Opinion
01 Civ. 1290 (CSH).
April 19, 2006
MEMORANDUM OPINION AND ORDER
As evidenced by two recently issued opinions and orders, dated February 27, 2006 (reported at 2006 WL 490068) ("the February 27 Order") and March 17, 2006 ("the March 17 Order"), familiarity with both being assumed, the Court has endeavored to address the question of who, if anyone, is presently obligated to represent the plaintiff RLS Associates, LLC ("RLS") in this action. After initially reviewing letters submitted by Richard L. Swomley, principal of RLS, and Rosenberg Feldman Smith, LLP ("the Rosenberg firm"), the attorneys who most recently worked on behalf of RLS, and after conducting a telephone conference with Mr. Swomley and Michael H. Smith, Esq. and Richard B. Feldman, Esq., of the Rosenberg firm, the Court concluded that the former equity partners of the now-defunct law firm of of Spitzer Feldman, P.C. ("the Spitzer firm") bore a continuing obligation to represent RLS in responding to the pending motion pursuant to a contingency agreement between RLS and the Spitzer firm. M. James Spitzer, Esq., formerly of the Spitzer firm, did not have the opportunity to be heard on this telephone conference because he was out of the country at the time.
Currently pending before the Court is the defendant's motion to dismiss the complaint with prejudice for failure to post a bond, to which RLS has not yet responded.
Following the February 27 Order stating that the former equity partners of the Spitzer firm were responsible for representing RLS in responding to the pending motion, Mr. Spitzer wrote a letter to the Court explaining his view on the representation issue (and taking issue with certain of the representations made by Messrs. Swomley, Smith, and Feldman as stated in the February 27 Order) and requesting that the Court reconsider its conclusions. In response, the Court decided that a more fully developed evidentiary record would be necessary before the Court could definitively resolve the representation issue. To that end, the March 17 Order contained a directive to Messrs. Spitzer, Smith, and Swomley to serve and file sworn affidavits stating their recitations of the operative facts and background information relevant to the question of who, if anyone, should be found to bear a continuing obligation to represent RLS. All three gentlemen timely filed such affidavits, as did Ronald J. Offenkrantz, Esq., a former equity partner of the Spitzer firm.
Mr. Swomley was given the opportunity to review the affidavits of Messrs. Spitzer and Smith before filing his affidavit, in which he was expected, pursuant to the March 17 Order, to respond to the assertions made in the Spitzer and Smith affidavits.
Although not asked to make such a submission, Mr. Offenkrantz has personal knowledge relevant to the dispute at issue, and the Court has therefore considered his affidavit.
In his affidavit, Mr. Spitzer states that he had a longstanding business and personal relationship with Mr. Swomley, and that the Spitzer firm initially took on the representation of RLS in the current dispute as a favor to a friend. Mr. Spitzer admits that the matter was taken on a contingency basis, but that there was no written agreement, and that the extent of the representation was never expressly discussed. Further, Mr. Spitzer expressed his belief that neither he nor Mr. Swomley anticipated that the matter would take on the dimensions that it has. According to Mr. Spitzer, Mr. Smith, at the time an associate at the Spitzer firm, did the bulk of the work on the RLS case, and, when the firm dissolved in late 2003, actively assumed control of and responsibility for the RLS case and took it with him to another firm. Mr. Spitzer states that, after the dissolution of the Spitzer firm, none of the former equity partners has provided any professional services in connection with the case. The affidavits of Mr. Spitzer and the other former equity partners of the Spitzer firm imply that, if anyone bears a continuing obligation to represent RLS in this action, it is Mr. Smith.
In his defense, Mr. Smith makes clear in his affidavit that he only agreed to handle specific, discrete portions of the case on RLS's behalf. For certain of these tasks, he was compensated (at least partially) by the Spitzer firm, while for others he performed without any sort of compensation at all, or even a real expectation of compensation. Critically, neither Mr. Smith nor his firm has ever appeared as counsel of record in this matter, and it does not appear that Mr. Smith entered into any agreements with Mr. Swomley or RLS regarding representation. Despite the statements by the former partners of the Spitzer firm regarding the depth and breadth of Mr. Smith's involvement in the case on behalf of RLS, I am unable to conclude that Mr. Smith agreed to become RLS's counsel in any and all aspects of this case going forward.
The former partners of the Spitzer firm do not appear to dispute that they continued to pay Mr. Smith (at least in part) for representing RLS, including a portion of the costs of prosecuting an appeal from an adverse judgment of this Court.
Therefore, after reviewing all of the evidence before the Court, I reach the same conclusion that I did in my previous opinion on this matter: The former equity partners of the Spitzer firm bear a continuing obligation to represent RLS in this matter, pursuant to a contingent fee agreement, while Mr. Smith bears no such obligation. Any ambiguity regarding the terms of or the extent of representation envisioned in the original contingent fee agreement between RLS and the Spitzer firm must be resolved in the client's favor, since the partners of the firm, as seasoned attorneys, should bear the weight of the failure to commit the terms of their representation to paper. Additionally, should bear the weight of the failure to commit the terms of their representation to paper. Additionally, the fact that the Spitzer firm agreed to represent RLS as a favor to a friend does not mean that the lawyers could unilaterally decide to terminate representation if the matter became more onerous than they believed the duty of friendship warranted. Finally, certain actions of the former partners of the Spitzer firm, namely the funding (at least in part) of the costs of continuing litigation after the dissolution of the firm, supports the conclusion that the former partners of the Spitzer firm continued and continue to be obligated to represent RLS.
Regarding the scope of the former partners' obligation to RLS, I conclude that it includes the responsibility of responding to the pending motion to dismiss as well as any appeal. In his affidavit, Mr. Swomley expressed his expectation that the former partners of the Spitzer firm (as well as Mr. Smith) "would to the greatest extent possible fulfill their ethical, fiduciary and contractual obligations (as applicable) to Plaintiff RLS Associates, LLC (including all motions, trial and appeals)," Swomley Affidavit ¶ 1 (emphasis added), while Mr. Spitzer maintains that it was not, in fact, originally anticipated by the Spitzer firm or RLS that the firm would represent RLS in any appeals. Even accepting Mr. Spitzer's statement that the scope of the representation was never explicitly discussed or made part of the contingent fee agreement, I resolve ambiguities in the client's favor. See, e.g., Abreu v. Ferrer, 239 A.D.2d 249 (1st Dep't 1997). Thus , I will accept what I interpret to be Mr. Swomley's recollection of the terms of the agreement, rather than Mr. Spitzer's. Accordingly, the former partners of the Spitzer firm will be held to be responsible for representing or funding representation in any appeal taken in this matter.
Consistent with Mr. Swomley's understanding of the Spitzer firm's obligations to RLS (and seemingly inconsistent with the position now advanced by the former partners of the Spitzer firm), the former partners previously funded part of the costs of the successful appeal from a prior adverse ruling by the Court in this action.
Having reached the above conclusions, however, the Court is mindful of the former partners' representations that they are no longer in the position to personally litigate this action on RLS's behalf. Given such representations, the Court will not order the former partners to personally litigate the action, but will direct that the former partners make arrangements for competent counsel to prepare and file papers responding to the pending motion to dismiss, and to represent RLS in any appeal, at the former partners' expense. RLS's input on the selection of counsel should be solicited, but RLS does not have veto power over the former partners' selection of counsel — RLS's agreement was with the Spitzer firm, which is no longer in existence; if RLS intends to hold the former partners to the agreement (which it does), RLS must accept the former partners' selection of new counsel, as long as successor counsel is competent and the selection is reasonable. If RLS does not wish to be so constrained, it may discharge the former partners of the Spitzer firm and retain any counsel it chooses, at its own expense.
Accordingly, I deny the request made by Mr. Swomley in his affidavit that the former partners of the Spitzer firm be ordered to deposit a $25,000 renewable retainer and pay all costs incurred by new counsel chosen by RLS in prosecuting this action.
The former partners of the Spitzer firm are hereby ordered to retain new counsel to represent RLS and serve and file papers responding to the pending motion to dismiss not later than June 1, 2006.
It is SO ORDERED.