December 28, 2009
VIKTOR OSTRETSOV, PLAINTIFF-RESPONDENT,
R. FALEY & R. MORTENSEN, INC., T/A PARWOOD SUNOCO, DEFENDANT/THIRD-PARTY PLAINTIFF,
CORPORATE BUILDING EXTERIORS, INC. AND SUNOCO, INC., THIRD-PARTY DEFENDANTS.
IN THE MATTER OF ALEXANDER FISHBEYN, ESQ., APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1102-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 30, 2009
Before Judges Fuentes, Gilroy, and Simonelli.
This appeal concerns a fee dispute between two attorneys who represented plaintiff Viktor Ostretsov at various times in the course of prosecuting his personal injury cause of action. Appellant Alexander Fishbeyn was plaintiff's first attorney. In the original retainer agreement, plaintiff agreed to pay Fishbeyn a contingency fee of one-third of any monetary recovery he obtained from the tortfeasor. Plaintiff discharged Fishbeyn and retained respondent Rosemarie Arnold after the case was submitted to court-ordered, non-binding arbitration. The arbitrator issued a decision awarding plaintiff $140,250*fn1. Fishbeyn rejected the award and demanded that the case proceed to trial based on his professional assessment that the arbitration award undervalued the extent of plaintiff's injuries. After Arnold took over as plaintiff's counsel of record, the case settled for the gross amount of $217,500.
Fishbeyn now appeals from the order of the Law Division awarding him $13,000 in counsel fees as compensation for his representation of the plaintiff up to and including the date the case was submitted to non-binding arbitration. Although Fishbeyn concedes that he is not entitled to receive one-third of the settlement proceeds, he argues that, under the equitable doctrine of quantum meruit, he is entitled to receive at least one-third of the non-binding arbitration award. He further argues that the trial court failed to give due weight to the evidence he presented that showed the professional time and effort he invested to prepare the case for arbitration.
After reviewing the record before us, we are compelled to remand this matter to the trial court to make the specific findings and analysis required pursuant to Rule 1:7-4. In conducting this task, the trial court must articulate, with specific reference to the evidence presented, the basis for any award. We will limit our factual recitation to the issues raised in this appeal.
According to his certification, plaintiff's decision to discharge Fishbeyn and retain Arnold was prompted by his dissatisfaction with the lack of progress in the case and Fishbeyn's failure to keep him informed about the status of the litigation. Specifically, the arbitration hearing took place on July 25, 2007. Although Fishbeyn appeared, plaintiff did not; in fact, plaintiff claims he was unaware that the case had even been sent to arbitration. It also seems that Fishbeyn decided to reject the arbitration award of $140,250 without first consulting with his client.
Plaintiff retained Arnold on August 17, 2007. By letter dated that same day, plaintiff notified Fishbeyn that he had retained Arnold to prosecute the case and formally requested that Fishbeyn turn over his files; Fishbeyn did not reply to this letter or comply with its request. Arnold sent a second letter dated August 20, 2007, requesting transfer of the file; Fishbeyn again did not respond.
Arnold then filed a motion in the Law Division to compel Fishbeyn to turn over plaintiff's file and seeking the imposition of sanctions for his failure to cooperate with the two previous requests for transfer.*fn2 On October 19, 2009, the court granted the relief unopposed. In his motion for reconsideration, dated November 9, 2007, Fishbeyn claimed that Arnold's notice of motion and supporting documentation was sent to a previous location where he no longer conducted business. By order filed December 12, 2007, the trial court directed Arnold to hold in escrow any monetary recovery obtained on plaintiff's behalf pending the resolution of the dispute over counsel fees.
Now in possession of Fishbeyn's file, Arnold proceeded to prepare the case for trial. She successfully moved for an extension of the discovery end date and retained Dr. Jen Lee to prepare a report documenting the extent of plaintiff's injuries. The case thereafter settled for $217,500.
Unable to agree on the amount of counsel fees each was entitled to receive, both lawyers petitioned the trial court to resolve the dispute. At a hearing scheduled for this purpose, Fishbeyn was unable to quantify the professional time he spent prosecuting plaintiff's case through arbitration. At the court's direction, Fishbeyn submitted a certification that purported to outline the nature of the services he provided and estimate the time he spent performing them.
After considering the parties' submissions and additional arguments, the court awarded Fishbeyn $14,060 and Arnold $31,630. According to the trial court, the fees awarded to Fishbeyn were based upon the amount of the proposed settlement at the time of arbitration, i.e. $140,250.00. The amount awarded to Mr. Fishbeyn is $14,060.00 [inclusive of cost] for a portion of fees based upon the $140,250.00. As no work was done by Mr. Fishbeyn which resulted in the ultimate settlement of $217,500.00, no fees are awarded to him on the balance.
Fishbeyn now appeals, arguing that the trial court erred by not properly applying all of the quantum meruit factors in making its fee distribution decision. Arnold, in response, disagrees. We will summarize the relevant legal principles at issue before addressing the argument at hand.
We have employed the equitable doctrine of quantum meruit, meaning "as much as he deserves," to determine counsel fee awards. La Mantia v. Durst, 234 N.J. Super. 534, 537 (App. Div.), certif. denied, 118 N.J. 181 (1989). Application of the doctrine requires a fact-sensitive analysis. Ibid. Although there are no "hard and fast" rules governing the application of quantum meruit, we have identified several guiding factors that trial courts should apply to promote a reasonable level of consistency in the doctrine's application. Id. at 540-41; see also Bruno v. Gale, Wentworth & Dillon Realty, 371 N.J. Super. 69, 75 (App. Div. 2004).
In applying the doctrine of quantum meruit to determine a fair level of compensation for an attorney, a trial court should consider: (1) the amount of time an individual attorney spent on the case in relation to the total amount of professional hours spent to resolve it; (2) the quality of representation provided; (3) the results achieved by each lawyer's efforts; (4) the reason the client switched representation; (5) the viability of the client's claims at the time of transfer; and (6) the amount of recovery ultimately realized. La Mantia, supra, 234 N.J. Super. at 540-41.
This analysis should not be conducted, however, as a mathematical exercise. "[I]f the predecessor's work, no matter how extensive, contributed little or nothing to the case, then the ceding lawyer should receive little to no compensation." Glick v. Barclays De Zoete Wedd, Inc., 300 N.J. Super. 299, 311 (App. Div. 1997). The relationship between the client and the attorney is also a significant factor to be considered in a quantum meruit determination. Bruno, supra, 371 N.J. Super. at 75. Finally, although not dispositive, the Rules of Professional Conduct also provide useful guidance for calculating a reasonable attorney's fee award. See RPC 1.5.
Against this analytical backdrop, the level and quality of evidence presented by Fishbeyn to support his application before the trial court was grossly inadequate. The following excerpt from Fishbeyn's professional services certification illustrates the point.
3. Since I was retained on a contingency basis I did not keep time records. To the best of my recollection I can summarize my actions between the date of my engagement on April 20, 2005[,] and the date of my discharge on August 20, 2007[,] without providing actual dates and time spent as set forth below:
4. Initial consultation with client by phone Preparation of retainer and authorizations Meeting with client out of the office Visiting scene of the accident Visiting Paramus PD and obtaining accident report Investigation of property ownership Correspondence to owners Setting up claim with liability carrier Following up with comp carrier Numerous conferences with client concerning treatment Numerous conferences with liability carrier concerning case progress Numerous conferences with comp carrier concerning lien and treatment Correspondence with hospital and providers concerning medical records Visit to Hackensack University Hospital to obtain records Preparation of Complaint Filing and service of Summons and Complaint Conferences with liability adjuster and defense counsel Preparation and filing of Amended Complaint Conferences and correspondence with defense counsel Review of court correspondence Review of Third-Party Complaint Review of motion practice as to Third-Party Preparation of Answers to Interrogatories and responses to Notice to Produce Propounding of Interrogatories Numerous conferences with client Preparation of client for deposition and attendance of deposition in Parsippany Preparation for and deposition of primary defendant Discovery exchange with two third-party defendants Following up with medical providers on additional treatment Obtaining additional medical records Conferences with client Preparation of client and attendance at second deposition in Parsippany Preparation for and deposition of third-party defendants Review of third-party discovery Review of various documents and discontinuance as to third-party Sunoco Following up with comp adjuster Preparation for and attendance of settlement conference before Judge Mecca Conferences with client Communications with medical providers Preparation for and attendance of Arbitration Conference with client Preparation and filing of demand for Trial De Novo Communications with the Law Offices of Rosemarie Arnold about transfer of file Copying file for transfer This "bullet point" recitation of the services Fishbeyn allegedly performed for plaintiff does not indicate the monetary value of the lawyer's time, does not identify the approximate time spent on each task, and does not set forth the overall hours devoted to plaintiff's case. Although plaintiff agreed to compensate Fishbeyn based on a percentage of the monetary recovery obtained, a lawyer seeking a judicial award of counsel fees under these circumstances must provide the court with the documentation necessary to ascertain the value of the services performed by the lawyer. This approach requires the lawyer to identify each professional task with particularity and requires the lawyer to quantify the professional time spent performing each task. Once this is done, the lawyer must provide a means by which the court can assess the reasonableness of the hourly rate requested based on the criteria outlined in RPC 1.5.
The trial court must then review this information guided by the principles discussed in La Mantia and Bruno. The court's specific findings of fact and ultimate conclusions of law must be based on this evidence, and explained on the record. R. 1:7-4. Cryptic conclusory statements not supported by or specifically linked to the competent evidence in the record do not satisfy the mandate in R. 1:7-4. Kas Oriental Rugs, Inc. v. Ellman, 407 N.J. Super. 538, 562 (App. Div. 2009).
Here, the trial court's findings lacked the specificity required by R. 1:7-4 and are therefore not amenable to appellate review. Curtis v. Finneran, 83 N.J. 563, 570 (1980). From this record, we cannot determine the basis for the court's award of $13,000 to Fishbeyn. We are thus compelled to vacate this award and remand this matter for further analysis consistent with this opinion. On remand, the trial court must develop a factual record that includes the evidence necessary to determine what level of compensation, if any, Fishbeyn is entitled to receive based on the amount of time he spent on plaintiff's case, and the quality of that professional effort relative to the results achieved.
Reversed and remanded. We do not retain jurisdiction.