Pardovani v. Crown Building Maintenance Co.

Background

John Pardovani brought eight claims against Jazz at Lincoln Center, Inc., Crown Building Maintenance Co. d/b/a Able Building Maintenance, Joe Miele, and Richard Cruz. Five claims alleged race discrimination under 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964, and the New York City Human Rights Law. Three claims alleged retaliation under those statutes. Miele also asserted a defamation counterclaim.

Pardovani retained Phillips & Associates on a contingency-fee basis. Under the retainer agreement, the firm would receive 40% of the gross settlement or award, including statutory attorney fees, if Pardovani recovered money. The firm represented Pardovani from the beginning of the case through trial, including discovery, settlement discussions, motions in limine, and trial preparation and presentation.

At trial, the jury found that Pardovani experienced race-based discrimination or a hostile work environment in violation of § 1981, Title VII, and the New York City Human Rights Law. It did not find retaliation. The jury awarded Pardovani $800,000 in compensatory damages and $1 million in punitive damages. It also awarded Miele $1 on his defamation counterclaim.

After trial, Phillips & Associates withdrew as Pardovani’s counsel at his request because of an “irreconcilable conflict.” The court previously awarded the firm $244,896 in statutory attorney fees and $17,362.92 in expenses. Phillips & Associates then sought a charging lien for 40% of Pardovani’s eventual recovery.

Entitlement to a Charging Lien

New York Judiciary Law § 475 governs charging liens in federal courts sitting in New York. A charging lien is an attorney’s claim against the client’s cause of action and any resulting judgment, settlement, award, or proceeds. A discharged attorney generally may receive such a lien for monetary recoveries obtained through the attorney’s work, but not when the attorney was discharged for good cause.

The court determined that Phillips & Associates was entitled to a charging lien. Pardovani argued that he had made the case rather than the firm, that the firm was dysfunctional, and that no attorney had devoted sufficient time to the matter. The court found those allegations insufficient to establish good cause for the firm’s discharge. Based on its own observation of the trial and its prior fee ruling, the court found that the firm had expended significant effort and had credibly represented Pardovani.

Amount of the Lien

Although the retainer agreement provided for 40% of the recovery, the court explained that a charging lien is an equitable remedy, meaning the amount must be fair. The court considered the agreement, the nature and difficulty of the litigation, the time spent, the amount involved, the result achieved, and customary fees for similar work.

The court found that 40% was higher than the typical one-third contingency fee in civil-rights cases and other matters discussed in the opinion. It also characterized the employment-discrimination litigation as relatively uncomplicated because the discriminatory statements were repeated and several incidents were documented. Although Phillips & Associates spent considerable time and effort, the court concluded that the risk-and-reward balance favored the firm.

The court also considered the relationship between the statutory attorney-fee award and the contingency arrangement. The statutory fee under § 1988 was awarded to Pardovani as the prevailing party, not directly to Phillips & Associates. Applying the contingency percentage to that fee was included in calculating the lien, but the court stated that limiting the lien to one-third helped avoid an improper double recovery or windfall for the firm.

Disposition

The court granted Phillips & Associates’ motion as to one-third of Pardovani’s eventual recovery, including the statutory attorney-fee award. It fixed the charging lien at $681,632, calculated as one-third of the $1.8 million jury award plus the previously awarded $244,896 in statutory attorney fees.