On appeal from Superior Court of New Jersey, Law division, Monmouth County.
Petrella, Gruccio and Landau. The opinion of the court was delivered by Gruccio, J.A.D.
[234 NJSuper Page 535] This case typifies a disturbing trend prevalent in the modern legal profession. Petitioner Evans, Osborne & Kreizman (Evans
Firm)*fn1 asserts its claim to an apportioned percentage of a contingency fee realized by respondent Monte & Marriott (Monte Firm)*fn2 from a personal injury action between plaintiff Judy A. LaMantia and defendants John F. Durst, R. H. Borgersen and Paul Klenoff. The facts of this case are uncomplicated.
In January 1981, as a result of family recommendations, plaintiff contacted Harry S. Evans, the senior partner in the Evans Firm. After an initial consultation with Evans, the partners decided to take the case and subsequently assigned it to Thomas D. Monte, Jr., who had recently become a partner.*fn3 As is the common practice with medical malpractice cases, the retainer agreement between plaintiff and the Evans Firm provided for a contingent fee arrangement.
Over a period of nearly two years, Monte devoted a substantial amount of his billable hours to developing plaintiff's case. The Evans Firm advanced monies for filing fees, expert testimony and other expenses.
In early 1983, Monte withdrew from the Evans Firm, taking plaintiff's file. A substitution of attorney was subsequently filed in favor of the Monte Firm, together with a cross-motion to preserve an attorney's lien in favor of the Evans Firm. As
of that date, the only retainer agreement was that between the Evans Firm and plaintiff.
The underlying lawsuit went to trial in January 1984 and the jury returned a $2.1 million verdict in plaintiff's favor. While pending on appeal, the case ultimately settled for a one-million-dollar lump-sum payment plus a life-time $7,000 monthly annuity.
Thereafter, the Monte Firm filed a motion for an increased fee. A fee of $414,044.42 was awarded, but the ultimate fee paid for services rendered was $404,000.00. Once the attorneys' fee was determined, the respective law firms squared-off for judicial apportionment of that fee. Following arguments of counsel, the motion judge issued a letter opinion dated March 23, 1988. The Evans Firm was allocated a fee of $50,610, representing 337.4 hours of billable time incurred (based upon a $150 per hour billable rate) while the file remained at the firm. The Evans Firm's ultimate recovery, with costs, totaled $52,596.78.
The central issue here is how the contingency fee award should be divided between the Evans Firm and the Monte Firm. We agree with the trial court that the proper measure of a former firm's compensation involves principles of quantum meruit. In re Estate of Poli, 134 N.J. Super. 222, 227 (Cty.Ct.1975). We question, however, the manner in which the court valued the contributions of the respective firms. Quantum meruit simply means "as much as he deserves," therefore, any distribution of a contingency fee award between two law firms is by its very nature a fact sensitive decision. Indeed, the parties have each presented published Law Division cases involving the fee-splitting issue. In one case, the contingency fee was divided based upon hours worked multiplied by the hourly rate. The other case divided the attorney's fee award based upon a percentage of the recovery.
In Anderson v. Conley, 206 N.J. Super. 132 (Law Div.1985), the controversy centered around a ...