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Chalom v. Benesh

Decided: April 5, 1989.


Harris, J.s.c.


I. Preliminary Statement.

This is an action by an attorney against former clients which seeks recovery of legal fees allegedly earned, which remain unpaid. The clients were served with process, but failed to answer in a timely fashion; consequently, the attorney obtained a default judgment. The court is called upon to, not only vacate the default judgment, but also to invoke the stern remedy of dismissal because of the patent failure of plaintiff to comply with R. 1:20A-6. This rule, effective January 2, 1986, requires an attorney, prior to the institution of an action to recover a fee, to advise his or her client of the availability of an arbitration remedy for fee-dispute resolution, and to certify that such notice was given in the body of the complaint.

The case arises in the context of an order to show cause in aid of litigants' rights why a default judgment should not be vacated.*fn1 For the reasons which follow, the default judgment is vacated, execution and any levies thereunder are permanently

vacated, and the complaint is deemed amended in accordance with this opinion.

II. Procedural Posture of the Action.

On November 1, 1988, plaintiff filed a two-count complaint against defendants seeking recovery of $5,000 of unpaid legal fees. The summons and complaint were served by the clerk of the special civil part (utilizing certified and ordinary mail pursuant to R. 6:2-3(d)) on November 4, 1988 (as to defendant Amir Benesh) and on November 28, 1988 (as to defendant Deluxe Transfer and Limo, Inc.).

Defendants failed to respond to the complaint, and default was automatically entered by the clerk of the special civil part pursuant to R. 6:6-2 on November 28, 1988, as to both defendants, although service upon defendant Deluxe Transfer and Limo, Inc. is indicated as having occurred on that date.

On February 9, 1989, plaintiff applied to the clerk of the special civil part for a default judgment in accordance with R. 6:6-3(a). Plaintiff submitted an affidavit of non-military service together with her affidavit of proof indicating the factual basis for the entry of a default judgment. Although both the complaint and affidavit of proof revealed that plaintiff was owed more than $5,000, she expressly waived the excess in order to comply with the jurisdictional limits of the special civil part. See N.J.S.A. 2A:6-35(b). A default judgment was entered in favor of plaintiff in the amount of $5,000 plus costs.

A writ of execution pursuant to R. 6:7-1 was issued by the clerk of the special civil part and a levy upon assets belonging to one or both defendants was effectuated shortly thereafter by a court officer. See N.J.S.A. 2A:17-1 et seq.; N.J.S.A. 2A:17-57.

On February 24, 1989, defendants requested that an emergent order to show cause be signed to vacate the default

judgment on the ground that R. 1:20A-6 was violated.*fn2 The court treated the application as one in aid of litigant's rights seeking to control process for the enforcement of judgments issued under the auspices of the court. See R. 6:7; R. 1:10-5. It was not treated as an application for an injunction under R. 4:52 since the injunctive power of the special civil part is circumscribed by R. 6:3-1 and is limited to "injunctions as applicable in landlord/tenant actions."

Notwithstanding this seeming limitation on the court's ability to act, the power to stay proceedings is incidental to the court's inherent power to schedule disposition of actions so as to promote a fair and efficient adjudication. This can best be accomplished by a decision properly addressed to the sound discretion of the court. A stay of a proceeding, like many forms of preliminary injunction, is to be sparingly granted. It is an extraordinary remedy, for which the moving party must demonstrate a clear entitlement. Suenram v. Society Valley Hospital, 155 N.J. Super. 593 (Law Div.1977).

The order to show cause was modified by the court to provide for a return date for argument. The form of the original order to show cause provided for instant, complete, and final relief without giving plaintiff an opportunity to present argument. As such, it plainly violated even the most rudimentary procedures of an order to show cause procedure. However, a modified order to show cause was signed by the court which granted emergent relief by vacating the levy and temporarily staying all further levies under the writ of execution. Plaintiff was also ordered to show cause why the complaint should not be dismissed, and the default judgment vacated.

III. Findings of Fact.

Plaintiff is an attorney admitted to practice law in New Jersey. As such, she is under an affirmative obligation to

follow the rules governing the courts of the State of New Jersey. On August 16, 1988, an "Employment/Retainer Agreement" was executed between plaintiff and defendant Amir Benesh. This agreement provided that plaintiff was to provide certain legal services for defendant Benesh at the hourly rate of $100. Although there does not appear to be any written agreement between plaintiff and the corporate defendant, plaintiff asserts that her legal services were on behalf of both defendants. Defendants claim that the legal services were performed only on behalf of the corporation.

Plaintiff alleges that she adequately performed legal services and is owed a net amount of $5,530.*fn3 In accordance with N.J.S.A. 2A:13-6, plaintiff apparently sent both defendants copies of her bills by certified mail, return receipt requested. It appears that such bills were received by defendants approximately two weeks before the institution of the within action.

On November 1, 1988, plaintiff filed her complaint. It is silent as to whether she notified her clients of their option to pursue the fee arbitration remedy as mandated by R. 1:20A-1 et seq. Furthermore, the complaint makes no allegation that ...

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