The parties entered into a written engagement agreement pursuant to which plaintiff agreed to provide legal services in connection with the proposed sale of defendant's business in exchange for the payment of plaintiff's hourly rates. Plaintiff would bill defendant upon the earlier of either defendant's abandoning the proposed sale or the closing of the proposed sale. The engagement letter permitted defendant to discharge plaintiff for any reason and at any time, upon reasonable notice. In the event of discharge, plaintiff would be entitled to all unpaid fees, costs, out-of-pocket expenses, and disbursements, within 30 days of being discharged. Plaintiff was also permitted to withdraw from representation of defendant under certain circumstances. In the event of withdrawal, defendant was to immediately pay all unpaid fees, costs, out-of-pocket expenses, and disbursements to plaintiff. The parties entered into an amended engagement agreement in which plaintiff agreed to defer payment for additional work until the end of the proposed sale engagement. The amended engagement agreement was substantially identical to the engagement letter. Plaintiff's retention ended acrimoniously.
The court rejects defendant's argument that it was entitled to partial summary judgment limiting plaintiff's recoverable fees to the ratable proportion of the work it completed based on plaintiff's initial fee estimate provided at the start of the parties' business relationship. The record is clear that the parties never agreed to a cap on fees and defendant does not eliminate any issues of fact concerning the amount of the fee estimate or explain what the pro rata share of fees would be.
Plaintiff is granted summary judgment as to liability since it established that there was a valid contract for legal services; that, pursuant to the contract, plaintiff performed legal work for defendant's benefit; and that, following termination of plaintiff's services, defendant has not paid plaintiff. The court defers for trial the issue of the amount of damages and the issue of whether the firm impermissibly charged an excessive fee.
White & Case LLP v. Shipman Assoc, LLC, NY Slip Op 01249 (1st Dep't March 9, 2023)
