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Balducci v. Cige

Superior Court of New Jersey, Appellate Division

August 30, 2018

LISA BALDUCCI, Plaintiff-Respondent,
v.
BRIAN M. CIGE, Defendant-Appellant.

          Submitted February 7, 2018

          On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-1004-16.

          Brian M. Cige, appellant pro se.

          Nagel Rice, LLP, attorneys for respondent (Jay J. Rice, of counsel and on the brief; Michael J. Paragano, on the brief).

          Before Judges Alvarez, Nugent and Geiger.

          OPINION

          NUGENT, J.A.D.

         Defendant, Brian M. Cige, an attorney, appeals from two Law Division orders. The orders declared unenforceable and void his retainer agreement (the "Agreement") with plaintiff, Lisa Balducci, a client he represented in a claim seeking damages under the New Jersey Law Against Discrimination ("LAD"), N.J.S.A. 10:5-1 to -4 9.[1] The orders also dismissed his counterclaim for fees and costs. The trial court permitted defendant to recover for his services based on the doctrine of quantum meruit.

         The trial court found defendant violated his professional responsibility to explain the Agreement's material terms to plaintiff so that she could make an informed decision about retaining him. The trial court's factual and credibility findings have ample support on the plenary hearing record. Defendant did not explain the effect his "greater three fee agreement" would have on any recovery, inform plaintiff of alternatives to such an agreement, or give plaintiff any indication of the tens of thousands of dollars in expenses she would have to pay as the case progressed. Hence we affirm.

         I.

         A.

         This action's procedural history began in July 2016 when plaintiff filed a declaratory judgment action seeking to have the trial court declare the Agreement unenforceable. Plaintiff had retained defendant to represent her and her child in a LAD action. She later terminated his representation and retained new counsel. After plaintiff terminated defendant's services, he billed her for $286, 746.67 in fees and expenses. Defendant's lien against any recovery impeded meaningful settlement negotiations, so plaintiff filed the declaratory judgment action.

         Defendant filed an answer. He also filed a counterclaim seeking a judgment for fees and costs.[2] Following a plenary hearing, the trial court declared the fee agreement unenforceable. This appeal followed.

         B.

         The parties developed the following record at the plenary hearing. Plaintiff and defendant were friends when she and her child met him at his office in September 2012 to discuss a possible lawsuit seeking remedies under the LAD.[3] During the meeting, defendant presented plaintiff with the Agreement. The Agreement included these terms:

3. Legal Fees. The Law Firm cannot predict or guarantee what your final bill will be. This will depend on the amount of time spent on your case and the amount of other expenses.
A. Initial Payment. The Law Firm will begin work on your case upon receipt of $3750.00. This sum will be used to pay for your initial filing fee, other fees and expenses, and legal fees, according to this Agreement.
B. Retainer. You agree to pay $7500.0 0* as the minimum retainer, but maximum amount for legal fees to be paid until the case is settled orjudgmentis entered. Notwithstanding, you are encouraged to make additional payments toward legal fees as invoiced to minimize having a large invoice when the case ends.
*$3750.00 to be paid within ninety (90) days of signing this agreement.
C. Legal Fee. You agree to pay the Law Firm for legal services the greater of:

i. Rate Per Hour

Services of

$475.00

Brian M. Cige, Esq.

(This hourly rates [sic] is subject to review and revision 11 January 2014 and annually thereafter. Further, at the Law Firm's discretion, it may either use the rates which were current when the services were performed and adding interest at the regular rate for paying clients or using the rate current at the time payment is made.)
ii. thirty seven and one half percent (37 1/2%) of the net recovery (including attorneys fees referred to in iii below).
iii. statutory attorneys fees, by settlement or award, received with credit for all payments received.
Client has been advised that, in employment cases, the employer may offer reinstatement of his or her prior position or a comparable position. In the event the client accepts an offer of reinstatements, the client agrees to pay the Law Firm fifteen additional percent (15%) of the total pay he or she would receive from the employer upon reinstatement for a one (1) year pay period, in no more than six (6) equal monthly installments.
D. All Services Will Be Billed. You will be billed at the hourly rate set forth in paragraph 3C for all services rendered. This includes telephone calls (minimum charge of [six] minutes), dictating and reviewing letters, travel time to and from meetings and the Court, legal research, negotiations and any other services relating to this matter. Client hereby gives the Law Firm a continuing lien on the client's claim and the proceeds thereof for the amount of the attorney's fees, out-of-pocket expenses, and costs for which the client is obligated under this agreement. The attorney's lien is given by the client pursuant to New Jersey State [sic] Annotated Title 2A:13-5.
4. Costs and Expenses. In addition to legal fees, you must pay the following costs and expenses: experts' fees, court costs, accountants' fees, appraisers' fees, service fees, investigators' fees, deposition costs, messenger services, photocopying charges, telephone toll calls, postage and any other necessary expenses in this matter. The Law Firm may require that expert(s) be retained directly by you. You would then be solely responsible to pay the expert(s).
5. Bills. The Law Firm will send you itemized bills from time to time. The Law Firm may require that costs and expenses (see paragraph 4) be paid in advance. All bills for costs and legal expenses are due upon receipt and failure to pay will waive any discounts. You will be charged interest at a monthly rate of one and one-half percent (1 ½%) on any remaining balance not paid within thirty (30) days from the date of the bill. If an outstanding balance necessitates collection efforts by the Law Firm will be paid its legal fees for collecting same. Further, at the Law Firm's discretion, it may either use the rates which were current when the services were performed and adding interest at the regular rate for paying clients or using the rate current at the time payment is made.

         The parties disputed the circumstances under which plaintiff signed the Agreement. According to plaintiff, defendant did not explain the terms of the Agreement. Rather, he told her, "[t]his is a standard agreement for a case like [this]." Plaintiff, who had worked for attorneys and who now operated her own business, "quickly glanced at it and . . . had a concern." She said to defendant, "Brian, this says that I am going to be responsible at the end if we lose the case." He said she would not. He told her the language concerning his hourly rate was standard for a LAD case like this. He said: "We are friends. I was at your wedding. I would never do this to you. Ignore that. Don't worry about it. It is standard information." Plaintiff signed it, because she trusted him, he was a friend, and she believed him.

         In contrast, defendant testified, "plaintiff was provided this. Read it. Understood it. And signed it." Defendant emphasized the "Signatures" paragraph of the agreement, located immediately above the signature lines, stated: "You and the Law Firm have read and agree to this Agreement. The Law Firm has answered all of your questions and fully explained this Agreement to your complete satisfaction. You have been given a copy of this Agreement." Defendant denied telling plaintiff he would not enforce the Agreement's hourly rate provision. He testified, "I provided her with the retainer agreement in my office. I asked her if she had any questions after she reviewed it. And she signed it. And we were on our way."

         Plaintiff's child testified and corroborated plaintiff's testimony. The child said defendant told plaintiff not to worry about legal fees if the case was lost. The child was emphatic defendant said he would never do that to plaintiff because they were friends.

         Plaintiff testified that after retaining defendant, she began receiving monthly bills for defendant's services. Extremely upset, she telephoned defendant and asked the meaning of the bills. He said: "Lisa, I have to by law keep track of the billing, . . . but I know they look a lot, . . . but I am padding them. So at the end of the day when they are found guilty of L-A-D at the very least, then the [defendants'] attorneys will have to pay for it and you will not have to have those fees." Plaintiff said defendant agreed to stop sending the bills because he realized how much they upset her.

         Defendant acknowledged plaintiff became upset when she received bills based on his hourly fee, so he stopped sending them. He denied he stopped sending them for the reason given by plaintiff. He claimed he had agreed she could defer payment.

         The fee agreement is dated September 7, 2012. Plaintiff terminated defendant's services in September or October 2015. The parties' attorney-client relationship had begun to sour ten months earlier, in January 2015.

         The problems developed, according to plaintiff, when depositions began in the underlying case. Plaintiff testified she was exhausted but was nonetheless doing much of the work to prepare for depositions while defendant was away at chess tournaments. To review material in preparation for depositions, plaintiff and her child went to defendant's office. Plaintiff said defendant required her to "pay his paralegal in which to keep the office open so both my [child] and I ...


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