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Keywords

contractbreach of contractdefendantarbitrationattorneylawyerprecedentequitypleasummary judgment

defendantarbitrationattorneylawyerequitysummary judgmentwill

Related Cases

Prudential Equity Group, LLC v. Ajamie, 538 F.Supp.2d 605

Facts

The dispute arose from an arbitration involving the Sahni family against Prudential Equity Group, LLC. Initially, the Sahnis retained Kroll, Moss & Kroll LLP but later terminated them and hired the Weiss defendants. Weiss then brought in Ajamie, a Texas attorney, to assist in the arbitration, leading to the creation of a fee-sharing agreement. After the arbitration concluded successfully, the attorney's fees became a point of contention, prompting the interpleader action to resolve how the fees should be divided among the involved attorneys.

In 2002, members of a family known as the Sahnis sought to arbitrate certain claims against Prudential Equity Group, LLC (“Prudential”). The Sahnis first retained defendant Martin Kroll and his firm, defendant Kroll, Moss & Kroll LLP, but subsequently terminated the Kroll defendants and retained the Weiss defendants to pursue their claims.

Issue

The main legal issues were whether Ajamie's participation in the New York arbitration constituted unauthorized practice of law, the enforceability of the fee-sharing agreement, and whether the Weiss defendants were entitled to deny Ajamie any recovery based on these claims.

The Weiss defendants contend that the fee-sharing agreement with the Ajamie defendants cannot be enforced—and that the Ajamie defendants are therefore not entitled to any of the attorneys' fees—because Ajamie engaged in the unauthorized practice of law by participating in an arbitration in New York even though he was not admitted to the New York bar.

Rule

The court applied New York law regarding unauthorized practice of law and the enforceability of fee-sharing agreements, specifically referencing New York Disciplinary Rule 2–107(A) which outlines the conditions under which lawyers may share fees.

New York Disciplinary Rule 2–107(A) provides that: A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of the lawyer's law firm, unless: 1. The client consents to employment of the other lawyer after a full disclosure that a division of fees will be made. 2. The division is in proportion to the services performed by each lawyer or, by a writing given the client, each lawyer assumes joint responsibility for the representation. 3. The total fee of the lawyers does not exceed reasonable compensation for all legal services they rendered the client.

Analysis

The court found that Ajamie's participation in the arbitration did not amount to unauthorized practice of law, as established by precedent. The fee-sharing agreement was deemed enforceable because it met the requirements of joint responsibility and client consent. The court also noted that the amended fee agreement clearly outlined the responsibilities and fee distribution between the firms, thus supporting the Weiss defendants' claim for partial summary judgment.

The Court concludes that Ajamie was not engaged in the unauthorized practice of law and, hence, that the Weiss defendants are not entitled to summary judgment denying the Ajamie defendants any recovery.

Conclusion

The court granted partial summary judgment in favor of the Weiss defendants regarding the enforceability of the amended fee agreement, while denying their other claims. The Ajamie defendants were granted summary judgment dismissing the Weiss defendants' breach of contract and unauthorized practice of law claims.

Accordingly, the Weiss defendants are entitled to partial summary judgment enforcing the amended fee agreement as a matter of law.

Who won?

The Weiss defendants prevailed in part, as the court upheld the enforceability of the amended fee agreement, allowing them to recover a portion of the fees as stipulated in the agreement.

The Weiss defendants are entitled to partial summary judgment enforcing the amended fee agreement as a matter of law.

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