SAN GENNARO SOCIETY v. SABETTA (1999)

Judgment, Supreme Court, New York County (Franklin Weissberg, J.), entered March 16, 1998, which awarded counsel fees in the amount of $145,357.35 to plaintiff's attorneys, unanimously reversed, on the law, without costs, and the matter remanded for a hearing before a Special Referee with the full participation of defendant.

Defendant was appointed Monitor pursuant to an agreement between the City of New York and plaintiff to resolve a dispute regarding issuance of a permit for an annual street festival.   The Monitor was to assure that expenditures made by plaintiff were paid only to legitimate charitable organizations.   Although the agreement unambiguously specified that no payments of any kind were to be made without the express prior approval of the Monitor, counsel for plaintiff obtained an order granting permission to withdraw as counsel and referring to a Special Referee a claim for a lien for legal services alleged to amount to $134,757.35.   The IAS court held that defendant had no standing to participate in those proceedings and, after the Special Referee approved the lien in the full amount, plaintiff's former counsel reduced the claim to judgment.

Defendant had the right, pursuant to the agreement between the City and the plaintiff, to be notified of the fee application and to participate in the proceedings before the Special Referee.   The claim for an attorney's lien is clearly a payment which is subject to the review and approval of the Monitor.   The assertions that the appeal should be dismissed on procedural grounds are without any basis since notice of entry was never served on defendant and the earlier order which denied standing was necessarily brought up by the appeal.   The doctrine of implied severance has no bearing on this case since the final judgment arose out of the same transaction as the earlier order and there were no other causes of action determined by the earlier order (Burke v. Crosson, 85 N.Y.2d 10, 17, 623 N.Y.S.2d 524, 647 N.E.2d 736).

MEMORANDUM DECISION.