By Joseph Ax
NEW YORK, Jan 10 (Reuters) - A lawyer who was replaced by
his client after negotiating a $1 million personal injury
settlement cannot collect his full contingency fee, a divided
New York appeals court ruled Thursday.
The Appellate Division, First Department, held that the
settlement for a woman injured by a bus was not finalized
because her acceptance of the offer had not been formally
communicated to the defendant. She eventually hired new
attorneys to seek a more favorable settlement, replacing her
original lawyer, Jeffrey Aronsky.
"This action was not settled because the executed release
was never forwarded to defendant nor was acceptance of the offer
otherwise communicated to defendant or its carrier," a
four-judge majority wrote in an unsigned opinion.
Aronsky will be allowed to place a lien on Adwoa Gyabaah's
recovery, the majority said. Once the case is over, he will
receive a pro rata fee based on the amount of work he
In dissent, Justice Richard Andrias said the fact that the
woman had signed a general release of her claims against Rivlab
Transportation -- coupled with a letter from defense counsel
stating he had been advised that the offer was accepted -- made
the settlement binding. Aronsky should therefore receive the
full contingency fee, he said.
Gyabaah was hit by a bus owned by Rivlab in August 2010 and
retained Aronsky on a one-third contingency fee basis, according
to the decision. Rivlab's insurance carrier offered to pay the
policy limit of $1 million to settle Gyabaah's claims.
Gyabaah signed a release and other documents in October but
eventually became convinced the deal was not favorable enough
and hired the Law Offices of Kenneth A. Wilhelm. Aronsky then
moved for an order enforcing the settlement and his fee.
Bronx Supreme Court Justice Julia Rodriguez rejected
Aronsky's request last year "in what (she) perceived to be the
interest of justice," according to the ruling.
The court agreed that the motion should have been rejected
but said the trial court erred in its reasoning.
"Although the motion incorrectly invoked the interest of
justice, the application of contract law nevertheless required
the denial of Aronsky's motion," the court wrote. "Defense
counsel's statement in the letter that he was 'advised' of a
settlement does not suffice as evidence that such a settlement
was effected. Moreover, the letter is devoid of probative value
because it is unsworn."
In dissent, Andrias said the state had a "strong public
policy of encouraging the resolution of disputes" and noted the
release signed by Gyabaah did not call for it to be physically
delivered to Rivlab in order to enforce it.
"Here, plaintiff signed two documents, on two separate
occasions, a week apart, that unambiguously release her claims
against defendant in exchange for $1 million," he said.
Barry Liebman, who now represents Gyabaah, said he was
pleased the court had accepted his argument that contract law
called for Aronsky's motion to be denied.
Lawyers for Aronsky and for Rivlab did not immediately
return calls for comment on Thursday.
The case is Gyabaah v. Rivlab Transportation Corp, Appellate
Division, First Department, No. 7654.
For Gyabaah: Barry Liebman of the Law Offices of Kenneth A.
For Rivlab: Elizabeth Gelfand Kastner of Kral, Clerkin,
Redmond, Ryan, Perry & Van Etten.
For Aronsky: Brian Isaac of Pollack, Pollack, Isaac & De
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