LLP v. United States Trust Company, et al., Additional Respondents. (2007)

Decree, Surrogate's Court, New York County (Eve M. Preminger, S.), entered September 23, 2005, which, inter alia, determined and fixed the fees of Chadbourne & Parke LLP (Chadbourne) at $300,000 plus $59,359.86 disbursements, and directed that Chadbourne return $720,493.20 plus pre-decision interest of $376,453.09, at the statutory rate of 9%, from June 25, 1996 to April 15, 2002, unanimously affirmed, with costs.

 The Surrogate, after considering the proper factors (see Matter of Freeman, 34 N.Y.2d 1, 9-10, 355 N.Y.S.2d 336, 311 N.E.2d 480 [1974];  Matter of Potts, 213 App.Div. 59, 209 N.Y.S. 655 [1925], affd. 241 N.Y. 593, 150 N.E. 568 [1925] ), properly exercised her broad discretion (see Matter of Sall, 292 A.D.2d 195, 739 N.Y.S.2d 363 [2002], lv. denied 98 N.Y.2d 606, 746 N.Y.S.2d 456, 774 N.E.2d 221 [2002], appeal dismissed 98 N.Y.2d 726, 749 N.Y.S.2d 476, 779 N.E.2d 187 [2002];  Matter of Marsh, 265 A.D.2d 253, 697 N.Y.S.2d 25 [1999], lv. denied 95 N.Y.2d 755, 712 N.Y.S.2d 447, 734 N.E.2d 759 [2000], appeal dismissed 95 N.Y.2d 956, 722 N.Y.S.2d 469, 745 N.E.2d 389 [2000], cert. denied sub nom Lefkowitz v. Bank of New York, 532 U.S. 1038, 121 S.Ct. 1999, 149 L.Ed.2d 1002 [2001] ) in concluding that Chadbourne had met its burden to prove the reasonableness of its proposed fee (see Matter of Hughes, 214 A.D.2d 353, 625 N.Y.S.2d 894 [1995] ) only to the extent of the above-detailed award.   While this Court had previously noted that Chadbourne's position in this matter was “fraught with difficulty” (see Matter of Hofmann, 287 A.D.2d 119, 124, 733 N.Y.S.2d 168 [2001] ), that statement in no way quantified the amount of fees to which Chadbourne was reasonably entitled, and did not preclude the Surrogate from finding that Chadbourne's efforts had been minimal.   Nor was Chadbourne entitled to a “premium” on its fee for the result it obtained.   While its efforts were a “success,” Chadbourne actually opposed the result for which it now seeks a “premium,” and delayed the consummation of the settlement while it sought releases for its individual clients, providing no benefit to the estate.   Contrary to Chadbourne's contention, the Surrogate was not required to provide detailed calculations for its fee award (see Matter of Duke, 297 A.D.2d 469, 746 N.Y.S.2d 709 [2002];  Matter of Guattery, 278 A.D.2d 738, 739, 717 N.Y.S.2d 764 [2000] ).

 Pre-decision interest was properly assessed as against Chadbourne inasmuch as it retained the excess fee from the estate for some six years, to its benefit, while denying the estate the use of the funds (see Matter of Aurecchione v. New York State Div. of Human Rights, 98 N.Y.2d 21, 26, 744 N.Y.S.2d 349, 771 N.E.2d 231 [2002];  Spodek v. Park Prop. Dev. Assoc., 96 N.Y.2d 577, 581, 733 N.Y.S.2d 674, 759 N.E.2d 760 [2001];  Yalango v. Popp, 232 A.D.2d 844, 648 N.Y.S.2d 763 [1996];  Scull v. Dickson, 127 A.D.2d 544, 512 N.Y.S.2d 106 [1987] ).   The assessment was particularly appropriate here, since the record supports the conclusion that Chadbourne was the cause of lengthy delay in fixing the fees (compare Matter of Duke, 297 A.D.2d at 471, 746 N.Y.S.2d 709).

 The Surrogate properly reduced Chadbourne's claim for disbursements.   Chadbourne does not attempt to refute the court's determination that its billing records do not reflect whether the disbursements represented actual costs to Chadbourne, and the Surrogate could have denied Chadbourne's disbursements claim altogether based on that failure (see Matter of Ellman, 7 A.D.3d 423, 424, 777 N.Y.S.2d 432 [2004] Matter of Duke, 297 A.D.2d at 470-471, 746 N.Y.S.2d 709;  Matter of Diamond, 219 A.D.2d 717, 718, 631 N.Y.S.2d 748 [1995] ).