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Elder v. Metropolitan Freight Carriers Inc.

decided: September 16, 1976.

LARYSSA ELDER, INDIVIDUALLY AND AS ADMINISTRATRIX OF THE GOODS, CHATTELS AND CREDITS OF ALFRED ELDER, DECEASED, APPELLANT
v.
METROPOLITAN FREIGHT CARRIERS, INC., JOSEPH HARDY, CASA TRUCKING CO., SALVATORE IORATA, COCA COLA BOTTLING CO., INC., APPELLEES



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY (D.C. Civil No. 481-73).

Adams, Hunter and Weis, Circuit Judges.

Author: Weis

WEIS, Circuit Judge.

This appeal challenges a district court's authority to enforce its rule regulating contingent fees in tort actions. We hold that its premature order of dismissal in a wrongful death action did not deprive the court of power to enforce compliance with its fee schedule. Nor was it required to accede to a fee higher than allowed by the rule but approved by a state court which had no jurisdiction over the negligence case. Accordingly, we affirm.

On October 3, 1972 a truck owned by defendant Metropolitan Freight Carriers, Inc. crossed the center line of a highway in New Jersey and collided head-on with the station wagon in which Alfred Elder was a passenger. Elder was killed in the collision, leaving as survivors a widow and three minor children.

The Surrogate's Court for Suffolk County, New York, where Elder had been domiciled and where his family continued to reside, issued restricted letters of administration to the widow. Mrs. Elder was authorized to institute a wrongful death action but not to settle the case without the Surrogate's approval. She retained the Smithtown, New York law firm of Schechter, Schechter & Wilshod, the appellant in fact, to prosecute the wrongful death action on a one-third contingent fee basis. That firm engaged Robert C. Minion of Garden City, New York, as trial counsel.

Mr. Minion determined that the suit should be brought in the United States District Court for New Jersey. Under the rules of that court, Kenneth Grossman, a member of the New Jersey bar, was retained to act as "docket" counsel. Later, Robert McKeever was substituted for Mr. Grossman.

After some routine discovery, the case was called for pretrial conference before a United States Magistrate in January, 1975. Through his efforts, the parties agreed upon a settlement of $300,000.00. At the conference they discussed the necessity of approval by the Surrogate's Court and the magistrate suggested that the defendant's insurance carrier might prefer an order of the district court to pay the money.*fn1 Defense counsel sent a letter to Mr. Minion, confirming the settlement and concluding:

"I shall await word from you with respect to proceedings before the Surrogate of Suffolk County where I believe plaintiff is domiciled. I believe that his findings will at least have to be incorporated in the Order of Dismissal if a separate hearing is not required. I am checking on this and will advise you."

On March 18, 1975 the district judge signed an order which read:

"It appearing that it has been reported to the court that the above-entitled action has been settled;

"It is, on this 18th day of March, 1975

"ORDERED that this action is hereby dismissed, without costs and without prejudice to the right, upon good cause shown within 60 days, to reopen the action if the settlement is not consummated."

On April 3, 1975 defense counsel wrote to the magistrate stating:

"Because of the nature of the action, a suit for wrongful death, and the existence of children, who suffered a pecuniary loss, the matter presently awaits a determination of the Surrogate of Suffolk County, New York, where the decedent's family resides, the manner of distribution. It was my understanding that when an Order is issued by the Surrogate, it would be reviewed and incorporated in an Order of the United States District Court directing payment and entering a dismissal.

"Since the matter was conferenced with you on several occasions and you are most familiar with it, I am writing to you with a copy to Judge Stern asking that the Court maintain an open file on it until the Order of the Surrogate's Court is issued and may ...


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