NY appeals court upholds Supreme Court ruling on law firms’ earnings split

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A state appeals court has upheld a lower court ruling that denied a motion to disqualify a state Supreme Court justice from a case and determined how two law firms would share the proceeds of lawsuits they both worked on.

In August 2022, state Supreme Court Justice Catherine R. Nugent Panepinto, in Buffalo, denied a motion from plaintiff Looney Injury Law PLLC to disqualify Panepinto, the justice assigned to the cases.

Panepinto also determined that the defendant, Cellino Law LLP, was entitled to 95% of the contingent attorney’s fees in the cases both firms worked on.

In a decision released Friday, the Appellate Division of state Supreme Court, Fourth Department, affirmed those rulings.

According to court papers, several clients retained Cellino Law to represent them in personal injury cases. Under the retainer agreements, Cellino Law would be entitled to a third of any settlement or award.

Cellino Law did substantial work on the cases before being notified that the clients decided to retain Looney Law instead, according to court papers.

After the cases were resolved, Cellino Law sought payment for work done on the cases.

“We conclude that Supreme Court did not abuse its discretion in denying the motion insofar as it sought recusal,” the Fourth Department wrote.

When there is no “legal disqualification,” the court wrote, a judge “is generally the sole arbiter of recusal.”

“It is well established that a court’s recusal decision will not be overturned absent an abuse of discretion,” according to the decision.

The Fourth Department ruled “there is nothing demonstrating any bias on the court’s part that unjustly affected the result to the detriment of respondents or that the court had a predetermined outcome of the case in mind during the hearing,” the court wrote.

“Thus, we perceive no abuse of discretion by the court in denying respondents’ motion insofar as it sought disqualification,” the court wrote.

The court also rejected Looney’s claim that the court abused its discretion in allocating the attorneys’ fees award.

“In fixing the percentages to be awarded to petitioners and respondents, the court properly considered the amount of time each of the involved firms spent on the case, the nature of the work performed, the relative contributions of counsel, the quality of the services rendered, and the amount recovered,” the court wrote.

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