On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-759-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Fuentes, Nugent and Newman.
Plaintiff, William M. Burke, M.D., appeals from an order granting summary judgment to defendant, John Izmirlian, resulting in the dismissal of plaintiff's complaint. We are convinced that plaintiff should be equitably subrogated to his deceased wife's court award of counsel fees in a post-judgment proceeding involving her former husband, which fees were paid by plaintiff. Therefore, we reverse.
The salient facts, which are not in dispute, were set forth in the litigation involving Ellen Marshall, the attorney who represented plaintiff's late wife, Laureen Moran, and plaintiff who had refused to pay Marshall's fee awarded by the trial court when he had guaranteed such payment. We quote the relevant factual background from our opinion in Marshall v. Burke, No. A-1858-05 (App. Div. May 24, 2007) (slip op. at 5-7).
The genesis of that matter was in late January-early February 1999 when, during the course of his own post-divorce litigation, defendant arranged a meeting with plaintiff and Moran to discuss plaintiff's representation of Moran in a post-divorce action initiated by Moran's former husband, John Izmirlian.*fn1 Earlier, defendant had conveyed to plaintiff his opinions that Izmirlian was dishonest, concealing his income from both the Internal Revenue Service and Moran, and that he should be made to pay all the child support for the daughter then living with defendant and Moran. By all accounts, that meeting was held at a local country club and thereafter, on February 5, 1999, plaintiff and Moran signed a retainer agreement.
According to plaintiff, the meeting lasted two hours during which they talked almost exclusively about Moran's legal situation. Defendant once again mentioned that Izmirlian was attempting to hide his finances and that he wanted to ensure Izmirlian paid his support obligations. Moran said she was unable to pay for plaintiff's services and plaintiff herself knew that Moran had no steady means of supporting herself, that Izmirlian had no money, and that Moran had previously discharged a fee obligation of approximately $15,000 in bankruptcy proceedings. Consequently, plaintiff raised the issue of payment, asserting that litigation would be expensive and that she could not proceed without payment. According to plaintiff, defendant assured her that he was "willing to throw some money at this, so that that little prick pays to support his kid." With that assurance, plaintiff entered into a retainer agreement, and commenced preliminary work on the case, including arranging a meeting between the parties, which turned out to be unproductive.
Because Moran had become very ill in the meantime, plaintiff cautioned defendant and Moran against proceeding, however, defendant urged plaintiff to continue and again promised to pay, which plaintiff memorialized in a letter of December 16, 1999. Although plaintiff never received payment during her representation of Moran, she did not demand payment during Moran's illness because she relied on defendant's promise and by then had only represented Moran for a short period. Both Moran and defendant, on the other hand, deny that defendant agreed to pay plaintiff's legal fees and costs on behalf of Moran. Defendant, however, admits paying a forensic accountant who aided Moran in tracking down Izmirlian's assets.
At the conclusion of the action between Marshall and defendant, defendant was ordered to "pay a counsel fee of $32,177.29 to Ellen Marshall, Esq. in accordance with the order filed February 22, 2000." A corresponding order of final judgment was entered on October 8, 2005. Id. at 5. We affirmed this order on appeal. Id. at 25.
On May 18, 2007, about six days before Marshall v. Burke was decided, a motion filed by Moran to enforce litigant's rights was granted, ordering defendant to pay counsel fees of $32,177.29 to Marshall. Another order was entered on October 19, 2007 on Moran's motion compelling defendant to pay counsel fees of $32,177.29 to Marshall. On May 23, 2008, on Moran's motion, an order was entered directing defendant to pay plaintiff's counsel fees owed to Marshall, and "[s]ince it appears that the plaintiff's spouse has paid this sum to Ms. Marshall," defendant was ordered to pay Moran directly.
Plaintiff filed a complaint in the present matter on March 10, 2008. Plaintiff alleged that defendant's breach of court orders caused him harm, including compelling his payment of Marshall's fees.
Default judgment against defendant was entered on October 14, 2008, and vacated on July 17, 2009.
Defendant thereafter moved for summary judgment. In granting summary judgment, the trial court found that plaintiff was not entitled to proceed as an equitable subrogee because he had paid Marshall as a volunteer. The trial judge also found that plaintiff's failure to provide notice of defendant's potential liability during the Marshall v. Burke case, pursuant to Rule 4:5-1(b)(2), was ...