Sweeney v. Nassau Electric Railroad

Scudder, J.

Plaintiff, by an attorney, commenced an action against defendant to recover damages-for personal injuries. Defendant in its answer pleaded as a defense that subsequently to the service of the summons the plaintiff, for valuable consideration, executed an instrument releasing and discharging defendant from liability upon the cause of action set up in the complaint and that such settlement or adjustment was made without the consent of plaintiff’s attorney. To this defense plaintiff, by his attorney, demurred on the ground that it was insufficient in law. The demurrer is based upon section 480 of the Judiciary Law, a new section added to the Judiciary Law by Laws of 1913, chapter 603. This section reads as follows:

“ Sec. 480. Settlement of actions for personal injury. — If, in an action commenced to recover damages for a personal injury or for death as the result of a personal injury, [there is] an attorney having or claiming to have a lien for services performed or to be performed who shall have appeared for the person or persons having or claiming to have a right of action for such injury or death, no settlement or adjustment of such action shall be valid, unless consented to in writing by such attorney and by the person or persons for whom he shall have appeared, or approved by an order of the court in which such action is brought.”

The conditional clause which constitutes the first portion of the sentence of which this section is composed is defective in that the predicate is omitted. The language employed, however, sufficiently indicates the legislative intent to enáble the court to remedy the defect by construction. The words "there is,” in brackets, in the above quotation, have been inserted by me to indicate my understanding of what the legislature intended. It was not the purpose of the legislature in passing this act to protect ignorant plaintiffs from being prevailed upon by unscrupulous defendants to settle meritorious causes of action for inadequate amounts. A plaintiff of full age and sound mind, however ignorant he may be, cannot be deprived of his right to settle an action as he pleases. Such right is incident to his absolute ownership of the cause of action. It is a property right protected by the Constitution, and the legislature is without power to deprive him of such right by making its exercise subject to the approval of his attorney or of the court. It is within the power of the legislature, however, to protect the claim of plaintiff’s attorney for services performed or to be performed in such an action by limiting plaintiff’s power to settle the action. Both the common law and the courts, in the exercise of their equitable powers, seek to secure to an attorney his fees and costs. By the common law an attorney by commencing an action acquires no lien on the cause of action. The lien only arises after judgment. But where, before judgment, the parties make a settlement of the action eollusively for the purpose of defrauding the attorney out of his costs, the courts have been accustomed to intervene and to protect the attorney by permitting him to proceed with the action, and, if he is able to establish a right to recover on the cause of action as it originally stood, to permit such recovery :td the extent of his costs in the action. Randall v. Van Wagenen, 115 N. Y. 527, 532; Coughlin v. N. Y. C. & H. R. R. R. Co., 71 N. Y. 443. The courts, however, recognize the plaintiff’s right to control the management of his own cause and to determine when the liti'giiti'on shall cease, provided he is willing and able to -satisfy his' attorney’s just claim. Lee v. Vacuum Oil Co., 126 N. Y. 579. Section 480 of the Judiciary Law is to be construed in the light of the law as it stood at the time of its enactment. It is apparent from the language of this statute that its purpose is to protect attorneys who conduct personal injury and death cases from collusive settlements by their clients. By its terms it is only when the attorney has or claims to have a lien that his consent in writing or the approval of the court is necessary to the validity of the settlement-. This construction of the statute disposes of plaintiff’s demurrer. It does not appear from the defense demurred to that the settlement which it sets up is within the statute. It is not alleged therein that plaintiff’s attorney has or claims to have a lien for services or that defendant had notice of any such claim or that plaintiff is not willing and able to satisfy his attorney’s just claims. Demurrer overruled, with 'costs.

Demurrer overruled, with costs.