ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK
COMMITTEE ON PROFESSIONAL AND JUDICIAL ETHICS
Year 1986 Ethics Opinions
THE ASSOCIATION OF
THE BAR OF THE CITY OF NEW YORK
FORMAL OPINION 1986-6
PROFESSIONAL AND JUDICIAL ETHICS
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July 14, 1986
A lawyer was retained "to
prosecute or adjust a claim for damages" on a contingent fee
basis. He and his client entered into a standard printed-form
retainer agreement, which gave the lawyer the "exclusive
right to take all legal steps to enforce [his client's] claim. .
. ." The retainer agreement does not mention appeals. The
case was tried before a jury, which rendered a verdict for the
defendant. The client has asked the lawyer to pursue an appeal
from the adverse jury verdict, and takes the position that, under
the fee agreement, he is obligated to do so without further
compensation. The lawyer asks if he is ethically obligated to
pursue an appeal from the adverse jury verdict. While we do not
opine on the legal issue of how the retainer agreement here
should be construed, we note that there is a duty under DR
7-101(A)(2) to honor any contractual obligations the lawyer may
have under the agreement, subject to the qualifications discussed
DR 7-101(A)(2) provides that a
lawyer shall not intentionally "[f]ail to carry out a
contract of employment entered into with a client for
professional services, but he may withdraw as permitted under DR
2-110, DR 5-102, and DR 5-105." Lawyers, therefore, have an
ethical obligation to perform professional services they contract
to provide until their completion, absent good cause for
withdrawal. See Hansen v. Wightman, 538 P.2d 1238, 1250 (Wash.
The scope of an attorney's ethical
obligation under DR 7-101(A)(2) is defined by the applicable
retainer agreement. If, for example, a lawyer was contractually
obligated under the retainer agreement to handle the contemplated
appeal, his contractual obligation would give rise to an ethical
duty to undertake the appeal. Conversely, if a lawyer was not
obligated by contract to handle the appeal, he would be under no
separate ethical obligation to undertake it. The determination of
what services are covered by any particular retainer contract
raises questions of law and fact beyond the Committee's
jurisdiction, turning on the language of the agreement and on the
understanding and intent of the parties.
In considering whether a lawyer is
required under a retainer agreement to undertake an appeal from
an adverse jury verdict, it should be borne in mind that New York
courts tend to construe attorney-client agreements "most
favorably for the client." Greenberg v. Bar Steel
Construction Corp., 22 N.Y.2d 210, 213 (1968). See Jacobson v.
Sassower, 66 N.Y.2d 991 (1985). The lawyer may also wish to
consider various judicial decisions which discuss the extent of
lawyers' obligations under contingency agreements. See, e.g.,
Holzberg v. Feuerstein, 104 A.D.2d 971 (2d Dep't 1984); Vitale v.
LaCour, 92 A.D.2d 892 (2d Dep't 1983); Matter of Wise (Smedley),
172 App. Div. 491 (1st Dep't 1916); Mrozinski v. Marinello, 46
Misc. 2d 637 (Sup. Ct. Nassau Cty. 1965); Ellis v. Mitchell, 193
Misc. 956 (Sup. Ct. N. Y. Cty. 1948), aff'd, 275 App. Div. 767
(1st Dep't 1949); Slepin v. Beck, 84 Misc. 254 (Sup. Ct. N.Y.
Cty.), appeal dismissed, 164 App. Div. 886 (1st Dep't 1914);
Matter of Sherburne, 129 Misc. 2d 56, 59 (Surr. Ct. Queens Cty.
1985). See generally 7 Am. Jur. 2d § 259 (1980); 13 A.L.R.3d 673
(1967). In addition, a case currently pending before the New York
Court of Appeals raises somewhat related issues. Shaw v.
Manufacturers Hanover Trust Co., 66 N.Y.2d 604 (1985) (granting
leave to appeal).
Three further comments should be
considered. First, even if it is determined that a contractual
(and hence ethical) obligation exists to handle the appeal,
nevertheless under DR 7-102(A)(2) a lawyer has an obligation to
refrain from knowingly "advanc[ing] a claim or defense that
is unwarranted under existing law, except that he may advance
such claim or defense if it can be supported by good faith
argument for an extension, modification, or reversal of existing
law." Cf. Fed.R.Civ. P. Rule 11.
Second, if it is determined that
no contractual obligation exists to handle the appeal, the lawyer
should so advise the client without delay to avoid any prejudice.
See DR 7-101(A)(3). Such advice should include information
concerning any procedural steps that should be taken to protect
the client's interests.
Finally, with respect to the
drafting of any future retainer agreements, we call attention to
EC 2-19, which wisely advises lawyers to reach a "clear
agreement with . . . client[s] as to the basis of the fee charges
to be made," and to "reduce to writing the
understanding of the parties regarding the fee."