Today’s New York Law Journal reports that a a Florida lawyer’s suit for two million dollars in legal fees to which he claims he is entitled for representing a Suffolk County, New York resident in a claim arising out of her husband’s death in the World Trade Center attack has been stayed pending the outcome of  estate proceedings in Suffolk County Surrogate’s Court.  Troiano v. Mardovich 06 Civ. 523 promises to be a very interesting case as it develops further.

The widow of Edward Mardovich originally contacted Thomas J. Troiano Esq., her friend and former neighbor and asked him to return to New York and assist her in making a claim for her husband’s death. After first receiving a "presumptive " award of damages by the Special Master in the amount of $1,087,240.40, Mr. Troiano convinced his client that this should be appealed. His efforts paid off and a new award of $6,656,151.40 was issued.

The parties had entered into a retainer agreement and, pursuant to this , Mrs. Mardovich originally approved payment of one third of the fund to her lawyer. Subsequent to this, however,  the guardian ad litem which the court appointed for Mrs. Mardovich’s minor children objected to the legal fees as excessive and protracted legal proceedings have been taking place on this issue before Suffolk County Surrogate John M. Czygier Jr.  Mr. Troiano then commenced his action in Federal Court 

It is common practice in the Surrogate’s Court that legal fees are reviewed and often reduced where the beneficiaries of an estate include small children. Even though Surrogate Czygier has taken no steps as yet to reduce Mr. Troiano’s legal fees, the Florida lawyer has attempted to head this outcome off by making a claim in Federal Court to have his retainer agreement enforced there.

This situation highlights a significant conflict of law.  Mr. Troiano proceeds not only upon a jurisdictional theory of  diversity but also based upon the jurisdiction conferred upon the federal courts by Congress in establishing the 9-11 fund and the  methods for making claims against it.  Mrs. Mardovich has asserted that all matters concerning her husband’s estate are clearly within the jurisdiction of the Surrogate’s Court and that the federal court lack’s jurisdiction to involve itself.

Federal District Court Judge Preshka engages in a lengthy discourse as to the various aspects of this conflict between federal and state jurisdiction. She points out that matters are further complicated by the fact that the courts of New York have already exercised jurisdiction over matters involving the 9-11 fund citing, in particular Cruz v. McAneney, 816 N.Y.S.2d 486(2 Dept 2006) reported earlier here.  Under what the court cites as the Brillhart Abstention doctrine,  "a stay or dismissal is appropriate when the federal action could be better settled in the pending state court proceeding." Therefore, while Judge Preska may not have made up her mind as to how deeply the federal court may chose to involve itself at this point, it is clear that she is waiting to see just how Surrogate Czygier deals with the issues before him in Suffolk County. Further details Will be reported here.