On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-2168-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Parker, R. B. Coleman and Lyons.
Plaintiff Angela Roper (Roper) and her law firm, Roper & Twardowsky, LLC, appeal from a June 7, 2006 order granting summary judgment in favor of defendants Davis, Saperstein & Salomon, P.C. (Davis Saperstein), Kevin Decie and Samuel Davis (Davis) and dismissing plaintiffs' complaint with prejudice. We affirm substantially for the reasons articulated by Judge Joseph J. Riva in his thorough and well-reasoned opinion rendered on June 7, 2006, as revised by his letter to the parties dated June 13, 2006.
This matter arises from a dispute between Roper and Davis Saperstein over payment of a referral fee. Roper referred a client, Dora Koehler, to Davis, a certified civil trial attorney, and to Davis' firm, Davis Saperstein, to pursue a product liability claim on behalf of Koehler. Davis Saperstein and Koehler agreed that Davis Saperstein would represent Koehler on a contingent fee basis, pursuant to R. 1:21-7, and Roper and Davis Saperstein separately agreed that, in consideration of the referral, Roper would be paid one-third of any fee Davis Saperstein recovered in Koehler's underlying action as authorized by R. 1:39-6(d). The underlying action settled, and Davis Saperstein sought an enhanced fee, pursuant to R. 1:21-7(f). However, because Koehler felt Davis had pressured her into accepting the settlement, she objected to Davis Saperstein's attempt to obtain the enhanced fee. Koehler also sought and received Roper's assistance in opposing Davis Saperstein's application for the enhanced fee, and there were threats that Koehler would seek to require Davis and Saperstein to disgorge any fees it might receive. Consequently, Davis Saperstein refused to turn over the referral fee to Roper until the court decided Davis Saperstein's enhanced fee application.
On September 15, 2003, the court denied the enhanced fee application and directed in its order that Davis Saperstein collect $541,500 for fees, costs and expenses from the sum of $800,000 held in an interest bearing escrow account pending resolution of the fee dispute. It further directed that the remaining $258,500 in escrow be released to Koehler. In spite of that order, Davis Saperstein did not pay Roper the referral fee. Instead, it kept in an interest bearing escrow account one-third of the amount the court had authorized for its fees and costs. Contending that she was entitled to receive $180,500, plus interest, Roper initially moved before the court in the underlying action for a release of the referral fee. The judge reserved decision on that motion and eventually directed Roper to file a separate action.
On May 17, 2004, plaintiffs filed their verified complaint in this action. The complaint consisted of five counts and alleged in Paragraph 20 that the Davis Saperstein firm "unilaterally and without any legal authority, disbursed to itself two-thirds of the legal fee . . . and placed the one-third due to Roper as a referral fee in escrow, to be released only upon Roper meeting outrageous conditions unilaterally set by [Davis Saperstein]." In the various counts, plaintiffs' asserted theories of breach of contract entitling them to a release of the funds (count one); breach of contract warranting consequential damages (count two); conversion (count three); violation of the Rules of Professional Conduct (count four); and breach of fiduciary duty (count five). They sought compensatory and punitive damages.
On June 8, 2004, even prior to the filing of a responsive pleading by defendants, plaintiffs filed a motion for partial summary judgment, seeking the turnover of the funds, plus interest. After one adjournment, that motion was granted on July 23, 2004. Defendants were ordered to release to Roper $180,500 with interest of $7,093.69, within five days of receipt of the order. When such release was not forthcoming, plaintiffs moved to enforce the court's order, and between August 23 and August 25, 2004, Davis Saperstein paid plaintiffs $188,913.23 as the full amount of the referral fee, plus interest.
Nevertheless, by order dated September 22, 2004, the court required defendants to pay plaintiffs' counsel fees related to defendants' failure to comply with the court's July 23, 2004 order. In spite of those developments, plaintiffs continued to demand relief pursuant to the remaining counts of the complaint.
Eventually, defendants moved for summary judgment and plaintiffs cross-moved to strike defendants' expert opinion. On June 7, 2006, the trial court granted defendant's motion for summary judgment dismissing the remaining counts of the complaint and denied plaintiffs' cross-motion to bar defendants' expert witness. In pertinent part, the court ruled:
The performance required by Davis Saperstein under the contract was payment to Roper of a referral fee equal to one-third of any counsel fee recovery by Davis Saperstein. Because Roper was paid the agreed upon referral fee, together with interest thereon, Roper has been made whole for any compensatory damages she claims to have suffered . . . having received her full "out of pocket" damages, Roper is not entitled to any additional recovery.
The court rejected plaintiffs' demands for consequential damages and punitive damages. Regarding the claim for consequential damages, Judge Riva wrote "Roper's alleged consequential damages claim, however, is not recoverable under the law. Roper has not provided any evidence that interest on a debt incurred by Roper's law firm was a foreseeable loss contemplated by the parties at the inception of the parties' referral fee agreement." The court also discussed and rejected the theories under which plaintiffs sought to recover punitive damages, concluding "there is no visible cause of action for conversion" and no basis for civil liability for violation of the Rules of Professional Conduct.
In this appeal, plaintiffs argue that (1) they are entitled to recover actual and punitive damages for "malicious conversion"; (2) they are entitled to recover compensatory damages above the referral fee; (3) the order entered in July 2004 directing defendants to release the funds to Roper "constituted an award of compensatory damages for the purpose of awarding punitive damages pursuant to plaintiffs' conversion claim"; and (4) defendants' expert rendered a net opinion and the trial court erred in relying on it. Because the standard controlling our review is the same as that applied to the motion judge, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995) and Prudential Prop. & Cas. Inc. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.) certif. denied, 154 ...