OPINION OF THE COURT
JEFFREY S. SUNSHINE, J.
Introduction and Background
On October 9, 2015, plaintiff husband moved by order to show cause (motion sequence No. 7) requesting the following relief: (1) granting the plaintiff interim counsel fees in the amount of $350,000; and (2) granting such other and further relief that is just and proper.
Defendant's counsel, Raoul Felder, Esq., filed an affirmation in opposition to plaintiff's motion for counsel fees on October 23, 2015. Plaintiff's counsel filed an affirmation in reply on October 28, 2015.
Subsequent to the filing of plaintiff's order to show cause and reply affirmation, plaintiff's counsel, Carolyn Byrne, Esq.,
This court previously issued an extensive 61-page written decision dated September 18, 2015 which more fully details the history of the litigation between the parties and specifically details much of the events for which counsel seeks fees in this matter.
Standing to Bring Counsel Fee Application Post-Substitution
As a threshold issue, the court must determine whether plaintiff's former counsel has standing to argue for interim counsel fees in this court, and if so, whether this court can grant fees for prior services rendered as well as future legal services the plaintiff will most likely incur.
The New York Court of Appeals addressed this precise issue in 2004 in the case of Frankel v Frankel (2 N.Y.3d 601 ). In Frankel, the husband filed for divorce in 1998, and Supreme Court granted it in 2001. The wife paid her attorney an initial retainer of $5,000, but the billings soon exceeded that amount. In June 1999, the 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. Eighteen days later, the wife discharged her attorney without cause. After taking into account the retainer and the two interim awards, the wife's attorney claimed that she owed him considerably more and proceeded against the husband for that amount pursuant to Domestic Relations Law § 237 (a). The Supreme 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, Second Department, reversed, holding that "former counsel has no standing to pursue the adversary spouse within the matrimonial action" (309 A.D.2d 65, 69 [2d Dept 2003]).
The Court of Appeals disagreed and established the principle that the attorneys for the non-monied spouse could seek attorney
In the case at bar, although plaintiff relieved his attorney and substituted himself pro se, it is undisputed that Ms. Byrne had been the plaintiff's attorney of record in this matter up to November 12, 2015 and that she was subsequently discharged without cause. Plaintiff annexed a current statement of net worth and invoices for counsel fees incurred in this matter from April 27, 2015 to September 20, 2015 showing $93,790.99 due and owing to counsel.
In light of the Court of Appeals decision in Frankel, this court shall decide Ms. Byrne's application herein; however, any potential award shall be limited to past fees incurred up to and including November 12, 2015 because of her discharge. This court herein determines that any prospective fees would be more properly addressed in a separate application by any incoming counsel whose assessment of the amount of fees commensurate with their experience and the parties remaining issues would be more appropriate. In doing so, the court does not preclude an application in the proper form pursuant to Domestic Relations Law § 237 for an award of counsel fees pendente lite.
Plaintiff annexes to this application both the retainer agreement (exhibit B) and statement of net worth dated December
In her affirmation plaintiff's counsel states that as of September 11, 2015, the plaintiff was indebted to counsel in the total amount of $70,658.59. Plaintiff's counsel affirms that plaintiff paid an initial retainer of $12,000, made an additional payment of $3,000 and that pursuant to a prior agreement with defendant's counsel dated January 29, 2015, plaintiff's counsel received $75,000 on consent from defendant for legal fees. Pursuant to the retainer agreement dated October 23, 2014, former counsel's hourly rate was $400.
Plaintiff, in his affidavit, states that he grossed $104,566 in 2014 and $111,650 in 2015 as of October 1, 2015, the date of the filing of this application. He indicates that he has been unsuccessful in his attempt to gain more clients and that the seizure of his computers
Plaintiff's counsel affirms that appearances in court for this matter have been averaging approximately 6 hours, totaling $2,400 in counsel fees per appearance. Counsel renews her counsel fee request of $350,000.
Counsel contends that as of the date of her motion, defendant's counsel had admitted to being paid $427,982.02 for fees as of June 2015 (exhibit F) and asserts that the defendant "admitted to at least $900,000 paid by her mother" to defendant's counsel's Interest on Lawyer Account Fund on defendant's behalf. Plaintiff's former counsel also argues that defendant's family appears to be paying for "her litigation costs, rent, child support, temporary maintenance, her share of the visitation supervisors" and other costs (exhibit G). Plaintiff's counsel asks that based on the above and the disparity in income between the parties, that the court grant her request for counsel fees.
Defendant's counsel argues that the defendant "cannot be responsible for plaintiff's `non-marital' legal services incurred in a marital action" as those are, he argues, beyond the scope of Domestic Relations Law § 237. He contends that plaintiff's alleged illegal use of spyware, interception of defendant's confidential communications and information and the ensuing litigation are not contemplated or covered under Domestic Relations Law § 237.
Defendant's counsel believes this is a case of first impression. He compares it to that of a case brought under different statutes, with the same facts, in both state and federal court. He believes that "the perpetrator in any Court, Federal or State, who seeks to slip-in under the disguise of Domestic Relations Law § 237, would never be able to receive counsel fees from his victim." Defendant's counsel argues that the court is therefore without authority to award any fees to plaintiff's counsel in connection with the non-marital services rendered on plaintiff's behalf. Additionally, counsel states that he is unable to "ascertain from the time already spent, how much time was spent on the `marital' portion of the case, and how much time was spent on `non-marital' efforts." Defendant's counsel indicates that he believes approximately 30.5 hours were dedicated by plaintiff's counsel working on the "spyware" related motion alone, which he calculates totals $12,200 in counsel fees. He argues that the defendant should not be obligated to pay plaintiff's counsel fees related to the plaintiff's alleged use of spyware.
Defendant's counsel also contends that plaintiff has engaged in non-meritorious conduct, advanced baseless arguments and has taken positions which resulted in a significant delay of the proceedings. Defendant's counsel cites two incidents: an incident where plaintiff's counsel brought an "emergency" application relating to visitation in which plaintiff and plaintiff's counsel initially refused to accept defendant's payment offer to referring the limited technological issue to a referee. Counsel argues that this motion is a "do-over," and that because plaintiff's counsel "continues not to follow the rules," the defendant has been forced to incur fees and been harassed.
Defendant's counsel states that the $350,000 figure "is nothing more than an unsubstantiated dollar figure for her fee apparently pulled out of thin air" and stresses that in her moving papers she seeks fees that would "allow us to go forward and conclude discovery in this case," and is limited by law to past fees. He also argues that plaintiff's counsel's billing records are "not reliable or accurate" and that it would be "unfair" for the defendant to "take the hit" despite the lack of clarity as to her billing records. Defendant's counsel notes his disagreement with 25 line items within plaintiff's counsel's billing records,
Defendant's counsel also calls into question plaintiff's attorney's knowledge of certain facts of the case and the timing of that knowledge. He asserts that it would be "illuminating" to know at what point plaintiff's counsel knew of her client's alleged misdeeds and that "unfortunately, the way her billing records presently are, we cannot accurately determine what portion of her services was rendered before or after she knew of the facts."
Counsel further argues that he has had to devote a great deal of billable time and effort as a direct result of plaintiff's alleged "extraordinary electronic activities." Defendant's counsel states that the defendant and counsel had to "try to unravel what was done and hidden," plaintiff's counsel had to "basically advise her client to invoke the Fifth Amendment," and therefore defendant should not be made to pay for plaintiff's counsel fees.
Defendant's counsel contends that the plaintiff is "financially able to pay for his legal fees." He states that, other than a $15,000 payment to his own attorney, plaintiff has made no contribution to counsel fees in this matter while defendant has paid $75,000 pendente lite to plaintiff's counsel, along with significant monies to her own counsel. He argues that plaintiff earns $111,650 per year, has $176,649 in a retirement account and received a total of $188,595.40 as a direct payment on February 2, 2015 (exhibit J) from the defendant, so he argues the plaintiff has sufficient monies to satisfy his counsel fee obligations without further contribution from the defendant.
Defendant's counsel states that despite his recent success in generating income, the plaintiff "does not seem to seek employment in any serious way" and that in analyzing the plaintiff's monthly employment search statement, "there is certainly no excuse for being underemployed."
Additionally, defendant's counsel states that along with the "illegal interception" of his client's communications and information, the plaintiff has established a pattern of noncompliance with court orders and discovery demands to the defendant's detriment.
In her reply affirmation "to the extent that there may have been omissions of e-mails, and even brief conferences or other entries that are not reflected in the bills, that is nearly always a product of [her] discretion, and not a reason to doubt the reliability of the bills themselves." She argues that many if not all of the "omissions" cited by defendant's counsel in his affirmation in opposition were minor, discretionary, and intentional as to "keep [her] billings as relatively low as [she has]."
To dispute defendant's counsel's allegations plaintiff's counsel attached emails and other correspondence between counsel and other parties for which she did not charge her client. Plaintiff's counsel argues that despite defendant's counsel's "distortions and misleading allegations" she "stand[s] behind these bills now just as [she] did when [she] filed the first motion."
As to the fees requested, plaintiff's counsel states that there is a "well-reasoned basis to conclude that another $280,000 in counsel fees will be expended prior to trial in addition to the $70,000 currently due, especially in light of their recent intention to move for a downward modification of support, and plaintiff would be unable to pay same."
An award of interim counsel fees is within the discretion of the court (DeCabrera v Cabrera-Rosete, 70 N.Y.2d 879 ). Pursuant to Domestic Relations Law § 237 (a), amended in 2010 (L 2010, ch 329, § 1, eff Oct. 12, 2010), the court in an action for divorce:
As to final counsel fee awards, it has long been established that "[a]n award of an attorney's fee pursuant to Domestic Relations Law § 237 (a) is a matter within the sound discretion of the trial court, and the issue is controlled by the equities and circumstances of each particular case" (Grant v Grant, 71 A.D.3d 634, 634-635 [2d Dept 2010] [internal quotation marks omitted], quoting Gruppuso v Caridi, 66 A.D.3d 838, 839 [2d Dept 2009], quoting Morrissey v Morrissey, 259 A.D.2d 472, 473 [2d Dept 1999]).
"In determining whether to award such a fee, the court should `review the financial circumstances of both parties together with all the other circumstances of the case, which may include the relative merit of the parties' positions'" (Gruppuso, 66 AD3d at 839, quoting DeCabrera, 70 NY2d at 881). "`An appropriate award of attorney's fees should take into account the parties' ability to pay, the nature and extent of the services rendered, the complexity of the issues involved, and the reasonableness of the fees under all of the circumstances'" (DiBlasi v DiBlasi, 48 A.D.3d 403, 405 [2d Dept 2008], lv denied 10 N.Y.3d 716 , quoting Grumet v Grumet, 37 A.D.3d 534, 536 [2d Dept 2007]).
It is also well-settled that "[a]n award of interim counsel fees is designed to create parity in divorce litigation by preventing a monied spouse from wearing down a nonmonied spouse on the basis of sheer financial strength" (Rosenbaum v Rosenbaum, 55 A.D.3d 713, 714 [2d Dept 2008], citing O'Shea v O'Shea, 93 N.Y.2d 187, 193 ; Wald v Wald, 44 A.D.3d 848 [2d Dept 2007]). "Such awards are `designed to redress the economic disparity between the monied spouse and the non-monied spouse' and ensure that the matrimonial scales of justice are
Interim counsel fees are awarded to level the playing field and "`prevent the more affluent spouse from wearing down or financially punishing the opposition by recalcitrance, or by prolonging the litigation'" (Gober v Gober, 282 A.D.2d 392, 393 [1st Dept 2001], quoting O'Shea, 93 NY2d at 193; see also Prichep v Prichep, 52 A.D.3d 61, 65 [2d Dept 2008]). Thus, interim fees are generally warranted "where there is a significant disparity in the financial circumstances of the parties" (Prichep, 52 AD3d at 65; see also DelDuca v DelDuca, 304 A.D.2d 610, 611 [2d Dept 2003]; Celauro v Celauro, 257 A.D.2d 588, 589 [2d Dept 1999]).
"[U]nlike a final award of counsel fees, a detailed inquiry or evidentiary hearing is not required prior to the award of interim counsel fees" (Isaacs v Isaacs, 71 A.D.3d 951, 951 [2d Dept 2010]; see also Prichep, 52 AD3d at 65; Singer v Singer, 16 A.D.3d 666, 667 [2d Dept 2005]; Flach v Flach, 114 A.D.2d 929, 929 [2d Dept 1985]). Additionally, it should be noted that the Court in Prichep specifically provided that "[w]hen a party to a divorce action requests an interim award of counsel fees, as opposed to a final award, no such detailed inquiry is warranted" (52 A.D.3d 61, 65 [2d Dept 2008]).
The portion of plaintiff's application for counsel fees relating to fees incurred prior to November 12, 2015 is the only portion of the application that the court will be addressing at this juncture. That branch of the application related to future counsel fees pendente lite is deemed moot as it relates to this particular attorney. Inasmuch as she is no longer the attorney of record any application for future fees would properly rest with an application by incoming or new counsel should the plaintiff seek to retain a new attorney.
The analysis herein must now turn to a determination of fees for outgoing counsel and this court must determine to what extent, inter alia, the underlying acts, if any, which resulted in the assertion of the invocation of the 5th Amendment have on a determination of an award of counsel fees. It is clear, that had this remained a pendente lite application for prospective fees the court would not require an evidentiary hearing on this issue of the merits of the underlying claim (that the acts of a party should preclude a fee) because the assertion
Inasmuch as the fee for outgoing counsel is not based upon future services, the inquiry is more akin to that of a final counsel fees award which requires an evidentiary hearing. In the case at bar, plaintiff's former counsel already received $75,000 voluntarily from defendant pendente lite and the final amount requested is not going to be utilized to defend or prosecute the action.
Certainly defendant's claims to the accuracy of the billing would be subject to examination at a hearing. While given the present knowledge of this court, there is no basis to impugn the ethics or integrity of plaintiff's former counsel as to a claim she had knowledge of the cloning of devices. To order a counsel fees evidentiary hearing now, which would be utilized at this juncture to address the issue of the alleged cloning and the assertion of the 5th Amendment protection, would entangle outgoing counsel in the merits of the matrimonial action and cause her to be part of what could be in effect a "trial within a trial" on the collateral issue of counsel fees for former counsel. The issue of the cloning and assertion of the 5th Amendment invocation are still in the discovery phase of litigation. The court does not agree with defendant's assertion that Domestic Relations Law § 237 acts or should act as a blanket prohibition on recovery of counsel fees, where an individual acts in a manner contrary to the law. The court must in each case in awarding final counsel fees evaluate the totality of the circumstances and the merits of the actions taken in conjunction with the very important concept of who is the monied spouse.
This court is well aware of the dictates of the Court of Appeals decision in Frankel as well as the Second Department decision in Prichep. The facts in Prichep clearly dealt with a pendente lite award and Frankel established not only the principle that courts should not defer the issue of pendente lite fees to the trial court, but that an attorney has the right to maintain a separate claim for counsel fees without the need for a plenary action.
In Prichep the Second Department held that "[t]he trial court will be in the best position to determine whether the fees should be charged to the husband, or charged to the wife as an offset against the equitable distribution award she ultimately receives, or divided between the parties." (Prichep v Prichep,
Here, since the claim of the entitlement to a final fee is truly a trial issue and this particular fee in this case at this juncture is not for the purpose of equalizing the playing field pendente lite, the issue will be deferred to the trial court. Had plaintiff's counsel remained as the attorney of record the outcome of this application may have very well been different pendente lite. The court would be loathe to deny counsel fees which could in effect deny the plaintiff proper representation and the "fault" arguments put forth by the defendant are far less persuasive at the pendente lite stage. The trial court, after hearing all of the evidence will be in the best position to assess what, if any, counsel fees should be paid by defendant. This is not to say plaintiff will not have to bear payment of some, if not all, of plaintiff's counsel's fees. The papers presented are devoid of any evidence that if the court were to award a fee now to plaintiff's former counsel there would be assets in equitable distribution which could be distributed to defendant to reapportion that award.
Plaintiff's motion (motion sequence No. 7) is held in abeyance and referred to an evidentiary hearing to be held after the conclusion of the trial in this matter and shall be limited to the issues as detailed herein.