Court rules on attorney fee-sharing dispute in malpractice case

A New York appellate court has ruled in a case involving a dispute over attorney fees in a medical malpractice lawsuit. The decision, made on September 30, 2026, affects attorneys Danette Molina and the law firm Kramer, Dillof, Livingston & Moore (KDLM). The court upheld a fee-sharing agreement that awarded 75% of the attorneys' fees to KDLM, leaving Molina with 25%.

This ruling is significant as it clarifies the enforceability of oral fee-sharing agreements between attorneys in New York. It highlights the importance of clear communication and documentation in legal fee arrangements.

Background

The case, known as Persaud v. Muoio, arose from a medical malpractice claim filed by Mala Persaud on behalf of her infant child. The lawsuit was initiated in 2015, with Molina representing the plaintiff since May 2013. As the case approached trial in July 2021, Molina brought in KDLM to serve as trial counsel.

After the case was settled in February 2022, Molina sought at least 50% of the attorneys' fees collected, citing the American Bar Association's Model Rules of Professional Conduct. In response, KDLM filed a cross-motion to enforce a fee-sharing agreement that stipulated they would receive 75% of the fees, while Molina would receive 25%.

The Ruling

The New York Appellate Division ruled in favor of KDLM, affirming the lower court's decision. The court found that both Molina and KDLM had significantly contributed to the representation of the plaintiff. The ruling emphasized that the existence of an oral fee-sharing agreement was established through Molina's email in July 2021, which referenced the 75%-25% split.

The court stated, "the submissions demonstrated the existence of an oral fee-sharing agreement to split attorneys' fees consistent with the Supreme Court's order."

The judges on the panel included Lara J. Genovesi, William G. Ford, Helen Voutsinas, and Donna-Marie E. Golia. They concluded that Molina did not provide sufficient evidence to support her claim for a larger share of the fees and that the absence of a written agreement did not invalidate the oral agreement.

Impact

This ruling sets a clear precedent regarding the enforceability of oral fee-sharing agreements in New York. It underscores the necessity for attorneys to document their agreements clearly to avoid disputes over fee distributions in the future. The decision is likely to influence how attorneys negotiate and formalize their fee-sharing arrangements.

Furthermore, the ruling may encourage attorneys to maintain clear communication and documentation throughout their representation of clients. This case serves as a reminder that both verbal and written agreements can have significant legal implications in the field of law.

What's Next

Details were not available in the court filing regarding any potential appeals. It is unclear if Molina plans to challenge the ruling further or if there are related cases pending that may affect this decision.