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Middlebrooks & Shapiro, P.C. v. Esdale

March 12, 2008

MIDDLEBROOKS & SHAPIRO, P.C., PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
v.
KENNETH ESDALE, DEFENDANT-THIRD PARTY PLAINTIFF-RESPONDENT/CROSS-APPELLANT,
v.
ESTATE OF RICHARD SHAPIRO, THIRD-PARTY DEFENDANT-APPELLANT/ CROSS-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-4726-01.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 7, 2008

Before Judges Parrillo and Gilroy.

Plaintiff Middlebrooks & Shapiro, P.C., a law firm, and third-party defendant Estate of Richard Shapiro (collectively, the plaintiffs), appeal from the May 25, 2006, order of the Law Division, which awarded defendant Kenneth Esdale, plaintiff on the counterclaim and third-party complaint, attorney fees and costs in the amount of $18,544.50. Plaintiffs argue that the amount of the award is excessive. Defendant cross-appeals, arguing that the award is insufficient. We affirm the appeal in part; except, we reduce the amount of disbursements awarded to defendant and remand to the trial court to enter an amended order. We affirm the cross-appeal.

The procedural history and statement of facts leading to the proceeding on remand, resulting in the order of May 25, 2006, are contained in our prior opinion, Middlebrooks & Shapiro, P.C. v. Esdale, No. A-3285-02 (App. Div. January 20, 2006). The following will suffice to place this appeal in context.

On March 1, 2000, defendant retained the services of plaintiffs to institute a specific performance action against a third-party to enforce a contract for the purchase and transfer of a liquor license. On dismissal of the Chancery action, the law firm filed suit against defendant in the Special Civil Part to recover $8,540.49 owed for legal services in prosecuting the Chancery action. Defendant counterclaimed and filed a third-party complaint against the Estate, alleging legal malpractice, and moved to transfer the matter to the Law Division, asserting that his claim exceeded the monetary jurisdictional limit of the Special Civil Part. The motion to transfer was granted, and the matter was tried to a jury.

Following the close of testimony, the trial court granted plaintiffs' motion for dismissal of defendant's loss of profit claim. Id. at 7. However, the court, citing Saffer v. Willoughby, 143 N.J. 256, 272 (1996), submitted defendant's claim for return of his retainer to the jury, determining that "if the jury found plaintiff negligent, defendant would be entitled to a judgment for $5,000, representing the return of the retainer based on the principle that an attorney may not collect fees for services negligently performed." Id. at 8.

The jury returned a verdict on special interrogatories, determining that: 1) the law firm had failed to prove its claim for legal services; 2) plaintiffs were negligent in representing defendant; and 3) and such negligence proximately caused harm to defendant. Ibid. The court molded the verdict and awarded defendant $5,000 on the counterclaim and third-party complaint, together with $40,000 in attorney's fees, and expenses of $8,340.80. Id. at 8-9. On appeal, we affirmed the dismissal of plaintiffs' claim and the award of $5,000 damages on the counterclaim and third-party complaint. We remanded the matter to the trial court for reconsideration on the issue of attorney's fees and expenses, concluding that the trial court had erred in awarding attorney's fees on the record submitted. Id. at 24-26.

On remand, defendant submitted an application to the Law Division for attorney's fees and expenses in the amount of $80,395.29. The application was supported by a twenty-four-page certification of counsel stating that, although counsel could not locate a copy of the retainer agreement with defendant, "[t]his matter was handled by my office on an hourly basis and not on a contingency fee basis." Attached to the certification were reconstructed time records, setting forth the items of legal services rendered; the time spent on each item; and a statement of disbursements. On May 25, 2006, the trial court rendered an oral opinion, awarding defendant $13,400 attorney's fees, together with $5,144.50 in expenses. A confirming order was entered the same day.

On appeal, plaintiff argues:

POINT I. THE APPLICATION FOR ATTORNEY'S FEES WAS NOT SUFFICIENTLY DETAILED TO ALLOW THE LAW DIVISION TO EVALUATE CAREFULLY AND CRITICALLY THE AGGREGATE HOURS ADVANCED BY COUNSEL TO SUPPORT THE CLAIM, AND THE LAW DIVISION ERRED WHEN IT AWARDED FEES BASED ON AN INCOMPLETE APPLICATION WHICH DID NOT COMPLY WITH THE APPELLATE DIVISION'S PRIOR DECISION.

POINT II. THE FAILURE TO COMPLY WITH RULES OF PROFESSIONAL CONDUCT, NEW JERSEY RULES OF COURT, AND CASE LAW RENDERED THE APPLICATION ...


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