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Surrogate’s Court Abused Its Discretion In Awarding Attorney’s Fees Greater than Those Called for by the Retainer Agreement—Evidence in Support of “Exceptional Circumstances” Justifying the Higher Fees Not Sufficient—Retainer Agreement Construed in Light Most Favorable to the Client

The Third Department determined Surrogate’s Court erred in awarding attorney’s fees in excess of those agreed to in the retainer agreement between the executors of an estate and the attorney hired to handle the estate.  Although the retainer agreement allowed for increased fees for “extenuating circumstances,” the Third Department found the proof of consultation and approval re: increased fees, required by the retainer agreement, lacking.  The court noted that a retainer agreement is construed in the light most favorable to the client:

Surrogate’s Court abused its discretion in fixing [the estate attorney’s] fee at $50,000. Surrogate’s Court is vested with broad discretion to fix the reasonable compensation of an attorney who renders legal services to a fiduciary of an estate, subject to modification only where that discretion has been abused (see SCPA 2110…). While the court is not bound by a retainer agreement when determining whether an unreasonable fee must be restricted …, a court “cannot award legal fees in excess of what has been agreed to by the parties in a retainer agreement” … . The attorney seeking fees bears the burden of establishing the reasonable value of the services rendered … . * * *

“The general rule that ‘equivocal contracts will be construed against the drafters’ is subject to particularly rigorous enforcement in the context of attorney-client retainer agreements,” such that we must construe the agreement in the light most favorable to the clients … . Matter of Benware, 2014 NY Slip Op 07218, 3rd Dept 10-23-14

 

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