On Thursday, in the matter, the Appellate Division, First Department, found that the settlement over a vehicle accident injury was not finalized because her acceptance of the offer had not been formally communicated to the defendant. The plaintiff had ultimately hired new attorneys to seek a more favorable deal, replacing Jeffrey Aronsky, who was her original lawyer in the matter, and who had been working on an agreement of earning one-third of settlement as contingency fee.
The appeals court observed, “This action was not settled because the executed release was never forwarded to defendant nor was acceptance of the offer otherwise communicated to defendant or its carrier.”
The four-judge majority said that Aronsky can receive a pro rata fee based on the amount of work he did and would be allowed to place a lien on the recovery by the original plaintiff.
The complainant in the instant case, Adwoa Gyabaah, was hit by a bus owned by Rivlab in August 2010, and she retained Aronsky on the basis of a one-third contingency fee. The insurance carrier of Rivlab offered to pay the policy limit of $1 million to settle the claims.
The appeals court remarked in its unsigned opinion that Aronsky's claim should not have been admitted at all and observed, “Although the motion incorrectly invoked the interest of justice, the application of contract law nevertheless required the denial of Aronsky's motion … Defense counsel's statement in the letter that he was ‘advised' of a settlement does not suffice as evidence that such a settlement was effected. Moreover, the letter is devoid of probative value because it is unsworn.”
However, in dissent to the majority, Justice Richard Andrias observed that there was a “strong public policy of encouraging the resolution of disputes,” and held that once Gyabaah signed the release, it did not call for it to be physically delivered to Rivlab in order to enforce it.
Justice Andrias also noted, “Here, plaintiff signed two documents, on two separate occasions, a week apart, that unambiguously release her claims against defendant in exchange for $1 million.” Andrias was of the opinion that the settlement was full and binding and Aronsky deserved his contingency fees.
The case is Gyabaah v. Rivlab Transportation Corp, Appellate Division, First Department, No. 7654.
