Tuesday, February 9, 2010

Two Appellate Wins in One Day

It is always nice to win an appeal, especially when representing the appellant. It is doubly nice to win two in one day.

First, the morning mail brought the news that I had prevailed in the Appellate Term, Second Department, in an unusual case, Sneddon v. Greene. In April, 2008, the trial judge had granted my motion that he recuse himself on the grounds there was an appearance he was not impartial. Four months later, however, the judge sua sponte vacated the order of recusal, put himself back in the case, and ordered a trial be held before him.

The Appellate Term granted my motion for a stay of the trial, and in the appellant's brief I argued that once the judge had recused himself he had no further jurisdiction or authority to participate in the case. The Appellate Term agreed.

There is little New York case law on the jurisdiction of a judge after he has recused himself. The Appellate Term decision in Sneddon v. Greene is in accord with the views of courts in other states which have addressed the question.

The second appellate success today came in the decision of the Appellate Division, First Department, regarding a fee dispute between attorney and client. I had been waiting for a ruling since I argued the case on March 10, 2009.

At the conclusion of a real estate transaction a law firm held in escrow approximately $310,000 which it claimed was the fee owed by the client. The client disputed the fee, and the matter went to arbitration under the Rules of the Chief Administrator of the Courts. See, 22 NYCRR § 137.0 et seq.

The arbitrators awarded the firm $280,000 without interest. But instead of paying itself the $280,000 from the escrow account and remitting the balance to the client, the firm persuaded Supreme Court, New York County, to grant it two years' interest on the fee award. It then entered judgment for the total amount, and with interest running on the judgment, the client was required to pay even more to satisfy the judgment.

I represented the appealing client, and the Appellate Division agreed that it was improper for a court to award the firm interest denied to it by the arbitrators. The Appellate Division also agreed that after the arbitrators' decision the firm should have paid itself the $280,000 from the funds in the escrow account and promptly remitted the balance to the client. Under the ruling the firm is directed to repay to the client, with interest, all sums received from the client above the $280,000 awarded by the arbitrators.

The Appellate Division ruling is also noteworthy because it cites provisions of the Rules of Professional Conduct to support its conclusion that the law firm acted improperly. The opinion offers useful guidance on the responsibility of attorneys involved in fee disputes with clients. The decision, Levin & Glasser v. Kenmore Property, LLC, can be found here.

It would be nice to say that having won two cases I can take the rest of the day off. But alas, there is always something else to do.

Friday, February 5, 2010

Interlocutory Appeals

Interlocutory appeals are a staple of civil appellate practice in the New York State courts. CPLR § 5701(a)(2)(v) gives a party the right to appeal to the Appellate Division from an interlocutory order which "affects a substantial right."

The New York courts have generously interpreted "affects a substantial right," so that there are few interlocutory orders which are not appealable as of right.

In the federal courts, however, there are few interlocutory appeals as of right. See, 28 U.S.C. § 1292(a). They must be authorized by a district judge. 28 U.S.C. § 1292(b). Litigants must, therefore, ordinarily await final judgment before raising on appeal a district judge ruling earlier in the case. There are two recent reminders of the limits on interlocutory appeals in federal courts.

In Mohawk Industries, Inc. v. Carpentier, ___ U.S. ___, 130 S.Ct. 599 (2009), the Supreme Court ruled that an immediate appeal would not be permitted from a disclosure order of a district judge which arguably impinged on the attorney-client privilege. This was the first full opinion written by Justice Sonia Sotomayor. The opinion can be found here.

Earlier this week in In re Zyprexa Products Liability Litigation the United States Court of Appeals for the Second Circuit restated the limited availability of interlocutory appeals in the federal courts. The decision can be found here.