Khatibi v. Bonura
- Edgardo Ramos
- 1:10-cv-01168
- U.S. District Court · Southern District of New York
- 10
In Khatibi v. Bonura, Judge Ramos vacated one lien but left the $1,195,000 reserved for other attorneys’ fees unchanged.
Kian Daniel Khatibi, Shandell, Blitz, Blitz & Ashley LLP, and former attorneys Ameer Benno and Richard Sullivan. The ruling vacated the law firm’s lien but left $1,195,000 reserved for the other attorneys’ fee claims.
What happened
In Khatibi v. Bonura, Kian Daniel Khatibi asked the court to eliminate a law firm’s charging lien and reduce money held for his former attorneys’ fees. The dispute arose after Khatibi settled his civil-rights case for $5 million and money from his settlement share was placed in a special account for fee claims.
The court found that Shandell, Blitz, Blitz & Ashley LLP had not represented Khatibi in this federal case and had never appeared for him here. The firm’s lien was therefore vacated. The court separately considered the fees claimed by Ameer Benno and Richard Sullivan and declined to reduce the $1,195,000 held for them.
Judge Edgardo Ramos granted Khatibi’s motion in part and denied it in part. The parties were ordered to update the court about a tentative fee settlement at a later telephone conference.
The detailed version
- Khatibi v. Bonura · No. 1:10-cv-01168
- Edgardo Ramos
- Sept. 16, 2020
Background
Kian Daniel Khatibi brought this federal civil-rights action under 42 U.S.C. § 1983 against Stephen Bonura, Robert Mazzei, the Village of Pleasantville, and the Village of Pleasantville Police Department. The case settled for $5,000,000 in April 2018. Because Khatibi’s former attorneys claimed fees, $1,645,000 from Khatibi’s share of the settlement was placed in a special account as security for those claims.
Khatibi later reached an agreement with Donald Sullivan for $450,000, which reduced the account to $1,195,000. The remaining dispute concerned fees claimed by Ameer Benno and Richard Sullivan. They reported working 794 and 372.6 hours, respectively, while Khatibi argued that only 273.7 and 224.4 hours were properly attributable to this case. Khatibi sought to reduce the amount held in the account by $950,000.
Khatibi also challenged a charging lien filed by Shandell, Blitz, Blitz & Ashley LLP. A charging lien is a claim by an attorney against money recovered by a client in a case. The firm had represented Khatibi in state-court proceedings seeking to vacate his criminal conviction, but it had not represented him or appeared for him in this federal action.
Legal standard
The court applied New York Judiciary Law § 475, which governs attorneys’ charging liens in federal courts located in New York. Under that law, an attorney who appears for a party may obtain a lien against a favorable judgment or settlement. The court explained that the lien is available to an attorney of record and that the amount must be fair.
For attorneys discharged without cause before a case ends, compensation may be calculated either as the fair value of services performed—called quantum meruit—or as a percentage of the client’s eventual recovery if the parties agreed to that approach. Quantum meruit means payment based on the reasonable value of the services provided.
Court’s analysis
The court vacated Shandell, Blitz, Blitz & Ashley LLP’s lien because the firm had not participated in this federal action and, to the court’s knowledge, had not been involved in it other than filing the notice of lien.
The court rejected Benno and Richard Sullivan’s argument that New York’s charging-lien statute did not apply because the case involved federal questions. The court also treated the fee dispute as one between Khatibi and his former attorneys, rather than solely a dispute between attorneys, because there was no identified agreement between the former attorneys and Khatibi’s later counsel concerning the fees.
The court nevertheless concluded that the parties’ agreement to postpone resolving the fees until later supported a percentage-based fee calculation. It therefore declined to reduce the $1,195,000 held in the special account. The court added that even a quantum-meruit analysis would not have made reducing the account appropriate at that stage.
Disposition
Judge Edgardo Ramos granted in part and denied in part Khatibi’s motion. The court vacated Shandell, Blitz, Blitz & Ashley LLP’s charging lien, but did not reduce the amount held in the special account for Benno and Richard Sullivan’s fees. The parties were directed to appear for a telephone conference on October 7, 2020, and provide an update concerning their tentative fee settlement.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.