plaintiff/client derived no benefit therefrom having any relation to the outcome or the amount of his past-due benefits.
The certification sets out no information about the usual and customary hourly rate of the attorney who rendered the services. Judging from the nature, extent and simplicity of the papers filed (the complaint is a single typewritten page, and the substitution is a printed form with blanks), the sum of $150. seems to be a reasonable sum for representation before the court by Freeman & Bass. (3 hours at $50. per hour).
The certification also states that the original retainer agreement made November 12, 1980 was for a "fee of 25% of all past due benefits received by the plaintiff", and it is asserted that these amount to $2,066.80, of which $516.70 is being withheld by the Social Security Administration for possible application to attorney fees if allowed by the court.
Of course, this description is to be read in the context of the provisions of 42 U.S.C. § 406, under which it means that the client agreed to pay a reasonable attorney's fee, in such amount as might be determined by the agency or by the court, as the case may be, payable only in the event that the outcome was successful and even then subject to a maximum of 25% of the past-due benefits to which the claimant was entitled. Future benefits that may ensue play no part in the calculation.
The certification of the substituted attorneys, Gluck & Tobin, Esq., details services totalling 27 hours in connection with the proceedings before this court. Of this total, time involved in sending a copy of the ruling here to the former attorney, discussing it with him, conferring with the client and engaging in phone and telephone communications with the former attorneys and negotiating their fee claim, must be excluded as this time relates to an aspect having nothing to do with the outcome of the case or establishing the past-due benefits to which claimant was entitled by reason of the suit here. These items aggregate 2.25 hours, and their deduction leaves a net time of 24.75 hours. The items appear reasonable, the papers filed or submitted reflect the effort involved, and the court is naturally aware of the time involved in coming to court on the date set for oral argument, waiting to be reached, and presenting argument.
This second certification discloses that the agreed rate arrived at with plaintiff was $95. per hour. Of course, this is also to be read in the context of 42 U.S.C. § 406, as outlined above. In comparison with the $50. per hour rate used for the relatively simple tasks performed up through substitution, the rate agreed on appears reasonable since a higher level of professional skill was called for during the briefing and argument stages. The court sets the amount of $2,351.25 as a reasonable allowance for the services rendered in this court by Gluck & Tobin, Esqs.
The combined sum of $150. and $2,351.25, or $2,501.25, is treated as an allowance to the attorney of record, Gluck & Tobin, Esqs., who are authorized to divide the same with Freeman & Bass Esqs., by paying them $150.00 thereof.
However, these figures are necessarily tentative since the base on which the 25% limit must be calculated is not known at this time.
The original claim for retirement insurance benefits, filed December 7, 1978 at the Plainfield Branch Office shows that it was filed not only for Mr. Oroshnik, but, by checking the "Yes" box on page 3, it was also filed to protect his wife's right to social security benefits as she was already 62 and was eligible on his earnings record. See Exh. 1, Transcript pp 77-80. Also, the decision of the ALJ mailed September 22, 1981 dealt with both Mr. Oroshnik's benefits and his wife's benefits, and while it was a denial generally for the calendar year 1979, it did find an entitlement to benefits for the months of March, June, August and October, which amount to a combined recovery for both of $1,462.10 compared to the earlier complete denial.
Presumably, application may be made to the Social Security Administration under 42 U.S.C. § 406(a) for an allowance based on that figure as the base for the 25% maximum for services before the agency, but the court has no voice in that aspect and expresses no opinion on it. However, if that sum is one successfully recovered in the proceedings before the agency, it will need to be deducted from the total amount of past-due benefits to which Mr. & Mrs. Oroshnik were entitled to receive by reason of the judgment here. The amount cannot be counted twice.
The attorney of record will accordingly need to obtain a certification from the Social Security Administration to establish the amount of the past-due benefits to which Mr. & Mrs. Oroshnik became entitled by reason of the judgment here, as of the date the judgment was entered, which was November 12, 1982. No benefits accruing or payable thereafter are to be included since they are future benefits after judgment, not past-due benefits.
The controls and limitations placed in 42 U.S.C. § 406 at various times are shown by the legislative history to reflect a concern by Congress that claimants be protected against any obligation to pay other than reasonable fees, and in no event not more than 25% of past-due benefits. The court takes care to see that this objective is achieved.
No order fixing the precise allowance can be entered until the certification is received. A form of order may be submitted at the same time the SSA certification is served on the U.S. Attorney and filed. In the event that the 25% limit be less than the amounts mentioned above, after deduction for such past-due benefits for which entitlement was established by the agency decision, then the allowance shall be reduced to that limit, and the authority to divide with the original attorney of record shall be prorated accordingly.
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