Lombardo v. Trans Union, LLC

Background

Lisa Lombardo alleged that JPMorgan Chase Bank, N.A. violated the Fair Credit Reporting Act, violated the Connecticut Uniform Commercial Code, and breached an automobile lease agreement. The parties participated in mediation on January 15, 2024. Lombardo’s attorneys and JPMorgan’s attorneys said they reached a binding settlement, but Lombardo disputed that a binding agreement was formed. She said she had not agreed to be responsible for taxes on the entire settlement amount and had repeatedly sought assurances about how the settlement would be structured.

The parties filed a settlement notice on January 17, 2024, and Lombardo’s attorneys later provided her with a proposed final settlement agreement. On April 19, 2024, her attorneys reported that Lombardo no longer wished to finalize the settlement. Lombardo later submitted a letter accusing her attorney of failing to disclose information, unilaterally setting his fee, and pressuring her to accept a settlement. She also disputed the amount and reasonableness of her attorneys’ fees.

Withdrawal of Counsel

Schlanger Law Group, LLP, and Lupkin PLLC moved to withdraw as Lombardo’s attorneys. They relied on the deterioration of the attorney-client relationship, their belief that there was no sound legal basis to oppose JPMorgan’s motion to enforce the settlement, and Lombardo’s fee dispute.

The court found that the first two reasons were satisfactory grounds for withdrawal. It found that the relationship had broken down because the parties described a strained relationship, conflicting accusations, and a lack of cooperation. The court did not assign blame to Lombardo or her attorneys, and it stated that the withdrawal ruling did not affect the merits of JPMorgan’s settlement-enforcement motion, any other merits issue, or the fee dispute.

The court also found that the attorneys’ belief that Lombardo was insisting on a defense they could not support in good faith justified withdrawal. The court rejected the attorneys’ third stated reason, finding that Lombardo’s willingness to submit the fee dispute to binding arbitration did not show that she had no intention of honoring her retainer agreement.

The court concluded that withdrawal would not cause enough disruption or prejudice to require denial of the motion. Discovery was closed, but no trial date or pretrial deadlines had been set. If JPMorgan’s settlement-enforcement motion succeeded, the case would be concluded; if it failed, Lombardo could continue the case with new counsel or without counsel.

Charging Lien

The attorneys also sought a charging lien under Section 475 of the New York Judiciary Law. A charging lien is a claim securing an attorney’s right to payment from money recovered by the client in the case. The attorneys asserted a lien of $712,053.26, but acknowledged that the court could postpone deciding the amount.

The court held that both firms were entitled to a charging lien because they had appeared for Lombardo, her retainer agreement authorized Schlanger Law Group to retain associate counsel and co-counsel, and the attorneys had good cause to withdraw. The court found good cause based on the irreconcilable differences about how to proceed and the deterioration of the attorney-client relationship.

The court granted the motion to fix a charging lien but deferred deciding the lien’s amount until the amount, if any, that Lombardo ultimately recovers has been finally determined. The court did not determine that the attorneys were entitled to the $712,053.26 amount they asserted.

Fee Arbitration and Disposition

Lombardo asked the court to require her attorneys to submit the fee dispute to arbitration. The court denied that request. It explained that the amount in dispute exceeded $50,000, so the attorneys’ consent was required for New York’s fee-dispute arbitration procedures, and Lombardo had not identified an agreement requiring arbitration.

The court granted the motion of Schlanger Law Group, LLP, and Lupkin PLLC to withdraw as attorneys of record and to fix a charging lien on any verdict, settlement, judgment, or final order in the case. It deferred ruling on the lien’s amount, denied Lombardo’s request to compel arbitration, and ordered Lombardo to oppose JPMorgan’s settlement-enforcement motion by December 9, 2024. The opinion did not decide whether the parties had reached a binding settlement or resolve Lombardo’s underlying claims.