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Alpert, Goldberg, Butler, Norton & Weiss, P.C. v. Quinn

November 24, 2009


On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-2205-07.

The opinion of the court was delivered by: Lyons, J.A.D.



Argued October 15, 2009

Before Judges Stern, Graves and Lyons.

This case focuses on the attorney-client relationship, especially its bedrock, the retainer agreement. It is a unique and extraordinary association. The attorney-client relationship has been a fertile source for authors over the years. It has spawned books, poems, plays, and movies. Literature on this topic includes fiction and non-fiction, tragedies and comedies. To resolve this case, we are obligated to review the long-established statements and principles of law concerning the attorney-client relationship and to analyze, in particular, the attorney's obligation to his potential client in finalizing a retainer agreement. The dramatis personae in this saga are plaintiff, Alpert, Goldberg, Butler, Norton & Weiss, P.C. (A.G.),*fn1 attorneys who formerly represented defendants, Michael Quinn, Marita Quinn (the Quinns), and Quinn-Woodbine Realty & Leasing Co., L.L.C. (Quinn-Woodbine),*fn2 and Clark E. Alpert (Alpert), the managing attorney of A.G.

The Quinns appeal from six orders entered by the trial court which culminated in two judgments against them and in favor of plaintiff in the aggregate amount of $163,745.93.


The following factual and procedural history is relevant to our consideration of the issues advanced on appeal. This case emanates from litigation between the Quinns and Quinn-Woodbine and the Banc of America Leasing & Capital, L.L.C. The Quinns were involved in two related post-judgment actions with the Banc of America. Both cases were venued in Cape May County. On December 29, 2005, Marita Quinn wrote a letter to Alpert and retained A.G. to consult on whether the counsel for Banc of America had committed professional ethics violations. Marita Quinn also expressed her concern that the Quinns' then-current counsel in the Banc of America litigation "had not been aggressive enough in informing the court" of the opposing counsel's allegedly unethical action. A.G. was paid $1,000 for its opinion.

On January 4, 2006, Alpert stated that he could not give comprehensive advice regarding the Banc of America counsel's conduct without being familiar with all the facts, though he did suggest exploring the possibilities that "their counsel fees were unreasonable." Alpert also addressed the Quinns' then- current litigation counsel's strategy and obligation to the Quinns.

On January 6, 2006, A.G. sent the Quinns a retention letter to confirm that the Quinns had retained the firm to represent them in the two Cape May matters on an hourly basis. The retention letter called for a $25,000 advance retainer on execution. The letter provides that:

[w]e charge on an hourly basis, less a ten percent fee discount if you pay timely (my present hourly rate, before applying the discount, is $375; associates began [sic] at $225; and paralegal time is $95). Examples of billable services include telephone calls, inter-office conferences, review of files and documents, court and deposition appearances, and travel time. We also charge for expenses, including out-of-pocket expenses, as well as "in-house" items such as copying. Details on any of these items and our policies will be provided to you upon request; whether or not you request them, you will be bound by our standard billing practices and firm policies in these and other regards, so feel free to ask. [(Emphasis added).]

On January 9, 2006, before the Quinns had signed the proffered retainer agreement, they sent the firm a letter in which they stated that they expected the firm to represent them regarding the underlying issues between them and the Banc of America.

On January 25, 2006, the firm sent another retention letter to the Quinns. That letter called for a $10,000 advance retainer to retain the firm on an hourly basis to analyze, but not to appear in, the two Cape May Banc of America matters. That letter contained the same language regarding the firm's billing practices as set forth above. The Quinns executed the January 25, 2006, retainer letter, but they did not receive or request the billing details in A.G.'s "standard billing practices and firm policies" (A.G.'s Master Retainer) at that time.

On February 9, 2006, the Quinns signed the January 6, 2006, retention letter in which they agreed to pay a $25,000 retainer. Again, the Quinns did not request or receive A.G.'s Master Retainer referred to in the retainer agreement, when they signed the agreement on February 9, 2006.

Approximately seven months later, after a dispute arose between the Quinns and A.G. regarding the handling of the Banc of America matters and related billing issues, the Quinns requested, for the first time, A.G.'s Master Retainer referred to in the January 6, 2006, retainer letter.

A.G.'s Master Retainer consists of eighteen single-spaced, typewritten pages and covers various issues regarding the attorney-client relationship. It contains a number of provisions of particular importance in this case. A.G.'s Master Retainer provides that: if the firm withdraws from a client's matter and is further entangled with the client, its time will be billable to and payable by the client, together with expenses; the initial advance retainer would be placed in the firm's general operating account rather than its trust account "because of the ongoing cash flow drain this file will engender"; balances owed and unpaid beyond thirty days will bear interest at the rate of twelve percent per annum; if there is a fee dispute or any proceedings relating to or arising from A.G.'s fees and expenses, the client will continue to pay the hourly fees and expenses for any time and expense that continues to be incurred by the firm by virtue of any fee dispute or related proceedings; the client will pay fees for any time and expense incurred by the firm in seeking to be relieved of counsel and dealing with any successor firm; photocopying charges are to be billed at twenty-five cents per page; and "extraordinary secretarial overtime" will be billed at $50 an hour. Another significant provision in A.G.'s Master Retainer is that no bills will be discounted unless the client agrees not to challenge any of the items billed in the "traditional" manner.

Trial in the underlying Cape May Banc of America matters was initially scheduled for April 2006, but it was ultimately postponed until January 2007. On August 28, 2006, however, A.G. notified the Quinns that they would have to pay a $50,000 additional retainer by September 16, 2006, in advance of the then-scheduled September 25, 2006, trial date. Discussions and disagreements resulted. In early October, the Quinns informed the firm that they had retained local counsel in Cape May to try the case, but the firm still demanded a $50,000 advance retainer.

On October 13, 2006, A.G. faxed to the Quinns its September 2006 invoice, which totaled $37,450. In the approximately eight months between January 2006 through September 2006, the firm had billed and received from the Quinns $183,565.78. Upon receipt of the September invoice, the Quinns alleged that it contained a number of unfair billing entries.

As a result of disputes between the parties, A.G. filed a motion to be relieved of counsel on October 18, 2006. The Quinns initially refused to consent to the application but then agreed. The trial court in the Banc of America matters granted the firm's motion to withdraw as counsel at the end of October 2006.

On November 17, 2006, our Supreme Court denied the firm's request to withdraw as counsel for the Quinns regarding a petition for certification that had been filed in the litigation with Banc of America. The Court ordered the firm to file the petition. The firm did not do so, but it ultimately charged the Quinns $14,885.60 for the services it had already performed regarding the petition.

On January 29, 2007, the firm sent a pre-action notice pursuant to Rule 1:20A-6 and N.J.S.A. 2A:13-6 to defendants, together with the notice of their right to fee arbitration and copies of its bills for September, October, November, and January. These bills amounted to $75,506.68.*fn3

On March 16, 2007, the firm filed a complaint demanding the Quinns and Quinn-Woodbine pay $75,712.93 in fees and expenses, plus collection fees.

Defendants were served with the complaint, a request for admissions, and document demands on April 11, 2007. Defendants did not respond to plaintiff's request for admissions. However, the Quinns, appearing pro se, filed an answer to the complaint on May 16, 2007. Also, on May 16, 2007, they filed a counterclaim which alleged professional negligence and breaches of duty by A.G. Defendant Quinn-Woodbine did not answer plaintiff's complaint and, on May 18, 2007, default was entered against it. Quinn-Woodbine filed a motion to vacate the default on June 1, 2007. The trial court denied that application without prejudice on June 22, 2007.

On June 12, 2007, A.G. filed an answer to the Quinns' counterclaim. One of the separate defenses raised was that the Quinns' claim did not conform with the requirements of the Affidavit of Merit statute, N.J.S.A. 2A:53A-26 to -29.

Because A.G. filed its answer on June 12, 2007, an affidavit of merit was required to have been filed on or before August 12, 2007, absent an extension. An affidavit of merit has never been filed in this case nor has a case management conference been held pursuant to Ferreira v. Rancocas Orthopedic Assocs., 178 N.J. 144 (2003).

Plaintiff moved for summary judgment on July 20, 2007. It sought judgment in the amount of $105,407.42. This sum was arrived at by adding to the total of the September, October, November, and January bills, $75,506.68, an additional amount for "collection fees" incurred since then. The firm represented itself in the action. Its summary judgment application alleged that the firm's retainer agreement required defendants to pay, in addition to the outstanding legal fees on the Banc of America case, collection costs, "withdrawal costs," and interest. Alpert, acting as A.G.'s expert, filed an accompanying certification in support of the summary judgment, in which he set forth his opinion that the firm's fees were reasonable.

On September 10, 2007, the Quinns filed a response in opposition to the motion for summary judgment. They argued that the firm could not demand payment of its withdrawal and collection fees because the fees were not specified in the retainer agreement which they signed. In the Quinns' certification in opposition, they argued that the bills were inflated and erroneous. They attached to their certification copies of the bills and the items which they deemed questionable.

On September 13, 2007, the trial court requested that the Quinns provide documentation of the firm's alleged double billing. The Quinns provided documentation of duplicate charges in the firm's second September 2006 invoice, on September 14, 2007. On September 15, 2007, A.G. filed a reply certification in support of summary judgment in which it agreed, for the purpose of the motion, to waive $4,954 of its claim and to deduct $3,360 of its claim outright as a billing error.

On September 23, 2007, the trial court requested the firm provide an itemization of A.G.'s claim for $9,800 in fees and costs in connection with its motion for summary judgment. The firm replied on September 26, 2007, with an invoice outlining its costs and fees.

On October 3, 2007, the Quinns filed a "motion for leave to file a supplemental pleading." The motion was supported by a certification which claimed that the firm had made errors in representing the Quinns in the lawsuits against Banc of America. On October 9, 2007, apparently without oral argument, the trial court granted the firm's motion for summary judgment in the amount of $97,552.42.

In the trial court's oral decision, it noted that the January 6, 2006, retainer agreement expressly incorporated A.G.'s Master Retainer. The court went on to note that the retainer agreement was an "arm's length agreement" and that it should be upheld. The trial court found that the Quinns had not produced an expert to challenge the amount of fees sought as unreasonable. It held that the Quinns' claims were unsupportable and they did not defeat the presumption that the fees were reasonable.

The trial court addressed the Quinns' argument that the January 6 and January 25, 2006, retainer agreements "were of little resemblance to the long form retainer agreement of which they were made aware of" on October 9, 2006. The court said that both agreements made reference to A.G.'s Master Retainer and that it would be readily supplied if asked for by the Quinns. The trial court concluded "the mere assertion by the Quinns that it never occurred to them to inquire is without merit." The trial court, however, did not address defendants' counterclaim in its summary judgment decision.

On October 10, 2007, the Quinns filed a "Notice of Motion to Amend Opposition to Summary Judgment under Rule 4:9-1." The exhibits and accompanying certifications from the Quinns extensively annotated the bills which the firm had provided. The Quinns set forth explanations of how they believed they were overcharged. They, however, did not provide an expert's certification to support their claims nor did they produce documents that were significantly different from those produced in their previous pleadings. On October 18, 2007, plaintiff sent defendants a letter demanding they withdraw their pending October 3, 2007, and October 10, 2007, motions as frivolous.

On October 27, 2007, the trial court denied defendants' October 10, 2007, motion to amend their opposition to the motion for summary judgment as untimely, given that summary judgment had been granted on October 9, 2007.

On October 29, 2007, the trial court dismissed defendants' October 3, 2007, motion to file a supplemental pleading and dismissed defendants' counterclaims with prejudice. The trial court, in exercising its discretion to dismiss the Quinns' motion to file a supplemental pleading, stated that the motion was untimely and an improper "disguised attempt to collaterally challenge the order for summary judgment" because it was being submitted after the summary judgment had been granted. The court also noted that the Quinns had failed to file an expert's affidavit of merit regarding plaintiff's alleged malpractice as required by the Affidavit of Merit statute.

On November 2, 2007, the Quinns filed a "motion for reconsideration" of the October 9, 2007, summary judgment order supported with a certification. On November 7, 2007, plaintiff filed a certification in opposition to defendants' October 3, October 10, and November 2, 2007, motions.

On December 1, 2007, the Quinns filed a reply certification in support of their November 2, 2007, motion for reconsideration of summary judgment. Plaintiff responded by demanding that defendants' motion be withdrawn as frivolous. On December 7, 2007, the trial court denied defendants' motion for reconsideration. On December 17, 2007, plaintiff moved for a supplemental award of counsel fees and other relief. On January 23, 2008, the trial court denied plaintiff's application without prejudice due to insufficient documentation.

The Quinns filed a notice of appeal on February 8, 2008. In opposition, plaintiff filed a motion to dismiss or for partial remand. We dismissed the appeal as interlocutory on March 18, 2008. On April 24, 2008, we awarded plaintiff a counsel fee of $2,500 in connection with the appellate application.

On remand, plaintiff filed a motion for supplemental counsel fees on April 7, 2008. Defendants filed a certification in opposition on April 29, 2008. On June 5, 2008, the trial court entered a supplemental money judgment of $66,192.51 in favor of plaintiff. The order, signed by the court, stated that "such additional fees are compensable under the retainer agreements between the parties; and it further appearing that the same fees are further supported by Rule 1:4-8(d)." As already noted, the aggregate judgment is $163,745.93.

On May 20, 2008, the trial court ordered defendants to deliver subpoenaed documents and to appear at a supplementary proceeding deposition. This deposition has not yet taken place. ...

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