Wright v. Ethical Culture Fieldston School

Background

Serene R. Wright, a former student at Ethical Culture Fieldston School (ECFS), and her mother, Josephine DeJesus, brought discrimination and retaliation claims under federal, New York State, and New York City law against ECFS and certain employees. They were initially represented by Derek Sells of The Cochran Firm (TCF), later replacing him with Nathaniel B. Smith and another attorney.

The defendants moved to enforce what they claimed was a settlement reached on June 16, 2022. TCF separately moved to enforce a charging lien, which is a lawyer’s claim against money recovered in a case to secure payment for legal services. The court also considered the plaintiffs’ request for discovery concerning the alleged settlement. Magistrate Judge Cave issued this report and recommendation for review by District Judge J. Paul Oetken; it was not itself the final district court ruling.

Settlement motion

The court applied New York contract principles and the four factors commonly used to determine whether parties intended to be bound before signing a formal settlement agreement. The June 26 draft and September 2 draft both stated that the agreement would become effective only when fully executed. The September 2 draft also added a non-disparagement provision that had not appeared in the earlier draft and had not been mentioned in the parties’ earlier communications.

The court concluded that the communications showed, at most, agreement on a monetary amount. They did not establish agreement on all material terms, including the non-disparagement provision. ECFS had not paid the settlement amount, the plaintiffs had not released their claims, and the drafts were never signed. On balance, the court found that no enforceable settlement was reached while TCF represented the plaintiffs.

Lien motion

Because the court found no enforceable settlement, the plaintiffs’ claims remained pending. The court therefore recommended denying TCF’s lien motion without prejudice, meaning the request could be raised again later. The court explained that fee issues are ordinarily deferred until the main case is resolved.

The court also analyzed the lien issue in the alternative. It rejected the plaintiffs’ argument that they had discharged TCF for cause. In the court’s view, the record did not show a significant breach of legal duty that would eliminate TCF’s right to compensation. The court therefore concluded that TCF would be entitled to a charging lien based on quantum meruit—the reasonable value of services performed—rather than the 40-percent contingency fee in the retainer agreement.

Using reduced hourly rates of $650 for Sells and $500 for Mina Q. Malik, and reducing the recorded hours by 10% to account for billing problems including internal conferences and block billing, the court recommended a lien of $56,945.00 if the settlement motion were granted. The alternative recommendation was to grant in part and deny in part the lien motion.

Recommended disposition

The report recommends that the Settlement Motion be DENIED, the Lien Motion be DENIED without prejudice, and the plaintiffs’ discovery request be DENIED. Alternatively, if the Settlement Motion is granted, the report recommends that the Lien Motion be granted in part and denied in part, with a $56,945.00 charging lien. Parties were given 14 days after service to file objections with District Judge Oetken.