The opinion
State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: November 17, 2016 522417
________________________________
In the Matter of the Estate
of BRADLEY MARC GINSBURG,
Deceased.
HOWARD I. GINSBURG, as
Administrator of the MEMORANDUM AND ORDER
Estate of BRADLEY MARC
GINSBURG, Deceased,
Respondent;
McCALLION & ASSOCIATES LLP
et al.,
Appellants,
et al.,
Respondents.
________________________________
Calendar Date: September 8, 2016
Before: Garry, J.P., Egan Jr., Lynch, Rose and Aarons, JJ.
__________
McCallion & Associates LLP, New York City (Kenneth F.
McCallion of counsel), for McCallion & Associates LLP, appellant,
and Leland T. Williams, Rochester, appellant pro se.
Holmberg Galbraith, LLP, Ithaca (Anna K. Holmberg of
counsel), for respondent.
__________
Egan Jr., J.
Appeals from those parts of an amended decision and a
decree of the Surrogate's Court of Tompkins County (Cassidy, S.),
entered June 19, 2015 and July 8, 2015, which granted
petitioner's motion to compromise the wrongful death claim
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asserted by decedent's estate.
On February 17, 2010, Bradley Marc Ginsburg (hereinafter
decedent), then a freshman at respondent Cornell University in
Tompkins County, jumped to his death from the Thurston Avenue
Bridge – one of several bridges extending across the gorges
located on or near Cornell's campus. The bridge in question,
which spans Falls Creek Gorge and connects two portions of
Cornell's campus, is owned by respondent City of Ithaca.
Petitioner, who is both decedent's father and an attorney
licensed to practice in this state, was granted letters of
administration in May 2011 and thereafter retained respondent
Leland T. Williams as counsel for the estate. In late 2011,
Williams commenced an action upon petitioner's behalf against,
among others, Cornell and the City of Ithaca in the United States
District Court for the Northern District of New York. The
complaint set forth 14 causes of action sounding in, among other
things, wrongful death and premises liability and sought damages
in the amount of $180 million, including $12 million in punitive
damages.
After District Court dismissed the punitive damages claim
and all claims against those Cornell representatives or employees
named in their individual capacities, petitioner terminated
Williams' representation and retained respondent McCallion &
Associates, LLP (hereinafter the firm) as counsel.1 Thereafter,
Kenneth F. McCallion (hereinafter McCallion) – a principal
therein – entered into settlement negotiations with Cornell and
the City of Ithaca upon petitioner's behalf. After much
discussion, the parties devised a proposed settlement of the
wrongful death claim – specifically, that petitioner would accept
a monetary sum from the City of Ithaca and, as to Cornell, would
agree that a scholarship would be established in decedent's
1
District Court subsequently dismissed the balance of the
negligence claims against Cornell and the City of Ithaca
(alleging personal injury, conscious pain and suffering, in loco
parentis and contractual relationship) – leaving only the
wrongful death claim intact.
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name.2 While McCallion was not opposed to this resolution, he
advised petitioner via email that, "[b]efore [he] sign[ed] onto
any settlement proposal," petitioner and the firm would need to
"reach an understanding as to the allocation of any settlement
funds" – namely, that "the balance of the net cash component of
the settlement," then anticipated to be $200,000, would be
allocated to the firm as counsel fees. In response, petitioner
advised District Court that he, in his capacity as co-counsel,
would be handling all further negotiations, and McCallion was
excluded from the settlement conferences that followed.
In September 2014, petitioner entered into stipulations of
settlement with Cornell and the City of Ithaca resolving the
wrongful death claim. Specifically, the City of Ithaca agreed to
pay $100,000 in settlement of the District Court action against
it, and Cornell agreed to establish a perpetual scholarship in
memory of decedent. Although documentation in the record
reflects that such scholarship, if funded by a private donor,
would have required an endowment of approximately $1.6 million,
the stipulation of settlement provided that the scholarship would
be established "using existing financial aid funds" and, inasmuch
as Cornell was neither "allocating any new money" to the
scholarship nor otherwise making any payment to petitioner, the
scholarship itself had "no monetary value" – except to the
student recipients thereof. District Court thereafter signed off
on the respective stipulations of settlement.
In November 2014, petitioner sought leave in Surrogate's
Court to compromise the wrongful death claim against Cornell and
the City of Ithaca. In conjunction therewith, petitioner asked
that both Williams and the firm (hereinafter collectively
referred to as respondents) be denied counsel fees – essentially
contending that Williams and McCallion each had engaged in
conduct that was contrary to the interests of the estate.
Respondents opposed petitioner's requests and cross-moved to,
among other things, disapprove the settlement agreements and
sanction petitioner in accordance with Judiciary Law § 487. By
2
Cornell "made clear that this would be the only basis
upon which [it] would settle the case."
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amended decision entered June 19, 2015, Surrogate's Court, among
other things, granted petitioner's request to compromise and
settle the wrongful death claim, allocated the $100,000
settlement received from the City of Ithaca to that claim and,
after deducting for funeral fees ($19,080.63) and litigation
expenses ($45,324.95 for the firm and $1,866 for Williams),
awarded counsel fees to respondents consistent with the terms of
the respective retainer agreements – $7,420.25 to Williams and
$11,241.68 to the firm. After deducting the fees and
disbursements due to petitioner's attorney, petitioner and his
spouse – as the sole distributees of decedent's estate – received
$3,560.37. Surrogate's Court thereafter entered a decree to that
effect, and respondents now appeal from portions of the amended
decision and decree – most notably with respect to the court's
finding that the settlement with Cornell did not have any
monetary value to decedent's estate and, hence, was not properly
included in the computation of counsel fees.3
The crux of respondents' argument upon appeal is that
Surrogate's Court abused its considerable discretion in
permitting petitioner to compromise and settle the wrongful death
claim against Cornell and the City of Ithaca – specifically, that
Surrogate's Court improvidently determined that the scholarship
established by Cornell in memory of decedent had no monetary
value for purposes of computing the requested counsel fees. We
disagree.
There is no question that a client "may at any time before
judgment, if acting in good faith, compromise, settle, or adjust
his [or her] cause of action out of court without [counsel's]
intervention, knowledge, or consent, notwithstanding any
contingent fee agreement and even though he [or she] has agreed
with [counsel] not to do so" (Dagny Mgt. Corp. v Oppenheim &
3
No appeal lies from the amended decision of Surrogate's
Court; rather, it is the decree itself that constitutes an
appealable paper (see Matter of Carvel, 97 AD3d 571, 571-572
[2012]; Matter of Cassini, 95 AD3d 1310, 1310 [2012]).
Accordingly, respondents' appeal from the amended decision is
dismissed.
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Meltzer, 199 AD2d 711, 713 [1993] [internal quotation marks and
citation omitted]; see Rules of Professional Conduct [22 NYCRR
1200.0] rule 1.2 [a]). Similarly, "notwithstanding the terms of
the agreement between them, a client has an absolute right, at
any time, with or without cause, to terminate the attorney-client
relationship by discharging the attorney" (Campagnola v
Mulholland, Minion & Roe, 76 NY2d 38, 43 [1990]; see Doviak v
Lowe's Home Ctrs., Inc., 134 AD3d 1324, 1326 [2015], lv denied 27
NY3d 904 [2016]). Finally, "Surrogate's Court is vested with
broad discretion to fix the reasonable compensation of an
attorney who renders legal services to a fiduciary of an estate,
subject to modification only where that discretion has been
abused" (Matter of Benware, 121 AD3d 1331, 1332 [2014] [citations
omitted]). Notably, such authority is "independent of the terms
of a retainer agreement or the consent of interested parties to
the requested compensation" (Matter of Elenidis, 120 AD3d 1229,
1231 [2014], lvs denied 24 NY3d 910 [2014], 25 NY3d 904 [2015];
see Matter of Greenfield, 127 AD3d 1189, 1191 [2015], lv denied
26 NY3d 904 [2015]).
Contrary to respondents' assertion, we discern no basis
upon which to disturb the determination of Surrogate's Court that
petitioner, a licensed and experienced real estate attorney,
exercised due diligence in the performance of his fiduciary
duties relative to decedent's estate, including giving careful
consideration to the settlement offers at issue. Nor are we
persuaded that petitioner's ultimate decision to compromise and
settle the wrongful death claim against Cornell and the City of
Ithaca in exchange for $100,000 and the establishment of a
perpetual scholarship in decedent's memory evidenced bad faith or
otherwise called into doubt the performance of his fiduciary
duties. Hence, as to the award of counsel fees, the issue
primarily distills to whether Surrogate's Court abused its
discretion in concluding that the subject scholarship had no
monetary value to decedent's estate.
The retainer agreement entered into between Williams and
petitioner obligated petitioner to pay counsel fees in a
specified percentage "of any net recovery obtained"; a similar
provision in the agreement reached between the firm and
petitioner entitled the firm to a fee in the amount of one third
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"of any amounts received by [petitioner] by way of settlement,
judgment or award, after deduction of any outstanding and unpaid
expenses." Respondents argue upon appeal, as they did in
Surrogate's Court, that the perpetual scholarship established by
Cornell in decedent's name had a minimum value of $1.6 million
and, therefore, their respective contingent fees should be based
upon such value plus the $100,000 monetary settlement received
from the City of Ithaca. Respondents' argument on this point,
however, misses the mark.
To be sure, the record reflects that, if the memorial
scholarship had been established by means of an endowment, a
private donation of approximately $1.5 to $1.6 million would have
been required to fund such scholarship in perpetuity. As set
forth in the affidavit from one of Cornell's representatives,
however, "Cornell never offered an endowed scholarship and made
clear that [it] would not do so." Rather, Cornell repeatedly
indicated "that existing financial aid funds would be used to
fund the scholarship, that federal regulations applicable to
Cornell as the administrator of such funds would apply, that the
recipient(s) would have to be financial aid eligible, and that
the recipient(s) would receive only the amount they would
otherwise be qualified to receive under applicable federal law
and Cornell financial aid policies." To that end, the
stipulation of settlement between petitioner and Cornell contains
the following language: "Cornell is solely using existing
financial aid funds to establish the scholarship . . . and is not
allocating any new money to fund this scholarship. Cornell [has]
insisted, and the parties agreed[,] that Cornell would not make
any payment to [petitioner] in any way whatsoever, whether
monetary or otherwise. There is no monetary value or any other
value to [petitioner] with regard to this settlement and no such
payment is incorporated in these terms of settlement. The
monetary value of the scholarship is only to those students who
receive a scholarship and no one else."
Regardless of whether this language was inserted into the
final stipulation of settlement at Cornell's behest (as the
record suggests) or upon petitioner's insistence (as respondents
assert), the fact remains that petitioner simply did not receive
any money or any other tangible assets from Cornell as a result
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of the settlement.4 Rather, as Surrogate's Court appropriately
found, petitioner – in his representative capacity as the
administrator of decedent's estate – received in settlement from
Cornell only the sentimental, "symbolic or moral value" of the
scholarship established in decedent's name. As the scholarship
itself clearly was not an asset of decedent's estate, Surrogate's
Court did not abuse its discretion in computing respondents'
respective counsel fees based solely upon the $100,000 monetary
settlement received from the City of Ithaca. To hold otherwise
not only would ignore the plain language of the stipulation of
settlement with Cornell but, further, would misconstrue the
nature of the scholarship itself by assigning – to decedent's
estate – a monetary value or benefit that exists only with
respect to the scholarship's actual recipients. Adopting
respondents' valuation analysis also would obligate decedent's
estate, which ultimately received less than $4,000 in settlement
proceeds and otherwise is devoid of assets, to pay a six-figure
bill for counsel fees – a result that hardly can be characterized
as reasonable, equitable or just. Respondents' remaining
contentions, to the extent that they do not lie outside the
jurisdiction of Surrogate's Court in the first instance (see SCPA
201), have been examined and found to be lacking in merit.
Garry, J.P., Lynch, Rose and Aarons, JJ., concur.
4
Indeed, as set forth in the affidavit of Cornell's
representative, "Cornell never offered – and would not have
established – the scholarship as an asset to the [e]state."
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ORDERED that the appeal from the amended decision entered
June 19, 2015 is dismissed, without costs.
ORDERED that the decree entered July 8, 2015 is affirmed,
without costs.
ENTER:
Robert D. Mayberger
Clerk of the Court