Hadrian Equities Partners, LLC v. SCWORX Corporation

Background

Hadrian Equities Partners, LLC and the Phillip W. Caprio, Jr. 2007 Irrevocable Trust sued SCWORX Corporation for breach of contract. Carole L. Bernstein, who had represented SCWORX, moved to withdraw after stating, among other things, that SCWORX was not paying her fees. SCWORX did not respond to the withdrawal motion or appear as directed. On May 30, 2023, the court granted Bernstein’s motion to withdraw.

Because Bernstein was not discharged for cause, the court explained that she was entitled to payment for work performed in the case. The court also recognized a common-law “retaining lien,” which allows withdrawing counsel to keep pleadings and other client documents in counsel’s possession until the client pays amounts owed for qualifying work. The court preliminarily granted Bernstein’s request for such a lien over SCWORX’s files, but requested additional information about the amount and gave SCWORX an opportunity to respond. SCWORX did not respond by the deadline.

The Requested Lien

Bernstein sought a retaining lien of $69,163.98. Her billing records described work performed in March 2023, including reviewing text messages, preparing for cross-examination, preparing witnesses, and attending five consecutive days of a hearing. The court found that all of the requested fees came from a separate private arbitration and that Bernstein had not substantiated unpaid time related to the lawsuit before the court.

Ruling

The court held that it could set fees for work arising from the lawsuit but not for work performed in unrelated proceedings. Judge Jennifer L. Rochon therefore denied Bernstein’s request for a retaining lien related to SCWORX’s litigation files in this case, with leave to renew if Bernstein can substantiate a basis for a lien based on unpaid fees for work performed in this action.