Lawyer-Judge Backs Firm's Demand for $414,000 in Fee Dispute

Judge Backs Firm's Demand for $414,000 in Fee Dispute
The New York Law Journal by Joel Stashenko  -  May 8, 2012

Emery Celli Brinckerhoff & Adaby is due more than $414,000 in fees from a disgruntled client who contended the law firm mishandled the accounting of a stock transfer transaction and other matters in what became an acrimonious attorney-client relationship, a judge has ruled.  Manhattan Supreme Court Justice Joan Madden held that the "account stated rule," in which a client who pays part of a bill is generally deemed to have accepted the entire billing as valid, dictates the payment of the amount the firm says Michael Rose owes it.  Also in Emery Celli Brinckerhoff & Adaby v. Rose, 103871/10, Madden denied Rose's request to temporarily stay the effect of the summary judgment order directing him to pay the bill for legal services rendered between 2006 and 2009 so he could begin discovery on whether Emery Celli committed legal malpractice or misconduct.  The judge said she had already rejected Rose's motion for an adjournment on Nov. 22, 2011. And she noted that she had earlier given Rose an April 25, 2011, deadline to amend his answer and include a malpractice action if he wanted to, but he did not do so.  "It is now too late in that 'game' to seek a stay in proceedings to conduct discovery or even a stay of the motion for summary judgment, which was fully submitted when this court denied Rose's request for an adjournment in its November 22, 2011, decision," Madden wrote in her latest ruling, dated April 27.  She cited Ward v. New York City Housing Authority, 18 AD3d 391 (2005), in which the Appellate Division, First Department, found that a lack of discovery was due to the failure by a defendant to take timely steps to obtain evidence he claimed was necessary to oppose summary judgment.  Here, Madden wrote that Rose had hinted for more than a year in 2009 and 2010 about his intention to file a malpractice action against Emery Celli but had never done so.  At this point, the judge said, it would be a time-consuming process for Rose to straighten out his opposition papers to state a coherent malpractice action because the papers mix "assertions of fact and law in an, at best, confusing manner" and are not in conformity with the CPLR.  Madden called Rose's filings "convoluted."

"The court concludes that Rose's request to resubmit his papers in opposition to ECBA's [Emery Celli's] motion for summary judgment and his motion for a stay are part of his long-established pattern of obfuscation and delay," Madden wrote.  Rose retained Emery Celli in 2005 to negotiate a buy-back of stock in the family business, the Broadside Reality Corporation, from Rose's two step-sisters and one of the step-sister's sons.  Rose hired Emery Celli for an initial retainer of $50,000 and the firm agreed to bill the real estate company for the hourly services of its attorneys thereafter. Emery Celli said it represented Rose or Broadside Realty in three subsequent suits stemming from Rose's efforts to gain control of the company.  In April 2008, Emery Celli negotiated a settlement with the other shareholders under which Rose would get back all outstanding stock for $12 million.  Emery Celli alleged that Rose, after sporadic payments to the law firm, stopped in 2009.  Rose countered that he had complained that the firm's billings were exorbitant and that he believed the settlement engineered by Emery Celli was designed to allow the step-sisters and the son to avoid paying their proper share of stock transfer taxes.  Rose based his effort to amend his action on an e-mail he said was written by the law firm in October 2009 showing that Emery Celli knew about mischarges in the transfer taxes. The judge countered, however, that the e-mail does not appear to reveal any such knowledge or significant new information, does not by itself demonstrate a valid claim for malpractice and was entered into the record contrary to CPLR rules.  Madden noted that Emery Celli attorneys had warned Rose after the settlement to retain a tax attorney, which he did, because the litigation firm does not do tax law. The judge also said invoices sent to Rose by Emery Celli detailing the outstanding bills seemed to be in order and, at any rate, were not rebutted by Rose as to why or when they were excessive.  What is clear, Madden said, is that the rhetoric by Rose had gotten more heated as time has gone by.  At one point, she noted, Rose contended in his papers that an expert witness was not necessary for Madden to conclude that malpractice was involved in the handling of the transfer tax because even a "highly trained circus bear could get this right."  In his latest filing with the judge, Rose suggested that the transfer tax question was not only malpractice, but possibly a RICO violation.  Madden said she agreed with Emery Celli's contention that the account stated rule makes Rose liable for the outstanding balance. She ruled that Rose cannot invoke legal malpractice as a defense against account stated in this matter because he failed to show how Emery Celli had actually committed malpractice.  Richard Emery said yesterday in an interview that the ruling is "especially appropriate in light of the fact that we achieved success for our client, who then decided not to pay us."  "He got exactly what he wanted—total control of his family company," Emery said.  Frederick Oberlander of Montauk, who represented Rose, did not return a call for comment.  |Joel Stashenko can be contacted at jstashenko@alm.com.