In this administrator's accounting proceeding of an insolvent estate, the decedent Scott Levy was a personal injury lawyer. One of the alleged creditors of the estate is the law firm of Parker & Waichman, LLP ("P&W"), which claims it is entitled to fees of $39,946.01 pursuant to fee-splitting agreements it had with the decedent; P&W's claim has been rejected by the administrator.

P&W now moves the court for an order compelling the administrator to comply with a previously-served discovery demand. The administrator opposes the motion on two grounds; first, that it is "burdensome, overbroad, immaterial and irrelevant"; and second, that P&W's status as a creditor must be determined before discovery can be had and P&W has failed to establish that it provided some work, labor, or services which contributed to the earning of the fees, which the administrator contends is a necessary prerequisite for a valid and enforceable fee-splitting agreement.

For the reasons that follow, P&W's motion is held in abeyance pending a determination that the fee-splitting agreements between P&W and decedent are binding and enforceable such that P&W may be deemed a creditor of decedent's estate.

BACKGROUND

On November 30, 1995, P&W sent the first of seven letters to Scott Levy, Esq. of Levy and Holmes, to confirm the fee-splitting arrangement to which the parties had agreed for negligence matters referred by P&W to Levy. According to the record, P&W sent its final letter to Levy decedent on February 6, 1998.

Levy failed to pay petitioner promptly, and in the parties' Stipulation, dated May 22, 2003, Levy agreed to apply for a home equity loan or to refinance his house to pay off his debt.^[FN1] Although Washington Mutual subsequently approved a residential mortgage loan for Levy's [*2]wife, administrator Meryl Levy, on November 25, 2003, Levy died before the closing on the loan took place. Thus, P&W never received the balance of the debt allegedly due.

Courts have held that "[a]ttorneys who share services and responsibility for a legal matter but who are not partners or associates may agree in advance on a division of fees based upon such responsibility and services" (Carter v Katz, Shandell, Katz and Erasmous, 120 Misc 2d 1009, 1016 [Sup Ct Queens County 1983]; Model Code of Prof'l Responsibility DR 2-107[A] [1990], hereinafter referred to as NY-DR § 2-107[A]).

When determining whether a fee-splitting agreement is enforceable, courts do not inquire into whether the division of the attorney's fee is proportionate to the work actually performed by each attorney (Oberman v Reilly, 66 AD2d 686, 687 [1st Dept 1978]; Aiello v Adar, 193 Misc 2d 649, 656 [Sup Ct Bronx County 2002]). Instead, "an agreement between attorneys for the division of a legal fee is valid and enforceable in accordance with the terms set forth in the agreement so long as the attorney who seeks his share of the fee has contributed some work, labor or service toward the earning of the fee" (Witt v. Cohen, 192 AD2d 528, 529 [2nd Dept 1993] [citation omitted]; see also Reich v Wolf & Fuhrman, P.C., 36 AD3d 885, 886 [2nd Dept 2007]; Rozales v Pegalis & Wachsman, 127 AD2d 577, 578 [2nd Dept 1987]; In re Estate of Fuller, 122 AD2d 792 [2nd Dept 1986]; Aiello v Adar, 193 Misc 2d 649, 655 [Sup Ct, Bronx County 2002]; Oberman v Reilly, 66 AD2d at 687; but see Matter of Adoption of E.W.C., 89 Misc 2d 64, 77 [Sur Ct Nassau County 1976]). Accordingly, "there must be a showing that the forwarding attorney did more than a mere recommendation of a lawyer" (Aiello v Adar, 193 Misc 2d 649, 656 [Sup Ct, Bronx County 2002]; Benjamin v Koeppel, 85 NY2d 549, 556 [1995]).

Although "[i]t has been observed that where reasonable and freely negotiated, . . . a contingent fee agreement, as with any contract' should be enforced in accord with the parties' intentions[,]" Lynn v Purcell, 11 Misc 3d 400, 406 [Sup Ct Nassau County 2005], quoting Alderman v Pan Am World Airways, 169 F3d 99, 102-104 [2d Cir 1999], "[a] fee sharing [*3]agreement which violates the Code of Professional Responsibility is void as against public policy"(Lynn v Purcell, 11 Misc 3d at 406 [citation omitted]).

Pursuant to NY-DR § 2-107(A),^[FN2] if attorneys who are neither partners nor associates of the same firm enter into a fee-splitting arrangement, there must be proper disclosure to the relevant clients. "A client is simply to be made aware that another attorney is jointly or independently representing his or her interests at no additional expense to her therefor. Any further elaboration or specificity regarding the exact arrangement between the collaborating attorneys is not ethically mandated by this Code provision" (Carter v Katz, Shandell, Katz and Erasmous, 120 Misc 2d at 1018; see NY-DR § 2-107[A][1]). The Model Code of Professional Responsibility also mandates that the attorney's fee be reasonable, in the aggregate, for the fee-splitting agreement to be enforceable (NY-DR § 2-107[A][3]; see also, Alderman v Pan Am World Airways, 169 F3d 99, 102 [2d Cir 1999] [stating that courts have broad discretion "to refuse to enforce contingent fee arrangements that award fees that exceed a reasonable amount"]).

Finally, NY-DR § 2-107(A) states that an attorney's fee "may be divided [among lawyers who are neither partners nor associates of the same firm] in proportion to the services performed by each lawyer . . . [or] the fee may be divided without regard to that proportion if each lawyer by a writing given the client . . . assumes joint responsibility ^[FN3] for the representation'" (Aiello v Adar, 193 Misc 2d at 657;NY-DR § 2-107[A][2] [1990] [upholding fee-splitting agreement because proponent of agreement "took a more active role in the action than merely referring the case[,]" provided full disclosure to client regarding such agreement, and assumed joint responsibility of the case], quoting NY-DR § 2-107[A] [1990]; compare Ford v Albany Med. Ctr., 283 AD 843, 843-44 [3rd Dept 2001] [concluding that because the attorney failed to assume joint responsibility for the case in question, and his fee-splitting share was not commensurate with the amount of work he performed, fee-splitting agreement was unenforceable, but he was entitled to his portion of the attorney's fee based on quantum meruit]; and Dugan v Dorff Const. Co., 281 AD2d 158, 159 [1st Dept 2001] [finding fee-splitting [*4]agreement unenforceable because fee allotted to proponent of agreement was not commensurate with services rendered to the client]; and Nicholson v Nason and Cohen, P.C., 192 AD2d 473 [1st Dept 1993] [determining that fee-splitting agreement was unenforceable because proponent "admittedly gave no [written disclosure] to any of the clients, and whose work, the record establishes, was merely that of a finder, searching for potential clients and conducting non-investigative interviews"]).

P&W alleges that it is entitled to its share of the attorney's fees recovered by decedent on the matters P&W referred to him, pursuant to their fee-splitting arrangements. P&W contends that because it had joint responsibility over the cases in question, it "equally owned'" the cases, and is therefore entitled to its share of the attorney's fee recovered for each case.

However, there is insufficient evidence in the record for the court to determine that the fee-splitting agreements between P&W and decedent are binding and enforceable, and therefore, that P&W has a valid interest in decedent's estate. Most notably, it is unclear from the records whether P&W contributed at all to the attorney's fees recovered by decedent or simply referred the cases to decedent, and whether the relevant clients were informed of the fee-splitting arrangements agreed to by petitioner and decedent, pursuant to NY-DR § 2-107(A).

Unless there is evidence presented to support the conclusion that P&W is a creditor of decedent's estate, the court will find that P&W lacks standing to pursue this matter. Therefore, P&W's discovery motion is held in abeyance pending a showing that the fee-splitting agreements between P&W and decedent are binding and enforceable.

P&W is therefore directed to serve and file affirmations detailing the services it claims it performed to earn a portion of the fees at issue not later than July 11, 2007. Failure to provide such proof will result in denial of the instant motion and dismissal of its claim. The administrator may submit opposing affidavits no later than July 25, 2007, on which date the instant motion will be resubmitted for decision.

This constitutes the decision and order of the court.

Dated: June 28, 2007

JOHN B. RIORDAN

Judge of the

Surrogate's Court

The Appearances of Counsel are as follows:

Genser Dubow Genser & Cona(for Administratrix)

445 Broadhollow Road

Suite 19

Melville, NY 11747

Parker & Waichman(for Petitioner)

111 Great Neck Road

Great Neck, NY 11021