July 27, 2010
COURTNEY AMBROSIO ZACCARO, PLAINTIFF-APPELLANT,
DONALD S. PAVLICK, ADMINISTRATOR OF THE ESTATE OF DONALD PAVLICK, JR., DECEASED, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-3928-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued June 8, 2010
Before Judges Grall, Messano and LeWinn.
This appeal involves a fee dispute between attorneys. On March 17, 2003, appellant Herbert J. Kessler, of Kessler, DiGiovanni & Jesuele, LLP, was retained by plaintiff Courtney Ambrosio Zaccaro to prosecute a dental malpractice suit against Dr. Donald Pavlick, Jr., D.M.D. (Pavlick, Jr.). Kessler and plaintiff entered into a written contingency fee agreement.*fn1
On June 2, 2003, Kessler filed suit but soon learned that Pavlick Jr. had died; on June 12, Kessler filed an amended complaint against Dr. Donald Pavlick, Sr. (Pavlick, Sr.), administrator of Pavlick, Jr.'s estate. During the next three years, Kessler engaged in discovery, retained experts, and otherwise prosecuted the malpractice action. However, disputes arose between him, plaintiff, and plaintiff's family members.
The nature of the disputes was set forth in Kessler's certification that accompanied his August 1, 2006 motion to be relieved as counsel. He explained that Pavlick, Jr. had treated plaintiff from April 24, 2001 through July 13, 2001. Kessler had retained Dr. Howard Pomeranz as plaintiff's dental expert, and Pomeranz opined in a series of reports that Pavlick, Jr. had deviated from accepted standards of care. Kessler detailed in his certification the remaining limited discovery that needed to be completed in the case.
During discovery, plaintiff learned that Pavlick, Jr. had entered into a June 6, 2001 consent order with the New Jersey Board of Dentistry (the Board) because of his cocaine addiction. Among other things, that consent order provided that Pavlick, Sr. would supervise his son's practice, and that Pavlick, Jr. would provide urine samples twice weekly for drug screening. It was also learned that Pavlick, Jr.'s death, on May 31, 2003, was caused by "acute cocaine intoxication."
Kessler had earlier furnished copies of the drug screenings conducted pursuant to the consent order to the motion judge who reviewed them in camera. In a letter dated February 8, the judge wrote to Kessler, his opponent in the malpractice action, and the Deputy Attorney General representing the Board, that "[a]ll of the test results during the period of the alleged malpractice were negative."*fn2
Kessler further certified that "[o]n at least three occasions during the . . . lawsuit," plaintiff demanded that he "attempt to introduce evidence at trial of . . . Pavlick, Jr.'s use of cocaine"; that he amend the complaint to add Pavlick, Sr. as an individual defendant; that he use a "'Timeline' created by . . . [plaintiff]" at trial; and that he "attempt to introduce at trial all acts of negligence committed by . . . Pavlick, Jr., whether or not th[e] acts were a proximate cause of [plaintiff's] injuries . . . ." Kessler's certification also claimed that plaintiff's uncle, a retired FBI agent, had written to him and threatened to discharge him if "[he] did not follow the directions contained in his correspondence."
Citing the judge's review of Pavlick, Jr.'s drug screens, Kessler claimed he "w[ould] not be able to satisfy [plaintiff's] continuing demand that [he] introduce such evidence at trial." Kessler certified that Pomeranz opined there was no theory of liability that could be asserted against Pavlick, Sr., and that Pavlick, Jr.'s negligence was limited to a two-day period, thus, making plaintiff's "Timeline" irrelevant.
Kessler referenced a letter sent to him by plaintiff in July in which she accused him of "not working in her best interests," and "turning a deaf ear to her requests." Kessler concluded that he could not "[e]thically . . . undertake the course of action that plaintiff . . . demanded," and sought to be relieved. He further explained that his firm had spent "in excess of $45,000 to date" in "advanced costs." Kessler noted that he would "make application for reimbursement of costs and a legal fee, based on quantum meruit, at the appropriate time."
At the October 20, 2006 oral argument on the motion, Kessler, plaintiff and her mother appeared. Plaintiff opposed the motion to be relieved and presented written opposition and an affidavit in which she explained her frustration with Kessler's alleged failure to "bring into evidence . . . Pavlick, Jr.'s many significant acts of negligence that [we]re closely connected with [her] injuries . . . ." Plaintiff further claimed that she wanted Kessler to "respond to suggestions that he use another definition of [p]roximate [c]ause[,]" but that Kessler "left [her] in the dark . . . ." She attached copies of her correspondence to Kessler. Plaintiff's mother also addressed the judge and essentially contended that Kessler had never provided a reasonable explanation regarding their requests.
After reserving decision, the judge placed an oral opinion on the record that same day. Citing RPC 1.16(b)(4),*fn3 he concluded that Kessler's "application of the rules of evidence to the facts of th[e] case" was correct. "Despite [Kessler] telling [this to] plaintiff, both plaintiff and her uncle still insist[ed] that [Kessler] follow a course of action inconsistent with ethical behavior and in contravention of the rules of evidence."*fn4 Noting a "fundamental disagreement" between Kessler and plaintiff, the judge entered an order (the October 2006 order) permitting Kessler and his firm to withdraw from the litigation and "preserve their attorneys' lien . . . and their right to petition the costs [sic] for reimbursement of costs advanced and legal fees, based on the principle of quantum meruit . . . ."
Several months later, plaintiff retained the firm of Britcher, Leone & Roth, L.L.C., to represent her in the malpractice suit. Kessler forwarded his file to E. Drew Britcher on January 26, 2007. In his cover letter, Kessler advised that his "firm [wa]s asserting a claim for reasonable legal fees and costs," and enclosed a copy of the judge's October 2006 order.*fn5 Britcher tried the case before a jury, and on November 7, 2007, judgment was entered in favor of plaintiff in the amount of $807,694.01. An appeal ensued, and the matter was ultimately settled for $700,000.
In June 2009, Britcher sent Kessler a check for the reimbursement of his costs but refused to honor his claim for legal fees. Kessler, relying upon the October 2006 order, filed a motion seeking apportionment of the legal fee based upon quantum meruit. Britcher opposed the motion and cross-moved for reconsideration of the October 2006 order.
At oral argument, Kessler contended that he was entitled to a portion of the fee because of the judge's prior ruling that resulted in the October 2006 order. Britcher contended that pursuant to our holding in Dinter v. Sears, Roebuck & Co., 278 N.J. Super. 521, 531-32 (App. Div.), certif. denied, 140 N.J. 329 (1995), Kessler was not entitled to any portion of the fee because plaintiff had not demanded that Kessler engage in unethical conduct, and because Kessler withdrew before she prevailed in the litigation and was not entitled to a fee under the contingency retainer. Britcher further contended that the judge should reconsider and vacate the October 2006 order pursuant to Rule 4:49-2, or alternatively, Rule 4:50-1(f), noting that plaintiff was not represented when she appeared and opposed Kessler's motion.
In an oral opinion entered on the record that same day, the judge reviewed our holding in Dinter. He found that "upon careful and closer scrutiny and inspection of the reasons why . . . Kessler sought to be relieved as counsel, it is evident that the real issue was [his] discord with plaintiff's mother and uncle." The judge noted that his "review of plaintiff's written requests . . . do not in any way suggest that plaintiff was seeking that Mr. Kessler commit unethical acts . . . . Plaintiff was merely seeking answers as to why information . . . was not being used in her case." He concluded that "Kessler's abandonment of his client constitute[d] a breach of the contingency fee agreement, thus forfeiting any right to recovery of any attorney's fee . . . ." He denied Kessler's motion.
The judge then concluded that he "must and w[ould] reconsider" entry of the October 2006 order. He noted that at the time, he was unaware of "the financial arrangement between plaintiff and . . . Kessler." Based on the contingency fee agreement, Kessler was not entitled to any fee, and the judge granted Britcher's motion for reconsideration. He entered an order reflecting his rulings, and this appeal followed.
Kessler contends that the judge erred in denying his application for a portion of the legal fees and erred in reconsidering his prior order permitting such an application. He further argues that the judge failed to explain his reasons for determining that "discord" was the reason he sought to be relieved, particularly since the judge heard no testimony regarding the issue. Kessler made it clear at oral argument before us that he seeks a remand so that a plenary hearing may occur.
Britcher argues that the judge had additional information in 2009 -- specifically the letters that plaintiff and her uncle sent to Kessler -- that permitted him to conclude that plaintiff had never requested that Kessler engage in unethical behavior. As a result, the judge properly reconsidered his original decision and determined, pursuant to Dinter, that Kessler was not entitled to a fee. Britcher further argues that Kessler never sought a plenary hearing below, though he candidly admitted at oral argument before us that such a hearing may have been appropriate.
We have considered these arguments in light of the record and applicable legal standards. We conclude that factual disputes exist that can not be resolved without a plenary hearing. We therefore reverse and remand the matter for further proceedings consistent with this opinion.
The parties agree as to the applicable law. In Dinter, supra, we said, Where an attorney is discharged by the client without good cause there may be an entitlement to a portion of an ultimate recovery based on quantum meruit . . . . Any quantum meruit fee in such circumstances would emanate from services actually rendered at the request of and for the benefit of the client to date of discharge . . . . In contrast, a discharge for good cause might not carry such entitlement. [278 N.J. Super. at 531 (citations and footnote omitted).]
However, "an attorney who, acting pursuant to a contingent fee agreement, voluntarily withdraws from representation before or without achieving any recovery for his client is not entitled to be compensated for services rendered absent a breach by the client or some ethical reason which might have required the withdrawal." Id. at 532 (emphasis added). In reaching this conclusion, we relied primarily upon Int'l Materials Corp. v. Sun Corp., 824 S.W.2d 890 (Mo. 1992), which we characterized as "ha[ving] synthesized the usual rule: The general rule is that a lawyer who abandons or withdraws from a case, without justifiable cause, before termination of a case and before the lawyer has fully performed the services required, loses all right to compensation for services rendered." Dinter, supra, 278 N.J. Super. at 532 (quoting Int'l Materials, supra, 824 S.W.2d at 895) (emphasis added).
The October 2006 order was clearly premised on the judge's conclusion that Kessler could apply for a fee in quantum meruit if the litigation was ultimately successful because he had demonstrated "a breach by [plaintiff] or some ethical reason which . . . required . . . [Kessler's] withdrawal." Dinter, 278 N.J. Super. at 532. Yet in 2009, without the benefit of any testimony, and without enunciating any detailed findings, R. 1:7-4(a), the judge determined that Kessler had "abandon[ed]" plaintiff because of a disagreement in which "she was merely seeking answers" to her questions. In other words, he reached the opposite legal conclusion, i.e., that Kessler had "abandon[ed] or withdraw[n] from [the] case, without justifiable cause . . . ." Dinter, supra, 278 N.J. Super. at 532 (quoting Int'l Material, supra, 824 S.W. 2d at 895).
A trial judge is under an obligation to state his findings and conclusions so as to create a record capable of meaningful review. See Ronan v. Adely, 182 N.J. 103, 110-11 (2004).
Failure in this regard "'constitutes a disservice to the litigants, the attorneys and the appellate court.'" Curtis v. Finneran, 83 N.J. 563, 569-70 (1980) (quoting Kenwood Assocs. v. Bd. of Adjustment of Englewood, 141 N.J. Super. 1, 4 (App. Div. 1976)).
We reject Britcher's explanation for the judge's turnaround -- that in 2009, the judge was furnished with copies of plaintiff's and her uncle's correspondence demonstrating that the true reason for Kessler's withdrawal was a disagreement and Kessler's failure to communicate with plaintiff. In 2006, when plaintiff filed her pro se opposition to Kessler's motion, she included an affidavit and attached some of those same letters.*fn6
There is also a document in the appellate record that indicates plaintiff advised the judge in 2006 that there was a contingency fee agreement in place. Thus, we are unsure what new information may have prompted the judge's 2009 "careful and closer scrutiny and inspection of the reasons" for Kessler's withdrawal.
More importantly, we think that there are obvious factual disputes regarding the communication that occurred between plaintiff and Kessler leading up to his motion to be relieved. Plaintiff, her mother, and her uncle all complained in their correspondence that Kessler simply was unresponsive to their legitimate requests to be kept informed. Kessler, it suffices to say, claims otherwise. That dispute was never resolved, and its resolution may impact the determination of the legal issues involved. For these reasons, we reverse the order under review, and remand the matter to the motion judge to conduct a plenary hearing.
For the sake of completeness, we address two other ancillary issues. Although Kessler never sought a plenary hearing before the motion judge, we reject Britcher's argument that he waived such relief. Kessler's 2009 motion was based upon the strength of the October 2006 order. In our view, it was understandable for him to assume that any issue as to whether his withdrawal from the litigation was justified had already been resolved. For the reasons already expressed, a plenary hearing is required.
Conversely, to the extent Kessler has argued that reconsideration of the October 2006 order was improper, we reject that contention. Motions for reconsideration are addressed to "'the sound discretion of the Court, to be exercised in the interest of justice.'" Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996) (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)). Reconsideration is to be utilized narrowly, and reserved for situations where the court relied "'on plainly incorrect reasoning[,]'" where the court failed to consider probative, competent evidence, or where "'there is good reason for [the court] to reconsider new'" evidence. Town of Phillipsburg v. Block 1508, Lot 12, 380 N.J. Super. 159, 175 (App. Div. 2005). (emphasis omitted) (quoting Pressler, Current N.J. Court Rules, Comment 2 on R. 4:49-2 (2005)). Reconsideration should be exercised "'in the service of the ultimate goal of substantial justice.'" Casino Reinvestment Dev. Auth. v. Teller, 384 N.J. Super. 408, 413 (App. Div. 2006) (quoting Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 264 (App. Div. 1987), certif. denied, 110 N.J. 196 (1988)).
Under the particular facts presented, the judge did not mistakenly exercise his discretion by reconsidering the October 2006 order to the extent that it reflected a finding that Kessler was necessarily entitled to share in the fee. As to the delay in bringing the motion, there is a dispute as to whether Britcher actually knew about the order; potentially, that explains the delay. Moreover, the October 2006 order lacked any significance unless and until Kessler actually sought to share in the fee.
Additionally, in 2006, plaintiff, although she appeared and provided a thorough explanation of her position supported by documentary evidence, was unrepresented. She responded to the limited inquiries made by the judge, but fairness dictates that she should be entitled to present her side of the story under questioning by her counsel, and that she should be permitted to subject Kessler's version of events to the crucible of cross-examination.
Reversed and remanded. We do not retain jurisdiction.