Submitted October 25, 2017
appeal from Superior Court of New Jersey, Law Division,
Burlington County, Docket No. L-0703-14.
Costello & Mains, LLC, appellant pro se (Deborah L. Mains, on
have not filed a brief.
Judges Alvarez, Nugent, and Geiger.
GEIGER, J.S.C. (temporarily assigned).
matter presents the unresolved issue of whether the
contingent attorney's fee limitation on minors'
settlements imposed by Rule 1:21-7(c)(6) applies to
a minor plaintiff's settlement of claims under the New
Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to
-42, and the New Jersey Civil Rights Act (NJCRA), N.J.S.A.
10:6-1 to -2, if the plaintiff does not apply for a
fee-shifting award of attorney's fees pursuant to
N.J.S.A. 10:5-27.1 or N.J.S.A. 10:6-2(f). The trial court
held the contingent fee is subject to the limitation imposed
by the rule. We affirm.
record on appeal establishes that during the 2011-2012 school
year, A.W. was a fifth grade student at Folwell Elementary
School in Mount Holly Township. During that year, A.W.
reported incidents of repeated bullying and intimidation by
other students to the school's principal. The following
school year, A.W. enrolled at F.W. Holbein Middle School,
also located in Mount Holly Township. Her mother, B.W.,
informed the school's administrators of the abuse A.W.
endured during the previous school year. Despite the alert,
the bullying resumed once A.W. began attending F.W. Holbein.
A.W. alleged she was subjected to ongoing harassment,
intimidation, and bullying by other students, which continued
on a near daily basis until, following a recommendation from
her physician, she was placed on homebound instruction in
October 2013. She ultimately transferred to a private school.
claimed the harassment she experienced was a manifestation of
gender or perceived disability discrimination. Even after
complaints to school officials, the harassment allegedly
continued on a daily basis without investigation or
appropriate action by school administrators. A.W. further
claimed the bullying and intimidation, coupled with the
school's failure to prevent or deter the harassment,
caused her to suffer severe emotional distress, anxiety,
depression, and Post Traumatic Stress Disorder.
retained appellant Costello & Mains, LLC to represent her in
her claims against defendant Mount Holly Township Board of
Education (the Board). On January 2, 2014, B.W., as natural
parent and guardian of A.W., entered into an eighteen-page
retainer agreement with appellant. The agreement provides for
a forty-five percent contingent fee or, in the alternative, a
fee based on prescribed hourly rates, whichever would be
greater. The fee provisions of the agreement state:
These are contingent matters, in that the fee arises only in
the event of successful conclusion by way of settlement or
You have asked the firm to represent you in a matter which
involves a claim or claims made under either New Jersey State
or Federal statutes which provide for "fee
shifting." These statutes provide that for a claim such
as yours, you are entitled to "shift" your legal
fees and most litigation costs to the wrong-acting defendant
and make an application to the Court upon successful trial of
your matter to have that fee added to your recovery. The
foreknowledge on the part of defendant(s) that it/they might
have to pay this fee in addition to any recovery by you is
also a consideration in any negotiation.
It is important that you understand that the fact that
this statutory provision exists does not relieve you of the
obligation to pay fees to the firm, potentially from any
recovery by you.
In such matters, it is customary for the firm to keep
accurate, hourly billing records as the matter progresses
toward trial. If at some point an offer to settle the matter
is made and the offer is made as a "lump sum" by
the defendant, you agree that the firm will be compensated in
the following manner:
The firm will get either 45% (forty five percent) of
the total settlement figure after costs are deducted or its
hourly rate accumulated to that point after costs are
deducted, whichever is greater, but not both.
If the offer made to settle the case is made with one
component for you and a separate component for the firm's
fees, you agree that those components will be combined in
order to determine what the total recovery is for purposes of
determining the firm's 45% fee.
If the matter proceeds to trial or arbitration and a fee
award is made by a Court, arbitrator or other competent trier
of fact and law, you agree that the fee awarded to the firm
will be added to the totality of your recovery for
purposes of determining what your total recovery is
with respect to the calculation of the firm's
45%. This is so because "attorney[']s
fees" are part of the relief due to you at the
close of such cases, and these fees thus form a part of
your relief and recovery.
agreement further enumerates the hourly rates charged by the
firm's attorneys and paralegals and also contains an
additional provision permitting appellant to request a still
The firm retains the right under New Jersey Court Rules to
request a fee that is higher than those provided for in this
agreement, if in the firm's judgment, the firm has
performed work that is in excess and thus disproportionate to
the fee that it has earned. You have the right to oppose such
an application or to consent to such an application if one is
made. The firm will advise you if one is being made and will
provide you with a copy of it at the appropriate time. The
[c]ourt, arbitrator or other competent trier of fact or law
retains the final decision as to whether or not a higher or
additional fee is to be provided.
March 24, 2014, plaintiff filed a three-count complaint
against the Board, alleging violations of the LAD and NJCRA
and demanding judgment for compensatory and punitive damages,
costs of suit, attorney's fees, enhanced attorney's
fees, and equitable relief. Following the filing of
defendant's answer, the parties engaged in discovery,
which concluded on August 15, 2015. The Board then moved for
summary judgment, which was denied on January 22, 2016.
Shortly thereafter, the parties reached a tentative
settlement, inclusive of attorney's fees and costs, in
the amount of $100, 000, subject to the Board's approval.
The proposed settlement precluded plaintiff from applying for
an award of attorney's fees and costs from defendant
under the fee-shifting provisions of the LAD or NJCRA. On
March 9, 2016, the Board approved the settlement. The parties
then agreed on the terms of a general release, which was to
be executed along with a stipulation of dismissal upon
approval of the settlement by the court.
A.W. was still a minor, appellant requested the trial court
conduct a "friendly hearing" pursuant to
Rule 4:44. Although Rule 1:21-7(c)(6)
imposes a twenty-five percent limit on contingent fees in
cases involving minor plaintiffs, appellant sought approval
of the forty-five percent contingent fee provided for in the
retainer agreement without moving for approval of the fee
pursuant to Rule l:21-7(f). Plaintiff did not oppose
the fee sought by appellant. During the hearing, appellant
elicited testimony from A.W. substantiating the merits of the
complaint and testimony from B.W. regarding her understanding
of the settlement. B.W. testified she understood the ...