Surrogate must decide if fee is reasonable (NY)


The surrogate in Suffolk County must determine whether a $590,000 fee paid to an attorney who spent “several days” negotiating a settlement in a will dispute was reasonable, a unanimous panel of the Appellate Division, Second Department, has ruled.

The decision in Matter of Talbot, 4067/10, gives Karen Cullin, the sole beneficiary of a $5 million estate, a chance to reclaim a portion of the contingency fee she had already paid an attorney under the terms of a retainer agreement.

Ms. Cullin, who was a friend of the decedent, retained James Spiess, a partner at McNulty-Spiess in Riverhead, in 2007 to represent her in a will contest when nine people had objected to its terms. Seven of the objectors claimed to be blood relatives of the deceased woman, Jo D. Talbot, who was blind and had died in 2005.

There had been two wills prior to the final one signed by Ms. Talbot six days before she died. The final will named Ms. Cullin as sole beneficiary. About six months earlier, Ms. Talbot had given Ms. Cullin power of attorney. According to Ms. Cullin’s lawyer, Paul W. Haug, of Lehigh Acres, Fla., the earliest will, like the last, made Ms. Cullin the sole beneficiary. The remaining will did not leave anything to her.

A settlement was reached in March 2007. The witnesses to the disputed will had testified, as had the attorney who drew it up, that during the month it took to reach an agreement there had been “several days of negotiations,” according to affirmation submitted by Mr. Spiess.

The settlement agreement provided that Ms. Cullin receive $4 million in liquid assets and the objectants receive $115,000.

In addition to paying $590,000 to Mr. Spiess, Ms. Cullin was required to pay $240,000 to cover the legal fees of several other parties, according to Mr. Haug.

Both sides are in agreement that initially Ms. Cullin, who could not afford to pay an attorney, had agreed to a one-third contingency fee plus a $5,000 retainer. But, before the agreement was finalized, Ms. Cullin asked, and Mr. Spiess agreed, that fee would be capped at $600,000.

According to Mr. Spiess’ affidavit, Ms. Cullin lacked the funds to pay the $5,000 but instead borrowed that amount from a friend who had accompanied her to the lawyer’s office.

In 2009, with Mr. Haug as her attorney, Ms. Cullin petitioned Suffolk County Surrogate John M. Czgier to review the reasonableness of the fees pursuant to his authority under Surrogate Procedure Act §2110.

Surrogate Czgier rejected the request, writing that it was “well settled” that courts will enforce contingency agreements unless an attorney has forfeited his right by “misconduct, or an agreement induced by fraud, or…taken some unconscionable advantage of his client.”

The panel, which heard argument on April 7, 2011, disagreed and found that surrogates have a broader responsibility to determine whether fees are reasonable.

“The surrogate bears the ultimate responsibility of deciding what constitutes a reasonable legal fee, regardless of the existence of a retainer agreement or whether all of the interested parties have consented to the amount of fees requested,” the panel concluded.

Justices Peter B. Skelos, John M. Leventhal, Sandra L. Sgroi and Robert J. Miller sat on the panel.

Mr. Spiess was represented by Anthony C. Pasca of Esseks, Heftner & Angel in Riverhead, who declined to comment.


Surrogate Must Decide If Fee Is Reasonable
Daniel Wise
May 17, 2011
New York Law Journal