Decision After Trial On February 26, 2018, the parties executed a settlement agreement in connection with this matter. The agreement provided that plaintiffs were entitled to be reimbursed for legal fees and costs as part of their damages under Navigation Law §181(1). The settlement agreement did not resolve the amount of the attorney’s fees; but provided to have that amount determined at a separate hearing.Pursuant to a retainer agreement plaintiffs agreed to a contingency fee equal to one-third of the recovery, which was $270,000. Disbursement and litigation expenses which are not in dispute equaled $5,453.00, for a total amount of $95,453.00 which plaintiff now seeks.ATTORNEYS FEES UNDER NAVIGATION LAW §181Navigation Law §181 allows recovery of both direct and indirect damages against the discharger of oil. Indirect damages can include an attorney’s fee incurred by a property owner against the discharger (see Starnella v. Heat, 14 AD3d 694, 789 NYS2d 227 [2005]; See also AMCO Intl. v. Long Is. R.R. Co., 302 AD2d 338, 754 NYS2d 655 [2003]; Strand v. Neglia, 232 AD2d 907, 649 NYS2d 729 [1996]). Although Navigation Law §181 provides for recovery of attorneys fees, it does not address how the fees should be calculated. Case law varies on appropriate method of fee calculation under §181. The methods include billed hours (see Miller Realty Assoc. v. Amendola, 51 AD3d 987, 859 NYS2d 258 [2008]; 2800 Hylan Blvd., LLC v. Motiva Enters., LLC, 2011 US Dist LEXIS 120924 [SDNY Sep. 28, 2011]) and contingency fees (see Fuchs & Bergh, Inc. v. Lance Enters., 48 AD3d 626, 853 NYS2d 106 [2008]). In 2800 Hylan Blvd., LLC v. Motiva Enters., LLC, 2011 US Dist LEXIS 120924, the plaintiff was awarded $82,773.50 in attorney’s fees based on hourly billings charged by the attorney. In Fuchs & Bergh, Inc. v. Lance Enters., 48 AD3d 626, the trial court awarded the plaintiffs $274,730.74 in attorney’s fees based upon a one-third contingency fee (plus litigation costs).1Defendants argue that under §181, the plaintiff is entitled to only “reasonable” attorney’s fees on a quantum meruit basis (Defendant Post-Trial Brief, p. 3). Defendants cite Miller Realty Assoc. v. Amendola, 51 AD3d 987, 859 NYS2d 258 (2008) for support. However, in Miller, the court’s reference to “reasonable attorney’s fees” specifically relates to “a landlord['s] right to recover an attorney’s fee pursuant to a lease provision” Id., 989. The attorney’s fees that were recovered by the plaintiff in Miller were contractual not statutory. Plaintiff asserts that since §181 requires payment of all damages “incurred,” it is entitled to recover all attorneys fees agreed upon irrespective of the amount. Underlying this assertion is that an agreed upon fee must be approved, whether or not it is reasonable. The court disagrees.Contingent fees are permitted on the theory that the attorney shares the litigation risk. If the recovery is too low or nonexistent the fee may be less than reflective of the attorney’s efforts; but the attorney may have a windfall if the recovery is much greater or requires less effort to litigate. “The essence of a contingent fee is risk — shared risk. Sometimes the attorney wins, sometimes he or she loses, sometimes he or she breaks even” (Belzer v. Bollea, 150 Misc 2d 925, 928, 571 NYS2d 365 [1990]). The Second Department held in determining reasonable compensation for an attorney, “the court must consider such factors as the time, effort, and skill required; the difficulty of the questions presented; counsel’s experience, ability, and reputation; the fee customarily charged in the locality; and the contingency or certainty of compensation” (see Vigo v. 501 Second St. Holding Corp., 121 AD3d 778, 780, 994 NYS2d 354 [2014]; Green v. Silver, 79 AD3d 1097, 1098, 913 NYS2d 574 [2010]).Defendants argue that granting the contingency fee of $90,000 would reward plaintiffs’ firm an amount disproportionate to the work their attorney performed. Defendants submit that a “reasonable” attorney’s fee must be based on the “lodestar” calculation: the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate (see Hensley v. Eckerhart, 461 US 424 [1982]). Defendants offered testimony from Glenn Sabele, Esq., an experienced trial attorney who reviewed the documents filed by plaintiffs’ law firm in connection with this hearing and estimated that no more than fifteen to twenty hours were spent by plaintiffs’ firm in prosecuting the case. When Sabele was asked what fee structure he would bill under if he were to take on an §181 case, he replied “I would bill on a one-third retainer” (Transcript, p. 37, line 11). Defendants’ own witness validated that a one-third contingency retainer in a §181 case is not unreasonable.STRICT LIABILITY DOES NOT GUARANTEE CERTAINTY OF COMPENSATIONNavigation Law imposes strict liability on any entity, large or small, commercial or residential, responsible for discharge of petroleum (see State v. New York Cent. Mut. Fire Ins. Co., 147 AD2d 77, 542 NYS2d 402, [1989]). The imposition of strict liability is to ensure prompt cleanup of an oil spill. Defendants argue that the strict liability removes the element of risk from the fee arrangement.Strict liability does not guarantee that attorney’s fees are proportionate to the efforts spent prosecuting each case. In 2800 Hylan Blvd (supra), plaintiff incurred attorney’s fees of $82,773.50, well in excess of one-third of the awarded damages of $228,583. In Fuchs (supra), it took over six-years to prosecute the case to its conclusion. The attorney’s fees awarded based on a one-third contingency fee are in some cases considerably less than a fee based on hourly billings. The risk principle justifying a contingency fee retainer remains valid in §181 cases despite the strict liability standard.NAVIGATION LAW §181 CASES DO NOT REQUIRE AN OCA FILING.Defendant argues that plaintiff is barred from recovery of counsel fees because an OCA statement was not filed. 22 NYCRR 691.20 states:Every attorney who, in connection with any action or claim for damages for personal injury or for property damages…due to negligence…accepts a retainer or enters into an agreement, express or implied, for compensation for services rendered or to be rendered in such action, claim or proceeding, whereby his compensation is to be dependent or contingent in whole or in part upon the successful prosecution or settlement thereof, shall, within 30 days from the date of any such retainer or agreement of compensation, sign personally and file with the Office of Court Administration of the State of New York a written statement of such retainer or agreement of compensation, containing the information hereinafter set forth.While the initial complaint filed by plaintiffs had negligence claims, the litigation was settled under the Navigation Law claim. Filing a written statement of a contingency retainer or agreement of compensation is not required by the OCA since the final settlement was based on property damages, not any negligence claims.CONCLUSIONPlaintiffs signed a contingency agreement with their law firm providing for one-third of the settlement award. This contingency fee percentage is within the statutory limits set under “Schedule B” of 22 NYCRR §603.7(e). In determining the amount of attorney’s fees to be awarded, the court is not bound by the plaintiffs’ contingency fee retainer agreement and can exercise its discretion to assess reasonable attorney’s fees. Contingency fee arrangements are an acceptable factor to be considered in determining reasonable counsel fees on a case-by-case basis.In the instant case the services provided by plaintiffs’ law firm achieved prompt and just compensation for the plaintiffs. Plaintiffs’ lead attorney has twenty-years of expertise in this specialized aspect of Navigation Law. The court finds that a contingency fee in the amount of one-third of the award is reasonable.ORDERED, that the application for counsel fees in the sum of $90,000 and disbursements in the sum of $5,453.00 is hereby granted.Submit judgment on notice.This constitutes the decision and order of this court.Dated: July 10, 2019
