On appeal from the Superior Court of New Jersey, Law Division, Essex County.
Approved for Publication April 28, 1997.
Before Judges Long, Skillman and A.a. Rodriguez. The opinion of this court was delivered by Long, P.j.a.d.
The opinion of the court was delivered by: Long
The opinion of this court was delivered by
In June, 1992, plaintiffs, Francine Glick and Annette Kraus, retained Jonathan D. Strum, an attorney licensed to practice law in the District of Columbia and the State of New York, to represent them in an employment discrimination action against their former employer and related companies, defendants, Barclays De Zoete Wedd, Inc., Barclays De Zoete Wedd - Information Technology Group, Barclays De Zoete Wedd, Ltd., and Laslo Gross (Barclays).
In September, 1992, Strum forwarded to plaintiffs a proposed contingent fee agreement for their review and signature. Under the proposal, Strum would receive 33 1/3% of the recovery if the matter did not go to trial; 40% of the recovery if suit was filed; and 50% of the recovery if Strum filed an appeal or took action on behalf of plaintiff to enforce the judgment. The proposal also stated that no fee would be payable if there was no recovery.
By letter dated September 22, 1992, Kraus requested a change in the proposal to exclude the severance pay previously offered by defendants from the calculation of Strum's fee. Kraus added, "Otherwise it is fine." Glick never responded to Strum. Strum never revised the contingency agreement or forwarded it to plaintiffs for signature and nothing further was done with respect to the fee.
Plaintiffs retained local New Jersey counsel, Jane R. Altman, to file the lawsuit with the understanding that they would compensate her for her services on an hourly basis. A nine count complaint signed by both Altman and Strum was filed on behalf of plaintiffs *fn1 in the Superior Court, Law Division, Essex County. The complaint sought recovery based on the Law Against Discrimination (L.A.D.), N.J.S.A. 10:5-12; negligence; fraud, deceit and misrepresentation; wrongful discharge; tortious interference with contractual relations; defamation; tortious interference with prospective advantage; breach of contract; negligent infliction of emotional distress; and intentional infliction of emotional distress.
Altman filed a motion to admit Strum pro hac vice. *fn2 On April 15, 1993, the motion was heard. On this date, David Scott (who was apparently retained by Strum) entered his first appearance as counsel to plaintiffs, although there is no evidence in this record that they consented to such representation. On April 30, 1993, Strum was admitted pro hac vice. Discovery then ensued.
By letter dated October 21, 1994, plaintiffs advised Strum that they had retained new counsel in the litigation against Barclays and requested a listing of documented expenses incurred by Strum. They asked that Strum release all files to Neil Mullin of Smith Mullin, P.C. By letter dated October 25, 1994, Mullin advised Strum that it was a matter of "utmost importance and urgency" that Strum promptly forward the file to Smith Mullin and requested that Strum submit an invoice for costs and disbursements. The letter also stated that Smith Mullin would honor any lien submitted by Strum and that it would place money sufficient to cover such lien in escrow until resolution. Substitutions of attorney were filed. The trial was scheduled to begin in February, 1995.
Strum sent Smith Mullin an "interim invoice" dated November 23, 1994, for expenses incurred and costs advanced in the amount of $10,849.66, $2,400.59 of which amount represented the balance owing to Altman for legal services. No charges for professional services rendered by Strum or Scott were included in this invoice. According to the certification of Strum's present attorney, Judith Rodner, based on her review of the file, Strum and Scott conducted discovery between April 30, 1993, and November 1, 1994, prior to the substitution of counsel. However, as of the date of oral argument on this appeal, Strum and Scott have neither rendered any bill to plaintiffs for services, nor have they provided an itemized listing or summary of the hours spent by them in representing plaintiffs.
By letter dated April 24, 1995, to Smith Mullin, Rodner confirmed that there was a fee dispute and requested Smith Mullin's "agreement" to honor her client's lien and place monies in escrow. On May 10, 1995, Rodner sent another letter to Smith Mullin confirming their agreement to place $250,000 in escrow. Smith Mullin promptly responded to such letter, denying any such agreement, reminding Rodner that Strum had not yet submitted any timesheets or invoices, and characterizing Rodner's demand for a lien in such amount as "outrageous." More correspondence between Rodner and Smith Mullin followed, with Smith Mullin making repeated requests for a copy of the contingent fee agreement or an itemized statement of services to no avail.
On June 2, 1995, plaintiffs filed a fee arbitration request. In the application, plaintiffs represented that they discharged Strum "for good cause" for failing to provide diligent, competent representation. In response, Rodner sent a letter to the Fee Arbitration Committee suggesting that its jurisdiction over this matter was questionable because the amount in dispute exceeded $100,000. Smith Mullin disagreed with Rodner over the existence of a valid claim for apportionment of its fee and urged the Committee not to decline jurisdiction.
On June 6, 1995, Strum and Scott filed a motion in the Superior Court, Law Division, Essex County, under the caption and docket of the Barclays litigation (which by then had settled), seeking reciprocal discovery and a hearing on the apportionment of attorney fees. Rodner certified that such motion was prompted by Smith Mullin's refusal to release information concerning the settlement and to engage in reciprocal discovery.
Smith Mullin countered that Strum and Scott were attempting to avoid the fee arbitration process by "disguising" their fee dispute with plaintiffs as a dispute with Smith Mullin and that Strum and Scott were proceeding improperly and "parasitically" by filing their motion under the docket of a lawsuit which had already been dismissed, instead of filing a new complaint to which plaintiffs could raise defenses and a counterclaim for legal malpractice. Smith Mullin certified that Rodner had, despite repeated requests, refused to produce copies of any written retainer agreement or any invoices or timesheets ...