Agusta & Ross v. Trancamp Contracting Corp.

193 Misc. 2d 781, 751 N.Y.S.2d 155, 2002 N.Y. Misc. LEXIS 1512
CourtCivil Court of the City of New York
DecidedNovember 21, 2002
StatusPublished

This text of 193 Misc. 2d 781 (Agusta & Ross v. Trancamp Contracting Corp.) is published on Counsel Stack Legal Research, covering Civil Court of the City of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Agusta & Ross v. Trancamp Contracting Corp., 193 Misc. 2d 781, 751 N.Y.S.2d 155, 2002 N.Y. Misc. LEXIS 1512 (N.Y. Super. Ct. 2002).

Opinion

[782]*782OPINION OF THE COURT

Charles J. Markey, J.

The focus of this controversy is a written general-special hybrid retainer agreement between a law firm and a, now, former client. Such a fee arrangement has not been discussed by any reported New York state court case.

The Facts

Plaintiff Agusta & Ross (A&R) is a law firm with its offices located in Queens County. Defendant Trancamp Contracting Corp. (Trancamp) erroneously sued herein as “Tran Camp Contracting Corp.”1 maintains its principal offices in Yonkers, Westchester County, New York.

On October 27, 2000, Michael J. Agusta, Esq., a principal of the plaintiff law firm, entered into an agreement (the agreement) with Albert A. Tranquillo, the president of Trancamp. In the agreement, A&R was named as “Special Outside General Counsel” of Trancamp. The agreement was broken down simply into two parts, “Legal Services to be Provided” and “Legal Services Not Included.”

A&R, in the legal services it agreed to provide, stated that it would provide “unlimited telephone consultations * * * on any existing or new legal matter which may arise,” would meet with the client on any new matter, will meet with the client quarterly to discuss “ongoing matters,” “will interface, as necessary with legal specialists” in order “to manage the cost of outside counsel,” “will assist you in receivable collections,” and will work with the client’s credit department to improve its procedures.

A&R, for “Legal Services Not Included,” singled out litigation, for which various fees were set forth. For instance, in the event of a collection case that was to be instituted in the Civil Court of the City of New York, plaintiff would take a contingency of 22% instead of the “standard 33%.” Regarding other litigations in which the client would be billed by the hour, Trancamp would pay $140 per hour instead of A&R’s “standard $250.00 hourly rate.”

The agreement stated: “For the above professional services to be rendered, our annual retainer shall be Twenty Five Thousand ($25,000.00) Dollars, payable quarterly, plus any [783]*783additional fees as described above, as they may arise from time to time.” Trancamp paid quarterly retainers on October 1, 2000 and January 1, 2001, each in the amount of $6,250.

At some point, although not specified anywhere, the relationship between the client and its attorneys collapsed, and by an endorsed complaint erroneously dated “February 30 [sic], 2002,” plaintiff instituted this action seeking the sum of $21,105.86. Defendant’s counterclaim seeks the sum of $212,000. In its counterclaim, contained in its answer dated March 8, 2002, Trancamp charges that A&R failed to perform any meaningful work for the plaintiff, received money for “no consideration,” filed a “false, fraudulent” charging hen in order to avoid turning over to Trancamp crucial papers and client files, and engaged in “gross overbilling [sic] and charges for nonexistent work.”

Plaintiff’s present motion is for dismissal of the defendant’s counterclaim. In support of the motion, Michael Agusta, Esq., contends: “The fees were earned where billed, and no specific services were required to be rendered.”

Defendant opposes the motion by submitting the affidavit of Mr. Tranquillo, its president.2 Defendant expresses shock at Mr. Agusta’s above-quoted statement. Tranquillo further contends that Agusta made numerous representations that he would undertake aggressive collection efforts before resorting to litigation. Tranquillo maintains:

“The promise was made to me that there would be aggressive dunning and telephone pursuit of open accounts to collect open bills within much shorter periods of time than litigation required, and that this was a specialty of his firm, along with its experience in litigation. It is expressly for this reason that I agreed to pay him an annual retainer of $25,000, which was supposed to cover the cost of his diligent collection activities without litigation. He is not simply entitled to the money for his sweet smile.”

Defendant further maintains that in addition to the $12,500 admittedly received by A&R, Trancamp paid an additional $9,000, part of which was to meet a demand by A&R before it would return any of Trancamp’s papers.

[784]*784The Applicable Law

This case involves two significant issues, the parol evidence rule and the varying types of fee arrangements and their permissibility.

A. The Parol Evidence Rule

The statement in Tranquillo’s affidavit referring to his conversations with Agusta prior to signing the agreement implicates the parol evidence rule. Although this issue was not briefed by either side, the parol evidence rule bars “extrinsic evidence of a prior or contemporaneous oral agreement when offered to contradict, vary, add to, or subtract from the clear and unambiguous terms of a valid, integrated written instrument” (Regent Partners, Inc. v Parr Dev. Co., Inc., 960 F Supp 607, 615 [ED NY 1997]; Congress Fin. Corp. v John Morrell & Co., 790 F Supp 459, 468 [SD NY 1992]; see, e.g., New York TRW Tit. Ins. Co. v Wade’s Canadian Inn & Cocktail Lounge, 241 AD2d 845 [3d Dept], lv dismissed 91 NY2d 848 [1997]). However, although the parol evidence rule bars such extrinsic evidence to vary the terms of a plain and unambiguous agreement, “where there is ambiguity or uncertainty in the agreement, the intention of the parties leading up to and attending the execution of the writing is admissible to ascertain the intention of the parties” (Geary v Dade Dev. Corp., 62 AD2d 1083, 1084 [3d Dept 1978]; see, e.g., Phalen v Vineyard L.V., 256 AD2d 1055, 1057 [3d Dept 1998]).

Where an allegation of fraud is made, a court will not apply the parol evidence rule (see, e.g., Berger-Vespa v Rondack Bldg. Inspectors, 293 AD2d 838, 840 [3d Dept 2002]). In the present case, any veiled charge of fraud by the defendant is directed not to the execution of the agreement, but, rather, to conduct subsequent to the signing.

The interpretation of the agreement sought to be introduced by defendant’s president would be admissible solely as to the intent of the agreement, but cannot be admitted to vary the terms of the agreement. Although Tranquillo may be truthful in his assertions, the agreement discusses generally the work that A&R would be expected to provide as “Special Outside General Counsel.”

B. Permissible Legal Fee Arrangements

The leading experts in the United States on permissible fee arrangements by lawyers are Professor Lester Brickman, Professor of Law at Cardozo School of Law and legal ethics expert, and Professor Lawrence A. Cunningham, Professor of [785]*785Law and Business at Boston College. Their joint writings have been approvingly cited and relied upon by courts of other jurisdictions in decisions discussing what fees lawyers may permissibly recover for their time and services (see, Brickman and Cunningham, Nonrefundable Retainers: Impermissible Under Fiduciary, Statutory and Contract Law, 57 Fordham L Rev 149 [1988]; Brickman and Cunningham, Nonrefundable Retainers Revisited, 72 NC L Rev 1 [1993], described as “the leading article on this topic” by the court in

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Related

Regent Partners, Inc. v. PARR DEVELOPMENT CO.
960 F. Supp. 607 (E.D. New York, 1997)
Congress Financial Corp. v. John Morrell & Co.
790 F. Supp. 459 (S.D. New York, 1992)
Cohen v. Radio-Electronics Officers Union District 3
679 A.2d 1188 (Supreme Court of New Jersey, 1996)
Matter of Cooperman
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Kelly v. MD Buyline, Inc.
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Martin v. . Camp
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Greenberg v. Jerome H. Remick & Co.
129 N.E. 211 (New York Court of Appeals, 1920)
In re Sather
3 P.3d 403 (Supreme Court of Colorado, 2000)
Geary v. Dade Development Corp.
62 A.D.2d 1083 (Appellate Division of the Supreme Court of New York, 1978)
New York TRW Title Insurance, Inc. v. Wade's Canadian Inn & Cocktail Lounge
241 A.D.2d 845 (Appellate Division of the Supreme Court of New York, 1997)
Atkins & O'Brien L. L. P. v. ISS International Service System, Inc.
252 A.D.2d 446 (Appellate Division of the Supreme Court of New York, 1998)
Phalen v. Vineyard L.V., Inc.
256 A.D.2d 1055 (Appellate Division of the Supreme Court of New York, 1998)
Berger-Vespa v. Rondack Building Inspectors, Inc.
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Cite This Page — Counsel Stack

Bluebook (online)
193 Misc. 2d 781, 751 N.Y.S.2d 155, 2002 N.Y. Misc. LEXIS 1512, Counsel Stack Legal Research, https://law.counselstack.com/opinion/agusta-ross-v-trancamp-contracting-corp-nycivct-2002.