Seth Rubenstein, P.C. v. Ganea (N.Y. App. Div., 2nd Dept., No. 2005-07813, April 3, 2007)

A New York appeals court rules that an attorney may recover under quantum meruit for services rendered in a guardianship proceeding despite the absence of a written fee agreement required by state law. Seth Rubenstein, P.C. v. Ganea (N.Y. App. Div., 2nd Dept., No. 2005-07813, April 3, 2007).

Cynthia Ganea retained Seth Rubenstein to represent her in proceedings for her appointment as her husband's guardian. However, the fee agreement was not memorialized in writing as required by a recently-enacted state law. In April 2003, Rubenstein applied for an award of more than $58,000 in fees and disbursements. Higher-than-anticipated fees were incurred as a result of animosity between Mrs. Ganea and her husband's adopted daughter, Sandra, who also sought appointment as guardian.

The guardianship court eventually appointed Sandra as guardian and awarded Mr. Rubenstein just over $18,000 in fees payable from Mr. Ganea's estate. Mrs. Ganea refused to pay the $40,000 balance, asserting that the guardianship court's award represented full payment. Mr. Rubenstein sued Mrs. Ganea for breach of contract and under a theory of quantum meruit.

The trial court ruled that Mr. Rubenstein's failure to comply with the state law did not preclude his attempt to collect attorney's fees and that such 'blind adherence' to the rule could lead to 'unduly harsh' results. However, the court ruled that the guardianship award made the issue of the quantum meruit value for guardianship services res judicata and Mr. Rubenstein was allowed to assert claims in quantum meruit only for the non-guardianship services.

The Appellate Division of the Supreme Court of New York affirms in part and reverses in part, finding that neither the failure to memorialize the fee agreement in writing nor the guardianship court's earlier award precluded Mr. Rubenstein from recovering in quantum meruit for all additional fees. The court notes that the law requiring a written fee agreement was enacted only seven weeks before Mrs. Ganea retained Mr. Rubenstein, and that the law does not provide for a penalty.