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Shanley & Fisher, P.C. v. Sisselman

Decided: February 13, 1987.

SHANLEY & FISHER, P.C., PLAINTIFF-RESPONDENT,
v.
SELIG J. SISSELMAN, INDIVIDUALLY; AS TRUSTEE OF THE LORRAINE R. SISSELMAN TRUST FOR THE BENEFIT OF H. JEROME SISSELMAN UNDER AGREEMENT DATED JUNE 15, 1951: AS TRUSTEE FOR TWENTY-TWO ARNON TRUST FUND; AS TRUSTEE OF THE 1963 H. JEROME AND LORRAINE R. SISSELMAN TRUST (THE MICHAEL DANIEL TRUST); AS TRUSTEE OF THE H. JEROME SISSELMAN TRUST FOR THE BENEFIT OF LORRAINE R. SISSELMAN; AS PRESIDENT AND TRUSTEE OF THE H.J. SISSELMAN TORAH FOUNDATION; AS A PARTNER IN BERGEN COUNTY ASSOCIATES; AS A PARTNER IN SISSELMAN ISRAEL ASSOCIATES; AS A PARTNER IN INDUSTRIAL CONSTRUCTION ASSOCIATES; AS A PARTNER IN ESSENGEE INVESTORS; AS A PARTNER IN THE PACE GROUP; AND AS CO-EXECUTOR OF THE ESTATE OF H. JEROME SISSELMAN; AND DEANNA K. SISSELMAN, INDIVIDUALLY, DEFENDANTS-APPELLANTS



On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County.

Michels, O'Brien and Landau. The opinion of the court was delivered by Michels, P.J.A.D.

Michels

Defendants Selig J. Sisselman, individually and in various trustee and partner capacities (Sisselman), and Deanna K. Sisselman appeal from a summary judgment of the Chancery Division which (1) awarded plaintiff Shanley & Fisher, P.C., $289,702.34 against Sisselman for legal services rendered to him on behalf of all named defendants; (2) declared that a February 7, 1983 letter agreement executed by Sisselman, individually, was valid and binding; and (3) dismissed with prejudice any and all other matters raised in the action.

The pleadings, affidavits and the voluminous exhibits establish that in early 1981 Sisselman's sisters and brothers-in-law commenced an action against him in which they disputed the management and/or control of: (1) a general partnership in which the Sisselman family had substantial interests; (2) the development of certain Berry's Creek Center property which was owned by these partnerships; and (3) various family trusts. These suits were filed some months after the death of Sisselman's father, H. Jerome Sisselman, on August 20, 1980. Prior to H. Jerome's death, Sisselman participated with his father as managing partner of the family partnerships and had been appointed by H. Jerome to serve as trustee for the various family trusts, as president and trustee of the H. Jerome Sisselman Torah Foundation and as co-executor of his father's will. After H. Jerome's death, Sisselman also served as a managing partner of Sisselman Israel Associates. He remained a managing partner of Bergen County Associates until his ouster from

all the family partnerships in 1981. However, Sisselman continued serving as the president and trustee of the Torah Foundation and as the trustee of the Twenty-two Arnon Trust, the 1951 Lorraine R. Sisselman Trust and the 1963 H. Jerome and Lorraine R. Sisselman Trust.

As a result of the suits which had been filed against him, Sisselman approached plaintiff law firm in 1981 to secure legal representation. Prior to plaintiff's retention, Sisselman met to discuss the pending litigation with John J. Francis, Jr., Esq. (Francis) and Glenn S. Pantel, Esq. (Pantel), a partner and an associate, respectively, of the firm. It is Sisselman's recollection that:

[he] made clear to Shanley & Fisher right from the start that it was [his] position that the costs incurred in defending [his] role (for example, as trustee) would be borne by the trust itself, if (as subsequent events have shown) it was found that [his] management of same had been in good faith and reasonable. [He] took a similar position with respect to [his] management responsibilities to the partnerships. It was certainly [his] understanding that Shanley & Fisher's fees would, in large part, be billed to the partnerships, where the work was clearly to their benefit. [He] made this point many, many times during [his] conversations with counsel at Shanley & Fisher.

[He] understood that there would be some charges which were to run solely to [him], but the majority of the work related to the businesses. (Emphasis supplied).

Ultimately, Sisselman "retained plaintiff as counsel for himself, individually, and in his various capacities, on behalf of the trusts and as partner or managing partner of the subject partnerships." However, at the time of plaintiff's retention in 1981, no written retainer agreement was executed. Sisselman orally agreed to pay the hourly fees of plaintiff's attorneys, with the understanding that the litigation would be managed in an "economic" fashion. In accordance with this oral agreement, plaintiff proceeded to provide counsel to Sisselman in the pending matters. This representation began in 1981 and continued into 1983, with Sisselman receiving separate bills for each of the matters plaintiff was handling. These bills were sent in the form of monthly statements which described, in detail, the work performed. During this period, Sisselman never objected

to either the format, detail or allocation of the bills, and he did, in fact, make partial payment totaling $299,721.31 for legal services rendered. Sisselman maintains that these payments were made "from personal funds on behalf of the partnerships."

However, during the course of plaintiff's representation, Sisselman fell behind in the payment of legal fees. As a result of this problem, which Sisselman attributed to his lack of liquid assets, the parties began to discuss alternative payment arrangements. During these discussions, which continued for many months, plaintiff suggested that Sisselman could meet his obligations for legal fees by "signing over" his interest in various assets or partnership interests. In accordance with these suggestions, plaintiff presented Sisselman with several draft payment agreements, recommending that he review the agreements with independent counsel.

In the fall of 1981, Sisselman came to the conclusion that partition of the assets of the various partnerships was necessary for financial reasons. Accordingly, he asked plaintiff "to move for partition of at least some of the partnership assets in order to provide [him] with liquid assets, both with which to pay them, and upon which [he himself] could live." Partition, however, was not sought by plaintiff until April 1983. In the interim, plaintiff participated in various settlement discussions in pending Sisselman family matters.

In the fall of 1982, plaintiff advised Sisselman that if the firm was not paid additional counsel fees, it would be unable to continue to appear in the pending matters. In conjunction with this request for payment, on October 15, 1982 and November 24, 1982, plaintiff drafted payment agreements which provided that it would not withdraw as counsel if Sisselman executed a note to reflect his indebtedness to the firm and assigned to it a security interest in his assets. In addition, plaintiff suggested that in order to raise additional cash Sisselman mortgage his home in Livingston, New Jersey. He refused to do so or to

execute either of the payment agreements with which plaintiff had presented him. In December 1982, plaintiff's board of directors recommended that the firm withdraw as counsel in the Sisselman matters if a security interest was not granted to the firm.

On February 7, 1983, Francis had a proposed letter agreement hand-delivered to Sisselman for his signature and approval. This letter agreement was executed by Sisselman on February 8, 1983. In signing this document, Sisselman acknowledged that the fees and disbursements of plaintiff, rendered to date, were "fair and reasonable." He further acknowledged that he had "received independent legal advice on th[e] Agreement" and that "there [was then] due and owing to Shanley & Fisher, P.C. the sum of $289,702.34 for legal services rendered . . . and disbursements [made] in connection therewith through December 31, 1982."

In consideration of Sisselman's acknowledgment of debt, plaintiff agreed "to forebear from seeking leave of [c]ourt to withdraw as [Sisselman's] attorney." It was further agreed that Sisselman would secure his obligation to pay this debt to plaintiff "by giving Shanley & Fisher, P.C. a security interest in all of the assets allocated to [him] by way of [c]ourt-ordered or [c]ourt-approved partition." However, if partition was not "ordered or approved by the [c]ourt within ten (10) days of the date of filing a motion . . . seeking partition," then the parties agreed that plaintiff was free to seek leave of court to withdraw and to proceed to collect payment of the debt. The executed letter agreement was approved by plaintiff's board of directors on February 11, 1983.

Sisselman asserts that, after reading the letter agreement, he signed it without making alterations because "Shanley & Fisher threatened to withdraw from the case[s] on the eve of trial if [he] did not." Sisselman further maintains that he "was desperate to keep Shanley & Fisher in the cases" since it would have been impossible to retain new counsel and acquaint them

with the cases, in time for the pending trial date. On the other hand, plaintiff asserts that this letter, in its final form, had been:

repeatedly discussed, reviewed and revised in accordance with the conversations and correspondence occurring among John J. Degnan, Esq. and Glenn S. Pantel, Esq. on behalf of plaintiff, and Sisselman and Thomas Bruinooge, Esq., who provided independent counsel to Sisselman. The acknowledgment letter executed on February 8, 1983, reflected changes suggested and proposed by Sisselman.

Pursuant to the terms of the agreement, plaintiff moved for partition of the family partnership assets. However, these motions were denied by the trial court. Although plaintiff's involvement in the Sisselman matters subsequently became "negligible," Sisselman still wanted plaintiff to continue its representation. Accordingly, he suggested that an associate rather than a partner be employed so that "the billings would accumulate more slowly."

On March 17, 1983, plaintiff filed a notice of motion to withdraw from these matters pending in the Superior Court. However, after its filing, this motion was left pending for several months in light of attempts by various family members to finalize a settlement. Sisselman was represented in these negotiations by other counsel, and, at that time, plaintiff did not advise him at all with respect to settlement. In September 1983, plaintiff refiled the aforementioned motion and added an application for leave to withdraw as counsel in another matter. By order dated October 28, 1983, the trial court granted in its entirety the relief sought by plaintiff. Plaintiff previously had been relieved as counsel in another Sisselman matter pending in the United States District Court.

After withdrawing from each of the cases, plaintiff instituted this action in the Law Division, Essex County, seeking to recover $301,909.60 in fees for legal services rendered to Sisselman and to his wife, Deanna K. Sisselman, individually. In their answer, defendants alleged that plaintiff had never rendered Deanna K. Sisselman, ...


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