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JANE MCCLUTCHY v. HAROLD MCCLUTCHY

November 30, 2010

JANE MCCLUTCHY, PLAINTIFF-RESPONDENT,
v.
HAROLD MCCLUTCHY, DEFENDANT. CECONI & CHEIFETZ, LLC, INTERVENOR-APPELLANT.



On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-2096-06.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 13, 2010 - Decided

Before Judges Skillman, Parrillo and Espinosa.

PER CURIAM

Ceconi & Cheifetz, LLC (C&C), represented plaintiff Jane

McClutchy in her matrimonial action. It is undisputed that the only parties in the action before the court were plaintiff and defendant, Harold McClutchy, and the only issues before the court were those that arose from plaintiff's complaint for divorce. At no time was appellant, C&C, a party to the action before the court and at no time did plaintiff ask the court to limit her contractual liability to C&C for the fees incurred in her divorce litigation. Nonetheless, the trial court sua sponte capped the legal fees of the parties' counsel at $50,000.*fn1 C&C appeals from that order and we reverse.

Plaintiff retained C&C pursuant to the terms of a written retainer agreement that complied with the requirements of Rule 5:3-5(a) and (b) and had annexed to it a copy of the Statement of Client's Rights and Responsibilities in Civil Family Actions (Pressler and Verniero, Current N.J. Court Rules, Appendix XVIII to Rule 5:3-5(a) at 2535 (2011)). The agreement identified the attorney in charge of managing plaintiff's matter, her hourly rate, and also identified the other attorneys who might work on the case, the hourly rate of each, and the rate to be charged for a paralegal. The agreement advised that plaintiff would be billed "approximately on a monthly basis." The agreement specified: "In the event that we actually receive payment of all or part of our fees and costs and disbursements from your spouse, either by way of court order or settlement, credit in those amounts shall be given to you. Regardless, you remain at all times primarily obligated to pay us for our invoices."

After nearly three years of litigation, the matrimonial action was tried for three days in September 2008. Each of the parties asked the court for an award of counsel fees from the other party pursuant to Rule 5:3-5(c). Although that Rule requires parties to submit supporting information pursuant to Rule 4:42-9 and identifies additional factors to be considered by the court, the trial court did not permit either counsel to submit a certification of services and limited counsel to a one- page summary of total fees incurred, less amounts already paid, with written summations. The one-page summary submitted by C&C reflected that plaintiff had paid $46,706 in fees and had an outstanding balance of $101,900.89.

The court was plainly concerned with the amount of the legal fees incurred by each party in what it perceived to be a relatively straightforward divorce with no exceptional issues between parties of moderate means. The court's written opinion of October 16, 2008, includes the following:

Finally, the issue of counsel fees remains. It is shocking to the court that [t]he cost of [the parties' daughter's] college education (215,000.00) at a prestigious school (Lehigh University) is exceeded by the cost of the divorce in attorneys and expert fees ($230,000.00), even prior to the trial. The court and everyone reading this opinion should be offended that such a situation has occurred.

Returning to counsel fees, the litigants must bear responsibility for such a high expenditure of monies as well as the attorneys. As Argila*fn2 posed, it should be apparent to the client that the acceptance of this particular employment (retained by the client) will preclude other employment by the lawyer (accurately stating that the lawyer cannot bill anyone else for that time).

In October 2006, there was $300,000.00 from the net proceeds of the sale from the Cape May property, yet none of these proceeds have gone to the parties and over $90,000.00 (over the course of the last year) has been spent on attorneys and unnecessary fees. The wife requested an advance of her share of equitable distribution from these funds. The husband was steadfast in his refusal and previous orders (by the prior judge) only authorized fees to be released from the escrow account.

However, here this case involved no novelty or difficulty of the questions or issues involved and the court could find no reason whatsoever for it to be necessary for two

(2) lawyers (a second chair) throughout the entire trial. The lawyers in this trial are of the highest experience, best reputation and have significant ability. The court actually wondered how this high level of representation existed in a case "ordinary" in nature with no complex issues. These parties were W-2 wage earners with assets for retirement and a marital home and a summer home. Their debt structure was ordinary, consisting of mortgages, an equity line and credit cards. There was nothing to authorize or explain almost a quarter of a ...


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