On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-135-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: September 10, 2007
Before Judges Cuff, Lisa and Lihotz.
Defendant Robert M. Silverman appeals from an award of counsel fees and costs totaling $59,793.50 for filing and maintaining a frivolous counterclaim for legal malpractice against plaintiff Cuyler Burk, LLP. Defendant contends that the counterclaim was not frivolous as defined by statute or court rule and that the award is excessive. We disagree and affirm.
The facts concerning the circumstances of the legal representation provided by Cuyler Burk to defendant and the services provided to him are undisputed. Defendant is an attorney who specializes in Lemon Law claims.*fn1 In February 2002, a disciplinary matter was commenced against defendant and he sought legal representation for himself and his associate from Cuyler Burk. According to the complaint filed by a former client, the Disciplinary Review Board (DRB) alleged that defendant had an agreement with Chrysler Corporation to collect a set fee of $2000 in every case brought by defendant against the automaker. On or about March 15, 2002, Cuyler Burk filed an answer on behalf of defendant.
On April 15, 2002, Cuyler Burk provided the DRB with a list prepared by defendant of all cases brought by defendant against Chrysler since January 2000. Cuyler Burk believed that the list refuted any claim that defendant and Chrysler had an established fee for every case. By May 7, 2002, this claim was resolved to the satisfaction of Walton Kingsberry, of the Office of Attorney Ethics, and the person directly involved in the prosecution of the disciplinary charges against defendant. Kingsberry withdrew from active participation in the matter and reassigned it to another attorney on his staff.
Stephen Cuyler and an associate commenced discussions with other DRB personnel regarding not only the set fee issue, but also a complaint by a client that defendant commenced suit against her in Pennsylvania in order to avoid this state's pre-suit notice of the availability of fee arbitration. See R. 1:20A-6. In the course of these discussions, Cuyler raised the possibility of diversion as an appropriate resolution of the charges. DRB personnel informed Cuyler that this remedy was not available because an earlier charge had been diverted and because a formal complaint had been issued. Nevertheless, Cuyler sought to persuade DRB personnel that a second diversion was not precluded by any rule. Defendant was promptly informed of these discussions.
Discussions with DRB personnel continued throughout May 2002. The DRB representative assigned to the case advised Cuyler that she would pursue charges that defendant represented to the complaining client that his services were free, that he would not entertain a settlement offer that did not include attorneys' fees, and that defendant commenced suit to collect his fee against this client in Pennsylvania in spite of the lack of jurisdiction to do so. The DRB representative continued to suggest that the matter could be resolved by consent, if defendant would accept a reprimand. All of these circumstances were communicated promptly to defendant.
In late May 2002, Cuyler recommended that defendant not accept this offer of discipline by consent. He did so based on defendant's desire to be admitted to practice in neighboring states and to open law offices in those states. A disciplinary record in New Jersey could jeopardize these plans. Thus, by letter dated May 29, 2002, Cuyler advised defendant to reject the offer because defendant would be required to acknowledge that he violated the Rules of Professional Conduct and any discipline would became part of his official record.
It is undisputed that Cuyler and defendant discussed the offer of discipline by consent with a reprimand the same day. Cuyler explained the difference between diversion and discipline by consent. Defendant informed Cuyler that he did not want the matter to proceed to hearing and directed Cuyler to continue to seek to obtain a diversion or, if unsuccessful, to negotiate discipline by consent. By June 4, 2002, Cuyler and the DRB representative had negotiated a disposition and defendant agreed to discipline by consent with an admonition. Defendant reserved the right to review the stipulation of facts.
A DRB representative prepared a proposed Stipulation of Discipline By Consent, Affidavit of Consent and Stipulation of Facts. Cuyler forwarded the documents to defendant and conferred with him. The firm prepared proposed changes and forwarded the changes to defendant on June 26, 2002. Through mid-July, negotiations continued. At defendant's suggestion, Cuyler Burk requested that defendant be able to admit to a violation of the Rules of Professional Conduct for commencing suit against his client in Pennsylvania rather than New Jersey.
On August 21, 2002, an amended complaint against defendant was filed due to the lapse of time. Defendant was informed once again why this procedure was necessary. Defendant did not respond to Cuyler's August correspondence until September 5, 2002. At this time, he expressed confusion and stated that he thought that the firm had only been negotiating a diversion. He also questioned the bills submitted by the firm, none of which had been paid. This was the first time defendant had questioned any bill. Twice in early September, defendant was reminded that he had agreed to pursue discipline by consent.
On September 17, 2002, the parties conferred. On September 20, 2002, Cuyler Burk withdrew as counsel for defendant. It is undisputed that defendant retained new counsel, a hearing was conducted before the District IV Ethics Panel on the amended complaint, and the panel found defendant had violated the Rules of Professional Conduct and recommended a ...