KURZMAN KARELSEN FRANK LLP v. KAISER (2001)

Order, Supreme Court, New York County (Emily Goodman, J.), entered December 6, 1999, which, in an action by a law firm against another law firm (defendant “KSM”) and its members (defendants Kaiser, Saurborn, and Mair) arising out of a fee-sharing agreement, granted defendants' motion to dismiss the complaint for failure to state a cause of action except for plaintiff's breach of contract claim against Kaiser, unanimously modified, on the law, to grant plaintiff leave to serve an amended complaint asserting a breach of contract claim against KSM, and otherwise affirmed, without costs.

 When Kaiser left plaintiff's firm, he took a case with him, promising, by letter, to pay plaintiff a specified part of any contingency fee he received.   Kaiser, Saurborn and Mair later formed KSM, which succeeded Kaiser as attorney of record in that case, which was settled after trial.   KSM received substantial fees but paid no part to plaintiff.   There is no merit to plaintiff's claim that with respect to these fees, defendants owed it a fiduciary duty under Code of Professional Responsibility DR 9-102 (22 NYCRR 1200.46) (see, Shapiro v. McNeill, 92 N.Y.2d 91, 97, 677 N.Y.S.2d 48, 699 N.E.2d 407), or otherwise. The alleged fee-sharing agreement confirmed by Kaiser, which used the phraseology “I will pay” to plaintiff a percentage “of any monies that come into my hands by reason of my contingency fee arrangement” with the client, was a future contingent promise to pay that could give rise only to a breach of contract claim (see, Clark v. Robinson, 252 App.Div. 857, 299 N.Y.S. 474).   It did not constitute an assignment of a portion of the client's recovery (see, Leon v. Martinez, 84 N.Y.2d 83, 88-89, 614 N.Y.S.2d 972, 638 N.E.2d 511), or convey a present interest in any specific fund (see, Donovan v. Middlebrook, 95 App.Div. 365, 88 N.Y.S. 607, Peters Griffin Woodward, Inc. v. WCSC, Inc., 88 A.D.2d 883, 452 N.Y.S.2d 599).   Thus, plaintiff's breach of fiduciary duty, accounting, conversion, and money had and received claims are either unfounded or duplicative of the breach of contract claim, and were properly dismissed (see, McMahan & Co. v. Bass, 250 A.D.2d 460, 461-462, 673 N.Y.S.2d 19, lv. denied in part and dismissed in part 92 N.Y.2d 1013, 684 N.Y.S.2d 484, 707 N.E.2d 439).   However, plaintiff should be allowed to amend the complaint to plead a breach of contract claim against KSM because that firm succeeded Kaiser as counsel of record in the underlying action and received the fees (see, Law Offices of Sanford A. Rubenstein v. Shapiro Baines & Saasto, 269 A.D.2d 224, 225, 703 N.Y.S.2d 110, lv. denied 95 N.Y.2d 757, 713 N.Y.S.2d 1, 734 N.E.2d 1212).   We have considered plaintiff's other arguments and find them unavailing.