Recently, a Manhattan judge reduced a firm’s legal fees by $74,000, allowing only $60,000 of the $114,000 requested. Attorney Adam Leitman Bailey and his firm were working on a “$70,000 settlement in a lawsuit over a noisy dog.”
Andrew Stein, the former Manhattan borough president, was a tenant renting a unit in an Upper East Side co-op building. When he moved into the co-op he was accompanied by two dogs, which constantly barked. It apparently created quite the nuisance and neighbors soon complained. In 2003, the co-op board hired Nessenoff & Miltberg and sued Stein over the dogs.
Stein moved out in February 2006, but the litigation continued. “Nessenoff billed more than $100,000 from 2006 until April 2009, when the co-op retained Adam Leitman Bailey, P.C. as its new counsel. There was a standing offer from Stein to settle for $35,000 but the co-op was seeking $500,000 in damages.”
In May 2009, Justice Edward Lehner dismissed the co-op’s claims for attorney fees. Stein then withdrew his settlement offer. In July 2009, the co-op emailed Attorney Andrew Bailey over what the co-op deemed “excessive and duplicative” billing by his firm.
In October 2009 the case settled for $70,000. Bailey’s firm requested $98,000 in fees, on top of the $15,000 already paid for a total of nearly $114,000. The co-op sued the firm, “seeking a judgment that the fee was excessive.” In response, Bailey’s firm counterclaimed.
The president of the co-op board testified that Bailey told him the work would only cost $50,000. Bailey testified that he was “95 percent sure he made no such promise.” The president also testified that he never authorized Bailey’s firm to prepare for trial. Naturally, Bailey argued that he did have the authorization.
Bailey also testified that he told the co-op as many as “50 times” to settle the case for a small amount. However, he did admit that he never put it in writing. He also said that the goal was to settle, but that this goal “got lost.”
Acting Supreme Court Justice Arthur Engoron said that the hourly rates were justified, but found that the amount requested was excessive. “A case that has been extensively litigated for years by another firm, and that was essentially ready for trial when inherited, and that settled without a trial, should not cost a king’s ransom.”
The judge also noted that the co-op would have come out ahead had it simply accepted the $35,000 settlement instead of dragging things out.
In the end, the judge knocked down the fees to $60,000, which included the $15,000 already paid. Bailey said he is considering an appeal. The co-op was satisfied with the decision rendered.
