Cite as: Estate of Jo D. Talbot, 215 P 2006/C, NYLJ 1202578841854, at *1 (Surr. SU, Decided September 11, 2012)

Surrogate John M. Czygier

Decided: September 11, 2012

 

*1

 

This matter was returned to the court's reserve trial and hearing conference calendar after the court's decision/order dismissing the petition brought pursuant to SCPA 2110 was reversed by the Second Department for failing to determine the reasonableness of the legal fee in dispute. An application for leave to appeal the decision to the Court of Appeals was denied. After conducting a hearing in this matter, the court determines, for the reasons set forth herein, that the legal fee paid by petitioner is reasonable, and fixes it in the amount of $585,000.00, plus the initial retainer of $5,000.

Background and Procedural History

The essential facts recited in the court's earlier decision bear repeating here. Upon the death of subject decedent on December 20, 2005, a testamentary document purporting to be her last will and testament, dated December 14, 2005, was presented for probate. Two other purported earlier wills, dated August 21, 2005 and July 27, 2005,

 

*2

 

were on file with the court. After litigation concerning the entitlement of potential objectants to SCPA 1404 examinations, a stipulation of settlement was placed on the record in open court and the latest will dated December 14, 2005, under which petitioner is the sole residuary beneficiary, was admitted to probate. Subsequent litigation ensued, but the instant proceeding before the court concerns an application, pursuant to SCPA 2110, wherein petitioner asks the court to fix and determine the fee of the attorney who represented petitioner during the probate litigation, pursuant to a contingency fee agreement.

After issue was joined, both parties sought summary judgment by motion (petitioner) and cross-motion (respondent), premised upon the documentation produced as exhibits and the parties' sworn statements. Upon reviewing the submissions, the court determined that there was no indication that the contingency fee agreement was fraudulently procured and that petitioner was, apparently, competent to enter into such an agreement with respondent counsel. As a result, respondent's cross-motion for summary judgment dismissing the petition was granted (Estate of Talbot, File #215P2006/C, S. Czygier, 3/17/2010). On appeal, the Appellate Division, Second Department determined that this court "properly considered whether the contingency fee retainer agreement was fraudulently or otherwise wrongfully procured," but should fix and determine respondent's fee "…after consideration of the relevant factors…and an evaluation of the reasonableness of the retainer agreement" (In re Talbot, 84 AD3d 967, 968; citations omitted).

 

*3

 

After waiving discovery, counsel for the parties appeared for a hearing of this matter on June 11, 2012, at which time, counsel for petitioner agreed, on the record, to respondent's proposed statement of issues as the issues before the court in this matter, whereupon the statement of issues proposed by respondent and agreed to by petitioner's trial counsel was made Court Exhibit #1. The agreed upon issues for the court's determination are as follows:

Issue #1: Were the terms of the retainer agreement which was negotiated between the Respondent and the Petitioner and her personal attorney, for services to be rendered by the Respondent to the Petitioner as a legatee under the Decedent's Last Will and Testament dated December 15, 2005, understood by the Petitioner, reasonable, and ultimately ratified?

The Respondent has the affirmative as to this issue.

Issue #2: Should the legal fee of the Respondent for services rendered to the Petitioner pursuant to the terms of their retainer agreement be fixed and determined at the amounts paid by the Petitioner to the Respondent in 2007?

The Respondent has the affirmative as to this issue.

 

*4

 

Testimony

As respondent had the burden of proof on the issues for trial, he opened by calling Michael Feigenbaum, Esq. to the stand as his first witness.

Attorney Feigenbaum, a practicing member of the Bar of the State of New York and a trusts and estates litigator since 1966, was the court-appointed guardian ad litem in the underlying contested probate proceeding, representing the interests of infants who were adversely affected by the propounded will. His appointment was effective in November, 2006. He testified that respondent (Spiess) appeared in the proceeding for petitioner (Cullin) in late January or early February of 2007. Attorney Feigenbaum described the extensive motion practice in the probate proceeding, noting that the estate had been mired in discovery and motion practice for a year until Spiess became involved. It was Attorney Feigenbaum's testimony that Spiess' appearance for Karen Cullin was the catalyst for movement in the litigation, as well as opening the lines of communication leading to a resolution of the proceeding. Prior to Spiess' involvement, the potential objectants had made a settlement demand of more than 50 percent of the estate. In the course of his representation of his wards' interest, Feigenbaum became fully familiar with the facts and circumstances of the decedent's various testamentary schemes, as well as the decedent's debilitated physical condition as described in an Article 81 proceeding, which had been commenced to have a guardian appointed for her.

Attorney Feigenbaum indicated that there were substantial concerns about the decedent's competence, as well as the possible exercise of undue influence over her; in fact, decedent, in the

 

*5

 

purported will on file dated August 21, 2005, made reference to being "held against my will" by Cullin, who, according to said purported will, was forcing the testator to sign documents. He stated his opinion, based on forty-five (45) years of practice as a Trust and Estate attorney and the facts and circumstances of the probate contest, that the December 14, 2005, will would be extremely difficult to prove as the decedent's last will and testament and unlikely to survive the will contest.

On cross-examination, Attorney Feigenbaum indicated that Spiess did not appear for the petitioner until motion practice concerning the SCPA 1404 examinations had concluded. A review of the temporary administrator's accounting (Accounting Decree, Petitioner's Exhibit #3, in Evidence) with this witness reflected distributions from the estate to Cullin in an amount in excess of $1,553,000, apparently a net residual amount after taxes and administrative expenses, and that it appeared that the net residue the petitioner could expect as her settlement amount, based on the exhibit shown the witness, was somewhere between $1,500,000 and $2,400,000. To this point, Attorney Feigenbaum commented during redirect examination that no beneficiary receives the entire estate without reference to administrative expenses, taxes, etc.

 

*6

 

Respondent Spiess then took the stand. He testified that he has primarily been a trust and estate litigator since his admission to the Bar in 1982. He was first contacted by Cullin in January, 2007, who indicated that she received his name from one or two other attorneys, who declined to take her case. According to Spiess, Cullin asked whether he took contested probates on a contingency fee basis. He responded that sometimes he did, depending upon his review of the particular facts of the case. Cullin had, apparently, indicated during this conversation that she lost confidence in the prior attorney representing her as a beneficiary of the estate, as well as the attorney-draftsman of the will in question. Spiess, who had his own attorney representing him at the hearing, testified that in anticipation of a meeting with Cullin, he reviewed the court file, learning that the decedent/testator had executed the will a few days before her death, that she had had a stroke some months earlier, that there was a dispute over who would be allowed to conduct SCPA 1404

 

*7

 

examinations, which were resolved in the potential objectants' favor by decision of the court, that there had been no discovery and no application for preliminary letters, even though the estate would be taxable. Spiess also noted that there were three (3) wills on file, which had all been executed within the last six to eight months of the decedent's life. He also discovered that an Article 81 proceeding commenced in Supreme Court by Adult Protective Services was terminated by the decedent's death; the allegations in that proceeding were to the effect that Cullin had been siphoning funds from the decedent, using decedent's power of attorney. There were a number of other firms involved representing possible objectants to the probate of the most recent will.

Spiess testified that he first met with Cullin at his office on February 2, 2007, and that Cullin was accompanied by two other people (Michael Lewis and Ellen Gabriel). She sought representation by Spiess solely as beneficiary of the estate. Spiess referred to his notes, which indicated that he advised Cullin that it would be a very difficult case with the potential for years of litigation, and as a non-relative, Cullin would only inherit by way of a valid will. Spiess indicated that at that meeting, Cullin appeared to be in good health and could comprehend the details of their discussion. In her meeting(s) with Spiess, Cullin had indicated that she had known the decedent for 10 years, and that she gave up a consulting business she ran in order to help the decedent, whose finances she managed for a number of years, since decedent was blind, lived alone and had no family. Cullin produced copies of the decedent's financial statements. Spiess' notes (Respondent's Exhibit #6, in Evidence), based on his review of decedent's financial records provided by Cullin, reflect substantial payments were made by Cullin from decedent's funds to Cullin, Attorney Shapiro and Attorney Devine

 

*8

 

(the attorney-draftsmen of the propounded will); these payments were made by Cullin's use of a power of attorney given her by decedent. Cullin indicated that she had no funds at her disposal to pay Spiess' legal fee; Spiess said he would agree to her request to take the case on a one-third contingency, but would still need a payment of $5,000 as an initial retainer to cover anticipated disbursements. According to Spiess, Cullin said she did not have any money at her disposal with which to pay him, and Spiess responded that he could not take the case without the $5,000 retainer. According to Spiess, Ellen Gabriel volunteered a loan of $5,000 to Cullin; Spiess said he would provide Cullin with a retainer agreement for her to review and she could let him know what she wanted to do.

Thereafter, Cullin called to make another appointment with Spiess, saying that she reviewed the retainer agreement and it was fine, but she wanted to meet with him. A meeting was set for February 20, 2007; Cullin appeared with her then current attorney, Shapiro, who participated in the meeting, giving information about the case, and ultimately signing a consent to change attorney. Cullin again indicated that the retainer agreement sent to her was fine but pointed out that, if successful, a one-third contingency fee would result in a large fee and she proposed capping the amount of his fee. Spiess asked what she was proposing, and Cullin stated a cap of $600,000. Spiess agreed, and this language was hand-written into the retainer agreement and initialed by the parties; the complete retainer agreement was also executed by both parties at that meeting. Cullin appeared to understand everything that was discussed in the presence of Attorney Shapiro, including the retainer agreement which was modified at her request to provide for a cap on legal fees.

Having been retained, Spiess participated in the scheduled SCPA 1404 examinations and prepared Cullin to be examined at same. As a nominated successor executor in decedent's will, pursuant to SCPA 1404(4), she was subject to examination by the potential objectants as to her involvement in the making of the will.

 

*9

 

Cullin's SCPA 1404 examination was scheduled, but Spiess indicated that she informed him she would not appear to testify out of concern for possible criminal repercussions regarding her use of decedent's funds by a power of attorney. In light of Cullin's refusal to testify, Spiess consulted with the attorney representing the nominated fiduciary/attorney-draftsman. Given their concerns about the decedent's capacity, the execution of the will and the possibility of undue influence, the attorneys concluded that a settlement was their best option, and discussion with the firms involved representing possible objectants to the probate of the most recent will.

Although she had previously indicated that she wanted to settle at any cost, Spiess testified that Cullin refused to pay the potential objectants more than $100,000. He, therefore, offered to reduce his fee by $15,000 and apply that amount to the settlement offer. Thereafter, a settlement was reached for a total of $115,000, plus a waiver of any interest Cullin may have had in a 1934 trust for decedent, a concession that was illusory at best, since Cullin had indicated she had already released any interest in said trust prior to Spiess' retention. A letter agreement signed by Cullin on March 21, 2007 memorialized the agreement (Respondent's Exhibit #14, in Evidence) and detailed the terms of the settlement negotiated by Spiess, which, in addition to the payment of the $115,000 and the waiver of any interest in the 1934 trust, included a reduction from $100,000 to $50,000 of the fiduciary's attorney's fee, and the replacement of the nominated fiduciary with Cullin in his stead. The letter, signed by Cullin as "approved and accepted", set forth how the settlement funds were to be disbursed, and that the retainer agreement was amended to allow Spiess a flat fee of $585,000, plus the initial $5,000 retainer.

 

*10

 

Spiess also testified that, when it looked like the case would settle, he suggested Cullin consult a tax attorney regarding the tax ramifications to her of the settlement, since she was going to be responsible for the payment of the estate taxes; this advice was also in the letter. According to Spiess, Cullin indicated that she had already engaged someone to advise her with respect to tax issues. Later that day, the stipulation was placed on the record in Surrogate's Court in open court pursuant to CPLR 2104, and Cullin acknowledged her acceptance of its terms under oath. On May 14, 2007, Cullin approved payment of the check in the amount of $585,000 to Spiess' firm (Ex. 16) as and for his legal fee.

After the settlement, Spiess testified that he continued to represent Cullin's interests while awaiting an accounting from the Public Administrator, who had been acting as Temporary Administrator. Cullin became displeased with waiting, and Spiess eventually learned that she had filed a grievance against him, which was rejected by the Grievance Committee for the Tenth Judicial District (Respondent's Exhibit #11, in Evidence).

It was also indicated for the record that Cullin has commenced a legal malpractice action against Spiess in Supreme Court alleging that he was negligent in his representation of Cullin in the probate matter.

 

*11

 

On cross-examination, after questioning Spiess about the nature of the decedent's relationship, if any, with those interested in the 1934 trust, petitioner's counsel questioned Spiess about his time records in this case, which reflected in excess of seventy (70) hours in legal services rendered Cullin. Counsel noted that, at his usual hourly rate ($300), Spiess' fee would have been approximately $21,000.

Respondent next called Harvey Besunder, Esq. to the stand, qualifying him as an expert witness who has served as Chair of various committees of the Suffolk County Bar Association and the New York State Bar Association, including the Grievance Committee for the 10th Judicial District, the Committee on Professionalism, the State Bar's Professional Disciplinary Committee and the State Bar's House of Delegates. In addition he was appointed by the Second Department of the Appellate Division to the Committee on Character and Fitness, as well as to the Independent Judicial Screening Committee. Attorney Besunder has served as President of the Suffolk County Bar Association and has lectured extensively for the past thirty to thirty-five years on the grievance procedure, ethics, condemnation/tax certiorari and Surrogate's Court practice and that he is familiar with the Code of Professional Responsibility. He has also testified in the District Court, Supreme Court and Surrogate's Court as an expert on legal fees.

 

*12

 

Attorney Besunder testified that he reviewed the record in the underlying estate, the decision of Supreme Court Justice H. Patrick Leis, III and the Court Evaluator's report in the Article 81 proceeding brought while this decedent was alive, and the retainer agreement in question; and, in his opinion, the fee was reasonable. He noted that the retainer agreement was given to Cullin to consider a couple of weeks before it was executed. She had an opportunity to review the agreement with separate counsel and had negotiated a cap, satisfying the standard for informed consent. In his review of the record, Attorney Besunder noted that the decedent's competence to execute a will would be questionable. His review of the various files indicated that the will offered for probate was signed by the decedent in the hospital six days prior to her death, after the Court Evaluator in the

 

*13

 

Article 81 proceeding found her to be non-responsive, blind, and lacking understanding. Based on his review of the Court Evaluator's report, there were issues concerning undue influence and competency, compounded by the decedent's blindness and her ability to communicate. Further, Attorney Besunder expressed the opinion that, if the latest will failed, Spiess would have to set aside the penultimate will (which did not benefit Cullin at all) in order to offer for probate a July, 2005 will (which did benefit Cullin). The risk was that Spiess would potentially be engaged in years of litigation over three wills, with no payment. Besunder also opined that Spiess obtained through negotiation everything he would have been able to recover if he had been one hundred percent successful in the probate contest, less $100,000. Besunder also read the settlement transcript, the letter agreement executed the day the stipulation of settlement was placed on the record and the back of the check paying the fee which indicated "payment approved" leading him to conclude that the petitioner ratified the agreement (Ex. 16).

According to Attorney Besunder, contingency fee cases are a sign of an attorney's risk. Quoting a publication he referred to of Professor (Roy D.) Simon of Hofstra Law School, Attorney Besunder opined that the greater the risk, the greater the reward (fee). Such arrangements enable a person who cannot pay legal fees access to the courts. There was no indication that Cullin did not understand the import of her agreement with Spiess. Citing Matter of Cooperman, infra, a New York Court of Appeals case, which was decided, according to Besunder when he was sitting on the Grievance Committee, he opined that this situation does not fall within the "nonrefundable fee agreement" addressed by Matter of Cooperman, infra. The agreement at issue in the instant matter does not say that it is nonrefundable and cites the $5,000 initial retainer as a minimum fee. Attorney Besunder also testified that Cooperman, infra specifically left minimum fee arrangements alone.

Further, Attorney Besunder noted Spiess' reputation in Suffolk County as an experienced, ethical trusts and estates litigator.

 

*14

 

On cross-examination, after reference to Spiess' affirmation of services indicating time spent, Besunder reiterated his opinion that the fee in this case was reasonable.

Upon the conclusion of Besunder's testimony, counsel for respondent indicated that he had no other witnesses. At this point, it became apparent that petitioner Cullin had entered the courtroom for the first time that day. Her attorney called her to the stand to testify, but respondent's counsel objected on the basis that he had served her with a subpoena for her testimony and for documents, and had wanted her here to testify at 9:30 as part of respondent's direct case. The "subpoena ad testificandum and duces tecum" was then marked as Court Exhibit #2; and, over respondent's objection, Cullin was allowed to take the stand as a witness in her own behalf.

In response to preliminary questions concerning her first meeting with Spiess, Cullin indicated that she attended her first meeting at Spiess' office accompanied by her personal attorney (Shapiro) and a girlfriend. According to her testimony, they discussed Spiess' hourly rate and she left the meeting with the proposed contingency fee retainer agreement, which she reviewed. When she noted that there were certain dates in the proposed agreement that were incorrect, Cullin discussed them with Spiess, who then sent her a corrected copy, Cullin identified the retainer agreement (Respondent's Exhibit #13) and the maximum fee language inserted therein, which she sought because she felt that one-third of $4,000,000 would be too high. She testified that it was her understanding that this maximum fee would be charged if the matter went to trial and that the fee would be one-third if there was no trial. She also testified that she signed the agreement in the presence of the girlfriend who accompanied her to the initial meeting and another friend.

 

*15

 

Cullin then testified to the details of her friendship with the decedent and started to answer questions concerning the genesis of the Article 81 proceeding brought during the decedent's lifetime. At this juncture, Cullin stated that she did not want to continue testifying. She refused to answer any more questions and walked out of the courtroom. The court gave her attorney time to discuss the matter with his client off the record to see whether Cullin wished to continue, either later the same day or the following morning. After a short recess, the court resumed proceedings, whereupon counsel for petitioner indicated that his client was adamant about not continuing to testify; since he had no other witnesses, he rested petitioner's case. Both sides having rested, they were given time to file post-hearing brief, which have now been received by the court and will be filed with this decision.

Legal Arguments and Memoranda of Law

It is initially noted that petitioner's counsel opens his brief with a "Statement of the Questions" before the court which do not adhere to the agreed upon issues for the hearing conducted in this matter. As there was no affidavit of service accompanying petitioner's brief, a copy of same has been provided to counsel for respondent herein.

Petitioner's counsel argues that Spiess spent only six (6) hours representing Cullin in the probate proceeding; that the probate litigation presented no difficult questions, asserting that certain findings in the context of the Article 81 proceeding would have supported the argument that the decedent had sufficient capacity and was not unduly influenced; that Spiess did not adequately represent Cullin in the probate proceeding; that the revised fee agreement of March 21, 2007 should be scrutinized as the product of the parties' confidential relationship; that the contingency fee/retainer agreement does not contain language providing "…for a refund of the minimum fee of $5,000.00 under any circumstances" (Petitioner's Brief, p. 2), and that this is a violation of the Code of Professional Responsibility under Matter of Cooperman, 83 NY2d 465.

Respondent's counsel argues that the fee was not excessive or unconscionable, as the product of a contingency fee arrangement; that the agreement is not prohibited under Matter of Cooperman, supra; that there has been no claim in the context of this 2110 proceeding of deception, coercion or fraudulent procurement; that Spiess is a reputable, experienced trust and estate attorney, who competently represented his client; that the agreement was ratified; and that petitioner's refusal to testify during the hearing of this matter failed to support her case in any meaningful way.

Discussion

 

*16

 

Based upon the sworn credible testimony adduced at trial, the demeanor of the witnesses, and the exhibits received into evidence, the court makes the following findings.

As heretofore mentioned, petitioner's counsel opens his brief with a "Statement of the Questions" before the court which do not adhere to the agreed upon statement of issues for the hearing conducted in this matter. Included in the issues raised by petitioner's counsel is a request for costs and sanctions against Spiess "for frivolous motion practices" (Petitioner's Brief, p. 1), which appears to be a reference to the cross-motion filed by Spiess in response to petitioner's motion for summary judgment which were the subject of the court's March 17, 2010 decision, later reversed by the Second Department (In re Talbot, supra). Not only was this issue not before the court on the hearing of this matter, but it is improperly raised in this context when Spiess has no opportunity to respond (22 NYCRR 130-1.1(d)). Accordingly, the request for sanctions is denied.

Issue #1: Were the terms of the retainer agreement understood by the Petitioner, reasonable, and ultimately ratified?

Respondent had the burden of proof on this issue. In addition to his own testimony and the sixteen exhibits entered into evidence, he produced two witnesses who testified to the difficulty of the litigation undertaken on Cullin's behalf (Feigenbaum) and the legitimacy of the contingent fee arrangement entered into as a result (Besunder). Both testified as to the degree of difficulty involved in the litigation.

The terms of the subject agreement, which was entered into in February, 2007, clearly states that the total fee would be the initial retainer ($5,000) plus "thirty-three and one-third percent (331/3 percent ) of all sums recovered…whether recovered by suit, settlement or otherwise…" (Retainer Agreement, ¶4, Petitioner's Exhibit #1).

 

*17

 

The agreement was amended, at petitioner's request, by a handwritten insertion to provide for a maximum fee of the retainer plus $600,000. This agreement was both signed and initialed by the petitioner and the respondent.

The court rejects petitioner's argument that this is a non-refundable fee agreement prohibited by Matter of Cooperman, supra. In that case, "the fee arrangements expressed an absoluteness which deprived (Cooperman's) clients of entitlement to any refund…" (emphasis added) (Matter of Cooperman, supra, @475). Although the agreement contains minimum fee language with regard to the $5,000 initial retainer (Retainer Agreement, ¶4, Petitioner's Exhibit #1), such language

 

*18

 

does not constitute the "nonrefundability impediment" (Ibid, @470) referred to by the Cooperman decision. This determination is also supported by the uncontroverted testimony of Attorney Besunder.

As heretofore noted, the contested probate proceeding was settled after the SCPA 1404 examinations of the attesting witnesses and the attorney draftsperson, but prior to petitioner's SCPA 1404 examination. The parties then negotiated a settlement, which was placed on the record in open court on March 21, 2007. The stipulation provided that the will would be admitted to probate, whereupon petitioner would be entitled to the entire net residue (at the time, this included approximately $4,000,000 in liquid assets and a house in Centereach, New York) less $115,000 for the nine (9) potential objectants, and that petitioner would succeed the Public Administrator as estate fiduciary. Respondent agreed to reduce his fee by $15,000 so that only $100,000 would come from petitioner's funds for the potential objectants' settlement amount. A confirming letter was signed by petitioner on the same day the stipulation was placed on the record reciting the terms of the stipulation, the legal fees payable to respondent and the fees payable out of the estate funds to separate counsel for their representation of the nominated fiduciary and proponent of the will. Respondent, apparently, received his fee shortly after decree of probate and letters issued to petitioner in May, 2007, by check in the amount of $585,000 of which petitioner approved payment (Ex. 16).

A copy of the estate tax return, form 706, signed by petitioner as executor on January 25, 2008 (Respondent's Exhibit #8, in Evidence) reflects a total gross estate with assets close to $5,300,000, deductions in excess of $2,300,000, including respondent's legal fee, and federal estate taxes in a net amount in excess of $550,000. Petitioner's affidavit filed in connection with a legal malpractice case against this respondent (Respondent's Exhibit #12, in Evidence), recites that there was also a gift tax liability in an unspecified amount. According to the summary account statement filed and the Public Administrator's Final Accounting Decree, dated July 1, 2009 (Petitioner's Exhibit #3, in Evidence) $1,553,297.57 was distributed to Cullin and $912,536.53 remained on hand on the closing date of the accounting.

Thus, petitioner, who was entitled to the entire estate by virtue of her position as sole beneficiary of the will admitted to probate, was entitled to collect or recover

 

*19

 

estate assets worth at least $4,000,000. This sum, of course, is not a net figure, as evidenced by the sums shown as distributable to this petitioner in the Public Administrator's accounting.

Despite Cullin's testimony to the contrary, the above-quoted language of the retainer agreement specifically expresses the application of the contingency fee arrangement on any recovery, not just the results of a trial of the contested probate proceeding. Indeed, it was after this very paragraph 4 of the agreement that the handwritten insertion, initialed by petitioner, provided for the maximum fee, the retainer plus $600,000. This amount was amended to $585,000 when Spiess agreed to contribute $15,000 towards the settlement of the case (Ex. 14).

Therefore, based on the credible testimony and the documents in evidence, this court can only conclude that the petitioner, an articulate woman who had previously run her own business, understood the terms of the agreement when she entered into it; indeed, a contingency fee arrangement was her suggestion. The court also finds that she ratified the agreement by not only modifying same to impose a maximum amount on the fee payable to respondent, but in her letter agreement of March 21, 2007 (Respondent's Exhibit #14, in Evidence) and her allocution when the stipulation of settlement was placed on the record in the contested probate proceeding on March 21, 2007.

There is no indication in the record that the arrangement entered into by the parties was fraudulently procured by the respondent or that he took unconscionable advantage of the petitioner. On this record, there is no genuine dispute that the petitioner's consent to the fee agreement was free and informed. Indeed, there is no dispute as to the fact that Cullin initiated the concept of a contingency fee since she had no funds, nor to the fact that she negotiated a cap on Spiess' fee. Absent proof that the agreement was fraudulently procured, the courts have tended not to interfere with contingency fee arrangements (see Estate of Krulish, 130 AD2d 959, citing Matter of Schanzer's Estate, 7 AD2d 275, aff'd 8 NY2d 972; see also Lawrence v. Miller, 11 NY3d 588).

There is also no genuine dispute that the thirty-three and one-third (33 1/3 percent ) percent contingency fee is within the range commonly charged by other attorneys in similar circumstances. Indeed, the court in Lawrence, supra, in a footnote to its decision, wherein the Court cited King v. Fox, 7 NY3d 181, 192 for the proposition that

 

*20

 

the facts and circumstances surrounding the parties' agreement, including the parties' intent and the value of the attorney's services, may render a fee arrangement unconscionable when entered into or in retrospect (Ibid), opined as follows:

In general, agreements entered into between competent adults, where there is no deception or overreaching in their making, should be enforced as written. Accordingly, the power to invalidate fee agreements with hindsight should be exercised only with great caution. It is not unconscionable for an attorney to recover much more than he or she could possibly have earned at an hourly rate. Indeed, the contingency system cannot work if lawyers do not sometimes get very lucrative fees, for that is what makes them willing to take the risk ~ a risk that often becomes reality - that they will do much work and earn nothing. If courts become too preoccupied with the ratio of fees to hours, contingency fee lawyers may run up hours just to justify their fees, or may lose interest in getting the largest possible recoveries for their clients. (Ibid @595 and 597, fn 4).

It remains for this court to determine whether the fee obtained herein was reasonable under the circumstances. At the time the agreement was entered into, the evidence, particularly the testimony of Attorneys Feigenbaum and Besunder, indicates that the admission of the will to probate was going to be extremely difficult given the substantial litigation which had already taken place, the anticipated continuing litigation, the questions surrounding the decedent's competence, and the fact that, if the December 14, 2005 will was denied probate, Cullin, who was not this decedent's distributee, would have to overcome a prior instrument that left her nothing, in order to propound another earlier instrument benefitting her. Cullin had consulted other attorneys who would not handle the case. The only way she could retain Spiess to represent her, given the aforementioned factual circumstances and Cullin's expressed inability to hire him at his usual hourly rate, was with a contingency fee arrangement: a proposal initiated by her, and negotiated by her while accompanied by independent counsel.

Thus, it is the finding of this court that, based upon the facts and circumstances detailed herein, the retainer agreement containing the contingency fee arrangement was fair and reasonable.

 

*21

Issue #2: Should the legal fee of the Respondent for services rendered to the Petitioner pursuant to the terms of their retainer agreement be fixed and determined at the amounts paid by the Petitioner to the Respondent in 2007?

 

In determining the reasonableness of an attorney's fee in an estate proceeding, the court will take into consideration a number of factors, including but not limited to the "time and labor required, the difficulty of the questions involved, and the skill required to handle the problems presented; the lawyer's experience, ability and reputation; the amount involved and benefit resulting to the client from the services; the customary fee charged for similar services; the contingency or certainty of compensation; the results obtained; and the responsibility involved" (In re Pratt, 35 Misc3d 1242(A), citing Matter of Freeman, 34 NY2d 1; Matter of Potts, 123 Misc. 346, aff'd. 213 App. Div. 59, aff'd. 241 NY 593; Matter of Van Hofe, 145 AD2d 424, 425; see also Matter of Szkambara, 53 AD3d 502). None of these factors standing alone are controlling, however, and all should be considered when a court reviews an attorney's fee (Ibid, citing In re Estate of Patchin, 106 AD2d 730).

Respondent has documented the time spent rendering petitioner legal services in this matter, including his contemporaneous time records (Respondent's Exhibit #15, in Evidence). However, this is only one factor in the determination of a legal fee (Matter of Freeman, supra; Matter of Kentana, 170 Misc 663). It appears to be petitioner's argument that the fee is unreasonable as disproportionate to the number of hours worked. Her counsel, in fact, evaluates the contingent fee at issue as if it were an hourly fee. Such an evaluation is misplaced. (See Jacobsen v. Oliver, 555 F.Supp.2d 72, 85-86), citing RESTATEMENT (THIRD) of the LAW GOVERNING LAWYERS §34 (2000). While time spent often serves as an appropriate starting

 

*22

 

point (see Estate of Gillett, 139 Misc2d 188), it is not controlling (In re Pratt, supra; In re Estate of Patchin, supra). Indeed, time spent has been referred to as the least important factor in determining legal fees (Estate of Gillett, supra, citing Matter of Kentana, supra); and, as alluded to in Lawrence, supra, pursuant to such agreements, attorneys can sometimes recover much more than an hourly rate would produce, but in determining the reasonableness of such fees courts should not be preoccupied with the ratio of fees to hours or time spent. For example, the court in Jacobsen v. Oliver, supra, a decision rendered by the U. S. District Court for the District of Columbia, used an analysis regarding the reasonableness of counsel fees in a contingency fee arrangement as including (1) whether the lawyer afforded the client a free and informed choice at the time the contract was made, (2) whether the fee was in a range commonly used by other lawyers in similar representations, and (3) whether there was a subsequent change in circumstances that made the fee contract unreasonable (Ibid @84).

The witnesses produced by respondent testified to the difficulty of proving the will in question, the concerns about the decedent's competence, and the potential for two additional probate contests, if this will was not proven. Respondent undertook the risk that years of litigation over three separate wills could result in no recovery, and no fee for him other than the $5,000 retainer. In addition to the difficulties previously discussed herein of having the propounded will admitted to probate, during the course of the litigation respondent was presented with an added hurdle when petitioner advised him she would not testify at an examination pursuant to SCPA 1404. This posture by a litigant, in and of itself, was a significant impediment and could have proven fatal to her case.

 

*23

 

Ironically, it provided the impetus for settlement negotiations to move forward.

The results of respondent's representation of the petitioner, who was not a distributee of the decedent, speak for themselves, as Attorney Besunder testified: respondent negotiated a settlement for petitioner's benefit constituting the decedent's entire estate less the $100,000 paid the potential objectants. Attorney Besunder further added that the expenditure of additional time would not have improved the result. Indeed, this case could well be the example discussed by the Court of Appeals in Lawrence, supra: the recovery of a fee much more than could be earned at an hourly rate in exchange for the risk that an attorney will do much more work and earn nothing. The risks in this case were staggering, the results achieved, under the circumstances, impressive. In light of these circumstances, the fee is not disproportionate to the value of the services rendered (see Matter of Lohausen, 2012 N.Y. Misc. LEXIS 3167, citing Gair v. Peck, 6 NY2d 97). Further, petitioner does not argue, nor is it apparent, that a change in circumstances subsequent to the execution of the retainer agreement rendered such fee unreasonable. Even with the benefit of hindsight, petitioner has offered nothing in the record to contradict the reasonableness of the fee as established by the testimony and the documents in evidence.

Conclusion

Upon consideration of all the relevant factors, the court fixes respondent's fee in the amount of $585,000, plus the $5,000 initial retainer.

Settle decree on notice.

Date: September 11, 2012.