Kevin Kennedy (Kennedy) was in his vehicle on the New York State Thruway on January 2, 2002 when he was rear-ended by a tractor trailer owned by Point Dedicated. Kennedy retained Cellino & Barnes on January 4, 2002 to represent his interests.

The Court held a preliminary conference with then counsel for Kennedy, Cellino & Barnes, and counsel for Point Dedicated on February 15, 2004. At that time a trial date of April 19, 2005 was established. Subsequent conferences were held on September 10, 2004, January 27, 2005, February 25, 2005, March 15, 2005, and March 21, 2005. The Court, at the request of the parties, referred them to ADR on September 30, 2004.

The Court was advised on January 27, 2005, that Kennedy's demand was $1,200,000.00 and Point Dedicated's offer was $800,000.00. On March 15, 2005 at a pre-trial conference, the Court was advised Point Dedicated offered $900,000.00, and counsel for Kennedy, Joseph Dietrich, III, Esq. (Dietrich) indicated he needed to further discuss that number with his client. Apparently, Dietrich recommended that his client accept the $900,000.00 offer.

Thereafter, on March 25, 2005, Kennedy discharged Cellino & Barnes and in effect rejected the offer of $900,000.00. At the request of the Beltz firm, who stated to the Court they were Kennedy's new counsel, the April 19, 2005 trial date was rescheduled for March 14, 2006.

On April 7, 2005, by letter, the Beltz firm informed Cellino & Barnes that Kennedy had elected that the fee due Cellino & Barnes be determined based on a fixed dollar amount [*2](quantum meruit) rather than on a contingency basis at the conclusion of the case.

Cellino & Barnes brought an Order to Show Cause seeking to establish their lien based on the contingency fee arrangement contained in the January 4, 2002 Retainer Agreement.

The Beltz firm initially appeared in opposition to the Order to Show Cause and stated on the record, in open court, that they had a signed retainer agreement with Kennedy entitling the Beltz firm to a one-third contingency fee. Subsequently, the Beltz firm stated its written Retainer Agreement was in fact contingent upon Cellino & Barnes being paid on a quantum meruit basis. Therefore, despite having asked the Court to reschedule the trial dates and having appeared on the return date of Cellino & Barnes' Order to Show Cause, the Beltz firm then decided it did not in fact represent Kennedy.

This Court nonetheless, relying on the Beltz firm's scheduling request and their on the record statements, determined that the fee dispute was between the two law firms, and directed that the one-third contingency fee arrangement contained in both Retainers would be allocated among the attorney's on a quantum meruit basis at the conclusion of the matter. Kennedy was offered the opportunity to contend that the discharge of Cellino & Barnes was for cause, but declined to do so.

Kennedy appealed and the Appellate Division, Fourth Department held that the dispute regarding fees was not between the attorneys, but was between Kennedy and Cellino & Barnes.

As the Appellate Division, Fourth Department stated, "It is settled that a client may discharge an attorney at any time, with or without cause . . . . As against the client a discharged attorney may recover the fair and reasonable value of the services rendered ..., determined at the time of discharge and computed on the basis of quantum meruit . . . " (Kennedy v. Point Dedicated, 31 AD3d 1117, 1118; quoting Matter of Cohen v. Granger Tesoriero & Bell, 81 NY2d 655, 658).

The Appellate Division, Fourth Department remitted the matter to this Court for further proceedings to determine the fee of Cellino & Barnes on a quantum meruit basis. In making that determination this Court was directed to consider (1) the terms of the percentage agreement (2) the nature and complexity of the litigation (3) the time spent (4 ) the results achieved (5) the attorney's experience, ability and reputation and (6) the fee typically charged by other attorneys in the same locality for similar services (Kennedy v. Point Dedicated, 31 AD3d 1117, 1119; citing Padilla v. Sansivieri, 31 AD3d 64; Schneider, Kleinick, Weitz, Damaskle & Shoot v. City of New York, 302 AD2d 183; Rosenzweig v. Gomez, 250 AD2d 664; also Smith v. Boscov's Dept. Store, 192 AD2d 949; see also Matter of Tillman v.Komar, 259 NY 133).

The Appellate Division, Fourth Department decision in this matter was issued on July 7, 2006. The Court had counsel for Kennedy and Cellino & Barnes in for a conference on August 18, 2006 to discuss any discovery issues. Initially, counsel discussed depositions of Kennedy, Barnes and Dietrich. Counsel returned for additional discussions with the Court on August 30, 2006, September 20, 2006 and September 27, 2006.

A hearing was scheduled for December 14, 2006. An Order to Show Cause regarding discovery issues was heard on November 1, 2006.

Finally, counsel, by letters dated December 14, 2006 and December 20, 2006, agreed to submit the matter on papers, without the necessity of a hearing, unless otherwise directed by the [*3]Court. Counsel agreed to a schedule of submissions to the Court that ran into February of 2007.

The Court received the affidavits of Dietrich, dated January 16, 2007, and the Cellino & Barnes' designated expert Richard Griffin, Esq., dated January 18, 2007. Kennedy filed a motion on February 5, 2007, seeking to dismiss the Cellino & Barnes lien. The responsive affidavit from counsel for Cellino & Barnes was served on February 16, 2007. The Kennedy motion was returnable on February 23, 2007. On February 20, 2007 counsel for Kennedy, in writing, advised the Court that Kennedy's motion to dismiss the lien would be submitted without oral argument. Finally, on February 23, 2007, counsel for Kennedy submitted their Reply Affirmation and Reply Memorandum of Law.

The January 4, 2002 Retainer Agreement, signed by Kennedy with Cellino & Barnes, provides for a one-third contingent fee on the net recovery after the deduction of expenses and disbursements.

Additionally, in light of Kennedy's sporadic work history and minimal earnings prior to the accident (net $7,000.00 from his self-employment as an interior landscape designer), a large economic loss award was problematic. Counsel needed to work with the economic projections of Dr. Reiber.

The Court notes the language used by the Appellate Division, "the time spent" not as Kennedy's counsel seems to prefer "hours spent".

The agreed upon contingency fee arrangement, established by the January 4, 2002 Retainer Agreement between Kennedy and Cellino & Barnes, serves to explain the failure by Cellino & Barnes to keep any contemporaneous time records for this file. In any event, failure to maintain contemporaneous time records would not absolutely preclude Cellino & Barnes from recovering fees if other means were available to determine the value of Cellino & Barnes services (Costello v. Kiaer, 278 AD2d 50; Matter of Greenleaf, 256 AD2d 179).

The affidavit of Richard Griffin, Esq. establishes that very few, if any, personal injury firms keep time records, which record time spent on a daily basis for each case and the nature of services rendered. Nor, is there any rule, regulation or ethical opinion requiring them to do so, when there exists a valid retainer containing a contingency fee arrangement.

The affidavits of Dietrich, dated April 11, 2005, May 5, 2005 and January 16, 2007 and their attachments, establish the extensive time spent by the Cellino & Barnes firm on this file. Additionally, the expert affidavit of Richard Griffin, Esq. also points out the "extraordinary amount of work" performed by Cellino & Barnes.

An award in quantum meruit (as much as is deserved) should in all cases reflect the [*4]court's assessment of the qualitative value of the services rendered ,and must be made after weighing all relevant factors that should be considered in valuing legal services (Padilla v. Sansivieri, 31 AD3d 64). Quantum meruit is not limited to a mere mathematical calculation based on the number of hours worked multiplied by a reasonable hourly rate (id.; see also Decolator, Cohen & DiPrisco v. Lysaght, Lysaght & Kramer, 304 AD2d 86; Cordes v. Purcell Fritz & Ingrao, 89 AD2d 870).

A discharge of an attorney, other than for cause, must be made on conditions that are fair to the client and the discharged attorney (Tenney v. Berger, 93 NY 524). A client's right to discharge counsel does not permit the client to deprive the discharged attorney of the reasonable value of his services (Matter of Krooks, 257 NY 329; Matter of Levy, 249 NY 168).

In valuing personal injury practices in matrimonial actions, Courts have often determined that a case has one-third of its value upon the signing of the Retainer Agreement. This appears to be a generally recognized concept among attorneys, reflected in the concept of a one-third referral fee. Courts have applied the next one-third value of the case to the discovery and preparation phase of litigation. Courts have applied the next one-third value of the case to the actual trial of the litigated matter.

As of March 15, 2005 Cellino & Barnes, at a pre-trial conference with the Court, obtained an offer of $900,000.00 from Point Dedicated.

Richard Griffin, Esq., in his expert's affidavit, opines that in his opinion and based on his years of relevant experience, a settlement value of $900,000.00 was appropriate in this case. This opinion as to the value of the matter stands unchallenged.

Kennedy relies on In re Rosedale and St. Lawrence Avenues, 219 NY 192, to contend that a discharged attorney has no right to claim payment pursuant to the terms set forth in the Retainer Agreement. This Court agrees. The Court of Appeals in Rosedale, stated "the client has the right to end the employment at any time before complete performance, and the value of the services then rendered becomes the measure of the attorney's reward".

However, in Rosedale (id at 193), the Court notes "the attorney now before us has made no attempt to prove the value of his services up to the date of the termination of his employment". Clearly, that is not the case here. It is unquestioned that Point Dedicated offered, in a pre-trial conference with the Court, $900,000.00 to settle this matter. Apparently, Kennedy, after discussion of the matter with the Beltz firm, rejected the offer and discharged Cellino & Barnes. Although Kennedy might believe his case is worth more than $900,000.00, he cannot dispute that Cellino & Barnes' efforts between January 4, 2002 and March 15, 2005 resulted in an offer of $900,000.00.

Again, the unchallenged affidavit of Richard Griffin, Esq., established that Cellino & Barnes concentrates their practice on personal injury cases and has considerable experience, expertise and success. Apparently, in the five years preceding March 2005, Dietrich, had achieved thirteen verdicts or settlements between $750,000 to $11,000,000.00.

It is unchallenged that a one-third contingency fee arrangement in personal injury actions [*5]is the norm in New York State and Western New York.

The Court recognizes that there are $17,000.00 in disbursements on this file that were due and owing to Cellino & Barnes, to which they are entitled, if not already paid. Therefore, in light of the signed Retainer Agreement, Cellino & Barnes would have received $294,039.00 as their fee, if the case had been settled on March 25, 2005. Cellino & Barnes legal expert, Richard Griffin, Esq., after subtracting $10,000.00 for additional work not required to be performed by Cellino & Barnes in light of their discharge, opines that Cellino & Barnes is entitled to a quantum meruit award of $284,039.00.

Current counsel for Kennedy contends, in the absence of any hourly records or breakdown, Cellino & Barnes is not entitled to any recovery of attorney's fees.

The Court rejects both positions. Kennedy has rejected the $900,000.00 offer of settlement from Point Dedicated, requiring the eventual trial of this case. As Dietrich pointed out in his January 16, 2007 affidavit, if his client had rejected the offer, he was ready, willing and able to go to trial on the matter. Clearly, that obligation to proceed to trial will fall to Kennedy's next attorney, and that attorney needs to be compensated for his/her efforts at trial.

Therefore, Cellino & Barnes' fee in the case of Kennedy v. Point Dedicated is established by this Court, on the facts, at $195,830.00. Cellino & Barnes' fee is a lien against any recovery in the underlying matter.

For the reasons stated above, Kennedy's motion or cross-motion to dismiss the lien of Cellino & Barnes is denied.

Trial counsel for Kennedy, or Kennedy pro se, and counsel for Point Dedicated are to appear in Part 37, on May 23, 2007 at 1:00 p.m. for the scheduling of trial dates.

SO ORDERED:

HON. PATRICK H. NeMOYER, J.S.C.