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This opinion is uncorrected and subject to revision
before
publication in the New York Reports.
-----------------------------------------------------------------2 No. 100
Perry Frankel,
Respondent,
v.
Karyn Frankel,
Defendant,
Schlissel, Ostrow, Karabatos,
Poepplein & Taub, PLLC,
Nonparty-Appellant.
Stephen W. Schlissel, for nonparty appellant.
Alexander Potruch, for respondent.
American Academy of Matrimonial Lawyers, New York
Chapter, amicus curiae.
ROSENBLATT, J.:
In matrimonial
litigation, counsel fee awards have helped reduce what would otherwise be a
substantial advantage to the monied spouse. Lawyers who represent non-monied
spouses may seek attorneys fees from the monied spouse in the divorce action
pursuant to Domestic Relations Law ' 237 (a). This
appeal raises the question whether attorneys may do so after their clients
have discharged them without cause. A divided Appellate Division said no. We
disagree and reverse.
The Frankels were married
in December 1988. The husband was a cardiologist and the wife a homemaker.
The husband filed for divorce in 1998, and Supreme Court granted it in 2001.
The wife paid her lawyer an initial retainer of $5,000, but the billings
soon went well beyond that amount. In June 1999, Supreme Court awarded the
wife's attorney an interim fee of $2,500. Nearly two years later, after a
32-day custody trial, the court granted an additional interim counsel fee of
$25,000 on March 12, 2001, to be paid by the husband at the rate of $1,500
per month. Eighteen days later, the wife discharged her lawyer without
cause. After taking into account the retainer and the two interim awards,
the wife's lawyer claimed that she owed him considerably more and proceeded
against the husband for that amount pursuant to Domestic Relations Law
' 237 (a). The court ruled that even though the
wife's attorney had been discharged, he could look to the husband for
counsel fees. The court then ordered a hearing before a special referee to
determine the appropriate award. On the husband's appeal, the Appellate
Division reversed, holding that "former counsel has no standing to pursue
the adversary spouse within the matrimonial action" (309 AD2d 65, 69 [2d
Dept 2002]).
Domestic Relations Law
' 237 (a) provides, in pertinent part, that
"[i]n any action or proceeding ... for a divorce
... the court may direct either spouse ... to pay such sum or sums of money
directly to the attorney of the other spouse to carry on or defend the
action or proceeding as, in the court's discretion, justice requires, having
regard to the circumstances of the case and of the respective parties."
The statute goes on to say that "[a]ny applications
for counsel fees and expenses may be maintained by the attorney for either
spouse in counsel's own name in the same proceeding." The provision is
silent, however, as to whether an attorney who has been discharged without
cause has the right in the same proceeding to seek counsel fees.
A divided Appellate
Division concluded that, because he was discharged, the wife's attorney had
no standing to proceed against the husband for counsel fees. The court
interpreted Domestic Relations Law ' 237 (a) as
authorizing only "the current attorney of record" to seek counsel fees
against a client's spouse (309 AD2d at 67). Reading the provision in light
of our precedents and the policy interests surrounding the statute, we agree
with the Appellate Division dissenters that Domestic Relations Law ' 237 (a)
allows an attorney who was discharged without cause to proceed against the
monied spouse in the matrimonial litigation.
In O'Shea v O'Shea
(93 NY2d 187 [1999]), we considered whether a trial court had discretion to
award fees under Domestic Relations Law ' 237 (a)
for legal services rendered before and after the divorce action. Although
the predecessor statute, former Civil Practice Act ' 1169, included language
limiting fees awards to services rendered "during the pendency" of an
action, this clause does not appear in the current statute. In concluding
that courts could award counsel fees for services performed both before and
after the divorce action itself, we looked not only to this textual change
but also to the policy underlying fee shifting in the divorce context. This
is a dramatic departure from the American rule that usually requires
litigants to pay their own legal expenses. We explained that giving courts
the power to order a spouse to pay the other's counsel fees "is designed to
redress the economic disparity between the monied spouse and the non-monied
spouse" and ensure that "the matrimonial scales of justice are not
unbalanced by the weight of the wealthier litigant's wallet" (id. at
190).
That is true here. If
lawyers terminated without cause lose their right to petition the court for
a fee award from an adversary spouse, the less affluent spouse would suffer
the consequences. The spouse with ready and ample funds would have a wide
choice of counsel, and the financial wherewithal to maintain the litigation,
while the non-monied spouse would struggle to find a lawyer who might have
to go unpaid. A matrimonial lawyer may be willing to carry a client on its
accounts receivable books, but not as to accounts that will prove
unreceivable. In this regard, the Legislature designed Domestic Relations
Law ' 237 (a) to eliminate the disparity between
the monied and the non-monied spouse. The husband's interpretation would
thwart the statutory intent.
As amicus American Academy of
Matrimonial Lawyers points out, the realities of contentious matrimonial
litigation require a regular infusion of funds. Although this is a
regrettable byproduct of divorce, interpreting the statute to preclude
applications like the one at issue here would confound the collection
process and discourage attorneys from representing non-monied litigants.
The husband argues that a rule
allowing a wife's discharged attorney to proceed against him would impede
settlements. We disagree. Allowing the application would enable a global
settlement that takes into account property distribution and other equities
that affect the outcome. Otherwise, the case would be "settled," leaving
unadjudicated the amount of the attorney's rightfully earned fees and
shifting the venue to a plenary proceeding -- another lawsuit, with the
unpleasant prospect of a judgment against the non-monied spouse.
Accordingly, the order of the Appellate Division
should be reversed, with costs, and the order of Supreme Court, Nassau
County, reinstated.
* * * * * * * * * * * * * * * * *
Order reversed, with costs, and order of Supreme
Court, Nassau County, reinstated. Opinion by Judge Rosenblatt. Chief Judge
Kaye and Judges Smith, Ciparick, Graffeo, Read and Smith concur.
Decided June 29, 2004
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