October 11, 2012
PATRICIA WONG, AN INCOMPETENT THROUGH GREGORY WONG, AS GUARDIAN, PLAINTIFF,
RONETCO SUPERMARKETS, INC. T/A SHOPRITE OF SUCCASUNNA, WHITESTONE ASSOC., INC., RIGS, INC, LEN RUSCIANI, FIDELITY LAND DEVELOPMENT, LLC, FIDELITY MAINTENANCE COMPANY, FIDELITY MANAGEMENT CORP., ROXVILLE ASSOCIATES, RICHARD P. WINNE, M.D., ANESTHESIA ASSOCIATES OF MORRISTOWN, NEW JERSEY PAIN CONSULTANTS, MORRISTOWN MEMORIAL HOSPITAL, THE PAIN MANAGEMENT CENTER, KAREN SHIPPE, R.N. OF THE PAIN MANAGEMENT CENTER, VICKY CHRISTOPHER, R.N., CLINICAL COORDINATOR FOR THE PAIN MANAGEMENT CENTER, DR. MARK RUBINETTE, DR. LEIGH S. ENDE, DR. DAN RICHMAN, DR. FEINBERG, DR. ROSEZENWEIG, DR. ABBOTT KREIGER, DEFENDANTS, AND RONETCO SUPERMARKETS, INC. T/A SHOPRITE OF SUCCASUNNA, DEFENDANT/THIRD-PARTY PLAINTIFF,
RICHARD P. WINNE, M.D., PAIN MANAGEMENT CENTER, RIGS, INC. AND LEN RUSCIANI, THIRD-PARTY DEFENDANTS, AND FIDELITY LAND DEVELOPMENT, LLC, FIDELITY MAINTENANCE CO., FIDELITY MANAGEMENT CORP. AND ROXVILLE ASSOCIATES, DEFENDANTS/THIRD-PARTY PLAINTIFFS,
RIGS, INC. AND LEN RUSCIANI, THIRD-PARTY DEFENDANTS.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3038-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 19, 2012
Before Judges Harris and Hoffman.
In this appeal, we review the trial court's order of October 25, 2011 dividing a contingent fee between two law firms generated from a multi-million dollar settlement received by plaintiffs in this personal injury case.*fn1 Because we conclude the judge's ruling did not constitute a mistaken exercise of discretion, we affirm.
On March 21, 2002, plaintiff Patricia Wong fell in a parking lot while pushing a shopping cart and injured her wrist. Several months later, plaintiff retained the services of Paul Selitto, Esq. (Selitto) to pursue a bodily injury claim for her. Selitto filed suit on April 22, 2003. Plaintiff was eventually diagnosed with reflex sympathetic dystrophy syndrome (RSD). On August 5, 2004, plaintiff suffered a catastrophic injury from a complication during an epidural catheter infusion in the course of treatment for her RSD. As a result, plaintiff fell into a coma and remains in a persistent vegetative state.
Plaintiff's brother, Gregory Wong (Wong), was then appointed guardian for his sister. Wong began to lose confidence in Selitto by the Fall of 2005. He was concerned that Selitto, a sole practitioner, did not have the resources to handle what had become a very complex case. In the Spring of 2006, Wong consulted Michael Noonan, Esq. of Nowell Amoroso Klein Bierman, P.A. (Nowell). Soon thereafter, he retained Nowell and the file was formally transferred on June 5, 2006.
Upon assuming responsibility for the case, Nowell devoted the time, energy and resources necessary to achieve a substantial seven figure settlement in September 2010. Forty-four percent of the settlement money came from the premises liability defendants and fifty-six percent of the settlement money came from the medical malpractice defendants. Selitto did not file any direct claims against the medical malpractice defendants before transferring the file.
When Selitto and Nowell were unable to agree upon the division of the attorneys fee, Selitto filed a petition for attorney's lien pursuant to N.J.S.A. 2A:13-5. Following a twoday plenary hearing, Judge Stephan C. Hansbury entered an order awarding Selitto a fee of $50,000. The order was accompanied by a five-page statement of reasons.
Nowell appealed and Selitto cross-appealed. On appeal, Nowell contends that Selitto should not be entitled to any fee based upon his failure to submit an itemized record of his time. Selitto, on the other hand, argues that the judge abused his discretion by arriving at a quantum meruit award without properly considering all relevant factors.
"Appellate review of a trial court's attorney fee determination is deferential. We will only disturb the trial court's determination on a showing of 'clear abuse of discretion' based on the record presented on the fee application." In re Estate of F.W., 398 N.J. Super. 344, 355 (App. Div. 2008) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)).
An attorney hired on a contingent fee, who is discharged prior to the completion of litigation, is not entitled to an award based on the contingent fee agreement. Glick v. Barclays De Zoete Wedd, Inc., 300 N.J. Super. 299, 310 (App. Div. 1997). Instead, the trial court, in its discretion, may award the attorney a fee "on a quantum meruit basis for the reasonable value of the services rendered." Ibid. Quantum meruit, a form of quasi-contract, permits recovery of as much as is deserved. Kopin v. Orange Products, Inc., 297 N.J. Super. 353, 367 (App. Div. 1997).
A quantum meruit fee award is an equitable determination which does not lend itself to "hard and fast rules." La Mantia v. Durse, 234 N.J. Super. 534, 539-40 (App. Div. 1989). When considering a quantum meruit award where a contingent fee must be split between two law firms, the trial court should consider:
(1) "the length of time each of the firms spent on the case";
(2) "[t]he quality of representation"; (3) "the result of each firm's efforts"; (4) "the reason the client changed attorneys";
(5) "[v]iability of the claim at transfer"; (6) and "[t]he amount of the recovery realized in the underlying lawsuit." Id. at 540-41.
In Glick, Justice (then Judge) Long provided guidance to courts for resolving future disputes:
[T]he crucial factor in determining the amount of recovery is the contribution which the lawyer made to advancing the client's cause. Thus, if a retiring lawyer cedes to his successor a substantially prepared case which resulted from an extensive investment of time, skill and funds, the retiring lawyer might be entitled to compensation greater than the standard hourly rate. In comparison, if a ceding lawyer's work contributed to a recovery by the client, but the new attorney was crucial in the success of the case, then the predecessor's compensation should be based, at most, upon a standard hourly rate. Finally, if the predecessor's work, no matter how extensive, contributed little or nothing to the case, then the ceding lawyer should receive little or no compensation. [Supra, 300 N.J. Super. at 311.]
Nowell submitted affidavits documenting 5,892 hours of work on the case. Selitto stated in a certification that he had spent "hundreds of hours" working on the case but testified that he did not feel "comfortable" that he could accurately provide an itemization of his time. Because he was handling the case on a contingent fee basis, he did not maintain contemporaneous time records.
After analyzing each firms' representation of plaintiff, Judge Hansbury came to the following conclusions:
There is clear evidence that Mr. Noonan and his firm were crucial in the success of the case. At the time Mr. Noonon commenced representation, Mr. Selitto had not retained a medical expert to evaluate RSD and could not, therefore, have proceeded to trial with the hope of any significant success even as to the 2003 fall. Regrettably, of course, the second incident dramatically altered the case. However, Mr. Selitto did not file a complaint against any of the medical defendants. The only work he had undertaken was essentially to gather some medical records and some court appearances.
Of course, these findings are entitled to our deference. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974).
While acknowledging Nowell's crucial contribution, Judge Hansbury also recognized that Selitto expended "four years worth of effort and clearly spent time in this matter." While the case was far from being trial ready at the time the file was transferred, the record established that twelve depositions were taken before the case was transferred. In addition to assembling voluminous medical records, Selitto also had retained a premises liability expert and obtained a report.
As a result of Judge Hansbury's ruling, he implicitly rejected Nowell's argument that Selitto was a ceding lawyer who "should receive little or no compensation" because he "contributed little or nothing to the case." Glick, supra, 300 N.J. Super. at 311. Instead, his ruling reflects that this was a case where a former attorney's work "contributed to a recovery by the client, but the new attorney was crucial in the success of the case[.]" Ibid.
We reject Nowell's contention that Selitto's failure to submit time records denies him entitlement to any portion of the fee. "[T]he failure to supply time records in support of an application for a reasonable fee is not fatal, Bolle v. Cmty. Mem'l Hosp., 145 N.J. Super. 593, 596 (App. Div. 1976), certif. denied, 74 N.J. 275 (1977), albeit, 'the time devoted to the case is an important factor and should generally be included as part of any application.' Ehrlich v. Kids of North Jersey, 338 N.J. Super. 442, 446-47 (App. Div. 2001)." Estate of F.W., supra, 398 N.J. Super. at 360.
In support of his argument that the award of only $50,000 constituted an abuse of discretion, Selitto points to the fact that the file was in his office for almost four years yet he was awarded only four percent of the total fee.*fn2 This argument assumes that Selitto should share in the fee attributable to the medical malpractice part of the case. Selitto did not file any direct claims against the medical malpractice defendants before transferring the file. He also had not devoted any substantial time or money to develop the medical malpractice case. Like the trial court, we discern no basis for Selitto to claim any portion of the fee related to the medical negligence claims.
The judge considered Selitto's testimony and the certification he filed along with his petition for attorney's lien pursuant to N.J.S.A. 2A:13-5 and concluded Selitto spent at least two-hundred hours on the case. While this figure is about one hour per week for the four years Selitto represented plaintiff, we do not find this figure unreasonable based upon the record established in the trial court.*fn3
We agree with Judge Hansbury's determination that Selitto was not equitably entitled to greater compensation than what his hours and standard rates would suggest. Therefore, we have no basis to disturb his ruling that awarding Selitto $50,000 of the fee represents a fair resolution of the dispute.