross amount of the proceeds of settlement, the amount to be paid as attorneys' fees, and the net amount to be received by petitioner as a result of the settlement" ( 22 NYCRR § 207.38 [b][4] ).
"[B]ecause confidentiality is the exception and not the rule ( Mancheski at 501, 835 N.Y.S.2d 595, citing Matter ofHofmann , 284 A.D.2d 92, 93–94, 727 N.Y.S.2d 84 [1st Dept.2001] ), ‘the party seeking to seal court records has the burden to demonstrate compelling circumstances to justify restricting public access ( Mosallem at 349, 905 N.Y.S.2d 575, citing Mancheski at 502, 835 N.Y.S.2d 595 )." ( Maxim, Inc. v. Feifer , 145 A.D.3d 516, 517, 43 N.Y.S.3d 313, 315 [1st Dept. 2016] ).
" ‘In determining whether good cause has been shown, the court shall consider the interests of the public as well as of the parties' ( 22 NYCRR 216.1 ; see Fordham–Coleman , 42 A.D.3d at 115, 834 N.Y.S.2d 422 ). Although the term ‘good cause’ is not defined in the rule, courts have held that ‘a sealing order should clearly be predicated upon a sound basis or legitimate need to take judicial action’ ( Gryphon Dom. VI, LLC v. APP Intl. Fin. Co., B.V. , 28 A.D.3d 322, 325, 814 N.Y.S.2d 110 [1st Dept. 2006] ; see Mosallem v. Berenson , 76 A.D.3d 345, 349, 905 N.Y.S.2d 575 [1st Dept. 2010] ; Fordham–Coleman , 42 A.D.3d at 115, 834 N.Y.S.2d 422 ). Inasmuch as ‘there is no absolute definition, a finding of good cause, in essence, boils down to ... the prudent exercise of the court's discretion’ [internal quotation marks omitted] ( Applehead Pictures LLC v. Perelman , 80 A.D.3d 181, 192, 913 N.Y.S.2d 165 [1st Dept. 2010] ; see Mancheski , 39 A.D.3d at 502, 835 N.Y.S.2d 595 )." ( Manufacturers & Traders Tr. Co. v. Client Server Direct, Inc. , 156 A.D.3d 1364, 1366, 68 N.E.3d 280 [4th Dept. 2017] ).
The Administratrix has not identified any particular privacy interest distinct from that of estate fiduciaries or beneficiaries in general who seek judicial leave to compromise wrongful death and personal injury claims. No compelling privacy interest on her part has been shown to justify sealing. As to the private interests of GM, the parties rely upon certain MDL court orders, and the assertion by GM that "confidentiality of private settlements was crucial to GM's continued attempts to settle other claims in the MDL, and it would be harmful to those other negotiations if confidential settlement documents were made public."
Affirmation of Robert C. Hilliard dated April 3, 2017, paragraph 15.
The parties' reliance upon the confidentiality agreement signed by the Administratrix is misplaced. "[W]hile there is a strong public interest in encouraging the settlement of private disputes, conclusory claims of the need for confidentiality of settlement agreements are insufficient to seal a record (see generally, George F. Carpinello, Public Access To Court Records In Civil Proceedings: The New York Approach, 54 Albany Law Review 93, 108–110 )." ( In re Will of Hofmann , 284 A.D.2d 92, 94, 727 N.Y.S.2d 84, 85 [1st Dept. 2001] ). Also, paragraph (D) of the confidentiality agreement here specifically authorizes the discussion and disclosure of the settlement terms "if (i) expressly required by law; * * * (vi) or to obtain court approval ...", and with the proviso that the Administratrix make "every reasonable effort, including but not limited to ... any necessary motions regarding sealing of court documents, made to keep such information confidential and only if prior written notice is provided seven business days prior to any such disclosure to GM's counsel" . There is nothing in the record indicating that such notice was not provided.
Notification to GM counsel is the responsibility of the Administratrix, not the court.
The Administratrix refers to MDL Order No.42, entered March 26, 2015, which established a Common Benefit Fee and Expense Fund. The provisions of this order relating to confidentiality state:
"48.Details of any individual settlement agreement, individual settlement amount, and individual amounts deposited into the Common Benefit Order Fund that the parties to the individual settlement agree must be confidential shall be kept confidential and shall not be disclosed by the court-appointed CPA to Plaintiffs' Co–Lead Counsel the MDL 2543 Leadership, Participating Counsel, or to any other Party or non-Party to any Common Benefit Action. Nor shall such information be disclosed by the court-appointed CPA to the Court, or the Court's designee, unless the Court requests that it receive that information."
The confidentiality restrictions imposed by Order No. 42 do not require sealing of this Court's records containing information on the settlement terms between the Administratrix and GM. Only the "court-appointed CPA" is prohibited from disclosing those terms and then only to "Plaintiffs' Co–Lead Counsel[,] the MDL 2543 Leadership, Participating Counsel, or to any other Party or non-Party to any Common Benefit Action". There is no other language in Order No. 42 which requires confidentiality of settlement terms to any and all persons or entities outside of those groups, let alone a state court which is required by court rule to have such information furnished. Furthermore, the fact that it was necessary for GM to seek a subsequent order from the MDL court, addressed below, to seal certain documents relating to settlements reached by GM with some MDL plaintiffs from a Qualified Settlement Fund (QSF) confirms the limited scope of the confidentiality mandated by Order No. 42.
According to the papers submitted, in September 2015 GM and entered into a memorandum of understanding (MOU) with certain MDL plaintiffs. The MOU established an aggregate settlement amount for these plaintiffs, provided for the court to appoint a special master to allocate a fair settlement amount to each eligible plaintiff, and settle claims. The Administratrix settled her wrongful death claims under this framework.
The subsequent MDL court order referred to above is a Memorandum and Order dated March 1, 2016. By its terms, this order applies only to "three documents relating to settlement with certain MDL Plaintiffs ... the Confidential Memorandum of Understanding ('MOU'), the Joint Retention Agreement for Special Masters Daniel Balhoff and John Perry, and the Joint Retention Agreement for the Qualified Settlement Fund ..." Those three documents are not on file with, and have not been disclosed to, this Court. and it has not been established or claimed that the Administratrix is one of the "certain MDL Plaintiffs" subject to that order. As previously noted, the actual settlement agreement between the Administratrix and GM provided for disclosure "if (i) expressly required by law; * * * (vi) or to obtain court approval ..." Turning to GM's claim that disclosure of the terms of settlement will negatively impact its ability to settle cases, no facts have been furnished to support such a conclusion. There is also no evidence presented that the QSF is still in existence and the work of the special masters in settling claims against GM is ongoing. Litigation counsel contend that their efforts produced a remarkable, if not windfall, result for the estate considering the circumstances of the accident and because expert review of the vehicle's "black box" revealed that the ignition switch defect may not have been a cause of the accident. It is difficult to accept that the special masters settled the claim here outside the ambit of their authority and/or absent evidence of defective ignition switch involvement. Moreover, there is nothing before the Court to indicate the extent, if any, of GM's involvement in the special masters' review of the estate's claim or offer of settlement. To the extent that it is asserted that revelation of the settlement here would cause embarrassment to GM, such does not constitute "good cause" to seal the records (see, Liapakis v. Sullivan , 290 A.D.2d 393, 394, 736 N.Y.S.2d 675 [1st Dept. 2002] ; In reWill of Matilda Benkert , 288 A.D.2d 147, 734 N.Y.S.2d 427 [1st Dept. 2001] ; In re Will of Hofmann , supra. ; In re Estate of Goldman , 21 Misc 3d 1138[A], 875 N.Y.S.2d 820, 2008 N.Y. Slip Op. 52419[U], 2008 WL 5076469 [Sur. 2008] ).
The 2016 Memorandum Opinion and Order was issued in response to the "GM Request That Confidential Private Settlement Documents Remain Sealed or Be Returned". A copy of that request is attached to the affirmation of Robert C. Hilliard, Esq. dated April 3, 2017. As part of GM's application, an expert opinion by Geoffrey Parsons Miller, a professor at New York University Law School was included. Professor Miller opined that litigation settlement agreements in private disputes are not subject to the right of public access and "deserve [confidentiality] protection because they do not call upon the court to exercise a judicial function." (see Exhibit 1 to said Exhibit 2, at page 6). The opinion does not mention or take into account the requirements for judicial approval of settlements contained in EPTL § 5–4.6 and 22 NYCRR § 207.38.
"There is no question that there is a general public interest in disclosure of court records (see, Nixon v. Warner Communications , 435 U.S. 589, 597, 98 S.Ct. 1306, 1312, 55 L.Ed.2d 570 ; see also, Newsday, Inc. v. Sise , 71 N.Y.2d 146, 153 n. 4, 524 N.Y.S.2d 35, 518 N.E.2d 930, cert. denied 486 U.S. 1056, 108 S.Ct. 2823, 100 L.Ed.2d 924 ; Matter of Brownstone , 191 A.D.2d 167, 594 N.Y.S.2d 31 ), or that that interest is a factor which should be taken into account when a court is deciding whether to grant a motion to seal pursuant to section 216.1." ( Matter of Twentieth Century Fox Film Corp. , 190 A.D.2d 483, 486, 601 N.Y.S.2d 267, 269 [1st Dept. 1993] ). "The public interest in openness is particularly important on matters of public concern, even if the issues arise in the context of a private dispute (Brown & Williamson Tobacco, supra , at 1179), about which secrecy, then, may well prove the greater detriment to the public (see generally, Doggett and Mucchetti, ‘Public Access to Public Courts: Discouraging Secrecy in the Public Interest ,’ 69 Texas Law Rev. 643, 648 [1991] )." (Danco Labs., Ltd. v. Chem. Works of Gedeon Richter, Ltd. , 274 A.D.2d 1, 7, 711 N.Y.S.2d 419, 424 [1st Dept. 2000] ). Due to the widespread public knowledge of the GM ignition switch defect, and the lack of compelling evidence of any harm or disadvantage to GM from disclosure of the settlement here, the presumption of openness of public court records has not been overcome. The application to seal the records and expunge information from prior decisions is thus denied.
II. Approval of Counsel Fees
The Texas and New York rules of professional conduct both contain similar requirements governing fee agreements "between lawyers who are not in the same firm" or who are "not associated in the same law firm" where there will be a division of legal fees. As relevant here, for such a fee agreement to be valid: (1) the agreement must include language stating the manner in which the fees will be divided, whether in proportion to services performed by each lawyer or by stating that each lawyer assumes joint responsibility for the representation; (2) the client must be informed of the fee-splitting arrangements at or before entering into the fee agreement; and (3) the client must consent to those arrangements in writing. The contingency fee agreement between the Administratrix and the Hilliard and Henry firms contains no language stating the manner in which the fees will be divided between litigation counsel, nor that the two firms share joint responsibility for representing the estate.
Texas Disciplinary Rules of Professional Conduct, Rule 104(f): "A division or arrangement for division of a fee between lawyers who are not in the same firm may be made only if: (1) the division is: (i) in proportion to the professional services performed by each lawyer; or (ii) made between lawyers who assume joint responsibility for the representation; and (2) the client consents in writing to the terms of the arrangement prior to the time of the association or referral proposed, including: (i) the identity of all lawyers or law firms who will participate in the fee-sharing agreement, and (ii) whether fees will be divided based on the proportion of services performed or by lawyers agreeing to assume joint responsibility for the representation, and (iii) the share of the fee that each lawyer or law firm will receive or, if the division is based on the proportion of services performed, the basis on which the division will be made; and (3) the aggregate fee does not violate paragraph (a)."
"A lawyer shall not divide a fee for legal services with another lawyer who is not associated in the same law firm unless: (1) the division is in proportion to the services performed by each lawyer or, by a writing given to the client, each lawyer assumes joint responsibility for the representation; (2) the client agrees to employment of the other lawyer after a full disclosure that a division of fees will be made, including the share each lawyer will receive, and the client's agreement is confirmed in writing; and (3) the fee is not excessive."
According to the affidavits and affirmations submitted, the Administratrix received a recall notice indicating that the vehicle the decedent had been operating at the time of his tragic death was "subject to an ignition switch defect". The next day, she contacted the Hilliard firm and spoke several times with a representative. Also that day, a person identified as "Ms. Gomez" (Gomez) from the Hilliard firm emailed to her a power of attorney and contingency fee agreement. On March 31, 2014 she flew to Washington, D.C. to participate in a meeting with GM Chief Executive Officer Mary Barra relating to the alleged ignition switch defect. While in Washington, the Administratrix met with Robert C. Hilliard, Esq. (Hilliard) and Gomez and discussed the decedent's accident. She also met briefly with Thomas J. Henry, Esq. (Henry). Gomez gave her another copy of the power of attorney and contingency fee agreement document. The Administratrix acknowledges that she "understood from that contract that [she] would be represented and my case would be handled by both law firms. [She] also understood that the costs associated with the litigation would be deducted from any recovery [she] received as a result of a settlement or jury award." She did not immediately sign the document. On April 1, 2014, the Administratrix discussed with Gomez reducing the contingency fee from 40% to 33.33%. A revised document with the reduced fee was provided to her, which she signed and returned to Gomez on April 3, 2014.
In his affirmation submitted on the application for attorneys' fee, Hilliard avers that the Hilliard and Henry firms "formed a joint venture ... to bring wrongful death and personal injury suits on behalf of people who had been injured and harmed as a result of GM's decade-long concealment of a safety defect in its vehicles * * * [and] agreed that we would jointly represent our clients in connection with their claims against GM." There is no assertion that the Administratrix was informed of this arrangement at or before the time she signed the contingency fee agreement. Indeed, there are no statements in any of the affidavits and affirmations submitted, nor is there any evidence before this Court, that prior to the contingency fee agreement being signed by the Administratrix it was discussed or otherwise revealed to her that there would be a division of fees between the Hilliard and Henry firms, that the fees would be divided equally or proportional to the services provided by each firm, or that the two firms did or did not share joint responsibility for representing the estate. The complete lack of any sworn statements by the Administratrix or anyone else that there were such discussions and/or that the Administratrix was aware of such matters at the time she signed the contingent fee agreement can only lead to the conclusion that there were no such discussions and that she was not advised or informed as required by the ethical rules. No other inference can be drawn. The fee agreement here simply does not comply with either the Texas or New York rule.
Contrary to the assertion of litigation counsel and their experts, neither the Texas nor New York rule is limited to instances where a retained attorney refers a case to another lawyer. Both rules find their roots in Rule 1.5(e) of the American Bar Association (ABA) Model Rules of Professional Conduct . Comment 7 to that rule clearly states that while a division of fees occurs most often "between a referring lawyer and a trial specialist", the rule is intended to cover "the fee of two or more lawyers who are not in the same firm" . The comments to Texas Rule 1.04(f) and New York Rule 1.5(g) also evidence that their respective provisions on a division of fees are not limited to the situation of a referring lawyer and a trial specialist. The Texas comment states that the rule "applies in all cases in which two or more lawyers are representing a single client in the same matter" , and the comment to the New York rule makes no mention at all of a referral being the circumstance to which the rule most often applies . There is simply nothing to suggest that these rules are limited to the extent asserted by litigation counsel, and the clear and unequivocal language of those rules apply to the contingent fee agreement between the Administratrix and litigation counsel. The comments to the Texas rule further make it clear that not only must a prospective client consent in writing to a division of fees arrangement but the client must also be advised of certain "essential terms", including whether the lawyers assume joint responsibility for the representation or will share the fee proportionally based upon the services performed by each attorney or firm, and the share each lawyer or firm will receive if the division is proportional. Indeed, the Supreme Court of Texas has stated, "[a] fee sharing agreement between lawyers who are not in the same firm violates public policy and is unenforceable unless the client is advised of and consents to the sharing arrangement." ( Johnson v. Brewer & Pritchard, P.C. , 73 S.W.3d 193, 205 [Tex. 2002], citing Lemond v. Jamail , 763 S.W.2d 910, 913–14 [Tex.App.–Houston, 1st Dist. 1988, writ denied] ; Fleming v. Campbell , 537 S.W.2d 118, 119 [Tex.App.–Houston, 14th Dist. 1976, writ ref'd n.r.e.] ). "When interpreting and enforcing attorney-client fee agreements, * * * [t]here are ethical considerations overlaying the contractual relationship." Lopez v. Muñoz, Hockema & Reed, L.L.P. , 22 S.W.3d 857, 868 (Tex.2000) (Gonzales, J., concurring and dissenting). * * * ‘In Texas, we hold attorneys to the highest standards of ethical conduct in their dealings with their clients. The duty is highest when the attorney contracts with his or her client ...’ " ( Hoover Slovacek LLP v. Walton , 206 S.W.3d 557, 560–561 [Tex. 2006] ).
"(e) A division of a fee between lawyers who are not in the same firm may be made only if: (1) the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; (2) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and (3) the total fee is reasonable."
"[7] A division of fee is a single billing to a client covering the fee of two or more lawyers who are not in the same firm. A division of fee facilitates association of more than one lawyer in a matter in which neither alone could serve the client as well, and most often is used when the fee is contingent and the division is between a referring lawyer and a trial specialist. Paragraph (e) permits the lawyers to divide a fee either on the basis of the proportion of services they render or if each lawyer assumes responsibility for the representation as a whole. In addition, the client must agree to the arrangement, including the share that each lawyer is to receive, and the agreement must be confirmed in writing. Contingent fee agreements must be in a writing signed by the client and must otherwise comply with paragraph (c) of this Rule. Joint responsibility for the representation entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership. A lawyer should only refer a matter to a lawyer whom the referring lawyer reasonably believes is competent to handle the matter. See Rule 1.1."
"10. A division of fees is a single billing to a client covering the fee of two or more lawyers who are not in the same firm. A division of fees facilitates association of more than one lawyer in a matter in which neither alone could serve the client as well, and most often is used when the fee is contingent and the division is between a referring or associating lawyer initially retained by the client and a trial specialist but it applies in all cases in which two or more lawyers are representing a single client in the same matter, and without regard to whether litigation is involved. Paragraph (f) permits the lawyers to divide a fee either on the basis of the proportion of services they render or if each lawyer assumes joint responsibility for the representation."
"[7] A division of fee is a single billing to a client covering the fee of two or more lawyers who are not affiliated in the same firm. A division of fee facilitates association of more than one lawyer in a matter in which neither alone could serve the client as well. Paragraph (g) permits the lawyers to divide a fee either on the basis of the proportion of services they render or if each lawyer assumes responsibility for the representation as a whole in a writing given to the client. In addition, the client must agree to the arrangement, including the share that each lawyer is to receive, and the client's agreement must be confirmed in writing. Contingent fee arrangements must comply with paragraph (c). Joint responsibility for the representation entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership. See Rule 5.1. A lawyer should refer a matter only to a lawyer who the referring lawyer reasonably believes is competent to handle the matter. See Rule 1.1."
Comment 15 to Texas Rule 1.04: "A client must consent in writing to the terms of the arrangement prior to the time of the association or referral proposed. For this consent to be effective, the client must have been advised of at least the key features of that arrangement. Those essential terms, which are specified in subparagraph (f)(2), are 1) the identity of all lawyers or law firms who will participate in the fee-sharing agreement, 2) whether fees will be divided based on the proportion of services performed or by lawyers agreeing to assume joint responsibility for the representation, and 3) the share of the fee that each lawyer or law firm will receive or the basis on which the division will be made if the division is based on proportion of service performed. Consent by a client or prospective client to the referral to or association of other counsel, made prior to any actual such referral or association, but without knowledge of the information specified in subparagraph (f)(2) does not constitute sufficient client confirmation within the meaning of this rule. The referring or associating lawyer or any other lawyer who employs another lawyer to assist in the representation has the primary duty to ensure full disclosure and compliance with this rule."
In New York, "[a]n attorney has an ethical obligation to advise his client of the fee arrangement" ( Matter of Estate of Jackson , 120 A.D.2d 309, 315, 508 N.Y.S.2d 671, 675 [3d Dept. 1986], lv. denied 69 N.Y.2d 608, 514 N.Y.S.2d 1026, 507 N.E.2d 322 [1987] ) and a fee agreement which violates the Rules of Professional Conduct governing a division of legal fees is contrary to public policy and unenforceable (see Ford v. Albany Med. Ctr. , 283 A.D.2d 843, 845, 724 N.Y.S.2d 795, 797 [3d Dept. 2001], lv. dismissed 96 N.Y.2d 937, 733 N.Y.S.2d 375, 759 N.E.2d 374 [2001], reargument denied 97 NY2d 654, 737 N.Y.S.2d 54, 762 N.E.2d 932 [2001] ).
In the context of this proceeding to compromise a wrongful death action, "the court shall, after inquiry into the merits of the action and the amount of damages proposed as a compromise either disapprove the application or approve in writing a compromise for such amount as it shall determine to be adequate including approval of attorneys' fee and other payable expenses ..." ( EPTL § 5–4.6[a] ). "'The Surrogate's Court bears the ultimate responsibility for deciding what constitutes a reasonable attorney's fee' ( Matter of Goliger , 58 A.D.3d 732, 732, 871 N.Y.S.2d 689 ; see Matter of Harrison , 119 A.D.3d 687, 688, 988 N.Y.S.2d 896 ; Matter of Talbot , 84 A.D.3d 967, 967–968, 922 N.Y.S.2d 552 ) * * * ‘regardless of the existence of a retainer agreement or whether all the interested parties have consented to the amount of fees requested’ ( Matter of Harrison , 119 A.D.3d at 688, 988 N.Y.S.2d 896 ; see Matter of Elenidis , 120 A.D.3d 1229, 1231, 992 N.Y.S.2d 128 ; Matter of Weinberg , 107 A.D.3d 729, 730, 968 N.Y.S.2d 509 )." ( In re Greenfield , 127 A.D.3d 1189, 1191, 7 N.Y.S.3d 513, 516 [2d Dept. 2015], lv. denied 26 N.Y.3d 904, 2015 WL 5254887 [2015] ).
Because the contingent fee agreement here does not comply with the applicable rules of professional conduct, violation of those rules cannot be condoned by approving the requested attorneys' fee provided for in that agreement. "Contracts contrary to public policy are unenforceable and courts will not recognize rights purportedly arising from them ( Szerdahelyi v. Harris , 67 N.Y.2d 42, 499 N.Y.S.2d 650, 490 N.E.2d 517 )." ( City of New York v. 17 Vista Assocs. , 192 A.D.2d 192, 198, 599 N.Y.S.2d 549, 553 [1st Dept. 1993], aff'd as modified , 84 N.Y.2d 299, 618 N.Y.S.2d 249, 642 N.E.2d 606 [1994] ). It is thus not within this Court's discretion to overlook the violation of professional conduct rules since " ‘[d]iscretion is not whim.’ Martin , 546 U.S. at 139, 126 S.Ct. 704. ‘[I]n a system of laws discretion is rarely without limits,’ even when the statute ‘does not specify any limits upon the ... courts' discretion.’ Flight Attendants v. Zipes , 491 U.S. 754, 758, 109 S.Ct. 2732, 105 L.Ed.2d 639 (1989). ‘[A] motion to a court's discretion is a motion, not to its inclination, but to its judgment; and its judgment is to be guided by sound legal principles.’ Martin , 546 U.S. at 139, 126 S.Ct. 704 (quoting United States v. Burr , 25 F.Cas. 30, 35 (No. 14,692d) (C.C.D.Va.1807) (Marshall, C.J.); alteration omitted)." ( Halo Elecs., Inc. v. Pulse Elecs., Inc. , 579 U.S. ––––, ––––, 136 S.Ct. 1923, 1931–1932, 195 L.Ed.2d 278 [2016] ).
That litigation counsel may have obtained an "extraordinary" result, as they claim, is but one factor to be considered by this Court in determining an "adequate" award of attorneys' fees (see, In re Estate of Drossos , 26 A.D.3d 602, 603, 808 N.Y.S.2d 837, 838 [2006]. "Relevant factors to be considered include the time required, the difficulties involved, the nature of the services provided, the amount involved, the professional standing and ability of counsel, and the results obtained" ( id. ), as well as "definite information ... as to the way in which the time was spent (discovery, oral argument, negotiation, etc.), ... the experience and standing of the various lawyers performing each task (senior partner, junior partner, associate, etc.)' [citations omitted]" ( Klein v. Robert's Am. Gourmet Food, Inc. , 28 A.D.3d 63, 75, 808 N.Y.S.2d 766, 776 [2d Dept. 2006] ; see, also, Flemming v. Barnwell Nursing Home & Health Facilities, Inc. , 56 A.D.3d 162, 164–165, 865 N.Y.S.2d 706, 708, aff'd , 15 N.Y.3d 375, 938 N.E.2d 937, 912 N.Y.S.2d 504 [2010] ). Finally, evidence of the customary fees charged by lawyers in this Court's jurisdiction for similar services should be furnished (see, In re Sucheron , 95 A.D.3d 892, 944 N.Y.S.2d 173 [2d Dept. 2012] ; Matter of Dowd , 74 A.D.2d 570, 424 N.Y.S.2d 293 [2d Dept. 1980] ).
The papers before this Court summarize the work performed by litigation counsel on behalf of the Administratrix and Hilliard's work as co-lead counsel in the MDL court. Specificity, even in the form of reasonable estimates, is lacking, however, on how much time was spent investigating her claim, seeking and obtaining documents and other evidence relating to the decedent's accident, preparing and filing a complaint in federal court, assisting her in complying with the multi-district litigation requirements including completion of a fact sheet, making application to the Kenneth Feinberg Compensation Fund, retaining and furnishing information to an expert, and pursuing her claim under the QSF with the special masters. There is also no information provided identifying the persons who performed these items of work, whether lawyers (partners or associates) or non-lawyer staff, nor indicating that any court appearances, depositions or hearings (including before the special masters) occurred specific to the wrongful death claim of the Administratrix. Litigation counsel are to submit such information, and any evidence of the customary fees charged in this jurisdiction for such services, within thirty (30) days hereof. Absent submission of such information, a decision will be rendered on that which has been furnished to date.