Weinberg v Sultan 2016 NY Slip Op 30272(U) February 10, 2016 Supreme Court, New York County Docket Number: /2013 Judge: Cynthia S.

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1 Wenberg v Sultan 2016 NY Slp Op 30272(U) February 10, 2016 Supreme Court, New York County Docket Number: /2013 Judge: Cyntha S. Kern Cases posted wth a "30000" dentfer,.e., 2013 NY Slp Op 30001(U), are republshed from varous state and local government webstes. These nclude the New York State Unfed Court Systems E-Courts Servce, and the Bronx County Clerks offce. Ths opnon s uncorrected and not selected for offcal publcaton.

2 [* 1] SUPREME COURT OF THE STATE OF NEW YORK,1 COUNTY OF NEW YORK: Part x SARAH WENBERG, Plantff, ndex No /2013 -aganst- DECSON/ORDER LESLE SULT AN, ET AL. Defendants. " x HON. CYNTHA s. KERN, J.S.C. Rectaton, as requred by CPLR 2219( a), of the papers cosdered n the revew of ths moton for: l Papers Numbered Notce of Moton and Affdavts Annexed...:... 1 Affrmatons n Opposton to the Moton /Cross-moton Reply Affdavts...: Exhbts... 5 Plantffs former attorney, Kenneth J. Glassman, has brought the present moton to wthdraw as attorney for plantff Sarah Wenberg and to allow hm to release and pay out of escrow attorneys fees owed to hm by Sarah Wenberg. Ths court prevously granted the moton by Mr. Glassman permttng hm to wthdraw as counsel for plantff and wll now address the porton of the moton allowng hm to release and pay of escrow attorneys fees owed to hm by Sarah Wenberg. There s also a cross-moton by the BrennanLaw Frm PLLC for an :1 order transferrng the escrowed funds n the possesson of Kenneth J. Glassman to an escrow, l. account under the supervson of movant who s plantffs;:current counsel. n hs affdavt n support of hs applcaton for attorneys fees to te pad to hm out of the 1 :

3 [* 2] funds n escrow, Mr. Glassman alleges as follows. Mr. Glassman was retaned by plantff pursuant to a wrtten retaner agreement on May 30, 2od 1 He was orgnally retaned to defend a pendng foreclosure acton for 371 W. 46th St. Howevr, at the tme he was retaned, the property had already been sold. At the closng, plantff!s attorney, Lesle Sultan, deposted nto her escrow account $368, of the net sales proceeds: On September 9, 2014 plantff and defendant 22 W. 30th St. Propertes LLC entered nto a so ordered stpulton n whch the escrow from Sultan was transferred to the escrow account of Kenneth Glassman as plantffs! attorney. The stpulaton provded that $368, plus bterest was "td be released to Kenneth J Glassman, as Attorney and held n escrow untl further.order of the court or plantff. hd. h. d. h f. : wt raws wt preju ce t e cause o acton or resc1ss1on. " n hs movng paprs, Mr. Glassman alleges that he has a chargng len on the funds! [ whch he s holdng n escrow as a result of whch the court should ssue an order allowng hm to release the proceeds n the amount of hs outstandng bll. Judcary Law 475 provdes: From the commencement of an acton, specal or other proceedng n any court... the attorney who appears for a party has a len upon hs clents cause of acton, clam or counterclam, whch attaches to a verdct, report, determnaton, decson, judgment or fnal order n hs clents favor, and the proceeds thereof n whatever hands they may come; and the len cannot be affected by any settlement betweenjhe partes before or after judgment, fnal order or determnaton. The court upon the petton of the clent or attorney may determne and enforce the len.,, :1 t Under New York law, a chargng len under Judcary Law 475. "s a securty nterest n the favorable result of ltgaton (ctaton omtted), gvng the attorney equtable ownershp 1 nterest n the clents cause of acton and ensurng that th.e attorney can collect from the fund he.. has created for that purpose on behalf of the clent." Chadbourne & Parke, LLP v. AB Recur, Fnans, 18 A.D.3d 222, 223 (1st Dept 2005). A chargng len s only enforceable aganst the 2

4 [* 3] fund created n that acton as there must be proceeds fron the ltgaton upon whh the len can affx. d. n the present case, Mr. Glassman does not have ahy chargng len n the funds whch are " beng held n the escrow account as the funds were not created as part of the ltgaton whch Mr: Glassman commenced on behalf of plantff. There has been absolutely no "verdct, report, determnaton, decson, judgment or fnal order" n favor: of plantff n ths acton whch resulted n the funds n escrow beng created. To the cotrary, the escrowed funds were " generated as a result of the sale of plantffs buldng to rlesle Sultan, hch s the very transacton that plantff s challengng n the present acton and whch obcurred before Mr. Glassman represented plantff. The sole reason that the funds were placed n escrow n the frst nstance and that plantff has not obtaned the funds when. they were released by Lesle Sultan s ;,! that she s stll pursung an appeal of ths courts decson dsmssng he clam for rescsson of the sale of her buldng. However, the proceeds from the sale of the buldng were not generated as a result of any actons taken n ths ltgaton as a result, of whch plantff does not have a chargng len n these proceeds. n hs opposton to the cross-moton by plantffs current counsel to have the escrowed. funds transferred to her, Mr. Glassman argues that he has.a retanng len n the escrowed funds.! Whether or not ths s a new argument that should have been n rased nmr. Glassmans movng papers or an argument that only needed to be rased n response to the moton by new counsel to have the escrowed funds transferred to her, the court fnds that Mr. Glassman does not have a retanng len n the escrowed funds. The Second Depart1ent has held that an attorney may not mpose a retanng len upon funds whch t s holdng n escrow on behalf of ts clent because t,1 3

5 [* 4] holds the funds n a fducary capacty on behalf of ts clent. Golberg & Connolly v. Graystone :( Constr. Corp., 65 A.D.3d 1082, 1084 (2nd Dept 2009). See also Schelter v. Schelter, 206 A.D.2d 865 (2d Dept 1994) (funds held n escrow by an attorney for a clent are not subject to an,j attorneys retanng len). Snce t s undsputed that Mr.. Glassman s holdng the funds n an! escrow account on behalf of hs former clent, he has no rght to mpose a retanng len on these funds. Based on the foregong determnaton that Mr. Gllssman does not have a chargng len or. a retanng len on the escrowed funds, plantffs new C01;lnsel s enttled to have the funds transferred to her to be held n escrow. However, these funds cannot be released from escrow pursuant to the stpulaton and order of ths court untl thre s a fnal determnaton of plantffs clam for rescsson of the sale of the buldng, ncludng ny appeal she may take of ths courts determnaton dsmssng her clam for rescsson. The foregong consttutes the decson and order of the court. j Dated: -:l. h O \ \( Enter: ---!( ". ;."... :..._..S.C. CYNTHA S. KERN J.S.C 4.,