Arroni v. Schembari Home Improvements LLC

54 Misc. 3d 909, 42 N.Y.S.3d 635
CourtNew York Supreme Court
DecidedDecember 14, 2016
StatusPublished

This text of 54 Misc. 3d 909 (Arroni v. Schembari Home Improvements LLC) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arroni v. Schembari Home Improvements LLC, 54 Misc. 3d 909, 42 N.Y.S.3d 635 (N.Y. Super. Ct. 2016).

Opinion

OPINION OF THE COURT

David F. Everett, J.

In the case at bar, Stephen R. Krawitz, of Stephen R. Krawitz, LLC, the original attorney in the above-captioned personal injury action, is disqualified from receiving the portion of the attorneys’ fees to which he would be entitled (on a quantum meruit basis) had he not violated the Rules of Professional Conduct by virtue of his conflicting representation. Conversely, Krawitz’s disqualification from receiving attorneys’ fees does not entitle current counsel, Marcel Weisman, LLC, to receive attorneys’ fees for work they did not perform. The Weis-man firm is entitled to attorneys’ fees on a quantum meruit basis, which in this court’s discretion is 90% of the net attorneys’ fees recovered. In the interest of justice, the court finds that the balance of 10% of the net attorneys’ fees, to which Krawitz would have been entitled, is to be forwarded to The Lawyers’ Fund for Client Protection of the State of New York, which has paid out an aggregate of $1,828,437 to 75 individual former clients defrauded by Krawitz, and which has only recovered $22,058 in restitution.

The underlying facts, as relevant to this fee dispute, are that plaintiff Oudi Arroni, by his original attorney Krawitz, commenced the above-captioned action by filing a summons and complaint in the Office of the Westchester County Clerk on April 22, 2013, to recover damages for injuries he allegedly sustained when, on June 2, 2012, the balcony railing he was leaning against at a residence located at 58 Broadway, Ossin-ing, New York, gave way, causing him to fall to the ground below. Defendants David Black (D. Black) and Kasturi Black (K. Black) were named as defendants based on their ownership of the premises, and Schembari was named as a defendant based on its installation of the balcony railing. Issue was joined by service of D. Black and K. Black’s joint answer on or about May 9, 2013, and by service of Schembari’s answer on or about June 11, 2013.

It is undisputed that, after commencing Arroni’s personal injury action, Krawitz was retained by K. Black on or about [911]*911August 19, 2013, to represent her in a divorce proceeding against her husband and codefendant, D. Black. It is also undisputed that in or about April 2014, Arroni discharged Krawitz as his counsel in his personal injury case and engaged the Weisman firm. At some point, Krawitz was also discharged as K. Black’s attorney in her matrimonial case. The Weisman firm contends that Arroni discharged Krawitz when he (Arroni) discovered the conflicting representation. Krawitz, however, claims that both Arroni and K. Black, whom he states were involved in a relationship, wanted him to represent K. Black in her matrimonial case, despite his advising them both that this would present a perceived conflict of interest.

In August 2014 Krawitz resigned from the practice of law, and his name was stricken from the roll of attorneys and counselors-at-law in the State of New York, nunc pro tunc to August 20, 2014, by order of the Appellate Division, First Department. This resignation was in connection with complaints of professional misconduct, including allegations, unrelated to this case, of intentional conversion and/or misappropriation of client funds held in escrow (see Matter of Krawitz, 124 AD3d 198 [1st Dept 2015]). Krawitz was subsequently convicted, by pleas of guilty, of grand larceny in the second degree and scheme to defraud in the first degree stemming from charges that he stole client funds. He is currently serving a prison sentence at Clinton Correctional Facility.

Currently before the court is a fee dispute between Krawitz and the Weisman firm. Krawitz claims entitlement to a portion of the attorneys’ fees commensurate with his representation of Arroni. The Weisman firm contends that Krawitz should be disqualified from receiving any attorneys’ fees in this action and that it is entitled to recover the entire $98,945 in net attorneys’ fees. This, the Weisman firm contends, is because Ar-roni’s discharge of Krawitz as his counsel of record should be deemed a discharge for just cause, based on a conflict of interest in violation of the Rules of Professional Conduct. Based on the retainer agreement of 33V3%, a settlement amount of $300,000, and disbursements in the amount of $3,165, the net amount received by Arroni is $197,890, and the amount of the net attorneys’ fees is $98,945.

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Related

Matter of Krawitz
124 A.D.3d 198 (Appellate Division of the Supreme Court of New York, 2015)
Shelby v. Blakes
129 A.D.3d 823 (Appellate Division of the Supreme Court of New York, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
54 Misc. 3d 909, 42 N.Y.S.3d 635, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arroni-v-schembari-home-improvements-llc-nysupct-2016.